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I know plenty of financial experts, but one of my favorites is Dave Ramsey. He talks about saving money, how to get out of debt, and getting free from living paycheck to paycheck. In fact, he has helped thousands of people get out of debt and have financial freedom.
And if you’re interested in knowing Dave Ramsey more, I’ve gathered some of his best financial tips and tricks that you can apply to your life. These are ideas that his fans love and are worth sharing with you so you can get started on having a debt-free life! So check them out and let me know what you think!
(Psst. You can get Dave Ramsey’s book, The Total Money Maker here and followed all the advice he had given. )
Budgeting with Fun Goals
Budgeting plays an important role in any financial planning. It keeps you guided on how much money to spend, to save, to use for bills bills and debt, and for other activities. Sticking to it can make your whole financial life balanced and free you from debt.
But you’ll also need to budget for your fun goals and entertainment activities. Just because you’re going to Disneyland doesn’t means you can splurge and spend unwisely. Instead of bringing cards on your vacation or outing, consider using cash. It helps you stick to your budget and shows you how much you have left.
Keep Your Savings Account at a Different Bank than Your Checking Account
Sometimes when you see you’re savings in your bank account, you might think that it’s fine to just spend some of it since it’s just sitting there. But before you know it, you’ve already spent it all.
So to stop this bad habit, start a separate bank account for your savings. Then you won’t see the saved money every time you log into your account. Meaning, you won’t be tempted to transfer and use it. Out of sight, out of mind.
Only Buy What You Need and Can Afford
Who cares if the mall has a big sale right now? Even though something is a good deal, it doesn’t mean you should buy it. Unless you need that shirt or or pair of shoes, steer clear!
Keep in mind that every dollar counts and is going to different parts of your budget. So you need to spend wisely so you don’t end up missing bill payments.
Be Patient with Purchases—and with Yourself
Similar to the tip above, being patient with your purchases can help you save up cash which can be used for investments. Let’s say for instance, your home appliances are 10 years old but still working and you’ve seen a great deal in the store for the same appliance. Instead of getting a new one, why not save up that money you would have bought it with and use it when you really need to replace that appliance. Do the same for your gadgets, cars, etc.
It’s much better to be patient and content with what you have, instead of having new things, but worrying how you’ll have money for your bills.
Embrace the Power of Cash
Make it a habit to always use cash in any transaction instead of swiping your cards. It doesn’t just keep you from paying interest, but also from having new monthly payments and saves you money. If you have the right amount of cash in your wallet, you’ll be more likely to be wise with what you have knowing that once it’s spent, it’s gone.
Without a buy-now-pay-later mentality associated with credit cards, you will purchase only items you can afford with the cash you have on hand.
Use the Envelope System
Okay, this one may be the easiest and simplest from this list. All you need to have are envelopes and a pen to start up your budgeting system. Begin by labeling each envelope with a category, (ex: groceries, rent, bills, savings, debt, etc.).
Once you’ve spent all the money in the envelope, you’re done spending for that category. You can’t use your debit cards and wait for the next month to fund them. This will effectively help you to spend wisely on what you have and save more.
Say Goodbye to All of Your Debt
Debt is one of the major roadblocks that keeps anyone away from financial freedom. It brings so much headache and stress and can drastically affect your life. No matter how big or small your debt is, it’s always great to get rid of it for good.
Consider using Dave Ramsey’s snowball method. Begin by listing all of your debts from smallest to largest. Then pay your smallest debt first, throwing any money you have left over at it, and pay the minimum with the others. By the time you’re done paying off the smaller ones, you’ll have so much more cash to use for the bigger ones, which creates a debt snowball.
Another Dave Ramsey tip that’s worth applying is to prepare for any emergency. Having a $1,000 emergency fund for rainy days can save you so much stress and keep you from whipping out your credit card (which goes against paying off debt). This fund will cover many major financial emergencies, such as a car repair or a trip to the hospital.
You can start your emergency fund by taking $100 a month from your salary. With consistent saving, in a year you’ll have $1,200 emergency fund set aside.
Get on the Same Team with Your Spouse
Having time to sit down and talk about your finances with your spouse can help you out a lot. If you work together as a team, you’ll both have one goal together and the money fights will lessen. You can budget, go over your bills, know your priorities and change your lifestyle towards achieving financial freedom.
Also, being in the same boat with your spouse can benefit your marriage as well. It can bring openness and transparency with each other, leaving no secrets.
Put Your Long-Term Goals in the Right Order
You know the importance of having a long-term goals but you need to have them in the right order. When you create your plan it must be something that’s realistic and on time. You will lose motivation if you run behind different goals at the same time.
For example, you want to save for your child’s education before planning for your retirement. Your child’s college will come first before your retirement so making it a realistic priority will keep you motivated and help you achieve newer heights.
I hope I was able to inspire and motivate you towards your financial freedom. Choose one, two, or all of these tips so you can transform your life and have financial peace. Let me know what you think!
Now, what was your favorite piece of advice from the list? Tell me in the comments down below. I’d love to hear about them!