Dave Ramsey Update
His motto: If you live like no one else, later you can LIVE like no one else! ™
(WARNING: Only boring, boring, personal-type blogging – no poker content, sorry!)
Prior to the start of the month, the wife and I created a zero-balance monthly budget. Well, with me being the geek, and her the free-spirit, I created the budget and she agreed that I did an OK job.
To start, we made “line items” for our “four walls”. First, we set aside money for giving to church and saving. Secondly we set aside cash for groceries. Then set a budget items for the house payment and utilities. And lastly, transportation costs. After those essential four wall items, we budgeted out exactly how much money was left to pay off our debt. After calculating our monthly income, then factoring in exactly how much and where our spending was going to go (to the last dollar), we forced it balance out to zero. No more Netflix or magazines! Goodbye house phone and HD channels!
The cash set aside for groceries, toiletries, gasoline, and the like was withdrawn from the bank via a cashed check at the same time the 1st of the month paychecks were deposited. This ensures that we will not need to use our debit cards for any reason (except emergencies). To spend the cash wisely, and within the budget, we are using an envelope system provided by Dave Ramsey through the course. An envelope system is nothing new; your grandparents (and possibly your parents) may have used it as a system back in the day.
We created 12 envelopes to start; each with a different category of cash expenditure or long term saving. Here is a list of each of our envelope expenditures and how much we are allotted for the month of April.
| *Grocery | $280 |
| *Eating Out | $50 |
| *Gas & Oil | $75 |
| *Clothing Replacement | $20 |
| *Cleaning/Laundry | $24 |
| *Toiletries/Cosmetics | $50 |
| *Pet Care | $50 |
| *Hair Care | $25 |
| *Entertainment/Blow Money | $40 |
| *Prescriptions | $24 |
| *Repairs/Tires | $0 |
| *Vacation | $0 |
As you can see by how little we are spending in each category that the money is tight. Now, we don’t have any kids, so the groceries go much further than you would think. Of course, eating all of the leftover instead of letting them spoil is key.
Unfortunately, we aren’t saving for car repairs/tires or vacation. We need to reduce or eliminate our debt first. No worries, though: remember, Baby Step #1? We have money set aside for emergencies!
Anyway, that’s our spending system. If anyone wants to know more, please email me. Next post, I’ll show you how we are saving money during grocery shopping. It is a lot of work counting every dollar, but it’s just what we need to do to become debt free. (Too bad the government doesn’t do that, huh?)
Thanks for reading.
