• Trying New Budgeting Styles | April Paycheck Budget

    Our April paycheck budget has a ton of new changes because our lives are different now and it felt like a good time to change up the budget as well! We are now trying out a pay yourself first method which we will soon combine with a percentage based style like 80/20 or 50/30/20. I’ll be sharing more about these as we try new stuff out!

    While our lives are so different as we navigate the current financial crisis and global pandemic we’ve adjusted our goals for the year and it felt like a good time to change up how we budget because everything else is different too!

    Our main focus for paying ourselves first is our savings for our emergency fund and building up 3 months of expenses because $1,000 is not an emergency fund.

    Budget With Me!

    In the video you can budget along with me as we cover the budget necessities: bills, fixed expenses, variable expenses, debt payments, and sinking funds.

    This is the first time we have implemented the pay yourself first method where we put all of our goals first and make sure those are covered before anything else. That means savings, investing, and debt repayment comes first in our budget before bills of expenses like food and fun.

    If you are new to watching our budgets, here’s a little run down of our situation! We both work full time, I do freelance work and earn income from my YouTube channel and this is our take home income that I am budgeting. I cover bills, variable spending expenses, sinking funds and the goals for the month. This month we are super focused on increasing our emergency fund which we are trying to cover 3 months of expenses and eventually even more.

    April Paycheck Budget Setup

    During this paycheck our main goal was to continue building our emergency fund.

    April monthly goals:

    • Save $2,000 for our emergency fund
    • Don’t do unnecessary online shopping

    Goals for this paycheck for me were:

    • starting a new type of budget
    • setting up business payments biweekly
    • emergency fund growth

    With that in mind we broke down our April 2020 monthly budget into a more specific way for this paycheck budget.

    April 2020 Monthly Budget

    Here’s the breakdown of the paycheck budget for the first half of April 2020.

    Extra Income$26
    Pennies Not Perfection$400
    Total Income$3,259

    With $3,259 in planned income for the month we broke it down this way.

    Pay Yourself First:

    Emergency Fund$1,130
    Student Loan$220
    Roth IRA$50

    Fixed Expenses:


    Sinking Funds:

    Life Insurance$35
    Car Insurance$75
    Car Repairs$50
    Emergency Fund Extra$45

    Variable Expenses:

    J Personal$100
    M Personal$50
    Buffer in Acct$9

    Paying Yourself First

    Paying ourselves first is super exciting! Let’s be real, it’s fun to save money and invest money once you realize what that money can do for your in the future.

    Paying yourself first isn’t hard it just means prioritizing things like saving, investing, and paying off high interest debt. Paying yourself by doing these things before anything else in your budget is a great way to hit goals.

    We plan to continue trying this style of budgeting and see how it helps us better hit all our many goals!

    Our Emergency Fund Savings

    Because we aren’t playing many different expenses like daycare or going out to eat or going to events or throwing parties (the list goes on) we are able to save a lot more money in our emergency fund!

    We recently determined what we need for our emergency fund to equal 3-6 months of expenses.

    Looking at our monthly expenses and cutting out many things for an emergency situation means we need roughly $3,000 a month for our expenses. This means for a 3 month emergency fund we will need $9,000 saved. For a 6 month emergency fund we will want to stock up $18,000.

    We have a plan for our emergency fund and hopefully things go well and we can save it up with our extra income coming in and big paychecks from the government.

    Now with planning to save $2,000 a month we will also be adding a lot of our regular income to our emergency fund. This means we will be able to save up to $9,000 much quicker than I originally expected.

    This paycheck we were able to save over $1,000 to the emergency fund which moves us even closer to our goals.

    Investing To Hit Goals

    While we are prioritizing savings during this time due to potential job security, we are also continuing to invest small amounts into the market and dollar cost average our investments.

    One of my goals this year is to max out my Roth IRA and because I haven’t started on that goal yet it felt like a good time to get going on that goal.

    I’ve been investing for a long time now and I love investing when markets are going up and when markets are going down. In fact, my shortest time frame investments are for at least 15-16 years from now when I want to use the dividends to help my daughter.

    Because I am not investing money for the short term I don’t worry much about the markets year to year ups and downs because I know that in a long time frame that money will continue to grow. That’s why I’m still investing small amounts even when I have bigger goals to achieve, because I know small amounts I won’t miss now will add up to huge amounts later.

