Ambition is great in many things, but setting your sights too high can backfire. To make big goals happen, it's important to take them one step at a time — and celebrate your achievements along the way.
Dave Ramsey has seven "
" he recommends people take on the path to financial fitness.
Baby Step 1: Amass a $1,000 emergency fund
Start by making sure you have some backup savings ready. If your car breaks suddenly, or you have some expensive health problems, it won't immediately wipe you out if you have an emergency fund to fall back on.
Start with the smallest debt you have to pay off and move up from there. By tackling the feat of paying off your entire debt (except for the house — that comes later) one loan at a time, you'll little by little work your way towards financial fitness.
Baby Step 3: Save up enough money to cover 3-6 month's worth of expenses
Once you've paid off your debts, saving will come much more easily. Build up that emergency fund to the point where if you lost your job, you'd have several months before you really felt the effect.