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Ask Dave

Taking A Breather

Dave tells Aaron which Baby Steps take the most gazelle intensity, and where they can let up a little.

QUESTION: Aaron’s wife either gives a lot of positive or negative feedback, depending on which Baby Step they are on. They make $125,000 a year before bonuses. How can he keep the ball rolling on all the Baby Steps? He doesn’t need to, as Dave explains.

ANSWER: You only keep up the focused, gazelle intensity through Baby Step 3. Basically, until you get out of debt and have a fully funded emergency fund, the house is on fire. But once you’re past that step, now we’re down to the wealth-building phase of the Baby Steps, which is retirement and college and paying off the house. After Baby Step 3, that when there’s a relaxing point. That’s when you save up money and go on a nice vacation or save up and buy a better car. You put those things on hold while you have the gazelle intensity.

What’s killing you guys is this: You guys were spending more than $125,000 a year. You can’t live like that anymore. You now have to live on less than you make. Being sloppy and spending more than you make is easier than being organized and living on less than you make. There will be a tremendous release and relief when you get through Baby Step 2. Living on less than you make and being responsible is harder in the short term but better in the long term. It forever changes you; it’s like growing up. You can never make enough to not limit yourself.