Gidget Talks Money, Part 1: Saving $$ Dave Ramsey-Style

This is the first post in a series on money. I’m very far from being an expert, but I figured I could share with you all the few things that I’ve learned over the last few years, hopefully bringing you a bit of financial simplicity. It’s going to be a fun week with a guest post and a giveaway, so make sure you subscribe if you haven’t already!

Let’s Get a Little Personal

Money is always a big issue in marriage. I bring this up because I personally didn’t really start to try managing my money somewhat wisely until I got married. Our first married year I worked less then full-time while my husband finished his last year of college. I had graduated (2 weeks before our wedding, I kid you not!), but I did not have a job with a salary worthy of a degree; in fact, it was the same job I had my senior year of college, but I loved it, and we had cheap rent and few expenses. Looking back, we basically lived off my husband’s student loans, something I regret now that we are paying them off (along with my loans from college, which then doubled after grad school!).

That first year was the first time I ever attempted making a budget and while we haven’t always stuck to it, I’m proud to say that we’ve always at least been striving to follow a budget during out 5-year marriage. I can’t actually imagine now, not having one, and just spending aimlessly.

Over the last five years we’ve tried various methods for saving and budgeting (a little more on this later in the week). We’ve been using an American Airlines credit card almost exclusively, paying it off every month, but racking up the miles (we’ve redeemed 2 free trips this way, and have one more saved up), but we’ve recently decided to stop this spending method since we have a little one and are traveling less (thanks also to rising travel expenses). I feel that this alone has saved us some money since I felt that there was unnecessary spending going on by using a credit card, even though we always paid it off. Going back to the debit card/cash makes it easier for us to stick to our budget, and I’m also considering going back to the “envelope method” that we used early on in our marriage.

The envelope idea, of course, came from financial guru Dave Ramsey. I’ve yet to actually read any of his books or attend his Financial Peace University (I plan to though!), but just his Baby Steps alone have converted me to his methods. This is essentially our long-term plan for savings:

Dave Ramsey’s Baby Steps

		$1,000 to start an Emergency Fund {ours is a little more since we live off one income}
		Pay off all debt using the Debt Snowball
		3 to 6 months of expenses in savings
		Invest 15% of household income into Roth IRAs and pre-tax retirement
		College funding for children
		Pay off home early
		Build wealth and give! Invest in mutual funds and real estate

Of course, somewhere along those lines we hope to buy a house, Lord willing, but we these are great guidelines for us. We’re currently on step 2, although we’re also doing a little bit of step 4 and an even littler bit of step 5 right now. If you’d like to read an easy-to-understand, yet more detailed explanation of these steps, check out Simple Mom’s series on them, starting here.

P.S. Wondering about that picture above? Nope, not my daily allowance. That was right after we sold one of our cars (a fairly new one that we still owed $$ on) and then paid cash for Moondoggie’s older, more-practical-for-snow Jeep. Hooray for eliminating some debt!

This series will officially continue on Wednesday, but I’m going to try to incorporate a little bit of this money-talk into tomorrow’s Translation Tuesday post, too… stay tuned!

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Tagged as: money, simple & frugal living