Monday, October 6, 2008

a piece of financial peace

Are you familiar with Dave Ramsey? He's the Financial Peace guy, with a plan for your budget that will whip your finances into shape, as long as you follow the plan. Sounds like my weight-loss plan. It'll work, as long as I follow it. Following it is the hard part.

Well, a couple of years ago we attended a several week long small group thing, and we worked through this presentation of the Dave Ramsey program. It is amazing when you stop and evaluate how you are spending the money you have coming in.

It actually is quite similar to the non-profit Consumer Credit Counseling Service that I used years ago, except that you are completely responsible for the payments. With the CCCS, they negotiated payments, reduced interest, and you had to send your monthly payment to them. With the DR program, you learn how to do that for yourself.

The goal is to get out of debt, and to be able to use cash for your future purchases. The program spells out bite sized steps you can take in order to get your spending and your budget in line.

We've been working on getting the plan in place for some time, and it's all down in black and white, now. Hooray! It's going to be much tougher for me than it is for my honey, though. He is so...strict? rigid? opposite of me? ...what nice word can I use...disciplined? methodical?-- about how he tackles these things.

Well, it's all for the best, especially in uncertain economic times. It's best to keep whittling away at that debt. The trouble with that is that it seems like NO ONE ELSE is doing it. Everything you see and hear is about buy it now. Have it tomorrow. Ninety days same as cash...take it home tonight.

What happened to saving up for things, and living within your means? Apparently the government has been listening to all that marketing hype, too, because look at the fix they're in. Balanced budget? Ha! What's that?

We decided to eliminate cable for now, to help balance our own when my honey went to the local office of the cable company, they asked him why he was cancelling the service. "Eight years of Republican government," he told them. The lady behind the counter said she knew exactly what he meant.


Crazy Daisy said...

LOVE his answer to why canceling the cable :) So perfect!

Faith said...

ah, Dave Ramsey. I have been reading his website and we are going to do his 7 step plan. We have quite a bit of credit card debt (just been irresponsible and living beyond our means) and we thought about doing the CCCS but I heard that it wrecks your credit score and Dave does not recommend it. Hopefully we can stick to the plan. I like the envelope plan too where you take out the money and put it in envelopes and when its gone, its gone. We usually overspend at the grocery store, I check out and faint when she says the amount due, yikes! And then the little trips to the store to pick up a pop, candy bar, gum, whatever adds up real quick.

But yah, they have made it too easy for you to charge stuff. When we got our house we charged alot, stove, refrigerator, microwave, lawn mower, dishwasher, you name it. We needed it though, that was the problem, but there were plenty of things we did not need that got charged too. Darn cards, they are getting cut up!

Now we got daycare, baby food, diapers to pay for as well, aahhhgg it never ends!

daisy said...

I think it's a very practical (and realistic) plan. It's not like going on a 800 calorie diet and you can't buy anything at all. It's about balance, and accountability.

It's like, here is where you are already spending your money. Let's write it down. Commit to this. Discipline yourself to plan your spending instead.

I'm really excited about it. It's amazing how many times we find ourselves getting ready to say, "We could use the credit card." No we can't. We paid it off and cut it up! No more.

katemcdonald said...

had to laugh at that last comment. Everyone is talking about Dave Ramsey..I have one book..I used to think he was (too) extreme- now he seems just smart

Norah said...

I've heard the name but didn't think about him very much until recently -- he has/had some very good, common sense suggestions for the bailout. I don't know if those steps were included in the plan that was passed or not... but his name comes up a lot now!

I've used various plans through the years, including the envelope plan :-). I think we are going to need to get more disciplined about spending again. Kids are grown so we let up a bit, but it's time to tighten up again now, methinks.

karen said...

Timely post ... I've been struggling with debt for some time now. I just joined a "Poverty Party," Daisy! Let me know if you want details. We're making drastic changes too - it's comforting to know others are in the same boat. Makes me feel like there's hope that I'll conquer this monkey on my back some day! Thank you for being brave and sharing!