    I’ve talked a bit about the investing platforms I use for different purposes and here are the ones I plan to use this month:

    Because all of thee accounts have different goals and allow me to try out the more popular investing platforms I’m able to try different things and also work toward multiple goals in the far off future.

    Trying New Budgeting Styles

    I don’t call myself a budgeting expert and probably never will because there are too many styles of budgeting. What works for me for a while doesn’t work for me at another time. What works for me may never work for you.

    The thing is that creating a budget and following it during times of uncertainty and times of stability both helps you create a sense of calm and control. And if budgeting doesn’t feel like it’s working for you? Try a different method!

    Some people love budgeting by paycheck. Some people love Dave Ramsey’s method. Some people adore YNAB. Some people do 50/30/20 percentage based budgeting. There really are many styles of budgeting and one size does not fit all!

    I plant to go through a few more styles of budgeting to see if we can improve on what already works for us. I think it is great to take the best bits of advice from various sources and make them work for you. Best practices from others can improve your life very quickly and that includes with budgeting!

    No matter what your goals are, continue with budgeting and using your money wisely and consistently to hit your goals. You don’t have to be perfect with your money but you do need to be consistent!

  • Is $1,000 Enough For An Emergency Fund?

    Certain financial experts suggest you start bettering your financial life with saving up $1,000, and while that is a good start, most people have expenses far beyond $1,000. But is $1,000 enough for an emergency fund?

    While a starter emergency fund of $1,000 can help many people get started, it’s important to consider whether or not $1,000 is enough for an emergency fund.

    Why do you need an emergency fund?

    Why exactly do you need to keep money in savings for an emergency? Generally when things are going well and income is flowing in most people do not prioritize an emergency fund (myself included!). However, ignoring an emergency fund only ends up hurting you when you finally encounter an emergency.

    An emergency fund is absolutely critical for anyone who wants to be prepared for handling the ups and downs of life. Life is filled with unplanned events and an emergency fund allows you to walk through things that pop up with lots of peace.

    What type of events might be considered an emergency? These are things that come up during a month that you weren’t expecting but are a normal part of life. That includes many things like the following that run close to over over $1,000.

    • Emergency: a dental office visit that ends up costing hundreds up dollars or even up to $1,200 or more for an emergency
    • Emergency: flat tires where you end up needing to replace 1 or even 4 tires that can costs from $400 – $1,000
    • Emergency: medical event where you have to visit the ER which could cost $500 with your deductible and more for ambulance services or follow up appointments

    There are a number of different types of emergencies but many of them cost hundreds of dollars that you likely don’t have included in your current budget. Having one of these expenses pop up could destroy your budget and send you into debt if you do not have an emergency fund.

    If you can’t pay for the emergency expense with your income during the month then you might turn to credit cards or borrowing from friends and family. Either situation increases debt and makes your life harder in the long run. Being able to cover an emergency expense with your emergency fund makes things easier and less stressful.

    An unfortunate fact of life is that “emergencies” do happen and they will happen to you. That is why having an emergency fund is something you must do if you want to maintain your quality of life and go through life without being stressed by each new emergency.

    How Would You Pay For $1,000 Emergency Expense?

    Let’s start at the beginning… Can you afford an emergency expense that is $1,000? As I shared before, many common emergency expenses can be $1,000 or even more. Sadly according to many studies and polls, almost half of American can afford a $1,000 emergency expense but unfortunately that means half can’t cover that unexpected bill.

    Most people who responded to the poll linked above would pay for a $1,000 expense like a cap repair by dipping into savings like an emergency fund.

    Others responded to say they would pay for an emergency expense by using a credit card, taking out a personal loan, or asking family for help to cover the unexpected expense.

    The Federal Reserve has backed up this type of response with survey results that said 61% of Americans said they would pay for an unexpected $400 expense with cash, savings or a credit card. In their poll only 12% said they would not be able to cover it.

    Between savings, credit, and help from family most people at least have an idea of how they would want to cover an unexpected expense.

    Is $1,000 Enough For An Emergency Fund?

    In most cases, $1,000 is not enough for an emergency for most people.

    On average a general emergency for people is more than $1,000 and Bankrate found that the average unexpected expense for survey respondents was about $3,500.

    So what happens when you’ve only saved up $1,000 for emergencies and then you encounter the typical $3,500 emergency? Unfortunately that means you have $2,500 you need to find a way to pay for and many people then turn toward credit cards or worse, payday loans. Those options can be a very high cost solution since the average credit card rate is 17%.

