In the Baby Step process, step 2 is arguably the most important for a few reasons.
First, by getting out of debt, you free up your most powerful wealth-building tool, which is your income. When you're not shoveling your paychecks out the door to credit card companies, student loans and car payments, you have money to do positive things like saving for emergencies, investing, buying nice stuff and giving to the less fortunate.
Being free from debt also saves you on the interest you pay. If you carry a $10,000 credit card balance at an annual rate of 24%, that means you are paying $2,400 a year for nothing. That's $200 a month. You get absolutely no benefit from throwing away that $2,400. It's just money that the credit card is taking from you. If you pay it off, that money stays with you.
Paying off debt brings a host of other positives into your life. When you have no debt, you relax a little more. Your relationships with your spouse and kids are better since you're not stressed about money. That improves your health. Paying off debt increases your discipline in everything from work to losing weight, since you live on a budget and have a plan.
Getting out of debt also teaches you a very important lesson: contentment. Baby Step 2 involves budgeting, sacrifice and possibly extra jobs or selling stuff. It causes you to focus on your goal of being debt free. It also makes you think about what is important in life. If you aren't able to have a date with your spouse or watch your child play sports for a while because you're working an extra job, you start to think of how awesome it will be when you can do that simple stuff again.
Time with your family doesn't cost anything but means everything. Not having to worry about collector calls or having too much month left at the end of the money produces a feeling of peace and contentment that you can't get anywhere else.
It's out there. It's waiting for you. Get on a plan, get going, and go get it.
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The Getting Started Guide: If you're new to Dave Ramsey, and need a few recommendations on how to get started with our plan for beating debt, this 6-part email series would be valuable to you.