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Abstract

is when you pay off the smallest debt first, build momentum, and then tackle the second-smallest debt after that. Don’t worry about interest rates or paying several debts off at once. Instead, pay off the smallest first, know what it feels like to have paid off some of your debt, and use that momentum to fuel you moving forward.</p><h2 id="fb15">Baby Step 3: Save 3–6 months of living expenses.</h2><p id="0242">As we have all seen over the course of the last two years, life can be a little unpredictable. Millions of people have found themselves without a job and don’t know where to turn to.</p><p id="429c">This is why saving 3–6 months is important. No job is ever safe. Now, let’s hope you never need to tap into this savings account, but wouldn’t you rather be safe than sorry? Having this savings account will stop you from slipping back into debt.</p><h2 id="cd68">Baby Step 4: Invest 15% of your household income.</h2><p id="557f">Nobody wants to work for the rest of their life, but if you don’t start investing, there’s a good chance you will have to.</p><p id="9ed7">The sooner you start investing, the more your money will compound (which makes you more money). And since you’ve paid off all of your debt, investing 15% shouldn’t be all that difficult.</p><h2 id="6296">Baby Step 5: Save for your children’s college fund.</h2><p id="b193">College is one of the biggest time and financial commitments we will ever have to make. And the sad part is that we are telling 18-year-olds to sign up for college without thinking about how it might impact their future.</p><p id="e5d1">The average college grad comes out owing about $30,000 in student loans. This does not take into account the amount they are going to have to pay in interest. So, before they even find their first “adult” job, our children are already going to be$ 30,000 in debt.</p><p id="cfa8">Don’t you want to help your children succeed? Yes, encourage them to get an education, but put your money where your mouth is. Start saving now so that your child doesn’t have to sit with $30,000 in student loans. Give them the gift of education so they can start their adult lives out on a debt-fre

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e path.</p><h2 id="14e0">Baby Step 6: Pay off your home early.</h2><p id="0001">Once you have paid off all of your debt (aside from your home), it’s time to tackle your mortgage. Just think about how nice it would be not to have a mortgage payment due every month. If you pay off your mortgage early, that’s just more money you can throw into retirement. It also means it’s more money you can have fun with now!</p><h2 id="1130">Baby Step 7: Build wealth and give.</h2><p id="f3b8">Build, build, build. If not for you, build your wealth for future generations. Help your children start college funds for their kids. Help your children pay off debts of their own. Also, do good in the community around you and give back to others.</p><p id="12de">With money, you’re not going to be able to take it with you when you die. Don’t be selfish with your money. Do good for others and help those around you as much as you can.</p><h2 id="491a">Why Dave Ramsey’s 7 Baby Steps Work</h2><p id="6e42">Dave Ramsey has helped nearly 6 million people get their financial situation under control, so it’s no question that his baby steps work.</p><p id="7258">But why do they work?</p><p id="3773">Having gone through the baby steps myself, I believe they work because they all build off of each other. You’re not trying to build Rome in a day, but you’re laying the foundation for the rest of your life.</p><p id="080c">Ramsey doesn’t suggest doing the most difficult task first, simply because he knows people will get burned out and will slip back into older habits. Instead, he has you start small (like a baby) and work your way up. Once you start and continue to make strides, then you move to the next hardest challenge. As is the case for most of us, the harder the challenge, the less likely we are to actually start.</p><p id="3c3e">If you are experiencing financial difficulties right now, consider implementing Dave Ramsey’s 7 baby steps in your life and get yourself out of debt. Who knows, maybe you will be one of the 6 million who Ramsey has helped. It’s not going to be easy, but just remember, you first need to take a step before you run a marathon.</p></article></body>

Why Dave Ramsey’s 7 Baby Steps Actually Work

They can help you get out of your current financial pinch.

Photo by Pixabay: https://www.pexels.com/photo/abundance-achievement-bank-banknotes-534229/

There’s really no way to sugarcoat it… the world is in an economic downfall right now. Millions of individuals are struggling financially and don’t know how they are going to ever get out of debt.

If this is you, maybe it’s time you turn to the financial experts.