    One thing to remember when thinking about emergencies: they will eventually happen. In any given year probably a quarter or the people you know will need to find a way to pay for a financial emergency.

    So if we know emergencies will happen, those emergencies on average are $3,500, and any given year it might be us that has an emergency, what do we do with this information? We plan to save more than $1,000 in an emergency fund so that we will not have to turn toward high cost solutions to cover emergency expenses.

    When $1,000 Isn’t Enough

    You might want to know some specific situations where $1,000 is enough for you and when it is not.

    When $1,000 is enough for your emergency fund:

    • you are a student and live with family and have very limited expenses
    • you have a very stable income that is guaranteed and multiple sources of that income

    In some cases where you have very low or no expenses or if you have multiple sources of guaranteed income then you may be able to get by with just $1,000 in savings.

    When $1,000 is not enough for your emergency fund:

    • if you have children and are the sole provider for them
    • if you own a home and need to cover any unexpected repairs
    • if you are self-employed or have commission based inconsistent income
    • if you work in an industry prone to layoff
    • if you have chronic health problems and will likely have medical expenses
    • if you have multiple pets especially if older or unhealthy

    As you can see, there are many life situations where there could be a need for more than $1,000 in an emergency fund. If you are more likely to encounter “unexpected” expenses regularly, then you should work to build a larger emergency fund.

    How much should I have in my emergency fund?

    Since we clearly know $1,000 is not enough for an adequate emergency fund, how much do you need to save?

    This exact number of savings you need will vary from person to person and will depend on a few factors.

    Your emergency fund will depend on:

    • your monthly income
    • your monthly expenses
    • the stability of your income
    • your risk tolerance

    You will need to take into account all of those factors to determine how much you want to save up for your emergency fund.

    Let’s say you earn $3,000 a month but your expenses per month are only $2,000. You have a stable job but you are a single person so if you lose your income you will not have a backup plan besides unemployment.

    In this case you would want to save up 6 months of expenses, so 6 x $2,000, or $12,000 would be your emergency fund number.

    If you have a spouse and you both work then you might air on the side of saving up just 3 months of expenses.

    The more unstable your income is the more your will want to save up. If you are a business owner or work on commission then you might want to save up 6 months of expenses or even more in order to feel secure.

    For us we both work so we decided to save up 3 months of expenses. That meant we needed 3 months of $3,000 in expenses, or $9,000. We plan to save up even more eventually but having $9,000 means we feel secure enough to weather most emergencies that come along.

    You will have to look at all of the factors in your unique situation and then decide what makes the most sense for you and what gives you the most peace. Finding the peace of mind number for your situation will depend on both the numbers and how you feel about the numbers. Remember that this is a very personally choice and won’t necessarily match the numbers of other people who may have different factors involved!

    Tips For Saving An Emergency Fund

    Savings can be challenging when you are trying to juggle debt repayment, mortgages or high rents, and lower paying wages than previous generations. However, despite the circumstances we need to be more focused than ever because we know that $1,000 is not enough to cover emergencies.

    If you have struggled to save in the past then saving for emergencies might be something you need to try multiple tactics to achieve. Here are a few ways people have found success in saving consistently to build an emergency fund:

    You can try one or more of these tactics in order to start saving and keep building your emergency fund savings accounts.

    Where To Save Your Emergency Fund

    Where should you save your emergency fund? What’s the best place to keep your savings?

    I personally use and recommend an online savings account with a high interest rate. There are many online bank accounts you can open at placed like Capital One, Ally, or SoFi where you get a high interest on your savings with no fees.

    Reasons I like these types of accounts for your emergency fund:

    • You don’t have account minimums so you can start your emergency fund from the very beginning with just $1 or $5 or whatever you can spare. If you watch my Transfer Tuesday videos then you know $5 of consistent action adds up!
    • They are easy to open and generally very user friendly. These banks are not complicated and they make the process very easy and also don’t charge fees that traditional banks may charge.
    • Online only banks make it more inconvenient to withdraw the whole amount in your emergency fund which means you will be more likely to only use it in a real emergency.
    • You can keep your savings account separate from your regular checking account. If you want you can open an account at one of these banks you don’t normally use so your money is safe and not immediately accessible to put into your checking account.

    Online bank savings accounts are my personal favorite way to save but you can also save in any other savings account. Just make sure there is not a minimum balance requirement in case you need to use all the money and that there are no fees.

