Dave Ramsey tips. There are the money lessons people look for. In this post, you’ll learn how to save money, the best money hacks you wish you knew, and the ways to reach financial freedom in your own terms.
When trying to find new and unique ways to conserve funds, financial guru Dave Ramsey is an excellent person to grab advice from in many different finance-related areas.
He’s well-known in the finance industry, and he knows what he’s talking about.
From cutting back on activities and items you don’t need to finding ways to obtain excellent deals, there are quite a few tips he has for saving money with little effort on your part.
Believe it or not:
His lessons are found everywhere, if you just search them.
You’re in luck because I’ve compiled a lot of them here.
What are the benefits of reading this article?
If you read the article from start to end without skipping on any step, then, you'll know the important things like:
If you are looking for easy, actionable money tips or some Dave Ramsey baby steps, read on!
TABLE OF CONTENTS
Dave Ramsey Tips: 15 Best Smart Money Tips From Dave
The following are 15 best smart money tips (e.g. Dave Ramsey budget) from IRAs and pre tax investment vehicles to simple living expenses:
1. Increase your income
One of the must-use Dave Ramsey tips is to find ways to increase your income and then pursue those methods.
Here’s the kicker:
There are many ways to increase your income.
You can add some extra dollars to your bank account by having yard sales or getting involved with side hustles, which are part-time gigs on the side.
You don’t have to reserve a lot of time for your side hustles, as there are plenty of ways to make quick and legitimate earnings with little work or time on your part.
In fact, how much time you want to spend on your side hustle is totally up to you!
One side gig to look into is paid online surveys. So many companies are looking for individuals to spend a little time providing their opinion on a wealth of topic areas.
You could make as high as $120/focus group or survey in your free time. Who doesn’t like that?
Interested in learning more and signing up? Three of the best survey sites I found include:
Semi-fast, more cash
If you are on the hunt for side hustles that could make you money month after month with little to no effort, here are some ideas that may not generate you fast cash, but they make you money in the long-run:
- Blogging: Where I made over $200,000 in a few years. I put in my time, and I’m getting all the benefits. Now, I blog for 5 hrs/mo and still make at least $10K. Click here to start your blog for just $2.95/mo.
- Freelancing: If you’re skilled at something like writing, graphic designing, or something else, you can do freelance to make extra money. You can advertise your service through social media and other platforms like Fiverr.
2. Trim your budget
It’s important to budget weekly. That’s one the Dave Ramsey budget tips.
With regard to practical budgeting tips, now is the time to cut out activities and items from your budget, which aren’t really necessary and are costing you a lot of money each month.
These include Starbucks coffee, eating out three times a week, massages, and other luxury items.
If you like doing it from scratch, there’s a tool just for you:
Trim is a great tool to use in order to help you cut your budget and save a lot of money in the long run. See my Trim review here.
It will look into your subscriptions, help you get deals only Trim knows, save you money on groceries, earn you automatic savings back, among others.
Here are some other bill negotiation apps you can use to trim your budget and still get the same level of benefits:
- Charlie – a free app that helps you cut your bills without even downloading an app. Just text Charlie and it will find you some savings. That’s easy. So far, Charlie’s helping people pay down $50 MILLION in credit card debt.
- Cushion – is designed to get your bank fee refunds. Tired of seeing late, maintenance, overdraft, foreign transaction fees, etc. Cushion is your best friend to negotiate with the banks. Period.
3. Pay off your debt
No kidding, debt is a disease that continues to live and breed (in this case, penalty and interest plus the principal) until you put a stop to it.
That’s why make every effort to pay off your debt.
You can use the debt snowball method or some other methods to decrease it little by little.
Also, another good way is to consolidate your consumer debt using personal loans such as SoFi or Upstart, both of which offers unbelievably low interest.
As you know, low-interest rate means low-interest payment. Low-interest payment means more money in your pocket. Cha ching!
I personally used personal loans to pay off over $40K.
After 4 years, I was debt-free and, luckily, saved over $200K in the process.
Click here to:
Try SoFi now | Try Upstart now
4. Invest in the future
It’s not only important to think about the present day, but also the future.
Dave Ramsey money tips also include investing in the future.
Investing in pre-tax savings plans is a wise idea as well as investing carefully-selected mutual funds.
When the time comes for you to invest, check out the offerings of Fundrise and Acorns, two online investment platforms.
Fundrise is designed for would-be real estate investors who want to dip in their money (for a minimum of $500). Yes, you now can invest for that amount! Historical returns for Fundrise investments were 8.7% – 12.4%. That’s something you don’t want to miss out on.
Acorns is designed for those who want to invest, but don’t have a lot, to begin with. Literally, you can invest cents with Acorns, and those will be invested.
I personally invested my cents in Acorns. In just 7 months, my investment grew to over $2,000 in between cents and commissions I get from referring people to Acorns.
Now, investing isn’t just for those who have money but also for those who want to grow their money one cent or a few dollars at a time.
