Why We Follow Dave Ramsey's Baby Steps
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There are so many plans out there for how to get in control of your money and how to get out of debt. There are 10 times that number of opinions out there about handling and even stewarding money. Many of the plans share similarities or the same overall idea. And yet many of them have opposing viewpoints. You could sit around and debate about who is right and who is wrong, but the people who are actually going to reach financial freedom are just choosing a plan and sticking to it.
Ryan and I started Dave Ramsey’s Baby Steps three times and it wasn’t until the third try that we actually stuck with it. The first time we (and by we, I mean I) completely messed up the budget within the first week and gave up. The second time, we just weren’t committed enough and we were just trying to do the Baby Steps-ISH. But doing anything “ish” will never get good results. The third time, it worked. Why? Because we felt it in our hearts. We were mad about our debt, we were tired of living paycheck to paycheck, and we dared to dream about what life might look like without debt.
Related: You Have Permission to Dream
A few months prior to giving it our third go we had autodrafted from our checking account out of our savings account a couple of times. It had left me feeling completely stressed out, insecure, and sick to my stomach. Then fast forward to the beginning of 2018 and our church treasurer handed me our tithing records for the previous year. When I opened that envelope, my heart sank. That number was so much less than we were expecting. It made us realize just how careless we had been with our spending. We realized we literally had no idea where our money was going. We knew something had to change.
We sat down with a friend who helped us hash out the misunderstandings we had with budgeting the first time around. And Baby Step 1, the emergency fund, was easy. We already had that money in savings and we could check the box. It felt good to move on. We started tackling our debt and we watched the number fall consistently as we threw every extra penny on those payments. The first loan was just a few thousand dollars so we paid it off in a fairly short amount of time.
It was AMAZING! The feeling of paying off the first debt was like nothing else. We felt confident that we could actually do this! We were motivated.
Related: How To Get Out Of Debt Fast
This is why Dave Ramsey’s Baby Steps work so well for so many people. It’s all about changing your behavior in a way that stops the bad habits and helps you to achieve quick wins that motivate you to keep going. And it’s about so much more than just debt, too. The very first step is to save $1,000 in an emergency fund. This creates a cushion should anything go bad while you’re working the debt snowball. But it also gives you that first quick win. Some households already have the $1,000 sitting in savings and can immediately check the box and move on. For those that don’t, it doesn’t take them long to reach that goal and the $1,000 is typically less than your smallest debt amount, so you get there fast!
I love it when Dave says it’s not about math, it’s about behavior, because if we were doing math we wouldn’t have gone into debt in the first place. It’s true. The majority of our financial problems are because of our behavior and personal choices. Sometimes things can happen that are out of our control, but the majority of the time it’s just poor decision making.
Other plans want you to pay of debt with the largest interest rate first. And mathematically that makes sense. But most of the people that start these plans lack the motivation it takes to push through until they end. You need a plan with steps and goals you can actually ACHIEVE. They key is changing your behavior and staying motivated.
So if you want to do math, sit there and do math. If you want to change your life, it’s time to get started on the Baby Steps.
And if you’re not sure where to start, I recommend beginning with reading Dave Ramsey’s Total Monday Makeover.
If you’re ready to start paying off debt or you want further guidance in your pay off journey, get my completely FREE downloadable Debt Free Guide. This is a full guide of reading and prompts that gives you the steps to paying off debt in a bite sized format so that you can stop feeling overwhelmed and start feeling motivated!