    Most savings accounts, even the ones with the highest return will not give you much return for your money. That is totally ok because you are not looking to make this money “work for you” as an investment.

    Your emergency fund is not meant to be an investment. It is meant to be an insurance policy so that it is there when you need it. You should not invest your emergency fund in the stock market since there is no guarantee the money will be there when you need it.

    Remember that whether you are starting with $5 or $500, keep saving your money!

    You may only be able to saving $5 a week but being consistent over time adds up and that consistency is more important than perfection!

  • How To Spend Your $1,200 Stimulus Check

    Stimulus checks for Americans are set to arrive starting April 9 and coming in waves over the next few weeks. The stimulus update for April 9 is that money should be arriving for people starting today Thursday April 9 or tomorrow Friday April 10 and the coming weeks.

    We are likely getting stimulus checks next week based on what government officials have said in the last couple of days so let’s talk about it! Today I’m going over some of the ways you could and should spend your stimulus money in order to use it wisely as well as share what we are doing with our stimulus money.

    Why Are We Getting Stimulus Checks & Who Gets Them?

    Let’s start with bad news – unemployment numbers are so very bad right now. I know people have been commenting on my videos about being laid off and I’ve been scared I would be as well, but now 10% of the American labor force has filed for unemployment with today’s numbers added in. That’s insane and more than any time in history for initial claims in a short period. 

    A lot of this is situational and hopefully most of these jobs come back and when stuff calms down people go back to work.

    Unfortunately combining this with the fact that most of us in the USA don’t have enough to cover $1,000 emergencies… we are in trouble. But the government is here to the rescue… in a way by hoping to get people through this temporary rough spot and get them spending as well to stimulate the economy.

    they are going to send every adult $1,200 if you made under $75,000 on your most recent tax return from 2019 or 2018. They will be looking at the most recent tax returns from these years. Married couples making under $150,000 will get $2,400.  You also get $500 per child on dependents. 

    So for us as a two income household with one child making under $150,000 we will get $2,900.

    If you qualify for these stimulus checks the government has now said they will start hitting direct deposit accounts starting next week. Considering I filed our taxes this year and got our refund in under two weeks… I believe they will hit our account next week. Things are moving fast and furious because they know we need the money out here.

    How To Spend It, If You Need It

    Since the money is coming soon, today I’m going to talk about ways to spend your stimulus check and share what we plan to do with ours because at a time of high unemployment and lots of uncertainty we need to make sure the money we are getting doesn’t go to waste. 

    Pay to cover your immediate needs. First, if you’ve lost your job and need the money for every day living then definitely pay for the essential necessities in your life. Pay for your food. Buy your medications. Pay for the things you need to actually survive right now. That’s what the money is for and using it for this is smart. Make sure you are healthy and well to get through this. 

    Pay your bills. Again, if you’ve lost your job and don’t know how to pay your rent then you should use this money for bills after you’ve covered the necessities for living. If the money won’t stretch far enough then cover the most essential bills until you get unemployment or a new job income coming in. This is again, for essential bills like covering your rent or utility bill, not paying for your subscriptions or other non necessary bills.

    Save the money. Open a high interest savings account if you don’t already have one and just save it. You can use Capital One, Ally, of SoFi. Open the account and put the money in this account and just let it sit there short term until you need it. If you’ve already started saving, then use the money to build your 3-6 months emergency fund and be more cautious right now. This is personally what we are doing because I do still have job uncertainty if this lasts longer than expected. 

    How To Spend It, If You Don’t Need It

    If you already have your essentials covered and an emergency fund and your job is very secure and this is “bonus” money for you, then congrats! You have a couple options for what to do with it.

    1) Invest in the market. The market is pretty volatile lately and doesn’t necessarily correspond to normal cues but you could go ahead and invest the money. Personally we use index funds and dollar cost averaging for the majority of our investing so I’d go with that method maybe in a Roth IRA but if you are doing this be cautious because none of us know how long this will last or what the market results will be.

    2) Invest in yourself. Spend the money to buy an online course you want to learn. Or spend the money on a certification you have been wanting to get and finally have time to do. If you have 

    3) Give it away. Give the money to a charity you care about. Or heck to people you know need it more than you. Venmo or cash app people money because you know they need it and you care about them. Be a blessing to others.

