Guest Post by Drew Bennett of BenSpark.com
My wife Allison and I have debt. We’ve been under the thumb of the credit world for some time now. The thing is, we put ourselves there by living beyond our means. We knew it as we were doing it but we had credit cards and we weren’t near the balances. We paid the cards every single month, we even paid way more than the minimum. The thing is that as we continued to use the credit cards we sank deeper into debt and the hold on us was so enticing.
About a year ago a good friend of mine lent me two Dave Ramsey books. Financial Peace and the Total Money Makeover. I read through the books and was ready to cut up all the cards and dive right in. Allison was not ready. I tried to get her to read the book with me. I read it out loud and she read it out loud and we got through the first baby step, a $1,000.00 emergency fund. That is as far as we got on our own. Talking about money is very hard for us. Our talks about money usually resulted in me getting mad and Allison crying and leaving the room because she felt that if we had money problems the repo men were coming within the hour. Not so, but I couldn’t talk about the issue without this result.
That brings us to three weeks ago. We started going to Financial Peace University at our local church. The suggestion was actually Allison’s and I readily agreed. The great thing about this setting was that there was a large group of people who were in the same boat or in a worse off boat. I look around the room and see that we are probably the youngest couple in the program and that felt good because we are starting to get control of our money early. If we can do that we can really change our life and the life of our family.
So, we started the month of February using the Envelope System. The Envelope System is where you take cash, but it into envelopes, label it for things like food, gas, dining out and blow. We are to pay for our daily items for one month using only the money in those envelopes. Is it time for a freak out yet? We’d been buying groceries, gas and dining out on our credit cards over and over so how could we manage this with straight cash. We had to set up a cash flow plan (fancy, not so scary way of saying budget). By creating the budget we were able to direct where our money should go based upon what we think we spend each month.
It is February 8th and our $500 for groceries is now $62. Now before you go getting shocked we did some planning ahead. Allison set up a meal plan for the month. We did a huge shopping at BJs and stocked up for meats and other things for our month of meals. We also picked up some of our major paper goods and the huge box of diapers. Our weekly trips to the grocery store are for lunches, vegetables and other things that won’t last the month.
Am I worried that 8 days into the month we are at $62? Yes. However, this is our first month doing this cash flow plan. We may have over budgeted in another area and so we can adjust the budget mid month or any time we want, it is our budget we tell the money where to go. I’m giving us permission to make mistakes and learn from them this month and every month coming. We are learning how to become debt free and we got ourselves into debt one day at a time, we’ll get ourselves out the same way. There will be mistakes, plenty of them but at least with some advanced planning we can minimize the impact financially that these mistakes will make in our life.
Are you giving yourself permission to fail?
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