Dave Ramsey Baby Steps + Free Printable Checklist

Grab the free Dave Ramsey Baby Steps printable below!

What Are the Dave Ramsey Baby Steps?

The Baby Steps are the foundational financial steps that Dave Ramsey created to teach people how to win with money. Many people like to follow these steps because they can help people get out of debt and take steps to leave a legacy for their families. Read about the steps and then download the free Baby Steps checklist to help you track which Baby Step you’re on!

Baby Step 1- Save $1000 for your starter emergency fund

The first step is to save your first $1000 as quickly as you can to create your starter emergency fund. If you already have at least $1000 in the bank, then you’re done with this step!

Baby Step 2 – Pay off all debt (except the house) using the debt snowball

The second step, which can be the hardest or longest step for some people, is to pay off all debt, besides your mortgage if you have one, using the debt snowball.

If you have more than $1000 in your savings, put the extra money towards the smallest debt you have.

To do the debt snowball, list your debts in order of amount from smallest to largest. Pay the minimum payments for all of your debts each month, and put any extra money you can towards the smallest debt. As you pay off each debt, roll the amount of money you paid toward those debts into the payment toward the next biggest debt, until all of your debts are paid off!

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

The third Baby Step is to save 3 to 6 months of expenses to create your fully-funded emergency fund. If you already had no debt, you could skip Baby Steps 1 and 2.

​Dave Ramsey suggests parking this fund in a high-yield savings account.

Baby Step 3b – Save a downpayment to buy a home

I decided to include this step, even though it’s not always mentioned. Baby Step 3b is to save a downpayment if you want to buy a house. 

Baby Steps 1-3b are considered “gazelle intense,” which means you are trying to finish them as quickly as possible and put as much money towards them as possible. Also, you only do one at a time.

Once you are finished with these steps, Baby Steps 4, 5, and 6 are more relaxed and can be done simultaneously. 

Baby Step 4 – Invest 15% of your household income in retirement

​The fourth Baby Step is to invest 15% of your household income in retirement. Dave Ramsey has a lot of good advice on which funds to invest in when you are ready to start this step.

Recommended: Dave Ramsey Recommended Budget Percentages

Baby Step 5 – Save for your children’s college fund

The fifth step is to save for your children’s college fund. This step is not required, but if you have younger children, it can be a great goal to strive for. Even if it’s just a small amount, it can help your kids start off adulthood without taking on debt.

Baby Step 6 – Pay off your home early

The sixth step is to pay off your home early. Up until now, you are supposed to just pay the house payment (if you have a mortgage) each month. Now, it’s time to buckle down and finish paying off your house. Once you pay off the house, you can experience real financial freedom.

Baby Step 7 – Build wealth and give

​Finally, Baby Step 7 is to continue building wealth and give generously. You can still give in Baby Steps 1-6, but now you can “live and give like no one else,” as Dave says!

Read more about the Baby Steps here: https://www.ramseysolutions.com/dave-ramsey-7-baby-steps

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