DAVE RAMSEY'S BABY STEPS - What We DIDN'T Follow While Becoming Debt Free (and Why)

Dave Ramsey has laid out the baby steps very simply. If followed, the baby steps are extremely well organized, simple, and highly effective. BUT, everyone’s lives are a little bit different and as laid out, following the baby steps 100% to the T may not be the best move for everyone.

There were two of the baby steps Brittany and I did a little differently than what Dave Ramsey normally recommends on his radio show:

1) Baby Step 1 - $1000 starter emergency fund. We felt this was a little too risky for us given the nature of our work schedules, high medical bills, and how often things seemed to break on our cars.

2) Baby Step 2 - paying off debts smallest to largest using the debt snowball (everything except the house). Brittany and I saw that we could pay off two of the debts in the middle of our snowball (our cars) and clear up $640/month. That would give us a TON of extra cash flow to throw at our student loans, and that's exactly what we did.

We do plan to continue following the general outline of the baby steps, but personalizing it more specifically to our lives as we always have. We’re on baby step 4 right now (investing our money), so after we move into our new house and our finances settle down, we plan on investing A LOT more than 15% of our income. And paying down the house early, etc., etc.

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[Dance]

I didn't follow baby step 1 for more than a couple months. It gave me so much anxiety only having a thousand as a safety net. Bumped it up to about 3k and haven't looked back.

However side note, my journey took over 5 years. So it's okay to bump it up in that case, plus it proved to be the right move over these years.

[toddmuddywaters]

I discovered you guys about a week ago. I'd been basically following the Dave Ramsey plan, much like you describe in this video. I was down to my $9800 car balance and my $3000 student loan when I began petering out. Your videos reignited that excitement and energy to become debt free and make that last push across the line by the end of summer. Thanks for the great and inspiring videos, and hats off to all the hard work you've done to reach your goals!

[heathmcconnell]

The other thing to consider is this. Dave has been recommending the $1, 000 as the starter emergency fund for (if I remember right) at least 2 decades now. Due to inflation, that $1, 000 back when he started recommending the $1, 000 is more like $2, 000 or $3, 000 now.
Overall, he has a lot of wisdom to impart. But I do wish he would take his starter emergency fund recommendation and index it to some kind of inflation calculator.

[lesstalkmorefood]

Love the channel. I’m 25 I have 30 days of baby stepb2 left and I definitely have money set aside for eating out I mentally couldn’t just take staying in the house all day every single day eating beans and rice

[simplevisuals]

I just learned about Dave Ramsey since Dec and have been in Baby Step 2 and I like to buy myself little things to treat myself (like make up and trips to McDonald’s) just to keep me sane during my intensive debt pay off journey (even if it’s only been 6 months) 😭🙌🏼 Also saved up 2 months’ worth of bills and living expenses first as my “Emergency Fund” by Feb (and thankfully I did because of the pandemic). Great video! Love Dave Ramsey, but some of his steps I needed to change it up!

[davidalexander]

Greatest debt repayment advice ever....'saving up thousands then dropping it on the debt all at once..' This is what I started to do after hearing it here...' Several reasons why this works. Mostly, the peace of mind knowing you have the money to pay off the debt after saving it. It turned the debt repayment process into a game which made it significantly less painful!! Also, totally agree on the emergency fund.

[homecookedflavours]

I am on baby step 2 and have two debts left and the lowest sum has low interest and the large sum is very high interest. I have decided to do the debt Avalanche method too and pay off the larger sum with the higher interest. Great video again

[Joseph-ndbi]

I agree. I did the same. Dave’s steps are tried and true and anyone that argues about them don’t understand the actual purpose of the steps. That being said I don’t see anything wrong with adjusting here and there as long as you can stay motivated.

[wendynoble]

A good reminder to know ourselves and to manage our money according to our strengths and weaknesses.

[stephenharris]

Listening to Dave long enough he will say it’s ok to give it a go with your own version. Just make sure to set a date and if you aren’t sticking to it, then you should just go with his approach.

[_TW]

I am glad you used your own minds to do as you needed to. Dave has a great template to get started.

[jacquelineschumann]

You guys are a cute couple! Thanks so much for making this video, it's comforting to know other couples are/were on their debt free journey too!

[MrSherhi]

we also have "fun stuff" envelope and it does keep you sane, to be able to go to a movies atleast once a month (around 15€ for 2 people in my country)...we also budget food, we cook at home so we save a lot of money and its nice to have some leftover money at the end of the month that we can spend on some sushi delivery without any regrets

like Dave Ramsey says, its not a limit, its a planned permission to spend

[NS]

Thanks for sharing! I think people do need to customize Dave's plan to fit their needs. I look at it like dieting, there is not one perfect plan that fits everybody. Apply the basic ideas of the Baby Steps, and tweak the specifics to fit you. Thanks for the videos y'all, I am embarking on buying my first home as well, definitely going to check out your videos on that.

[MrMrMayday]

I am currently on my debt free journey. While I understand Dave's method, I am doing my own thing. 1. I still use my credit card but always pay it off completely. 2. I only carry over $500, since I still have my credit card.(My pay allows me to cover any expenses in the 1000 range within a month) 3. I started with the Debt Snowball, but switched to avalanche once I got down to my student loans.

[MrKjet]

She's starring a lot at him while he's talking😁

[keirongillespie]

Absolutely love your journey! Dave Ramsey's advice has been a huge help to me, although I didn't follow it like gospel either. Still was able to become debt free and am now maxing out my rothIRA and contributing towards my brokerage account. I wish I didn't already have a robinhood account so that we both could get more free stocks. I look forward to following you guys into the future. You two are very inspiring! You're a couple of rock stars! Keep it up.

[chrisoo]

I like your style of saving up then just knock out a debt

[carakerr]

We use credit cards for the cash back and we invest about $1, 000 a year from cash back. We invest 15 percent of our income to 401k and an Index Fund. We also have chosen to invest over paying off student loans and we will pay these off once we have a larger Sum in our investments We have a fully funded emergency fund but try to put most of our money into our investments and retirement. We also may never buy a home and live in an economical apartment but we are older and our children are grown. Home ownership is not the best choice for all especially if you can have a moderate rent. Thank you for this. God bless! Oh and we always tithe and give alms ❤️only have a 72k salary drive 1 older car. 🚗

[vincentortega]

I am also not following the $1000.00 emergency fund; I also believe that is not enough. I'm back on baby step 1 building back up my savings reserve after having to pay for some major car repairs. I feel like 7000.00 is a good reserve for me. Great video advice. Thanks.