    I would say that it’s worth playing it safe with this stimulus check. Having more money on hand is the best bet. 

    There may be more rounds of layoffs, there may be more rounds of stimulus checks. Or there may not be. None of us really know yet and anyone saying they know something for sure is just talking with false confidence. Use this money for the best use for your family in whatever way makes the most sense for you. 

  • How To Start An Etsy Shop

    Starting an Etsy shop in 2020 to earn more income is a great idea! Etsy is a huge marketplace for sellers as you can sell both physical and digital products to a huge audience.

    If you want to start an Etsy shop in order to earn part time or full time income then this tutorial for beginners will help you get started! I know a lot of people who have never sold online before can feel intimidated which is why I created this tutorial on how to set up an Etsy shop step by step. It is very easy and seeing someone else do it makes it feel much easier!

    Starting Your Etsy Shop

    In order to start an Etsy shop you will need an idea of what you want to sell and a name picked out for your new Etsy store. If you haven’t already decided this before starting your video you will want to think about what you will sell in your new Etsy store and what brand you want to build around your shop.

    Once you’ve got a general idea you are ready to watch this video tutorial on how to create your new Etsy shop!

    You can start your shop with this link for 40 free listings to jumpstart your shop without having to waste money on those first listings.

    Why Start Selling On Etsy

    Creating an Etsy shop is a great way to have an outlet for selling in the beginning when things are new and you don’t have an audience. Etsy is a great platform for beginners because it is a marketplace which means it already has buyers who are looking for items to buy.

    When you open a new shop on Etsy you instantly have the same access to all those buyers and don’t have to drive traffic to your listing like you would on your own website. This is why I highly, highly recommend Etsy for beginners who want to sell items online.

    I personally love selling on Etsy and have made hundreds of sales in my first 6 months of selling digital downloads online. Starting my Etsy shop was one of the best things I ever did online which is why I want to show others how to do it and encourage you to take the step to creating your dream of selling online!

    Beginner Etsy Success Tips

    Starting from scratch on Etsy can be hard. There are some ways to speed up the process like learning from a course or following best practices from successful Etsy shops.

    Because I know how hard it can be to start an Etsy store and grow it, here are my best tips for building a successful Etsy shop from the beginning:

    • have a strong niche where your products are very focused on either one niched area or style
    • create a strong brand story and share that in your shop and listings
    • continue your brand elements throughout the shop via colors and fonts
    • share photos that clearly show your items and how they can be used
    • make your descriptions clear and very descriptive – the more the better when you are explaining what comes with your item and how it can improve someone’s life
    • clearly articulate your shop’s policies if you don’t offer refunds or have specific policies that a buyer needs to share
    • build your shop with more listings to bring in new buyers and more traffic
    • make sure you promote your listings both on Etsy with seo and ads and off Etsy with social media

    Those are tips that can get your Etsy shop started and off the ground in less time. Making sure you start off strong from your very first listing means you won’t have to spend time later going back to fix your early mistakes.

    Growing A Business On Etsy

    Etsy has downsides but it’s also an amazing place to build a business and earn an income.

    If you want to grow on Etsy I recommend my friend Sharon’s Etsy Entrepreneur course where she walks you through the process of setting up an Etsy shop and growing it to make $1,000 a month or more. She grew her Etsy store of digital downloads to more than $1,000 a month and has inspired many people to do the same.

    Remember that your Etsy growth will depend on being consistent and growing over time. Very few people start their Etsy shop and go full time the very same month. For most of us we begin with one product and grow over time.

    Over time you will learn tips and tricks to grow your Etsy shop and find that success on Etsy can be far beyond you expected. I personally know multiple full time Etsy sellers who started as a fun side hustle and now make a full time living selling on Etsy.

  • How to Build an Emergency Fund

    Having an emergency fund is incredibly important and the roller coaster of this year has proven it to many of us. Currently my number one financial goal is saving up a 3 to 6 months emergency fund.

    We can’t control everything in the world despite our internal desire for control and certainly. Life happens and it can be very unpredictable. The face that people can feel secure and then end up laid off the next week proved that the unexpected can happen. Beyond just job loss, cars will need repairs, medical costs can occur, and any number of unexpected things can happen.

    Having an emergency fund helps you weather those unexpected storms so your financial life does not spiral out of control. When you are facing unexpected expenses you are able to tap into your emergency fund instead of taking on new debt.

