Our Budget

Wednesday, August 3, 2011

There have been a few follow up questions about Dave Ramsey and our budget, so I thought I'd try my best to address them.

I think Tony watched his first Dave Ramsey video 3 years ago. It was simple. It was basically common sense. Live within your means and do extraordinary things with your money over time. And yet, we didn't know a single person who handled their money in this way.

So we didn't either.

But the seed had been planted and we signed up for Financial Peace University.

And failed to complete it.

So we signed up again, for real.

Except we weren't ready to give up our check cards.

Going to a straight cash budget was scary, so we didn't.

We put it off and put it off and put it off.

Until one day in April, Tony decided we were making the change to straight cash. I wrote about my struggles here and here. It was brutal. Switching to a straight cash budget felt like going through withdrawals. In fact, it was like abandoning an addiction, to stuff. This was mainly giving up the frivolous purchases that gave instant, if fleeting, gratification. Notice I said, "was brutal." Past tense, because now, it is 2nd nature and just like anything that requires discipline, it's completely worth it.

We budget our funds in 2 week increments, just as we are paid. Budgeting has a lot of implications, like waiting to try the new recipe or saying "No." to friends or family when invited out to dinner or an activity. But as a positive aspect, in these moments of humility, we believe we have gained some respect. For the friends we no longer spend time with because of a lack of understanding, we have a greater appreciation for the ones who do! It also requires us to sit down, every two weeks and have a conversation about what is coming up.

After our reoccurring bills are paid, we allocate:

$100 - Tithe [admittedly less than the minimal 10%, but more than we have ever made a habit of giving]
$240 - Gas [we've found this to be high, so any extra is saved]
$140 - Groceries [$70 per week]
$40 - Toiletries and Household Needs

With the above budgeted we have found ourselves with a little extra money. This money is our collective "Crap, we're out of wipes.", "A bottle of wine would hit the spot tonight." and "Yes, we'd love to join you at Acapulco for some tacos." We intentionally do not spend it all, so that we can be saving some money during this time.

And that's that. We either have the money or we don't.

And if we don't, it doesn't get purchased or we don't go.

It seems stupid simple, because it is. Don't spend more than you make.

I'm not saying that it isn't difficult. It is. The list of needs and wants never shortens, but their importance dwindles. More strength is given to moments, memories and actions, than to things. That's not to say that I wouldn't love to provide my boys with fabulous trips, frequent date nights with my husband or the newest clothing for myself. It just means that at this point in our lives, we've prioritized putting in the time paying for how we have lived in the past and I greatly look forward to making memories that we no longer have to pay for long after they are hazy.

ps: We shop at Aldi, with a calculator.

pps: This is not a slam on anyone. It's just an elaboration on how we budget our money and a challenge to rethink how you may spend yours.


AJ said...

::Like:: It's hard, but it's doable, and it's definitely more peaceful.

Anonymous said...

We are doing the 7 Baby Steps...and...well, have been, because we just RE-started them. We got to over $1,000 in savings...then maternity clothing was needed...and baby stuff...and then...I stopped working altogether last fall.

So, we're back at step 1, and it's HARD. We have talked about doing a cash budget (I almost said diet!) before, but haven't really followed through. We went over budget things 2 weeks ago, and we decided one small but big thing we could stop was our coffee stops. They are often. Many times a week, both of us. So, we did. We haven't gone since...and that will be about $150 savings a month! Nuts, right? For coffee.

It's nice to read about other people who are struggling, too...as unhappy of a situation as that is. It's nice to know we CAN survive without that 20% off AE top (because I'm with you there), etc. if we really just knock it off.

Way to go on sticking with it!

Unknown said...

Way to go, girl. Proud of you and your family for being so responsible with money. That's quite rare these days.

I believe in tithing wholeheartedly. Ever since our New York trip in May we've been strugging to get ahead so we've been putting that on the back burner. Which I hate! Up until this point, we've done 10% every paycheck and I really believe God blesses those sacrifices [although that's certainly not the motivation to do it!] Keep it up! :)

Kait said...

I don't comment often, but I hop over from Mere's blog and read all the time :)

We recently (this month) switched over to a cash system. We have done it before, but always had a hard time sticking to it. My husband is looking at getting out of the military in the next year and we are hoping to have a nice savings built up. It's nice to read about someone else doing the cash system and succeeding with it!

