This is the second post in the Dollars for Donuts series. Read the first post here
If you know my husband and I at all, you know that we are huge fans of the topics of stewardship, finances, and budgeting, which of course means we're Dave Ramsey disciples. And thoroughly enjoy making more Dave disciples of
anyone that comes in contact with us our friends.
There's a lot that goes in to budgeting–so many categories, specifics, taxes, investments, IRAs… ya, that part is not my forté. (Grateful that it's Jordan's!) But it's also incredibly simple at the same time.
Believe it or not, budgeting brings freedom! Many have the impression, as I initially did, that a budget is restrictive and eliminates the fun and spontaneity of life.
Qutie the opposite is true in fact. When you know you have money budgeted to go out to eat, you're not stressing on date night wondering how you're going to pay for this. When Christmas rolls around the corner again, there is no going in to debt for gifts because you planned ahead and have been saving money throughout the year.
Budgeting allows you to give generously to others, treating them to coffee, dinner, and gifts. The old adage, "If you fail to plan you plan to fail" rings true in the area of finances. If friends decide last minute to go to a movie one night, you don't have to miss out on the fun nor stress by spending those last few dollars you have left from your paycheck.
Just so you can trust that this is not a magical gene you have to be born with, I'll share a glimpse of my past financially history with you.
I remember when my parents first opened bank accounts for my sister and I and gave us debit cards. Oh, happy day! They graciously put $700 in each of our accounts. Within the last year or two, I came across the check register from that Christmas gift and was nauseous at how I spent it: eat out. shop. gas. repeat. Within one month, I had all but depleted that account, and on nothing of any significance I assure you.
Money constantly was burning a hole in my pocket. My sister was always the saver, and I was quick to wear my money via clothes, shoes, activities.
But praise the Lord that's not where my story ends! Jordan and I took Dave Ramsey's class Financially Peace University in 2010 and (aside from Jesus) it is the best thing we have ever done for our relationship. (I will say that I don't agree with Dave on everything, but it is an incredible starting point.)
Thanks to Dave's wisdom and God's grace, I have radically shifted my views on money, as well as my spending and saving habits. My dad likes to tease me about this, saying when I was younger he couldn't get me to stop spending money and now he can't get me to start.(I will say my parents are two of the most generous people I've ever met and they've set a great example for me in that area.)
While either end of the spectrum (frivilous spending versus stingy greed) isn't healthy, I believe there truly is a middle ground we're called to.
To get the scoop on our budgeting in depth, check out my husband's ROCKSTAR post. It's legit. Rather than reiterating all of that, I created the skinny version of Shirkman budgeting.
Here are the basics of our budgeting:
Give. To God, others and yourself (via savings, retirement, etc.) What a remarkable first change to implement in your budget. I am continuously blown away by the truth that you can't outgive God. By generously blessing others, we open a door for God to bless us in incredible ways. Pastor Mark Driscoll articulates this principle of giving perfectly: "There's a lot of money that I regret spending. There's not a dollar that I've given in Jesus' name that I wish I could get back."
Stick with it. Two things I promise: 1) you'll want to give up and it will be tempting to do so, but 2) you will get the hang of it! Vow to try it for at least three months. You won't have it figured out the first time–and that's ok. Don't just throw in the towel. Commit to working through the kinks each paycheck. Which is where the next step comes in...
Have a monthly budget meeting. With your spouse if you're married, or if you're single, a friend that can hold you accountable. Review how you did the previous month, discuss upcoming expenses, and make adjustments where necessary.
Use the cash envelope system. Even if you don't continue with this method for life, it helps you get used to a budget and feel the impact of it. I'll have another post detailing how we use the envelope system soon.
Meal plan. It is ridiculously easy to spend an absurd amount of money at the grocery store. By planning ahead for the week, you can use ingredients for one meal in the next, thus eliminating waste and reducing cost. We eat relatively healthy and naturally, and are able to do it on a modest grocery budget. (Read more about how I meal plan)
Pray. As a follower of Jesus Christ, I know that I am simply his money manager here, and all I have is his. I want to be faithful with what God has entrusted to me, and I truly believe prayerful budgeting is how to ensure that happens.
As John Maxwell says, "budgeting is telling your money where to go rather than wondering where it went."