Now, bring it all home. Baby Step 6 is the big dog! Your mortgage is the only thing between you and complete freedom from debt. Can you imagine your life with no house payment? Any extra money you can put toward your <a href="https://www.ramseysolutions.com/real-estate/mortgage-payoff-calculator?promo_name=Baby%20Steps%20Calculators&amp;amp;promo_id=ramseysolutions.com%2Freal-estate%2Fmortgage-payoff-calculator&amp;promo_creative=mortgage&amp;promo_position=3">mortgage </a>could save you tens (or even hundreds) of thousands of dollars in interest.

Baby Step 6: Pay Off Your Home Early

It's time to get serious about retirement—no matter your age. Take 15% of your gross household income and <a href="https://www.ramseysolutions.com/retirement/investment-calculator?promo_name=Baby%20Steps%20Calculators&amp;amp;promo_id=ramseysolutions.com%2Fretirement%2Finvestment-calculator&amp;promo_creative=start%20investing&amp;promo_position=2">start investing </a>it into your retirement. Start with your company’s 401(k) plan and invest up to the full employer match. Then invest the rest into Roth IRAs—one for you and one for your spouse (if you’re married).

Baby Step 4: Invest 15% of Your Household Income in Retirement

You know what people with no debt can do? Anything they want! The last step is the most fun. You can live and give like no one else. Keep <a href="https://www.ramseysolutions.com/retirement/net-worth-calculator?promo_name=Baby%20Steps%20Calculators&amp;amp;promo_id=ramseysolutions.com%2Fretirement%2Fnet-worth-calculator&amp;amp;promo_creative=building%20wealth&amp;amp;promo_position=4">building wealth </a>and become outrageously generous, all while leaving an inheritance for your kids and their kids. Now that's what we call leaving a legacy!

Baby Step 7: Build Wealth and Give

By this step, you've paid off all debts (except the house) and started saving for retirement. Next, it's time to save for your children’s college expenses (that is, if they make it through Algebra II and Chemistry unscathed). We recommend 529 college savings plans or ESAs (Education Savings Accounts).

Baby Step 5: Save for Your Children’s College Fund

You’ve paid off your debt! Don’t slow down now. Take that money you were throwing at your debt and build a fully funded emergency fund that covers 3–6 months of your expenses. This will protect you against life’s bigger surprises, like the loss of a job or your car breaking down, without slipping back into debt.

Baby Step 3: Save 3–6 Months of Expenses in a Fully Funded Emer

Next, it’s time to pay off the cars, the credit cards and the student loans. Start by listing all of your debts except for your mortgage. Put them in order by balance from smallest to largest—regardless of interest rate. Pay minimum payments on everything but the little one. Attack that one with a vengeance. Once it's gone, take that payment and put it toward the second-smallest debt, making minimum payments on the rest. That's what's called the debt snowball method, and you’ll use it to <a href="https://www.ramseysolutions.com/debt/debt-calculator?promo_name=Baby%20Steps%20Calculators&amp;amp;promo_id=ramseysolutions.com%2Fdebt%2Fdebt-calculator&amp;promo_creative=knock%20out%20your%20debts&amp;promo_position=1">knock out your debts </a>one by one.

Baby Step 2: Pay Off All Debt (Except the House) Using the Debt

In this first step, your goal is to save $1,000 as fast as you can. Your emergency fund will cover those unexpected life events you can't plan for. And there are plenty of them. You don’t want to dig a deeper hole while you’re trying to work your way out of debt!

Baby Step 1: Save $1,000 for Your Starter Emergency Fund

Dave Ramsey’s 7 Baby Steps is a money management plan designed to help you get out of debt, save money and build wealth. You can achieve financial success!

Baby Step 7: Build Wealth and Give

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