    Even if you are already in debt then an emergency fund can be the stepping stone you need to get out of debt because this system prevents you from adding more debt. Emergency funds are important because even if you are living near the end of your means you will have money set aside if things get even worse financially.

    We are still paying off debt but we are prioritizing an emergency fund for just this reason – having money set aside for unexpected events means you won’t have to ever go into debt again.

    So how do you build up an emergency fund?

    Set Your Savings Goal

    If you don’t know how much money you need for your emergency fund then it will be impossible to know when you can feel more secure with your savings.

    Unfortunately the question of “How much should I have in my savings account?” will vary between all of us because an emergency fund needs to be tailored to your individual situation. There is no right answer to the question of “how much should I have in my emergency fund.”

    In general there are a few milestones and goal amounts most of us can use as our individual goals.

    For just beginning you can start with a goal of $1,000. This is often the experts recommendation for a minimum savings and often referred to as a started emergency fund. It is a great place to start when you have never saved before.

    For a more secure emergency fund you should start thinking in terms of “months of expenses” and aim for between 3 to 6 months worth of your expenses.

    Set Savings Milestones To Hit

    For our situation we determined that one month of expenses roughly equalled $3,000 when we cut back all of our extra categories. That meant a 3 month emergency fund for us was $9,000 and a 6 month emergency fund was $18,000.

    These types of numbers can be very daunting when you start saving your emergency fund. It’s easy to feel intimidated by those numbers so I recommend after saving $1,000 you then aim for 1 month of expenses saved first. This is actually the amount I recommend in a “beginner emergency fund” and it is the amount many budgeting systems recommend so you can get one month ahead of your spending.

    After saving up one month of expenses you can then work on adding another and another until you have 3 months of emergency fund savings. Three months of expenses is a great amount to achieve and can make most of us feel much more comfortable.

    Beyond that you can work on moving up to 6 months of expenses saved or even 1 year’s worth of expenses depending on your situation and risk tolerance. You can continue adding amounts to your emergency fund each paycheck until you are at your desired number. Remember that you should always base your numbers on your exact situation!

    Along the way you can track your progress with a visual emergency fund tracker. Once you hit these milestones or mini milestones you set for saving you can give yourself a little bit of a reward!

    If you are just starting out this can all feel daunting, but remember that consistent savings over time will put you in a much more secure position.

    Pick Your Savings Account

    You may wonder what type of savings account you should use for your emergency fund. Some people even ask if they should invest their emergency fund (short answer: no!).

    I personally use and recommend an online savings account with a high interest rate. There are many online bank accounts you can open at placed like Capital One, Ally, or SoFi where you get a high interest on your savings with no fees.

    Reasons I like these types of accounts for your emergency fund:

    • You don’t have account minimums so you can start your emergency fund from the very beginning with just $1 or $5 or whatever you can spare. If you watch my Transfer Tuesday videos then you know $5 of consistent action adds up!
    • They are easy to open and generally very user friendly. These banks are not complicated and they make the process very easy and also don’t charge fees that traditional banks may charge.
    • Online only banks make it more inconvenient to withdraw the whole amount in your emergency fund which means you will be more likely to only use it in a real emergency.
    • You can keep your savings account separate from your regular checking account. If you want you can open an account at one of these banks you don’t normally use so your money is safe and not immediately accessible to put into your checking account.

    Online bank savings accounts are my personal favorite way to save but you can also save in any other savings account. Just make sure there is not a minimum balance requirement in case you need to use all the money and that there are no fees.

    Most savings accounts, even the ones with the highest return will not give you much return for your money. That is totally ok because you are not looking to make this money “work for you” as an investment.

    Your emergency fund is not meant to be an investment. It is meant to be an insurance policy so that it is there when you need it. You should not invest your emergency fund in the stock market since there is no guarantee the money will be there when you need it.

    Add Money Every Paycheck

    Once you’ve got your account setup it’s time to add money! Take a look at your budget and see what money you can set aside for emergency fund savings.

    You can do this a number of ways. Many people like to automate their savings by either setting up an automatic withdrawal from their account or even having your paycheck deposit a certain percentage directly into that savings account. Both of these methods can help you consistently save without ever thinking about it.

    You can also manually move the money every time you get paid. This method can work well for people as well if you enjoy feeling like you’ve done something and made progress.

    So how much should you be saving every paycheck for your emergency fund? That number is totally up to you and what your budget can allow!

