My Budget life after Ramsey
Have you heard about Dave Ramsey? If you are into budgeting and saving, you probably know who he is. Some people say he is grumpy, old school and unrealistic. But I like his style. Dave Ramsey’s no-nonsense approach to saving and being debt-free was what got me hooked on the subject.
We are a one-income household living in Silicon Valley, where the cost of living gets higher by the minute. The two of us were always conscious about cash and never actually splurged. But we also didn’t have a budget set for anything. We would be mindful, but that was it.
A couple of years into marriage, a mortgage, and kid later, we started to talk more and more about finances. And honestly, every time my husband brought up the subject, I would cringe. I would bring up the whole — I stay home raising our daughter and deserve that overpriced hipster coffee or a nice lunch out to relax — excuse. I would play the “I’m doing my best” card.
So one random day, my hubby started talking about this podcast he listened to on his way to work. He said I would love the guy’s style. His straightforward approach to saving, his simple tips about cash. The way the guy got mad and went on and on about the dumb financial choices we all do. I was curious.
One episode of The Dave Ramsey Show was all it took. It turned me into an overnight fan. I would listen to his podcasts every chance I had. I was impressed that I haven’t heard about him earlier. Why is it that people don’t mention this guy more often I would think. I guess money is a very touchy subject and each person has a different approach to it. So the same way I loved Ramsey’s approach to cash, other people hate it.
The bottom line is that he got my attention. Having a budget for everything, saving more, paying all your debt, thinking more and more about retirement and the future started to be interesting topics for me. I found myself talking about money, saving, and budgeting more often with my husband. And honestly, once we were on the same page about this, everything got so much easier.
After I took a step back and started to pay more attention to the big picture — from grocery shopping to that coffee shop run and online subscriptions — I noticed how we could change habits and save money. And that happened around the same time we decided to use our credit cards only for certain things while paying 90% of our expenses with our debit card. Those two mindset shifts made an enormous difference in how we handle finances now.
And I’m not talking about having crazy boring spreadsheets with detailed budgets. Nope. I don’t like that. We use Mint, and that is it. We set our monthly budget and keep track of it. We allocate our expenses by group as most people do: groceries, bills & utilities, kids, restaurant, shopping, entertainment, etc. We work towards our goals as the month goes by. And honestly, I feel proud when I check our budget and see that we are well within our expectations. I feel even better when we are below budget. Do I go out and spend more since I’m below budget? Hell no. I keep on it and give myself an extra pat on the back.
Listening to Ramsey’s podcast and hearing all the questions and the stories from his listeners always teaches me new things. And oftentimes, I find myself cheering with the people giving their “debt-free scream” on air.
Do I do things to the T as he recommends? No. But I do listen to all his tips about how you can better control your finances. And I love when he says that your behavior has the biggest impact on your finances. It is such a simple statement, but we forget about it more often than we should.
I won’t go into details about all of Ramsey’s theories here. But here is a glimpse of one of his famous strategies to get you out of debt, The Baby Steps.
1. Safe money for an emergency fund (he recommends $1,000)
2. Pay off all debt (except mortgage) using the debt snowball method (Google this)
3. Save 3–6 months of expenses in a fully funded emergency fund
4. Invest 15% of your household income in retirement
You can Google the rest of the steps. But I’m pretty sure you get the picture. The guy is all about being mindful and saving so that you can control your finances. And not the other way around. His baby step number six is all about paying your home off early. He explains how you can pay your mortgage faster if you are on top of your finances and doing things right. And that idea is excellent! My husband and I are now constantly talking about plans to pay off our mortgage early. After hearing how so many of his listeners did it, you get the bug and want to do it too.
Who doesn’t want to pay off all debt and have a debt-free life? Imagine the freedom of not having to stress every month about all the bills you have to pay. Think about how relaxed you would feel knowing that you paid off all the big stuff and now just need to handle your monthly cost of living. And don’t forget that the more you learn and try out your version of saving, you will be more savvy about it. You will tweak your day to day to better adjust to your new reality.
For me the most eye opening task was to cut on groceries. I realized that if you plan and don’t go to the grocery store too often you will already see a great difference in your expenses. We still don’t do meal plans or any other intensive grocery planning, but I do try to go to Costco once or twice a month max for the big items. Then I try to go Trader Joe’s or Grocery Outlet once a week for smaller items or last minute needs.
Some strategies I learned with this plan:
- Every time you go to the grocery store you will find something you need. So don’t go too often and plan ahead. Have a list.
- The old wives’ tale that says you will buy more if you go to the grocery store when you are hungry is true. So avoid doing that. It should be common sense already.
- If you have a party and/or are hosting, think about what you will need before getting to the supermarket and stick to your plan.
- Don’t go to Target unless you really need it. Target always has something you want but don’t need. So forget about browsing around. Simple.
- And if you really need to go to Target, always check their app for coupons and cartwheel offers. You can save a lot doing this.
- Costco has a lot of items you can freeze and use as you go, so don’t turn your head on some bread, meat, bakery items, etc. because the portions are huge.
- Take advantage of cashback apps. I love ibotta! Just please don’t buy extra stuff for cashback. Stick to your list/needs. It is easy to get carried away to get cashback faster but remember the want/need idea to keep you grounded.
With this whole topic of saving, I believe that the first step, and the hardest, is to understand that you could use some help on the money management front. Everything after that is just hard work. Once you realize you can manage finances better and start to learn more about it and put some new ideas to practice, you will see the result and will be happy about it. From there it is just a matter of time for the new rules/routine to turn into a habit. After a while you won’t even remember the time when grocery shopping was just an errand that you never thought about in depth.
The same goes for credit cards. We were always on the lookout for points, miles, cashback bonus and other promos from credit cards. We would sign up for new cards to get extra miles and keep our spending spread into different cards, depending on their offers of points, cashback, etc. Turns out that managing all of that is stressful. And it is also stressful to always have to pay that monthly invoice. You get into a never ending cycle of spending/paying. So after listening to Ramsey’s podcasts we decided to cut our credit card use and start paying everything with our debit card. Even though the miles/points are great, the ease of paying with debit is greater. It is so much easier for you to manage the money you actually have in hands instead of juggling the credit card invoices that you pay for in the following month. It makes things way simpler.
Maybe you just need to find someone you “click” with to start looking more into finances and how to optimize your budget life. I know that for a lot of us talking about money is taboo. And some think it is plain boring to discuss ways to save. But once you find the part of the process that interests you the most you will enjoy it. Trust me on this one.
Note: I’m not affiliated with Dave Ramsey in any way. I’m just sharing how I got into budgeting, saving, being savvy about finances.