SHORT – Dave Ramsey Baby Step 1 – Save $1,000 for an initial emergency fund

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  • Some people wonder why you should only have $1,000 in an initial emergency fund
  • If you make under 25K you should have $500
  • The main point is we don’t want to delay you from getting out of debt
  • You don’t have the cash flow because you are making payments
  • To fund a proper emergency fund of 3-6 months of expenses it will take you time. Because of this and that ‘life happens’ while making payments on debt the initial $1,000 will tide you over.
  • Some will argue that $1,000 is not very much for an emergency fund – well, it is more than you got now which means you have nothing at this point.
  • Anyone that knows the history of the Baby Steps will know that in the beginning the first step was to pay off debt. That didn’t work out very well and so adding the little buffer of $1,000 has proven to be helpful. 

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