Dear Dave,

I make $38,000 a year and I’m about to start Baby Step 3. It took 14 months to pay off $8,000 in debt for Baby Step 2, so I’m wondering how long it should take to save up my three to six months of expenses. I’ve also not done a lot towards retirement. I’m 52, and I’m worried about that. How can I stay motivated in the Baby Steps and handle retirement worries?

— Donna

Dear Donna,

The general time frame I look at for saving up a fully funded emergency fund is six months to a year. Your take-home pay should be about $3,000 a month, so three to six months of expenses will probably be in the neighbourhood of $8,000 to $10,000. If it took you about a year to pay off that much in debt, then it should take about a year to accomplish this.

But if you start building retirement right now and have an emergency, you know what you’ll use? You’ll use your retirement. That’s why the emergency fund comes before retirement in the Baby Steps. The average household income in America, which is often two incomes, is around $52,000. I would challenge you to think about and work towards what you could be doing at age 60 that will make you that much or even more.

You’re probably working really hard for that $38,000. In your 50s, if you’re starting over — or if you start making a lot more — we call that an “encore career”. So I want you to start thinking fresh again.

Don’t quit today, but you’re going to be making $38,000 eight years from now unless you start aiming at something else. All this is as much an answer to your retirement fears as trying to leapfrog and start doing retirement without an emergency fund.

Put your emergency fund in place over the next 12 months, and start doing some goal setting and thinking. Maybe you’d like to own your own company by that time.

Ask yourself, “What would I do if I could do anything?” Because you know what? You can do anything!

— Dave

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Dear Dave,

I’ve heard you talk about the importance of giving using the phrase “outrageous generosity.” But at what point does outrageous generosity become foolish overspending?

— Josiah

Dear Josiah,

This is a good question. Your first mandate is to take care of your own household. The Bible says if you don’t do this, you’re worse than an unbeliever. So start with your own family. Are you able to take care of the basic lifestyle and needs of your family? The pursuit of giving shouldn’t interrupt the food on your own family’s table.

The Bible also says in the house of the wise there are stores of choice food and oil, but a foolish man devours all he has. You need to be saving, too, in order to be biblically wise. If you spend everything you make, or, for that matter, if you gave away everything you make on an ongoing basis, it would be foolish.

There are individual times where people may be called to give in an extreme way, but I’m talking about a pattern of living or way of life over an extended period of time. If you just say you’re going to give away your whole income and let the government support you at the expense of your family, that’s not biblical. And it’s not a wise way to live your life.

—Dave

Dave Ramsey is America’s trusted voice on money and business, and CEO of Ramsey Solutions. He has authored seven bestselling books. The Dave Ramsey Show is heard by more than 11 million listeners each week on more than 550 radio stations and digital outlets. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.