5 Realistic Money Hacks that Would Make Even Dave Ramsey Sweat
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As one of the most well-known finance gurus, Dave Ramsey has a lot to say. While he spends time helping individuals figure out how to pay off their debts and to save their money, there are a few main things that you should take into consideration financially.
I’ve personally compiled a list of realistic money hacks that you need to take into consideration the next time you’re looking at your budget!
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1: Stop Treating Your Money as if You’re Gonna be Rich
A common but not often talked about mistake people often make is to treat their finances like they’re rich or going to be. If you spend time looking at all of the main finance gurus, you will notice that they all have one thing in common – talking about being rich and getting richer.
Most individuals don’t make enough money to consistently be taking out even a chunk of their money to savings, so how do they expect us to create an emergency fund, have multiple savings accounts, and on top of that, invest money for ourselves, our children, and in our 401k.
When financial gurus talk about financial risk, they are really talking about risking only a portion of what their current income is. Not risking their entire livelihood – which is common among regular hardworking individuals.
Do not make the mistake of treating your finances as if you’re rich or will be rich. More than likely, you will not. While you should save, invest, and put money in your 401k, it should not be your entire life. Make sure you take care of yourself now and save what you can so you can have a nice retirement. Just don’t expect to retire in a mansion.
2: Get Rid of High Interest Debt
If you’re currently a person who has any sort of debt, you should already know that you need to get rid of your high-interest debt first. A common misconception that many people have is what is called the ‘snowball’ effect.
The snowball effect is when you pay off the smallest amount of debt you have first and continually move on to the next highest debt. The snowball effect is said to give you the confidence to continue paying off your debt.
While it is good to have confidence knowing that you can pay off these debts, I personally believe it is much more motivating knowing that I’m saving money by paying off my high-interest debt first.
If you’re struggling to see how getting rid of your high-interest debt first is helpful, try calculating how much money you’ll save by paying it off first. You’ll be shocked, I promise!
3: Use Cash
As a person who can attest to the power of swiping a debit card – one of the best money-saving hacks you can do is to pay with cash. Too often, people are completely desensitized to swiping their cards.
Whether it be for groceries or a quick candy bar, you’re not able to see the amount of money that’s being taken from you. By paying with only a set amount of money in cash each month, you’ll be able to physically see how much money you’re actually spending.
This hack is good for people who have a spending habit, as long as they don’t continue to use their cards. While most individuals are able to automate their savings and make recurrent payments, not everyone is able to control the itch to spend.
Just be careful you don’t lose your wallet!
4: Throw Out Your Old Subscriptions
Are you holding onto that old gym membership in case you decide one day that you want to go? Maybe you’re holding onto an Amazon account that you never use but sometimes let family members log onto.
Get rid of any of the old subscriptions that you aren’t currently using. In an almost completely digital world, it can be hard to track your subscriptions. If you’re interested in seeing what subscriptions you use and how often, simply make an excel sheet to keep track of how often you’re using the service.
You can also use different services interchangeably for cheaper or for free. Say that you’re paying a hefty subscription for audiobooks you listen to – but infrequently. Instead of spending large subscription fees, subscribe to a different service like Amazon Audible instead, and save those few extra dollars each month.
If you’re holding onto any old subscriptions that you only use once or twice a month – find a different service or a free alternative.
5: Visit Your Local Thrift Shop
The other day I went thrifting with my mom and I was completely flabbergasted as to how cheap the items were compared to new store-bought items. There was even a desk at the thrift shop for only $20! When I bought my current desk, it cost me around $130 and was very similar in condition. Talk about a steal!
When you’re looking to buy replacement items or anything that loses value over time, try to buy used or thrifted items!