Also, can I please just say I wish we could buy enough groceries for a week with $70. Our grocery prices are through the roof here right now!

Mrs. Lukie said...

It IS so worth it. It was really difficult for us while we were going through the baby steps, but looking back? Being debt free and now paying down our mortgage is the most freeing, amazing feeling ever.

With baby on the way, we are having to analyze our budget and change a few things up (like, starting a college fund for Baby L, which will take some of the money away from paying down our mortgage), but again--all worth it.

Proud of you guys for sticking to your guns. We got crazy looks & comments from friends & family when we first started, but now that we're debt free, no one says a dang thing!

Samantha said...

We don't do all cash (we use our credit cards for everything to get the free rewards cash & pay it off in full monthly) but we do have a very detailed budget.

It's super important for us to stick to it because we are hoping to have the cash on hand in 2.5 years to complete an addition to our house.. so that we can then have kids and I can stay home.

While it is SO hard right now to not go out and go on shopping sprees, movies, eating out, etc. all of the time, especially knowing that we DO have the money, I have to keep reminding myself that it will be worth it in a few years. But dang, sometimes it is just so hard to not be jealous of other people.

It is exciting for you guys that you are still working on this! I see SO many people around my age who just blow through credit cards, etc and spend so much more than they make in order to keep up with their wants, that they are just screwing themselves in the future. It seems so immature that they don't think ahead. You are doing it!!!

Sara said...

I wish I could convince my husband to do this with me. Y'all are a great example.

Sarah said...

This is too funny. I was just over at Dave's website looking up how to budget and use envelopes. I switched back over to my Google Reader and saw your post in my queue!!!

Thanks for writing about this. It gives me courage to go for it and deal with the feelings of withdrawal that I know will come!!

God bless.


Leslie G said...

It's really encouraging to see that you have budgeted money for tithe. Usually when people are short on money, they quit giving, because their bills have to be paid. God will most certainly bless you and take care of you for honoring Him with your tithe, Leah!

Lindey said...

I've never commented on a blog before but I do read yours almost every day. I can't remember how I found it but I love your honesty.

My husband and I have been on the Dave Ramsey plan for the past 4 years and just finished Baby Step 2 last month. We came out of college with over 80K in student loans and knew we needed to pay them off as fast as possible.

The past 4 years have been hard but coming out on the other side I see how God has blessed us beyond what we could imagine.

All this to say, hang in there and it will all be worth it. You and your family are an inspiration and you are honoring God in every aspect of your life, even the hard ones.

PS: Agreed, Aldi is a budgeting girl's best friend!

DianeTaylor said...

Hi Leah - thanks for sharing your breakdown with us. I hope I didn't offend you in your last post about Dave Ramsey's FPU principals. What I admire MOST is that you and Tony are ON THE SAME PAGE! That is half the battle - and most of the time I am on one page (the save-save-save page) and my other half is on a different page (spend-spend-spend). So counter-productive! You inspire us all to strive for this by working together instead of against each other.


leah @maritalbless said...

Thank you so much for all of your comments! They are so encouraging!

Diane, don't you worry! You definitely didn't and have yet to offend me, ever. :)

Meredith said...

We aren't 100% there yet, but we are getting a LOT better than we have been about managing our money...but one of the hardest things for us is that Justin not only works hourly, but part of his paycheck is commission based, so it changes from month to month.

For us though, the biggest thing has been learning how to say no...or rather, "It just isn't in our budget to go out to dinner, but we'd love for you to come over and have taco night with us instead!"

Meredith said...

Oh, and PS- we shop with a calculator too. And also, I requested Total Money Makeover from the library right after your last Dave Ramsay post :)

Bree said...

I have to give my husband most of the credit for our financials. I was raised with money responsibility and have to credit my parents, but my husband is the one who has changed my views. We do have one credit card that we use to earn cash back but pay it in full each month. We never spend more than we have. I give him most of the credit for us being where we are even with me spending most of a year unemployed. We were able to make it work and not have to borrow money use credit cards to make ends meet. Now, even though we have two incomes again, we have learned what we can live without and we both have a hard time justifying the splurges (i.e movies, dinners out, unnecessary clothing for me :) ). We still treat ourselves from time to time, but there is definitely an analysis of their necessity.

Anonymous said...

Awesome. We do the same EXCEPT we don't pay cash for gas because who wants to walk inside? Twice if you need change.? Super annoying, so we budget it, but yah.


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