Ramsey Everyday Millionaires Where Does Extra Cash Go When You’re on the Baby Steps?
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Sep 17, 2025 The discussions revolve around finding a balance between saving and enjoying life while paying off debt. Personal anecdotes make budgeting for fun experiences relatable. A couple's journey highlights strategic financial steps to manage extra cash along with mortgage debt. They face dilemmas about handling a potential inheritance, learning to prioritize mortgage repayment and retirement savings over new investments. The emphasis is on disciplined financial strategies that lead to long-term wealth.
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Follow The Baby Steps Order
- Filter extra cash through the Baby Steps and prioritize debt first, then emergency fund, then investing 15% of income.
- After 15%, throw extra money at kids' college funds and paying off the house before other goals.
Young Couple With Large Home Equity
- Lara and her husband are mid-30s with only a $400K mortgage and about $600K home equity on a $1M house.
- They have employer pensions and retirement accounts (TFSAs, RSPs) but no market investments.
Invest 15% Before Extra Mortgage Payments
- Increase retirement investing to 15% of household income before accelerating mortgage payoff with extra cash.
- Then apply any remaining extra money to pay down the house principal to reach a paid-for home goal by a set age.