I’m officially on baby step 1, woo hoo! But wait… isn’t that the first step? Kind of. There are seven steps, and it starts at one, but you need to do a few things before you can actually start that emergency fund. To be honest with you, there’s not much talk about baby step zero. Unless you read The Total Money Makeover, you probably wouldn’t even know there’s a baby step zero. But have no fear, I will break down baby step zero for you.
What is Dave Ramsey’s baby step zero?
Baby step zero is when you’re not current on your four walls (utilities, transportation, rent, food) and student loans. Remember, you can’t start baby step one (emergency fund) if you’re behind on your bills, kids need clothing, your fridge is completely empty, your car is in the shop or you’re late on rent or mortgage.
There are two things that have to be done before you can begin saving for an emergency fund.
Before beginning an emergency fund you have to make sure your four walls are in place.
A roof over your head, utilities on, food (rice and beans are welcomed), basic clothing, and transportation (you can catch the bus).
Think about it, before you can even concern yourself with gaining wealth, you have to make sure your children are not at risk of being taken away because you can’t provide the basic needs for them. It may sound drastic but sometimes, it is that serious. I know, I’ve been there! (Literally, in a shelter with three little girls. If you’re there, please -stay strong and keep reading!)
For years I’ve been coasting when it came to paying the bills. I would pay the bare minimum, just enough to keep it on. But do you know what happens? Every few months they’ll give you a ten day shut off notice. It’s not a long-term solution, nor should it be.
Which brings us to the second thing that must be done in baby step zero.
Before beginning an emergency fund you have to get current with your bills AND student loans.
This was a tough one. My husband had a paycheck we pay our bills with, but we have an income problem. If I truly wanted to start baby step one, I had to accept that we’d only have $184 for a month for necessities. I spent ten hours meal planning and was able to buy everything on my list for a total of only $124! It is possible!
If you are super behind on your student loans, ask for a forbearance and apply for an income-based repayment plan. A forbearance will bring your account to current, so that’s a huge weight off of your shoulders.
Baby step zero is the time and place to begin calling around like crazy. Your basic bills, they can be cut for the most part. Are you aware of the ways you can save money monthly and yearly? Here are ten things you can do today to start saving money on your monthly bills.
That’s it, get these two things finished and you will complete baby step zero. But honestly, it’s a behavior change. Baby step zero is where you commit to never go into debt again. Cut up the credit cards and grab a shovel, it’s time to make some money. Need clothing? Go to thrift stores or churches that have clothing drives. Once you reach baby step one, it’s gazelle time. You need to get intense and intentional. But first, get those four walls in place!
Share in the comment section any tips you have to get out of baby step one.