Review:

Baby Step #1: $1,000 cash in the bank as an emergency fund

Baby Step #2: Get out of debt using the debt snowball

Baby Step #3: Fully funded emergency fund

Baby Step #4: Start your retirement investing

Have you noticed all this time we haven't saved for kid's college or retirement? The problem is, if you try to do the investing before you do these three baby steps,  emergencies will take out your retirement savings and debt will eat up your income and take away your ability to aggressively save for retirement. 

So now here we sit after the first three baby steps with no payments, and we have this emergency fund, rainy day fund, as a buffer between us and life. Now we can do our investing right.

We (Dave Ramsey) suggest you invest in your retirement at a level of 15%.

You can easily do 15% if you have no payments but a house payment. Do not do anymore than 15% at this time. Now, what I (Dave Ramsey) use are good growth stock mutual funds with long track records and spread it across four types:

Growth and Income

Aggressive Growth

International

A Regular Growth Fund

And I (Dave Ramsey) put 25% of my retirement in each of those 4 good mutual funds with long track records. Don't miss out on your long-term investing.  "In the house of the wise are stores of choice food and oil, but a foolish man devours all he has" - Proverbs 21:20

Next Step: Baby Step #5: Save for College

Book: Purchase Dave Ramsey's "The Total Money Makeover Workbook" at our Crossroads eStore