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August 30, 2022

Dave Ramsey Baby Steps: One Couple’s Lessons Learned After 10 Years

Nicole Hill and Andy Hill

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Are you getting started with the Dave Ramsey Baby Steps? Congratulations! You're about to embark on a really powerful journey!

After completing all 7 Baby Steps, Nicole and I have some pros and cons to share from our experience with them over the past 10 years.

We hope our thoughts help you navigate the Dave Ramsey Baby Steps on your journey to financial freedom and beyond!

Getting Started with Dave Ramsey

We had a little bit of a different start when it comes to embracing the Dave Ramsey Baby Steps in our lives. More than a decade ago, Nicole and I learned about Dave Ramsey for the first time. Our first introduction to him happened when I was browsing money topics on our dinosaur of an iPad. I stumbled across his radio show.

For me, it was love at first listen. His message really resonated with me initially. However, Nicole was a little bit more of a skeptic. She likes to joke that it was love at first sight for me, and a bit of love and hate for her.

Now that we have more than a decade of experience–and two different viewpoints!–with them, we thought we'd share some of the lessons we've learned.

The Baby Steps Lay a Strong Foundation

When I first stumbled across Dave Ramsey's message, it was through his podcast. I was quick to embrace his ideas, and Nicole–for the most part–jumped right in with me. After all, we knew we wanted to get ourselves in a better place financially, and the Dave Ramsey Baby Steps seemed like just the ticket.

Some of the biggest changes we made right away were purchasing Nicole's car after the lease was up and cutting up her credit cards. While those decisions were tough, we felt the impact right away. Even Nicole–who definitely was a bit skeptical at first–says she saw the value in it and watched our net worth start to grow.

No matter how you felt about the Baby Steps initially, there's a good chance that you've started to see an impact from them if you've been following them for any length of time. And if you haven't started? That foundation is coming, I promise.

Debt Freedom is Invaluable

Part of why the Dave Ramsey Baby Steps are so well known is that they are a straightforward plan to buck some of the core beliefs of American capitalist society. Essentially from birth, Americans are encouraged to spend, spend, spend. There is a lot of mindless consumerism happening.

Many of us leave school without even really having a basic understanding of personal finance topics like saving or investing. But we do know how to spend! Because of that, so many Americans struggle with debt and have to wait decades upon decades to truly live the life they want.

The Baby Steps point out that debt freedom is the ultimate freedom. You don't just regain control of your money; you gain control of your time. You don't have to be tied to work and fill in every waking hour with opportunities to earn more money. Instead, you can restructure your life based on your priorities.

Debt freedom is invaluable and the Baby Steps really showcase that.

The Baby Steps Work if You Keep Going

One of the most indisputable lessons we've learned about the Baby Steps after following them for a decade is that they work. We became millionaires in 10 years by mostly following the steps.

It's true that we graduated out of them at some point and did some fine tuning, but they were equal parts motivating and entertaining, especially at the beginning when we didn't really know where to start.

If you feel like you are spinning your wheels trying to decide how to start your financial journey, the Baby Steps within Total Money Makeover are a great starting point that will yield results relatively quickly.

Money isn't Just Offense; it's Defense, too!

When you think of all the eye-catching headlines about money and personal finance success stories, they focus on offensive money moves. Doubling your salary. Making the leap to entrepreneurship. Seeing huge growth in your investment portfolio. Retiring early. All of those things are incredibly important and impressive.

But being smart with money is also about playing defense. The Dave Ramsey Baby Steps focus on defensive measures you can take to protect your money.

That's where we really got exposure to term life insurance and umbrella insurance. While those topics might not generate a lot of clicks online, they can absolutely change your life.

In fact, I recently spoke to someone whose wife passed away unexpectedly. He said having term life insurance changed his life again. Her loss was incredibly tragic and hard on their family. But having term life insurance meant that he could pay off debt and spend more time with his daughter while they grieved.

The Baby Steps and Dave Ramsey's advice are important because they cover both offensive and defensive money moves that you can make.

Credit Cards Might Actually Work For You

Anyone who has spent even a handful of minutes learning about the Baby Steps knows that credit cards are a giant no-no. Since the Baby Steps seemed so insistent on the drawbacks to credit cards, we were quick to stop using them.

Interestingly enough, we continued to track our spending over time. When we looked back at the years we used credit cards and compared to the years we didn't, we realized something shocking: our spending didn't change. In fact, for us, it was harder to keep track of our money.

When we gave up credit cards, we used a combination of debit cards and cash to cover our purchases. The biggest downfall we discovered was that we couldn't account for small purchases the same way we could with a credit card. We even gave different envelope systems a try. The fact that we didn't feel like we were as in tune with our spending combined with the fact that our spending didn't decrease led us to reconsider credit cards.

Now, we're committed to using them responsibly and enjoying their benefits at the same time. Credit cards have grown increasingly convenient in terms of all the credit monitoring and transaction tracking they offer. Plus, we've started to get into travel hacking with different points and miles.

