Dave Ramsey’s Key To Saving Money
Written by
Ellie Diamond
Edited by
Zuri Anderson
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Money expert Dave Ramsey hasn’t always been wealthy. He made it big as a real estate investor in his 20s but had built his fortune on debt. He went bankrupt in 1988.
Ramsey and his wife spent the next several years regaining control of their money. They learned a lot about saving and smart spending, and Ramsey has dedicated his life to helping others do the same.
In a recent interview with Tennessee’s Knoxville News Sentinel, he discussed one of his favorite topics: saving instead of spending. Here are his top tips.
Look for Insurance Savings
Insurers have various discount programs that policyholders don’t always know about.
You might qualify for a good driver or safe vehicle discount on your car insurance or a recent renovation price break on your home insurance.
Start by contacting your agent, if you have one, or the insurance company directly if you don’t. If that doesn’t work, you can always shop around.
Simplify Your Phone Plan
A recent J.D. Power study shows that the average wireless customer spends $141 monthly on service. Ramsey believed that paying less is possible.
He urged subscribers to lower their bills by “getting rid of extras like costly data plans, phone insurance and useless warranties.”
Start by looking at your bill and determining what you don’t need. If you can’t do without something, try calling the provider to negotiate — or switch to another provider.
Prep Food and Coffee at Home
There’s a reason you see this advice everywhere. According to some number-crunching from CNET, replacing your favorite coffee shop order with a home-brewed option can save you between $307 and $736 per year.
CNET also crunched the numbers on meals. On average, cooking your favorite meals at home costs 50% less than ordering them as takeout [7]. If you add in the delivery cost, it costs 75% less.
Simply eliminating two weekly delivery meals from your budget can save you $1,440 annually.
Switch From Cable to Streaming
Replacing cable TV with streaming services can save you hundreds, assuming you pick your subscriptions strategically.
Subscribers in major U.S. cities spend an average of $74 monthly on basic cable or $147 per month if you add premium channels.
By comparison, ad-supported versions of basic streaming services like Netflix, Hulu and Disney Plus cost $10 or under. If you don’t need ad-free experiences or live TV, you can get four services for under $40.
The key is to find which services have your favorite shows and subscribe only to the ones you need.
Declutter Your Home
“Get rid of things you don’t need and are willing to let go of for the sake of your financial future,” Ramsey told Sentinel readers.
Yes, getting rid of things you already own can save you money! If you sell your unwanted belongings online or at a yard sale, those earnings can go directly into your savings account.
Your newly decluttered home will make it easier to see what you have. You’re less likely to spend money on something you “lost” only to find it a week later!
More importantly, however, decluttering makes you a more intentional buyer.
Reimagine Your Vacation
Ramsey encouraged would-be savers to cancel their vacations in favor of “finding fun close to home.”
With the average cost of a hotel room measured at $158 and round-trip domestic airfare at $382, it’s easy to see the benefits of scaling back.
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