The Baby Steps is not just an investing guide, but also a lifestyle guide for financial security. The Baby Steps Dave Ramsey will give you the tools you need to achieve your financial dreams.

These are the 7 baby steps that Dave Ramsey believes the average person should follow to become financially independent.

If you’re happy with your job and your income, you may not be interested in this blog post. If you’re tired of living paycheck to paycheck and want to ensure you’ll never suffer from financial instability, you’ll want to pay attention to this blog post.

Who Is Dave Ramsey?

Dave Ramsey, the expert on personal finance and author of the bestselling book “The Total Money Makeover“, is back with a brand new book: The 7 Baby Steps.

What are dave ramsey’s “baby steps”

Ramsey took his ideas from the financial world and applied them to personal finance, and his work has seen a massive increase in popularity and acceptance. His philosophy is that everyone can and should live a financially secure and happy life.

Dave Ramsey Baby Steps

Seven important tips for building wealth:

STEP 1. Save $1,000 for your starter emergency fund.

STEP 2. Pay off all debt (except the house) using the debt snowball.

STEP 3. Save 3–6 months of expenses in a fully-funded emergency fund.

STEP 4. Invest 15% of your household income in retirement.

STEP 5. Save for your children’s college fund.

STEP 6. Pay off your home early.

STEP 7. Build wealth and give.

Baby step 1. Save $1,000 for your starter emergency fund

It’s hard to imagine anything more important to our well-being than having an emergency savings account. And yet, many of us aren’t putting money aside to cover unexpected expenses. That’s where an emergency fund comes in—a stash of money you’ve saved up for when life throws you a curveball. But how much should you save? For this step to make sense, you need to know how much you need to save for your situation.

Baby step 2. Pay off all debt (except the house) using the debt snowball

The concept of the debt snowball is now very well known, but many people still don’t know that debt is like a snowball that accumulates as the debt keeps growing.

When you think about all the debt you’ve accumulated over time, it can be devastating. It can make you feel helpless, hopeless, and even hopelessly lost. But there is hope! “Baby step 2 Dave Ramsey” can help you achieve true financial freedom while learning the basics of personal finance.

For most people, the best way to tackle debt is to attack it in small chunks, and this is why we recommend the debt snowball. The debt snowball is a great way to start paying off debt because it allows you to pay off one debt at a time, while simultaneously making progress on the other debts.

It has been said that debt is like a monkey on your back. You can’t get away from it. The debt monkey is always there, and you never know when it’s going to jump onto your back and make you do something you might not want to do. The debt monkey is a little like a baby, and like a baby, it needs to be fed and cared for. It is important to feed and care for your baby debt monkey, because when you do, it will stop bothering you, and it will ensure that you will never again have to worry about your debt monkey. The debt snowball is a great way to feed and care for your debt monkey.

Baby step 3. Save 3–6 months of expenses in a fully-funded emergency fund

Congratulations! You’ve made it to the next step.

So you’ve already paid off all your debt. You’re debt-free! And you’re free to live the life you want. But what about the future? What about if something goes wrong? What if you need to pay for your kids’ college or some other expensive need? Do you have enough money set aside to cover it? Or do you need to start an emergency fund?

For sure. ​

The “baby step 3” may seem daunting, especially to those who still have a large debt or a significant amount of unpaid bills. You may also have a lot of other obligations, including a family to take care of, a mortgage payment, a car payment, and a job to pay for.

The good news is you don’t have to do everything at once. You can start with something small, like saving 3 to 6 months of expenses.

Baby step 4. Invest 15% of your household income in retirement

Before getting started, it’s important to know that there’s no guarantee you’ll be able to retire early. You may be able to retire at age 65 or you may not ever be able to retire—no one can tell you with any accuracy whether this is the case with you.

But you can make an educated guess, and investing 15% of your household income in your retirement accounts in your 20s, 30s, 40s, and 50s can help you guess with more accuracy in your 50s, 60s, and 70s.

You can put off saving for retirement or you can invest in a 401(k) plan, but the only surefire way to have enough money to live on when you are at retirement is to have a savings plan. If you don’t save before you retire, you’re kicking yourself in the rear for not doing anything at all.

Baby step 5. Save for your children’s college fund

Believe it or not, investing money in your children’s college fund is one of the most important things you can do. As you’re probably aware, many families will need to pull money out of their college fund to help pay for their kid’s living expenses after they’ve graduated, particularly if they went to a more expensive college.

The cost of college continues to rise, and most of us know we’ll need to save ahead of time to pay for college when the time comes. The good news is that when you start saving early, you can save more.

Start by knowing how much you need to save and then start thinking about ways to make saving easier once you’ve decided how much to save.

Baby step 6. Pay off your home early

One of the best ways to make long-term money is to pay off your home early, and what better time to start than now? It’s no secret that house prices are rising, which means the best time to buy is now. If you are considering buying a home, now is the best time to pay off your mortgage. The best part about paying off your home early is that you are “laying the foundation” for wealth, because you are building up equity slowly, rather than having it all at once. Equity is what you have leftover after all your debts are paid.

Baby step 7. Build wealth and give

You know what people with no debt can do? Anything they want! The last step is the most fun. You can live and give like no one else. Keep building wealth and become outrageously generous, all while leaving an inheritance for your kids and their kids. Now that’s what we call leaving a legacy!

Dave Ramsey

With no debt, robust emergency savings, a funded retirement, and savings for your kids’ education, you’ll be in the envious position of building wealth. You’ll also be in the position to give to causes that are meaningful to you. With no financial burdens left to tie you down, you can live life exactly as you wish without worrying about money.

Marissa Geannette, clevergirlfinance.com