The Dave Ramsey plan is a great way to strengthen (or restrengthen) your financial foundation. I have applied its principles in my budgeting techniques and have found it to be very effective. This page is a basic overview of his plan and the “baby steps” that individuals can take to become financially stable.
He does have one PRE-baby step–Cut up all credit cards and “draw a line in the sand”. NO MORE DEBT! During the “pre-baby step” stage, focus on getting current on all bills (rent, car payment, credit cards, etc.) After getting those things under control, focus on these steps:
The 7 Baby Steps
1. $1,000 to start an Emergency Fund
2. Pay off all debt using the Debt Snowball
3. 3 to 6 months of expenses in savings
4. Invest 15% of household income into Roth IRAs and pre-tax retirement