Dave Ramsey Recap weeks 3 and 4.
Feb 25, 2016 11:16:23 GMT -5
Post by jessiespano on Feb 25, 2016 11:16:23 GMT -5
Sorry I'm behind. My baby is going through an attachment phase and its damn near impossible to put him down.
Ok.
Week 3. Cash flow planning.
So this week covered the importance of doing a budget. If you aren't doing a budget, your money just leaves. You need to tell your money what to do.
Overdrafts are a sign of crisis living. So you need to budget down to the dollar.
A cash flow plan (budget) won't work if you leave things out, overcomplicate the plan, don't do one, and don't actually live on it.
You first need to take care of the four walls: food, shelter, basic clothing, and transportation and utilities. Take care of those before you take care of anything else.
A written plan can remove money fights from couples, remove guilt, fear and shame that go with buying necessities, will show if you are overspending in certain areas, and will give you a sense of control.
The easiest and most powerful plan is a zero based budget (budgeting to the dollar) using the envelope system.
The idea is paying for things in cash makes you actually feel the spending, whereas using a debit or credit card does not.
Good places to use the envelope system:
Food (ALL food. Groceries, eating out, coffee runs, etc)
clothing
entertainment.
Its important to give both partners a spending allowance in an envelope. This is no questions asked money. Each person can do whatever they want with it- it gives each person a sense of control and not like the other person is controlling them.
You need to do a budget every month, and hold a budget meeting in your house 2-4 times a month.
Week 4. Dumping Debt.
This was a long video and I had to leave at the beginning to take H to the ER. I watched it alone while taking care of both kids later.
It was mostly about dumping credit myths. Essentially- don't ever use a credit card. You don't need a FICO score- this is basically a scorecard of your debt. If you are paying cash (or using a debit card) you don't ever need a score. Ramsey is against debt consolidation, because many people consolidate, and then accrue new debts on the side. I get it, but consolidation is still something we are looking into.
His big steps to get out of debt are:
Stop borrowing money
save money
sell things to make money
get a part time job or overtime
(pray).
Then we filled out our debt snowball. You are supposed to start with the smallest balance regardless of interest. When that's paid off, (and you should have a garage sale, get another job, etc to jumpstart that) you roll that minimum payment over to the next smallest debt. Then so on and so forth. We are actually going to start with our second smallest debt because the interest on that is SO high. Our tax refund will take care of most of it. And honestly, our car payment has such low interest that it will shift places through this process at some point.
So that's basically it. If anyone ever has questions feel free to ask!
Ok.
Week 3. Cash flow planning.
So this week covered the importance of doing a budget. If you aren't doing a budget, your money just leaves. You need to tell your money what to do.
Overdrafts are a sign of crisis living. So you need to budget down to the dollar.
A cash flow plan (budget) won't work if you leave things out, overcomplicate the plan, don't do one, and don't actually live on it.
You first need to take care of the four walls: food, shelter, basic clothing, and transportation and utilities. Take care of those before you take care of anything else.
A written plan can remove money fights from couples, remove guilt, fear and shame that go with buying necessities, will show if you are overspending in certain areas, and will give you a sense of control.
The easiest and most powerful plan is a zero based budget (budgeting to the dollar) using the envelope system.
The idea is paying for things in cash makes you actually feel the spending, whereas using a debit or credit card does not.
Good places to use the envelope system:
Food (ALL food. Groceries, eating out, coffee runs, etc)
clothing
entertainment.
Its important to give both partners a spending allowance in an envelope. This is no questions asked money. Each person can do whatever they want with it- it gives each person a sense of control and not like the other person is controlling them.
You need to do a budget every month, and hold a budget meeting in your house 2-4 times a month.
Week 4. Dumping Debt.
This was a long video and I had to leave at the beginning to take H to the ER. I watched it alone while taking care of both kids later.
It was mostly about dumping credit myths. Essentially- don't ever use a credit card. You don't need a FICO score- this is basically a scorecard of your debt. If you are paying cash (or using a debit card) you don't ever need a score. Ramsey is against debt consolidation, because many people consolidate, and then accrue new debts on the side. I get it, but consolidation is still something we are looking into.
His big steps to get out of debt are:
Stop borrowing money
save money
sell things to make money
get a part time job or overtime
(pray).
Then we filled out our debt snowball. You are supposed to start with the smallest balance regardless of interest. When that's paid off, (and you should have a garage sale, get another job, etc to jumpstart that) you roll that minimum payment over to the next smallest debt. Then so on and so forth. We are actually going to start with our second smallest debt because the interest on that is SO high. Our tax refund will take care of most of it. And honestly, our car payment has such low interest that it will shift places through this process at some point.
So that's basically it. If anyone ever has questions feel free to ask!
