Financial Peace University---what works long term

[Ottakee]

Dh and I are in Dave Ramsey's Financial Peace University classes at church right now. This week was setting up our cash flow plan, figuring out those irregular expenses (taxes, insurance, etc).

 

I have the budget almost done so we can go over it. It looks good on paper and should be workable. Dh though got notice Friday that he likely will be loosing his job in the next 2-4 weeks (we knew this was coming as they are closing down the prision that he teaches at). That means we will be redoing the budget.

 

We are sitting OK. We have only 1 small car payment, no mortgage, no other debt, and 3 months of living expenses already in an emergency fund.

 

What things made this work for you LONG TERM? I am looking for ideas to keep us on the right track.

 

We will not have a college savings account (our kids all have special needs so likely will never go to college but if they do it is paid for through the state). We don't have debt (other than the car) to pay down, etc. I would though like to have our own little benevolent fund set up. Just last night our friends' son was hit by a truck and is in very critical condition--we want to be able to give them a gas card/cash, etc. in a time like this.

 

How also do you figure those things that you just don't know are coming up---weddings, baby/bridal showers, etc? How about expenses for kids activities that you are new in?

 

ANY and ALL hints would be great.

[Guest HeyJulie]

You are doing great - what a jump start you have on the Dave Ramsey plan.

 

Over the next few months you will find you adjust and tweak your budget as needed. I highly recommend staying true to the weekly budget meetings between you and your husband. Your budget is fluid, and as long as you are both on the same page all is good.

 

Unexpected expenses - the longer you do your budget the less unexpected expenses you will find. For example, you can add your benevolent fund to the budget, right under your charity line (to keep them seperate - then you know what you have for tithing, etc.). You can have a line item for kids activities and start building that up, then use it as you need it.

 

True emergencies will come from the emergency fund. But you can plan for a new furnace, a new roof, a new car - even if it is 5 years away so those do not have to be considered an emergency.

[....]

That sounds great! Stick with the Baby Steps. You could go onto Dave's website and listen to some of his MP3s to keep yourself motivated.

 

Also, Dave Ramsey is the reason we made it through a 7-month unemployment and came out in one piece. Just follow through the Baby Steps and call in on Debt-Free Friday!

[cat in black]

After years on a budget, I adopted even more money saving strategies I learned from a local lady who does couponing workshops. She has a self-published book that is full of hints and tips that enabled me to put between $50 and $100 a month in an extra account for emergency situations. I don't know if I am allowed to post a link to her website or not, but somebody will remove it if I am overstepping lines here:

http://theartoffrugality.blogspot.com/

 

She has brilliant plans for surviving holiday gifting plus wonderful recipes that are dirt cheap. I thought we were doing very well with our savings until I discovered Wendi Meredith's strategies and took my frugality to a whole new level. Her advice is very practical and she points out repeatedly that "frugal" and "cheap" are two different things.

[....]

Thank-you so much for posting that link. :001_smile:

[mrs.m]

\What things made this work for you LONG TERM? I am looking for ideas to keep us on the right track.

 

....

 

How also do you figure those things that you just don't know are coming up---weddings, baby/bridal showers, etc? How about expenses for kids activities that you are new in?

 

ANY and ALL hints would be great.

 

We reviewed our budget about every-other-month to discuss what was working and what wasn't. What got raided when we got low? What got low too often? This review process is really important at first. In other budget plans, we set the budget and just kept struggling through it not working. Of course, we dropped it after a few months because it was frustrating.

 

We actually allocated a gift fund and this covers ALL gifts throughout the year and Christmas. It allows me to shop ahead for Christmas at sales if needed.

 

We also have an activity fund. This swim team dues, summer pool dues, soccer teams, etc. We figure each thing the kids are involved in per month based on an average. We put extra in to cover things such as uniforms, pictures, meet costs, etc.

 

The gift and activity funds are a seperate checking account that is linked to our main account. So I spend out of my regular account and move the money from those accounts as needed. We don't touch these accounts except for what it is designated for! The amount in the account can build up really high and then drop down.

 

We are getting ready to set something like this up for homeschooling as well. But I'm still trying to figure out what is reasonable per year to spend.

 

The other thing that has helped is putting the "spending money" into a seperate account from the bill paying account. Spending money is stuff such as gas, groceries, dinning out, etc. I use a debit card on this account and keep track of it daily. I used cash for many years and reluctantly switched to this last year. It's been working quite well! But start with the envelop method first!

Edited January 24, 2010 by jannylynn

[Parrothead]

 

But start with the envelop method first!

I'm going to have to do that very soon. I don't want to have a bunch of checking accounts to keep up with so I'm going to go the envelope method. Actually I'm going to get one of those accordion style binders so I don't have envelopes all over the place.:tongue_smilie:

[mrs.m]

Actually, I think they are savings accounts and not checking. I don't have checks or a debit card for them. The bank we use makes it really easy to manage multiple accounts online. We have auto deposits set up too! I wouldn't mind the activity fund being in an envelop but the gift fund wouldn't be good as cash!

 

I used a plastic coupon sorter for many years while I was learning to budget! :D I switched to a debit card after a friend had her purse snatched. When I realized how much money I was carrying daily, I became very uncomfortable! I highly suggest not carrying ALL your money with you. That will limit your spending as well!

[Parrothead]

Actually, I think they are savings accounts and not checking. I don't have checks or a debit card for them. The bank we use makes it really easy to manage multiple accounts online. We have auto deposits set up too! I wouldn't mind the activity fund being in an envelop but the gift fund wouldn't be good as cash!

 

I used a plastic coupon sorter for many years while I was learning to budget! :D I switched to a debit card after a friend had her purse snatched. When I realized how much money I was carrying daily, I became very uncomfortable! I highly suggest not carrying ALL your money with you. That will limit your spending as well!

Oh, wow! You were carrying it with you? Wow. I'm planning on leaving the vast majority of it at home. I need to look into getting a safe.

 

When I go shopping for X I'll take X's money with me and leave the rest behind.

[Ottakee]

Thanks for all of the ideas. We have to figure out what I will carry cash for and what I will use a debit and then transfer the money over. This might take a bit of book keeping but I think I can make it work.