#7 Baby Step 6: Pay off your home early.

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Figuring the Figures: Understanding Dave Ramsey's Baby Step 6

Host: ZtikMan

Introduction:

Welcome to "Figuring the Figures," the podcast where we break down personal finance concepts and make them easier to understand. In today's episode, we'll be discussing Dave Ramsey's Baby Step 6, which is all about paying off your home mortgage. We'll cover what Baby Step 6 is, why it's important, and how to achieve it. So, let's dive in.

Segment 1: What is Baby Step 6?

Baby Step 6 is the step where you focus on paying off your home mortgage early. After completing the first five baby steps, you should have no debt other than your mortgage. The goal of Baby Step 6 is to become debt-free, including your mortgage.

Segment 2: Why is Baby Step 6 important?

Paying off your mortgage early has several benefits. First, it frees up a significant portion of your monthly budget, which can be used towards saving for other financial goals, such as retirement or your children's education. Second, it reduces the amount of interest you pay over the life of your loan, saving you thousands of dollars in the long run. Finally, being debt-free, including your mortgage, can provide peace of mind and financial security.

Segment 3: How can you achieve Baby Step 6?

Achieving Baby Step 6 requires discipline and commitment to paying off your mortgage early. Here are some steps you can take to achieve this goal:

1. Set a goal: Determine how much you need to pay off your mortgage early and set a goal to achieve it. This can be a dollar amount or a specific time frame.
2. Review your budget: Review your monthly budget and identify areas where you can cut back to free up extra cash to put towards your mortgage.
3. Consider refinancing: Refinancing your mortgage can help lower your interest rate and reduce your monthly payments, making it easier to pay off your mortgage early.
4. Make extra payments: Make extra payments towards your principal whenever possible. This can be a lump sum payment or an additional payment each month.
5. Consider bi-weekly payments: Switching to bi-weekly payments can help you pay off your mortgage faster by making an extra payment each year.

Conclusion:

Achieving Baby Step 6 can be a significant financial milestone and provide peace of mind and financial security. Paying off your mortgage early frees up a significant portion of your monthly budget, reduces the amount of interest you pay over the life of your loan, and provides a sense of accomplishment. Remember to set a goal, review your budget, consider refinancing, make extra payments, and consider bi-weekly payments to achieve Baby Step 6. Thanks for tuning in to "Figuring the Figures," and we'll see you next time.

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