My Seven Baby Steps Journey

Hello,

Let’s talk about the seven baby steps to financial freedom.

I haven’t written a Sunday MJV post in a long time. This blog has moved from very personal to bookish only. Today, we take a step back towards the personal and I want to share my financial journey.

I spent my 20s as a money dunce.

And, I am ready to change and to move towards financial freedom and learn how to create and sustain wealth.  Last year, I first heard about the seven baby steps to financial freedom and decided to start. Before I share my journey let’s review the seven baby steps together.

The Seven Baby Steps

The seven baby steps to financial freedom was created by American businessman Dave Ramsey. It is a simple system that mixes saving, paying off debt, investment and moving towards a debt free life.

Baby Step One: Save USD $1,000 cash in a beginners’ emergency fund.

Baby Step Two: Use the debt snowball to pay off all your debt outside of a mortgage. Debt snowball means paying off the debt with smallest balance, then you keep going, tackling the next larger debt until you’ve cleared all the monies owed.

Baby Step Three: Create a fully funded emergency fund to cover three to six months of living expenses.

Baby Step Four: Invest 15% of your household income into retirement.

Baby Step Five: Start saving for college.

Baby Step Six: Pay off your mortgage early.

Baby Step Seven: Build wealth and give generously.

My Journey So Far

I started my first baby step in late 2017 and then in October I first stuck my hand in my little savings.  And the fund was destroyed by Christmas. Yikes.

January 2018 was my reset and started saving again. I decided to save my emergency fund in JMD. It was important for me to ensure that I have enough to cover any type of small emergency that may pop up. This involves illnesses, loss of any kind, damages, repairs, etc.

Honestly I feel as if it took me way too long to save this mini fund. But I was elated at the end of April when I hit that goal.

Now I need to remember that this money is for emergencies only.  And not for this or that, shopping or going out.

Baby Steps One to Three

My only debt is my credit card. Each month I pay off my bill in full, so I have that under control. But my biggest challenge is I still want to lower my credit card usage.  In time I want to be cash spender. This is something that I’ll need to steadily work towards.

So I am sort of mixing it up and also focusing on step three. I am a full-time worker and as such I’ll be using my present salary to help guide me and I’ll save the equivalent of six months pay.

And guess what?  I start baby step three this May. I am excited about the possibilities and thrilled to working to intentionally save.

Further to this, I’ve already been saving since 2016, 10% of my monthly salary into the company’s pooled retirement fund. I don’t intent to make any major adjustments to this area.

My Why

I didn’t grow up with strong role models in wealth creation and savings. As an adult I’ve been winging it. Before the start of 2018, I’d save some cash then spend it all and then I start again without direction.

Now I see very clear life goals that require money. Chief among these goals is home ownership. Therefore, I am also steadily saving money for my down payment. Further, in 2020 I want to have a baby. These major life changes require money.

And, I am saving because I want to thrive. I’ve had a decade of working filled with varied levels of money stress. It is time to leave this behind.

Honestly, I’ve had money anxiety for years and it always seemed as if I would be paid and spend and I was on this cycle. This year I broke this cycle.

Therefore, I will continue the seven baby steps and I will continue to seek out information on saving and investment.

How do you feel about your money and spending habits?

Do you save? If you do, what are your methods? Please share your recommendations.