Click here to read all of the 33 Days And 33 Ways To Save Money And Reduce Debt posts.

Today’s tip comes from my buddy, Big Honkin’.  He and I recorded the latest episode of the No Credit Needed Podcast: Big Honkin Special, and I asked him to give me a simple, easy-to-implement savings technique.

Eat out less - Plain and simple, if you plan your meals, eat at home, and eat less while you are out, you will save money - lots and lots of money.

Remember, doing the small things, over and over, can add up to real, substantial savings.

Saving $5 a day, 5 days a week, will add $25 to your weekly budget.  Multiply this by 50 work-weeks and you have $1250 per year.  Over the course of 40 years, that’s $50,000.  If you invest $1250 for 40 years at 8%, you’d end up with more than $350,000.  Brown bag it.

(Be sure to check out Big Honkin’s site: GeekOutOnline.

Click here to read all of the 33 Days And 33 Ways To Save Money And Reduce Debt posts

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Big Honkin (who recently introduced himself to readers of No Credit Needed) has written an article about the value of having and Emergency Fund. Big Honkin is a “real life” friend of mine and he’s just started to get out of debt and organize his finances. I think you’ll enjoy Big Honkin’s article and you can check out his new, non-personal finance site, Geek Out Online, where you can “immerse yourself in total geekdom”.

The Value of an Emergency Fund (and the Tragedy of Not Having One)

Today I put some things on Ebay. Things that I never thought I would sell. I knew that I could potentially get a few hundred dollars from these items, but I hated the idea of parting with them. BUT…I had to. Why? No emergency fund.

One of the first things NCN told me when I started to get serious about getting debt free and saving money was, “Save up an emergency fund.”

My first thought was, “If I had money, I’d save an emergency fund.”

Then…I had to learn the hard way. There I was driving the 17 mile drive from my house to my work when I looked down at the gauges on my dashboard and noticed that my temperature gauge was pegging out. I pulled off the road into a convenience store parking lot and attempted to let the engine cool down. Much to my chagrin…nay…my horror, when I went to crank my vehicle up again it was making what can only be described as god-awful noises. I tried to limp to town, (Yes, even though there was a convenience store I wasn’t in town) only to break down on the side of the road about four miles from the store. A guy in my church who is a mechanic went and pulled the vehicle back to his shop and then delivered the bad news…I was going to need a new engine. Imagine my horror when I realized that I had to come up with roughly 1,000 dollars.

Thankfully, my church stepped up on my behalf and took care of the engine as long as I handled the labor. I still had to pay out 450 dollars to get my vehicle fixed. Suddenly, I realized…I needed an emergency fund.

The money I paid to get my vehicle repaired set me back and caused me to be a little behind on a bill or two, but it also sparked my resolve to never be caught in this position ever again. In the weeks following, I had several conversations with NCN about how to get started with a budget, how to get caught up, and what I needed to do. Again, he mentioned an emergency fund.

Now, I was listening. I started to build a bit of an emergency fund. I didn’t have much at all. In fact, I only had about fifty bucks held back. I was still (read that “am still”) trying to get everything caught up and get to the point where the budget I have set up is working for me. All of the sudden on an Thursday morning, my vehicle wouldn’t crank. I called my friend from church…he said two words that didn’t seem to be a big deal, but they would be a big deal before all was said and done…he said fuel pump. A fuel pump that cost me nearly $400 dollars to replace.

What have I learned? Have an emergency fund. In fact, (and NCN may disagree with me on this) I would say, build an emergency fund before you really start throwing money at your debt. (NCN Edit: I could not agree MORE! See below!) At this point, because of my experience, I would say build yourself an emergency fund by any means necessary. If I had an emergency fund, a new engine would have been a big deal, but it wouldn’t have set me back so much. A fuel pump would have been a pain, but it wouldn’t have stressed me out so much. Emergency fund, emergency fund, emergency fund! Can’t say it enough. If you are new to the world of Personal Finance blogging or you are like me and trying to get things headed in the right direction, SET UP AN EMERGENCY FUND! You’ll be glad you did.

