Have you thought about becoming debt free and financial independent? Dave Ramsey has 7 baby steps to help you achieve that goal.

Baby Step 1 – Create An Emergency Fund

The first step is to create an emergency fund. This is intended to help you in-case of an unexpected expense comes up. Ideally you’d want to have 1 months salary saved up.

Baby Step 2 – Paying off Credit Card Debt

The debt snowball calculator is a tool that’ll help you pay off your credit card debt. The idea behind this is you add all of your credit cards into the debt snowball spreadsheet and then starting paying off your debt. As you pay off one credit card you’ll roll that payment over to the next credit card. This will create a debt avalanche and have you paying off your debt very quickly.

Baby Step 3 – Increase Your Emergency Fund To 4 Months of Your Salary

Congratulations you’ve paid off all of your debt! Now it’s time to increase your emergency fund. Having 4-6 months worth of your salary will give enough of a buffer in case some major were to happen such as losing your job.

Baby Step 4 – Start Investing 15% of Your Income For Retirement

Now it’s time to start planning for retirement! Investing 15% of your income into a retirement plan is a great place to start. Depending on your age and current retirement portfolio you might want to save more. This

Baby Step 5 – Saving For Kid’s College

The average cost for a bachelors is $32,295. By opening a 529 plan, you’ll be able to start putting aside money tax free for your kids. If you don’t have any kids, consider jumping straight to step 6.

Baby Step 6 – Pay Off Your Mortgage

Most American’s spend 28% of their income just on their mortgage. The excel mortgage calculator is a great tool that you can use to see the impact of adding additional payments to your mortgage payment. This will help you estimate when your mortgage will be paid off.

Baby Step 7 – Start Building Wealth