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Back in May, I completed Dave Ramsey’s Baby Step 1: Save up $1000 for emergencies. And then, I unexpectedly left my job a few weeks later. Because I left my job without another one lined up, I lived off my emergency savings until I got another job a little while later.
I knew I had to build up my cushion again, but I wasn’t really committed until I started YNAB. To quickly recap YNAB’s Four Rules:
1) Give every dollar a job — Completed when I started YNAB in August.
2) Save for a rainy day– Also completed when I started YNAB, as I began saving for “rainy days” like car repairs and car taxes.
3) Roll with the punches– You can say I’m always completing this rule, because a budget is all about flexibility.
And number 4, the whopper:
4) Live on last month’s income.
I decided to combine Baby Step #1 from Dave Ramsey’s Financial Peace University and YNAB’s Rule Four to save a month’s income in my checking account as my buffer/emergency savings. I’ll use the money currently in my checking account to budget a month in advance, but if a true emergency comes up, I’ll have the money already sitting in my checking account to use.
How did I do it?
- By giving every dollar a job, I was able to find the spare dollars that I previously wasted and give them a purpose.
- I became a side hustler. Don’t worry, it’s definitely not bad like it sounds! I actually work in retail in addition to my full-time HR job.
- The CEO of my company gave everyone a bonus. My bonus was $400.
- Since my full-time job is paid on a bi-weekly schedule, we had an extra paycheck at the end of December.
I’m so excited to have Baby Step #1 and YNAB Rule Four complete! Up next, I’ll be working on YNAB Rule Two: Save for a rainy day as I save up $400 for new tires and $600 for my car taxes that is due in July. And then, I’ll FINALLY get the ball rolling (pun intended) for Dave Ramsey’s Baby Step #2: Pay off all debts using the debt snowball.