If you have been busy trying to work out how on earth to sort out your finances then you must have come across the name Dave Ramsey.
Dave Ramsey is a financial guru who is renowned for giving people helpful advice on getting their personal finance back on the right track.
Dave Ramsey’s tips are becoming more and more popular among the masses and with very good reason too.
Related post: How to get out of debt when you are completely broke
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Dave Ramsey has helped more than 1 MILLION families sort out their finance through his ever-popular course Financial Peace University.
Tips from Dave Ramsey have set millions free from financial debt and onto a life of complete debt-free living.
He is known for his popular teachings on zero budgeting, the cash envelope system and is his popular book Total Money Makeover.
There is A LOT of information to digest!
It would probably take a lot of time to get through all the material so today I just want to sum up 15 of the best Dave Ramsey tips you can get.
These will help to give you more clarity and understanding of what you should be doing and looking for if you want to live a financially free lifestyle.
15 Top Dave Ramsey Tips
1. Create a budget
Having a budget is one of those things that is almost do or die.
You can’t even begin to sort out your finances if you don’t know exactly how much money you have coming in and going out each month.
Budgeting doesn’t have to be boring. Someone said “budgets are sexy” and it’s so true.
Your budget has the power to free you from debt.
If you are serious about turning the corner with your finances your journey needs to begin with a budget.
A zero-based budget is a good place to start.
A zero-based budget, in a nutshell, is a budget where every single dollar has a job and is accounted for.
2. Stop borrowing
You will never be able to truly escape debt if you continue to keep on borrowing.
Its time to cut up those credit cards and make a plan within your budget.
This leads nicely onto the next point.
3. Pay off your debts
Paying off debts is super super important.
You can’t be free if you are still walking around with a ball of debt tied around your ankle.
Its time yo cut that chain by starting to pay off your debts.
One of Dave Ramsey’s tips is to use the debt snowball method which requires you to write down all your debts in order from the smallest down to the largest.
The idea behind it is that you get rid of the smallest debt first then move on to the next smallest until you have eventually cleared all your debts.
4. Trim your budget
There is no shame in trimming down your expenses if you need to.
It makes no sense in trying to keep up with the Joneses if you don’t have a budget just like the Joneses.
Take the time to take a real close look at your budget and begin to cut down on some of your costs where it makes sense.
For most people, one of the largest expenses that they have aside from their mortgage is a grocery budget.
Meal planning can be a great way to save on some money on your groceries.
If you have no idea or desire to meal plan then you can try a company like Platejoy who will do all the leg work for you.
You can take a look at them here and even use my coupon CRAZY10 to get $10 off.
Meal planning is a simple way to cut your grocery shop almost in half.
5. Cash envelope system
Using the cash envelope system is a great way to keep on top of your budget especially if you are one of these people who is constantly going over budget each month.
Using the cash envelope system is the perfect thing to use as you can physically see your money going down, therefore, forcing you to re-evaluate things before spending another dollar.
6. Emergency fund
You don’t have an emergency fund yet?
Then you need to get on that right away if you don’t want to end up back in the debt hole again.
Having an emergency fund is a necessity and I’ll tell you why.
If tomorrow you lose your job (God forbid) or if your roof falls in and it’s not covered on your home insurance, what are you going to do?
The chances are that you will have to dig further into debt in order to cover the cost.
It will just be more accumulating extra interest charges that you really don’t need at a time that you are trying to get out of debt.
Dave Ramsey is known for advising people to start with a goal of $1000 as an emergency fund to begin with whilst they are still paying off debts.
After your debts are cleared you can then increase this amount to 3-6 months worth of expenses.
7. Know the difference between good credit and bad credit
Take a moment to digest this one because you will need it.
Good credit is where you borrow money for things like a mortgage. Bad credit is when you perhaps borrow money on a credit card for no good reason.
A good credit purchase will usually have some type of reward afterward that makes the initial debt worth it.
Bad credit does not do this. Usually, there are no rewards after having bad credit, at least nothing that will be of real benefit to you.
8. Increase your potential to earn
You can earn money in lots of different ways today and it’s not just about having to apply for a second job.
There is a lot more to it than that.
You can sell things that you are no longer using in your home, in essence, declutter. You can have a yard sale or sell the items on eBay.
You could also consider side hustles.
9. Avoid brands where possible
We have all been sucked into a generation that says if it’s not a brand then it can’t be very good.
This is far from the truth.
There are a lot of off branded items that are just as good if not better than branded items.
You can save yourself a whole lot of money just by cutting down on branded goods.
10. Keep your savings account separate to your checking account
We’ve all been there before where everything is kept in the one account and then we accidentally on purpose end up spending our hard earned savings.
There is a simple fix for that, keep the two accounts separate from each other.
If you know that your savings are going to tempt you consider leaving your savings account debit card with a family member or friend making it harder for you to access on a whim.
11. Set goals
Setting goals gives you something to aim for. They don’t have to be boring goals like Pay off loan number 1 in 6 months.
In can be fun things like once we pay off our first debt we get to have a fun day out with a particular budget in mind.
Setting goals will help to keep you motivated when you feel like giving up.
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12. Budget together
Budgeting with your partner is one of the best things you can do if you want to be successful at budgeting.
There is no point in only one of you being in agreement with the budget as the other person will not stick to it.
If you come up with a budget that you both agree on you can save on arguments and debt too!
13. Have a buffer
A buffer is a great thing to have because its easy to forget items that should be in your budget or perhaps something that you didn’t plan for just pops up.
Sometimes life just happens and it’s out of our control.
Having a buffer or a miscellaneous section on your budget worksheet is a great way to make sure you stay on track financially.
14. Save and give
Another of Dave Ramsey’s tips that he is known for talking about is saving and giving.
Giving doesn’t have to mean that you give up money that you don’t have.
There are other ways that you can give too. You can give someone your time, advice or help.
Once you are debt free there is no harm in also giving monetarily to others also.
These things are precious and Dave believes that there is a blessing in being able to give and so do I!
15. 7 Baby steps
These 7 baby steps are one of the more popular things that Dave talks about and it goes as follows:
1. Save $1000 towards a starter emergency fund
2. Pay off all debt except for your house using the debt snowball method
3. Save 3- 6 months of expenses for a full emergency fund
4. Invest 15% of your household income towards retirement
5. Save for your children’s college fund
6. Pay off your home early
7. Build wealth and give.
Dave advises that you follow these steps in order.
Final thoughts on Dave Ramsey’s tips
There is so much information above that if you take the time to go through it all you can surely make a difference to your lifestyle for good.
Just remember that it takes time to put a budget in place and get everything working so don’t beat yourself up if in the first month things don’t go according to plan. Keep trying and you will get there.
That was another Dave Ramsey tip lol!
p.s If your not sure where to start with creating a budget you can take a look at this post on how to start a budget for beginners