Click here to open an account with:
The Practical Saver Pro Tip
Start with Swagbucks and Survey Junkie to make free money fast. Invest the money in Acorns and let it grow. When your fund is over $500, then, consider investing on Fundrise. Basically, you make money from free money.
5. Eat less
Think of your last grocery trip and how much you spent on the food you bought.
If you could make an effort to eat less, and still eat healthy, you’ll not only be healthier, but also have more money in your pocket.
Sometimes it takes just cutting out the extra junk food or purchasing smaller containers and packages of items as opposed to the larger boxes, as not all bulk items will save you money.
You can either do a pantry challenge – an awesome challenge to do.
Another way to save money in the food department is to try out the $5 Meal Plan, which will help you to plan delicious meals and do so inexpensively.
For $5/mo, you’ve got a lot to gain from proper, budget-friendly meal planning.
Check out the $5 Meal Plan website and sign up for a risk-free 14-day trial membership.
Click here to try the $5 Meal Plan.
6. Build credit with “good credit” not “bad credit ” if you have no other option
Dave Ramsey tips frequently discuss good credit and bad credit and differentiate the two because there is a big difference.
Good credit is something such as a mortgage, for example, whereas bad credit relates to many of the other types of credit.
So, should the time come when you need to take out some form of credit, make sure it’s the good kind and not the bad kind.
There’s a place to start to build a good credit. But not everyone knows where to start.
It’s your credit history or credit score.
Wondering what your current credit score looks like and interested in receiving tips on how to manage your credit and loans?
Credit Sesame can help you with both of these items for FREE.
It’s free and can exactly show you where the problems are, what you can do to improve your credit, what to stay away from, among others.
Click here to open a free account with Credit Sesame and see where you need to start.
7. Create a zero budget with the envelope system
Maintaining a budget is extremely important for saving money.
There’s something called the zero budget system, a great option with regard to Dave Ramsey tips, which you can apply using the Dave Ramsey envelope system.
Think of it this way. You’re paying all of your bills in cash. When you get your income, you assign each portion to a specific envelope, so that every portion of income has its place.
An easy way to try out the zero budget system is to use a budget template.
Click here to get started with an easy-to-use budget template today.
8. Use cash and the envelope system for certain budget categories
If you have certain expenses, which aren’t necessities, but you can’t stop spending money on them, try the cash and envelope system for those specific expenses per the Dave Ramsey tips.
This is a good way to manage your money effectively.
Have a budget for the specific categories, put cash in an envelope, and when the cash is gone, don’t spend any more money on that category until your next paycheck.
That’s the main idea about that budgeting method.
That’s really it!
9. Don’t compare your spending to that of others
It’s easy to compare your situation to that of others and say, “Mr. Smith can spend all of that money on a car, so why can’t I?”
You’re not Mr. Smith.
You both have totally different budgets and comparing your situation to that of others, or trying to spend as much money as someone else can lead to an empty bank account and an unhappy situation.
Always view your situation as just that. Your situation.
10. Eliminate your credit cards
One of the easiest ways to get into trouble with money is to spend too much on your credit cards.
Want an easy solution?
Cut your credit cards up and just keep one credit card for emergency purposes.
This is one of the many simple budgeting tips.
If you need to have a card which you use from time to time, make it a debit card.
11. Tackle the budget as a family
If you are married, make sure your spouse tackles the budget with you.
Dave Ramsey tips state that this should be a joint effort and both of you should be working to save money together.
When you look at the budget collectively, one might think of something the other doesn’t.
The Practical Saver Pro Tip
Never keep up with the Joneses. It's exhausting and doesn't make sense. Don't mirror what others do. Your situation is different that theirs. Create a budget that works for you and stick with it.
12. Get used to the fact that each money could be different
Not every month will be the same financial situation.
Certain instances pop up from time to time which means you have to tweak the budget to accommodate.
If you have additional expenses one month, don’t worry, as you can try to recollect the money from your budget the following month or plan ahead with an emergency fund envelope.
13. Make a payment schedule
When you have bills to pay each month, try to schedule them on the same dates each month.
That’s one of the baby steps you can take, which can help you big time later on.
In all seriousness, this is probably one of the easiest things to do.
You don’t even need a high school or college education to see the value of getting into a payment schedule.
Preparing your payment schedule will help to ease stress and ensure that you’ll have the money in your account when the time comes to pay the bills.
14. Buy generic
If you don’t have to spend money on brand name items and can buy generic items, do so.
There are many retailers which offer generic versions of popular name brands.
These items are pretty much the same thing, except for the label on them.
Buying generic items rather than brand names will help to save money without sacrificing quality.
15. Pay off your house early
Another one of the Dave Ramsey tips is that if there is a way for you to pay off your home early, do so.
There is so much security in owning your home free and clear, in addition to not having the monthly payments creeping up on you each month.
