If you’re like me, and I suspect at least one of you are, you have a tenuous relationship with making a plan at best. I don’t like planning; it seems like a waste of time. I feel like I’m being fair if I say at least nine out of ten plans I make fall through. I would much rather wait until the last minute and see if the stars align for a night out, friend visit, or whatever. Even I acknowledge one area where a good plan is crucial though: finances. Lots of us have found out the hard way that if you don’t count your pennies you can’t count on having any dollars. I just want to briefly introduce you to a plan that changed my life.
Dave Ramsey is a financial expert who advises many people via radio, internet, books, and seminars; he’s fairly radical in his teaching. I don’t always agree with him, but it works. Dave has a system for managing finances called The Envelope System; click Here for an in depth explanation. I will share the high points:
- EVERYTHING is paid for in cash. If you absolutely must tweak this for your situation, then do so sparingly.
- You set aside your budget for the month in envelopes; say you allow $400 for groceries . . . You would put that amount in an envelope, and that’s it. You do this for everything you will need to spend money on.
- Under no circumstances do you go over that amount. If you forget the envelope on your way to the store you wait or turn around; if you go over the amount you have left you put things back. If necessary put more in that particular envelope next month, but make yourself stay in budget.
- Reward yourself, within reason, if there’s anything left at the end of the month.
There are many different financial plans and strategies out there which are more complicated, and I don’t doubt they work. I just know this one did wonders for me. I’ve never had a lot of money and still don’t, but I learned how to live off of what I have and use money more wisely. I have tweaked this basic plan a great deal over time to suit my situation and lifestyle; I encourage you to do the same, but only after going strict long enough to get a grip on things.
You may not need my (or Dave’s) advice, and that’s fine! This post isn’t for everyone; it’s for someone out there who has the same issues with money I used to. If that’s you I hope you’ll at least give it some serious thought.