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November – Living our First Dave Ramsey Cash Flow Plan

November 4, 2009 · Filed Under Budgeting · 5 Comments 

Hopefully you’ve noticed that my wife and I have been attending Dave Ramsey’s Financial Peace University over the past few months.  One of the major tenets of his FPU plan is to create a workable budget and then actually live according to it.

Well, November marks the official start of our latest attempt at budgeting.  I have had a fairly detailed budget for the past few months but we were not proactively living according to it (what is the point of that?).  This month, however, spurred on by the FPU class, we are going to give this whole budget thing another try.  Let me say that I really want to live by a budget.  I want to feel like I am controlling my money and not just sitting around wondering what happened to it at the end of each month.  Just in setting up our latest budget, I’ve found some areas where money just seems to be disappearing.  That both encourages and frustrates me….but hopefully this will be the start of something good!

The way I see it, there are two overarching keys to being able to convert your budget from a purely academic exercise to a useful tool:

  1. It has to be realistic – You are not going to be able to go an entire month spending only $25 on groceries for your family of 5 (ok, maybe if you have a huge “victory garden” and a chicken, and maybe a cow).  If you set up a completely unrealistic budget, you will be completely frustrated by the 2nd week of the month and then be completely off your budget.  So, be accurate when you set it up, even if what you are seeing is ugly.  Get used to living a budget, then in following months you can actually live on your budget and tweak your spending to get it where it needs to be.
  2. It has to be easy to administer – Do you really think you will keep up with your 324 line spreadsheet past the 2nd week of the month?  Your plan must be simple to monitor and administer or else you will neither administer nor monitor it.  Again, the point is to reduce or eliminate all sources of frustration so that you can keep up and keep on your budget.  That is why the cash envelope system is so powerful – there’s basically no administration.  Look in envelope, if there is money, you can spend it; if not, then you can’t spend it.  No spreadsheets, no budgeting software, no piles of receipts to itemize each weekend (just writing about all of that is frustrating).

Our plan for November

We haven’t made any major changes to how we’re living.  After discussing it quite a bit, we have decided to keep using a credit card for our bigger purchases.  We will start using the cash-based system for some expenses – this month that will be our dining out category.  In order to take a more proactive attempt at tracking our spending during the month, we are going to simply collect all of our receipts and put those in various envelopes.  We’ll then periodically chart our spending to make sure we are on track and be mindful of how much more we can spend that month.  To be honest with you, I am a bit nervous about this plan since I feel it might violate key #2 I mentioned above – keeping receipts, tracking spending from multiple sources….yuck.

To alleviate that concern a bit, I’m in the process of searching for a simple budget tracking tool that will help us to monitor how we are doing throughout the month.  The one I am starting the month off with is SimpleD Budget.  It is very basic but very simple too – so we’ll see how that goes this month.

Not completely dropping the credit cards yet

As I mentioned, we’ve gone back and forth on the credit card thing.  I know Dave Ramsey is a huge proponent of cutting them up and never using them.  I’m somewhat up in the air on them while my wife does not think it is a good idea to use cash for everything.  She is open to trying to use our debit card, but I’m not sure I see a significant difference between using a debit card and a credit card that you pay off each month.  As such, it’s a work in progress, but this is what we’re trying this month.  I will keep you updated on our progress this month and any changes we make for next month’s plan.  Wish us luck!

Events this Week: Dave Ramsey’s Town Hall for Hope and Thrivent’s Teach Your Kids to Share Day

April 21, 2009 · Filed Under Random · Comment 
Dave Ramsey's Town Hall for Hope

There are a couple of events coming up this week that you might want to check out.

Town Hall For Hope

From Tired of hearing the fear, doom and gloom that’s filling the airwaves? Join Dave Ramsey for a nationwide town hall meeting and discover what’s happening with the economy, how we got here, and where we’re going.

If that piques your interest, then check out Dave Ramsey’s Town Hall for Hope.  This is a free event that will take place on Thursday, April 23rd at 8 PM eastern time.  You can watch it at one of the many locations throughout the country to which it will be broadcast.

Dave will spend the first 30 minutes or so discussing the current state of the economy and will then answer questions from viewers live for the next hour.  If you are interested in attending, check out Dave’s TownHallForHope site for more information on the event, FAQs, and a tool to find places near you that will broadcast the event.

Thrivent Financial’s Teach Your Kids to Share Day

Another event that might interest those with young kids or grandkids ages 6-10 is Thrivent Financial for Lutherans Teach Your Kids to Share Day taking place on Friday, April 24.  This event will focus on learning of the importance of a values-based approach to money management.  Some info from the site:

Together, families will:

  • Explore ways kids can share, save and spend.
  • Discuss the importance of being responsible with money.
  • Build a financial foundation for children that will last a lifetime.

This event costs $10 which includes dinner, activities, educational materials and "stuff to take home!"  In light of the dearth of financial education that our children learn in school (the extent of my personal financial education was learning how to write a check), this is a worthwhile topic to teach to your kids and this event sounds like a good way to get a little education on it.  To find a location near you, check out this page .

For full disclosure, Thrivent Financial is a faith-based, not-for-profit membership organization that provides financial services.  Frankly, I don’t know a whole lot about the organization but it does sound like a worthwhile event and this dislaimer is on their site:"This event is open to adults (parents, grandparents, aunts, uncles, etc.) and children ages 6–10. You do not have to be a member of Thrivent Financial for Lutherans. No products or services will be sold."  Read more about Thrivent Financial here.

Book Review: The Total Money Makeover

August 14, 2008 · Filed Under Book Reviews · 4 Comments 

A Proven Plan for Financial Fitness

By Dave Ramsey

BFN Book Reviews

Since I started Borrow From None, I have been reviewing a personal finance book each Thursday. I will provide a brief overview of the book and the author, touch on the good and bad in the book, and finally, give you my personal recommendation for whether you should borrow the book, buy the book, or neither.

What is this book about?

Click here to continue reading…

The Lesser of Two Evils: Determining Which Loan to Pay off First

August 4, 2008 · Filed Under Paying off Debt · 5 Comments 

The other day I was asked a good question: "We are looking to put some extra money towards prepaying one of two loans, so how would you go about determining which one to pay off?" Like most good questions, there is no easy answer. For most debt repayment questions, I would turn to Dave Ramsey’s debt snowball (pay off the loans in order from smallest balance to highest) or a similar technique (pay off the loans in order from highest interest rate to lowest). But this person was asking a slightly different question. Click here to continue reading…

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