Thursday, January 17, 2013

A little about how I do what I do with our money

Hi all--
After my post the other day I got to thinking maybe someone out there somewhere would be interested in how (more detailed how) I've been making changes in our home to help save money and pay off debt.
So, today's post will be about our budget. A couple of strategies (if that's the right word) we are currently using are from a course I took several years ago through our old church in WA, it was Dave Ramsey's Financial Peace University. The pieces we are mainly using are trying to budget for anything we are spending money on. The idea is that most "surprise" expenses aren't a surprise at all. For example, we didn't used to budget for dog food but every month we buy it or we didn't have a real plan for sports or school photos but they aren't surprises, we knew they were coming. So now, we track where our money is going and budget accordingly for these expenses.
Another piece of Dave Ramsey's course is to start by getting money in your savings for emergencies so that you aren't struggling when those emergencies/unexpected expenses to come up. His course recommends $1,000 in that fund at all times while you're working on paying debt down.
After completing the emergency fund our goals are set on paying some debt down as fast as possible. Dave Ramsey's course talks about snowballing debt starting with the smallest first and then rolling those payments into the larger ones as you get them paid off. Our debt is a little different because we have a few that are small but aren't gaining interest and the larger ones are so we have decided to start with one that is costing us a lot extra in interest/penalties and then when that's paid we can focus on the smallest to the largest from there.
Another Dave Ramsey principal (looks like we are following his guidelines more than I realized!) is to budget to 0, if your bills and expenses are all accounted for and you have $5 extra at the end of the month it shouldn't get spent but paid toward whatever you are working toward getting done. This one is hard for me and I am working on it, my instincts want a cushion in our account and if we have extra I want to spend it! Gotta keep your eye on the prize. My prize is being able to be an at home mom and I just keep telling myself that's what my hard work is for.
Here is an example I found online that is similar to how we budget...

I have also started utilizing our online banking bill pay option and a free website called that helps you budget and categorize your expenses easily. Another Dave Ramsey principal is to use cash. I do use cash for our groceries but using cash for everything in our family isn't doable. But this is helpful to be aware of what you have and not using more than that. I think that covers our budgeting, if you have questions don't hesitate to ask. I'd be happy to help anyone else trying to make the same changes we are! I'm not sure what the next post will be about, maybe how our meal planning is going and saving us money.
Thanks for reading!

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