Where We Go From Here

I previously wrote that we aren’t done yet. We paid off our debt sure, but that doesn’t mean we can quit working and buy a beach house just yet. We are using Dave Ramsey’s Baby Steps as our guide.

1. $1,000 to start an Emergency Fund
2. Pay off all debt using the Debt Snowball
3. Three to six months of expenses in savings
4. Invest 15% of household income into Roth IRAs and pre-tax retirement
5. College funding for children
6. Pay off home early
7. Build wealth and give!
Invest in mutual funds and real estate.

Since paying off our debt we have been able to save enough to fully fund our emergency fund with 6 months worth of expenses. We’ve also been able to put quite a bit into savings for a down payment on a house. It’s been over 18 months since we sold our house, moved and started renting while we looked for a house.

Where does that leave us?

*Step #4. Invest 15% of household income for retirement.

Currently we are still investing 4.5% and saving the rest for the downpayment. I waffle back and forth on whether we are doing the right thing. I’m not sure if we should continue to do this, or invest the full 15% and save the rest for a downpayment? I know that investing a full 15% every month would significantly lower the amount we could save and take us longer to save up for a house. What would Dave Ramsey suggest? Not sure. What do you suggest?

I do know that I, at the very least, want to continue investing the 4.5% into the 401k. My husband’s employer matches that and I would hate to lose out on that free money.