Compounding Interest vs Following the Baby Steps # 3 to the Tea 🤔💭

Compounding Interest vs Following the Baby Steps to the Tea 🤔💭

Lately, I’ve been thinking a lot about compounding interest and the incredible advantage it can offer over time 📈✨. Being in my late 30s, I feel the pressure to make the most of the time I have left. The idea of letting even small investments grow exponentially over the years is hard to resist—it feels like a way to get ahead without constantly hustling for more money 💸.

Yet, here’s the challenge: I’m still not done with Baby Step #3, and that makes me pause. For context, Baby Step #3, as taught by Dave Ramsey, is all about building a fully funded emergency fund—3 to 6 months of living expenses tucked away safely 🛟💰. It’s designed to give peace of mind, a buffer for life’s unexpected events, and the freedom to make decisions without panic. And honestly, starting this step has already lifted a huge weight off my shoulders. For the first time in a long while, I feel calmer, knowing that my essential expenses for the next few months are covered 🧘‍♀️🏠. In other words, I’ve experienced it firsthand, and it’s solid proof that the Baby Steps really work.

And yet, the pull of compounding interest is strong. Time is one of the few things we can’t get back, and the thought of letting my money grow over the years makes me wonder if I’m “missing out” by focusing on safety first. I think, “If I start investing now, even a small amount could grow into something significant decades from now.” That feeling is hard to ignore.

✅Check out my blog post on how I started my emergency fund here.

But then I remind myself of the peace that comes with following Baby Step #3. There’s something about knowing that your basic needs are covered that no chart, no projection, and no percentage can ever replicate. It’s a type of freedom that’s hard to explain—a calm that allows you to think clearly, make decisions without panic, and plan for long-term growth 🧘‍♀️💖.

This has made me realize that there’s a reason the Baby Steps exist. They’re not arbitrary—they’re a proven system for building both security and wealth sustainably. While compounding interest can help grow money, its purpose is really different with the Baby step # 3. 

So, what’s stopping me from following the Baby Steps to the tea? Honestly, nothing. I’ve already felt the relief and confidence that comes from Baby Step #3, and I know it works. I could continue investing and chasing compounding gains, but the safety and stability I’ve gained by focusing on my 'gap fund' emergency fund are invaluable 🛡️💰.

At the same time, the thought of letting my money grow while I wait is hard to ignore. I know that once my emergency fund is fully in place, I’ll be able to invest with confidence and take full advantage of compounding interest. But for now, I’m left wondering: is it wiser to prioritize safety and follow the steps exactly as outlined, or should I try to balance both—building my emergency fund while still investing a bit here and there?

I don’t have the answer yet 🤷‍♀️💭. For now, I’ll continue along currently what I am doing—hoping that when the time comes, I’ll make the choice that’s right for my future.

That is it for now. Thanks for reading all the way 🙏💛