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

Dave Ramsey is one of the biggest advocates of getting out of debt. His 7 baby steps are a budget plan to help you get out of debt and start saving money. The Baby Steps can be broken down as follows: pay off all your debts, save $1,000 in an emergency fund, create a budget that you follow, invest 15% of your income in Roth IRAs and Roth 401k’s, pay off your house early through extra payments, and enjoy life!

Many families find themselves in debt, whether it’s from credit cards, student loans, or medical bills. Regardless of the cause, you may feel as if your financial situation is unsalvageable—that you’re doomed to stay buried in debt forever. This isn’t true!

Are you in debt? If so, Dave Ramsey knows how hard it can be to get out of debt when the cards are stacked against you. He’s helped countless people who were just like you—people who needed to improve their finances, even if they had little money to work with at the time—and today he wants to help you too.

How to Save Money and Become Debt-Free Following Dave Ramsey’s 7 Baby Steps

Have you ever wanted to pay off your debt and live a life free of financial stress? Then Dave Ramsey’s seven baby steps are a great place to start! In this guide, you’ll learn how to save money, spend less and get out of debt, so you can reach your financial goals and make smart financial decisions in the future. You’ll learn how to create your own action plan based on Dave Ramsey’s seven baby steps and how the first step toward saving money is cutting out small expenses—which will help you to kickstart your savings plan!

Do you want to become debt-free but don’t know where to start? Dave Ramsey has outlined seven steps that can help you get on the right path to becoming debt-free and saving more money than ever before. Learn more about Dave’s baby steps, including how to save money, in this helpful guide.

Dave Ramsey, the popular host of the radio show The Dave Ramsey Show and author of seven bestselling books, has developed what he calls his 7 Baby Steps to Financial Peace. The steps are meant to help people get out of debt, save money, and achieve overall financial peace. Learn more about how to start saving and become debt-free following these steps with this guide on how to start saving and become debt free following Dave Ramsey’s 7 Baby Steps!

Step 1 – $1,000 Emergency Fund

It’s important to start saving as soon as possible, and one of the best ways to do that is by putting $1,000 in a savings account that you won’t touch. This way if anything happens where you need money immediately, it will be there for you. But remember – don’t spend this money unless absolutely necessary! Make sure your bank will give you a decent return on this money. You can also set up an automatic transfer from your checking account to your emergency fund every month.

Step 2 – Pay off Credit Card Debt

The old adage don’t use your credit card as an ATM has never been more true than today. The average household with a credit card carries $15,000 in debt. So the first thing you should do to become debt free is pay off that high-interest debt. According to Dave, if you can only make the minimum payments on your credit cards each month, stop using them! Instead of making those small payments and keep adding interest and fees on top of what you already owe, take out a new loan or savings account and start attacking this debt. Pay it off by tackling one of those expensive cards at a time (probably one with the highest interest rate) until they’re all paid up.

Step 3 – The 60% Solution

The 60% Solution means you should spend no more than 60% of your gross income on housing, transportation, food, and clothing. The rest can be saved for retirement or to pay off debt. This is a good place to start if you are struggling with your finances. You don’t have to go into full-blown savings mode like I did in order to make progress. There’s always going to be some sort of spending that isn’t considered essential—food out with friends or buying the latest trendy item online. The 60% Solution helps you prioritize where your money goes, so you can keep saving while still enjoying life.

Step 4 – Automate Savings

Automating your savings is an essential step in the process of becoming debt free. It will put money in your pocket every month, and it will make sure you have a strong financial foundation to build on. The best way to automate saving is through payroll deduction or by setting up automatic transfers from your checking account into a high-interest savings account. You’ll want to set aside 10% of each paycheck for emergency funds before you set aside anything else for bills, food, or clothing.

Step 5 – Invest 15%

Dave recommends investing 15% of your income. This is not just for retirement savings but to also build an emergency fund and have money to invest in other opportunities. You need to save at least $1,000 in an emergency fund before you can start saving for retirement. Once the emergency fund is established, you should move on to saving for retirement and any future investments or goals you may have.

Step 6 – Downsize to a Smaller Home

Downsizing to a smaller home is the sixth step on the Dave Redmon Baby Steps. This step is about giving up the American Dream of having a large house with a big yard, and instead focusing on saving money and becoming debt free. The idea behind this step is that in order to build wealth, you need to first get rid of all your debt, then start saving money. So by downsizing your home, it means you’ll have fewer mortgage or rent payments and more money for savings.

Step 7 – College Funding for Children

Dave recommends saving for college through a 529 plan. To open one, you will need to contact your state’s financial aid office and ask for an application. You can then fill out the application and mail it in with your deposit. The best part about this is that many states have tax deductions for depositing into these funds, so by doing this you are able to save money on your taxes in addition to saving for college.


Dave Ramsey’s Baby Steps are a great way to get out of debt and start saving for the future. After following these steps, you will be in a better position financially and be able to achieve your dreams. It may seem like a lot of work now, but it’ll pay off in the long run. When you follow these baby steps, you will feel more confident about your financial situation and know that no matter what happens tomorrow or next week, you’re not going to have an issue with money.

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