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If you are trying to get a handle on your finances or become debt-free, the Dave Ramsey Baby Steps may be just the thing to help you.

Dave Ramsey Baby Steps UK Version

Dave Ramsey’s 7 Baby Steps to Financial Freedom were originally created as a way to help people in America navigate their way through the US Financial System to clear debt, build wealth and live a life free from financial worries.

While the steps do carry over to the UK financial system in principle, they need a bit of tweaking and translating to fit the systems and products that we have available to us. The list below is the UK Version of the Dave Ramsey Baby Steps.

Dave Ramsey Baby Steps – UK Version

The 7 Baby Steps to Financial Freedom as originally outlined in the best selling book ‘The Total Money Makeover’ are the ones that you’ll see shared most often online but anyone who listens to the Dave Ramsey radio show will be able to tell you that there are technically 9 steps in total.

Baby Step 0 and 3b are often missed out by people who share information about the plan online without fully understanding how the Baby Steps work. Luckily, we are very well versed in the Dave Ramsey Plan and have laid out each step below with a quick break down of their main points. You can find more in depth posts on how exaclty to tackle each step by cliking the button below them

Baby Step 0 (BS0) – Get Current on Your ‘Four Walls’

  • Get Current on your ‘Four Walls’
    • Talk with your spouse and get on them on the same page concerning finances
    • Create a budget and learn to stick to it
    • Cut your lifestyle and get rid of non-essentials
    • Get current on ALL bills

Baby Step 1 (BS1) – Save a £1000 Starter Emergency Fund

  • Save Your Starter Emergency Fund of either £500 or £1000
    • Cut up credit cards – you won’t be needing them anymore!
    • Get life and long term disability insurance if you have debt or if your family couldn’t survive financially if you died (especially important if you have children)
    • Get rid of any cars that you can’t pay off within 24 months
    • Draw up a will

Baby Step 2 (BS2) – Pay Off All Debt (Excluding Mortgage)

  • Pay your debts off smallest to largest (regardless of interest rate), minimum payments on all debts and then throw any extra money at the smallest debt.

Baby Step 3 (BS3) – Save a Fully Funded Emergency Fund of 3-6 Months of Expenses

  • Build Your Emergency Fund to Cover 3-6 Months of Expenses
    • Start your replacement car fund
    • Start furniture or other non-essential stuff replacement fund

Baby Step 3b (BS3b) – Save a House Deposit

  • Save a House Deposit
    • Aim for a minimum of a 20% house deposit to make sure you get access to the best rates

Baby Step 4 (BS4) – Invest 15% in Retirement

  • Invest 15% of Household Income in Retirement
    • Make use of retirement vehicles and any company matching schemes to max tax relief
    • Fund a LISA (Life Time ISA)

Baby Step 5 (BS5) – Save For You Children’s Future

  • Save For Your Childrens Future
    • Consider a junior ISA or children’s bond – the money will be the child’s, but inaccessible until they turn 16/18.

Baby Step 6 (BS6) – Pay Off Your Mortgage

  • Pay Off Your Home Mortgage

Baby Step 7 (BS7) – Build Wealth and Give

  • Build Wealth and Give

Unsure Where You Are On The Baby Steps? Take Our Quiz!

Dave Ramsey Baby Steps – Frequently Asked Questions

Why do the Baby Steps work?

The Baby Steps work because they break down the basic principles of personal finance into bite-size, manageable chunks. They often get criticized for being too simple or narrow-focused but that’s the magic behind them, keeping it simple and helping to build one good habit after another (even if it takes a bit of time) means you will eventually get to your end goal.
You might stumble a bit along the way but you’ll only be stumbling on one step, the ones before it are already completed and become your safety blanket.

Who is Dave Ramsey

Dave Ramsey - US Finance Guru

Dave Ramsey is an American personal money management expert, radio talk show host, and TV personality. He has helped thousands of people become debt-free, build wealth and change their financial lives for the better.
He gives no-nonsense advice to people who have gotten in over their heads with debt and helps them to find their way out in a responsible and methodical way. Regardless of whether you love or hate his approach (you have to check out some of the clips of the radio show if you haven’t already!) there is no denying that his plan works.

How do you do the Baby Steps?

The Baby Steps are designed to be worked in numerical order. Baby Steps 0 through to 3 should be worked on individually (don’t move to the next step until the previous one is completed) and Steps 4,5,6 can be worked on at the same time as they are typically long term projects or tasks.

How long does it take to complete the Baby Steps?

The Baby Steps take as long as they take. I know that’s probably not the answer you want to hear but the further you get into the steps the better idea you can form on how long it’ll take you to complete them.

Ideally you want to be working hard at them and going at it with ‘Gazelle Intensity’ (see below) to get them done quicker, but it all very much depends on how much surplus money you have to work witth/if you can pick up a side hustle/if you’re willing to cut your lifestyle back.

What is ‘Gazelle Intensity’?

Gazelle Intensity is a phrase coined by Dave Ramesy to illustrate how hard you need to be working at completing the steps, especially baby step 2, if you want to see changes happen fast.
The idea is you want to be running away from debt like your life depends on it, much like how a gazelle runs away from a hungry lion.

Are the Baby Steps a religious thing?

While Dave Ramsey is a strict Evangelical Christian and will sometimes provide scripture based answers to callers on his show, the Baby Steps (overall) are just a common sense approach to handleing money and can be of use to anyone who is trying to fix their financial situation.

5 Comments

    1. Potentially yes, but the idea of the baby steps is that it’s helping to change your mindset around money. Plus, if you throw all the money you have at debts and an emergency happens your only option is to go bakc into more debt to cover it. By having the emergency fund sorted first, it helps to prevent the need to go into more debt should an emergency occur.

  1. Get rid of any cars that you can’t pay off within 24 months

    Should this not be get rid of any cards? Not cars?

    1. Nope, it’s cars! The suggestion being that if you can’t pay it off in 24 months then it’s too expensive for your current income. I don’t beleive there is a set income vs car cost equation on this point, it’s more playing into the mindset side of things.

  2. Hello Charlotte. Thanks for this, it’s helpful to see how the steps translate into the UK economy. The link at Baby Step 7 doesn’t work – it just takes you out back to the beginning of the article.

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