Pay off your home early and you’ll find that you are much more relaxed and feeling secure because of this.
The Practical Saver Pro Tip
There's no hard and fast rule when it comes to using Dave Ramsey's tips. There's no one-fits-all solution to becoming financial independent and achieve financial freedom. Use what's applicable and create your own money tips - ones that can help you manage your finances.
Dave Ramsey Baby Steps
Since we’re already discussing about Dave Ramsey tips, we might as well complete this post with information on one of the best pieces of advice he’s given.
This is known as the Dave Ramsey Baby Steps.
It’s basically discusses what it takes to become debt-free and, eventually, achieve financial independence.
The steps are very straightforward and simple.
Here are they:
1. Save your first $1,000 emergency fund
How many times have you been in emergency situations where you needed to shell out money? I bet the feeling is not good at all.
That’s why it’s very important to save for emergency. This way, you are not digging yourself into more debt (if you are already in one).
2. Pay off your debt
For the most part, debt is a hindrance to financial freedom. Being in debt is, by far, one of the most challenging situations to be in.
When you don’t have enough money to pay off your debt, you could always be thinking about how to pay them off, where to get the money, etc. The stress and pressure add up and can be unbearable.
One of Dave Ramsey tips is to use a debt snowball method. That said, you can use any other debt-paying method that works for you.
3. Save 3-6 months worth of expenses
If you can do, pay off your debt while saving money that covers your expenses for 3 to 6 months.
You may find that you may need to find a second job to make these tasks happened.
The lesson here is to save as much as you can. This way, when situations you cannot control occur, then, you have some stashed money to use.
Always err on the side of caution.
4. Invest at least 15% of your income towards retirement
At one point, you’ll need to retire.
The best time to save for that is now. You don’t want to be in your 40s or 50s and haven’t saved enough to help you retire comfortably.
Believe it or not:
Over a quarter of Americans don’t have retirement savings. That’s a shocking statistic.
Save now so you won’t have to worry if you have enough in due time.
5. Save money for your kids’ college fund
While kids nowadays can loan money for education, it’s best to save money as early as you can for your kids’ education.
That’s assuming you are the type of parents who want to pay for your kids’ education and who don’t want your kids to bury themselves in debt even before they start working.
Here’s an eye-opening statistic: Americans now owe over $1.53 TRILLION in student loans. That’s why a T.
6. Pay off your home (early) if you can
Mortgage is one of those debts that can keep people awake at night.
Between the never ending mortgage payments, interest on the loans, among others, paying it off early can mean a whole not only to your pocket but also to your peace of mind.
Just like you do with baby step 2, you put a lot of effort and money towards paying your mortgage off.
7. Build your wealth
Now that you’ve paid off all your debt, save money for emergency, and save money towards your kids’ education, is now the time to build your wealth.
Invest as much as you can but be knowledgeable on where you put your money in.
The Practical Saver Pro Tip
While it's always good to focus on paying off debt, don't forget to breathe. Take a break and celebrate the small wins you've achieved. After all, you owe it to yourself for doing great things.
My Take On Dave Ramsey Tips
While Dave Ramsey has a lot of great points when it comes to saving, making money, and paying off debt, there are instances where I don’t agree with his take on certain things.
Here are some of them:
1. Stop using credit cards
While credit cards can be a culprit as to why you are in debt, closing all of them, which is one of his advice, isn’t always a good idea.
First, if you close your credit cards, your credit score will take a hit. See a credit simulation on Credit Sesame for free.
Second, if you want to an important purchase like buying a house, a car, or something else, your credit needs to show credit activities and variations of credits. Not having those credit cards can disqualify you for getting the important things you need.
Here’s what to do:
Pay off your balance and leave your cards open. This way, you’re debt ratio is in stellar state, which will drive your credit score up.
2. Pay off all your debt
While this Dave Ramsey money tip is a good one, paying off all your debts may come with a big sticker price.
Let’s say, you’ve paid off all of them, and, then, you lost your job. To make things worse, you didn’t have enough money saved because you put everything towards debt payment.
So, what happens now? You’re going to use debt to help you survive financially. The cycle goes on.
Here’s what to do:
Pay your debt and save money, at the same time. Once you’ve build up over 6 months worth of expenses, then, you can start putting more money towards debt repayment.
3. Use snowball method
The whole premise of the snowball method is to pay the debt with the lowest balance first regardless what the interest rate is.
While this keeps a person motivated, the best way to do it is to first pay off the debt with the highest interest.
Why? It’s because the earlier you pay it off, the less interest you’d get charged.
Dave Ramsey Tips: Conclusion
Saving money doesn’t have to be a difficult task. You can literally save 1,000 dollars or even more with simple budget tweaks.
There are many ways to go about saving money and doing so in a stress-free manner.
Having financial security will make you and your family happy, at ease, and able to pay the bills each month with little worry on your end.
Follow the Dave Ramsey tips above and get on your way to achieving financial stability easily and efficiently.
