Some of our current threads have me wondering how many people keep a budget?
If you do keep one, does it work for you? How do you run it?
If you don't keep one, why not? What problems have you had trying to keep a budget?
Budgets
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A Karenina
- Posts: 968
- Joined: Thu Oct 14, 2004 8:36 am
Budgets
We are what we repeatedly do. Excellence, then, is not an act but a habit.
Aristotle
Aristotle
Budgets
Ooh Ooh...Hey!!! My sister keeps a budget since her divorce, she started listening to Dave Ramsey on the radio and then bought his book. Following his prgroam, she paid off $24,000 of marital debt in 16 months. Her only debt now is the note on her house. She's a single mom who makes less than $40,000 a year. (She'll probably shoot me for posting that, but it's so cool what she's accomplished that I don't care!!)
Are you on a budget, AK? I need to be but since I have no Friggin' JOB, it seems kinda pointless right now. :yh_rotfl
Are you on a budget, AK? I need to be but since I have no Friggin' JOB, it seems kinda pointless right now. :yh_rotfl
[FONT=Arial Black]I hope you cherish this sweet way of life, and I hope you know that it comes with a price.
~Darrel Worley~
[/FONT]
Bullet's trial was a farce. Can I get an AMEN?????
We won't be punished for our sins, but BY them.
~Darrel Worley~
[/FONT]
Bullet's trial was a farce. Can I get an AMEN?????
We won't be punished for our sins, but BY them.
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A Karenina
- Posts: 968
- Joined: Thu Oct 14, 2004 8:36 am
Budgets
Congratulations to your sister!!! 
And I won't even nag you that now is when you need a budget the most.
Yeah, I'm on a budget, though lately it's highly fluid, meaning I'm spending aimlessly and will regret it the next few months. LOL
Do you have any tips that your sister passed on to you? What worked for her, and how did she stick to it?
And I won't even nag you that now is when you need a budget the most. Yeah, I'm on a budget, though lately it's highly fluid, meaning I'm spending aimlessly and will regret it the next few months. LOL
Do you have any tips that your sister passed on to you? What worked for her, and how did she stick to it?
We are what we repeatedly do. Excellence, then, is not an act but a habit.
Aristotle
Aristotle
Budgets
You're right about needing a budget myself, and I guess I am on one of sorts. It's the "Don't spend ANY money whatsoever" budget.
The plan she followed was pretty simple, I guess, every penny she made was earmarked for a specific area. Right down to lunch money for her son, and of course, savings. She took the biggest bill, and threw money at that until it was paid off, then the next biggest bill, and the next and so forth. She had an envelope system for the small stuff, (her entertainment, her son's lunches, etc...) and when the cash from that envelope was gone, there was no more cash for that area till she got paid again. I don't pretend to understand the whole thing, but she could tell you better. She's been in here before, and I'll see if she wants to jump in and explain her system.
She was on the radio last week for getting through the program. Dave Ramsey has a show where his "clients" call in after getting out of debt, and tell folks how they did it, how long it took, how much they paid off and so forth. It was really cool, she got to shout out over the radio; "I'M DEBT FREE!!!!" It was awesome.
I'll see if I can find a link for this guy if you're interested, AK. ((((((((AK)))))))))
The plan she followed was pretty simple, I guess, every penny she made was earmarked for a specific area. Right down to lunch money for her son, and of course, savings. She took the biggest bill, and threw money at that until it was paid off, then the next biggest bill, and the next and so forth. She had an envelope system for the small stuff, (her entertainment, her son's lunches, etc...) and when the cash from that envelope was gone, there was no more cash for that area till she got paid again. I don't pretend to understand the whole thing, but she could tell you better. She's been in here before, and I'll see if she wants to jump in and explain her system.
She was on the radio last week for getting through the program. Dave Ramsey has a show where his "clients" call in after getting out of debt, and tell folks how they did it, how long it took, how much they paid off and so forth. It was really cool, she got to shout out over the radio; "I'M DEBT FREE!!!!" It was awesome.
I'll see if I can find a link for this guy if you're interested, AK. ((((((((AK)))))))))
[FONT=Arial Black]I hope you cherish this sweet way of life, and I hope you know that it comes with a price.
~Darrel Worley~
[/FONT]
Bullet's trial was a farce. Can I get an AMEN?????
We won't be punished for our sins, but BY them.
~Darrel Worley~
[/FONT]
Bullet's trial was a farce. Can I get an AMEN?????
