Taking control of your finances might seem scary. But thanks to gurus like Dave Ramsey, transforming financial stress into freedom is possible.
In this article, I’ll cover six of Dave Ramsey’s top tips for saving money! So, if you’re excited to see your savings grow, keep reading!
1. Ensure Your Emergency Fund Is Topped Up
Emergencies catch us off guard, but being financially unprepared adds stress to the mix.
Dave Ramsey suggests saving around $1,000 for unexpected moments. This will be your financial safety net.
His idea is that while you can’t stop emergencies from happening, you can cushion their blow.
Another great method for building up your emergency fund is by aiming to save enough to cover your expenses for 3 to 6 months.
Singles or stable dual-income couples need about three months saved up.
But if you’re the sole breadwinner, a single parent, or your income fluctuates, aim for six months.
If you are wondering where to stash this cash, you actually have a lot of options.
Specifically, a savings account for easy access, a money market account for a bit more interest, or an online bank that offers even better rates.
Just don’t hide it under your mattress or in a risky investment.
Note: If you’re juggling debt or your savings don’t yet cover 3 to 6 months of living expenses, stop investing for a while.
Additionally, use your emergency fund wisely. Before dipping into it, ensure the expense is unexpected, necessary, and urgent.
Pro Tip: Tools like Dave Ramsey’s EveryDollar can help you keep your saving goals on track.
2. Switch to Packing Your Lunches Instead of Eating Out
Eating out burns through cash faster than you’d think.
So, Dave Ramsey’s tip is to pretend restaurants don’t exist unless you’re clocking in for a shift.
Instead, start packing lunches. Opt for chicken — lots of it. Buying bone-in cuts and learning to debone them yourself saves a bundle.
And yes, get comfortable with eating the same meal a few times; it’s all about that meal prep magic.
Consider growing your own food as well. Even with limited space, you can significantly cut down on grocery runs.
Indoor hydroponic gardens and a couple of outdoor plots can yield about 30% of your food needs.
From garlic and peppers to tomatoes and herbs, the variety is endless. Plus, learning to can and preserve means you enjoy your harvest year-round.
Also, before your next grocery trip, take stock of what you already have!
Stick to a shopping list, lean towards generic brands, and don’t shy away from sales or meatless meals.
Pro Tip: For those nights when you’re too tired to cook, freeze meals ahead of time.
That homemade lasagna will taste way better than anything ordered online, and your bank account will thank you for skipping the delivery fees.
3. Spend Less Than You Earn
Living within your means sounds simple, but it is where many people stumble.
Dave Ramsey’s advice is to budget for less than you earn and watch your savings grow.
For one thing, cutting back on monthly subscriptions can free up more cash for you.
Consider what you really use. Note that streaming services, gym memberships, or subscription boxes can keep piling up.
Rethinking your leisure spending can also make a significant difference.
Swap out expensive hobbies and habits like frequent restaurant visits, movie nights, or pricey coffee runs for more wallet-friendly alternatives.
If you’re a coffee enthusiast, for example, learning to brew your own coffee can save you a small fortune.
Other areas to reassess include discretionary spending like clothes shopping, movie outings, sports events, concerts, and beauty salon visits.
On a personal note, reducing your utility bills can be surprisingly straightforward.
Simple habits like taking shorter showers, washing clothes in cold water, and turning off lights when not in use can noticeably lower your monthly expenses.
Additionally, try reevaluating your phone plan or canceling unnecessary add-ons like phone insurance.
Options like Visible offer unlimited data on a reliable network for just $25 a month.
Pro Tip: Assigning every dollar a job before you even receive it was a major turning point for me.
This just means you’ll want to make sure every cent has a purpose before it lands in your pocket.
4. Give a Shot at a No-Spend Month
If you’re trying to ditch debt or boost your savings, consider every month a no-spend month.
A no-spend month means zeroing in on what’s truly necessary. Clearly define what you will and won’t buy right from the start.
Pro Tip: Team up with a friend for accountability! It really makes a difference.
Primarily, DIY projects are your best friend during a no-spend month.
Instead of hiring someone for that new backsplash or light fixture, grab some tools and do it yourself. There are plenty of how-to videos online.
Get a library card as well. Before you hit “Add to Cart” for that new read, check out your local library first.
For audiobooks and eBooks, apps like Libby are fantastic resources.
Moreover, master the art of saying “no” or “not now.” Try your best to limit impulse purchases and stick to your budget.
When you feel like buying something, though, consider tidying up or organizing your space instead!
5. Try Cash-Back Apps & Coupons
Dave Ramsey advises not to miss out on coupons and cash-back apps as they offer significant savings.
Check out Rakuten for a start. This app offers cash back on purchases across many stores, plus loads of coupon codes. First-timers even get a $10 bonus after spending $25.
Meanwhile, Drop is the ultimate reward system app. It allows you to earn points on purchases from groceries to Uber rides. Plus, playing games within the app can boost your points tally.
For drivers, GasBuddy is a must. It finds the lowest gas prices nearby, potentially cutting up to 25 cents off every gallon you pump.
Further, you can use Flipp for deal-heavy holidays like Black Friday. It compiles all the top deals from your favorite stores into one place.
6. Clear Your Debt
Once you’ve established a fund saved for emergencies, it’s time to pay your debt.
Dave Ramsey’s debt snowball method is a strategic way to become debt-free. This involves paying off your debts from the smallest balance to the largest.
Start by listing all your debts from smallest to largest without considering the interest rates.
Make minimum payments on all your debts except for the smallest one. You’ll have to pour as much money as you can into eliminating that smallest debt.
After wiping that one out, apply its payment to the next smallest. This increases your payment on the next debt without straining your budget further.
Continue this process, rolling over payments from cleared debts to the next in line. With each debt eliminated, you’ll feel lighter and more in control.
Note: Steer clear of “Buy Now, Pay Later” schemes. They’re often too good to be true and can derail your debt-free journey.
I hope these tips from Dave Ramsey help you think differently about saving money! Do you have any thoughts or questions? Share them in the comments!
