Like making the menu plan, it seems that I will now spend the last weekend of every month making up the budget for the following month.
The budget is only one aspect of Dave Ramsey's financial program. His take on it is a bit different. It's not based on averages, or projections, or anything about what you should do. Instead, you look at your take home pay and spend it on paper before you touch a penny of it.
The budget, then, is simply a spending plan for that month.
It is a scarey thing to do because, now that I've done it, I can clearly see there is no money for painting the bathroom, for example. (Not unless I take it from my personal "blow" money allocation). I can live with that this month. But next month? This could get oppressive fairly quickly. But the goal is to avoid the credit cards --no matter what.
That's why it's really important to have set up what Ramsey calls the "baby" emergency fund of $1,000.00. We will actually have to use ours this month to help pay for some dental work. In the past, I wouldn't have touched that fund--but simply used the credit card. We have a dental plan which will reemburse most of the cost: so our Emergency fund won't be depleted for long. My husband says he likes the idea of being his own lending institution. The rates are certainly better!
The best part of the budget, for me at least, is the Allocated Spending Plan. Each expense is listed down the side as before: but the sheet is divided into four columns, each representing a pay period. It's perfect for us as my husband is paid weekly and one of my biggest challenges was keeping track of what to pay when.
Here's an example from the book:
I don't know how well you can see it, but basically, when the first expense is deducted from the pay cheque the amount remaining is written beside the expense--separated by a slash. Keep doing that down the column and you have a running total of how much money is left from that pay cheque after paying each expense.
From doing ours, for example, I realised that I have even less money available for groceries in week two than I thought I'd have.
Good to know.
If you are interested in these forms, there's a collection of them here in both word and pdf format at the Byrd's Nest.