I’ve been a fan of Dave Ramsey and Suze Orman for quite some time. I’ve put a lot of their ideas into practice. We’ve never carried debt but we started and completed our emergency fund. I’ve even set up a budget, created an account on mint and tracked our money . But that’s where it stops. I never have set up any practices to stay in budget. I watch it go into red every single time, far beyond the limits of the budget. It’s been depressing. I knew Dave Ramsey’s budget system was the “envelope system”. Where you budget your money, put cash for non-bills in envelopes and when it’s out, it’s out. That scares me to death. Because what if I saw the cutest top on sale at Target and I HAD to have it. Or what if I REALLY wanted Taco Bell for lunch instead of a pb&j. Or what if…
The end to all those sentences is, I wouldn’t be able to get what I wanted. And that’s just lame. I’m a grown, responsible adult and I should be better able to control those desires. Because it may cost to opt-in but I have to count the cost of opting out. The price of my inability to control my desires is someone’s next meal or the clothes on their back. We have to be more responsible so we can give more. We have to be more responsible so we are equipped to handle crisis so we are not running around trying to fix it instead of concentrating on others. We have to be more responsible so our kids see us be more responsible. Since December we have gotten much better but we’re ready to take the next step and tackle the envelope system.
Based off the budget I had set up in mint.com, I created a budget on Dave’s forms and actually planned where every single dollar is going to go with every paycheck. I know when bills are coming and going. We’re saving for once-a-year stuff. We’ve set up what money is staying in checking, what’s being moved to savings and what goes in an envelope. I even have a coffee envelope! Everything in moderation, people! You didn’t think I was going to completely cut that out did you?
Scott and I actually had a budget meeting. Dave suggests “the nerd” do the budget and then present it to the spouse. They are able to make any changes they want without question. I, of course being the nerd, presented it last night with much anticipation. We went through every line item with little fighting and actually very little changes.
So October 1 we start. It’s going to be weird dealing in cash. It’s going to be weird planning meals. It’s going to be weird rationing out clothing money. It’s going to be weird not going to Chick-fil-a every single time we want. It’s all going to be weird for a while.
Weird and scary. But I believe so worth it.
Very curious…do you have a budget? If so, how do you control your budget? Are you a Dave Ramsey fan?
I have never really created a budget. I make sure I have enough money in my account to cover bills and such, and the what is left over is what I have to spend. I am HORRIBLE at saving though. I know I should set aside emergency money, and if I ever want a nice vacation setting aside some money every month would help for that…but I just can’t seem to do it. If I see something I want (sometimes need, but mostly want), I usually go out and get it and tell myself that NEXT month I’ll set some aside (or set a little more than normal aside). Doesn’t tend to work out too well though.
Part of my problem currently, is that I am a supply teacher and I’m not getting much work since the start of the school year (that’s normal from what I’m told). And, when I get work it is quite inconsistant so I don’t know from week to week what my pay will be. So, at this point, I guess it would be really beneficial for me to save most of the money I do get (after bills), for those times when I’m not getting much work (and therefore not getting much money)…
Shelley, Dave’s system does account for inconsistent income. Pretty sure he has a separate form and how to plan for that. You should look into the Total Money Makeover or Financial Peace University in your area.
But yes, we have been like that…make sure we have enough to cover bills and if there’s enough left after we do what we want to do, it might get saved. Most of the time, there’s not much left! Dave really pushes for people to pay the church and then yourself first.
I am horrible at budgeting, mainly because we don’t have any extra money and when I go over on groceries, we have to cut somewhere else. Since my husband’s been out of work for over a year, we don’t have the money for the little extras or the emergency fund. But he started work on Monday and once we’ve established how much he will bring home and pay off some of my hospital bills from this summer, I plan on implementing the envelope system. He tends to buy coffee and snacks and all that, while I’m less of a “little things” spender. I can make do with what I have, but he ALWAYS needs something during the week after I’ve purchased groceries already or done the shopping. So, I think the envelope system will help us there. And I want to do better with our giving also. We haven’t been able to give as much as we’d like due to the living from paycheck to paycheck, so we should be doing a little better starting in October.
I, personally, am not a fan of Mint. I think it’s mainly because it doesn’t work well with my bank and categorizes things wrong and I have to spend too much time fixing them.
Leann, so glad he got a job. I hope it will help you guys catch up and set up a new budget!
This was annoying to me as well when I first learning to use Mint. But then once you set up your categories, you can make it so that every purchase from that same vendor will automatically go straight through into your set category. A little bit of extra work, but it does do it once you set it up.
I have much to say and there is no way I will be brief. Bear with me.
We are big Dave Ramsey fans, but we often fail at sticking to the plan. We went to FPU 2.5 years ago, when we were expecting our fifth child. Husband was in a good job but we were not being smart with our money. We had no focus, no plan, and too much debt and it was a burden on us.
I was scared of switching to cash. It seemed so finite and limiting. But it is not! First of all, give yourself a “blow” envelope so you can buy that cute top or treat yourself to lunch or whatever. Just set a limit for it. Just making the switch from our debit card to cash made a HUGE difference in our spending. It did not solve all of our problems, but it got us started. I think a lot more about how I spend my grocery money, etc. with cash. But, I will confess that we often run out of cash and start using the debit card at the end of the month. We’re spending less, but it is not perfect.
