After the Baby Steps: A Christian Family's Investing Roadmap

You paid off the non-mortgage debt. You built the emergency fund. Maybe you even paid off the house. Financial Peace University gets millions of families out of debt — but the wealth-building and generosity chapters get about an hour of class time. This guide goes deeper, with the faith angle most financial planning resources skip.

Where most graduates get stuck

The early baby steps are mechanical: list debts, attack smallest first, throw every extra dollar at them. The process is clear. Baby Steps 4 through 7 involve judgment calls and questions that don't have one right answer:

Which retirement accounts does the 15% go into, and in what order?
What happens to the tithe when income doubles?
Should we actually pay off the mortgage early if the rate is 3%?
Is my 401(k) invested in companies we'd never knowingly support?
How do we build genuine generosity into the retirement plan — not just keep tithing?

Those questions deserve real answers.

Baby Step 4: How to actually invest the 15%

Invest 15% of household gross income for retirement. That's the right target. The order in which you invest it matters more than people realize.

1. Capture the full employer match first

If your employer matches 401(k) contributions — say, dollar-for-dollar up to 4% of salary — maximize that before anything else. A 100% instant return on matched dollars beats every other investment decision you will make this year. This comes before the Roth IRA, before the HSA, before everything.

2. Max the Roth IRA next

Once the match is captured, put the next dollars into a Roth IRA. In 2026, you can contribute up to $7,500 per person, or $8,600 if you are 50 or older.¹ For a married couple, that's up to $15,000 per year in Roth accounts, growing and withdrawing tax-free.

The stewardship case for Roth over traditional is simple: paying taxes on seed rather than harvest gives you certainty. You know what the government gets now; you don't know tax rates in 30 years. The mathematical case depends on your current versus expected future tax rate — for most families under $200,000 in household income, Roth wins.

2026 Roth IRA income limits (married filing jointly): Full contribution allowed below $242,000 MAGI. Contribution phases out between $242,000 and $252,000. No direct contribution above $252,000 — but the backdoor Roth strategy (contribute to a non-deductible traditional IRA, then convert) is available at any income.¹ The pro-rata rule can complicate this if you have existing pre-tax IRA balances; a fee-only advisor can walk through whether it applies.

3. Return to the 401(k) for the remainder

After the employer match is captured and the Roth IRA is maxed, put remaining retirement dollars back into the 401(k) until you reach 15% of gross income. In 2026, the employee deferral limit is $24,500 — rising to $32,500 if you are 50 or older, or $35,750 if you are 60–63 under the SECURE 2.0 super catch-up provision.²

If your 401(k) plan has poor fund options and you have already maxed the Roth IRA, some planners prefer a taxable brokerage account over over-contributing to a bad plan. A fiduciary advisor can review your specific fund lineup.

Baby Step 5: College funding, and what the program doesn't say

The Ramsey program recommends an Education Savings Account (Coverdell ESA) first — $2,000 per year per child, tax-free growth — and a 529 after that. In practice today, the Coverdell's low cap and income phase-out ($190,000–$220,000 MFJ) make it secondary for most middle-to-upper-income families. The 529 is the primary vehicle.

What Christian families often overlook about 529 plans:

K–12 tuition. Up to $10,000 per year from a 529 can pay for private school — including Christian schools. Many families use this feature to fund faith-based elementary and secondary education they otherwise couldn't afford.
529-to-Roth rollover. Under SECURE 2.0, up to $35,000 of unused 529 funds can roll into a Roth IRA for the beneficiary after the account has been open 15 or more years.³ This largely eliminates the "what if my child doesn't go to college" risk.
Retirement first. The 15% retirement target should be fully funded before heavy 529 contributions. You can borrow for college. You cannot borrow for retirement.

Baby Step 6: Pay off the mortgage — the math and the theology

Ramsey says pay it off. Critics say that at low interest rates, expected investment returns exceed the guaranteed return from paying down the mortgage. Both arguments have merit.

For paying off the mortgage	For investing instead
Guaranteed, risk-free return equal to your rate	Historically, equity real returns (~7%) exceed most mortgage rates
Freed cash flow dramatically expands giving and savings flexibility	Tax-advantaged retirement space (401(k), Roth) is use-it-or-lose-it each year
No debt means no forced sale in a job loss or health crisis	Below ~5%, expected investment value exceeds extra mortgage payments over time
"The borrower is slave to the lender" (Proverbs 22:7)	Mortgage interest may be deductible for itemizers with large balances

A useful rule of thumb: above a 5–6% mortgage rate, accelerating payoff is a sound financial decision, not just an emotional one. Below 4%, the math clearly favors continuing to invest in tax-advantaged accounts first. Between 4% and 5%, the answer is genuinely personal — and risk tolerance, income stability, and generosity goals all belong in that conversation.

