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 #5 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 5 – Money Map Destination 5
What does the Baby Step say?
- College funding.
What does the Money Map say?
- Buy affordable home.
- Begin prepaying home mortgage.
- Begin investing wisely.
Observations and Questions
- As a reminder, Baby Step 4 told us to begin investing 15% of income into Roth IRAs and pre-tax retirement plans. In this 5th Baby Step we are to fund college for the kids. Dave’s advice throughout each step is to complete that step before moving to the next step. So, with all the debt gone, an emergency account saved and 15% of income dedicated to retirement the focus becomes saving for education.
- If you remember, the Money Map Destination 4 had a step within to begin saving for children’s education. Once this savings has begun (along with retirement and major purchases), the Money Map tell us to buy an affordable home and begin prepaying the mortgage.
- I think it’s important to note a few key differences that are becoming clear after going through this exercise. The Baby Steps seem to draw clear lines around what has to be completed before moving to the next step. It mainly uses milestones to tell you when a step should be completed in the grand scheme of things. The Money Map uses the word “begin” a lot (retirement, children’s education, investing, etc.) and many of these are completed in later phases. The Money Map seems to provide action items (specific steps or action that should be taken) in each phase. Again, I think a lot of the action items in Dave’s Baby Steps are assumed, i.e., create a budget.
- The Money Map scripture in this destination is Ecclesiastes 5:13-15. “Savings are put into risky investments that turn sour…he man who speculates is soon to where he began—-with nothing.”
What are your thoughts on this phase? Are you convinced yet that a particular approach (Baby Steps or Money Map) work best for you? Which do you think at this point provides you the clearest guidance for your situation?
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