Our Story, Part 5: so, what’s next?

So at this point we are looking toward starting our Baby Step #4, or investing 15% of our gross income into our retirement fund.  This is where things get CRAZY exciting as we get the chance to actually put our money to work.  But first, let’s review how we got to this point, and again, we are following what Dave Ramsey refers to as his 7 Baby Steps:

Baby Step #1—$1,000 emergency fund

We were fortunate to have this as we began our marriage in April 2008.  Truthfully, I think that’s about all I had starting off, and Julie had been really successful in saving during her single years (so grateful for that).  The idea here was to have at least this much in the bank so that if something unusual happened, we would be able to handle it and move on.

Baby Step #2—repay all debt, excluding our home mortgage

Once we got this process started and began to think about how long it was going to take us to repay this, we got really serious, really quick.  We started off slowly, but as a dent began to form in the big total and we saw it going down, it was easy to get excited about the process.  We weren’t spending extra money on anything.  My colleagues at Hope know I wasn’t the person to ask to go to lunch, because we just weren’t doing it.  It was pretty challenging, but extremely rewarding at the same time.

Total Time to Complete: about 13 months

Baby Step #3—complete our emergency fund with 3-6 months of expenses

This step was awesome because we saw our tally go in the other direction!  We kept the same intensity and were able to get to fully-funded emergency fund within about 5 months.  That was very exciting, that we I even got a little early Christmas present at the end

So, what now?

Julie and I are going to sit down over our Christmas break and put together our budget for 2010.  Our newest line item will be 15% of our gross income into retirement.  This step is going to require the same discipline as the other Baby Steps because it’s a such significant portion of ours and anyone’s income.  We’re excited, though, and next week we’ll have a post reviewing the Baby Step #4 chapter of The Total Money Makeover [affiliate link].

(Need a budget template?  We’ve got you covered and the templates include 2010.)

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