Week 5: New Financial Outlook

As promised, here is my post about budgeting: the most exciting thing ever that everyone loves talking about. Okay, maybe sarcasm is lost through electronic communication, but you can't blame a girl for trying. So let's dive in:


The New:
During the summer of 2013, my parents encouraged me to check out Dave Ramsey and his Financial Peace University program. So yes, it may have taken me six months to be totally on-board with this, but I'm hoping that I will look back on February 2014 as the month that my financial life began to transform into a stress-free, relatively organized system that eventually became second-nature. We shall see...
So I'm no money expert, nor am I about to give you Mr. Ramsey's entire financial plan, but I will tell you some of the main points that I took away from his lessons and will be attempting to successfully imitate over the next month (for now).

Key Changes (from my current spending habits/money practices):

• Pay for everything with cash. He talks a little about the difference between paying for things with cash versus with a debit or credit card. He makes a good point in saying that when you feel the cash leaving your hand, it is a lot harder to watch it go than paying for something with your card. (This is my paraphrase of course.)
• Make sure that every dollar coming in has a purpose. It is so super easy to just spend money until it is gone and then wait for the next paycheck so you can do it all again. I admit: I, myself am guilty of this. BUT that is no way to plan for the future or to be a good manager of the monetary blessings that God has poured out on me so from here on out, every dime that I earn will belong to one of the following categories: rent, utilities, internet bill, groceries, gas/car maintenance, savings, or pocket money. After every month, I will review my spending plan. If I didn't set aside enough for groceries, but I had extra funds in my gas category, I will adjust accordingly.
• Use an envelope system.  The idea here is that you keep the allotted amount of cash for your different categories in separate envelopes, and when that envelope is empty, you don't buy any more of that category until next month. Basically, this is an accountability and organization tool for combining the first two items. I believe that Dave Ramsey has a special one, but I just picked up a coupon organizer last time I went grocery shopping, and I think it will work out just as well. You can see it right in the middle of the picture below.

The Evidence:

Here it is, the official kit that my parents handed down to me as they urged that I give it a shot:

The Verdict:

Well, it would be silly for me to give a verdict on this just yet, seeing as today is my first day at this whole she-bang, but I will say this much: I am very excited to have some purpose and organization in my bank account. There's a pretty good chance I'll post more about this as the months pass and I have a better understanding of what works for me and the adjustments that I'm sure I'll have to make.

Like I said, I take credit for 0% of this! I am simply attempting to follow Dave Ramsey's Financial Peace University program. The website for it is here if you want additional information about things that go deeper that the items I discussed.