Lorenzo and Jennifer Dunford talk about affording life, children and everything else on one income. They discuss what “afford” really means and what the “it” actually is. Great show!!!
My husband and I just finished a 13-week Sunday school class at our church on Dave Ramsey’s Financial Peace University. Here is his website. He has books you can buy. He has a daily radio show all over the country that you can listen to. He travels the country doing live shows.
He is married. He has 3 grown children. He has made millions, lost it all and then regained wealth again in a wiser way.
Not only was this class informative, it really helped my husband and me get more on the same page with money.
I want to give you Dave Ramsey’s 6 steps to Financial Peace to whet your appetite a little. Maybe it will interest you in taking the class, reading his book, listening to his radio show or checking out his website.
I believe he has been so successful because
- he is giving hope to people;
- he is requiring them to be personally responsible for their lives and not rely on the government or any other organization or person;
- he is like a compassionate father on his radio show toward people that call in with disastrous situations;
- yet he does the tough love thing in explaining what they must do;
- and this leads back to giving people hope.
Dave chopping up those credit cards.
Baby Step 1
Get $1000 in savings. Dave says to go crazy and get this money in the bank in the first month or two of deciding to work his system. This is the first level of your emergency fund that will protect you from little emergencies. If your income is less than $20,000 put $500 in. If your income is over $70,000, put $2000 in. Remember, this is only for emergencies.
Baby Step 2
Kill all debt except your mortgage. He calls it the “debt snowball.” He says to get mad and stay mad until you get out of debt. He says “Remember there is no energy in logic, only in emotion.” What he means is, ‘by being mad about being in debt, you will have the energy to get out of it.’ Put your debt in order of smallest debt to largest and pay the smallest off first, then the next smallest and so on. You do this so you can see progress quicker.
Get rid of these babies. Fast!
Baby Step 3
At this point, your only debt is your home. So now you will go on to save the rest of your emergency fund. The amount is 3-6 months of your monthly expenses. Keep this money in a simple money market account or bank account. Do NO investing with this money. It is only to protect you if an emergency comes up. This is typically hard for the guys not to want to invest a rare chunk of money that gets saved up, but be patient. You will get to invest later.
Baby Step 4
Save 15% of your gross household income to put into retirement accounts. You can read his book or go to his site to get more details on this.
A little more leisure time out here? Sounds good!
Baby Step 5
Now and only now is it time to start college funds, if this is in your plan. He says he knows you might feel guilty about waiting until now to do this part, but don’t you dare do it before doing the first 4 steps. Again, read his book.
This place looks cool!
Baby Step 6
Now is the time to pay off your mortgage. It may be a number of years to get to this point, but when you do, you will be able to pay it off quickly, because everything else is in order.
The root word of mortgage is ‘mort.’ It means dead. That right there makes me want to get rid of our mortgage!
Baby Step 7
Build wealth, give and invest.
Hosanna Institute of the Sahel, Inc. A Mission in Niger, West Africa. This ministry brings Jesus and basic necessities to the people. I’d like to be able to give tons of money to places like this. www.hosannasahel.org
This is the road to Financial Peace.
I want to leave you today with this last little bit. It really helped my husband and me.
Women Generally Want Security From The Daily Issues
They want a cash savings account for those times when a crisis happens. Anything from an unexpected medical bill, to the washer being replaced, to the car breaking down and needing $500 worth of repairs, etc. We don’t want our husbands stressing out about these things and then that stress trickling down to the entire family. We just want it taken care of. Am I right, ladies?
Men Generally Want Long Term Security
The “emergency fund” idea of having 3-6 months worth of monthly bills in a saving account earning almost no interest is very difficult for men. Dave Ramsey had to tell my husband to do this. Not me, thank goodness. (I don’t know why life is that way ladies. It just is.)
Men tend to want the retirement, college, and other investments, in order ASAP. But that “emergency fund” savings account is key to having financial peace. Stuff will happen and you will have to pay for it. You might as well prepare for it so it doesn’t freak you both out and cause strife in the marriage.
The God Component
Jesus even said “In this world you will have trouble. But take heart! I have overcome the world.” -John 16:33. So I figure with Dave’s plan and a serious prayer life, we can be in great shape. And if you need me to prioritize this for you; the prayer life comes first!
What men and women each want in order to feel secure are both important. In Dave’s plan they are both taken care of in a precise order that has been successful for many people.
We are just starting out, but it seems to us a very wise plan of action.
