Are you struggling with your money? Do you want to be better at your personal finance and get financial freedom in 2020?
If your answer is “YES” for any of these questions, you must know these 9 BEST TIPs that I figured out from Dave Ramsey. These tips will blow your mind and help you to have a better plan to work on your finance this year.
Who is Dave Ramsey?
He may be known as a financial guru who teaches and gives financial advice on his TV Show and online channels.
His contents are varied from emergency funds, side hustles ideas, and destroying debt. You can easily find the answer about any financial question by listening to his podcast or reading his book Total Money Makeover.
Below I have summed up the top 9 money hacks and tips that Dave Ramsey wants everyone to know as soon as possible to help them get out of financial struggles and start living their dream life.
Money Tips 1: Keep Your Current Cell Phone
It looks like new generations of smartphones are delivered every year, or even less than that. Therefore, if you asked Dave Ramsey about money tips, one of the first things that he will recommend for you is “Don’t change your phone” – as long as it still can make a call and send a text. It means your phone still works and doesn’t need to be replaced.
Because everytime you upgrade a new phone, it means you spend more few hundred dollars (at least, if you use a phone plan to upgrade) per year for a phone.
However, do you think that your new smartphone (example Iphone 10 or 11 Pro Max will be out of date and can’t be used just after 1 or 2 years??). The answer is “NO”, you can use your Iphone (or whatever you phone is) for years and still be in good quality and condition.
So, you don’t need to waste that much money every year just to follow the new trend. Let’s keep your phone until it literally doesn’t work anymore. Then, you can buy a new phone that’s 1-2 models old or used/refurbished instead of wasting money on the latest, new models.
Money Tips 2: Stop Buying New Cars
Well, honestly, you don’t need to buy any new car if your old car still works or you can use public transport instead.
Following Dave Ramsey, the idea of “Stop buying new cars” is: Unless you need to drive off a lot, you buy the car means “Investment”. If not, you should not try to buy a new car to impress someone or evidence yourself (except when you already have a lot of money and this new car doesn’t mean too much to your income).
Because on average, a brand new car depreciates in value by 18% in its first year alone. So, it is better to try to buy a 1-year old used car for 18% off the sticker price instead!
So to avoid this pitfall, when you want to BUY a new car, let find the best deal that you can find for your car, then figure out what the monthly payment would be. With this assumption, let’s start to set the amount of cash aside in your “Car Jar” until you can save up to the value of that car.
Although it is a long game, it will help you to avoid more debt, and feeling more excited to save little money everyday and one day, your dream car will come true!
Money Tips 3: Using Cash Instead Of Cards
Why should you do this?!
Well, do you know that you have the intention to spend more on your cards rather than when you make payment by cash!
Following the analysis from Forbes, using your plastic credit cards make you feel more comfortable when you spend your money. Because your brain will be cheated that your spending is not too much and still in your control compared to when you really withdraw 500 dollars and start shopping by cash and see it gone!
So, to reduce the amount of money you waste on shopping and buying unnecessary pieces of stuff, let make more payments on cash instead of using your credit cards.
Money Tips 4: Have an Emergency Fund
This emergency fund will help you to solve the urgency situation and need money immediately. If you don’t have this fund and all your money based on your salary, what will happen when you need to pay the hospital fee or car repair in advance on the 20th of the month and your salary will be paid on 29th?
And maybe you will be concerned about where to put an emergency fund? Well, as Dave Ramsey recommends, when you start to build your small, fluid, $500 emergency fund as part of following Dave Ramsey’s advice, you’ll want that to be an easily-accessed savings account or cash.
So, you can easily withdraw your money when you need it immediately. For example like fixing your cars or paying the hospital fees in advance.
And when you start to follow Dave Ramsey’s baby steps, you’ll eventually build a much bigger emergency fund, to cover 6-12 months for your expenses in the case that you have issues or are stuck with finance such as millions of people are having during the coronavirus epidemic.
Money Tips 5: Go For Free Stuff Whenever Possible
Following Dave Ramsey tips with money, he includes advice to get you to spend less, it means to be preferred being on taking advantage of free stuff whenever possible.
You don’t need to feel shame when receiving (or asking for) unwanted, old furniture from friends or your neighbours. And it is also no shame in checking the free section on gumtree to receive some old stuff that others don’t use but are still good and fit for you.
And if you have the chance to use a coupon on an already good deal, let’s do it. But make sure to purchase the things in need, not buying just because it is “On Sale”.
Money Tips 6: Said “No” with Brand Name
Well, actually, I don’t mean you shouldn’t buy the stuff from well-known brand names at all. It just means try to reduce buying everything with the “big brand name”, and let focus on the quality of products.
Maybe you will love to have Nike or Adidas, these names are so great to buy shoes. But do you really need to buy all your stocks that also come from these big brands?
Or you can find the stuff with the same quality (or a little lower but still make you feel comfortable) for a better price.
If the product you are going to buy doesn’t really need a big brand name to make sure about its quality, let come up with a smaller brand. So you still can have this product and still save a lot of money instead of paying for the “brand name”
Money Tips 7: Stop Eating Out All the Time
Have you ever counted how much money you spend eating outside every year? That amount of money is insane!!! Believe me, you will be shocked when knowing how much you can save each month if you reduce the amount you eat outside every 2 times per week less than you normally do.
Let’s start to learn how to cook from home, it makes you eat healthier and also helps to save a lot of money for your bank account.
Money Tips 8: Unsubscribe From Emails With Discount Offers
“Subscriber-only discounts” – This kind of email from the stores you bought will make you spend more money on average whenever you see their email.
So the money tip of Dave Ramsey is unsubscribed from all of these emails. Because of the less discount you see, the less spend you make!
Because these companies understand the psychology of consumers, so when the buyers receive an email that says “Don’t miss out on this special deal”, they have the tendency to make quick buying decisions before they even realize that they didn’t need to buy any of it.
Money Tips 9: Increase Your Income
Well, after having 8 money tips from Dave Ramsey, I believe that this one should be placed at the end but should be the priority at the first in your “To-do list”. Because if you can earn more money, it means you can spend more and still save more. Because the game of money such as the game of percentage, if you spend 500 dollars and it just 10 percent of your income, it will be easier and more comfortable than spending 500 dollars and it equals to 20% of your income.
And to do it, you should start to work more hours to earn more or find another extra income stream to help you earn an extra few hundred or even more each month.
You can start your side hustle by making your blogs on WordPress (a free platform for you to create your own website) and earning from affiliate programs.
Besides my obvious favorite side hustle of making money by blogging, check out these other ways to make money online to boost your side hustle cash flow.
Bonus: Start a Dave Ramsey Side Hustle
Take Online Surveys – The perfect side hustle while you watch tv, wait for public transports, or even sit on the toilet. Yes, you can make money while you are using the bathroom.
Start a Money Making Blog – It takes a lot of effort up front but once you start seeing the success of the sky’s the limit. You can check out my Pinterest Boards to get more ideas about how to earn money by blogging.
Investing in Stock Market – Want to make money by investing in the stock. You need to understand it. And the best way to avoid losing your money is by learning from experts. And apply it to your stock strategy.
Finally, I would like to say that there are A LOT OF ways to make you be better with money and let money work for you (instead of your work for it) — the priority of advice Dave Ramsey always recommends.
Any small step you start with these money tips will bring you to close your financial goals and make you have a better and happier life.
Always remember that the more you understand and self-discipline with your finance, the better result you will get on your income journey.
And you can check it out my other article about “How To Be Smart with money – Financial Tips for your 20s” here.