Dave Ramsey Baby Steps
Follow these proven 7 Baby Steps to get out of debt, build wealth, and achieve financial peace. Over 6 million people have used this plan successfully.
Save $1,000 Emergency Fund
Start by saving $1,000 as quickly as possible. This small emergency fund will help you avoid going further into debt when life happens.
Action Steps:
- •Sell items you do not need
- •Work extra hours or pick up a side job
- •Have a garage sale
- •Cut expenses temporarily
Pay Off All Debt (Except Mortgage)
Use the debt snowball method to pay off all debts except your mortgage. List debts from smallest to largest and attack them one by one.
Action Steps:
- •List all debts smallest to largest
- •Pay minimums on all debts
- •Put every extra dollar toward smallest debt
- •Celebrate each victory
Build 3-6 Months Emergency Fund
Now that you are debt-free, build a full emergency fund of 3-6 months of expenses. This provides real security and peace of mind.
Action Steps:
- •Calculate 3-6 months of expenses
- •Keep in a separate savings account
- •Only use for true emergencies
- •Replenish immediately if used
Emergency Fund Calculator
Calculate how much you need for your full emergency fund.
3 months: $0 | 6 months: $0
Invest 15% for Retirement
Start investing 15% of your household income for retirement. Use tax-advantaged accounts like 401(k) and Roth IRA first.
Action Steps:
- •Start with employer 401(k) match
- •Max out Roth IRA if eligible
- •Choose growth stock mutual funds
- •Automate your investments
Ready to Start Investing?
Use our investment calculator to see how 15% investing can build your wealth.
Calculate Your Retirement →Save for Children College Fund
If you have children, start saving for their college education. Use tax-advantaged education savings accounts like 529 plans.
Action Steps:
- •Open a 529 education savings plan
- •Consider Educational Savings Account (ESA)
- •Start early for compound growth
- •Do not sacrifice retirement for college
Pay Off Your Mortgage Early
Focus on paying off your home mortgage early. Every extra payment goes directly toward principal and saves thousands in interest.
Action Steps:
- •Make extra principal payments
- •Consider bi-weekly payments
- •Apply windfalls to mortgage
- •Stay motivated with payoff calculators
Build Wealth and Give Generously
Continue building wealth through investing and real estate. Give generously to causes you care about and enjoy the fruits of your discipline.
Action Steps:
- •Max out all retirement accounts
- •Consider real estate investing
- •Give generously to charity
- •Enjoy your financial freedom
Success Stories
Sarah & Mike
Paid off $87,000 in debt
"The Baby Steps gave us hope and a clear plan. We are now debt-free and building wealth!"
James Family
Built $50,000 emergency fund
"Having a full emergency fund gives us incredible peace of mind and security."
Lisa & Tom
Millionaire net worth
"We followed the Baby Steps for 15 years and now have over $1 million invested!"
Ready to Start Your Journey?
Begin with Baby Step 1 today and take control of your financial future.