Baby Steps for College Students

Dave Ramsey has these 7 steps that, when applied consistently over time, will guarantee wealth. As a recent college graduate, I found that I learned a lot of these steps too late, or that they didn't seem particularly applicable to my life now. Rachel Cruze, Jon Acuff, and Christy Brown (from Dave Ramsey's Speaking Team) adapted some of these steps to be more applicable for college students, and I've brought them here to share with you, along with some of my own thoughts.


Baby Step 1: $500 Emergency Fund
Dave has adults store up a full $1000, but Rachel believes that $500 is more than enough to cover any emergencies that students may come across. I'm inclined to agree, especially since most students also have their parents to help them out, so the chances of having to dip into your own emergency fund is lower. However, if you have the income to establish the full $1000 primary emergency fund, why not go ahead and do it? Eventually you'll want to expand that emergency fund to 3- to 6-months expenses anyway.

Baby Step 2: Have a pile of money to pay for Tuition.
This is going to be a tougher nut to swallow. Most college students are being helped handily by their parents to go to college, and I'm no exception. But, considering that Dave Ramsey's "thing" is getting out of debt, it makes a lot of sense that they would recommend that you save up money for tuition before going to college. Even working part time at minimum wage can earn enough to go to school incrementally, especially if you do your GEs at a community college first while you save up more money.


Baby Step 3: Debt Snowball
This is actually what Dave typically has listed as "Baby Step 2". Basically, you list all of your debts smallest to largest with all of their minimum payments. Then you look at your budget and squeeze out any extra money that you can and you apply it to your smallest debt. Then, after that is paid off, you take that minimum payment, along with everything else you were paying, and apply that to the next smallest and so on and so forth until you've paid off your debts.

After the Debt Snowball, you join up with the regular Baby Steps, which can be found here.

"Why are people so obsessed with having stuff now that they forfeit their future money?"

Bonus Tip: I think it's wise to just stay completely clear of credit cards. People will argue with me about it, but what do you really need it for? Buying stuff you can't pay cash for? That sounds like a good idea... Okay, no it doesn't. Why are people so obsessed with having stuff now that they forfeit their future money? It just seems dumb to me. I've already got student debt, unfortunately, but I'm doing my best to keep from getting more and I'm planning on paying off what I have before I enjoy many of life's luxuries.

Graduated from college? Do you have any financial tips for college students?
Do any of you college students have tips for other students?