The total money makeover summary6/2/2023 ![]() ![]() ![]() It’s about behavior modification over math. “The reason we list smallest to largest is to have some quick wins,” Ramsey writes. Even Ramsey admits that the debt snowball isn’t mathematically optimal. Critics note that it makes more sense to pay off high-interest debt first. This is the most controversial part of Ramsey’s plan. When that debt is gone, do not alter the monthly amount used to pay debts, but pay all you can toward the debt with the next-lowest balance. Throw every penny you can find at the smallest debt.Ĥ. Pay the minimum payment on all debts except the one with the smallest balance.ģ. List your non-mortgage debts from lowest balance to highest balance.Ģ. Once you’ve built some savings, it’s time to tackle your debt. If you have a cash cushion, life’s mishaps won’t force you deeper into debt. This money is to be used only for emergencies: car repairs, medical bills, etc. ![]() Step one: Save $1,000 cash as a starter emergency fundīefore you do anything else, says Ramsey, you must save a $1,000 emergency fund. By following these in order - and not moving on to the next until the current step is complete - readers gradually progress from debt to wealth. At the core of The Total Money Makeover are Ramsey’s seven “baby steps” to financial freedom. ![]()
0 Comments
Leave a Reply. |