Financial Security Steps - Welcome - Balanced FI

The Financial Security Steps: Welcome!

The Financial Security Steps give you beginner’s guidance

If you’re interested in improving your finances and you’ve done any research, you’ve probably heard of Dave Ramsey. He’s likely the most well-known personal finance guru, and his 7 Baby Steps have helped millions of people get out of debt and eventually become financially free. I’ve created the Financial Security Steps as a compliment to the Baby Steps.

Dave Ramsey isn’t always right though

Dave Ramsey’s Baby Steps are:

Save $1000 for a starter emergency fund

Use a debt snowball to pay off all debt except your mortgage

Save 3-6 months’ expenses to fully fund your emergency fund

Invest 15% of your income into retirement

Save for your children’s college

Pay off your mortgage

Build wealth & give

He has TONS of great advice, but I disagree with some of it. My family situation (raising a child with special needs on a single full-time income) impacts my view.

A $1000 starter emergency fund just isn’t enough

In July, we spent $1800 on repairs for two of our vehicles. We’re in debt-payoff mode, so we don’t have a vehicle repair sinking fund set up yet. Instead, we used our $2000 emergency fund, and that was barely enough.

The Baby Steps are too broad for many people to even begin

It can be overwhelming to look at that list and figure out the first tiny step to take. How exactly do you find the money for the starter emergency fund? Where do you find the money each month to put toward the debt snowball? You need to budget, but how?

The Ramsey network has extensive training materials on these topics, but it’s a lot of information. I’m here to help break it down even more.

Compounding interest makes earlier retirement savings important

Ramsey recommends halting all retirement investing while paying off debt (baby step 2) to have more money to throw at your debt. I think it’s important to contribute something to retirement as soon as possible, to make compounding interest work for you.

The Financial Security Steps are your beginner’s guide

Let me help you get started, with a simplified plan for your path to financial security… and join my family as we follow the steps too! I’m sharing, openly and honestly, our journey through debt payoff to financial security, using the Financial Security Steps.

This process compliments Dave Ramsey’s Baby Steps, with added security for families that make less or have crazy {medical} expenses. The final step of the Financial Security Steps will put you at roughly Baby Step 5 or 6.

The goal of the Financial Security Steps is not financial independence, but rather financial security. Read more about my philosophy regarding financial independence vs financial security. You could very well become financially independent later and never have to work again, but financial security is a more attainable stepping stone.

Begin your journey

As I post each step of the Financial Security Steps, I will update this list with links to each detailed article.

1. Track Expenses

2. Save a Mini Emergency Fund + Begin Retirement Savings

3. Save for Recurring Expenses

4. Calculate Your Net Worth

5. Create a Debt Payoff Plan

6. Create a Budget

7. Pay Off Debt

8. Save an Emergency Fund of 6 Months Expenses

9. Increase Retirement Contributions

10. Choose Your Next Financial Goal

Balanced FI

Download your printable version of the Financial Security Steps here:

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top