The Truth Behind The Dave Ramsey Baby Steps
These steps do help lots of people get out of debt. There is no denial in this. He does a great job just going in there with a black and white no-nonsense way of helping people out.
Here are The Dave Ramsey Baby Steps
Baby Step #1: Save $1000 for an Emergency: Saving $1000 for an emergency is an excellent start to help you fight off debt and create a path to wealth.
Baby Step # 2: Pay off All Debt via Debt Snowball (except your house) The Debt Snowball Method is a way of getting rid of debt but focusing on the smaller debts first and using the psychological win as a way to push you to the finish line. So you organize your debt by smallest to most significant and start knocking off the smallest first.
Baby Step #4: Invest 15% of Your Income for Retirement Paying off debt is enormous, but even a little money going towards your retirement can really help the compounding snowball make things move.
Baby Step #5: Save For Your Children’s College Fund
Dave recommends you save for your children’s college fund in a 529 plan. It is an excellent plan to help save for them to get to college.
Baby Step #6: Pay off Your House Early This is a considerable debate about paying off your house early. This was not the early 90s when interest rates were high. The interest rates are pretty low these days, and there is no compounding interest on the mortgage.
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