Dave Ramsey

Dear Dave,

I’m about to complete Baby Step 3. I’ve been very intense about following your plan, but I was wondering if there’s ever any kind of frustration or letdown after you’ve come this far.

Rasheed

Dear Rasheed,

You’re right. The beginning three Baby Steps are very intense. First, you get $1,000 in the bank—$500 if you make less than $20,000 a year—for a beginner emergency fund as fast as you can. Then, pay off all your debts, except the house, from smallest to largest, and after that you finish out your emergency fund with three to six months of expenses. This is a real whirlwind of activity, because everything should be wrapped up in an aggressive, we’ve-got-to-get-this-done kind of attitude.

I guess if there’s a letdown it could come from the feeling that once you’re out of debt except for your house, things should kick into overdrive and you’ll become instantaneously wealthy. That just isn’t realistic. But it does remove a ton of stress from your life, and you’ll experience a sense of freedom that you’ve never felt before.

As for frustrations, they’ll be fewer because a huge cause of stress and frustration will disappear after you gain control of your money and get out of debt. You may feel like things aren’t moving fast enough, but things never seem to move fast enough when you’re intense and really into what you’re doing!

—Dave

Dear Dave,

Our son is 21, and he’s embarking on a career as a professional soccer player. He’ll only be making about $30,000 a year, and we want to know how we can help him manage this money and not get caught up in the idea that he has to live a glamorous lifestyle.

Karen

Dear Karen,

“Glamorous” isn’t the word I’d use to describe a $30,000-a-year job, even for a 21-year-old. I think the biggest thing here is to make sure he develops some emotional maturity and uses basic, common-sense guidelines to help keep things in perspective. If he makes a habit right now of budgeting and living on less than he makes, he’s going to have a lot easier time later on if he starts raking in the big bucks.


Dave Ramsey

Dave Ramsey is a personal money management expert, popular national radio personality and the author of three New York Times bestsellers.
 
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