Does Dave Ramsey recommend you keep saving during step 2? I have reached the $1000 emergency fund and I'm ready to go on to step 2 but I'm not sure if I'm supposed to keep saving or not. One place he says you pay yourself second after God but I'm not sure if that is after step 2. Anyone know?

I've looked in the book and I'm still not sure.

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AMY

The way I always understood it (and the way we do it here) is to save the $1000, then pay off debt for step 2. In step 2 your supposed to take money out of 401k matching if you have it there, so as far as I'm concerned that means no savings! After you get Step 2 done, then I think you can start matching again and start saving up for your 3-6 months of expenses!

I'm interested to hear what everyone else thinks though, it's been a while since I read the book so I could have read it wrong!

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Nope! You have it right!! After saving $1000, you do your debt snowball. No retirement and no more saving....unless it is replace money taken out of the emergency fund (which really needs to be an emergency!!!). Then after your debt snowball (everything paid but the house) you build your savings to 3 to 6 months of living expenses and do 15% of your income to retirement (college for the kiddos is after this....I think!). Dave Ramsey is AWESOME!!!! Love listening to him on the radio and now he is on television!!! Woooo WHOOOOO!! He is on the Fox Business Network...around here at 8 p.m. He rocks!! My husband and I are on his plan.

im silly, i just posted a question in the chit/chat section...i don't know how to move it, it should probalby go here.

Im hoping to begin his plan ASAP!

And yes, I believe its pay off ALL debt first (except mortgage) and then build up your savings.

During baby step 2 you do not continue to save but focus on paying off debts. You do stop contributing to your 401K FOR NOW. However, do not take money out of it unless you're on the verge of bankruptcy. The taxes are terrible. I watch Dave Ramsey's show every evening and have several books. He seems to give the right advice.

he has a show on TV???? What channel????

So, You don't Start saving for again until all your debts ( besides house) are paid??

Then after that - when can you start saving for college?


I havent read the book Yet.

I think some of the ideas I hear sound Good.

But others don't make sense for us.

I believe you start saving for college (don't quote me..lol) after you have paid all debts down and maxed out retirement. I agree with you, not ALL of his steps work for us....if we had an ungodly amount of debt, i would follow it to the T. You should read it, it's a great eye opener.

Thank you - I am glad I am not the only one who isen't sold on all his Ideas.


Yes I am going to read the book - just so I can use some of the Ideas - and to know what alot of you are talking about on this board I am clueless.... so It can't Hurt!!

What is the name of the main book you reccommend I should Read??