![\"Dave](\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/09\/Dave-Ramsey-Crop.png\")
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\n \u00a9Dave Ramsey <\/p>\n
Commitment to Our Readers<\/p>\n
GOBankingRates’ editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services – our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines<\/a> and our products and services review methodology<\/a>.<\/p>\n 20 Years<\/strong> Trusted by<\/strong> Dave Ramsey has built his entire brand around helping people win with money, and his advice is pretty straightforward. No fancy investment tricks or get-rich-quick schemes, just proven strategies that have helped millions of people build wealth<\/a> and get out of debt.\u00a0<\/p>\n Here are some things the financial guru wants you to start doing with your money right now, as well as details on why they\u2019re important and how you can implement them yourself<\/a>.<\/p>\n Save Your First $1,000 Like Your Life Depends on It<\/p>\n What Ramsey Says:<\/strong> This is the first of Ramsey\u2019s Seven Baby Steps<\/a>. Before you do anything else with your money, scrape together $1,000 for a starter emergency fund. This isn\u2019t your full emergency fund<\/a>. It\u2019s just enough to handle small emergencies without going into debt.<\/p>\n<\/p>\n Why It Works:<\/strong> That $1,000 acts like a financial buffer between you and Murphy\u2019s Law. When your car breaks down or your kid needs emergency dental work, you won\u2019t have to reach for a credit card. It\u2019s about breaking the cycle of borrowing money every time life happens.<\/p>\n How To Get Started:<\/strong> Cut expenses to the bone for a few months. Skip dining out, cancel subscriptions you don\u2019t absolutely need and sell stuff around your house. Most people can find $1,000 faster than they think when they get serious about it.<\/p>\n Attack Your Debt Using the Snowball Method<\/p>\n What Ramsey Says:<\/strong> The second Baby Step, this is where you\u2019ll want to list all your debts from the smallest to largest balance (not including your mortgage), ignoring interest rates completely. Pay minimums on everything, then throw every extra penny at the smallest debt until it\u2019s gone. Once that\u2019s paid off, roll that payment into the next smallest debt.<\/p>\n Why It Works:<\/strong> This is all about psychology, not math. Paying off that first small debt gives you a win that builds momentum. Ramsey argues that personal finance is 80% behavior and only 20% head knowledge, so the emotional boost matters more than optimizing interest rates.<\/p>\n The Reality:<\/strong> You might pay slightly more in interest compared with targeting high-rate debts first, but most people stick with the snowball method<\/a> longer because they see quick progress.<\/p>\n<\/p>\n Build a Fully Funded Emergency Fund<\/p>\n What Ramsey Says:<\/strong> Once you\u2019re debt-free<\/a> (except your house), save three to six months\u2019 worth of expenses in a fully funded emergency fund, which is the third Baby Step. This money sits in a boring savings account where you can access it quickly if needed.<\/p>\n<\/p>\n Why This Changes Everything:<\/strong> A decent emergency fund means you won\u2019t have to go back into debt for unexpected expenses. Job loss, medical bills and major repairs can all be handled with cash instead of credit cards.\u00a0<\/p>\n The Sweet Spot:<\/strong> Most people need closer to six months\u2019 worth of expenses, especially if you have irregular income or work in an unstable industry.<\/p>\n Live on a Written Budget Every Single Month<\/p>\n What Ramsey Says: <\/strong>Do a zero-based budget where every dollar has a job before the month begins. Income minus expenses should equal zero, meaning you\u2019ve assigned every dollar to something specific. This budget \u201chelps you give every dollar you made that month a clear purpose,\u201d Ramsey said in a Facebook post<\/a>.<\/p>\n Why Most People Fail:<\/strong> They budget in their heads or use vague categories. However, writing it down (or using an app) and being specific will yield better results. \u201cEntertainment\u201d isn\u2019t a budget category; instead, try \u201cdinner out: $80,\u201d and \u201cmovies: $40\u201d as budget categories.<\/p>\n The Game Changer:<\/strong> When you know exactly where your money goes, you stop the money leaks that keep people broke. Those random $20 purchases can add up to hundreds per month. \u201cWhen you\u2019ve got a plan, you\u2019re more likely to not overspend,\u201d Ramsey said.<\/p>\n Start Investing 15% for Retirement<\/p>\n What Ramsey Says:<\/strong> Once you\u2019re debt-free with a full emergency fund, invest 15% of your household income into retirement accounts<\/a>. This is Ramsey\u2019s fourth Baby Step. He recommends starting with your work\u2019s 401(k) (with full employer match) and then investing the rest into Roth IRAs.<\/p>\n<\/p>\n The Magic Number:<\/strong> While 15% might sound like a lot, it\u2019s the sweet spot between building wealth and having money for other goals. Less than 15%, and you probably won\u2019t have enough for retirement. More than 15%, and you might neglect other important goals like your kids\u2019 college or paying off your house.<\/p>\n Where To Put It:<\/strong> Max out any company match first (free money), then Roth IRA, then back to your 401(k).<\/p>\n Cover Your \u2018Four Walls\u2019 Before Anything Else<\/p>\n What Ramsey Says:<\/strong> In tough financial times, prioritize food, utilities, shelter and transportation before paying any other bills. These are your survival needs, and they come before credit card payments, student loans or anything else. \u201cAnd until you clear food, utilities, housing and transportation and get them all current, you don\u2019t spend on anything else on anything,\u201d Ramsey said on The Ramsey Show<\/a>.<\/p>\n Why This Matters:<\/strong> Keeping your basic needs covered reduces the panic that leads to bad financial decisions.<\/p>\n The Priority Order:<\/strong> Feed your family, keep the lights on, maintain your shelter and ensure you can get to work. Everything else is negotiable.<\/p>\n Live Abundantly and Give Back<\/p>\n What Ramsey Says:<\/strong> When you\u2019ve paid off your debts and your \u201cmoney is working for you,\u201d you can experience \u201ctotal financial peace,\u201d per Ramsey.<\/p>\n The Mindset Shift:<\/strong> Instead of feeling overwhelmed by the size of your debt or how far behind you are, focus on the next step. Remember, you don\u2019t have to fix everything at once. Just make progress consistently.<\/p>\n![\"\"](\"https:\/\/cdn.gobankingrates.com\/wp-content\/uploads\/2023\/11\/icon-20.svg?webp=1&quality=75\"){kind=icon}
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