This week we are looking at Dave Ramsey’s baby step #1. Baby step #1 is to save up a $1000 emergency fund. The emergency fund is to be used strictly for emergencies. Not to pay the pizza deliver guy (you shouldn’t be ordering pizza anyway!), not to grab for lunch money on the way out the door (brown bagging it is less expensive!), and not for that cute pair of boots you want.
What constitutes an emergency?
- A broken furnace that needs to be repaired because it is winter
- A fridge that breaks down and can’t be repaired
- If your only vehicle needs repairs so you can get back and forth to work
We happened to be saving money for a Disney vacation in a few years. All while we have about $65k in debt. Our priorities were not what they should have been. We took what we had saved up so far, added what we needed from our bank account, and there we have out $1000 emergency fund. Not everyone has money in the bank to put aside and not everyone can easily pull their $1000 together like we did.
So how can you save up for your $1000 emergency fund? I polled the other members of a Dave Ramsey Facebook group I’m in and here are some ideas we came up with.
- Save any monetary gifts you receive for holidays or your birthday
- Have a garage sale and sell things you don’t need or use anymore
- Sell unwanted items on ebay
- Put money aside from your tax return if you get one
- Get a second job
- Baby sitting
- Making crafts and selling them
- Selling baked goods
- Get creative with your meals and see how far under your budget you can get. Put the extra that wasn’t spent that month away.
- Sell any extra “toys” like cars, motorcycles, ATV, snowboards, etc. (this was part of baby step 0 last week!)
You’d be surprised how quickly you can save up $1000 for your emergency fund when you really put your mind to it. Do you have any ideas? Comment below and I’ll add them to the list!