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Dave Ramsey’s ‘Baby Steps’ vs Ramit Sethi’s ‘Rich Life’: Which Is Better for Building Wealth?

May 25, 2025

3 min Read

Written by Jennifer Taylor

Edited by Cory Dudak

A young couple sitting at their kitchen table, reviewing financial documents and managing their household bills.

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Building wealth might be easier than you think. Personal finance experts Dave Ramsey and Ramit Sethi have each created a step-by-step method that can help take your finances to the next level.

If you’re ready to make some changes to your financial situation, following one of these approaches might be the answer. Keep reading for a closer look at each method to help you decide which option could be the better path to help you build wealth.

Dave Ramsey’s Baby Steps

Ramsey’s method, the “7 Baby Steps,” is designed to help you build an emergency fund, pay off debt and build wealth. Here’s a brief overview of the steps and how each one works.

1. Save $1,000 for your starter emergency fund.
2. Use the snowball method to pay off all debt (except your mortgage).
3. Save 3-6 months of expenses in an emergency fund.
4. Invest 15% of your household income in retirement.
5. Save for your children’s college fund.
6. Pay off your home early.
7. Build wealth and give.

Ramit Sethi’s Rich Life

Sethi’s “Rich Life” method focuses on having the ability to spend money in a manner that makes your life feel full. Here’s a look at the eight rules in this process.

1. Your rich life should fit you like a handmade glove.
2. A rich life puts you in control.
3. Getting started is more important than becoming an expert.
4. It’s okay to make mistakes.
5. Play offense, not defense.
6. You don’t have to wait until you retire to live a Rich Life.
7. Focus on the big wins.
8. A rich life is generous.

Which Method Is More Likely to Help Build Wealth?

Both Ramsey and Sethi’s methods focus on the same thing: building wealth. However, their approaches are largely different. One isn’t wrong or less effective, they just might be best suited for different people.

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Those who are deep in debt and require a more structured approach could benefit from Ramsey’s strict, clear-cut steps. Since they offer little room for interpretation, exactly what you need to be doing is spelled out in front of you.

Sethi’s method might be a better choice for people without much debt, who are trying to figure out the best way to allocate their money. This could be those early in their career or even high-earners who feel like their spending is out of control or isn’t fully serving them.

Regardless, both methods are proven successful, so you really can’t go wrong. You can always try one approach and if it doesn’t seem like the right fit, it’s okay to switch to the other one and see if that’s a better choice for your needs.

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