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A few months ago, I did Financial Peace University with Dave Ramsey through my church. As a former single mom, I thought I knew pretty much everything I could about stretching my dollar. And I had a good start, but I was far from knowing everything (and I still have a lot of new-to-me ideas to hone in on).

My husband and I took this course at the urging of several friends and my own sister. When my parents decided they wanted to take it, we decided it was as good a time as any to sign up, just to get everyone off our backs. But it didn’t take long for us to realize we’d just made the best decision we could.

Whether you decide to follow suit and find a FPU course of your own to join (and yes, it’s Christian based. But there are real life habits the course teaches that every person, regardless of faith, should learn), here are the three biggest take-aways I want to share with you about gaining control of your finances.

1. Tell your money where to go. This is also known as the “envelope system.” Every month, I take my paycheck and split it up into categories of where it will be spent. Dave Ramsey suggests going to a cash only system (putting money in pre-labeled envelopes) so you can actually feel yourself spending money. When you use your debit card, it’s easy to be immune to what you’re spending. Actually taking the money out of your wallet and giving it to someone else for a service or product keeps the awareness on how much you are actually spending. Personally, I use a hybrid of using cash and debit. For things like gas and bills, I use my debit card (as even DR does). For things like groceries, our family only uses cash. We have managed to shave $400 off our family’s food budget just by doing this alone! I also plan for large expenses like summer camp, my son’s braces, vacations, birthdays, etc. Each month I set aside a small amount for each item, and over time it builds up.

This first rule is, in my opinion, the most important of all financial decisions you can make. I am never caught with an empty wallet when it comes time to pay the piper, and I’m always prompt with my payments. It’s a really good feeling to be able to give my kids’ summer camp $300 of my hard-earned money and not feel pinched by it because I’d planned for it ahead of time.

2. Cut up your credit cards. I know. You want to build your credit up so you can have a nice credit score so you can buy big things. But how about, instead, saving money to buy those big things? There’s a more in-depth description at FPU detailing how you can even buy cars and houses without credit, but I’m not going to go there. But I will tackle the smaller topic of using a credit card for things like groceries, electronics, gifts, “emergencies”… When you pay off those things you used credit for, you are also paying up to 22% more in interest. That’s such a waste. If you follow the first step of planning out your money’s path, step two will be easier. And if you don’t have the money for something, DON’T BUY IT.

Note on emergencies: We’ve all been there. The car breaks down. The roof has a leak. The kids need new clothes. The dog falls and breaks his leg (true story). FPU’s true first step is to save $1000 and put it away for EMERGENCIES ONLY. In the case of the broken dog, we had to shell out $400 for x-rays (before the $3200 surgery bill….yikes). Thanks to our emergency fund, we were able to pay that first $400 right away.

3. Snowball your debt payments.  Gather up all your debt and become clear what you owe on them, and what the minimum payments are. Pay the minimum on each one except the smallest one. On that smallest one, pay the most you can each month until you’ve paid it off. Then apply that amount to the next debt. And so on. With each debt that’s zeroed out, momentum starts to increase. And soon it will actually feel possible to get out from under all that debt.

Further money making/saving ideas:

If you’re in a bind right now, look through your things and see where you can save. Are there areas you can trim in your food budget? Are you paying too much in the entertainment department? Are there things you can live without for the time being (like a data plan on the cell phone, or cable/internet, or…..)? Search your house for things you can sell on Craigslist. Consider taking up an odd job or two for a little while, like cleaning houses or baby/pet sitting.

Do you have some tried and true methods you’ve used to keep your budget low? Share them in the comments!

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