Inspired by strategies from financial experts like Dave Ramsey, these 5 steps are designed to help anyone—regardless of where they’re starting—move toward financial freedom.
Step 1: Save $1,000 for Emergencies (Fast)
Before paying down debt or investing, you need a starter emergency fund. Life happens—car repairs, medical bills, broken appliances—and if you’re not prepared, you’ll just end up using credit again.
Start with $1,000. Sell unused items, take on a quick side gig, or cut expenses fast. This fund is your first buffer against falling further behind.
Step 2: Eliminate All Non-Mortgage Debt (The Snowball Method)
List your debts from smallest to largest, regardless of interest rate. Pay minimums on all but the smallest, and attack that one with intensity.
Once it's paid off, roll that payment into the next debt. This “debt snowball” keeps you motivated and builds momentum. It works—millions have used it to wipe out tens of thousands in debt.
Step 3: Build a 3–6 Month Emergency Fund
Once you’re debt-free (except for your home), it’s time to build a fully funded emergency reserve. Aim for 3 to 6 months of living expenses.
This fund protects you from losing your job, medical emergencies, or major repairs—without going back into debt.
Step 4: Start Investing 15% of Your Income
Now that your finances are stable, you can focus on building long-term wealth. Contribute 15% of your income to retirement accounts—like a 401(k) or Roth IRA.
If your employer matches contributions, make sure to get the full match. The earlier you start, the more time compound interest has to grow your money.
Step 5: Pay Off Your Home Early and Build Wealth
With no other debts and retirement underway, it’s time to pay off your mortgage. This step may take years—but imagine life with zero payments. Once your home is paid off, you can invest even more, give generously, or retire early.
You Don’t Need to Be Rich—You Just Need a Plan
These five steps have helped millions of families ditch debt, gain control, and finally breathe financially. You don’t need to earn six figures—you just need to commit, stay consistent, and take one step at a time.