Fees Can Take a Big Bite Out of Your Money

This lesson is a hard one to learn, and most of us learn it the hard way, unfortunately.

As Dave Ramsey Baby Step devotees, it made sense that we would seek out an endorsed provider for money advice. Unfortunately for us, I didn't listen to Nicole when she detected more of a sales pitch than an informational meeting with the person we chose. Things went from bad to worse when we continued working with him and went to invest a big check after my best year in sales ever.

The provider recommended we put that $100,000 check in a bond fund, even though we told him we hoped to use it relatively soon for a house down payment. While we can debate the merits of investment types all day, there's one thing that isn't up for debate. Fees can really drain your investments.

So imagine my shock when we discovered that this particular bond fund came with a front load fee to the tune of 5%. In an instant, my $100,000 check turned into a $95,000 one.

While I was largely at fault for not asking about fees or how this provider got paid, we also really wish that there was more emphasis within the Dave Ramsey Baby Steps to do your due diligence when it comes to fees of any kind.

Everybody's Situation is Unique

There isn't a lot of leeway in the Dave Ramsey Baby Steps and there isn't really any room for differing opinions on his radio show. That's something that we accept about his program. It's meant to be black and white so that people don't have to overthink–instead, they can just get started.

Still, something that we've really come to understand after talking with hundreds of different money experts, individuals, and families about money is that everyone needs to make the financial decisions that are best for the situation they are in.

Once we started to give ourselves permission to deviate from the Baby Steps, we started to see different results on the path to financial independence and Coast FIRE. If following all the steps with absolute fidelity is what works best for you, then that's fantastic. But if you find yourself needing to make changes, that's OK, too.

And definitely be kind to yourself on your financial journey. A lot of what Dave Ramsey says in the name of entertainment isn't how people should talk to themselves when they're navigating tough money circumstances. We all make mistakes and we all struggle. The important thing to remember is that strengthening your family tree is a journey. Aim for consistent progress, not perfection.

Advice Sometimes Needs Updating

When we think about everything that's happened in the past few years, it's mind-boggling. We've been through a pandemic, a recession, seen the Great Resignation unfold, and experienced incredible inflation and supply chain issues, and so much more. In short, our world is very different than it was even just a few short years ago.

That's important context to keep in mind when you look at the Dave Ramsey Baby Steps. When he first designed them, the idea of a $1,000 emergency fund to keep people out of more credit card debt was really significant. But now, you'd be hard-pressed to find another money expert who thinks that $1,000 is enough for even a basic emergency fund.

That doesn't mean that the Baby Steps are wrong necessarily. It means that advice needs to evolve over time. One thing that Nicole and I are both excited about is to see how the Dave Ramsey brand continues to evolve, especially as more money experts, like his daughter, take on bigger roles at the company.

As you work through the Baby Steps, remember to give yourself permission to grow and evolve. You want to make choices that serve you on your money journey. Something might work really well for you at the beginning of the program, and it might need to be updated as times–or your situation–change.

Final Thoughts on The Dave Ramsey Baby Steps

The Dave Ramsey Baby Steps are powerful. There's no doubt about that! If you are looking to get started by making improvements to your finances, they are a clear and concise starting point.

However, it's also important to give yourself permission to evolve and make the choices that work best for your financial situation. While we've followed the Baby Steps for years, we've also made different decisions regarding credit cards and investments. Personal finance is personal and everyone's situation is unique.

Approach the Dave Ramsey Baby Steps knowing that they are a useful framework and also understand that you can pull in other information and advice on your journey. The first steps are so powerful because they help us unlearn the cultural tendencies to overspend and rely heavily on debt.

If you want to start your financial journey toward debt freedom, the Dave Ramsey Baby Steps are definitely worth exploring. Learn more about how they can transform your money situation here and keep us posted on your progress!

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What do you think of the Dave Ramsey Baby Steps? Where are you on your financial journey?

Please let us know in the comments below.


Andy Hill

Andy Hill is the award-winning family finance coach behind Marriage Kids and Money - a platform dedicated to helping young families build wealth and happiness. Andy's advice and personal finance experience have been featured in major media outlets like CNBC, Forbes, MarketWatch, Kiplinger’s Personal Finance and NBC News. With millions of podcast downloads and video views, Andy’s message of family financial empowerment has resonated with listeners, readers and viewers across the world. When he's not "talking money", Andy enjoys watching his kids play soccer, singing karaoke with his wife and watching Marvel movies.

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Marriage Kids and Money Podcast

About Marriage Kids & Money

The Marriage Kids and Money Podcast is dedicated to helping young families build wealth and happiness.

With over 300 episodes and counting, we've interviewed millionaire parents, award-winning authors, and personal finance experts to help you find your version of family financial independence.

On Fridays, you'll hear me and my wife Nicole discuss life, money and relationships on our show "Bread & Wine".

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