    Remember that even if you can only save $5 or $25 that those amounts will add up over time. Your savings amounts can be small but when they are consistent they will add up. Taking action toward your goals consistently will matter more than the amount you choose to start and you can always increase it over time.

    Add Extra Money

    Besides the consistent paycheck savings you’ll contribute to your emergency fund you can also add any extra money you come across.

    So where do you find extra money for emergency fund savings?

    This would include things like bonuses, tax refunds, and any sort of windfall. You can contribute at least a big percentage of any big amount of money to growing your emergency fund.

    It will also include weekly amounts you find within your budget from cutting back or spending less in certain areas. For example some weeks I’ve spent less than my grocery budget by $5 or $8. Instead of rolling that money over, I put it in my emergency fund. I started doing a thing called Transfer Tuesday where every week I moved money over on a Tuesday so I’d have certainty that at least some extra money was going toward my goals each week.

    You can also put any extra money you earn from side hustles into your emergency fund. This “extra” money you earn beyond your normal salary.

    In this step of savings you can also systematically increase the amount you were originally saving from your paycheck. You can increase your savings per paycheck from $25 to $30 for an example.

    Remember that savings can feel like it’s taking forever but the more money you can throw toward your emergency fund the quicker it will go. Stay consistent and over time that money will definitely grow!

    Keep Preparing For Emergencies

    Like I mentioned earlier, unexpected things will happen. So we all need to expect the unexpected to eventually occur. All we can do is to continue preaparing for future emergencies.

    One way of doing this is continuing to save until we have a fully funded six month emergency fund saved up. We never know when uncertain times will hit so saving during good times will provide during hard times.

    Another way of doing this is building a stockpile of important supplies and preparing in physical ways for emergencies that may come along like a natural disaster.

    We can also make a plan for how we will handle emergencies like losing a job. Knowing what to do when you lose your job can make the whole experience less emotional and more of a practical experience where you walk through certain action steps.

    It is impossible to prepare and save for every potential emergency that may come along, but being financially prepared will help you work through emergencies and focus on what matters instead of worrying about your bank account and how you will buy groceries or make your payments.

    If you haven’t already begun saving in your emergency fund, I highly recommend you do so!

  • What Are Dave Ramsey’s Baby Steps?

    If you’ve ever looked up how to get out of debt then you’ve come Dave Ramsey. He is the author of countless books on personal finance and focuses much of his advice on how to get out of debt fast in order to live a better life. Live like no one else so you can live like no one else, as he often says on his popular radio show.

    I’ve been listening to Dave Ramsey’s radio show podcast every day for months and I’ve even taken his Financial Peace University class with my husband! Along the way we picked up a lot of good advice including learning about the baby steps.

    The Baby Steps To Financial Peace

    So what are the baby steps in Dave Ramsey’s program? Why do they work? Watch the video below for a summary or keep reading!

    There are 7 baby steps to financial freedom in Dave Ramsey’s program. The steps are designed to help you get out of debt forever, save for emergencies, and build wealth.

    Baby Step 1

    Save $1,000 for your starter emergency fund.

    This step is designed to get you off of the roller coaster of using credit in order to float any unexpected expenses that come up in your life.

    Baby Step 2

    Pay off all of your debt using the debt snowball.

    The debt snowball method of paying off debt is where you pay off all your debts from smallest balance to largest balance. It’s designed to help you get wins quickly by eliminating some small debts very quickly.

    Baby Step 3

    Save 3-6 months of expenses in a fully funded emergency fund.

    Saving up an emergency fund is critical to living life without debt. Saving up a funded emergency fund prepares you to handle any emergencies of financial crisis situations that come along like a job loss.

    Baby Step 4

    Invest 15% of your household income into retirement.

    Once you are debt free and prepared for emergencies then it is time to start investing for retirement. This baby step is to help you provide for your future needs in retirement.

    Baby Step 5

    Save for your children’s college fund.

    In baby step 5 you save for your children’s college expenses in the future. Because you will never take on debt again in the future you will need to save to pay for college.

    Baby Step 6

    Pay off your home early.

    Baby Step 6 is all about paying off your home early and living a mortgage free life. Once you pay off your home you free up a lot of your income to use for the final baby step.

    Baby Step 7

    Build wealth and give generously.

    The final baby step is one that will continue for your entire life. You continue saving and building wealth. You also give generously in this step as you earn and build wealth for yourself.

