Paying Off Debt

Dave Ramsey’s Baby Steps

March 28, 2006

I love personal finance and have, therefore, read and listened to lots of financial experts. No one has impacted our personal finances as much as Dave Ramsey. I find other experts interesting and maybe picked up a pointer or two or have something I already know reinforced but Dave Ramsey has actually impacted our finances in measurable ways.

Part of this is because I can both read Dave and listen to him. That’s an extra dose of reinforcement and it’s hard to really “get” Dave fully unless you can listed to him. But the main reason that his philosophy has had such an impact on our finances is the baby steps.

There are seven baby steps in Dave’s Total Money Makeover and they sum up his complete financial philosophy. They’re not perfect. But they take abstract ideas like debt elimination and building wealth and put concrete steps to them.

  • Baby Step 1: Save $1000 in a starter emergency fund
  • Baby Step 2: Start the debt snowball
  • Baby Step 3: Finish the emergency fund (3-6 months of expenses)
  • Baby Step 4: Invest 15% of your income for retirement
  • Baby Step 5: Save for college
  • Baby Step 6: Pay off your home mortgage
  • Baby Step 7: Build Wealth

We’re still on Baby Step 2 and, to be honest, have been there a while. But we have consistently paid down debt and I know we’re in a better financial position today because of the Baby Steps.
















  1. You hit it right on the nose, bub. The Baby Steps are the way to go. It takes big-time focus to make your payoffs; keep at it and you’ll deep-six your debt soon enough! Great job.

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