Today I’m going to show you exactly how we organize the monthly cash flow in our home. But first, a few preliminary words : )
#1 Reason For Divorce
Money problems are said to be the number one reason that married couples get divorced or at best, co-exist in a loveless marriage. That is so sad. Are we ready to put a stop to that nonsense. How about if we get off our high horses, practice a little humility and consideration and make this area workable.
The devil just loves it when he can wreck marriages and families with this issue (or any issue.) Because when he wrecks families – he wrecks the foundation of our society. Almost any problem you see in society has it’s roots in the breakdown of the family.
Don’t Let The Devil Beat You At This Game
Don’t let pride, anger and resentment ruin your marriage. You are God’s child (whether you know it or not) and because of that, you have the capacity to win over evil. To resist evil. We have to crucify pride and other toxic emotions to be successful here, but we can do it!
It is all a matter of “Just how motivated are you?” Do you want a joyous life? Do you want less stress? Less struggles with your hubby?
I Know Money In Marriage Is A Tough Area
I can easily say my husband and I spent the first 10 years of our marriage fussing and fuming about different aspects of money. How to use it. How to organize it. How to save it, etc. Well, we grew up in different families. It’s no wonder. And it stressed us both out to no end.
I Made Mistakes The First Time
I’ve told you that I was married once before. In the late 80’s. It was short, 2 years, and a big mistake. We didn’t have children and we owned no property. Thank the Lord. I was pretty stupid and ignoring all of the red flags. (Note: #1 Don’t ignore the red flags. #2 Hang out with that guy WITH your family. That is when the flags really show up!)
Anyway, we always had our money in separate checking accounts. We split all the bills as if we were roommates. I will never forget a friend saying “If you don’t put your money together, you aren’t really married.” My feminist self (at that time) ignored that comment, but it would not ignore me. She was completely right.
So #1 – Put Your Money Together
Yes, you can do it! I know it’s a hard thought for some of you who have not done it yet. BUT you must learn to be dependent on each other and, Lord knows, I, the big-time career girl, resisted that COMPLETELY! It is not just a tangible thing you are doing; it is also an emotional and spiritual tie you are creating.
Whatever Your Reason For Keeping Your Money Separate; It Ain’t Good Enough, Sis.
It isn’t the right thing to do if you really want to create a strong, unified family. Got that?
So How Do We Actually Manage Money Together?
During those first 10 years of our marriage, we tried every which way to do our money. I did the bills, he did them, we did them together, I did this part, he did that part, etc.
We have finally, finally come up with something that works very, very well for us.
And remember, my husband and I are both quite strong-willed people. You get two strong wills together and fireworks are sure to happen. If one of you is very passive, then you may not have issues in this area. I’m not saying this will work for everyone, but I gotta think it will help some.
This Is Our Current Monthly Marriage Cash-Flow Plan
My husband is a self-employed attorney. We have 3 main checking accounts.
- “Business” The money starts here.
- “Home – Joint” Money moves from “Business” to “Joint”
- “Home – Allison” Money moves from “Joint” to “Allison”
“Lucy, let me splain.” (Wasn’t “I love Lucy” Great?)
- At the beginning of each month, I transfer all our personal income (business profit) to our “Joint” checking account. I leave an agreed upon amount in the “Business” account for Matt to conduct business. As we are self-employed, each month’s income is different. The very first thing we do, before anything else, is pay our tithe. I write a check and mail it immediately. Tithe literally means 10%. We’ve been doing this for about 8 years and I could do an entire testimony about it, but I’m just going to say that God will bless you financially if you start giving back just 10%. You will start to see supernatural things happen if you trust in this spiritual law. It’s all His anyway. He’s just letting you use 90%.
Honor the LORD with your wealth, with the firstfruits of all your crops; then your barns will be filled to overflowing, and your vats will brim over with new wine. -Proverbs 3:9-10
- Each month, the following bills are automatically deducted from our “Joint” checking account. This includes:
- Any insurance
- Any investment
It took me a little work to set those up, but it is so worth it to not have to concern ourselves with making sure the bill is paid on time, writing a check, mailing it, etc. Of course, we just have to make sure money is in the bank : )
- Then I transfer an agreed upon amount from the “joint” checking account to the”Allison” checking account. This is for things I pay for while Matt is at work. In this account I have 6 categories. We have agreed how much should go into each category.
