Today, we’ll begin on breaking down the actual 7 step process that my wife and I used to get out of debt and properly save for our future. If you haven’t already done it, I recommend reading or re-reading the posts from week one (Day, 1, Day 2, Day 3, Day 4, Day 5). It’s immensely important that you get a good foundation under you (Last week’s information) before you begin building the house that we’re going to start building through this 7 step process, so make sure it’s sufficiently under your belt, or at least in the process of getting there BEFORE you start these steps. 

Before I begin explaining how to do this, I want to qualify this information with the following: This is a marathon, not a sprint! If you’re looking for a quick fix, this isn’t it. Have you ever heard the story of “The Tortoise and the Hare“?If not, click on the link up there (Hint: The tortoise wins). If you have, read it again. This, like anything in life, takes lots of steady, hard work in order to make it a reality.

In the spirit of full disclosure, I have to admit that this 7 step process is not of my own making. Dave Ramsey is the person who invented it. I’m simply here to encourage you to make the jump, and follow in my footsteps as well as the footsteps of thousands of others.

That being said, I plan to elaborate on the steps, add useful stories about our journey through it, and offer some pointers on how to overcome setbacks and avoid falling off the rails that I’m absolutely certain will help you on your way and keep you on going with your goal in mind.

So what are the steps?

1. Save $1,000 to start an emergency fund
2. Pay off all debt using the debt snowball method
3. Save 3 to 6 months of expenses for emergencies
4.  Invest 15% of your household income into Roth IRAs and pre-tax retirement funds
5. Save for your children’s college fund (If applicable)
6. Pay off your home early (If applicable)
7. Build wealth and give

So why do we do it this way? Because any large scale life change is best done in small, manageable steps. If you focus, like a laser, on one thing at a time, you can easily accomplish any goal.

Think of it like changing your habits and eating healthier. If you look at it like a diet and just work super hard until you’ve lost your goal weight, you’ll stop, and then all of the weight will come back (Sometimes worse than before). Debt is the same way. You have to put systems in place that will help you keep yourself accountable for the long haul and keep debt out of your life for good.

Remember, its a marathon, not a sprint…
Come back tomorrow to get the scoop on step 1 of the process. I’ll teach you why it’s important to save that thousand bucks, and why you shouldn’t have any more than that saved until you pay off your debt.

 

Are you ready to REALLY change? Comment below, and tell us what you’re going to do and WHY.

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