Disclaimer: I am not a representative of Dave Ramsey or Ramsey Solutions. All opinions expressed are my own.
I am going to throw out a word and I want you to say the first thing that pops into your head. Ready for it? BUDGET. What did that do to you? Was your first thought one of anxiety, anger, and frustration? For some, the mere mention of the word budget makes them squirm uncomfortably in their seat. Those people are probably not doing a real budget, with a zero balance each month.
I know, because I once was one of those people who didn’t want to do a budget with my husband each month. I thought it would be too constricting, and we mostly knew where we were spending our money, so it would only create more drama, right? Oh, how wrong I was.
Our Debt Free Story
Our debt free journey began 7 years ago. We were newly married, had a brand-new baby, and were living on a single income of $27,000. Life was stressful! We had the typical debt: student loans, credit card debt, car loans, and a mortgage. We were drowning in debt!
We fought about money all the time. Not because we didn’t trust each other, but as a response to the frustration of our situation. All the while we still hadn’t figured out how to do a real budget. One where we told our money where to go, before we spent it. Instead, each month we would sit down and reflect on the last month’s spending. It was always discouraging to see that we had spent more than planned, and then the fighting would start all over again.
A friend loaned us a copy of The Total Money Makeover by Dave Ramsey. It made sense, and offered a glimmer of hope for our future. We were hungry for change, so we dug in! It was a very drastic and scary approach to our money. In fact, the first thing Craig did was cut up our credit cards so we couldn’t fall back on using them if things didn’t work. We were all in.
We took on side jobs, sold Craig’s nice car and bought a junk car, and really focused on living on the bare minimum so we could be free from our debt. Debt has become so “normal” in America, that it can be hard to imagine living without it. But we were tired of feeling trapped under our debt, and were willing to do whatever it took to get rid of debt for good!
We paid off our debt, slowly at first, and then making greater progress as we gained momentum. Every time we got rid of a loan or credit card payment we felt energized. Finally, after a few years, we had paid off all our debt except the mortgage. Our income did eventually increase, but we made the decision to start attacking debt while we were still living on less. Now we could save for emergencies and retirement. During this time, we also decided to build a new home, all while adding 3 more children to our family.
The biggest takeaway from the whole process was budgeting. Once we learned to be on the same page with our finances, it felt that we could take on anything together. Sitting down each month to fill out a zero-based budget is now something we can enjoy. Instead of fighting, we are looking toward our future together and excited about our possibilities. We are working towards paying off our mortgage and want to be able to use our whole income to leave a legacy for our family and serve others.
Do you want that for your life? Can you imagine a marriage where there are no money fights? Do you long to leave a legacy for your family? Friends, if we can become debt free on a single income, then so can you. But it starts with a budget.
What is a Zero-Based Budget?
A zero-based budget is where all the money you bring in each month is given a purpose. Every dollar is assigned to be spent, saved or given away. Here is a basic example:
It seems simple, and that’s because it is! Now, it does take a few months to figure out how much money to put in each category, especially if you haven’t been budgeting. So be patient in the process. Also, if you are getting out of debt, any extra money goes toward paying off debt. Here is an excellent article explaining the “Baby Steps” created by Dave Ramsey. This is the plan we followed and I am so thankful we did!
We have received criticism from some people who say it doesn’t make sense. That debt is a good “tool”, and mathematically we could earn more on our money if we invested it instead of setting aside some for emergencies. They are correct in thinking the math is off, but these doubters are forgetting the X factor: Risk.
Life happens, and no amount of preparation can prevent tragedies, whether financial, physical or other. However, you can prepare to respond by setting aside money for when disaster strikes. I don’t know about you, but if something happens to my family, the last thing I want to be worried about is if I can pay for their medical expenses, or if we will be able to pay our bills each month. I also don’t want to run out and get a loan, adding more stress to the situation. There is peace in knowing that you have a safety net, a backup plan for life.
So now that you have heard our story about getting out of debt and the importance of creating a new budget each month, I challenge you to give it a try. We are only a few days into July, so start now and finish off the month giving every dollar a purpose! Here are some resources to help you along the way:
Here is a great video explaining zero-based budgets
https://www.daveramsey.com/get-started/budget This is the ultimate source for budgeting.
https://www.everydollar.com This is free and is what we use to create our budget. We are so pleased with this app and how easy it is to use we bought Every Dollar Plus so transactions are automatically added from our bank accounts.
Again, I am not being paid a penny to endorse these products or companies. I am just so thankful that these resources are here and that they change lives! Since we started doing a budget and working to take control of our finances, our marriage has changed. We are an unstoppable team, because we are focused on a common goal: to leave a legacy of opportunity for our children and grandchildren. This is not because we have a lot of money, or zero stress in our lives, but in spite of it.
I want to encourage anyone reading this who feels that their circumstances are too difficult to change. You can do this. It takes sacrifice, hard work, and faith, but you can take back your finances and your life. Now it’s your turn to share. What is the hardest part of budgeting for you? Is it communication with your spouse, or just finding enough money for the month? Leave a comment below.