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Dave Ramsey's 7 Baby Steps

What are The Dave Ramsey 7 Baby Steps?

As SmartVestor Pros, we encourage our clients to follow Dave Ramsey’s proven system for eliminating debt and building wealth: Dave Ramsey’s 7 Baby Steps. As we guide you through these seven steps, we’ll help you effectively focus your efforts in key areas toward making real progress toward your goals for the short, intermediate, and long-term.

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Dave Ramsey’s Simple System—And the Support You Need


You don’t need a degree in finance, but you do need to know the basics. We’ll provide you with the resources and education you need.


The distance between step 1 and step 7 feels much shorter when we celebrate the little wins together. And we do.


Education and encouragement coupled with sound strategies equals empowerment. We want to see you making confident decisions.

Download the Dave Ramsey 7 Baby Steps PDF

At Burgdorf Wealth Management, we firmly believe that financial independence is possible for everyone. We are an established, experienced team with a simplified approach to helping our clients manage their complex finances. By implementing the same faith-based steps that Dave Ramsey follows, we are an ideal partner for individuals and families who want to take control of their finances and work toward financial independence, while upholding their values.

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Step 1: Save $1,000 to Start an Emergency Fund

The objective of this first baby step is to accumulate $1,000 which will serve as an emergency fund. This fund can help safeguard your finances against unforeseeable life events, which can occur more frequently than we’d like. Having these funds on-hand can help you avoid adding to your debt—while trying to eliminate it—in order to cover unplanned expenses.

Step 2: Eliminate Debt Using the Snowball Technique

The goal of this baby step is to pay off all debt, except your mortgage. This includes car loans, credit cards, student loans, and personal loans, for instance. To begin, you simply make a list of all your debts and order them by their balance. Beginning with the smallest balance, you focus on paying off each debt. As one debt is eliminated, you apply that payment to the next debt. Check out this Snowball Debt Calculator to see how soon you could be debt-free.

Step 3: Build Your Emergency Fund

Congratulations on eliminating your debt! Step 3 is an exciting one. When you reach this baby step, you’ll redirect the money you were using to pay off your debt to build up your emergency fund. Your goal is to set aside enough in your emergency fund to cover 3-6 months of expenses. This fund can help further protect you from unexpected events and expenses and can help you avoid debt in the future.

Step 4: Allocate a Portion of Your Household Income to Retirement

With debt out of the way and a good safety net in your emergency fund, it’s time to start looking and planning ahead by investing 15% of your gross income toward retirement. If you plan to work until age 67, you would be doing this because you choose to, not because you need to. A professional investor can assist you in developing a robust investment strategy to help fund this baby step.

Step 5: Build Your Children’s College Education Fund

At this baby step, you have cleared all your debts except for your mortgage, and you have started investing in your retirement. Now, it’s time to start saving for your children’s college education expenses. We suggest utilizing 529 college savings plans or ESAs (Education Savings Accounts), but we can help you find the best-fit vehicles and strategies for your goals.

Step 6: Pay off Your Mortgage Ahead of Schedule

This baby step is the final step between you and freedom from debt! By making extra payments toward your home loan principal, you not only reduce your overall interest but also accelerate your journey to complete homeownership. We can help you figure out how much extra to put toward your mortgage with the goal of saving thousands of dollars in interest.

Step 7: Build Wealth and Give

This final baby step is the most enjoyable one. You can live comfortably and give generously like never before, even as you continue to build your wealth. Begin by determining your present net worth and then continue to accumulate wealth and give to causes you care about. In this way, you can leave behind not just an inheritance, but a lasting legacy.

Do Dave Ramsey’s Baby Steps Work?

At Burgdorf Wealth Managers, we are firm believers in Dave Ramsey’s 7 Baby Steps system. It works. We’ve seen it time and time again. The journey looks different for everyone, but we believe that anyone can follow this process and pursue financial independence. However, the expertise, services, guidance and resources that a SmartVestor Pro can offer can help you jump start your journey and accelerate your progress. We want to help you leverage every advantage and resource you have available to you. Want more info? Download the Dave Ramsey Baby Steps PDF below.

Download Dave Ramsey Baby Steps PDF
<strong>Meet with Pat, Our Smartvestor Pro</strong>

Meet with Pat, Our Smartvestor Pro

Pat Buchana’s financial philosophy has always been informed by the teachings of his faith. He believes that biblical principles encompass the essentials of what people need to know to be smart with money. These principles, and the standards and practices of SmartVestor Pros, guide Pat’s advisory services today. Leveraging his extensive experience, education and deep care for his clients, he works to guide them toward true financial independence for the life they want.

Other Resources

Financial Peace University

Financial Peace University, developed by Dave Ramsey, is a top personal finance class in the U.S., having helped almost 10 million people. Contact us if you’re interested in starting this course to help you take charge of your journey to eliminating debt and building wealth.

The Total Money Makeover

Support your Baby Steps journey with even more insights from Dave Ramsey’s book, The Total Money Makeover. This bestseller has helped millions of people take charge of their finances on their journey toward financial independence.

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*Dave Ramsey, the above mentioned professional,  is not affiliated or registered with Cetera Advisors LLC. 

*Working with an advisor that is part of the SmartVestor network cannot guarantee investment success or that financial goals will be achieved. There can be no assurance that working with a Dave Ramsey SmartVestor Pro (SVP) will produce or achieve better results than working with an advisor not affiliated with the SmartVestor program. Advisors that participate in this program pay a fee to belong to the program for client leads that are provided. Dave Ramsey and the Dave Ramsey SmartVestor program is not affiliated with Cetera Advisors LLC or Burgdorf Wealth Managers and is not sponsored or endorsed by Cetera Advisors LLC or Burgdorf Wealth Managers.

*All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.

*Investors should consider the investment objectives, risks, charges and expenses associated with municipal fund securities before investing. This information is found in the issuer's official statement and should be read carefully before investing. Investors should also consider whether the investor’s or beneficiary’s home state offers any state tax or other benefits available only from that state’s 529 Plan. Any state-based benefit should be one of many appropriately weighted factors in making an investment decision. The investor should consult their financial or tax advisor before investment in any state's 529 Plan.

*For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisors LLC nor any of its representatives may give legal or tax advice.