How To Save Like Dave Ramsey

money advise

Ramsey’s Advice For YOUR Money.

Dave Ramsey is a very well known name in the money world – and for good reason! His advice has helped countless people get out of debt, conquer their money woes, save for retirement, and finally make the big, life-changing purchases they’ve always wanted. What are some of his top tips on how to keep your money safe and save for the life you want? Continue reading to see how you can save like Dave Ramsey.

Save Like Dave Ramsey

1. Set Up a Side Income Source

If you have a part-time job and are having trouble making ends meet, Ramsey suggests getting creative and using your talents to string together other side jobs to supplement your finances — that’s the advice he gave a caller on his radio show who was having trouble supporting his family with a $13.50-an-hour job.

“If you cut grass for yourself, for two people, you could average $25 an hour,” he said. “Let’s start to think that way in the short term to get the income up. … Even if you just did a few little things and made a thousand bucks a month, dude — that changes your whole life right now.”

2. Stop Buying What You Can’t Afford Up Front

If Dave Ramsey is known for anything, it’s his insistence that people need to minimize their debt — and, ideally, never get into debt in the first place.

“You’ve been buying stuff like out of control — like it’s water,” he told a caller with more than $80,000 in credit card debt. “I mean, you’re broke and you go buy a new car, and put it on payments. … We just keep buying crap we can’t afford like you’re in Congress. It’s got to stop. You’ve got to stop buying things you can’t pay for.”

It’s a basic concept, but it does require a certain amount of will power. Once you decide that one purchase you can’t afford is OK to cover with credit, it’s easy to slip into the mentality of justifying all your expenses and quickly accumulating debt. But, as Ramsey told the caller: “You do not want to be this clueless five years from now.”

3. Finally Budget Your Income

Many people are stuck in a paycheck-to-paycheck lifestyle. Maybe it’s something they’ve fallen into on hard times, or maybe it’s the incorrect perception that their income necessitates it. According to Ramsey — and almost every personal finance expert out there — it doesn’t have to be this way.

“The problem is you’re getting on the wrong side of this,” Ramsey told one radio show caller. “The money is gone and then you’re trying to look back and see where it went. … Instead you need to tell it where to go before it leaves.”

In short: Budget. Budget everything. And there are no lack of budgets out there to help you. Between the 50-30-20 budget, the envelope method and other tactics often cited as cures to overspending, it can even be difficult to narrow down an option that works best for your situation. The best tip is to isolate your needs, consider your expenses for them, and then tackle your wants and negotiables.
– via The Huffington Post

4 Ways to Find Success Using the Envelope System

One of the pieces of advice that Ramsey is best known for is his envelope system – a way to easily track your money and control your spending, day to day. Below is a short breakdown of how the envelope system works and what it could do for you.

1. Account for Every Penny

The most boring part of any process is often the most important. When determining how much to allow in each budget, accounting for every expenditure is essential. What’s also important is to calculate how much you’d need in each budget by adding up how much you’ve spent in the past on bills, such as utilities and groceries — to the penny. Rough estimations from the depths of your memory will only harm your ability to budget accurately.

2. Budget Realistically

You might have big savings goals, but being unrealistic with each budget will be your own worst enemy. If you know you spend $200 on gas every month, which primarily goes toward your daily work commute, why set your budget to $100? In this particular scenario, you’ve already set yourself up for failure since spending $200 to get to work is non-negotiable in most cases (unless your employer is in walking distance or you have the opportunity to carpool).

3. Leave Plastic Cards at Home

When going out on supermarket runs or to a restaurant, a key component to saving money with the envelope system is to leave any debit cards or credit cards at home. Doing so prevents you from letting your willpower buckle at checkout.

If you absolutely must pay for something urgent and unexpected that’s beyond your budget, you can adjust how you’ve divided up your money by pulling money from a more flexible budget, like groceries. At the end of the month, you would have still kept within your total spending budget anyway.

4. Let Yourself Have Fun

Too much restriction for the sake of saving money can set yourself up for failure with the Dave Ramsey envelope system. For this reason, give yourself permission to set up an entertainment or “weekend” budget for a few fun activities you can indulge in throughout the month. Soon enough, you won’t even feel like you’re wanting when it comes expenses like treating yourself to a night out with friends.
– via GOBankingRates

Do you want to save like Dave Ramsey? Who’s your favorite money guru?

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