7 Things Dave Ramsey Wants You To Start Doing With Your Money

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Dave Ramsey has built his entire brand around helping people win with money, and his advice is pretty straightforward. No fancy investment tricks or get-rich-quick schemes, just proven strategies that have helped millions of people build wealth and get out of debt. 

Here are some things the financial guru wants you to start doing with your money right now, as well as details on why they’re important and how you can implement them yourself.

Save Your First $1,000 Like Your Life Depends on It

What Ramsey Says: This is the first of Ramsey’s Seven Baby Steps. Before you do anything else with your money, scrape together $1,000 for a starter emergency fund. This isn’t your full emergency fund. It’s just enough to handle small emergencies without going into debt.

Why It Works: That $1,000 acts like a financial buffer between you and Murphy’s Law. When your car breaks down or your kid needs emergency dental work, you won’t have to reach for a credit card. It’s about breaking the cycle of borrowing money every time life happens.

How To Get Started: Cut expenses to the bone for a few months. Skip dining out, cancel subscriptions you don’t absolutely need and sell stuff around your house. Most people can find $1,000 faster than they think when they get serious about it.

Attack Your Debt Using the Snowball Method

What Ramsey Says: The second Baby Step, this is where you’ll want to list all your debts from the smallest to largest balance (not including your mortgage), ignoring interest rates completely. Pay minimums on everything, then throw every extra penny at the smallest debt until it’s gone. Once that’s paid off, roll that payment into the next smallest debt.

Why It Works: This is all about psychology, not math. Paying off that first small debt gives you a win that builds momentum. Ramsey argues that personal finance is 80% behavior and only 20% head knowledge, so the emotional boost matters more than optimizing interest rates.

The Reality: You might pay slightly more in interest compared with targeting high-rate debts first, but most people stick with the snowball method longer because they see quick progress.

Build a Fully Funded Emergency Fund

What Ramsey Says: Once you’re debt-free (except your house), save three to six months’ worth of expenses in a fully funded emergency fund, which is the third Baby Step. This money sits in a boring savings account where you can access it quickly if needed.

Why This Changes Everything: A decent emergency fund means you won’t have to go back into debt for unexpected expenses. Job loss, medical bills and major repairs can all be handled with cash instead of credit cards. 

The Sweet Spot: Most people need closer to six months’ worth of expenses, especially if you have irregular income or work in an unstable industry.

Live on a Written Budget Every Single Month

What Ramsey Says: Do a zero-based budget where every dollar has a job before the month begins. Income minus expenses should equal zero, meaning you’ve assigned every dollar to something specific. This budget “helps you give every dollar you made that month a clear purpose,” Ramsey said in a Facebook post.

Why Most People Fail: They budget in their heads or use vague categories. However, writing it down (or using an app) and being specific will yield better results. “Entertainment” isn’t a budget category; instead, try “dinner out: $80,” and “movies: $40” as budget categories.

The Game Changer: When you know exactly where your money goes, you stop the money leaks that keep people broke. Those random $20 purchases can add up to hundreds per month. “When you’ve got a plan, you’re more likely to not overspend,” Ramsey said.

Start Investing 15% for Retirement

What Ramsey Says: Once you’re debt-free with a full emergency fund, invest 15% of your household income into retirement accounts. This is Ramsey’s fourth Baby Step. He recommends starting with your work’s 401(k) (with full employer match) and then investing the rest into Roth IRAs.

The Magic Number: While 15% might sound like a lot, it’s the sweet spot between building wealth and having money for other goals. Less than 15%, and you probably won’t have enough for retirement. More than 15%, and you might neglect other important goals like your kids’ college or paying off your house.

Where To Put It: Max out any company match first (free money), then Roth IRA, then back to your 401(k).

Cover Your ‘Four Walls’ Before Anything Else

What Ramsey Says: In tough financial times, prioritize food, utilities, shelter and transportation before paying any other bills. These are your survival needs, and they come before credit card payments, student loans or anything else. “And until you clear food, utilities, housing and transportation and get them all current, you don’t spend on anything else on anything,” Ramsey said on The Ramsey Show.

Why This Matters: Keeping your basic needs covered reduces the panic that leads to bad financial decisions.

The Priority Order: Feed your family, keep the lights on, maintain your shelter and ensure you can get to work. Everything else is negotiable.

Live Abundantly and Give Back

What Ramsey Says: When you’ve paid off your debts and your “money is working for you,” you can experience “total financial peace,” per Ramsey.

The Mindset Shift: Instead of feeling overwhelmed by the size of your debt or how far behind you are, focus on the next step. Remember, you don’t have to fix everything at once. Just make progress consistently.

Real Talk: Today’s economic challenges are real, but his methods work regardless of external circumstances. The principles of spending less than you earn, avoiding debt and investing consistently have worked through recessions, inflations and market crashes.

Getting Started Today

Pick one area and start there. If you have debt, begin listing it from smallest to largest. If you don’t have $1,000 saved, figure out how to cut expenses this month. If you don’t budget, sit down this weekend and plan next month’s spending.

The key is starting with where you are, not where you think you should be. Remember, this isn’t about perfection; it’s about progress. Every small step builds momentum toward bigger changes that can transform your financial life.

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