This post contains affiliate links. If you click on a link and make a purchase, I may earn a commission at no extra cost to you.
I’ve talked about the baby steps before but want to break each step down in case you’ve never heard of them. Dave Ramsey created seven baby steps for people to follow, regardless of where they’re at in their financial journey. You can see all of them here.
As you can see, the first step is to save $1,000 as your starter emergency fund. If you already have $1,000 in savings, congratulations! You can move on to baby step 2.
If you’re like we were when we first started the plan, we had nowhere near $1,000 in savings, so this is where we started. We only had maybe $50 in savings at the time and the thought of having a $1,000 was a little mind-blowing and felt a little daunting honestly. I mean, we were living paycheck to paycheck, like many Americans, and had no idea where or how we’d find the extra money to save.
We started with our budget. Creating a monthly budget before the month starts is so critical, regardless of which baby step you’re on. This way you can plan out exactly how much money you have coming in and where you’re choosing to spend it. By writing down all our expected income and expenses, we had a clearer picture of where we might be able to find some extra money.
After creating a budget and seeing where your money is going, you’ll need to see where, if at all, you can cut to find some extra cash to put towards your emergency fund. This led to some hard conversations and tough decisions that we had to make. It didn’t happen all at once, but eventually we ended up cutting back on multiple “wants” and focused on our needs because having an emergency fund and getting out of debt was more important to us than those “wants”. You will likely have some similar decisions to make.
The goal is to finish this baby step as quickly as possible. The excitement you feel when you reach $1,000 will help create momentum as you move into baby step 2.
Here are some things that my husband and I have done to make some extra money:
*Go through your house/garage and sell items. Not only will this get you some extra money, but you’ll likely feel a little lighter from not being surrounded by so much stuff. We used our local Facebook marketplace and had a lot of luck with selling on there.
*Work overtime, if you job allows you to, and/or get a part time job. We’ll talk more about this when we go over baby step 2, but as an example, I recently got a seasonal summer job at a big-name home improvement store working on the weekends and was able to make $1,000 in a month.
*Cut out some (or all) of your streaming services and/or subscriptions. Take a close look at what monthly subscriptions you’re paying and try getting rid of some of them. When we started the process, we had cable and chose to get rid of it and get Netflix instead. There are SO many options nowadays and it can quickly add up if you use multiple ones.
*Eating out is one of my favorite things to do but it be expensive, especially if you have kids. Look at your bank account statement and see how much you spent on eating out the last month. Groceries/eating out is generally one of the highest line items in budgets. Meal planning, instead of eating out, can be a huge money saver (and might even be healthier). It takes a little time and effort but is worth it.
*Do you have any bigger ticket items you can sell? For example, we had an old boat and four-wheeler that we hardly ever used so we decided to sell them. We later also ended up selling our camper, after we got rid of our truck. Look around. Do you have anything that you’re willing to part with to reach your goals?
*Donate plasma. Our local donation center pays $100 for the first six donations a person makes. You’re allowed to donate twice a week, so just by doing that you’ll have $600 in three weeks. Of course, check with your doctor first before donating and don’t only rely on a blogger whose only medical knowledge comes from Grey’s Anatomy.
These are just a few of the many ways you could earn extra money and complete your Baby Step 1 emergency savings. It will be hard, and you’ll need to get out of your comfort zone but I’m confident you can do it! And the feeling you get when you do is energizing and gives you the motivation you need to start Baby Step 2. If you want more information on the baby steps, check out this book by Dave Ramsey which I’ve reviewed in a previous post. It’s a great place to start if you’re brand new to these ideas.
A couple things to note BEFORE starting the baby step process:
-If you’re married, you need to work together with your spouse on this. It is critical/essential that both people are on board.
-If you’re behind on any payments, take care of your basic necessities first (food, housing, transportation, and clothing) before trying to get caught up. After those basics are covered, work on getting caught up on your payments.