5 Dave Ramsey Tips for Making Room in Your Budget to Invest

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  • Investing helps you build wealth, but it can be challenging to find enough money to invest.
  • Finance expert Dave Ramsey offers tips for freeing up cash to invest more.
  • You can try to reduce your spending in certain areas to leave more money for your brokerage account.

Could these tips help you invest more for your future?

Investing money is one of the smartest things you can do with it. After all, why wouldn't you want your hard-earned cash to start working for you so it earns returns that build your wealth without you having to work for every dollar?

Unfortunately, when you have a lot of pressing expenses, it can be hard to find as much money as you might hope to deposit into your brokerage account. The good news is, finance expert Dave Ramsey has provided some suggestions for finding room in your budget so you can free up some funds to purchase assets that can earn a return for you.

Here's how Ramsey believes you can cut spending to invest more.

Simple ways to reduce spending

The Ramsey Solutions blog provided five possible ways to reduce spending in order to increase investing. The five things Ramsey suggested are:

  • Packing your lunch to take to work instead of buying lunch out.
  • Switching to a cheap streaming service and canceling cable TV.
  • Making your own coffee at home instead of buying it from a gourmet coffee shop (acknowledging how common this advice is, Ramsey says "It's a classic because it's true.").
  • Switching to generic items from name brand items (like buying a cheaper off-brand cereal).
  • Cutting your insurance costs by working with an independent agent to find a provider that offers cheaper coverage.

Ramsey explains that while these changes are pretty minor ones in terms of your actual lifestyle, the impact can be dramatic when it comes to preparing for your future.

As he notes, "Those dollars and cents add up month after month, and they can give your retirement savings a huge boost."

Ramsey's advice can go a long way toward helping you invest more

Ramsey's five money-saving suggestions are great ones and you should definitely think seriously about trying them out if you haven't already. But even if you are doing these things now, the finance expert also has some advice that could make a big impact on your savings.

"It all comes down to your choices -- you have to make investing for your future a priority, even if it means cutting out little luxuries here and there," Ramsey said. He urged taking a look at the details of your personal budget to find the indulgences you can cut out -- even if his own specific suggestions won't work for you. If you've already cut your cable service, for example, you could switch to a cheaper cell phone plan to realize similar savings.

Ramsey is absolutely right that most people can find cuts to make, and should try to do so if they aren't investing at least 15% of their income for retirement. It's much easier to voluntarily make sacrifices that you choose to make now than to be forced to sacrifice later out of necessity if you didn't invest enough to build financial security.

You don't have to strip all the fun from your budget, and you shouldn't. But if you're dissatisfied with the amount you're investing, looking at your budget to find luxuries that you can cut back or eliminate can make all the difference. Try this out today.

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