A Groundhog Day Lesson for Financial Freedom

Financial Baby Steps

Groundhog Day is definitely one of our more peculiar holidays.


Each February since 1840, legendary weather forecasting groundhog Punxsutawney Phil emerges from his winter burrow in Pennsylvania. If it’s a sunny day and he sees his shadow, there will be six more dreary weeks of winter weather. But, if it’s a cloudy day and Phil does not see his shadow, an early spring is on the way.

This strange holiday even inspired a 1993 rom-com film about a TV weather reporter named Phil (played by actor Bill Murray) who gets trapped in a time warp and has to slog through the same unbearably monotonous day over and over again. He makes small changes in his behavior every day, but still can’t move beyond Groundhog Day until he has a genuine change of heart.

So, what does all this have to do with achieving your financial goals? It’s about seeing the future you want – whether it’s an early spring or early retirement – and making an honest commitment to small changes that can help you pay off debt and save for the future.

Popular author and radio host Dave Ramsey is widely regarded for his disciplined approach to personal and household finances and strict debt management. His “7 Baby Steps to Financial Peace” is a good place to start if you want to jump off the Groundhog Day running wheel.


  • Baby Step 1: $1,000 cash in a beginner emergency fund – Save $1,000 as fast as you can, and put it in a bank account that is separate from your checking account. This rainy day fund will prevent you from going deeper into debt the next time your car battery dies or your roof starts to leak.


  • Baby Step 2: Use the debt snowball to pay off all your debt but the house – Never heard of the snowball debt reduction strategy? Here’s what you do. List all of your debts (minus your mortgage) in order from smallest to largest. Pay off the smallest debt first while paying the minimum amount on your other debts. Then add what you were paying on the first debt to the next one. As each debt is paid off, your cash flow increases, eventually making it easier to pay off the bigger debts.


  • Baby Step 3: A fully funded emergency fund of 3 to 6 months of expenses – Calculate how much you need to live on for 3–6 months. Work toward saving that amount in a simple checking account or money market account to be financially prepared for a significant emergency such as losing a job or serious illness or injury.


  • Baby Step 4: Invest 15% of your household income into retirement – Ramsey writes, “With no payments and a full emergency fund, the money you were using to attack debt can now help build your future. Take 15% of your gross household income and invest it first into matching company 401(k) plans and then Roth IRAs. Even a couple hundred dollars a month invested now can make you a multi-millionaire.”


  • Baby Step 5: Start saving for college – Two options to save money for your children’s college fund are a 529 college savings plan or Education Savings Account (ESA). Both offer tax advantages and allow you to save money in an individual investment account.


  • Baby Step 6: Pay off your home early – By the time you reach this baby step, the only debt standing between you and financial freedom is your mortgage. Ramsey compares it to running a marathon, saying it takes the average family five to seven years to pay off their mortgage early. His advice: “Stay focused and intense, and keep a steady pace.”


  • Baby Step 7: Build wealth and give generously – This one may seem counterintuitive, but there’s a profound saying by Nobel Prize winner and former British Prime Minister Winston Churchill: “You make a living by what you get; you make a life by what you give.” You’ve worked hard to reach this final baby step, and what better way to celebrate than to give generously and leave an inheritance for the next generation?


If these baby steps still seem daunting, a biweekly loan acceleration payment strategy can help you pay off your debts faster (baby steps #2 and #6) while saving money and building equity (baby steps #1, #3 and #5). To learn more, click here.


Celebrate this Groundhog Day by taking the first step on the road to greater control of their financial future.

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