I started following Dave Ramsey about three years ago when I was $50,000 in debt. I had an $18,000 car loan, and another $33,000 in student loans. It felt like I was going to be paying on these loans for the rest of my life. To make matters worse, I was paying thousands extra in just interest.

Once I started listening to Dave Ramsey, it was game on. I focused on my financial goals and was completely out of debt in two years. While I don’t follow Dave Ramsey anymore (more on that in a later article), the baby steps actually work. They are called baby steps for a reason — they are steps anybody can start taking to get out of difficult financial situations.

Here are Dave Ramsey’s 7 baby steps.

Baby Step 1: Save $1,000 for an emergency fund.

This is pretty basic, but it’s the first step. If you want to get out of debt, you need to stop putting yourself in debt. That starts with building an emergency fund you can turn to in the case of EMERGENCIES.

Going out with your friends on the weekend is not an emergency. Buying new clothes or dinner is not an emergency. You should only use this money when something comes up like a medical emergency, your car breaks down, etc.

Baby Step 2: Pay off all debt using the debt snowball method.

The debt snowball method is when you pay off the smallest debt first, build momentum, and then tackle the second-smallest debt after that. Don’t worry about interest rates or paying several debts off at once. Instead, pay off the smallest first, know what it feels like to have paid off some of your debt, and use that momentum to fuel you moving forward.

Baby Step 3: Save 3–6 months of living expenses.

As we have all seen over the course of the last two years, life can be a little unpredictable. Millions of people have found themselves without a job and don’t know where to turn to.

This is why saving 3–6 months is important. No job is ever safe. Now, let’s hope you never need to tap into this savings account, but wouldn’t you rather be safe than sorry? Having this savings account will stop you from slipping back into debt.

Baby Step 4: Invest 15% of your household income.

Nobody wants to work for the rest of their life, but if you don’t start investing, there’s a good chance you will have to.

The sooner you start investing, the more your money will compound (which makes you more money). And since you’ve paid off all of your debt, investing 15% shouldn’t be all that difficult.

Baby Step 5: Save for your children’s college fund.

College is one of the biggest time and financial commitments we will ever have to make. And the sad part is that we are telling 18-year-olds to sign up for college without thinking about how it might impact their future.

The average college grad comes out owing about $30,000 in student loans. This does not take into account the amount they are going to have to pay in interest. So, before they even find their first “adult” job, our children are already going to be $30,000 in debt.

Don’t you want to help your children succeed? Yes, encourage them to get an education, but put your money where your mouth is. Start saving now so that your child doesn’t have to sit with $30,000 in student loans. Give them the gift of education so they can start their adult lives out on a debt-free path.

Baby Step 6: Pay off your home early.

Once you have paid off all of your debt (aside from your home), it’s time to tackle your mortgage. Just think about how nice it would be not to have a mortgage payment due every month. If you pay off your mortgage early, that’s just more money you can throw into retirement. It also means it’s more money you can have fun with now!

Baby Step 7: Build wealth and give.

Build, build, build. If not for you, build your wealth for future generations. Help your children start college funds for their kids. Help your children pay off debts of their own. Also, do good in the community around you and give back to others.

With money, you’re not going to be able to take it with you when you die. Don’t be selfish with your money. Do good for others and help those around you as much as you can.

Why Dave Ramsey’s 7 Baby Steps Work

Dave Ramsey has helped nearly 6 million people get their financial situation under control, so it’s no question that his baby steps work.

But why do they work?

Having gone through the baby steps myself, I believe they work because they all build off of each other. You’re not trying to build Rome in a day, but you’re laying the foundation for the rest of your life.

Ramsey doesn’t suggest doing the most difficult task first, simply because he knows people will get burned out and will slip back into older habits. Instead, he has you start small (like a baby) and work your way up. Once you start and continue to make strides, then you move to the next hardest challenge. As is the case for most of us, the harder the challenge, the less likely we are to actually start.

If you are experiencing financial difficulties right now, consider implementing Dave Ramsey’s 7 baby steps in your life and get yourself out of debt. Who knows, maybe you will be one of the 6 million who Ramsey has helped. It’s not going to be easy, but just remember, you first need to take a step before you run a marathon.