So far we have learned a lot about savings and some easy tips to always keep in mind. Here is a run down;
- Dave Ramsey shared with us the baby steps to financial wealth.
- The first step was to have a savings plan and to try and put aside $1000 for Emergency Funds.
- Next is to get out of debt! You can’t build wealth if you are constantly in debt.
- It is also important to have a fully funded emergency fund from 3-6 months
- Next, start a long term investing which includes 15% for retirement. Although that seems like a long way away, it is very important to start saving and budgeting early.
- He went on to suggest that we start planning to save for our children’s future (if you plan on having any) which includes colleges and weddings.
- Another major step is to pay off your house!
- Lastly, you should build a ton of wealth and give a lot of it away like to charities!
- The top three things to save for includes, emergencies, future purchases, and wealth building.
- After reading The Automatic Millionaire, I learned that how much you earn has almost no bearing on whether or not you can and will build wealth.
- One last important fact I learned about was the pay yourself first formula.
- The first group are those who are broke; they don’t pay themselves and they spend more than they earn.
- Next are those who are poor; They spend everything they make and save nothing.
- The next group is the middle class; They pay themselves first 5-10% of income.
- The upper Class/Wealthy pay themselves first 10-20% of income.
- Lastly, the ones who are wealthy enough to retire early pay themselves first 20% or more of income.
Although it may seem impossible at times, with the right steps and financial planning, anyone can become a millionaire!