Dave Ramsey- You should try it!

shofar

Sun, Jul 28 2019, 11:07 pm

If this helps anyone it's worth it. With the post all about people not knowing how to budget and manage their money, this is a great system. Basically envelope budgeting, no credit cards, but you can use a debit card or check. https://www.daveramsey.com/fpu#in-progress=0
There's a great app that goes with it. It's well worth the $130 a year with the amount of money you can save and how much debt you can pay off. Definitely a mindset adjustment but it's actually exciting once you get the hang of it.

amother

Smokey

Sun, Jul 28 2019, 11:32 pm

I used to listen to him on the radio all the time, many years ago. His deep voice going on and on about beans and rice, rice and beans. I loved it. I still remember the callers squealing “we're debt free!” Back then I was quite smug that it won’t ever happen to me. I was practically raised with the envelope system since childhood and was great at budgeting and not spending more than we have.

Fast forward 10 years and I recently found out my dh business went completely bankrupt. Our savings are gone and he has major credit card debt. This all happened behind my back and It was like the proverbial rug that has been pulled out from under my feet. So, I don’t know if this is feasible for us now that income is almost nonexistent but praying it turns better real soon and I can go back to this.

Florake

Mon, Jul 29 2019, 1:29 am

To A Mother; Can I ask, how you were "budgeting" when you really didn't know what your income or debts actually were?
We're you budgeting alone or with your dh? Didn't you check your savings balance and credit card statements? How did your dh hide all this from you?

baby12x

Mon, Jul 29 2019, 4:54 am

Yes- I have a strict budget every month. Its based on the Dave Ramsey plan and I call it the Modern Envelope System because I don't do physical envelopes but use different bank accounts.

I put aside maaser money every paycheck and then I can give larger amounts when needed because it's already set aside.

I also put a portion away for yom tov every month so when yom tov comes around I have a nice amount put away. I also put "extra" money in that account so for example some of our tax refund or bonuses etc. That way, even though we are "poor" and live on a tight budget we were able to make pesach this year with no debt! (It was very exciting). It takes a whole year of budgeting to make sure that yomim tovim aren't breaking the bank. You can't start budgeting in September for sukkos.

I wrote more about it here: https://adimesaved.com/budgeti.....ystem

amother

Aquamarine

Mon, Jul 29 2019, 6:39 am

A great alternative is Mesila. They are geared to Jewish life and its unique budgeting needs such as the yom tovim.

I have taught this system with great success.

amother

Chocolate

Mon, Jul 29 2019, 9:42 am

I've started doing a modified Dave Ramsey system 5 months ago. I still use CCs, but otherwise created a budget (shared spreadsheet), am following the baby steps. We've paid off one car loan 2 years early, and were able to save for my son's bris, and the insurance deductible without much stress, just more awareness and focus.

Hope to tackle the other car loan, and my husband's student loan debt (which is due soon) with more aggression. It's really empowering!

amother

Wine

Mon, Jul 29 2019, 11:45 pm

What happens if LIFE happens, and you don't have the means? How does budgeting come in?
In other words, the expenses are greater than the income.
Though we don't have much income, we need to pay for Shabbos, Yom Tov, Kids expenses...

There's no way Bderech Hateva we can make this work on paper. But life continues.
Without luxuries, The only way to do it is by using credit cards, paying back with another, than repaying this one with the first card...
There's no budget when the outgoing is more than the incoming. Just to live...

amother

Amber

Tue, Jul 30 2019, 12:04 am

I agree, wine. When you sit down with a pen and paper and realize that your expenses are approximately double your income you know you're in trouble.

baby12x

Tue, Jul 30 2019, 3:26 am

amother [ Amber ] wrote:

I agree, wine. When you sit down with a pen and paper and realize that your expenses are approximately double your income you know you're in trouble.

Once you realize what the real numbers are then you can figure out a plan of action to make that difference smaller and smaller.
You can lower expenses or raise your income.

You work on getting that number closer and closer so its as small as possible.

Paying down debt is usually a good start and good way to free up some money.

Figuring out how to make extra money and then PURPOSEFULLY and MINDFULLY spending or saving it can do wonders for your budgeting, debt repayment or savings.

amother

Purple

Tue, Jul 30 2019, 12:44 pm

Just curious to know how you'd deal with this one:

$70K income on a good year

(Numbers below are on the low end, winter heating is higher usually, food can be more etc.)
$2400 rent and utilities
$1000 food (family of 10+)
$450 transportation
$450 credit card payments ($15K debt over many years)
$275 business expenses
$250 miscellaneous

That's $58k BEFORE Yomim Tovim, emergency expenses, or the biggie - tuition.

