Let me start off by telling you that only a couple years ago, I was a financial mess. I had no idea how to handle money, let alone keep track of my spending. My husband and I somehow got by. I paid bills when they came in, often forgetting some of them, and spent money on an 'as needed’ basis. I didn't save for the future or plan for my retirement. I was just unaware the effects that my oblivious spending would have on me later on, and I know I was not alone in my thinking. I’m going to tell you how the Dave Ramsey Plan helped me.
Going from Two Incomes to One Required Me to Start Paying Attention to Our Finances
After having children I wanted to be a stay at home mom more than anything, and at any cost. Although, I didn't even consider how hard it was going to be going from two incomes to one. My husband was a great provider, but I was clueless when it came to finances and I had no idea how to decrease our debt. My husband always said I was in the “want it now” generation, he was right, I wanted it now and I wanted to pay for it later.
One afternoon my husband was watching a show on the Fox Business channel. He asked me to join him and said it was really interesting. I didn't really have any interest in financial shows but I liked the way it was set up, and I started to relate to some of the callers that were calling in. The show was called The Dave Ramsey Show.
It wasn't long before I was watching the show daily and enjoying it very much. I still wasn't sure exactly what to do about implementing the Dave Ramsey Plan into my life, but I did love the idea. I learned more about his plan every time I watched and eventually I ended up reading his book. It literally changed my life and my views on money.
Don't Let Money Control You
One of my favorite parts about the plan was taking charge over my money. The way my husband and I were living money was controlling us, paycheck to paycheck. It wasn't until I started the Dave Ramsey plan that I felt in control of my money and my life again.
I Started to Immediately Cut Back on My Expenses.
I switched down to basic cable, we didn't really need much more anyways, and I was able to bargain a promotion for that. We got rid of expenses we no longer needed, subscriptions we weren't using and things that were not necessary in our lives. I admit that it was hard, really hard, to let go of some of the things I enjoyed but I decided that getting a good grasp on our finances and our financial future was more important to me. So I said goodbye to manicures, eating lunch out, buying my kids every new toy, the new car, the new cell phone and the new couches I thought I needed. Things started to become a little clearer when I saw how much money I was saving. All these things that brought me excitement for a short amount of time, were costing me for long amount of time. If I bought the couches on credit I would most likely want new ones before these were even paid off. I needed to re-evaluate what was really important in my life.
This Really Helped My Marriage.
One of the number one reasons for arguments in any marriage is finances. A great part of this plan is writing out a monthly budget. At the beginning of every month my husband and I sit down and write out all of our expenses. This helps us both understand how much money we have (or don't have) for the month, and we both can clearly see where it is going. There is no longer a reason for us to argue about money because we are both very aware of our incoming and outgoing money.
How the Snowball Helps you to Pay off Debt
Dave Ramsey has a different view on paying off debt than the average debt consultant. It has always been advised to pay off the debt with the highest interest rate first. The Dave Ramsey plan has you write out all of your debt and apply any and all extra funds to the debt where you owe the smallest amount. The reason this plan is so successful is that you build up momentum each time you pay off a debt.
Use Cash For Everything
The envelope system is fantastic. Basically, you give yourself a designated amount of money for expenses such as groceries, gas, eating out, etc. once that money runs out that is the end of it. I make out three evnelopes every month, each holds a different set of cash; groceries, eating out and gas. I make a strict rule not to spend anything over this amount. Somehow carrying cash is a wake-up call as to how much money I actually have. Counting out the remainder of my grocery money for the month helps me to be a much better planner.
Saving for our Future
Even on one income my husband and I have been contributing to our 401K monthly, with a substantial amount. I now realize the importance of saving for our retirement. Of course there are some things we will have to do without, but our dreams for retirement are much more important than those short term thrills.
The Plan Really Works
When you really look at the Dave Ramsey Plan you realize it’s common sense, something everyone should know, but sometimes we need things laid out for us in an easy to follow plan. This plan works, because I am living proof. My husband and I don't have car payments, we are on pace to paying off our house early, saving for retirement and building a college fund for our children. All on one income that has been furloughed three times now.