Joe Levi:
a cross-discipline, multi-dimensional problem solver who thinks outside the box – but within reality™

Finished Baby Step Number One

My wife and I have recently decided to undertake Dave Ramsey’s Total Money Makeover to help us get out of debt and secure our financial freedom.

Dave recommends the following seven-step process to achieve financial independence, he calls these the “Baby Steps to get your finances in order and on track.”

  1. $1,000 to start an Emergency Fund
  2. Pay off all debt using the Debt Snowball (excluding your home, see step 6)
  3. 3 to 6 months of expenses in savings
  4. Invest 15% of household income into Roth IRAs and pre-tax retirement
  5. College funding for children
  6. Pay off home early
  7. Build wealth and give! Invest in mutual funds and real estate

One rule is to work on one step at a time, finish the one step before moving on to the next step (if you want to know why, read his book!!).

Today marks a big day for us, we’ve successfully checked off step one. Funny, it’s not that big a step, but it feels liberating and already the weight of debt is being cast away.

Tomorrow, on to step two. We have a line-of-credit, vehicle payment, and two credit cards to pay off (probably in that order).

(Hat tip to Mike Dopp for helping light a fire under my finances to turn “talk” about financial security into action.)


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4 Responses

  1. Travis says:

    Congratulations on completing step 1. My wife and I completed step 2 less than a year ago. We just barely got around to starting step 3, but that will be a while before we complete that. Congrats again.

  2. Bryce says:

    Dave Ramsey is the best! As of tomorrow, we will also have baby step one taken care of. After that, all we have is a car loan, a loan from my Mom, and two ginormous student loans. Woohoo!

  3. Joe says:


    Awesome! Congrats on step 1!!! I’m lucky to not have any student loans to pay back… I made it all the way through with a Pel Grant, a Native American scholarship, and money out of pocket.

    My wife doesn’t have her B.S./B.A. yet, but she does have her A.S. and is okay with not getting “the rest” just yet. When she does she’ll be using a Pel Grant and some other scholarship(s) to make up for the rest. Debt is evil.

    My dad has loaned me money in the past, but he always tells me “I don’t owe him anything” when I try to pay it back. Without doing so deliberately he’s following Dave’s rule of “never loan money to friends/family — if they need it, GIVE it to them.”

    Next up for us is a 0% Discover card (which jumps up to a gazillion percent in July), then another Discover card at 5.99%, then a car loan, then the next baby-step, then the house.

    It feels so liberating! Thanks for sharing your story!!

  4. Joe says:


    Congrats on finishing steps one AND two! That’s awesome!!

    I just cut my piddley 4% (plus 2% employer match)401(k) contributions and will be putting all of that toward debt starting this paycheck (I’ll turn it back on again in step 4).

    My wife and I are prepping our “envelopes” for next pay-day. Everything looks good on paper. We already used part of our tax refund to pay over $1k of the first bill, and we’re already paying double the minimum payment, so we’re already working on step two. The disappointing news is that my projects show it taking 2-3 years (or more) at current “Gazelle speed” to knock 2/3 of the bills out, leaving us with one more (plus our home). Hopefully our “debt acceleration worksheet” will be enough incentive to keep us at this level of energy.

    Step 3 will take another 10.76 months (round that up to a year for some buffer), so before I’m on to step four, it’ll likely be 4 or 5 years down the road. ACK!

    Again, congrats on your progress! Keep me up-to-date!

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