Do you like the Dave Ramsey Baby Steps or the Crown Money Map? Dave Ramsey created the Baby Steps and Crown Financial Ministries created the Money Map for prioritizing and setting financial goals.
If you’re just joining, this is article #4 in a series about The Baby Steps and Money Map. I invite you to follow along with me as I walk you through both approaches, discuss my observations, hopefully, stimulate your thinking and raise some questions. I’ll round out the series with some summary thoughts.
Baby Step 4 – Money Map Destination 4
What does the Baby Step say?
- Invest 15% of income into Roth IRAs and pre-tax retirement plans.
What does the Money Map say?
- Begin savings for major purchases (home, auto, etc.)
- Begin saving for retirement.
- Begin saving for children’s education.
- If you want to start your won business begin saving for it.
Observations and Questions
- We see some key differences between Destination 4 and Baby Step 4. The Baby Steps are more specific on what amount should be contributed to retirement.
- The Money Map recommends savings across four areas including retirement. Note: Baby Step 5 is college funding.
- I think it’s important to have a plan to save for major purchases beyond retirement and children’s education. Once the emergency savings is fully funded (after debt is paid off) it’s important to create a car savings each month. Otherwise, when the need for a car presents itself, one will be forced to go back into debt. It’s also important to have seperate savings contributations for a home if that hasn’t already been purchased.
- The Money Map scripture in this phase is Proverbs 21:5. “Steady plodding brings prosperity.”
What are your thoughts on this phase? Do you think the Baby Steps left out important areas of savings, or were they meant to be high level and convered in Dave’s book, The Total Money Makeover: A Proven Plan for Financial Fitness.
Photo by Ann Cleaver.
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