Final answer:
The statement "Your first baby step is to pay off all your debt" is true because managing your finances effectively is crucial to achieving financial stability. Option a is correct.
Step-by-step explanation:
The statement about paying off debt as a first step is true. Doing so avoids accruing interest on credit balances and financially benefits your net worth, making it a rational financial strategy.
One critical step in this process is paying off debt, which helps to prevent the accumulation of interest and leads to a healthier financial state. This is because every month you carry a balance on your credit card, you're subject to interest charges on the money you owe. Therefore, the most rational decision is to pay off debts as soon as possible, thereby reducing financial liabilities and ultimately increasing your net worth.
Option a is correct.