Implementing the Plan (IV)

Kadie and I had to make several changes to how we approached our finances. But the first thing we had to do was simply to pay attention. Due to our exceptional fiscal laziness, we had not kept good track of our finances. Here’s one example: When I started my current job, I was given the choice of receiving my pay over the course of twelve months or over the course of nine. We chose twelve months…or at least we thought we did. Actually we were being paid over nine months but didn’t even realize it. So when February rolled around I suddenly realized that my pay would end in another two months. I grew concerned that our kids would start getting hungry after that last paycheck.

Fortunately, due to summer school and Kadie picking up some extra shifts, we survived. That story is but one account of our inattention to our finances. Miraculously we survived, but have never felt any sense of financial stability. We realized that we initially needed to follow two suggestions of Ramsey.

First: the dreaded budget. We sat down and worked out a budget. Actually, Kadie wrote out the budget and then we went over it. Ramsey suggests that one spouse is usually more detail oriented than the other…he refers to them as the nerd. Kadie was a math major before she transferred to nursing school, so we each felt comfortable with her crunching the numbers.

As noted earlier, I am what Ramsey refers to as the free spirit, not often bound by details. But the free spirit has to make a change in the budget. That gives us ownership in the budget too. So I made a small change and we had our first budget.

Our second choice was to go with the envelope system. This is a collection of envelopes into which you divide up things that you normally pay cash for. In our case we established envelopes for entertainment, grocery, clothes, allowance for the kids, and gifts. We then placed a certain amount of cash in each envelope after every paycheck. When the envelope is empty…well, that’s it until you get paid again. The kids (and our friends!) have gotten used to us declining dining invitations with “Sorry, we’d love to but the envelope is empty!” I particularly found this helpful as a visual reminder that money is limited. It hurts more to pay with cash than it does to pay with a credit or debit card. More than anything else, this has forced us to live within our means.

Next: Our debts!!