Dave Ramsey's Baby Steps - For the UK
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- เผยแพร่เมื่อ 28 มิ.ย. 2024
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Dave Ramsey is a genius, and has helped millions of people achieve financial peace. But sometimes his teachings are difficult to translate to the UK - Here's my attempt to do so.
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Thanks for this fantastic way of explaining Dave Ramsey's 7 baby steps. I need to save for my children's future. I already paid off my mortgage.
Saving grace of a video! Thank you!! Dave Ramsey showed up in my life and I’m grateful. Even better to have it translated for us Brits :D
Glad to be of service - enjoy! Loads more at meaningfulmoney.tv and also the Facebook group is a great place to get help: meaningfulmoney.tv/community
Thanks Pete. I'm a big fan of Dave Ramsey so it's good to think about the baby steps from a UK point of view. I'm currently working on baby steps 4 5 and 6.
Excellent video on the baby steps and you did a fantastic job of making them relevant to the UK. My respect sir!
Thank you!
Great video. I follow Dave Ramsey and this is pretty much the interpretation that I've taken of the baby steps for the UK.
Thank you for this. I love Dave Ramsey, but being in the UK this is soooo good. Thank you
Glad it was helpful Peter!
Great video 👍 Dave Ramsey suggests as a step 0 before you start it to write a budget with your exact ingoings and outgoings to make sure you are using every penny correctly
Worked for me. Thanks for helping others build wealth!
Great video! I'm American and have lived in the UK for a decade. A couple minor adjustments to what you've said: baby steps 4, 5, and 6 are concurrent. I think a starter emergency fund of £500 is more the equivalent of $1k because everything is just more expensive in the US (and salaries are higher).
Also I don't think you need a 6 month emergency fund 3 months will do as we have the NHS so getting ill is not such a financial burden
If you have a workplace scheme you should join it as soon as they let you as the younger you start the better and it multiplies over the years and you benefit from the employer contribution over that time as well. So in the uk, pension contributions to a workplace scheme ( if it exists) should be part of baby step zero along with the budget !!
I used the Dave Ramsey baby steps and cleared £13k of debt in 9 months… I drank the coolade and joined the cult!! 😂
Seriously, when I did my debt free scream in 2019 I wept for joy
Thanks for explaining
Great idea doing this. I’ve been watching Dave Ramsey for years and have always wondered what the UK version of his baby steps were! Lord willing, I will be on baby step 3 soon!
You got this!
This was so useful, thanks!
Really glad, VL - thank you!
fantastic job
This is really helpful, thank you 🙏🏼
I’m glad, Susan - thanks for watching!
Just found this.Familiar with Dave Ramsey but the retirement thing needed explaining.
I’m so glad to have found your channel. I’ve just finished recording my own video about this which I was about to post - your video is awesome! So looking forward to looking through all your other videos...
Hello VWFL! Please DO post your own video! The more people share this stuff the better and there will be people who take it better from you than from me! Look forward to watching! (Just realised I've posted this comment from my personal YT account, but it's Pete from MeaningfulMoney here! Keep in touch...
Pete Matthew thanks, dude! I have posted it on my channel. Looking forward to catching up on all your videos old and new! Thank you!
Thanks for this Pete. Been following your podcast for a while and have bought (and read your book)!
... and thanks for what you do. I think I’m on the path and will continue to listen to the podcast!!
Boom! Cheers Mark!
Discovered your channel. Working my way through back catalogue 🙂
Great to have you with us, William!
Great video.
Great video! Thank you. Have been watching/listening to Dave for over two years now and feel blessed to have accidentally discovered him on TH-cam. I would like to know how one goes about adjusting for property price conversions from U.S to U.K. What I mean by this is: Generally, U.S homes are larger and cheaper, so how as a Brit do I purchase a larger home that doesn't amount to more than a quarter of my take home pay? My American counterpart likely lives in a home that has the square footage of the home that I 'need' to upgrade to, yet doesn't spend the percentage of their monthly wage that I would need to to purchase it on U.K soil. I'm not expecting you to answer this, it's just a flaw that I see in Dave's method when applied to the U.K housing market. Other than this, I'm a fully signed up member to Dave's teachings and he has made my life so much better.
Yeah, I get your point, Steve. It's important to try and apply the gist of Dave's teaching, while making amendments for the differences in the American market and the UK one. Student loans are a case in point, but so is this. There's massive disparity in house prices even within the UK, so even that needs navigating carefully. Thanks for watching and commenting!
One thing you might not realise is the extra costs of home ownership and living in the states, OK a lot of housing is per square foot cheaper I guess than UK, maybe as the country is bigger? plus there is a large rental population. My son has a house in New Jersey, 25 mins from new york city and I would guess if it was 25 mins from London probably three times the price it is in USA. However his "council tax" is $10,000 pa, then there is health insurance which is not cheap, he was on a family deal via father in law and that was over $2K a month. So its hard to relate the two, the good thing in the states is they tie in the mortgage rate typically for the life of the mortgage so that cost is known V our traditional variable rate
Great video and explanation Pete, i'm on baby step 2. Great advice.
Keep going Adrian - the future is bright!
Dave ramsey suggested savings for a home between step 3 and 4
Nice one Pete! Thanks for this.
In your book, Dave signed off on the statement that UK student loans are not loans at all? I find that extremely hard to believe.
Dave didn't sign anything off in the book, except for my description of the Debt Snowball and the fact that I credited him there. I thought it courteous to ask his team to read that section of the book, and they gave it their blessing. Other than that, they don't sign off on anything i say because I'm not affiliated with them in any way.
Great video. Thanks for this. I have this question regarding Emergency Fund i.e. where do i park it apart from my bank account? Are there any low risk easy access MF's that you can suggest?