The often-missed point: paying off a mortgage eliminates a $2,000–$4,000 monthly payment. For a stewardship-minded family, that cash flow freed up for giving may be the most compelling argument of all — and one a secular financial planner will rarely make.

Baby Step 7: Build wealth — but toward what?

The secular version of Baby Step 7 is: accumulate more. Max the accounts. Build the net worth. Retire well.

The stewardship tradition adds a question most financial planners never ask: How much is enough?

Ron Blue, one of the founders of Kingdom Advisors and a major influence on the biblical-stewardship tradition behind Financial Peace University, spent decades helping Christian families answer exactly that question. His framework distinguishes between what you need to live, what you need to pass on, and what you should hold in reserve — and what surplus remains for generosity. For families who have lived through the baby steps and are building real wealth, the surplus often becomes substantial.

What stewardship-driven Baby Step 7 planning looks like in practice:

A targeted retirement number, not "as much as possible." What income do you actually need in retirement? Work backwards from that figure with a specific savings target — rather than just maxing every account indefinitely.
A giving plan that grows with wealth. A 10% tithe is a starting point, not a ceiling. Families at Baby Step 7 are often in a position to give at 15%, 20%, or more — and the tax-efficient tools for doing so change the math dramatically. Use our giving-capacity calculator to see what percentage your budget can actually sustain, and the tithing calculator to see what different commitment levels look like in dollars.
Legacy planning with intentionality. What passes to children, and what passes to ministry? A properly structured will, charitable bequest, and beneficiary designations should reflect actual values — not the default inheritance your state's probate law assigns.

The question every Ramsey graduate should ask about their 401(k)

Here is one most Financial Peace University classes do not cover: the broad-market growth funds typically recommended are not screened for values. Unless you have specifically requested otherwise, your 401(k) almost certainly holds companies in gambling, alcohol, weapons manufacturing, adult entertainment, or abortion-related services.

A growing category of biblically responsible investing (BRI) funds screens explicitly for these exposures. Fund families like Timothy Plan (since 1994), Eventide, GuideStone, and Inspire offer portfolios with explicit screens. Some 401(k) plans now include one or more of these options.

If yours doesn't, you still have leverage: max the Roth IRA first, where you can choose any BRI fund freely. For the 401(k), direct contributions to the most neutral options available while keeping values-aligned investments in the IRA. For a full breakdown of the tradeoffs — fees, tracking error, and how to screen a fund — see our biblically responsible investing guide.

When a financial advisor is worth it

The Ramsey program is excellent for getting out of debt and building the investing habit. Where it tends to underprepare graduates for the decisions ahead:

Tax efficiency at higher incomes. The match → Roth IRA → 401(k) order works cleanly until you hit income limits, Roth phase-outs, and backdoor pro-rata rules. At household income above $150,000–$200,000, tax planning becomes complex enough that mistakes are genuinely expensive.
Giving efficiency. A donor-advised fund, a qualified charitable distribution from an IRA after age 70½ (see our QCD calculator), or gifting appreciated stock rather than cash can double or triple the charitable impact of the same dollar. Most families do not know these tools exist.
Estate and legacy planning. Beneficiary designations, trust structures, charitable legacy instruments, and the mechanics of passing wealth intentionally — these require professional help to execute correctly.
Values-aligned portfolio construction. Knowing which BRI funds are available across accounts, understanding their fee structures relative to plain index funds, and building a coherent allocation — this is where a Certified Kingdom Advisor® earns their fee.

The advisors we match are fee-only fiduciaries — paid by you, not by product commissions — who understand generosity as a planning goal, not a budget line to minimize. Many hold the CKA® designation alongside a CFP®. A first conversation is free.

Ready to connect? Tell us about your household and we'll match you with a faith-aligned, fee-only advisor. Get matched — free, no obligation.

Sources

IRS: 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500 — Roth IRA contribution limit $7,500 for 2026; catch-up $1,100 for age 50+ ($8,600 total); income phase-out $242,000–$252,000 MFJ, $153,000–$168,000 single. Published November 2025.
IRS: Retirement Topics — 401(k) and Profit-Sharing Plan Contribution Limits — $24,500 employee deferral 2026; catch-up contribution $8,000 (age 50+); super catch-up $11,250 (ages 60–63, per SECURE 2.0 § 109).
IRS: Retirement Topics — IRA Contribution Limits — Traditional and Roth IRA limits and phase-out rules for 2026; 529-to-Roth rollover rules under SECURE 2.0 § 126.
Kingdom Advisors — Certifying body for the Certified Kingdom Advisor® (CKA®) designation; stewardship planning framework referenced in the Baby Step 7 section. Ron Blue co-founded the organization.

Tax values current as of June 2026. Contribution limits reflect IRS Rev. Proc. 2025-67 for tax year 2026.

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