Money matters

I have recently been struggling with my finances. The hard part is figuring out where everything is going. I was basically paying for everything with my debit card and not keeping track of how much I was spending. It turns out I was spending more that I was making. Because I don’t have a credit card, I was drawing on my savings to make up any differences in what was going out. When the savings ran out, I began to get overdrawn on my checking account. It was time to get things back under control.

Several years ago I discovered a guy named Dave Ramsey on the radio. Dave teaches people how to get out of debt and start saving money. His methods sometimes run counter to the conventional wisdom, but they are simple and easy to follow. He’s not one of those get-rich-quick con-artists, he’s just a regular guy who preaches common sense in finance. Using his methods I paid off about $8,000 in credit card debt and was debt free for about 3 years.

In March of 2004 I decided that it would be nice to buy a new car because my old car was kinda getting shabby. Of course I hadn’t saved one penny towards buying a new car, so I financed it and suddenly I was back in debt. This is where is all started going wrong. By December of 2006 the savings was gone and my checking account was overdrawn.

In early January I decided that my problems could be linked to the fact that I had strayed from the path that had gotten me out of debt in the first place. Not only had a I strayed from the path, I had never really been on the path at all. I had followed along in the ditch and that got me out of debt, but it didn’t keep me out of debt. To get and stay out of debt, I realized I’d have to walk back to the road, crawl up out of the ditch, and walk down the center-line.

My solution was to go to my trusty Financial Peace Planner and get on a plan. That meant budgeting and using an envelope system, two things I had not done before. Both of them seemed too cumbersome and complicated. I’ve found that not to be true at all.

Being a complete and utter nerd, I decided that I would create a spreadsheet (download here) to help me with my budget. This was a good idea because not only did it help me to create an easy to work budget, it also satisfied my computer geekiness. Once I had my budget I discovered that using the envelope system wasn’t as cumbersome as I had thought. With everything now planned out in the budget, it was easy to withdraw the correct amount of funds on payday and then put the funds in my wallet whenever I planned to use them.

I also discovered some great web sites that I have added to my Links page (page not active at this time – Ed.). Check them out and contact me if you have any questions.