Is Dave Ramsey right about debt? Is all debt bad? Should I pay off low-interest debt, too?

While some of the answers to these questions are debatable, the crux if this article will speak to you whether you’re payingt off all debt or just the high-interest, “bad debt.” Keep reading to learn if Dave Ramsey’s baby steps really work and if they can help you get out of debt sooner than later.

The long and short is that, yes, Dave Ramey’s method of paying off debt is totally legit, and it worked to help me and my then spouse pay off over $120,000 worth of debt.

From that debt-free place, I was able to home school my children, earn extra income from home to invest in real estate and the stock market while living a relaxed, traveled-filled life on the south-side of Chicago.

In fact, Dave Ramsey’s system worked so well that I’m using it again to recover from debt after going through a difficult divorce where I chose not to take what was due to me. (That’s another story that nyou can read here when you get a moment.)

If you want to know more about The Total Money Makeover and Dave’s Debt Snowball method, then this quick guide can help you learn more about Dave Ramsey’s method of dumping debt so you can get started with your own debt repayment plan.

A Short Review of Dave Ramsey’s The Total Money Makeover

Dave Ramsey’s The Total Money Makeover is a practical and inspiring guide to achieving financial freedom through discipline and proven strategies. The book outlines clear, actionable steps like the “Baby Steps” approach, emphasizing budgeting, eliminating debt, and building wealth. What stands out is its straightforward, no-nonsense style, making financial concepts accessible to everyone.

Many readers, myself included, have found success applying Ramsey’s methods, from creating an emergency fund to paying off debt completely. While the program requires commitment and doesn’t promise overnight results, it truly works when you follow itconsistently. Whether you’re struggling with debt or simply seeking better money management, this book offers timeless advice to transform your financial future.

How We Paid Off $120,000 in Debt

Paying off $120,000 in debt may sound like a monumental task, but through a mix of practical steps and spiritual principles, I was able to completely eliminate that burden. My hope is that by sharing my story, you’ll discover insights and strategies that can help you on your own debt-free journey. Below, I’ll break it all down into actionable steps that combine, faith, Biblical wisdom along with practical execution.

Starting the Journey

My story begins more than 20 years ago. I was a newly married stay-at-home mom, homeschooling my children. While this lifestyle was meaningful, it put immense pressure on our finances.

We had considerable debt, garnishments on our income, and a modest household budget supported by a single post office salary. The situation looked grim, but I knew we needed to make a change to secure a better future for our family.

At the time, my church played an influential role. The pastor frequently spoke about the importance of financial stability and getting out of debt—not only to create a better life for ourselves but to serve a higher purpose. Inspired by this wisdom and supported by spiritual teachings, we decided to tackle this challenge head-on.

The Practical Steps

The practical steps we took were guided largely by financial principles from Dave Ramsey’s teachings, which I learned about through his radio program based on his debt strategy in the Total Money Makeover debt payoff guide. The steps we took were based on Dave Ramsey’s practical steps, detailed below.

The Seven Baby Steps

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

The first step involves setting aside $1,000 as a small emergency fund. This starter fund helps cover unexpected expenses and prevents you from relying on credit cards or going deeper into debt.

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

Focus on tackling all your debts, except your mortgage, using the debt snowball method. This strategy involves paying off your smallest debts first for psychological momentum as you work toward eliminating larger debts.

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

Once debt-free, build a comprehensive emergency fund that can cover 3 to 6 months of living expenses. This safety net provides financial security in case of unexpected life events like job loss or medical emergencies.

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

Now that you’re financially stable, it’s time to plan for your future. Invest 15% of your household income into retirement accounts such as a 401(k) or Roth IRA to build wealth for later years.

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

Start setting aside money to fund your children’s college education. Use accounts like Education Savings Accounts (ESAs) or 529 college savings plans to help secure their future without accumulating student debt.

Baby Step 6: Pay Off Your Home Early

With your other financial obligations in check, focus on paying off your home mortgage early. Becoming completely debt-free provides incredible freedom and reduces financial stress.

Baby Step 7: Build Wealth and Give

The final step is about enjoying the fruits of your hard work. Continue building wealth through investments, start giving generously to causes you care about, and create a legacy for future generations.

Here’s How We Used Dave Ramsey’s Strategy Pay Off Debt

Created a Budget

We built a detailed budget, ensuring every dollar had a purpose. This helped us track our expenses and allocate money toward debt reduction. A budget is simply a spending plan that puts you in control of your finances, and it was instrumental for us. Even if you’re new to managing money, tools like spreadsheets or paper-based planning can work wonders.

Cut Expenses and Increased Income

We made sacrifices by cutting back on unnecessary expenses, focusing only on essentials. At the same time, I started working from home while homeschooling, which helped bring in extra income to accelerate our progress.

The Spiritual Principles

Equally important on our debt-free path were the spiritual principles that nurtured my mindset and strengthened my faith throughout the process:

Declaring and Speaking Debt Freedom

One spiritual step I relied on was the power of declarations. Inspired by scriptures like Mark 11:23–24, I would repeatedly decree that I was debt-free. Speaking life over my finances through affirmations like “Wealth and riches are in my house” created a positive and faith-based mindset.

Applying Biblical Lessons

I also drew inspiration from scriptures such as 2 Kings 4, which tells the story of a widow who was instructed by the prophet Elisha to sell oil to pay her debts. This passage reminded me that solutions could come through small steps rather than waiting for one big financial breakthrough. By handling payments one at a time, I began to see steady progress.

Another key example came from Matthew 17, where Peter was instructed to find a coin in a fish’s mouth to pay taxes. This showed me that God could provide in unexpected ways, and it strengthened my faith during challenging moments.

Combining Practicality with Faith

Faith and action went hand in hand throughout my debt-free story. Reading scripture, trusting God’s provision, and acting on financial wisdom created a powerful combination. These principles not only helped us pay off over $120,000 in debt but also opened the door to a brighter financial future, including opportunities in real estate investment.

Take the First Step

If you’re ready to start your debt-free journey, I encourage you to take action today. Whether it’s creating a budget, speaking affirmations over your finances, or simply believing that debt freedom is possible, you can start small and build momentum.

Download my free eBook, “Get Out of Debt Now: A Free Guide on Accelerating Debt Elimination,” to take your first step toward financial freedom. With practical tips and spiritual insights, this guide will help you create a plan to eliminate debt and build the life you’ve always envisioned.

Together, with determination and faith, you can achieve financial freedom!