My wife and I have attended the Dave Ramsey Financial Peace University course and have started making slow progress on this journey to financial success. It’s a program we would both recommend as it forces you to become disciplined with how money enters and leaves your household.

The beauty of the Dave Ramsey Financial Peace University program is that he’s created an easy way for everyone, regardless of age or income, to reach a point in their life where finances don’t control emotions and help in changing a family legacy. The way or baby steps are broken down into 7 stages that are achievable through a simple desire to live well. As Dave Ramsey frequently says, “Live like no one else, so that you can live like no one else”.

From the Dave Ramsey website, the 7 stages are:

Baby Step 1

$1,000 to start an Emergency Fund

An emergency fund is for those unexpected events in life that you can’t plan for: the loss of a job, an unexpected pregnancy, a faulty car transmission, and the list goes on and on. It’s not a matter of if these events will happen; it’s simply a matter of when they will happen.

Baby Step 2

Pay off all debt using the Debt Snowball

List your debts, excluding the house, in order. The smallest balance should be your number one priority. Don’t worry about interest rates unless two debts have similar payoffs. If that’s the case, then list the higher interest rate debt first.

Baby Step 3

3 to 6 months of expenses in savings

Once you complete the first two baby steps, you will have built serious momentum. But don’t start throwing all your “extra” money into investments quite yet. It’s time to build your full emergency fund.

Baby Step 4

Invest 15% of household income into Roth IRAs and pre-tax retirement

When you reach this step, you’ll have no payments—except the house—and a fully funded emergency fund. Now it’s time to get serious about building wealth.

Baby Step 5

College funding for children

By this point, you should have already started Baby Step 4—investing 15% of your income—before saving for college. Whether you are saving for you or your child to go to college, you need to start now.

Baby Step 6

Pay off home early

Now it’s time to begin chunking all of your extra money toward the mortgage. You are getting closer to realizing the dream of a life with no house payments.

Baby Step 7

Build wealth and give!

It’s time to build wealth and give like never before. Leave an inheritance for future generations, and bless others now with your excess. It’s really the only way to live!

We highly recommend attending one of the courses that are offered as part of the Financial Peace University program or reading his book titled The Total Money Makeover. However, as good as the book is, the discussions, stories and encouragement from others in the financial peace class makes the financial peace journey much more enjoyable.

As our friend likes to say, “The joy is in the journey, not the destination”.