Are you are looking for money saving ideas to help you save money and stay on top of your personal finances? Then it is worth reading Dave Ramsey’s book “The Total Money Makeover” where he outlines Baby Steps to help you build a strong financial foundation for you and your family. My husband and I also took Dave Ramsey’s Financial Peace University at church awhile back. Dave Ramsey tips are pure gold!
When it comes to personal finance tips and money advice, Dave Ramsey is an absolute personal finance guru. He has helped a lot of people save money, pay off debt and live a better life, including me. With the Dave Ramsey tips we learned at his Financial Peace University and doing side hustles, we have paid off over $80k in debt.
Whether you are overspending, struggling to save money, looking to learn how to make a budget and stick to it, or looking to get out of debt, below I have summed up 20 Dave Ramsey tips on saving lots of money.
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20 Dave Ramsey Tips on Saving Money
Dave Ramsey has helped many people save money, pay off debt and find a way to to be financially free. The 20 money saving tips by Dave Ramsey I have summed up below are based around his 7 Baby Steps. Here are the Baby Steps to help you build a strong financial foundation for you and your family.
Dave Ramsey’s Baby Steps:
- Save $1,000 for your starter emergency fund
- Pay off all debt (except the house) using the debt snowball
- Save 3-6 months of expenses in a fully funded emergency fund
- Invest 15% of your household income in retirement
- Save for your children’s college fund
- Pay off your home early
- Build wealth and give
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Millions of people have got out of debt by following these 7 Baby Steps listed above. But, with these 20 Dave Ramsey tips, you could save money, pay off your debt for good, save for emergency funds, and build wealth for you and your family.
#1 Create a Zero-Based Budget Using the Envelope System
Creating a monthly budget is the first and most important step to save money, pay off debt for good and build wealth. By creating a budget you are essentially telling your money where to go.
The most important Dave Ramsey tips for saving money is creating a zero-based budget. It ensures all of your income is accounted for. In other words, you assign every dollar you earn a job by allocating it to an expense category in your budget.
The concept of envelope system is simple: you put cash in individual envelopes for each spending category in your budget such as groceries, entertainment and clothing. You will only put the budgeted amount for each spending category in individual envelopes.
When you pay for something, the money has to come out of the appropriate envelope. When the cash in the envelope is gone, you cannot spend anymore. If you are constantly overspending on certain categories in your budget, then you can try the cash envelope system to stick to your budget.
#2 Automate Your Savings
One of the Dave Ramsey tips includes automating your savings. To make sure you pay yourself first, set up automated transfers between your checking and saving accounts.
Simply instruct your bank when, how much and where to transfer money every time you get paid by direct deposit or receive your paycheck.
By automating your savings, you can save money without noticing it and make savings a priority.
#3 Pay Off Your Debt Except the Mortgage
Dave Ramsey recommends paying off the debt with the smallest balance faster first, if you have multiple debts, like credit card debts, auto loan, student loan, etc. This is because you are more likely to eliminate a debt faster. Eventually, this creates a debt snowball!
How to Create a Debt Snowball
- Pay as much as you can to pay off the debt with the smallest balance first while making the minimum payments on your other debts.
- Once you have paid it off, add those payments you were paying on the debt with the smallest balance to the monthly payment on the next smallest debt to destroy it.
- Repeat this method until you have paid off the last debt.
It is easier to see results quickly with this method and can make you feel motivated.
#4 Build an Emergency Fund
Unexpected expenses can happen at any time. If you are not prepared, sudden financial emergencies can cause a devastating financial setback. The best way to be prepared for unforeseen financial emergencies is to have an emergency fund.
That is why Dave recommends saving three to six months of expenses in a fully funded emergency fund. Take the money you were throwing at debt repayments to fund your emergency savings fund. Plus, put any extra money you bring in to speed up the process. If you save money money by cutting spending, direct that amount toward the emergency savings fund as well.
You will want to keep it in a place that is easy to access so that you can get to it easily and quickly, such as a regular savings account, money market account, or simple checking account. Do not dip into it unless a true emergency arises.
#5 Stop Buying New Cars
New cars are expensive. If you are in the habit of changing your car often, you will have to invest more money every year.
The average new car depreciates in value by 20% in the first 12 months. So it makes only sense to buy a 1-year old car for 18% off the sticker price instead of buying a new car (if you really need one). However, if your old car is only 2-3 years old but working fine, stop buying new cars if you want to save money.
#6 Build Credit with “Good Credit” Not “Bad Credit” If You Have No Other Option
According to Dave Ramsey, a mortgage is considered as “good credit” and just about everything else is considered as “bad credit”.
When you are buying a house it can be a good investment because you think it will rise in value over time. So, when you are paying a mortgage you are essentially building credit (money) with good credit (mortgage).
