#4 Save
Save money for a rainy day. Save for a speeding ticket. Save for those emergencies, getaways, things that are unexpected. I'm all about planning ahead...but sometimes you need a little extra cash in the bank for that spontaneous part of life. Trust me on the value of saving. Your car might break down, or you really might need a "getaway weekend" with your spouse. Either way, you'll be darn pleased you've got a couple extra hundred in the bank. If I'm being really good, I will put any extra money left over from our budget into savings. Save, save, save. Even if it's just $20. You'll be glad that you did.
One thing that always confused me is that we're told to save, but at the same time we're told to invest. I never knew what the magic amount in the bank account was that made it alright to invest. Dave Ramsey has a great, clearly outlined 7-step approach to this dilemma. It's completely changed my approach to saving! Have you entered the giveaway for his new book: The Money Answer Book? Check it out here!
Lindsay graduated from Brigham Young University with her Bachelor’s in English. She has lived in Colorado for a little over a year. Her husband loves her because she makes him laugh. Her daughter loves her because she makes the best food in the world. :) Lindsay loves her book club, quilting, her family, and going places-the library, the zoo, hiking, sporting events. She loves to GO!
I've never really understood this until just recently. I've followed Dave Ramsey, and he's empowered me to get out of 21k of debt in 7 months. WOW. In that time, we also paid tuition, school expenses, etc. in cash. We have just over 3 months of expenses in our emergency at the moment and the feeling is amazing.
ReplyDeleteBut that's not even the half of it. I was able to get my friend on Dave's plan and while he was on Baby Step 2 (the debt snowball, pay off your debts smallest to largest), he had already completed Baby Step 1 (save a baby emergency fund - $1000 as fast as possible). This came to GREAT use when he got in a car accident on Friday and then his wife needed medical treatment on Sunday. It all hit at the same time, but because he had his emergency fund in place, he's doing alright.
Just another side note, because we were completely out of debt and doing "well" compared to other people our age, we were able to splurge a bit and make him some dinner and at least knock some stress off of his life. Like the old cliche goes, it's not if it will happen, it's when. Best be prepared.