I was living paycheck to paycheck and driving myself crazy!
The first step on the Dave Ramsey financial freedom plan is to save $1000 (more or less depending on your personal situation) in an emergency fund, fast!
In order to do this I had to completely drain my budget, leaving only necessary items and putting every single cent into my savings.
Step 1 – list all your mandatory fixed expense, the key thing here was MANDATORY. Netflix is not mandatory, your nails are not mandatory and honestly your hair isn’t mandatory right now either. Things like rent, phone and insurance were on this list. I also added to the list any debt I had at the moment (car note, credit card etc) but only paying the minimum amount. Once this step is complete then you know how much money you have left.
Step 2- the variable expenses – depending on your situation this may be more than your fixed expenses. stop (or drastically reduce) things like going out to eat/drink and shopping, remember that this is only temporary so don’t cry. Take a good look at how much you spend on things like groceries (you will be surprised by how much food you buy but don’t eat). Focus on cooking all of your meals and making them as simple as possible so that you don’t spend too much. Look for coupons, sales and shop at Aldi, get as close to a rice and beans diet as possible and again keep in mind that this is only until you meet your goal. Cancel as many month to month subscriptions as you can (Netflix, hulu etc), trust me every dollar counts.
Step 3- Couch money – I literally went through my room and gathered all the loose change I could find and found about $50. Who knows you may even find more! While doing this consider items what you can quickly sell whether its clothes that are in good condition that you are no longer wearing or small electrics that you barely touch, Poshmark has worked for me but there are plenty of reselling apps.
Step 4 – Make more money – If you still haven’t reached the goal then it’s time to make more money. Can you babysit? Dog sit? Ride share? Or have some other side hustle that can quickly bring in a little money? Do it!
Follow these steps and you should be able to gather some extra money for your emergency account. Restricting yourself can be really hard but knowing that it’s only temporary will help you push through. Whether you are going to follow all of Dave Ramsey’s baby steps or not you should always make sure you have some money tucked away for emergencies!