When you pay a mortgage, it is good credit because it comes with a great interest rate against substantial collateral you expect to rise in value over time.
If you take a car loan, it is considered ‘bad credit‘ because you end up with a depreciating value in your asset.
#7 Keep Your Current Cell Phone
Smart cell phone are costly. If you change your cell phone often, you are wasting money. You should keep your current cell phone if it still works and does not need replacement to save bucks.
A lot of people change their cell phones every year, wasting money on the latest, new models. Do not pay for a brand new phone that does exactly the same thing your current cell phone does. That’s why phone flipping is so profitable and can earn you $1k extra each money.
#8 Use Cash Whenever Possible
When you use cash for shopping or daily living expenses, you will spend only what you have. If you pay with credit cards, you run the risk of spending more than you are making. This is because you may be tempted to buy things you would not need at all in the first place.
When you use cash you will never spend more than you make. One of the top Dave Ramsey tips include using the cash envelope system for different spending categories of your budget.
When you use only cash to pay for your daily living expenses, the money spent comes out of the appropriate cash envelopes. Using cash to pay for your daily expenses helps you stick to your budget and stop overspending.
#9 Unsubscribe from Emails with Discount Offers
Email marketing is a great way for retail stores or brands to promote their products. If you have subscribed to emails from your favorite stores or brands, they will send you emails whenever there are discount offers on different products that want you to spend money.
These offers are the big temptation to spend money. For instance, you may see a special offer on a product you would not need to buy at all in the first place, but you may end up buying that product because of the temptation. If you unsubscribe from these emails, you will not be distracted by the “not miss out on the deal” temptation.
#10 Eat Less
Americans spend almost one-third of their household income on groceries each month, according to a report by USDA. Food is a huge expense, but you can reduce it by eating less.
Do not go to expensive hotels and restaurants if you are planning to save. Instead, you can enjoy delicious and healthy food in your own home with less money.
Cut on your grocery bills. Do not grocery shop on the weekends. This is because of offers and free samples that want you to spend more. Planning your weekly meals is another way to save money each week. Check out more ways to save money on groceries!
#11 Avoid Brand Names
Many of the Dave Ramsey tips include advice to spend less in order to save money. You will spend less and save money and valuable time by buying generic items instead of brands.
In general, name brand products are not superior to generic items. The ingredients of generic products are similar to name brand products. But due to a lack of trust some people have in generic products, they spend more money on name brand products.
Generic products cost far less than their name brand products. So, do not pay more for a name. You will save a lot of money by buying store brands or generic brands instead of brands.
#12 Go for Free Stuff Whenever Possible
If you really want to save a lot, then you can take advantage of free stuff whenever possible. Get unwanted, old furniture like sofas, kitchen appliances, baby clothes and more from family or friends.
Check the free section of Craigslist regularly for things you can get for free that you would need to buy anyway. Put the money you save toward debt repayments or fund your emergency savings fund.
#13 Pay Off Your Credit Card Balances in Full Each Month
When you use credit cards but do not pay off your outstanding balances each month, you accrue interest charges which varies depending on the credit card provider and your credit score.
If you really cannot pay off your credit card bill in full each month, just stop using your card and use cash instead.
#14 Cut Up Your Credit Cards
One of the Dave Ramsey tips include cutting up your credit cards. It is easier to not be focusing as much on saving money when you have credit cards. This is because when you have the cards, you know you can use them if unexpected expenses pop up.
If you do not have the credit cards anymore, you no longer have a backup. But by saving money each week and month, you will be prepared for the unforeseen expenses.
Sure, credit card companies offer many different rewards, but you can be tempted to spend money you have not budgeted for on your credit cards. Even if you pay off your credit card bill each month, you can overspend when you carry cards with you.
#15 Minimize Your Budget Line Items
Most Dave Ramsey tips on saving money include advice to spend less. The best way to do that is to minimize your budget line items. Look at your expense categories and see what items you can remove from your budget to save money.
Look at your budget line items and see what you can cut out completely from your budget. Do you really need that magazine subscription and weekly gym membership?
You will save big bucks by eliminating nonessential line items in your budget. Put that extra cash toward debt repayments, or if you have already paid off your debt, put that cash into your emergency savings fund.
#16 You Do not Actually Need a Credit Score
A credit score determines your ability to qualify for a loan. The only way to get a credit score is to borrow money from a variety of lenders. But one of the top money saving tips by Dave Ramsey is to use cash.
If you always use cash, you do not actually need a credit score. This is because you will never need a loan if you always pay cash. If you want to get a credit score, you are going into debt.
You are probably wondering how to get a mortgage without a credit score. You do not need a credit score to be approved for a mortgage.
