Get Out of Debt with a Budget
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The last couple weeks I’ve shared bits and pieces of what FishPapa and I did to get out of debt. If you missed the first few parts, you can start at the beginning.
After saying adios to credit cards and regularly listening to the Dave Ramsey show, we came to grips with how much we were in debt at that point. $16,025.30 to be exact. (This included truck loan, home equity loan and credit cards.) We knew it was time to get to business. We had serious debt, and it needed serious attention.
One of the most important things we did was to start budgeting. Yes, I know, you’re sighing already. Well, it’s true; you have to have a budget.
We always knew this. The thing is that though we had tried to budget for years and years, we had never been successful. I had read all kinds of books about it, but we could neither fit into the prescribed allowances that the financial guru of the day was recommending nor could we really predict what our self-employment income was going to be. We were stuck.
Give Every Penny a Name
Dave Ramsey made it clear: give every penny a name. I had listened to the program long enough to hear him say, write it down on paper, every month. Tell every dollar where it’s going to go. Together.
It was freeing not to deal with percentages. Allot 25% of your income for this, that, or the other thing. That is not my real life! I don’t think in percentages. But, to take what we have and subtract what we owe? I can do that kind of math.
So, with trusty red notebook in hand, we sat down together at the beginning of every month. We went through every bill and wrote them out in a list, subtracting them from the amount of money we had to spend. Then if there was anything left, we discussed what things we thought we would need to plan for: clothes, birthdays, tires for the vehicles, etc. We also allowed each of us some “fun money” so that we would have the freedom to splurge, even if it was just a little. At this point, we paid just the minimum on all our accounts. Once we got the swing of budgeting, then we started going after our debt.
Part 5: Get Out of Debt by Reducing Expenses
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Pay your tithe (10%) of your income to you home church. If you don't you are robbing God according to the book of Malachi. This is not an option for believers.
I have been a SAHM for more than 10 years, and the sowing and reaping principle has given us miracle after miracle with our finances. We don't have the best of everything like the "Jones", but our God has supplied all our needs as we have honored Him with the first fruits of our labor.
oops! I meant #59! Sorry!
Did you read # 58? It should be removed!
i cut everyone's hair (didn't say i do it WELL, though!!!) … and we gratefully take all hand-me-downs from anyone we know. i recently put myself on an allowance b/c i was spending too much on fast food and coffee. now a Happy Meal is a rare treat, and they appreciate it, and they know they can get more food if they forego the toy and drink.
I thought I would share info about a company I started a little over a year ago to help people save money (nothing like doing something about "it"!). It is FREE to sign up and it saves 15% on average at participating retailers (which includes names like Target Stores, Petco, Footlocker, Fashion Bug, Catherine's, Lillian Vernon…ok, you get the idea!). Please visit the Infinity Network fan page on Facebook and it explains how easy it is to join. Happy savings everyone!
Love Frugal Friday and Dave Ramsey! Thanks for hosting.
Hey Jess – I messed up on my link — you can delete #44. I put the wrong title. Mommy brain….
I have really enjoyed all your posts on Getting Out of Debt. Thanks for hosting!
~Liz
I had to smile- I thought we were the only ones who used a staples "penny" spiral notebook for budgets. We've got 2- 1 for each of 2 accounts we have. Its incredible how such a simple item can improve your life. Nothing fancy, just practical. I guess great minds think alike! 🙂
I totally agree. For some reason the naming the money thing really made sense to me! Once I started writing down every penny I couldn't believe how much we wasted!
You gotta love Dave…
Toni
Oh! I am so excited to be first especially because I'm a long time reader, first time participant! My husband and I were supposed to have a budget meeting tonight but he was really tired – not a good time to talk money. We saw Dave Ramsey and have the Gazelle software, so that is definitely helping.