MERRY CHRISTMAS EVE!
Welcome back! I hope everyone’s getting a lot of good tips as we go through this series on the steps to financial freedom. I am gleaning this information from Dave Ramsey’s book: “Total Money Makeover.”
Here’s a review of steps 1-3:
1. Save $1,000 in an emergency fund
2. Pay off All debt except mortgage using the debt snowball
3. Save three to six months in living expenses.
And now Step 4: Invest 15% percent of household income in ROTH IRAs and pre-tax retirement.
“I can’t do that the econonomy is bad!!”
Yes you can! (Like my pun?)
It’s easy to allow outside circumstances like sales, commercials, the media, a bad economy, to affect our spending and savings habits. However, if you have a system in place and you’re operating on “financial autopilot” so to speak, then you have no need to worry about the economy or any other global catastrophe.
By the time you reach step 4 of the plan, you will have a lot of disposable income to save for your retirement. And no, you do not have to invest your retirement money in the stock market. I know that’s what many people are worried about now with our schizophrenic markets. You can get a tax advantaged IRA and direct your money to be invested in a cash type investment. Thus you hwon’t have to have a lot of heartburn as you watch the stock market swing up and down. I won’t tell you should place your money but I highly recommend you do your own research.
So get saving!
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