Wednesday, February 25, 2009

Financial Peace...

Worker Man and I started a Dave Ramsey class during the beginning of February and let me tell you, it is DEFINITELY working for us! There are many things about the class that work for us but I’m going to touch on a few of them that have really set us on the right track.

Dave Ramsey has seven baby steps to financial peace. We are only on the second baby step and it will take years to complete the program BUT the first step was critical; not only for our finances but also for our marriage. The first step is to put $1000 into an emergency fund. Now, this may seem like a strange step one but in order to achieve the second baby step (becoming debt-free except for your mortgage) it is imperative that you have some money set aside in case of emergencies.

Now, why did this work for our marriage? Well, Dave says that women have a security gland (figuratively) that causes major pain when there’s no money. But, when a woman realizes that there is money and that there will be food on the table and a warm house the security gland loosens up and you don’t even know it’s there. This is so true for me. When I see $1000 sitting in a savings account, I feel a lot better about us using as much money as we can to pay off debt.


The second thing that has worked for us is a zero-based budget. You can get it on his website for free.

The concept is that you will have every penny of your income spent on paper each month before it actually comes in. His reasoning behind this is that it is important that you control your money rather than your money controlling you. You will know how everything will be spent and you will plan that out before there’s “too much month left at the end of the money”.

Lastly, we use the envelope system. So, we take money out at the bank at the beginning and halfway through each month. We divide it into our envelopes (groceries, out to eat, clothing, entertainment, gifts) and we only spend what money we have in our envelope during the two weeks before we “refill” it. It such a simple way to keep track of how much you’re spending in each category. It also makes you spend less because it has been statistically proven that people spending cash tend to spend less money than people using a card. Typically 12-18% less! So, when your money runs out, it’s out until next month.

Many people think that this may be a little over the top but it’s really works for us!


  1. We have been through FPU twice, the second time as leaders. It has been a real blessing. I'm glad it's working for you!

  2. LOVE Dave! He is totally awesome! Way to go!

  3. My mom just became a certified Financial Peace University counselor. She has lived frugally for as long as I can remember but only recently started using Ramsey's method. I think its great that so many people are starting to think more carefully about their spending. Thanks for helping get the word out!

  4. a great free site that works on daves principles is

    lots of help there...great people...

  5. Good for you! My husband and I facilitate FPU at our church.

  6. I LOVE Dave Ramsey! My hubby introduced me to his ideas (Dave's) back in college (yes, my hubby is a financial nut) and it has been so wonderful to have that savings, have no debt beyond the house, and stash as much as we can into savings. Esp now, as so many are losing jobs (and my hubby works in construction) it is so much less stressful to look at our savings and know we can make it a good year without jobs. Congrats on starting that, and truly it is wonderful freedom!

  7. Thanks for sharing the zero based budget sheet. I printed it and may give it a spin.

  8. Thanks for sharing..... I have done the envelope....and it does work.