Ramsey's first investing rule is to never invest until you pay off all of your toxic debt, which includes everything but your mortgage. Ramsey says you can't build wealth if your income is tied up in monthly finance charges.
Eliminating debt is easy to talk about but hard to do. By attacking your debts from smallest to largest, you can make quick wins that close outstanding accounts and boost your confidence.
Eliminating debt puts you on solid financial ground, but without enough cash in the bank to cover three to six months of expenses, you could tap into your retirement account in an emergency.
Ramsey says saving 15% of your paycheck every pay period in a tax-advantaged account is the most important thing you can do once you're debt-free and have enough savings to last at least a quarter year.
Ramsey stated in “The Total Money Makeover: A Proven Plan for Financial Fitness” that people spend money they don't have on unnecessary purchases to impress others.
Modern society has amazing gadgets and software that were unimaginable one generation ago. Many can save you money, and Ramsey wants you to use them all.
Technology can help you save and grow money, but Ramsey has many followers who built wealth the old-fashioned way. Start with a basic budget after balancing your checking account. Baby steps are key.
Every hour you spend learning new ways to manage and grow your money is an hour you don't spend budgeting, planning, or investing for the future. You should keep learning, but start with what you know.
Ramsey's solution is to only buy ingredients for a meal plan and never deviate from it. He suggests ordering online and picking up groceries to avoid temptation, or leaving the kids at home when you go to the supermarket.
No matter how much you follow news and trends, a good money pro will have a better perspective based on their own experience and what you tell them about your goals, strategy, and circumstances.