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No emergency fund? Mom shows how to fix that

Survey finds most people don't have $1,000 saved
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So you don't have $1,000 to pay for a car breakdown? You're not alone.

A new survey by Bankrate finds most Americans don't have a $1,000 emergency fund to fix their car, patch a roof leak or visit the emergency room/

But one woman who had no cash on hand is now putting her family back on track, and showing how anyone can build up an emergency account.

No cash for emergencies

Jodi Disseklamp is a mom of four young children, who like 60 percent of Americans, had no emergency fund.

"Nope. Nothing," she said.

Every dollar that came in went right out.

"We were living paycheck to paycheck, with nothing saved for emergencies," she said. "Our cars were breaking down nonstop."

The frightening result?

"We had close to $16,000 of credit card debt," she said. "We were spending frivolously, swiping plastic every chance we got."

But then a friend introduced her to Dave Ramsey's Total Money Makeover program, where one of the first things he says is to put the credit cards away.

"When you start spending real cash, you feel it,"  Ramsey said. "Ouch!"    

When we interviewed Ramsey a couple of years ago, he said you need to start by building up an emergency fund.

Disseklamp was taken aback.

"He suggests to build up a $1,000 emergency fund, which for people for us, was where are we going to get a thousand dollars?" she said.

But by following Ramsey's book, and keeping a log of all monthly expenses, she started cutting costs until it hurt.

For instance, her family would often go out to dinner, putting $50 on the credit card. Now she has a menu on the refrigerator, and tries to make as many meals as possible at home.

"You'd be amazed with four kids how much money we spent on McDonald's a month," she said.

Simple changes, big results

Among the changes she made, based on Ramsey's book:

  • Home-cooked dinners
  • Couponing
  • No frivolous expenses
  • Logging all income and expenses each month
  • Paying down her credit cards, starting with the smallest account first
  • Stashing a bit of each paycheck into a savings plan.

The result? 

"By September of this year, we will be credit-card debt free," she said.

And as Ramsey followers often do when they get to that point of financial freedom, she let out a cheer and applause, anticipating the day when her debts are gone.

Disseklamp says if you don't have an emergency fund, buy Ramsey's book or borrow it for free from the library, and learn the exact steps for building that emergency stash for those days when life happens.

As always, don't waste your money.

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