Everyone has their go-to person for advice. For Kate Kaden, a YouTuber whose content focuses on frugal living, one such person is financial expert and podcast host Dave Ramsey. In a YouTube video, she shared the following as her top three lessons Ramsey taught her about saving money.
Make a Budget
Kaden loves budgeting and agrees this tip has saved her thousands of dollars on unnecessary expenses. Not everyone loves to draw a budget like Kaden, but the act of budgeting in itself can be quite simple and easy.
Start by calculating your monthly expenses and spending on a spreadsheet. Then, separate the needs from the wants and set small achievable goals to trim down your spending. See your spreadsheet as your accountability partner so as to have a clearer picture of how you spend your money and where to adjust if needed.
Kaden advises making a budget that’s unique every month. “Budgeting has been the key to reducing stress, getting better results and feeling in control of my finances. It helps me not to be confused or wasteful because I know where every dollar is going,” she said.
Get Out of Bad Debt
The second lesson is to get out of bad debts like car loans, student loans, credit card loans and so on.
If you’ve been caught in a web of credit card debt like many Americans, consider transferring your high-interest credit card balance to a new card that offers a 0% introductory rate. The interest savings alone from the new card can help you pay off your initial loan at a lesser cost. Remember to use credit cards responsibly by spending only what you can pay off at the end of the month, and taking advantage of cash back and rewards programs to lower your credit card spending.
However, the best way to get out of bad debts is to lower your overall spending and increase your income. “Getting out of bad debt is great as it frees up so much money that can be channeled to other things [like investments],” Kaden said.
Save an Emergency Fund
The third lesson which helped Kaden is saving for an emergency fund. An emergency fund is there to rescue you when unplanned situations happen — because emergencies don’t care about your financial health. The freedom an emergency fund buys you is priceless, according to Kaden.
To build your emergency fund, put aside extra money as often as you can. And if you don’t think you have leftover money to contribute, consider cutting out an expense to redirect this money to your fund — such as buying coffee less times per week, or cooking more meals at home instead of eating out.
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