Pros and Cons of Dave Ramsey's Baby Steps

The Dave Ramsey baby steps are the foundation of his approach to help individuals and families become debt-free.

People say that the beauty of the baby steps is the overly simplified approach. Many individuals shy away from the personal finance space because it’s difficult to understand the concepts.

The concept here is relatively simple – save $1,000 as fast as you can, any way you can.

Dave Ramsey Baby Step 1: Save $1,000 For Your Starter Emergency Fund

Pros of Baby Step 1

More than anything, this step is about getting a quick win early. This baby step allows you to check the box to say you were able to complete one of the baby steps in a short period of time.

While saving $1,000 still checks that first box, you could more easily get derailed if an emergency comes in at more than $1,000.

Cons of Baby Step 1

Dave Ramsey Baby Step 2: Pay Off Debt Using the Debt Snowball

The goal is to put as much money as you can towards the lowest dollar amount debt and pay it off as fast as possible.

Dave Ramsey Baby Step 3: Save 3 – 6 Months in an Emergency Fund

This step involves taking all the money you were using to pay down debt and putting it in an emergency fund.

Swipe Up To Learn More About the 7 Dave Ramsey Baby Steps