We are finishing up our first month on “the Dave Ramsey plan.” If you are not familiar with Dave Ramsey, he recommends using a “cash only” system. We actually started taking the Financial Peace University class at a local church about six weeks ago, but we went to a cash based system at the beginning of April.
At the beginning of the month, we put together a budget and funded envelopes for the following categories (I’m sharing our categories because some people have asked about it): restaurants, groceries, clothing, babysitter, miscellaneous/toiletries, gifts, pet care, entertainment, auto care/maintenance, medical co-pays/prescriptions, lawn care, “blow money” (money each of us gets to spend, no questions asked). All of our other bills were paid out of our checking account. We decided that I would continue to use the debit card for gas for convenience sake (it’s not like you can really impulse buy/overspend at the gas station unless you go inside). My husband gets reimbursed for gas and work-related expenses and this fluctuates from month to month. We weren’t sure how to handle that, so we went to Dave’s site and read up on it and he recommends creating an expense account where you deposit your monthly expense check. We actually had a checking account that we had opened when we were first married but don’t really use anymore, so he has been using that for his business-related expenses and it has worked out beautifully!
Last night, we were talking about our budget for May and going through all of our envelopes and we realized that we had $78 in cash left. This may not seem like that big of a deal to some, but for us it was huge. In his class, Dave Ramsey talks about how people tend to spend 12-18% more when they are using plastic, even if it is a debit card, and I guess he was right! We were a lot more conscientious about our spending when we were using cash.
We were also able to pay off 5 credit cards in full this month, which was a great feeling.
The best part is that there has been so much peace in our home!
I have read several Dave Ramsey books, but taking the class has made such a difference. We paid $99 for a 13 week class which also includes child care and my husband and I both agree that it was money that was well spent. You can also buy the “kit” and do it from home, but I think that doing it with a group of people makes a huge difference. To find out if there are classes in your area, click here. In case you’re wondering, I get nothing for “endorsing” this program, but I believe in it and I’m so grateful for all of the changes that it has brought into our home after just one month!