The secret to budgeting is figuring out what works for you through trail and error. But my utilities/transportation are less. ex: my rent is over Dave Ramsays estimate. Also, you have to realise that we are all in different positions, our expenses vary depending on our location as well as personal responsibilities. As long as you realize that a motivator is bound to make more mistakes than an advisor, his game makes sense.ģ5% savings (school/retirement/condo etc.)ħ% utilities (gym, phone, electric, internet, transportation)ĭonating more than you're saving is insane. People need to realize that the reason why he has so many followers is because he is a motivator rather than a personal advisor. I agree that he is overly optimistic and his math is off.but he is selling encouragement, not financial planning. Then, after settled, continue to give.Ī lot of people in this thread seem to have only heard of DR's stuff second hand and not heard what he actually has to say at all. He has said on multiple occasion that it is reasonable to stop giving for a whole in order to get yourself in order and bring yourself to a higher income. It is more about the giving than tracking the numbers to be sure they match.Īnd finally, he has addressed the 10% in terms of a "rule". He has also said that, while he pushes for 10%, less than 10% is still a good thing. He advocates donating time if you do not donate money. He has said that he understands in people stop giving during the debt time period. People are down voting you, but you are correct in a way. Here, please treat others with respect, stay on-topic, and avoid self-promotion.Īlways do your own research before acting on any information or advice that you read on Reddit. Get your financial house in order, learn how to better manage your money, and invest for your future. Banking Megathread: FDIC, NCUA, and your cash. Private communication is not safe on Reddit. Scam alert: Ignore any private messages or chat requests.And that’s the most important wealth-building tool you have!ĭave Ramsey is an author and radio show host. Investing becomes easy at this point because you’ve freed up your income. Then, invest the rest into Roth IRAs - one for you, and one for your spouse, if you’re married. Start with your company’s 401(k) plan, up to the full employer match. In Baby Step 4, take 15% of your gross household income and start investing it for retirement. Now, it’s time to really start thinking about your future and retirement. It’s time then to revisit your emergency fund, and bulk it up to a full three to six months of expenses in Baby Step 3. Next, pay off all your debts from smallest to largest - except for your home - using the debt snowball method. Getting $1,000 in the bank as a starter emergency fund is Baby Step 1. I’m guessing you’re new to my way of doing things, so let’s start from the beginning. Would it be OK to use a home equity line of credit to start investing? We were thinking the eventual returns might justify doing this.Ī: No! Never put something as important and meaningful as your home on the line just for the sake of investing. We’d like to start preparing for the future, but our debt is preventing us from investing for retirement. You also have to consider things like where you’re thinking about them going to school, how much you want to save up and other factors. The thing is, there are just too many variables, the main one being the ages of the kids, to set a strict percentage. There’s no rush if they’re toddlers, but you might want to start looking at things like a 529 or an ESA (Education Savings Account). If you have teenagers in the house, you need to get serious about college funding soon - like right now.
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