We won't be punished for our sins, but BY them.
-
A Karenina
- Posts: 968
- Joined: Thu Oct 14, 2004 8:36 am
Budgets
I'd love a link! Professional interest
It's interesting to hear about the different theories. Some say pay off the largest one first. I say pay the smallest one first (especially for those with low willpower). Yet others say pay off the highest interest ones first...and they're all true, I think. Depends on the person and their situation.
I'm so impressed with your sister's story!!
One more thing very quickly before I go to work (thereby reducing my wage yet again since I'm salaried...boy, I'd be rich if I was hourly, LOL).
The cool thing about budgets is that you can really see where your dollars go. You can tackle each item one by one. Find cheaper: phone service, insurance, interest rates, groceries...wherever your money is flowing, you can attack it and Make It Stop. <~~~~ I just wanna make it stop, LOLOL
Mostly, I'm bragging today because my brain is functioning this morning. Last night I was scaring people as I worked and sang songs about little old ladies who swallowed flies.
It's interesting to hear about the different theories. Some say pay off the largest one first. I say pay the smallest one first (especially for those with low willpower). Yet others say pay off the highest interest ones first...and they're all true, I think. Depends on the person and their situation.
I'm so impressed with your sister's story!!
One more thing very quickly before I go to work (thereby reducing my wage yet again since I'm salaried...boy, I'd be rich if I was hourly, LOL).
The cool thing about budgets is that you can really see where your dollars go. You can tackle each item one by one. Find cheaper: phone service, insurance, interest rates, groceries...wherever your money is flowing, you can attack it and Make It Stop. <~~~~ I just wanna make it stop, LOLOL
Mostly, I'm bragging today because my brain is functioning this morning. Last night I was scaring people as I worked and sang songs about little old ladies who swallowed flies.
We are what we repeatedly do. Excellence, then, is not an act but a habit.
Aristotle
Aristotle
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Erinna1112
- Posts: 413
- Joined: Tue Jan 04, 2005 1:00 pm
Budgets
Hehehe...well, here's a cat about to be let out of the bag...
I am BabyRider's sister.
She talked me into coming here, and it's great! I love it. I don't get in often enough because I work full-time, I go to school full-time and I'm a single mom...but when I can, I do.
A Karenina...the link to the website run by the guy whose plan I used to get out of debt is really easy: www.daveramsey.com.
Gone (for me) are the days of trying to keep up with the Joneses. I've discovered that the Joneses are living paycheck to paycheck and don't have a dime in the bank.
Ramsey's got a seven-step, common-sense plan to get out of debt and build some real wealth. And no, you don't have to buy a tape set for three easy payments of $19.99, either.
The steps:
1. $1000 into a starter emergency fund - it's called "Murphy insurance" - you know, Murphy's law? Anything that can go wrong, will....this is a hedge against that while the debt is being attacked.
2. Pay off debts, smallest balance to largest. Forget about interest rates at this point. (BabyRider had this one teeny point a tad backwards). Line 'em up, in order, and pay minimums on everything except the smallest one. Attack the smallest one with every dime you can scrape up off the sidewalk. When the smallest one is gone, roll the money you were paying on that one in with the minimum payment on the second-smallest. As you roll up the debts, the amount gathers momentum - like a snowball rolling down a hill.
3. Beef up the emergency fund to contain 3-6 months of expenses (NOT income - expenses). For most families, this will equal about ten thousand dollars. I'm a single mom, and I have a twitchy "security gland." I am shooting for the full six months. If you're married or have some other fallback income, it can be toward the lower end of the range.
4. Invest 15% of your take-home pay into tax-sheltered retirement funding. This comes before paying down on your mortgage, because there are just way too many 70-year-old people out there with a paid-for house but no money. Not a good financial plan.
5. If you have any kids, and you want to contribute to their education, this is the step at which you start a college fund. Your own retirement comes first, though - if you pay for a college education for your kids but don't put any away for yourself, you're still going to wind up at seventy with no money, and you'll be a burden on those kids.
6. Now is when you aggressively pay down your mortgage. With no other payments, this could be huge. Mine will be paid off by the time I'm fifty.
7. Invest, build wealth, GIVE, and have FUN!!
The key here is that you do ONE THING AT A TIME. Focus on only one of the steps until you get it done. Don't do the next until the current one is finished. If you're trying to save an emergency fund, put some away for kids' college, pay down debt, and invest all at once, you're going to spin your wheels and get nowhere.
