I apologize for the delay since my last Financial Peace update. I felt like I stalled our process with Christmas and the Holidays, but we’re back on track. Today I’m sharing my thoughts and tips on how we’re tackling the Financial Peace Course Baby Step 3.
Financial Peace Baby Step 3
Let me start by encouraging you to buy the course, keep an eye out because many local churches hold it at a discounted price. Nothing better than taking the course and having the materials to walk towards Financial Peace in your life.
Baby Step 3
Save 3-6 months of expenses in a fully funded emergency fund.
I know what you’re thinking, how am I going to save that if I’m barely making it or just trying to get out of debt?
Well, I know because that is how we felt! After reading it and not even having the money to save $1,000 on step 1, but also save 3-6 months of expenses according to Financial Peace Baby Step 3!
The way I see it is that instead of getting frustrated about not being able to reach that now, it gives me something to look forward to!
So hubby and I went back to our budget and figured out how much we needed on a monthly basis to pay our bills, so that we had an idea of the total amount we would need to save for this Baby Step.
We decided to go with 6 months, since we’re both self employed and Dave Ramsey encourages you to do 6 months if you own a business/are self employed.
A month after we read Baby Step 3, we’re still trying to figure out how to get started on saving more!
Our cuts so far have helped us trim our budget and not use credit cards since we started the program, but we haven’t been able to go beyond that and I’m blaming it on the first holiday in 5 years without using a single credit card! Yay!
We had to use our first emergency fund to pay for holiday expenses, but that’s all right, we’re starting again!
Just being honest with you, so you don’t think I have all the answers.
Ideas to start saving, if you’re living paycheck to paycheck
Trim Your Budget
If you haven’t done that when you started, that is my first advice. Look at your budget and find items you can live without.
Look at needs vs wants. Keep the needs and remove some wants. Here’s a list what we trimmed out of our budget: Expenses To Cut
Earn More Income
This is a tough one for us, but I’ve been looking for extra ways to earn income from home while serving my clients with social media and maintaining my blog.
Pay Yourself First
I have not been able to do that yet, but one piece of Ramsey’s advice is putting 10% aside every time you make some money while you’re starting out and more later, after you pay off your debt. I’m working towards being able to do it.
Live Like No One Else, So You Can Live & Give Like No One Else Later
He keeps repeating that through the course and it’s my motto, every time I feel like giving up or I feel like using my credit card or buying something I don’t really need.
Takeways
Start saving now, first for your $1K emergency fund and then for 3-6 months of expenses, because you never know what the future may bring.
Review your budget and find areas you can cut.
Add new income to your equation as a way to increase savings.
Change your life to reflect the future you have ahead of you.
Not ready to tackle Financial Peace Baby Step 3?
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It’s good to be financially stable and practicing saving is a good thing as well. Those are great points to keep in mind.
Having financial peace sounds great. Helps to know what to do.
Finances are tight and saving is a tough one. That said I agree lice different to others, so you can live better. Maybe cook at home and I agree deffo saves not having takeaways x
I love what you said about focusing on both savings and generating more revenue. Often people focus on one or the other, not both! Thank u so much…
It’s going to be a tough year ahead so this is such an important post. Lots of great advice here. Thanks for sharing!
Finances and financial stability can be such a long journey. These are good tips for getting to a better financial place.
Starting the year with your post is very helpful as i do need to start taking baby steps to save money. Will be making a point to pay myself 10% first before anything else
I’m always looking for ways of getting more income. I now have my blog plus a job which is working our pretty well. My aim this year is to pay myself first and then also put aside more money each month to pay for my self employed tax bill in advance.
I love the Pay yourself first system. It helped me build an emergency fund last year even if I was living paycheck to paycheck.
I always try to save as best I can. I honestly hate spending money, so I’m usually good about saving.