JayBee

Any of ya'll follow Dave Ramsey? A friend of mine turned me on to him. Seems pretty legit but I do have a question about his process.

For those unfamiliar he has this deal called 7 baby steps -

1 - Save $1000 emergency fund
2 - Pay off all debt except house
3 - Save 3-6 months of expenses in an emergency fund
4 - Invest 15% of income in retirement
5 - Save for children's college fund
6 - Pay off home early
7 - Build Wealth


So basically on my own I was already doing some of this so my question has to do with procedure. I have steps 1,3 & 4 done. Step 5 does not apply. My only debt other than the house is a car loan. I have enough money to pay off the car, however before coming across Dave's advice I was going to put that money towards my mortgage. I'm not the most mathematically minded guy but I assumed I would save a ton in amortization over the long term.

If I was to follow Dave's advice I would pay the car off and then work toward paying off the mortgage. It makes sense but as previously stated wouldn't the money go a longer way over the long term if I threw it at the mortgage? What about putting into retirement savings?

Also, paying the car off would take my 6 month emergency fund down to 1-2 months... I know I can build it back up at a faster rate but... its kind of relaxing to know that I have 6 months of bills in the bank. That begs the question though - what can I do with that money to earn back on the short term? something that I can access the money if need be? rather then just sit in my bank at 2%

Thanks