The Seven Baby Steps
Dave Ramsey can help you find financial peace one step at a time. Some of this may seem a little odd, but it has worked for millions. It can work for you too. Here's the process:
Baby Step 1 - $1,000 to start an Emergency Fund
An emergency fund is for unexpected life events. This is a small safety net that will help address those events while working on getting rid of debt. Learn more here
Baby Step 2 - Pay off all debt using the Debt Snowball
This is one of those areas that goes against what many teach. List your debts, excluding the house, starting with the smallest balance. Don’t worry about interest rates unless two debts have similar payoffs. If that’s the case, then list the higher interest rate debt first. Learn more here
Baby Step 3 - 3 to 6 months of expenses in savings
Now that you've paid off all your debt except for the house, it's time to continue that momentum and start throwing all your "extra" money at building a full emergency fund. Learn more here
Baby Step 4 - Invest 15% of household income into Roth IRAs and pre-tax retirement
When you reach this step, you’ll have no payments—except the house—and a fully funded emergency fund. Now it’s time to get serious about building wealth. Learn more here
Baby Step 5 - College funding for children
While you are saving for your retirement, you can start saving for your children's future too. Learn more here
Baby Step 6 - Pay off home early
Hopefully you that gazelle intensity have become a habit in your life and you can start putting some of that extra money (after your 15% investment + college funding) toward paying off your last debt. You are getting closer to realizing the dream of a life with no house payments. Learn more here
Baby Step 7 - Build wealth and give!
It’s time to build wealth and give like never before. The possibilities are endless now! It's time to live like no one else, because you have lived like no one else! Learn more here
