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Why We Started Using Dave Ramsey’s Financial Program and the Envelope System

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We have recently gotten back on the Dave Ramsey bandwagon after my husband lost his job a while a go. I can’t even tell you how wonderful it has been!  When he first lost his job we couldn’t do envelopes because we only made enough to pay the bills.  

I thought I would re-post an old post about how we got started using the Dave Ramsey program.  As I read through this post we have been going through a lot of the same things again, and following this program was exactly what we needed to do!

I love budgeting and finances. If I ever got a job it would be to be a family finance counselor. I seriously L.O.V.E. everything about figuring out money. It started when I was little and my mom would always balance her checkbook at the table and talk to herself {probably grumbling, because she doesn’t love it like I do} while using her awesome big calculator. I just loved it. Now, I am not into investing, I have NO clue about any of that, but when it comes to budgeting, balancing, getting out of debt, and teaching your kids about money, I could talk to you forever about it. {don’t worry not today}
 
The last year has been an up and down for us when it comes to money. We would be doing so good saving and not overspending, keeping to a budget, and then we had some problems with work and finding new jobs and starting school again, and all that fun stuff {insert sarcastic eye roll} We were doing fine paying our bills and everything, but we just weren’t saving. In October my husbands parents introduced us to a program called Financial Peace University by Dave Ramsey. I was NOT interested because in order to have “financial peace” I thought you had to have a lot of money. Well it turns out you don’t!! Really I promise. Read on….
My husband and I are totally changing how we do our money. I thought we were doing just fine, but we were doing a lot of nickel and diming that I didn’t realize.  You know you have all done it …you go to Target to the dollar bin section and leave having spent an extra $20 dollars that you weren’t planning on spending….Urgh}

Anyway, We listened to the Dave Ramsey CD’s and started his envelope system, which basically means we pay our bills and then divide what ever is left into envelopes in cash. We also got rid of the credit card. {we have one for my husband work}. For instance we have about 10 envelopes such as savings, clothes, food, gas, my scrapbook fund, vehicle maintenance, date night, etc. We take the cash we have left over after we have paid our bills for the month (or for us two weeks) and have percentages to put in each envelope totaling 100%.  If there is $30 dollars in clothes then I either save it or spend it, when it is gone it is gone and we have to wait to buy clothes until there is more money in there. It has been the best thing, because my husband doesn’t get frustrated with me when I bring home a new shirt because he doesn’t care as long as it was in the envelope! With gas and grocery we already know how much we need each month so we just plan for it so we will have enough!
This is the envelope system I have, but in black, I like the red…..hmmm!

 

Here are Dave Ramsey’s Seven tips for Financial Peace
1) $1,000 emergency fund – We put this in the bank after it is saved.
2) Pay of all debt with the debt snowball – Once you have paid of your highest interest debt, roll the money over to your other debts so you are paying more and it will be payed off faster.
3) 3-6 months of expenses in savings – This comes out as a bill, We have a certain percentage that we put in there each month before we take cash out.  
4) Invest 15% of income for retirement – We are working on doing this!
6) Pay off your home early
7) Build wealth and give

We are almost done with #2 and working on #3. We started the system in November and got #1 done really quick and quite honestly I don’t know how. Dave talks about giving 10% of your income to a charity. The church we belong to encourages it and I think that because we did pay a tithing that we were blessed to be able to fulfill our plan. #2 is almost done. We payed off our van, payed off a business loan and my husband bought a truck with CASH!!! {it’s not that nice…ya know $1,000 dollars doesn’t get me that dream 2011 King Ranch Ford F 250, but hey we’re almost out of debt.} Now we are just using the debt snow ball to pay off our school loans which may take a while! Some of you might think this is way to personal to share, but I am not writing it to brag, just to show you that it is possible and that you can do it also. Do what is best for you. We were glad we found this. It has SAVED us so much, and I didn’t think we even needed to be saved. 😉 When I go buy things I always think, do I want to spend this money right now or should I save it for something else. Having a budget, being almost out of debt, and knowing where our money is going makes us feel WAY less stressed about money, less worried about our future, and really excited about saving.

Comments

  1. I’ve heard of the envelope system before and really want to start. I pay most of our bills online (everything, but medical because those are always different) and do our banking online. Our checks go directly into our bank account too. So how would that work?
    Also, just a mini testimony on tithing. On the months that I pay tithing before everything else we NEVER have to worry about making ends meet, but on the months I forget and get busy things are always more stressful financially. Coincidence? I think NOT!! 🙂

  2. Thanks for the information; I have heard good things about his program. I know that one of my children uses the envelopes.
    Blessings for the info.