Great video. I have savings, my company pays in my pension, I have no debt other than a mortgage so I guess that starts me off at baby step 7? Any tips? Should I pay more into my pension before making over payments on my mortgage? Thank you.
Hi Tyson - Scroll down on this page to question 5 - meaningfulmoney.tv/2014/04/23/mmp057-your-questions-answered/
I feel you missed the case where the employer doesn't match or pension contributions but you're a high rate earner and salary sacrafice into pension anyway is a good strategy to make a large lax saving (in exchange for putting a chunk of your income out of your hands for a long te of course). How does that shape up Vs just as much as your employer will match and the rest in a LISA?
Really good video! Do you know if you can have a work pension and then open one with a bank as well? Also, if I have a help to buy ISA that I pay into would that exclude me from getting a lifetime ISA? Really helpful video for the UK, I’ve subscribed to your channel! 👍🏼
Hi Amber. You can definitely open another pension in top of your work pension as long as you stay within the annual contribution allowance. Don’t open a pension with a bank though - there are much better options around.
You can have both a H2BISA and a LISA, and you can transfer one into the other (H2B -> Lifetime).
MeaningfulMoney that’s great thanks, I wasn’t sure I could pay into both LISA AND H2BISA in the same tax year but I will look into it, thank you 😊
One step that may be worth adding is buying a funeral plan. Given the sad fact that we all have to die one day and that funeral costs just keep on rising, it would be prudent to fix the price by buying a plan in advance.
Current students pay 6% interest at the moment (subject to change), and if your kids are going to strive to be high earners, it will cost them a bomb to repay. It is an unfair system. It is best to pay for their uni fees to help them avoid debt and start to build their wealth earlier.
I appreciate the sentiments, but your comments are incomplete. Not all students pay 6% on their loans - it depends on what stage of their studies they're at, and if they have graduated, what they are earning. Higher earners pay more interest. Everyone has to make their own judgement call on this, but I maintain my stance that the UK student loan system is about the best loans system you're ever going to get, and for most of us, it is better to make use of the system than pay the £50,000-plus - money which could be left invested...
@@PeteMatthew This government tuition fees are outrageous and to make students pay back at interest, how can this be the best student loan system? What you are saying is applicable to most people who earn below £40k after they graduate. However, for a high earner it is not the same rules. This government punishes students for wanting to be successful! So if my children were high earners, I would prioritise paying off their student loans before investing. If not, i would ignore the student loan completely.
Is it wise to save for a mortgage using a short term investment fund or just save up cash for a down payment? Banks interest rates on savings accounts are atrocious.
No such thing as a short-term investment fund really, KTTK. Better idea is to use a LISA if it's your first property. If not, look for regular saver accounts, you can get a half decent rate there. But don't risk money you need in the short term in an investment that involves risk.
Just a question if doing this as a couple would you suggest having an emergency fund together or separate
Both, ideally. That’s not to say you need three times the amount, but having some money in your individual names is always a good idea, I think. Up to you, basically - no right or wrong
im not sure whether to go for a stocks and shares ISA or the lifetime ISA
Lifetime ISA is only for buying a house, or for retirement. You can get either a stocks & shares Lifetime ISA, or a cash Lifetime ISA, depending on in what timeframe you'll need the money (if you're planning to buy a house or will reach retirement age within the next 5 years, it's safest to go for the cash LISA.)
A standard stocks & shares ISA is more flexible option because (a) you can take money out of it at any time without incurring the 25% fee, and (b) the yearly limit is £20,000 (limit is £4,000 for LISA), but it doesn't give you the 25% government top-up.
I'd recommend joining the MeaningfulMoney Facebook group, where people will be able to answer your questions much more quickly: meaningfulmoney.tv/community.
How do I find your content about UK student finance that you mentioned?
Best to go to MeaningfulMoney.tv and click the learning centre. Or buy my book at Petesbook.com 😉
Please note that Scottish students have a slightly different system and the Scottish government pays the university fees. (SASS) Some students get by with that and a part time job for living expenses, especially if they stay at home and attend a local uni.
Not sure what the system is in Wales or Northern Ireland but its definitely not the same over the whole UK.
I have my £1,000 emergency fund in a standard savings account and my (currently) 4 month emergency fund in ISAs (aiming to build it up to 6 months). Is this a sensible strategy in your opinion?
Sounds good to me Steve!
I'm 4 years late on this video so don't know if this will be seen but I'm halfway through baby step 2, end of year I will be debt free. I have no pension, self employed at 43, should I just put all money into an isa savings? Not sure what benefit putting into a pension and an isa (ps I know about 20k limit a year) thanks for any advice.
I’d say both. Start with 5% of your earnings into a pension, then anything else you can afford to save into an ISA. I did a video called pensions vs ISA which might help you - link at the end of this comment. But I wanted to say a massive well done - what you’ve done is not easy and you deserve congrats for your achievement to become debt free. Keep going!
th-cam.com/video/y-4s1wqwQ7k/w-d-xo.htmlsi=wC-vwVx8zT1WKWni
@MeaningfulMoney wow thanks alot for the advice and video. Really great info. (Wish I would of known about all this bloody stuff 20 years ago lol, but I'll drum it into my kids) thanks again.
How safe is a pension really?
Very.
Save for higher education..... I feel you do still need to have pot going for this if, as parents you're earning enough, the government will reduce their contribution and you are expected to make up the rest. The maintenance loan for my daughter did not fully cover her accommodation let alone food, travel etc.
Anyone else felt like they've been 'soending like congress' this black Friday? 😂
So glad I came across your channel and this video. You answered a big question I had on student loans ha ha
Thanks for being here, SA!
@@MeaningfulMoney Thank you :)