In the last couple of years Dave Ramsey has become a household name in the world of finance.
If you don’t know who Dave Ramsey is, he’s an author, motivational speaker, and businessman. On top of this, he made a fortune in real estate, went broke, and then became rich again. He knows what he’s talking about when it comes to managing your money. He’s been on both ends of the spectrum, both very rich and incredibly poor.
So without further adieu, here are 10 brilliant Dave Ramsey tips to manage your finances
Budget To Zero Before The Month Begins
This simply means you account for every cent you make and plan where it is going. You don’t spend money freely, you have a meticulous and carefully planned out budget set up ahead of the month. No that doesn’t mean you put in your budget “$82 for groceries” but you set a spending top for every category. $150 for groceries. $100 for entertainment. Etc. Every dollar is accounted for and given a ‘job.’
Act Your Wage
One of the best pieces of advise he’s ever given. “Key to winning with money. Live on less than you make! Act your wage. Quit spending like you are in Congress.”
Stop trying to keep up with the Joneses. Spend less than you make and stop looking around to what other people are spending their money on. We’re naturally consumers but this comparison game will drown you and make you miserable in the long term.
Cancel Subscriptions and Memberships
You don’t need all of them. A very big chunk of money gets drained out of our bank accounts monthly because of subscriptions. If you haven’t gone to the gym in four months, cancel it! You can work out at home watching youtube videos and save anywhere from $30 to $150 a month, depending on your membership and location.
Same goes for many things, do you really need a hulu, netflix, and amazon prime video subscription?! Pick one! Only one and once you get bored of it, cancel and try another one. You don’t need so many options.
Save For The Unexpected
Always set a portion of you salary aside for the mishaps of life. You never know when your car will get towed or your refrigerator breaks. You need to have some money saved up just for these situations.
A problem I see often is people save up for certain things or vacations, but they don’t account for misfortune. Although we don’t like to think about these bad situations, we still need to be financially responsible and plan ahead. About $1000 for just pure emergencies is a good amount to have when you are in debt. Once you get out of debt, Ramsey recommends having a couple months salary saved in case of something as bad as job loss.
This ones simple and you can start today. Most generic brands taste almost identical to their brand name counterpart. The truth is, when you pay for brand names, you’re really paying the companies marketing costs. Generic medication, staple food items, cleaning supplies, and paper products are all things you can be saving a ton of money on.
That’s right. Unsubscribe from all email lists. Email marketers are pros at getting you to make purchases. They know how tempting coupons or flash sales are for many of us. It is their job to get us to open that email and make a purchase. So go to the bottom of every email you receive and click the ‘unsubscribe’ button. As an added bonus, you will have a less cluttered mailbox.
Buying lunch a couple times a week adds up tremendously. In fact, the average household spends about $3,154 on food outside the home each year. That money can be spent in much better ways.
Borrow, Don’t Buy
Instead of going to the store every time you need something, ask a family member or neighbor. I only use a hammer about one a year, so it doesn’t make sense to purchase one, I just borrow from a friend whenever it’s needed. Chances are, there are plenty of things you only need to use once and then shove it in a drawer. Perhaps you even forget you own it and purchase a second one later on (I know I’ve done this!). Borrow, don’t buy.
Ask For Discounts
There have been plenty of times I’ve asked a store clerk if she knew about any discounts and they told me they did. Some stores have apps you can download for exclusive coupons or even provide student, seniors, veteran discounts. Always ask for discounts at museums, movie theatres, and events. You’ll be surprised.
Automate Your Savings
Save money without even giving it a second thought. Set up your accounts to automatically transfer money from your paycheck to your savings account. A good rule of thumb is to automate 10% of your salary.