Be prepared to make adjustments to your cash disbursements for a couple of months. It took us a few months to really know what we needed in each envelope. But it is worth it! It is so freeing to have a plan, even when we mess up and get off track.
We did go a little off his plan though. Even though we have debt, we set aside 3 months of expenses first. My husband is a commission-based job and we need the security of that emergency fund to stay on track with our debt plan. This actually saved us when he was laid off–we were able to pay all our bills and not add to our debt until he found a new job.
Anyway–this will be so great for your family once you get used to it. Good luck!
nichole, thanks for the encouragement! I just know I will do better when I have to hand over cash. A debit card is TOO easy. Just today I ran out of hairspray that I usually get at the salon and I just can’t make myself pay the full price for it with cash. Going to CVS at lunch to pick some up and stay within my “Hair” budget for the month. Normally I would have swiped my debit card and said who cares!
Oh Amy, I do love Dave. He completely changed the way *’scuse me, monkey #1 needs toast with cheese sandwich, very important matters at hand, be right back* ok, anyways, he completely changed the way I (we) think about money and purchasing things. I have used Mint before, and I LOVED it, but you have to really be on top of it. I am going to do a post next week or maybe for tomororw on which online or software financial program I’d like to use. Great post.
Ammie, I do the same thing within mint. It is actually pretty good at catching things and it’s amazing how you realize you go to the same places all the time!
We really need to sit down and plan out an actual budget. As it is now, we more or less just make sure we have enough in the bank to cover the bills and then my grocery budget is whatever I can get from what’s left. I haven’t used cash in so long, I’d be scared to try this!
Stacey, as I said, I’m scared to death of using cash. I’m well known for not having even $1 in change on me. It’s definitely going to be weird. Isn’t it funny though that the older generation is probably scared to use plastic and we are scared of cash?
Amy,
I set up a budget 5 years ago, but went over in every category. It was just a way to track expenses, not a true budget. We’ve been doing cash for two years now and it creates a STOP SIGN in the budget. If you don’t have it, you just stop spending. We were so committed to it we vowed to eat PB&J if it meant sticking to the budget. Thankfully, this never happened…but it was the mindset you must have to make it work.
After using DR envelopes I found this neat wallet from Savycents that is a cash system wallet. I did a review on my blog if you’re interested:
http://carolinaclipper.blogspot.com/2010/03/savycents-wallet-review.html
How long did it take you to get everything set up in Mint? I do everything manually in Excel and may be open to something in the new year. Would you recommend it?
R
I keep meaning to do a full review but yeah, basically that’s what I’ve been doing…tracking expenses, not sticking to the budget.
Mint is really good at automatically feeding in items and then categorizing them and showing you how much you have left. I think you still need a cash flow plan to show you when to take certain things out. So yes, I think it’s a good companion to a budget, cash flow plan and envelope system.
Hi, Amy! I found your blog via a comment you left on the LPM blog. 🙂 I just want to encourage you that my husband and I, after reading Dave Ramsey’s book Total Money Makeover three years ago, did what he suggested and used the envelope system. We’re still doing it, and totally out of debt. YOU CAN DO IT!! It definitely takes some getting used to, and it is scary, but we feel so much better about knowing where each dollar is going…and that we intended for it to go to that purpose.
And as Dave himself says…”You have to live like no one else, so you can live like no one else.” Blessings to you!
Honey Bee, thanks for finding me! Thank you for the encouragement as well!
You are going to LOVE it! Chris and I do envelopes and it has been life changing! There are months we fall off but I know at the beginning of each month it is a fresh start! This month we didn’t get to the bank to get cash (Figure that one out – we both work for the bank and can’t make it to the bank to get cash?!!?) and I feel out of control using my debit card, it really stresses me out!
I have all the CDs if you’d like to borrow – he has great information taking you through all the baby steps – from saving to college, insurance, giving and retirement savings.
Part of the reason why Chris still has the white car … because we will being paying cash for the next car and we will not have a Mortgage by the time the kids are in middle school! I’m a huge fan of Dave’s principals and encourage others to take the steps he lays out in Total Money Makeover!
Go Amy and Scott!!!!
Erica, that’s awesome! Not having a car payment is the best thing ever!
I”m a DR fan! We tried the total money makeover, but my husband wasn’t big on the budget deal. I did make a sort of makeshift budget for a while, but stopped, and never got into the envelope system. So maybe that means we really didn’t do the TMM… We tried. I did get the kids kit for my oldest and while it was good for a while, she got to the point where she expected to be paid for everything, not just what was on her board. When she insisted I pay her $50 to pick up sticks after a storm, we took a break. But yes, being debt free will be a great thing when it happens. I’m driving my piece of junk car til it dies just because not having that extra payment is NICE! Now if we can just get rid of those student loans!
Yes, I’m very torn on the kids and allowance. I never got allowance growing up and yet I feel like I have great financial sense–even though I don’t follow through sometimes.
we’re cracking down on Oct 1 as well. we always bleed money in september with back to school expenses. but – in my defense – they JUST opened a new target with a starbucks in it less than 2 miles from my house. i’m only human!!
(we like dave as well, but don’t really follow any specific system)
Can not blame you on that! I have had to limit myself to once a week at our Starbucks that is 3 minutes away. Target AND Starbucks is a lethal combination!