Here are the Steps to Follow in order to ensure a great, debt-free life
Step #1: Save At Least One Month Salary As an Emergency Fund
This is the first step you need to take, before you go ahead with anything else. Simply put, you can use this money only for emergencies such as medical expenses, car repairs, etc.
How often have you thought, “Oh, I’ll save later…let me just cross the bridge when I get there.”
Well, many people may think that this step is ridiculous; however, it’s best to back yourself with some money for emergencies, before you set out to save some. Makes sense, right?
Step #2: Start Tackling Debts
Now that you have some money set aside for emergencies, you can begin concentrating on your debts.
You can start off by writing about your debts from the smallest ones to the biggest ones. Then, you can focus on your smaller debts first, by saving every little penny for it.
Once you finish off that debt, you can move on to the next one.
The step mentioned above might not be optimal for many couples since they may argue that it’s sensible to start with the biggest debt first. In fact, even Ramsey admits that this might not be the best option for every couple.
However, he states that this provides ‘quick wins’ and could prove to be sensible for people who get motivated while they clear some small debts.