    Those are the 7 baby steps in Dave Ramsey’s program and for many millions of people they have led them out of debt and into a stable and even wealthy position.

    Good & Bad Advice From Dave Ramsey

    Dave Ramsey is a polarizing figure in the personal finance community. People either love him or hate him … or get sued by him.

    Personally I think he has both good and bad advice depending on people’s situations. He is wrong in his opinions just as much as the rest of us are wrong, but his advice has helped more people get out of debt than anyone else.

    Here’s some of the good advice he gives:

    • Paying off all your debt. Being debt free brings peace of mind and getting rid of high interest debt saves you a lot of money.
    • Building up an emergency fund. Having savings for an emergency gives you the chance to survive any number of unexpected events and is a great idea for all people.
    • He encourages a written budget every month. Obviously as a budgeter I love this advice because giving your money a job to do will help you be able to save up and achieve all sorts of financial goals.

    Here are a few of the pieces of advice that aren’t as good that I don’t personally follow:

    • He says stop your retirement contributions until you are out of debt even if you get a 401k match. Personally skipping a 401k match seems insane since you are generally getting that money with no risk and it’s part of your overall compensation package at your job.
    • He says stop using credit cards even if you’re able to use them responsibly. The goal of having no credit is noble but it often makes people struggle with getting a mortgage or even certain jobs. Keeping our cards open and using them sparingly has earned us rewards and kept our credit scores high.
    • He still encourages a $1,000 emergency fund which isn’t enough for most basic emergencies and this number has not changes in decades. At minimum I think a starter fund should at least have $1k per person in the household.
    • He says you should never ever go on a vacation if you are in debt. I disagree as life is short and none of us know what will happen tomorrow. While we have the chance we plan to live our best life while still paying off debt. We also do all of our vacations in cash so we don’t add to our debt.

    It seems like I listen to Dave Ramsey but don’t actually implement all of his advice, just some of it. In fact I often go out of my way to do the opposite of what he teaches because it makes more sense mathematically and for my life.

    Unfortunately because we generally follow his guidelines instead of exactly following them, he would insult us. He’s go on a rant and call us stupid and that’s one thing I really disagree with regarding his style. He routinely insults and is rude to people who don’t follow his advice exactly even if they are successful. This turns a lot of people off his advice and his show, but hopefully they find ways to take the good without the bad.

    Who Is Dave Ramsey?

    dave ramsey personal finance

    Dave Ramsey is a Christian personal finance expert, radio show host, and author. He is the author of the New York Times bestselling books Financial Peace and The Total Money Makeover.

    His radio program, The Dave Ramsey Show, is heard on more than 450 radio stations throughout the U.S. and transmits Ramsey’s inimitable financial advice to millions of listeners each week.

    Overall he has helped millions of people get out of debt and build wealth through his radio show, live events and personal finance books.

    What Is Dave Ramsey Good For?

    Dave Ramsey is great for motivation.

    I listen to Dave Ramsey because he is a great motivator. He has spent years learning how psychology and how to motivate others to take action.

    Listening to his show keeps me committed to accomplishing my financial goals. I might not be paying off debt and saving in the same way he teaches but I am paying off debt and saving. We don’t have to agree on the details on everything to agree on the big things. His show keeps me motivated on the big things like getting rid of debt and building wealth.

    I truly love listening to debt free callers to his show. I love hearing how they’ve paid off so much debt and the ways they have cut down their lifestyles and made sacrifices in order to achieve a big goal. Often they had paid off way more than I’ve paid off! I re-listened to his special show where people who had paid off everything including the house called in and that was super inspirational to me. I want to pay off my house one day.

    Ultimately I love Dave Ramsey’s motivation because I do want to live without any bills. I want that freedom. I want to life life without having debt hanging over me. With no debt comes no risk. When things get bad you don’t have to worry about that debt.

    In conclusion, Dave Ramsey is good for inspiration. And perhaps the occasional idea. At least that’s what he is good for to me!

    Get Inspired By Dave Ramsey

    You can get inspired, motivated, and fired up by Dave Ramsey and his advice in many ways.

     I recommend doing one or all of the following:

    rave ramsey total money makeover

    Whichever way you decide to listen, enjoy! He offers a ton of great info for free on his daily radio show and youtube channel so you never had to pay for the financial advice and motivation if you don’t want to do so.

    Dave Ramsey will definitely inspire you and motivate you to take action to improve your personal finances and your entire life.