Baby Step 1: Save $1000 Quick

In Dave Ramsey's 7 Baby Steps to wealth building, the first step is called Baby Step 1:  Save $1000 fast in a starter emergency fund.  As a single mother, I can tell you, this step saved my life, and got me on the road to turning my financial life around.  You see, I had always made good money.  But I blew most of it.  At the height of my career I had been making $100,000 a year, but had so much debt and out of control expenses after my divorce that my dream of purchasing a home for myself and my children was out of reach.  This was a wake-up call for me:  I made too much money to be so broke!

I decided to follow the Baby Steps, which help you build wealth by dumping debt and increasing savings.  Baby Step 1 is to save $1000 fast.  This breaks the debt cycle by giving you a buffer between you and life.  Any new emergencies are paid out of this fund instead of using a credit card.  This $1000 is insurance.  It should be kept in a place where it is liquid and easily available, like a simple savings account, or cash at home.  If you make less than $20,000 a year Dave recommends you save just $500 for Baby Step 1.

There are lots of ways to save $1000 fast.  Have a garage sale, or sell something on craigslist/facebook/ebay.  Cut back on discretionary spending like eating out or traveling for a month or two.  Take on an extra side job, or work overtime at your current job.  I had some money in savings, so I simply took my savings down to $1000 and then threw the rest of the savings at my debt, which is Baby Step 2~coming soon in the next blog!

 In the past, I always used to "outearn my stupidity", as Dave talks about.  I knew I could always make money to cover expenses and unexpected costs, but it kept me constantly scrambling, and on edge emotionally.  Baby Step 1 changed all that.  Once I had $1000 in the bank that was untouchable for anything but emergencies I slept better at night.  There is such a deep peace that comes from knowing you have a backup. ​ While I was getting out of debt I had to use the emergency fund 3 times for car repairs of about $300 each.  This was easy and peaceful, without the stress and worry I experienced before.  What a relief!  I simply paid the bill out of the fund, and then replenished my emergency fund with my monthly income.

How can you free up $1000 fast for your Baby Step 1?  I guarantee it, this one step will change your life!  It will take you from feeling out of control financially to having actual peace in the realm of money.  It is a game-changer.  And hopefully it will inspire you to go on to Baby Step 2, and knock out all of your debt except your home!