According to Baby Step 1, how much should college students save as an emergency fund?

In the context of Dave Ramsey's Baby Steps plan, Baby Step 1 emphasizes the importance of establishing a foundational financial safety net through an emergency fund. For college students, the recommended amount to save as an emergency fund is $1,000. This amount is designed to cover small but unexpected expenses that may arise, helping to prevent students from going into debt when unforeseen circumstances occur, such as a car repair or medical bill.

The amount chosen as the correct answer provides a solid balance between being achievable for students, who may have limited income, and being sufficient to handle those minor emergencies that could disrupt their financial stability. This step encourages the habit of saving and financial planning, which are crucial skills for long-term financial health.