One of Dave Ramsey's financial literacy campaigns features seven "baby steps" that individuals and households should pursue in order to gain financial freedom. Each step should proceed when the previous one has been completed or is near completion. These include: Establish an emergency savings fund of at least $1,000 Pay off all non-housing debts ASAP starting with those with the smallest outstanding balances (known as the debt snowball method) Increase yout emergency fund to 3-6 months' income Invest 15% or more of your gross monthly income into a retirement account like a 401(k) or IRA Start college funds (if you have children) in qualified accounts like 592 plans and ESAs Pay off your mortgage as early as possible Build wealth