Are you looking for a financial guru that you can trust? Want to know more about Dave Ramsey? His work has publicized the popular “baby steps” method to getting out of debt and Dave Ramsey is certainly not shy of publicity himself. He’s a popular figure in personal finance and for good reason. In this article, you will learn more about Dave Ramsey and his baby steps to personal finance.
Who is Dave Ramsey?
Dave Ramsey is a personal finance personality based in Nashville, TN. First, Ramsey is radio show personality, businessman, and author. Also, Dave Ramsey is an evangelical Christian and his faith informs much of his work. In addition, Ramsey has written several books, including The Total Money Makeover. Finally, Dave Ramsey also hosted a TV show on the Fox Business Network from 2007 to 2010.
What are the Baby Steps?
Dave Ramsey’s baby steps are in order below:
Step 1 – Build up a $1000 starter emergency fund.
Step 2 – List debts smallest to largest and pay them off one by one.
Step 3 – Build up a 3-6 month emergency fund
Step 4 – Invest 14% of your income into a retirement fund
Step 5 – Save for your children’s college fund
Step 6 – Pay off your home early
Step 7 – Build wealth and give
Do the Baby Steps work?
Just like any good diet or exercise program, any program works if you stick to it. If you’re disciplined and stick to a payment schedule for your debts, you will eventually pay off your debt. If you stick with Ramsey’s plan, you are far more likely to make financial progress than if you continue no financial plan.
What are some dangers of the Baby Steps?
The most popular criticism of the Dave Ramsey baby steps is that his advice is too generic or “one size fits all”. Certainly within the realm of personal finance there are millions of variations and several different situations. Everyone’s personal finance situation is different. Other criticisms include not encouraging a large enough emergency fund while focusing on eliminating debt at the cost of building up savings. In addition, his Endorsed Local Provider program has had a checkered past. Listen to one experience with an Endorsed Local Provider here
Bottom Line: If you’re looking to get out of debt and build wealth, the baby step system is a basic and reliable method to help guide your personal finances in a positive direction.
Read more here:
How to Start a New Financial Chapter
Baby steps! We’ll get there if we stick with it for long enough. Persistence pays off in the end.
Good article Christianna. 🙂