Dave Ramsey says: Sick and tired of being sick and tired

Sick of being broke all the time? Dave Ramsey gives advice to someone who is new to the baby steps program.

Jan 20, 2026, 3:00 PM

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Dear Dave,

I’ve been listening to your radio show, and as a result I’ve decided I’m tired of living paycheck-to-paycheck and being broke all the time. I know Baby Step 1 is saving a beginner emergency find of $1,000. But do you recommend getting current on past due bills before starting the Baby Steps?

Edward

It’s hard being broke all the time

Dear Edward,

I love it! When people decide to change their lives, and they talk about it the way you have, I know they’re serious about making something good happen. You’re sick and tired of being sick and tired, and you’re going to get control of your money and your life. Let’s get started!

First things first. Make sure you’re up to date with all the necessities. I’m talking about food, clothing, shelter, transportation and utilities.

Next, either get current—or make payment arrangements—for any consumer debt you have, including credit cards. This doesn’t include your home, but we’ll get to that part in a minute.

How the baby steps can help you stop being broke all the time

You’re spot-on with Baby Step 1. After that comes the debt snowball and Baby Step 2. Start paying off all debts, except your home, from smallest to largest. Once you’ve paid off this debt, you’ll be able to save more and increase your beginner emergency fund to a fully-funded emergency fund of three to six months of expenses pretty quickly. This is Baby Step 3.

At this point, you can really start planning for the future. In Baby Step 4, you’ll start investing 15 percent of your income for retirement. If you have kids, setting aside something to help them with college comes next in Baby Step 5. Baby Step 6 is a milestone.

This is when you start throwing tons of cash at your mortgage, and pay off your home early. I told you we’d get back to this, didn’t I?

But Edward, the real deal is Baby Step 7. Why? Because this is when all your hard work, discipline and wise financial decisions have put you in a place where you can build wealth like crazy. You don’t have to deal with being broke all the time!

Not only that, you can give and help others by being outrageously generous. At this point, you’re securing your future and helping others in a big way.

Go make it happen, dude. Take control of your finances, your life and be a blessing to others!

— Dave