Dave Ramsey’s BABY STEPS to Becoming DEBT FREE!

0.1: Commit to NO DEBT EVER AGAIN. (Mortgage is possible exception)

0.2: Talk with spouse and get him/her on the same page as you concerning finances.

0.3: Do a written budget.

0.4: Temporarily stop all retirement contributions.

0.5: Get current on all the basics (You MUST have Food, Utilities, Shelter, Basic Transportation).

0.6: Amputate “toys” (bikes, boats, ATV’s etc) if your snowball will take more than 12 months.

0.7: Get a second job if Baby Emergency Fund will take more than 30-90 days.

0.8: Get current on all bills.

BS 1.0: Save #1,000 in Baby Emergency Fund.

1.1: Shred or cut up ALL credit cards. (You have an EF now, no NEED to keep those CC’s!!)

1.2: Get Health Insurance NOW.

1.3: Get Life Insurance NOW.

1.4: Amputate cars that you can’t pay off within 24 months. Buy a safe older vehicle: $2-3K range.

1.5: Consider raising insurance deductibles to $500 or $1000 and dropping full coverage on paid for used car.

1.6: Draw up a will.

BS 2.0: Do a debt snowball, paying all of your debts from lowest balance to highest.

2.1: DEBT FREE except the mortgage-you can take your first vacation if you can pay cash for it.

BS 3.0: Save 3-6 months EXPENSES in Fully Funded Emergency Fund.

3.1: Start car replacement fund.

3.2: Save 20% for home purchase OR pay down existing mortgage to the point you can drop PMI.

3.3: Start furniture or other non-essential stuff replacement fund.

3.4: Move up in car if you still feel the need to (must pay cash for it)

BS 4.0: Start contributing 15% of your paycheck to retirement.

BS 5.0: Save for kids college fund. (Educational Savings Account - ESA)

BS 6.0: Pay off house early.

BS 7.0: Live like no one else since you have lived like no one else.-Give and Build Wealth!