I’m cheating a little this week with my challenge. We’ve already started using a budget, but I thought I’d spend some time fine-tuning it. For the first part of our married life, we didn’t use a budget. We never got ourselves into any significant debt other than the house and a car payment. We just spent what we had and stopped when it ran out. We’ve since learned that even though we didn’t get ourselves into a lot of debt, we weren’t using our money efficiently; we weren’t saving like we should, and we certainly wasted a lot. Two resources we used to help educate ourselves in this area were Crown Ministries and Dave Ramsey’s Financial Peace University. Our favorite was the latter. If you’ve never heard Dave Ramsey on his radio show, taken one of his classes or read his books, I’ll give you the highlights. His basic premise is to stop using credit. He has a series of what he calls “baby-steps” to financial freedom. First you build a $1,000 emergency fund, then you begin what he calls the “debt snowball.” You work on the smallest debt first, then move to the next, applying the money you were paying on the small one to the second, and so on. It snowballs until you have all debt paid. The next step is 3 -6 months in savings, then Investing in Roth IRAs, a college fund for the kids, paying off your house early, and finally building wealth and giving. To find out more information visit his website here. There are links to find a Financial Peace University class in your area (I highly recommend – it completely changed our perspective) or to purchase his book Total Money Makeover (which I also recommend if you can’t take the class).
So, what am I doing this week? I need to find a more efficient way to track our budget. I don’t like using the computer programs and spreadsheets. I’m a little old-fashioned at times and I simply feel more in control and that it is more accessible to me when I write it down with a pen and paper. Dave Ramsey suggests that you and your husband have monthly budget meetings to plan for your expenses and agree on the budget each month. He says that most marriages have a “nerd” and a “free spirit”. I’m the nerd, so I track the budget. My husband is the free-spirit, so he makes sure we get to have a little bit of fun now and again. (Ok, I confess, he’s part nerd and I’m part free-spirit too, but we balance each-other out). When we have our meetings, I write it all down, break it down with each of our paychecks throughout the month and start tracking to make sure we aren’t over-spending in each area. By the end of the month it looks like a bunch of chicken-scratches that no one but me can understand. I need a neater way to keep track of it, without using the computer — yes, I’m holding out on the computer thing. I’ve tried it and my brain simply works better with pen and paper. So that’s my challenge this week. I’m going to be coming up with some sort of a document/method to keep my budget clear and organized. Any great methods you use? Leave me a comment!