What is the first Baby Step in Dave Ramsey's plan?

The first Baby Step in Dave Ramsey's plan is to save $1,000 for a starter emergency fund. This step is crucial as it establishes a financial safety net that can help individuals cover unexpected expenses, such as car repairs or medical bills, without resorting to debt. The idea is to create a small cushion that can prevent financial setbacks from derailing one's overall budget and progress toward financial stability.

By having this emergency fund in place, individuals can address emergencies in a way that keeps their financial plan intact. It provides peace of mind and encourages disciplined saving. This foundational step sets the stage for subsequent actions in the plan, such as paying off debt, saving for significant future expenses, and investing for retirement, thereby helping individuals achieve greater financial health over time.