Dave Ramsey on Zero-Based Budgeting
March 26, 2009 by Karen Weideman
Filed under budget, finances, financial matters
Yesterday I told you about Dave Ramsey’s envelope system which helps budget your money so that you don’t overspend. I’ve been thinking more about budgets and realize this is a subject that needs to be addressed and it’s also an area in which I need improvement.
A study of Harvard graduates showed that those with with written goals achieve more than others. Some words from Dave Ramsey:
Your budget is a written goal for your money. People who win at anything have written goals. Goals are what you are aiming at. Your money won’t behave unless you tame it. You need to have a budget for every month. Spend every dollar on paper before the month begins. Give every dollar of your income a name before the month begins. This is called zero-based budgeting. Income-outgo=exactly zero. Match up every income dollar until you have given it an outgo name (this includes savings).
We have learned the importance of saving for rainy days and having an emergency fund. We are trying to live a debt free life, even with two house payments. (Yes, it still hasn’t sold!)
How is your budget?
image from daveramsey.com
LOVE Dave Ramsey. Great behavioral advice. Some of it doesn’t make sense until you’ve gotten into it and understand the reasons behind it. But, I’m telling you – it works really well (if you follow the advice!) It’s kind of like dieting – if you plan your meals and buy healthy food, you tend to be healthier. If you eat whatever feels good at the moment, and eat out of boredom, emotion, etc., then you’re probably not going to look or feel too good later.
He does offer great advice. I was hooked during the first class we took. Here we are two years later and our finances are so much better now.
I’m hoping your house will sell soon. Dave Ramsey is the best! And budgeting is a lifesaver. I’ve done a few posts about budgeting here: http://www.thetowells.com/?s=budget
When we first moved to CO, we were also paying 2 house payments until our house back east sold. It was hard back then in good times; must be horrible to do now. Good luck on the sell. May it quickly move.
~Carol
Savvy4.com