Dave Ramsey’s Financial Peace University – Week 1 Super Saving

by financialmom on June 30, 2011

in Emergency Fund, Financial Peace University, Money

Post image for Dave Ramsey’s Financial Peace University – Week 1 Super Saving

Dave Ramsey’s Financial Peace University gets right to the point in Week 1 by starting with the topic of Super Saving. Dave  says you need to get $1000 in the bank as quickly as possible, like within 30 days.  This is the start of your emergency fund, and Baby Step One of his Seven Baby Steps to financial freedom.

$1000 in Cash

The idea is you keep the money liquid, and put it somewhere where you can get at it quickly.  You don’t want it too accessible, like under the mattress, or in a coffee can in the fridge.   Then it would be way too easy to spend it on non-emergency items, such as needing a pizza delivery right now.

Why is $1000 the magic number Dave chose? $1000 should be enough to cover many unexpected events that happen, such as a car repair, appliance replacement, or medical bill.  This is the beginning of your emergency fund, and Baby Step Three is to have 3-6 months of expenses in the bank.  You have to start somewhere, and many people have never had $1000 in a savings account.

What is Not an Emergency Fund

Dave also covers what is not to be used for an emergency fund in Week 1 of Financial Peace University. An emergency fund is not your home equity line of credit; it is not the overdraft protection on your checking account, and it is definitely not plastic, as in your credit cards.  It’s $1000 in cash, and cash only.

Not having cash to pay for emergency items is what gets us into trouble.  By trouble, I mean debt. We get ourselves into a never ending cycle of monthly payments we can’t afford.  Break the cycle now by doing the work to get an emergency fund.

What is an Emergency

If you are married, it’s really important that you agree with your spouse what is an emergency. That way you avoid money fights over how the emergency fund should be spent.  It’s probably easier to start with what is not an emergency – buying groceries, putting gas in the tank, going out to eat because you are really hungry, the HDTV you need to watch football games, or the dining room set you absolutely have to have right now.

How to Get it Done Fast

So how  can you get $1000 in the bank quickly? Some of the most interesting discussion we had in class centered around how to get $1000 in the bank fast.    I have heard everything from taking on extra work at your job, to taking a part time job in addition to your current job, selling some stuff you no longer need, and stop spending money on going out to eat, or for entertainment.

For more ideas on how to increase your income and reduce your spending, download my free report offered right now on the top right sidebar.

A Challenge

Be willing to be different than your family, friends, and neighbors. Draw the line in the sand, and say I can’t live like this anymore.  Dare to live a life that is not based on debt.  The value of an emergency fund is some peace of mind.  It will be hard work, but it will be worth every minute when you are financially free. 

New Profile Pic 2599R Dave Ramseys Financial Peace University   Week 1 Super SavingPamela Otten is CEO of Pamela Otten LLC, a Registered Investment Advisor. She loves to work with women business owners and entrepreneurs, and women in transition due to job change, death, or divorce. Pamela will help you set and reach your financial goals, educate you to understand your investments, and teach you how to do more charitable giving. Pamela is a Qualified Kingdom Advisor (www.kingdomadvisors.org), trained and committed to integrating biblical principles with her investment advice.

cc smallest Dave Ramseys Financial Peace University   Week 1 Super SavingPhoto Credit – NCinDC

Financial Planning, Investment Advice, and Investment Management provided through Pamela Otten LLC, Registered Investment Advisor.

The opinions voiced in this material are for general information only, and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, please consult your financial advisor prior to investing.

pixel Dave Ramseys Financial Peace University   Week 1 Super Saving
PinExt Dave Ramseys Financial Peace University   Week 1 Super Saving

{ 6 comments… read them below or add one }

Paul Crowson June 30, 2011 at 4:52 pm

Hey Pamela, great article and advice from Dave Ramsey, we have tried it once, and you are making me want to give it a go again!

Reply

Olga Hermans June 30, 2011 at 6:13 pm

Great advice Pam, I hope a lot of people will come by and take these tips to heart. Especially in these days, it is very important to have a reserve…thanks!

Reply

Robert Seth July 1, 2011 at 10:30 am

Amen Pamela, Very good advice! This is so important and not only gets people off the cycle of debt, but brings back their self respect. Thanks for sharing!

Reply

Karen Knight July 2, 2011 at 7:55 am

Timely advice for me. Thanks Pamela! I had forgotten about my “Emergency Account”, it is sitting here with .46c in it…. am off to restock….

Reply

Jandi Theis July 4, 2011 at 10:49 pm

Thanks for the great advice! I especially appreciate the tip about discussing with your spouse what counts as an “emergency”. Thank you!

Reply

Gabriela Calles October 12, 2011 at 4:01 pm

Pamela,

I took FPU when i was 19 and am now 24, and thought it was One of the BEST courses i have ever taken. I strayed away from it for a couple of years but am realizing that it was a mistake, I’m now starting this emergency fund once again and getting back into the habit of following this. Thanks for the encouraging article!

Reply

Leave a Comment

CommentLuv badge