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7 Dave Ramsey Baby Steps – Start Saving & Become Debt Free

First, let’s start by introducing Dave Ramsey to those who may not have heard of him. For those who may not know Dave Ramsey, he is an American financial guru who is the author of some of the best-selling books. He has also hosted a nationally syndicated radio show. Dave Ramsey was born in Tennessee but now lives in the Nashville area with his family. In 2006, Dave started the Dave Ramsey Baby Steps which teaches people how to become debt-free. According to him, you can become debt-free by first saving money in order to pay off your debts.7 Dave Ramsey Baby Steps – Start Saving & Become Debt Free

The Baby Steps theory posited by Dave Ramsey is categorized into five stages which are – $1,000 emergency fund, pay off all debt using the debt snowball – save for retirement – save for your child’s education or buy your own home (or both) – start giving 10% of income away as tithes and offerings.

Dave Ramsey’s 7 Baby Steps


Baby Step 1 – Save $1,000 in an emergency fund

The first step in Dave Ramsey’s baby step plan in saving $1000 in a savings account. This baby step plan is targeted at people who are living paycheck-to-paycheck. This implies that they constantly spend the money they earn on day-to-day expenses. They live from one payday to another without any room left over to save some of what they make.

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Baby Step 2 – Pay Off All Debt (Except the House) Using the Debt Snowball

The Dave Ramsey Baby Steps 2 plan recommends paying off all debts except the mortgage or other home loan. You can do this using what is known as a debt snowball. This means that you start with the smallest debt and use any extra money to pay it down as fast as possible. After you have paid off one of these lower-balance accounts, roll its balance into another account like it (or add $50 if necessary) to help you keep chipping away at higher balances.

The whole essence behind the Dave Ramsey baby steps plan is that by focusing on smaller debts first, people are able to feel victorious after each victory. This leads them towards continuing their good progress instead of becoming discouraged as a result of not seeing results right away.

Baby Step 3 – Save 3-6 months of expenses in an emergency fund

Have you ever thought of including emergency savings in your budget? If you have never included it because you can’t yet afford it hear this. If you never have an emergency fund, then the reality is that your credit cards or personal loans will be your go-to source when something unexpected crops up. This could mean that even a small problem could quickly spiral out of control into a full-fledged financial disaster if you don’t have any money saved up to cover for emergencies.

As such, Dave Ramsey recommends that you save three to six months’ worth of expenses as soon as possible. You are to keep this money separate from funds used on other parts of life (i.e. groceries). The reason behind this strategy is to keep you fortified against whatever events come up at work, home, or otherwise.

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Baby Step 4 – Invest 15% of your household income for retirement

The fourth step recommends that you save three to six months’ worth of expenses as soon as possible. You also have to keep this money separate from funds used on other parts of life (i.e. groceries). The essence of this strategy is so that no matter what event comes up at work, home or otherwise, you’d be better equipped for it.

To ensure success with Dave Ramsey baby steps is to ensure you have a safety net in case anything goes wrong. Typically, things will eventually go wrong if you don’t prepare ahead of time. If you prepare ahead of time, when eventualities crop up, your credit cards can handle things until you get back up on your feet.

Baby Step 5 – Save for your children’s college fund

The fifth step posits that you save for your children’s college fund ahead of time. At this stage, you have cleared all your debts and are now saving for your children’s college fund. You have to understand that this is not an easy step to take. It will require a lot of work on your part as a parent to pull this off. However, if you start it early enough, you can achieve it.

Baby Step 6 – Pay Off your home early

This Dave Ramsey baby step 6 actually depends on your current financial situation. However, if you are doing Dave Ramsey’s Baby Steps, then this is something you have to achieve. What paying off the house early means, is that there are no mortgage payments to make. It also offers more cash for retirement. You can achieve this just by refinancing or just making extra monthly payments.

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Baby Step 7 – Build Wealth and Give

At this stage of the Dave Ramsey baby steps, you must have been out of debt and become rich. Here, the goal is not to have a lot of money in your bank account but rather the ability to help others.


The whole idea behind the Dave Ramsey baby steps plan is to get you out of debt and into financial freedom. If you are able to follow judiciously all the steps mentioned above, you may just be on your way to financial freedom. You too can live a life free of debts you know!!!



  • Christian Ehiedu

    I write for Educational, Financial, technology, and social media content producers. I am deep into doing credible research that will benefit you the reader. You can contact me on Tumblr, Chris Adam Facebook, Shopfortool Pinterest Account. I am a Technician and a woodworker. I have lots of years of experience in Technical work. I did some per time work at an electrical store. Having gathered lots of experience in the use of various tools link Mechanic Tools, Woodworking Tools, Power Tools, and Plumbing tools, I decided to put up this blog to help advise intending buyers or new biz on the right tools to buy on the market. My social Handle:

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