Dave says...

So, I've been talking about this Dave Ramsey guy a bit. I bought his book, Total Money Makeover, and I've been working my way through it. Actually, I began working my way through it, got tired of reading about him busting a lot of financial myths that I never believed in anyway, and skimmed my way to the actual "Babysteps", as he calls them. In the Total Money Makeover, Dave Ramsey has 7 Babysteps to begin your journey to Financial Peace. I'll go through these steps on here as I get to them, but if you're the kind of person that likes to skip to the end of the book, click here.
The first Babystep is to save $1000 to start an Emergency Fund. Save $1000. Do not pass Go, do not collect $200- unless you're going to put it in this Emergency Fund! Save up $1000 dollars as quickly as possible and keep it liquid. Do not make it too easy to access (IE- do not link it to your checking account so it can get eaten up by your overdrafts) and do not tie it up in something that will make you reluctant to use the money when you need it (IE- a CD or similar fund that has penalties for early withdrawal). The goal of this emergency fund is not to sit there and make you money. The goal is for it to be there when you need it for a true emergency. He even goes so far as to share what one woman did. Once this woman had her emergency fund, she got ten $100 bills, framed them, and wrote "In case of emergency, break glass." and hung it in a difficult to access, inconspicuous place in her house (the back of an over-stuffed coat closet or something like that). I thought that was amusing. The point is, it's there when you need it. It's your security blanket- your beginning of peace- to know that you have something there to smooth the unexpected bumps in the road. So, if you scroll down, you'll see a new ticker- my "Mary, Mary, quite contrary, how does your Emergency Fund grow?" ticker. Have a gander...