Tuesday, May 5, 2009

The big "B" word

Um that is budget for all of you out there who think I'm swearing! For any of those who know me, budgeting is not my idea of a good time. However, like Dave Ramsey says MONEY IS ACTIVE, if you don't tell your money what to do, it will always RULE YOU! Isn't that the truth, I'm sick of being ruled by my money!

Spend your month on paper and allocate where everything goes. Simple words but lots of work. Plus he says it usually takes 90 days for a budget to really work, and you have to do a new one each month. So I started it, Mike and I will do it together on Friday (I know, what a fabulous date night-make a budget!) and it is amazing how much further your money goes!

Another big lesson is using the envelope system to pay cash! I know, some of you might just ask... CASH, WHAT IS THAT? It's that green, paper stuff you can pay with that does not resemble a debit card. Now bills and some things you don't pay for cash (EFT's) but food, entertainment and clothing should all be allocated a monthly amount and used. So my first lesson will be getting my week's groceries with my cash! When it's out it's out! I think most of the blogs I follow with the coupon ladies, they all use cash. You see how much you spend, you don't have to keep track of it with your bank and will probably spend less. You put the amount in an envelope and there you go. Now with clothes I don't buy them all the time but I know that summer and back to school will be here before I know it, so I'm going to start allowing some cash to go in an envelope so I will be ready and NOT GET OUT THE CREDIT OR STORE CARD!

So remember how excited I was with my baby step 1 and emergency fund? You'll never guess-this week we have two EMERGENCIES. Our washer broke. So there goes $200 because we kinda need our washer. Our car is idling all weird and the engine light is on, so we'll have to take that to the shop for a diagnosis and then who knows how much it will cost (the warranty ran out last year). The good news is: we don't have to put any of it on a credit card!! Bad news is: we have to build our $1000 back up. There is a sense of peace knowing you have the money to pay for it though and not the guilt and remorse over pulling out the credit card.

Words of the wise for the week:

"The plans of the diligent lead surely to plenty, but those of everyone who is hasty, surely to poverty". Proverbs 21:5

Overdrafts are a sign of CRISIS LIVING and sloppy, lazy money habits.
Note: in 2008 banks made 10.3 billion in overdraft fees

A written plan removes the "managment by crisis" from your finances.

Use the four walls principle: you must build your (financial) house with four walls before you can do anything else, so always make sure every month you have paid for: food, shelter, clothing & transportation.

If you will LIVE like no one else, later you CAN live like no one else!