Dave Ramsey Calculator
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The Dave Ramsey Baby Steps Calculator
Follow Dave Ramsey's proven plan to get out of debt and build wealth.
Your Estimated Debt-Free Date
—
Understanding Dave Ramsey's Baby Steps and Debt Payoff
Dave Ramsey's financial program, outlined in his "Total Money Makeover," emphasizes a common-sense approach to personal finance. A cornerstone of this plan is the aggressive debt payoff strategy, often referred to as the "Debt Snowball" or a variation of it. This calculator helps you visualize the potential timeline for eliminating non-mortgage debt by applying extra payments.
The core principle is to first build a small emergency fund, then attack debt with all available resources before moving on to investing and wealth building. This calculator focuses on the debt payoff phase, simulating how quickly you can become debt-free.
How the Dave Ramsey Baby Steps Calculator Works:
This calculator uses a simplified model to estimate your debt payoff time. It takes into account your total non-mortgage debt, the extra amount you can put towards debt each month (above your minimum payments), and your initial emergency fund status.
- Baby Step 1: Emergency Fund. Dave Ramsey recommends saving $1,000 first. This calculator assumes you've completed or are working on this.
- Baby Step 2: Debt Snowball. This is where this calculator shines. You list all debts from smallest to largest, regardless of interest rate. You pay minimums on all but the smallest, throwing every extra dollar at that smallest debt. Once it's gone, you add its payment to the next smallest debt's minimum payment, creating a "snowball" effect.
- Baby Step 3: Fully Funded Emergency Fund. Once debt is gone, build 3-6 months of living expenses.
The Calculation:
The calculator estimates payoff by simulating monthly payments. It essentially calculates:
Remaining Debt = Total Debt - (Extra Monthly Debt Payment)
It then determines how many months it takes for the Remaining Debt to reach zero at the given Extra Monthly Debt Payment.
Example:
If you have $50,000 in debt and can put an extra $500 per month towards it:
Payoff Time (Months) = Total Debt / Extra Monthly Debt Payment
Payoff Time (Months) = 50000 / 500 = 100 months
This is approximately 8 years and 4 months.
Important Considerations:
- This calculator is a simplification. It does not account for interest accrual, which can significantly extend payoff times. Dave Ramsey's strategy often works best with smaller debts where interest is less of a factor, or when aggressively paying down higher-interest debts first.
- The "Extra Monthly Debt Payment" should represent money *above* your minimum required payments across all debts.
- The $1,000 emergency fund (Baby Step 1) is crucial to prevent going back into debt for unexpected expenses.
- This calculator focuses on non-mortgage debt.
Use this tool to get motivated and see the power of consistent, aggressive debt repayment. Adjust your "Extra Monthly Debt Payment" to see how increasing your commitment can drastically shorten your debt-free journey!
function calculateDaveRamsey() {
var totalDebt = parseFloat(document.getElementById("totalDebt").value);
var monthlyDebtPayment = parseFloat(document.getElementById("monthlyDebtPayment").value);
var emergencyFund = parseFloat(document.getElementById("emergencyFund").value);
var resultValueElement = document.getElementById("result-value");
var resultMessageElement = document.getElementById("result-message");
resultValueElement.textContent = "–";
resultMessageElement.textContent = "";
if (isNaN(totalDebt) || isNaN(monthlyDebtPayment) || isNaN(emergencyFund)) {
resultMessageElement.textContent = "Please enter valid numbers for all fields.";
return;
}
if (totalDebt <= 0) {
resultMessageElement.textContent = "You have no non-mortgage debt to pay off!";
resultValueElement.textContent = "Debt-Free!";
return;
}
if (monthlyDebtPayment 0) {
payoffMessage += years + " year" + (years !== 1 ? "s" : "");
if (remainingMonths > 0) {
payoffMessage += " and " + remainingMonths + " month" + (remainingMonths !== 1 ? "s" : "");
}
} else {
payoffMessage += remainingMonths + " month" + (remainingMonths !== 1 ? "s" : "");
}
resultValueElement.textContent = payoffMessage;
if (emergencyFund < 1000) {
resultMessageElement.textContent = "Keep focusing on Baby Step 1: Build a $1,000 starter emergency fund before aggressively attacking debt.";
} else {
resultMessageElement.textContent = "This is an estimate, ignoring interest. Focus on Baby Step 2: Attack your debt!";
}
}