There are several sub-steps - you have to have a written budget, every month. The way I do it is to sit down at the beginning of each month, and write down where every dime of income for the month is going. Earmark every cent. This doesn't mean that it's *spent* in the month; it's just accounted for.
Included in my budget are several "sinking funds" - money set aside for irregular expenses and used when those expenses occur. I have car maintenance, car replacement (yep, they're separate), home repair, vacation, and gifts. Each of these gets a small amount each time I get paid and when the time comes to use them, the money is there.
I have every single financial thing that I possibly can set up to be automated. I have my paycheck direct-deposited. My 401(k) comes out first, of course. But my sinking funds are all automatically deducted from my checking account. Every bill I get is paid online.
You also have to commit to NEVER BORROWING AGAIN. I don't use credit cards. Don't need 'em. I quit credit cards cold turkey October 25, 2003, and won't ever do that again. I pay cash for cars. I pay cash for EVERYTHING except my house.
I have an envelope system, too, as BR mentioned. There are several categories for which I would have previously written a check or used a credit card - groceries, eating out, entertainment, clothing for me, and clothing for my son. But now I use cash, in an envelope. I have a budgeted amount for each of these categories. I pull out cash from the bank (yep, cash; nope, it's not unsafe - the purse doesn't look any different with cash than it does with credit cards) and put the budgeted amount in an envelope. Groceries includes everything I buy at the grocery store - cat supplies, cleaning supplies, toiletries, cosmetics, as well as food. When I shop in one of the categories for which I have an envelope, I use the cash in that envelope, and only the cash in that envelope. When the cash in the envelope runs out...I STOP SPENDING in that category until it's time to put more money in the envelope. This is the single best spending-control method I've ever run across.
Using this system, I did indeed dig myself out from under $24,000 in credit card, student loan, and medical debt in sixteen months, on a salary of well under the national average household income.
It's not complicated. It's not easy - it requires discipline, sacrifice, and a total change in mindset - but it's not hard to understand.
Sorry so long, but that's the entire program right there. Free of charge. If you want to read more, the guy I listen to on the radio also has several books. His name is Dave Ramsey, and the books are at any bookstore. My favorite is The Total Money Makeover, but he has one called Financial Peace Revisited that's also very good.
I am BabyRider's sister.
She talked me into coming here, and it's great! I love it. I don't get in often enough because I work full-time, I go to school full-time and I'm a single mom...but when I can, I do.
A Karenina...the link to the website run by the guy whose plan I used to get out of debt is really easy: www.daveramsey.com.
Gone (for me) are the days of trying to keep up with the Joneses. I've discovered that the Joneses are living paycheck to paycheck and don't have a dime in the bank.
Ramsey's got a seven-step, common-sense plan to get out of debt and build some real wealth. And no, you don't have to buy a tape set for three easy payments of $19.99, either.
The steps:
1. $1000 into a starter emergency fund - it's called "Murphy insurance" - you know, Murphy's law? Anything that can go wrong, will....this is a hedge against that while the debt is being attacked.
2. Pay off debts, smallest balance to largest. Forget about interest rates at this point. (BabyRider had this one teeny point a tad backwards). Line 'em up, in order, and pay minimums on everything except the smallest one. Attack the smallest one with every dime you can scrape up off the sidewalk. When the smallest one is gone, roll the money you were paying on that one in with the minimum payment on the second-smallest. As you roll up the debts, the amount gathers momentum - like a snowball rolling down a hill.
3. Beef up the emergency fund to contain 3-6 months of expenses (NOT income - expenses). For most families, this will equal about ten thousand dollars. I'm a single mom, and I have a twitchy "security gland." I am shooting for the full six months. If you're married or have some other fallback income, it can be toward the lower end of the range.
4. Invest 15% of your take-home pay into tax-sheltered retirement funding. This comes before paying down on your mortgage, because there are just way too many 70-year-old people out there with a paid-for house but no money. Not a good financial plan.
5. If you have any kids, and you want to contribute to their education, this is the step at which you start a college fund. Your own retirement comes first, though - if you pay for a college education for your kids but don't put any away for yourself, you're still going to wind up at seventy with no money, and you'll be a burden on those kids.
6. Now is when you aggressively pay down your mortgage. With no other payments, this could be huge. Mine will be paid off by the time I'm fifty.
7. Invest, build wealth, GIVE, and have FUN!!
The key here is that you do ONE THING AT A TIME. Focus on only one of the steps until you get it done. Don't do the next until the current one is finished. If you're trying to save an emergency fund, put some away for kids' college, pay down debt, and invest all at once, you're going to spin your wheels and get nowhere.
