If you’ve been reading this blog for any length of time, you know that every winter my husband and I do a bet with each other to see who can spend the least amount of money for the longest amount of time. I won all the bets (here’s one of them) up until last year when I lost (sniff).
This year, however, we’re not doing the bet. This year we’re doing a seismic overhaul of how we manage our household finances. It has been revolutionary and I am on fire.
It all started a couple years ago when my friend and her husband took a Dave Ramsey class. She’d fill me in on Dave’s theories and methodology and I’d grill her on the details. I began to think that we might benefit by learning more about The Dave Plan, but my husband didn’t view the new ideas as rosily as I did. His comments ran something like this: “You pay for everything with cash? That’s stupid.”
“But hon, I do better when I pay with cash,” I’d say. “I need to see what I’m spending.”
“Nah, it’s too inconvenient, not to mention too risky. I don’t like it.”
So we continued to bounce along from pay check to pay check (it’s amazing how attached you can get to a non-working plan), spending money when we needed to and wanted to and hoping we didn’t face-plant. Sometimes we’d get sick of all the bouncing and would attempt to get control of the situation, but it never stuck and soon we’d be back in the good old Sliding By Position.
A note of clarification: our financial situation wasn’t dire, as far as financial situations go. We didn’t have credit card debt, and John possessed a fairly good understanding of how our money moved. (We’ve since learned that understanding how our money moves is very different from controlling how our money moves.)
Then last fall my friend loaned me her Dave Ramsey book. I slurped it up, and when she informed me that a new Dave class was opening up, I planted myself in front of John and informed him that we needed to take it. He, wisely, agreed. So every Tuesday evening for the past eleven weeks (two more to go!) we’ve been meeting at a local school for our two-hour sessions; the first hour we watch a DVD of Dave and the second hour is class discussion.
Far and away, the best thing this class has done for us is—and this can not be overestimated—it has put us on the same page, hallelujah! We now share a framework with which we can talk about money. John agrees that paying for things with cash is perhaps a wise idea, and we plan to get rid of our household credit card in the near future (we’ve switched to debit) and—
Whoa, whoa, whoa, let me back up. For those of you who aren’t familiar with either Dave Ramsey or his Financial Peace University (the fancy name for our class), here is a sample of a couple of the main ideas:
*people spend 12-18% more when they use a credit card than when they use cash (even when paying off the credit card every month), so use cash
*rainy days will happen; plan for them
*never get a loan for a car or anything for that matter (except a house and college, if you must)
*financial peace means having a plan and sticking to it
Dave’s financial plan is comprised of a series of baby steps, the first three of which are:
1. put aside a thousand dollars in an emergency fund
2. snowball your debt
3. save 3-6 months of living expenses (which is step one expanded)
There are more steps, but since they’re the ones that John and I are working on right now, they are all I’ll mention. I don’t want to overwhelm myself (or you).
This class has challenged me to not only change how I handle money, it’s also challenged me to rethink how I view money. I somehow got the idea growing up (in a series of Mennonite churches and with halfway-granola Mennonite parents) that money is bad. We were to avert our eyes from it, and not depend on it, talk about it, or roll in it. People who had a lot of money were entangled in its snares. Not being controlled by money meant not having any. ‘Cause didn’t Jesus tell us to sell everything and follow him?
These teachings still persist. Just the other week we had a Sunday church service that revolved around money. The classic Do Not Worry About What You Will Eat Or Drink scripture was duly intoned, and there was much talk about trusting God and good stewardship and yadda yadda yadda. Inside I was screeching, Don’t tell us not to worry! Tell us what we can DO so we can STOP worrying! Which is completely anti-Everything I’ve Been Taught because not worrying about money is all about faith, right?
Wrong! If faith means turning a blind eye to finances and just hoping things work out, than I want none of it. (Which is probably not what any church leaders intended us to do—the turning a blind eye part—but when we’re given mystical, floaty, o-happy-day teachings in place of concrete advice, general clueless-ness is the unintentional side effect.)
What does work is getting A Financial Education and A Plan and Sticking With It. Scrutinizing our spending habits, naming where the money goes, and working with what I have and ONLY with what I have, has provided me more peace than anything I’ve ever done.
(I can share more of the nitty-gritty details regarding our allocated spending plan and envelope system, if you’re interested—just give a shout-out in the comments. But if not, no prob. I don’t want to drag you all through our money dirt [which is not to be confused with pay dirt].)
Three Post Blog Post Disclaimers
1. Dave Ramsey does not know who I am.
2. I do not agree with everything Dave Ramsey says.
3. Dave Ramsey sometimes gets borderline Prosperity Gospel-ish which turns my stomach—when he gets going like that I just plug my ears and chant, I’m not listening I’m not listening.