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Baby Step 1: $1,000 Saved. Then Spent. Then Saved.

Baby Step 1 is to put $1,000 in the bank. That’s it.  It is to be used in emergencies only. Not when the TV breaks. Not when the printer loses ink. Not when the couch gets tough.

The car breaks. The kid gets sick. A family member passes away. EMERGENCIES.

Your $1,000 is the first chunk of flack plating in your blast suit.

Let me show you why I’m using blast protection as an example:

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That picture was taken from the northeast corner of 11th and Harney. I took it today at around 12:30 while I was delivering to an address up the street. That ice palace in the middle is M’s Pub in the Old Market. The red machine on the left side is hiding the base of a crane.

Several weeks ago, crews running fiber optic cabling nicked a gas line with a drill. Moments later, the smell of gas consumed the building. People scattered. The building literally exploded. It was a total loss, including all residences above the pub.

Nobody was killed. Many were injured, but nothing life threatening.

There M’s Pub was, minding its own business. Then, by no fault of its own, someone blew it up. Poof.

That’s absolute proof that:

Something unexpected can and will happen at any time.

One of Meredith’s coworkers on the hotline waited tables at M’s Pub. She watched her second job go up in flames. I’m not being figurative. And you know what hurt her heart the most? Some of her coworkers waited tables full time. They were out of a job. Just like that.

Here’s a common one: your car will break. And you didn’t get paid recently. The only money you will have is money you don’t have – VISA, AMEX, Discover and/or Mastercard.

Or maybe it’s not your car. Maybe it’s an unplanned doctor’s visit not covered under insurance. Maybe it’s a broken pair of glasses. Whatever it is, it’s life, and it will require money you don’t have.

The $1,000 in Baby Step 1 is your cushion. It protects against life’s smaller emergencies that would otherwise end up on top of a pile of credit card debt. Or worse, a pile of debt to loved ones. But there’s more:

That $1,000 in the bank is the end of paycheck-to-paycheck, overdrafting, crisis living when coupled with a diligent budget.

I will never forget a conversation in the foyer at church. I was newly married. I was speaking with a middle-aged member in my Ward leadership in Grand Island.  He said, “You work your whole life, many hours a week, and you still find yourself living paycheck to paycheck.”

He looked tired. I remember being surprised. He was of the age that I assumed life was not paycheck to paycheck anymore.

Fast forward to two and a half years ago, and I was weeping at night, stressed to an extreme and switching jobs. I had developed Shingles at the ripe old age of 27. We were living paycheck to paycheck with two kids.

Fast forward to now. One more kid. A budget. $1,000 in the bank. The result?

We haven’t been living paycheck-to-paycheck for 18 months.

You want to talk about singing a song of redeeming love! I cannot explain the freedom this step has given us. But hold the phone.

I want you to understand loud and clear that the $1,000 was so frustrating at first. So very frustrating. There we were, cooking along at 1,000,000 miles an hour toward Baby Step 2. We’d smash the $1,000 and start Baby Step 2: the debt snowball.

Then the Buick died. $800.

The Baby Steps aren’t like levels on Mario. When you complete one, you don’t mark it off and move on. Nope, it’s an icy hill and you’re following a guide. The weather’s rough, so you can’t see far in front of you. All you can do is take your best foot forward. Sometimes ice shows up. Or the wind blows you over. Or someone throws a snowball. Or a shovel.

Back down we went. We only had $200. Time to bring that back up to $1,000.


No, whiney RI, you can’t. You need your $1,000.


We built the $1,000 back up and got a couple good whacks in at the debt. That pizza money was really coming in handy. This time for two months straight.

Another emergency would come up. $500. $300. $1,200. We’d pay it out of the EF, and save cash for the rest. Then we’d build it back up again to $1,000.

This happened over and over. Over and over.

It used to frustrate me so much that we were stuck in Baby Step 1. I felt like we would NEVER be able to finish Baby Step 2. Stuff just kept happening and we never got any traction.

Then Amazewife reminded me:

For the first time ever, we were paying cash for everything.

That is traction. We were starting to get weird. Meredith helped me look back and see how far we had come. We were doing it. We were winning. We weren’t paycheck to paycheck, and we were more disciplined.

Around that time, Murphy moved on. We destroyed our credit card once and for all, then Meredith’s student loan (almost 3 years early.)

Step 1 is so essential. We would not be where we are today if it weren’t for having that $1,000. But that $1,000 is so stupid. It doesn’t sit still. It’s always blocking emergencies and protecting our family. That makes it hard to stand on. But we’ve learned to just build it back up again when it crumbles and keep on climbing.

If you don’t have $1,000 in the bank right this second, you should. Do it. As fast as you can. Sacrifice. Sell stuff. Don’t buy stuff. It doesn’t solve everything, but our $1,000 has made the crucial difference in every pinch we’ve been in over the past 18 months.

Do everything you can to get $1,000 in the bank and earmark it for those emergencies. 

Or don’t. Keep living paycheck to paycheck. Keep fighting with your loved ones when you don’t have enough money to pay for the thing that just caught fire. Then watch it explode. As Dave Ramsey might say, it is your poopy diaper. Sure it smells bad, but it’s warm and it’s yours.

Your choice. Your very intense choice.



  1. I have to disagree with your take on debt.

    Baby step one should be to pay off all high interest debt.

    Baby step two should be to have that emergency fund and pay cash for things.

    It is very important to have that $1000+ cushion for emergencies. Personally, I like to keep $5k earmarked should our furnace or AC quit on us. However, if you are carrying high interest credit card debt, you should make it a priority to pay that off as quickly as possible. It does you no good to have $1000 in the bank accruing interest at 0.25% or less, and have $800 of credit card debt accruing interest at 24.99%.

    If you pay off that $800 in CC debt, you're left with only $200 in the bank. If an emergency crops up that is going to cost you $500, you're fund is tapped out, but you're CC debt is only accruing interest on $300, not $800.

    Food for thought.

    1. Hello Anonymous! Thanks for your reply to the post and thank you for disagreeing.

      I first have to clarify that these "Baby Steps" are not original to me or my website. We espouse the ideals put forth in Seven Baby Steps of Dave Ramsey's Total Money Makeover. ( This series of posts will be to explain our experience in the trenches with said Steps.

      About your math, I'm glad we can agree that $1,000+ is good for emergencies. Indeed, the $1,000 is only the beginning of 3 to 6 months of expenses that will be raised in Step 3. (That is roughly $18,000 in the bank if we go whole-hog.)

      But speaking to your example, if I have no CC debt to pay off, then I can keep that $1,000 in the bank without having to pay off anything, save cash for the rest and pay no interest on any amount. If I were having a knife fight in that moment with interest rates, they stab themselves and I walk away a free man.

      Debt is debt. Dave Ramsey likes to quote Proverbs 22:7, "The rich rule over the poor, and the borrower is slave of the lender" (NRSV). I can testify of its truth. Debt is about spiritual bondage. Your spirit is bound down. Not free. We have been marketed to so heavily that we are down on two knees begging to buy debt products. We feel we need them.

      Amazewife and I have decided that we don't need the financial and spiritual bondage of debt anymore. Nobody does.


      Food for thought.


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