Sure, in theory we could move somewhere else where salaries are higher and maybe tuition is lower, but that usually comes with a significantly increased cost of living. (Find a house in Brooklyn for a family our size for $2400 after utilities!)

DH works, I do some things part time (childcare would make me working very expensive).

How do we survive? Not sure, to be honest. But although I tried using Ramsey's system and others, I can't get the numbers to add up.

amother

Maroon

Tue, Jul 30 2019, 12:47 pm

amother [ Purple ] wrote:

Just curious to know how you'd deal with this one:

$70K income on a good year

$2400 rent and utilities
$1000 food (family of 10+)
$450 transportation
$450 credit card payments ($15K debt over many years)
$275 business expenses
$250 miscellaneous

That's $58k BEFORE Yomim Tovim, emergency expenses, or the biggie - tuition.

Sure, in theory we could move somewhere else where salaries are higher and maybe tuition is lower, but that usually comes with a significant increased cost of living. (Find a house in Brooklyn for a family our size for $2400 after utilities!)

You don't mention special circumstances. But generally, a two income household should have the ability to pull in quite a bit more than 70k in a good year.

amother

Pewter

Tue, Jul 30 2019, 12:57 pm

Same question here! If my expenses are more than my income Sad

At this point my DH is not working (incapacitated) suddenly. Prior to that he had been bringing in approx 80K income. I have 3 small children and besides tending to my dh hand and foot I am working a 9-5 job for 40K annually. We are slowly building up more CC debt. Its terrible watching it happen but I am not sure if there something I can do about it.

I am not sure how budgeting can help.

Though I would sure love any ideas.

baby12x

Tue, Jul 30 2019, 2:18 pm

I was very struck by these questions and it inspired me to write about why its a good to budget even if your expenses exceed your income.

Basically its about being in control and having a specific goal in mind.

There is no magic wand and budgeting won't solve all your problems but it can help you take control

I'll be putting a blog post up about it soon

stillnewlywed

Tue, Jul 30 2019, 2:52 pm

amother [ Purple ] wrote:

Are you both working?

amother

Pewter

Sat, Aug 03 2019, 9:50 pm

baby12x wrote:

As promised: https://adimesaved.com/how-to-.....ncome

Thank you so much for this! Even though I know all this I needed to hear it.

HonesttoGod

Sun, Aug 04 2019, 2:00 pm

Budgeting helps in all the above crazy situations because you KNOW what is happening. You KNOW how much is coming in, how much is going out, what you're missing etc.

Knowledge is power.
I do an adapted version of Dave Ramsey, I paid off all my debt and I am in control of my finances now and I love it.
You don't even have to pay for the premium version of the every dollar app. It is free for the basic and teh basic is plenty. Jsut input your transactions manually.

baby12x

Sun, Aug 04 2019, 2:29 pm

amother [ Pewter ] wrote:

Thank you so much for this! Even though I know all this I needed to hear it.

I get it. Sometimes it is so hard and its so tempting to throw in the towel and just say, does it even matter? I might as well give up.

It helps to have a plan and a goal. It keeps me motivated.

amother

Forestgreen

Sun, Aug 04 2019, 2:31 pm

I always budgeted my entire life, while I didnt use physical envelopes...it was in my head how I was dividing the $...and I always put "extra" away for wen we have ubexpected expenses or less income.

I always budgeted bec I grew up very poor. I had to work young and had to budget to spend on needs.

My dh didnt learn this. He says he grew up poor because he couldnt buy everytging he wanted....

But, to me, dave ramseys ideas ...are obvious and thats one thing im grateful for from my challenging life.

However, I agree with others that ppl who have more expenses than income cant "just get more income" as a lot of ppl are "working to their max" like my dh who works 3 jobs and does some childcare while I work long hrs in one job.

So, budgeting is important but its not always going to give ppl the breather ppl need.

ibelongtosomebody

Sun, Aug 04 2019, 2:48 pm

How can I implement the 'envelope' system with my checking accounts? Is there a way to have, say, 10 linked checking accounts? 1 groceries, 1 clothes, 1 bills, etc.? Anyone have any suggestions?