Dave Ramsey Update {The Importance of an Emergency Fund}

 

Hey guys! You didn't think my last post about buying a car would be the end of our Dave Ramsey journey? I wouldn't leave you guys hanging like that. So I decided to do a follow up post so you wouldn't feel alone out there with your financial struggles or even financial successes. Having people in it with you, and supporting you is so important. As I have posted before 2020 was insane to say the least. I know everyone has had their different financial situations. Which is why I wanted to dedicate a specific post to the importance in having an Emergency fund. I think everyone can either say "I wish I had had an emergency savings." Or "I'm so glad we had an emergency fund." After this last year kicking us right in the butt. Parents being forced to work from home and basically home school their kids. People losing their jobs and their businesses. It amazes me on what is still standing and it saddens me the local businesses we lost. Thankfully we fell under the category of "I'm so glad that we had an emergency fund." Not because of loss of a job. But for two important reasons. 

Reason 1: 

The world did not stop moving we still had financial emergencies come up in 2020. We have now lived with no credit cards for about a year and a half. Any major or minor emergency is going to be coming out of that emergency fund. That way we are not still owing someone after our financial emergency like we would if we would've on a credit card. 

It felt like a lot of emergencies too. Annoying as they were we still made it work and we just go back to rebuilding it afterward. We PAY OURSELVES BACK not a bank, or credit card.

2020 financial emergencies

April: Car Maintenance $636.74

May: Locksmith $184

{freak incident where the lock mechanism broke on a bedroom door and wouldn't open}

June: Plane tickets for a funeral. $473.92

Washer broke got a new set. $1423.96

Dec: Transmission $4909.67

{Ended the year with a new transmission}

TOTAL= $7628.29

In just emergencies alone. I couldn't imagine having to deal with loss of job, unemployment, etc.

Even now that I totaled it all out seems so insane that we managed to do all that without using a credit card.

Reason 2:

With our financial freedom we were able to help and give to others. Tithing to our home church not only  helped pay the staff but was used to help others in the community who were having financial hardships. We supported local businesses in the area. Supported friends small businesses financially by buying their product etc. I also had a new years goal last year to give everyone a birthday and Christmas present for 2020 and I did that successfully. {I'm big on birthdays}

 

Emergency fund should be $1000 at the minimum and 3-6 months expenses (i.e electric, water, groceries bills etc.

Ways to earn extra money to fund your Emergency fund

We didn't just rely on my husbands income from his main job. We also did a lot of side hustles. 

These are the ones we have used and we always finding more.

DoorDash driver

{A great way to earn money by delivering groceries, food etc}

Shopkick {Scanning, shopping}: 

{I've been using this one for a few years now and it has helped fund a lot of things}

USE CODE: EARN642480

MyPoints  {Surveys and shopping}

https://www.mypoints.com?rb=71146176 

 Fetch {Shopping/scan receipts}: 

USE CODE: DJ69T

We did a thing... {Dave Ramsey Update}

 As many of you may already know we are big Dave Ramsey people. In a post from last year {almost 1 year exactly} we paid off all our debt. It was probably the millionth time we had paid off our credit card. We paid off a personal loan. We then moved on to putting money away for an emergency fund. Dave Ramsey calls for $1,000 for emergencies right off the bat. Then move onto saving up 3-6 months of expenses for emergencies. If you don't have job stability it's best to save up the 6 months expenses. That's all the money you NEED to survive if you were to lose your job. Thankfully with the army the hubby's job is secure enough that we did the 3 months plus the $1,000 emergency fund. 

Once that was all done we started work on our new goal. A new car for yours truly. There wasn't anything majorly wrong with my old one. It was in fact old and things were slowly falling apart and not working well anymore. We needed an upgrade, badly. After listening to many Dave Ramsey podcasts and binging Financial peace University we were confident that we were going to save up the money and buy a new {used} car in cash. 

We had told a lot of our family and friends that we were doing this. Not to brag or anything. Just so they could go along on this journey with us. Rooting us on from the sidelines and celebrating with us when it came down to get the car. 

We picked up doordashing on the side. Thankfully it was very lucrative during the quarantine and we were able to move our timeline up.. A LOT! Our plan originally was save as much as we could and by next February tax refund time we could get a new car. We decided on a budget and went hardcore. We were out almost every single day delivering food to hungry people. Some of them not so nice. But we did it! We even brought the kids along a lot of the time and they absolutely hated it. But they saw their parents hustling for a goal. It was a teachable moment for sure. Between the stimulus money, money from our move, saving from our paycheck and supplementing our income with delivering food we moved our timeline up 8 whole months!!

I still can't believe we did it. I still can't believe this shiny new car is sitting in my garage. 

Dave Ramsey also had some helpful tips on buying used cars and negotiating with dealerships. Our first test run didn't go so well. We ended up walking away. We got what they call "sticker shock". Not realizing the crazy taxes and dealer fees that get added on to the price. We felt defeated and almost didn't want to look again. We put it off for another week. We kept doordashing in the mean time just in case we needed to up our original budget. We went back to the drawing board and researched the car we wanted in our vicinity. There was this particular car from the beginning that had been hanging around the AUDI dealership. It wasn't my first choice because it's a 2016 and I wanted something a little newer. Did you know the value of a new vehicle can drop by more than 20 percent after the first 12 months of ownership. Then, for the next four years, you can expect your car to lose roughly 10 percent of its value annually.

NEVER BUY NEW! Unless you are rich and can do what you want I guess. 

But for us small town folk. It's a pretty ridiculous notion. 

We walked in and asked for this car specifically. They brought it around we test drove it and we practiced our negotiation skills in the car on the way over. We knew what he would say and we knew what we were going to say. They gave us their first offer and we declined. We told them another number and he went in the back {wherever they go} to work on the numbers. 

He came back right at our budget "out the door" all taxes included. It even has a 2 year warranty on it and we treated way better at the dealership then the other one. 

Then I pulled out my checkbook and wrote the biggest check of my life. 

It can be done folks! You can work hard, save and be patient and buy a car in cash. You don't have to have car payments. As much as anyone will try and tell you to finance. 

You don't HAVE to be in debt!

The kids can't wait to ride in it. We haven't let them yet. I'm afraid to get it dirty.

If the world was ending...

What a bizarre time we are living in now. There's been some days this last week that we've driven around just to take a ride. It's like living in a ghost town in some places.
I want to go to the movies. I want to go bowling. I want to go to Target for crying out loud. 

Out of boredom we even signed up for Doordash just to make some extra money. I mean why not right? We aren't doing anything else might as well make some extra money. 

If you read my old post over the summer "Freedom"

you will see that we have been following the Dave Ramsey program. We were doing it based off of the baby steps that can be found on Pinterest and listening to his podcast. Well, thankfully Dave Ramsey is now offering Financial Peace University as a two week FREE trial on his website. We've been binge watching all of the videos. It's gotten us fired up for the future. It's got great information on how to avoid making stupid financial decisions. Which we have in the past for sure. 

I know this might sound boring to some people or hard to do. But I've heard so many stories of people paying off thousands of dollars in debt. Paying off their houses in just a matter of years!

That's insane to me! Even single parents are doing it. We weren't in that bad of a hole thankfully. But we've managed to get through the first 4 Baby Steps in 8 months. 

It's worth it! You're stuck at home anyway! Might as well make a plan for the future once this craziness is over and we can go back to normal.