Emergency Funds, Stock Piles, and Murphy

Have you ever heard of Murphy? According to Dave Ramsey- when everything is going right, Murphy will be there to mess things up. In Dave Ramsey's Finanical Peace University, Dave has what he calls "Baby Steps." Baby Step #1 is to build an emergency fund of $1,000.00. Coupons can help you achieve this even when money is tight.

The first thing you need to do is stop using credit cards (this was and still is a struggle for me). Next, make a budget of all your expenses. Making sure you include savings & tithing. (struggle for me) Once you have a balanced budget, take note on how much you have listed for groceries. When you get paid, take that amount out of the bank and put it in an envelope labeled groceries. This method is called the Envelope Method and can also be used for your gas and other bills.
For example:

• My family's grocery budget is $200.00 per month.
• When we get paid, I go withdraw $200.00 out of the bank and put it in my coupon holder (green pencil pouch)
• I make my meal plans on a weekly basis, based on my stock pile. (Until you build your stock pile, base your meal plans on what's on sale.)
• On a weekly basis, I match up Publix's sales to coupon by visiting one of my favorite blogs.
• Any change I receive from my shopping trip goes back into the envelope until the next week.
• When the month is over, add it to your emergency fund.

Once you have reached your goal of $1,000.00 in the bank- do NOT touch it (struggle for me). I added a component to Baby Step #1- Continue to do your couponing, but if something is a really great deal, use your overage from last month to stock up on that item. Typically, you will want to create a stockpile that will last you 12 weeks. (remember the sales cycle) So if you think you will use a box of pasta a week, and you find can get it cheap this week, try to buy 12 boxes. This may be difficult if you do not get the many newspapers, but I have found that good friends will often let you have a coupon of theirs if they are not going to use it.

Now when Murphy comes, you will be prepared. If you or your spouse loses your job, you will be able to eat off your stockpile for 3 months. If your car battery dies, you will have your emergency fund in place and will be able to purchase a new one without creating strain on your budget. However, please remember to replace the funds for your emergency fund as soon as possible.

If you are thinking, there is no way I can stick to couponing.  Try getting a "coupon buddy." This is not only a great way to bond with friends but if will keep you disciplined. My coupon buddy is my mom- but we also have a group of ladies who get together about once a month to cut and swap coupons.  It is also fun because it makes it into a challenge- who saved the most money!

Next time- I am going to talk about Dave Ramsey's Baby Step #2!