#17 Increase Your Income
If you are struggling to save even after budgeting your money, you will need to look for ways to increase your income. These days, there are many different ways to make some extra money thanks to Internet, the gig economy and the sharing economy.
Here are a few ideas to get you started:
Sign up with one or more of these sites and start bidding on jobs that match your skills. If a client awards you a job, you complete and submit it. If the client approves your work you get paid.
You can get paid to complete online surveys. Typically, surveys will pay you a few cents per survey, but they can add up quickly. Sign up for as many legit survey sites as possible, such as MyPoints, Survey Junkie, and Swagbucks are some of the top survey sites that pay.
Sell Things Online
If you do not have much old stuff to sell, you can buy in-demand items at cheap prices and sell them online for a profit. You can even open your own store with Shopify!
Manage Social Media for Other People
Are you active on social media? Have got good social media skills? Then you can manage other people’s or companies’ social media accounts and pages to earn extra money.
Make Money from Apps
There are a variety of tasks apps that you can use on your smartphone to make money. For instance, Sweatcoin can help you earn money by walking and the Nielsen mobile app submits you in a drawing for $10,000 each month.
Drive for Uber or Lyft
You can drive for Uber or Lyft on the weekends or in evenings to make extra money thanks to the sharing economy.
Do Odd Jobs
Here are 117 more ways to increase your income. Try to increase your income as much as you can for saving more money.
#18 Cut Spending
One of the important Dave Ramsey tips is to spend less by cutting spending from every budget category. Take a look at expenses in your budget you can cut out completely temporarily to save money that you can put toward debt elimination. Identify expenses you might be able to live without for a few months.
Cancel some of your monthly subscriptions like gym membership, make coffee at home, watch a movie at home instead of going to the theater, and so on to free up extra cash.
If you cannot cut out some of your expenses, find out what expenses you can cut back on to save some money. You can downgrade your TV package, cut your phone and Internet bills, and reduce food shopping bills.
#19 Use Cash-Back Apps
There are tons of cash-back apps out there to choose from. You can save money and earn cash back on every purchase using cash back apps.
One of Dave Ramsey’s money saving tips is to save money on purchases by using cash back apps whenever and wherever possible. Cash back apps will not make you rich, but if you use them whenever and wherever possible, they can add up to some serious savings.
Some of the best money-saving cash back apps you can sign up for saving money include:
These money-saving apps will give you points just for scanning your receipt, answering consumer surveys, and buying specific products. The points are redeemable for cash or gift vouchers.
#20 The Top Dave Ramsey Tips are to Save, Save, Save
In all of the above-mentioned Dave Ramsey tips, the common theme is to save your money. The title of the article says it all – saving money. Save as much money as you can for your future (e.g, retirement, big future purchases, and big life events).
The first and the most important step to saving money is to create a zero-based budget using the cash envelope system. It will show you where your money goes and how to control your spending to save money. Reduce your non-essential items to save bucks.
Cut out completely those things you really do not need in your spending list, or cut back on items to decrease your spending. Take advantage of the many money-savings apps out there and coupons to save money on online or in-store purchases.
Only use coupons for products you already buy if you want to make real savings with coupons. Use cash back apps, websites and coupons to spend less on things you are already buying.
The more money you save, the more money you have to enjoy a better life, build wealth and sharing it with others. The long term goals of my family are to sponsor missionaries to help build churches around the world.
Final Words on these Dave Ramsey Tips
Following these 20 Dave Ramsey tips will help you save money to pay off all your debt for good, be prepared for emergencies, and build long-term wealth. Whether you are struggling to save money, get out of debt, stay out of debt, or stick to your budget, Dave Ramsey money saving tips will help you take control of your finances.
What are some more ways that you are trying to save and pay off debt? Let me know in the comments! Also, ask any questions you have and I will try my best to help.
Frugaltastic Budgeting Binder
How can you get ahead and pay off your debt or save any money?
Trust me, I have been there before I started budgeting to save money and side hustling to make extra money.
I designed these budget sheets in the Frugaltastic Budgeting Binder to help me track my finances with ease and so can you!
There are 8 pages to track your finances however you wish including a cute colorful cover to keep everything nice and tidy.
You can write in the months so this one binder can be used year after year. No need to purchase a new printable for each year, which will save you money.
The Frugaltastic Budgeting Binder includes:
- Trendy rainbow chevron cover and design
- Our Monthly Budget worksheet with monthly comparison
- Debt Payment Tracker
- Our Savings Log
- Bill Payment Tracker
- Bill Payment Checklist
- My Daily Expenses
- Donations Tracker
- Gift Tracker
Get the Frugaltastic Budgeting Binder for only $7 with this special link as a thank you for reading this article. Use code BEFRUGAL if necessary.
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