See? I told you you’d enjoy the article. Just a few comments. I built up my emergency fund BEFORE I started to get out of debt. Twice, I had to use the money in my emergency fund and, both times, I rebuilt my emergency BEFORE I resumed debt repayment. Before getting out of debt, I always tried to keep at least $1000 in my savings account. Now that I am debt-free, I have 12 months worth of expenses in my savings account.

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I’d like to introduce guest author, Big Honkin. Big Honkin and I are friends in the “real world” and I’ve asked him to contribute a series of articles to No Credit Needed. Big Honkin is at the same place I was about 3 years ago: He’s ready to get out of debt. Big Honkin has joined the No Credit Needed Network. Click here to see his current NCN Network chart. Without further ado, Big Honkin and the beginning of his story… (I’ll have a few comments at the end of the article.)

Big Honkin Debt Reduction: Big Honkin Decisions

Honkin (hawn’ - kin) adv. - an adverb used to describe the adjective big. The term “big honkin” may be replaced with “very big,” however, scholars maintain that the phrase “very big” does not convey the actual bigness of something that is
big honkin.

ex. I can’t eat anything else after that big honkin meal we just had.

So, I’m Big Honkin, and I want to reduce my debt. I’ve known NCN off line for a while now and as he got excited about his debt elimination, I began to get a vision for being able to do the same.

The problem? I had no idea where to start. As I logged onto No Credit Needed and listened to the No Credit Needed Podcast, I found that NCN was talking about things that are a few years down the road for me. I would seek for tips that he may have had to help me get started on the journey into debt free living, but he was already there, and now he’s talking about how much he is saving and where it’s all going. That’s all good and well for him, but what about me? What about Big Honkin?

The first issue I had in getting started was that it seemed that I was always behind on everything. Car payments, electric bill, water bill, phone bill, name it, and it was late…consistently late.

Up to this point in my life, I always though the answer was more money, or bigger paychecks. Then, I sat down and worked the numbers and realized that I was making enough in a month to pay my bills, buy some groceries, and have a substantial amount left over. What then?

Well, then comes the first step in my trip to a debt free lifestyle. Get caught up. How? Honestly, this requires a little biting of the bullet and just doing the work to get caught up. I had to look and see what I was spending, where I was spending and how much I really needed to be spending. What I found is that I had to cut out a few things for a little while. And you know what? I could do without the things I cut out in my life. What things?

1. Hobbies. I am a hobby obsessed geek. All of my friends know. My family knows. Everyone where I work knows. While hobbies are a great diversion, I fell into the trap that a lot of people fall into. I let my hobbies become too big. As I made the decision to quit spending for a while on my hobbies, I had money to put towards bills to help get caught up.

2. Entertainment. I love my movies and DVDs. I love my TV shows. All of these things cost money. Now, I think it’s important to have entertainment in your life. The problem is, I let entertainment be too much in my life. There are some TV shows during which I refuse to answer the phone. So what did I do? I decided to make a list of movies that I really wanted to see, which ones I would like to see, and which ones that if money were no issue I’d go see. Then, I decided to only see the movies that I really wanted to see, and only see them once. (I am a movie repeater, I will see a good movie three or four times…in the case of one of my favorites several years ago…17 times!)

I decided to put buying DVDs on the back-burner for a while and spend that 15 to 20 dollars on bills. I mean…that’s practically a water bill. As far as the TV goes, I asked myself..do I really need 500 channels? The answer is no. And you know what, I don’t miss any of the ones that are gone.

3. Going out to eat. I do this…A LOT!!!! To the tune of almost $100 a week on eating out at restaurants. So, I decided to brown bag it a bit to work. Be willing to shrug off laziness and cook supper in the evenings. (I’m a good cook, and I enjoy cooking.) The difference…amazing.

Overall, I had to make the decision to cut some things out. I found out that I can live without these things, and I also have a plan to phase some of the hobbies and stuff back into my life without breaking my bank again.

So, I’m caught up on my bills and working on taking the next step. Getting a budget into place. Any ideas?

As you can see, Big Honkin has already begun to make changes in his lifestyle. Comments, suggestions, and ideas are welcome! How did you get started? How did you manage that “first budget”? How did you “get ahead” so that you had money in the bank BEFORE the bills arrived?

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