- Education (school stuff)
- Snacks (The children and me – when Dad is not with us)
- Babysitter (daytime)
- Save (Anything I can save, I do with whatever I please – It’s not much right now as we are on a serious “get-out-of-debt” plan. And so, I have to be diligently frugal, but it still gives me a sense of my own freedom.
Husband knows “freedom” is my middle name so he figured out that I could get on board if I had a little wiggle room. He likes this plan because he knows exactly what I will spend each month – no more, no less. He doesn’t ask any questions. He is not even a signature on the account (his choice.) He just wants good food around the house and no more discussions about money for these above categories. It took us several months of adjusting to come to the right amounts.
- After I transfer this money into the “Allison” account, I go to the drive through bank. I withdraw it all in cash.I always wonder what the teller is thinking so I tell her about Dave Ramsey. They smile nicely.
And I put it in this cool wallet we got from our Dave Ramsey class.
It separates your money into categories.
You can write down what you spend. This is their example. You could create your own real easily, I’m sure. It is actually a fun challenge to spend only the amount in the envelope per month. “No babes. We cannot go to McDonald’s. Our snack category is used up. Or better yet, how about if we save our snack category for that new computer and eat at home! Yeah!” Hopefully my exuberance rubs off on them!
I decided to operate with cash instead of using my checkbook or debit card (stop using a credit card please!) when Dave Ramsey (in our class) said they have done studies and found that we register physical pain when we hand over our cash. Whether it is to the grocery clerk, the gas attendant, or to buy a car. We do not register this same physical pain when we use a check or a debit card. I believe it is true!
- Next, (still at the drive-through bank,) I withdraw another amount of cash that we have agreed on and I put it in another set of envelopes that both my husband and I have access. Some of these things we use monthly, and others are savings for later times. Our current categories are:
- Home repairs and renovation
- Date Night babysitter
- Car Repair and Tires
- Gas & Oil
- Blow Money (after debt is paid off)
- Miscellaneous (usually household stuff)
- As time goes on we will probably add other categories.
- I go to husbands office once a week for about an hour or two (He is with the children). I balance the checkbooks once a month and the other 3 weeks I just keep track of the checkbooks against the banks records. With an irregular salary, we have found that we really need to keep a close watch or it can get out of control. Presently, I will leave him a note as to everything I did e.g. transferring money between accounts or whatever, but we’ve decided we need to have a face to face meeting on this so we are now figuring out how that is going to happen.
How Our Grandparents Did It
Guys, this is how our grandparents handled their money. They saved cash in envelopes for different purposes. A new roof in 20 years. A new car in 10 years. Christmas.
This is how people handled money before society went crazy with credit cards and started living way beyond their means.
What Were We Thinking?
Somehow people in their 20’s and 30’s think they are supposed to be living at a standard that their parents were living at in their 50’s and 60’s. It just ain’t so.
I’m not saying don’t think big. I love to think big. We just have to have patience and do it the right way. Ouch! It hurts me too sometimes, but I am much better at it that I used to be! And I feel like an adult being a good steward of what God gave us, rather than a child who has instant gratification problems.
In the end – we will have the freedom that comes with this kind of wisdom and we will have what Dave Ramsey calls “financial peace.” Peace in your heart. Not stress. Not fear. Not crisis-thinking.
The Borrower Is Servant To The Lender – Proverbs 22:7
We are doing this so we can be free. So we are not in bondage to someone or some institution. So we can really live. So we can really give.
And What If My Husband Doesn’t Like This Plan?
- First, pray that his heart will soften in this area and he will see that working together will benefit him too.
- Second, find the right time to discuss it with him. Anything you ever want to work out with him can be all about timing.
- Third, admit your failures in this area to him. Apologize. If you are sincere, eventually, if not right then, he will probably admit his failures too. Be the example of a godly woman to him.
- And fourth, be ok with a plan he comes up with. Be respectful to his ideas. And keep praying. It can evolve into something that works well for your family.
Very soon I’m going to do a post about what Dave Ramsey calls the “6 steps to Financial Peace.” I highly recommend that you find his class (lots of churches offer it) and take it as a couple.
God Bless You And Your Ability To Be Wise In Your Money Matters!
So glad you stopped by! My name is Allison and I’m a blogger in Small Town, Oklahoma. I love social media, (used to be a tv producer in LA before kids) finding chemical-free answers for everything in life, building businesses with my hubby of 22 years and loving on my 5 babes ages 8-20. I’m mostly into social media video, so find me on facebook, instagram and lately, snapchat!