Dave Says: Spend, Save and Give
Dear Dave,
I just finished paying off all my consumer debt in Baby Step 2. It took a long time, but I finally did it. Now, it’s time to grow my $1,000 beginner emergency fund to a full-funded emergency fund. I’ve been working on this for a while, and I’m glad I’m doing it. But I was wondering at what point can you spend, and have a little fun, when you’re following the Baby Steps plan.
Mark
Dear Mark,
Congratulations, buddy! The first couple of steps can be the hardest. I’m really proud of you for sticking with it and making it happen.
I recommend completing the first three Baby Steps before you start thinking about spending money on fun stuff. In my mind, that positions you on pretty solid ground, financially speaking. So, at that point it’s okay to have a little fun going on a vacation or buying something—reasonably priced, of course—that you’ve had your eye on.
Like you said, Baby Step 1 is saving $1,000 for a starter emergency fund. Baby Step 2 is where you pay off all debt—except your home—using the debt snowball method. In Baby Step 3, you go back and fully fund your emergency fund with enough cash to cover three to six months of expenses.
But don’t have so much fun that you forget about the other Baby Steps. Baby Step 4 means putting 15 percent of your income into pre-tax retirement plans, like mutual funds and Roth IRAs. Don’t neglect saving for college if you have kids. That’s Baby Step 5. And Baby Steps 6 and 7 are paying off the house early and building wealth and being outrageously generous. Live like no one else, so that later you can live and give like no one else.
Everyone likes having fun. And there’s nothing wrong with spending some cash if you can afford it. I just want people to make sure they have their finances in order first. Remember, there are only three things you can do with money. You can spend it, save it and you can give it away. Following my plan will allow you to do all three without putting yourself in a financial bind.
Keep up the good work!
— Dave
*Leadership and small-business expert Dave Ramsey is the CEO of Ramsey Solutions. He has authored eight national bestselling books, including EntreLeadership, and is a host of The Ramsey Show and The EntreLeadership Podcast.
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* Dave Ramsey is an eight-time national bestselling author, personal finance expert and host of The Ramsey Show. He has appeared on Good Morning America, CBS This Morning, Today, Fox News, CNN, Fox Business and many more. Since 1992, Dave has helped people take control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.
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Today is International Day of Charity!
#InternationalDayOfCharity
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You are awesome!
International Day of Charity is a day to celebrate giving back and making a difference in the world! 🌎💖 It’s a time to spread kindness and generosity to those in need, whether it’s through donations, volunteering, or simple acts of kindness. Let’s come together to make the world a better place and show how powerful love and compassion can be! 💪 #InternationalDayOfCharity #SpreadKindness #MakeADifference #GiveBack #CharityDay
How to Observe International Day of Charity
Take part by volunteering your time at an organization such as a homeless shelter, senior center, food pantry, or animal shelter. Donate food to a food bank. Give your time or money to another charitable organization. No matter how you choose to participate, you are sure to be helping to alleviate human suffering.
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More on the day
International Day of Charity, observed annually on September 5, is a global initiative dedicated to promoting and increasing the awareness and effectiveness of charitable actions worldwide. Established by the United Nations in 2012, this day highlights the importance of philanthropy and encourages people to engage in acts of kindness and support for those in need.
The day serves as a reminder of the critical role that charitable organizations and individuals play in addressing global challenges such as poverty, hunger, disease, and inequality. By focusing on charitable activities, the International Day of Charity aims to inspire people to contribute to causes they care about, whether through monetary donations, volunteering, or spreading awareness.
One of the key objectives of the International Day of Charity is to encourage individuals and communities to support charitable organizations and initiatives. This can be done in various ways, including making financial contributions, participating in charity events, donating goods, or offering time and skills to help those in need. The day also emphasizes the importance of collaborative efforts between governments, private sectors, and non-profit organizations in addressing social issues.
In addition to individual actions, the International Day of Charity highlights the impact of collective efforts in making a difference. Many organizations use this day to launch fundraising campaigns, volunteer drives, or special events aimed at raising awareness and garnering support for their causes.
Observing the International Day of Charity is an opportunity to reflect on the power of giving and the positive impact it can have on communities and individuals. It encourages everyone to consider how they can contribute to making the world a better place, whether through small acts of kindness or larger-scale philanthropic efforts. By fostering a culture of generosity and compassion, this day helps to build stronger, more supportive communities globally.