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Dave Ramsey Money Tips
If you have struggled with debt and searched for financial freedom solutions you have with no doubt come across Dave Ramsey. Maybe you were searching for tips or how to’s, baby steps to follow. Maybe you just needed direction in the messy road map that is personal finance. You are not alone!
When the industry my husband was working in started laying people off he was one of the first to go and that sent our financial future into a tailspin. We weren’t alone either 30,000 people got laid off in his industry.
Just think about it, that is a lot of stress, emotion, worry, mortgage payments, grocery bills, car payments and more. We were lucky enough to find Dave Ramsey and have a personal email exchange with his office. His staff by the way are amazing!
They directed us to all the resources we needed, what to read, what to do, what to watch. In a time where you feel stressed and not knowing direction it is nice to have someone in your corner.
Who is Dave Ramsey?
Dave Ramsey is a trusted voice on money. An author that teaches families how to budget, beat debt and build a legacy. He started at some of the same places you might be starting from. High levels of debt and frustration without a clear path to follow.
Dave Ramsey started his company, wrote his books, created his vision and his get out of debt plan all from his kitchen table. Proving that with a plan, faith in yourself and step by step action you can pay down your debt and seek financial freedom.
Dave Ramsey gives advice on budgeting, emergency funds, side hustles, destroying your debt and so much more. If you are searching for answers related to budgeting, debt or personal finance you should read his book Total Money Makeover or watch the Dave Ramsey Show it is truly inspiring.
Dave Ramsey Baby Steps
These are the core of Financial Peace University. The action steps you can take if you successfully want to get out of debt. Getting out of debt will not happen overnight; it takes time. And every little money saving, debt busting step counts.
This means the latte you are skipping tomorrow morning just got you $5 toward your goal. No step, no frugal living choice, no money saving action is too small.
It all adds up to your goal. If you don’t believe me or you need some inspiration read this. Our small steps totaled $1000 saved in one month after following Dave Ramsey tips.
dave ramsey baby steps:
Step 1: $1000 In An Emergency Fund
Step 2: Pay Off All Debt With The Debt Snowball
Step 3: 3 To 6 Months Expenses In Savings
Step 4: Invest 15% Of Income Into Retirement Plans
Step 5: College Funding
Step 6: Pay Off Your Home Early
Step 7: Build Wealth And Give
The best dave ramsey money saving hacks
Above you will find the Dave Ramsey baby steps but these are just the basics of Dave Ramsey’s tips. Dave Ramsey and his hosts cover lots of money saving material.
For example Rachel Cruz helps people win with money and live the life they want to lead. Chris Hogan specializes in helping people build wealth through average everyday activities and skills. Christy Wright helps Moms build business and earn more income.
There is a large wealth of information covered by the Dave Ramsey Team. So in order to help you start your money saving, debt reduction journey we are going to break it down into some of the best hacks.
Each and every one of us wants to be able to get our finances in order, provide for our family and start doing more of what we love.
1. Pay With Cash
We live in a pay with plastic, electronic transfer economy. Vary rarely does a person carry cash. So rarely that grocery store cashiers and restaurant hostesses already have the debit machine ready and waiting. If you do pay with cash you get a surprised look. It has become second nature to swipe, tap and click.
If you are looking to reduce your debt and save money start carrying and paying with cash it puts a tangible value onto what you are buying. When you pay with cash you are more aware of what you are actually buying for that amount.
Try it the next time you set up your budget. Withdraw your grocery money in cash and work with your grocery budget and pay the cashier with cash instead of plastic. See if there is a different connection to the goods or the amount you spent.
2. Use The Envelope System
The purpose of an envelope system is to ensure that all areas of your budget get the allocated funds. There is no cross dipping to cover other bills. You withdraw all of your budgeted funds in cash from the bank and place them into marked envelopes.
Examples of budgeted areas you may use envelopes for might be groceries, gas, childcare, entertainment and coffee money. You place the budgeted amount in each and that is all you get. You have to make this amount work till next payday. For more information on the envelope system.
3. Have An Emergency Plan
I cannot stress the importance of an emergency fund enough. Dave Ramsey sets the start of an emergency fund at $1000 to pay for emergencies.
An emergency being your car broke down, your children are sick and need medical care, the hot water tank broke, real functional big picture emergencies. Mama needs a new pair of shoes is not an emergency.
Your emergency fund needs to be in an account that is accessible in the case of an emergency. Setting up an emergency fund is step number one of Dave Ramsey’s baby steps.
It’s your starting platform. Gathering it up, earning $1000 and putting it in an account. You may need to take on a part time job, tighten the budget, sell something, start a side hustle or simple allocate part of your paycheck to reach this goal. It should be a goal you achieve quite quickly.
4. Assess Your Spending
If you have listened to or watched Dave Ramsey before you’ll know that you need to be aware of what you are spending your money on and making sure your money is working for you.
This simply means you aren’t thoughtlessly charging this, that and everything without being aware of how it fits into your budget. I believe it’s called casual spending.
Assessing your spending is also a great way to set up a budget in the beginning and curb your spending. It is real easy to do.
For a select period, two weeks or a month collect all your receipts even the small ones and calculate how much you are spending on groceries, utilities, coffee, eating out and etc.
We did this as a family and I honestly was surprised how much we were over spending on groceries and eating out to the extent that it was wrecking our budget. You can read about all the things we stopped buying.
5. Create An Active Budget
When I say an active budget I mean you are creating a functional budget that you are using. Not a budget you set up and forget about which I have heard lots of people do.
Dave Ramsey teaches a zero based budget which means your income minus your expenses equals zero. Every dollar is accounted for.
You can use the information you collected above in tip number four assessing your spending to help you setup your budget. We have a Budgeting Binder that can assist you in all your budgeting set up.
6. Increase Your Income
The quickest way to pay down your debt and seek financial freedom is to make more money or increase your income. You can do this by getting a raise, changing jobs or seeking a side hustle. Discover 35 perfect jobs for stay at home Moms.
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You can also earn extra money by selling off your extra stuff like books, children’s clothes, toys and unused items that are collecting dust in the basement or attic.
7. Live Well On Less
One of the keys to saving money is living well on less. Frugal living and making smart choices with your money is super simple and easy to do. For more information on frugal living discover 50 frugal living tips that will save you money and the secret must haves of a frugal home.
8. Learn To Meal Plan
Dave Ramsey talks about how meal planning, essentially organizing your meals, knowing what your cooking and grocery shopping accordingly can save you money.
9. Stop Buying Brand New Cars & Electronics
Brand new items whether it be cars or the latest cellphone or electronics are 100% want items and they go down in value the moment you start using them.
If you are looking to buy a new car go with last years model or older. Buying used will save you thousands of dollars. New gadgets are great but if your current electronic still does all the stuff you need why pay more?
10. Stop Trying To Keep Up
Is the grass really greener on the other side of the fence? Or was the vacation, name brand clothes and nice cars all put on credit?
Stop trying to keep up with what you think you should be and start appreciating and enjoying what you have.
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Updated June 14, 2020