There are several sub-steps - you have to have a written budget, every month. The way I do it is to sit down at the beginning of each month, and write down where every dime of income for the month is going. Earmark every cent. This doesn't mean that it's *spent* in the month; it's just accounted for.
Included in my budget are several "sinking funds" - money set aside for irregular expenses and used when those expenses occur. I have car maintenance, car replacement (yep, they're separate), home repair, vacation, and gifts. Each of these gets a small amount each time I get paid and when the time comes to use them, the money is there.
I have every single financial thing that I possibly can set up to be automated. I have my paycheck direct-deposited. My 401(k) comes out first, of course. But my sinking funds are all automatically deducted from my checking account. Every bill I get is paid online.
You also have to commit to NEVER BORROWING AGAIN. I don't use credit cards. Don't need 'em. I quit credit cards cold turkey October 25, 2003, and won't ever do that again. I pay cash for cars. I pay cash for EVERYTHING except my house.
I have an envelope system, too, as BR mentioned. There are several categories for which I would have previously written a check or used a credit card - groceries, eating out, entertainment, clothing for me, and clothing for my son. But now I use cash, in an envelope. I have a budgeted amount for each of these categories. I pull out cash from the bank (yep, cash; nope, it's not unsafe - the purse doesn't look any different with cash than it does with credit cards) and put the budgeted amount in an envelope. Groceries includes everything I buy at the grocery store - cat supplies, cleaning supplies, toiletries, cosmetics, as well as food. When I shop in one of the categories for which I have an envelope, I use the cash in that envelope, and only the cash in that envelope. When the cash in the envelope runs out...I STOP SPENDING in that category until it's time to put more money in the envelope. This is the single best spending-control method I've ever run across.
Using this system, I did indeed dig myself out from under $24,000 in credit card, student loan, and medical debt in sixteen months, on a salary of well under the national average household income.
It's not complicated. It's not easy - it requires discipline, sacrifice, and a total change in mindset - but it's not hard to understand.
Sorry so long, but that's the entire program right there. Free of charge. If you want to read more, the guy I listen to on the radio also has several books. His name is Dave Ramsey, and the books are at any bookstore. My favorite is The Total Money Makeover, but he has one called Financial Peace Revisited that's also very good.
Do not meddle in the affairs of dragons, for you are crunchy and taste good with ketchup.
I swear by my life - and my love of it - that I will never live for the sake of another man, nor ask another man to live for mine. ~Ayn Rand
If you're not outraged, you're not paying attention.
A*M*E*N!
I swear by my life - and my love of it - that I will never live for the sake of another man, nor ask another man to live for mine. ~Ayn Rand
If you're not outraged, you're not paying attention.
A*M*E*N!
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A Karenina
- Posts: 968
- Joined: Thu Oct 14, 2004 8:36 am
Budgets
Erinna :-6 Thank you!! I've only got a minute to reply right now, but will respond in full - hopefully on Wednesday.
I love how happy you sound about this - it's very inspiring!
I love how happy you sound about this - it's very inspiring!
We are what we repeatedly do. Excellence, then, is not an act but a habit.
Aristotle
Aristotle
Budgets
A Karenina wrote: Erinna :-6 Thank you!! I've only got a minute to reply right now, but will respond in full - hopefully on Wednesday.
I love how happy you sound about this - it's very inspiring!
My thanks too I am on the financial rebound after a divorce that took everything from my children and I. I vow to be independant as the ex is most unreliable with support payments that have been court ordered. I am going to check out your link it facinates me to be managing my own funds now, albiet I have very little after all the bills but I will make it.
Your her sister Erinna well hot damn that is cool.
Hehehehe
Cheers
I love how happy you sound about this - it's very inspiring!
My thanks too I am on the financial rebound after a divorce that took everything from my children and I. I vow to be independant as the ex is most unreliable with support payments that have been court ordered. I am going to check out your link it facinates me to be managing my own funds now, albiet I have very little after all the bills but I will make it.
Your her sister Erinna well hot damn that is cool.
Hehehehe
Cheers
�You only live once, but if you do it right, once is enough.�
― Mae West
― Mae West
Budgets
I have never owned a piece of plastic in my life! I am not in debt and I am not the richest guy on the face of the earth. But I have what I have! What I could or could not say about my present state of affairs is entirely about what you want to say!