Personal finances. Ugh! If you’re like me, you’ve viewed managing your finances as a chore and your least favorite thing to do. Neglecting this area of our life can cause financial strain, which leads to stress and conflict and feeling out of control. In December, I made a commitment to take control of my finances by learning how to budget and get out of debt. I enrolled in Dave Ramsey’s Financial Peace University, a nine-week course that promises to teach me how to get rid of debt, manage my money, and spend and save wisely.
The first step in gaining financial peace: manage money better. Implementing these three things has already made a positive impact on my stress level and my wallet.
#1: Budget. I have never created a budget for my personal finances. Never! As you can imagine, this has created some financial stress for many years. Rather than my money controlling me, I am now controlling my money—and it has reduced stress tremendously. Rather than whipping out the debit card and making purchases on the fly, I now create a zero-based budget where I account for every dollar spent. All of my spending is categorized, even my “fun” expenses. My “fun” money is now in the form of cash in an envelope I replenish every pay period. When the cash is gone, so is my fun. (Well, fun spending, that is.)
#2: Pay in cash. Debit cards are an easy and convenient way to make purchases. We all know that. But do you know they are also spending traps? When we pay in cash, we see the money leaving our hands and feel the pain of watching the pile dwindle. After holding the cash in my hands, I will often question the purchase, because I don’t want to part with my money as quickly as I did. Debit cards are still great for paying online bills and buying gas at the pump, but for the most part, all other spending is done in cash.
#3: Save receipts. Saving receipts has allowed me to calculate the exact amount I spend on items each month. From groceries to gas and everything else I buy, the receipt is saved in an envelope and compared against my budget. The big eye opener came when I reviewed a month’s worth of gasoline receipts. I don’t like the number, but at least now I can plan appropriately.
My discipline today is going to lead me to better options in the future. What areas do you need help in with your finances? How do you stay disciplined? Did you attend Financial Peace University?
We’d love to hear from you. You might inspire our next article.
Written by: Jennifer Reeves is the media sales director for West Michigan Woman.
Photo Courtesy of: FreeDigitalPhotos.net (Adamr)