Save $1,000

After you've got into the habit of planning a monthly budget and after you've got current with all your debts, the next step is to save an emergency fund. This savings is just for emergencies.

There's nothing so frustrating as to do all that work with budgets, make progress with bills, and then to get hit with some kind of emergency. You get right back behind on the bills again and you feel, "what's the use?" The emergency fund is for life's little emergencies.

As I said in the past, Dave is okay with his advise, however for many people there may just not be enough income to do all these things. What is needed is discipline and more income. An additional, part-time job to supplement the income may be necessary. Just note, that the Rich Dad crowd doesn't have the corner on financial wisdom, either. Additional income, without the spending discipline steps that Dave Ramsay suggests will only mean more spending. To truly get out of debt, some people may need to do both.