Dave Ramsey, financial guru who has helped so many families get out of debt, recommends that most of us start on the path to financial solvency by first saving up $1,000 toward an emergency fund. By having a solid emergency fund, we are less likely to go into debt, should the unexpected happen, such as the home furnace needing to be replaced, the car needing to be repaired, or the experience of a medical crisis.
Saving that $1,000 is the first step of Ramsey’s overall get-out-of-debt plan.
How can you save that much when there doesn’t seem to be any money left over each month? Here are seven ways to do it.
Skip the grocery store and cook from the pantry one week each month. The average family wasted 25-30 percent of their food that expires or goes to waste. Instead, skip one grocery trip a month and eat from the surplus in your pantry, fridge and freezer. Average savings: $200-$250 per week.
Hold a garage sale. Gather all of the un-needed things from your home and host a garage sale. Make sure to advertise well in advance and price your items to sell. With one day’s work, you may be able to fully fund your emergency resources. Average savings: $500-1,200.
Get a second job. While getting a second job may not be appealing, just remember that it is temporary, just until you earn the money for your emergency fund. There are so many different jobs you can do, including those appropriate for a stay-at-home parent, such as babysitting. Average savings: $10-20 an hour.
Skip eating out. Eating out can get expensive. Lower your food costs simply by preparing food at home. Meals don’t have to be time consuming or complicated. Throw some ingredients into a slow cooker, used some prepared foods as meal ingredients, make extra and freeze it, or any number of other easy ways to get dinner on the table. Average savings: $150 per week.
Give up a vice. Whether it is cigarettes, fancy coffee, soda, or a visit to the vending machine each day, giving up a small habit can add up to big savings. Make a firm decision to give up something that isn’t absolutely necessary (and may not be good for you anyway), and then put that money into your emergency fund. Average savings: $85-170 a month.
Get a piggy bank. If you empty out your change into a piggy bank each day, it will start to add up without you ever feeling like you are sacrificing anything. Some banks have caught on with programs that will round up your purchases and deposit the change into a savings account. You can skip the fees and do it yourself, instead. Average savings: $300-500 a year.
Use coupons for groceries. Cut your grocery bill by using coupons. Just 20 minutes each week will reward you with extra cash that can be put toward your emergency fund. Just make sure that you only buy food that you will actually eat and aim to combine a coupon with a sale to get the most savings. Average savings: $30-90 per shopping trip.