Groceries and Gas are pretty self explanatory but let's discuss fun and extra. Fun included anything like dinner or movie out, clothes, golf trips, etc. So anything outside of "needs"and really more of "wants". Extra was for any unforeseen expenses- like a doctor's appointment, prescriptions a new tire, etc. After each week was over any money that was still left in the envelopes went straight to savings. This became actually fun for us to see how much we could save and not spend during the week. We significantly cut back on our "fun" spending right away since that was an easy one to save because it was a "wants" purchase anyway. For us, the envelope method was the best, we are visual learners I guess - and bonus, I can lay down mad rhymes. Seriously though, knowing that I was walking into the grocery store with a certain amount of cash and that I could only spend that much was extremely helpful and we wasted not one penny. Now I'll back up for a minute, in our budget we had enough wiggle room to allocate extra payments towards our monthly credit card bill each month. If you don't, then using the envelope method and putting all of that extra towards your debt would work perfectly. After making extra payments each month towards our credit card and sticking to our budget we were able to get rid of that debt in just about a year, yippee! Next, we took the money we put towards our credit card and snow balled it right over to the car payment (this is actually baby step #2) - you can imagine how fast your debt will start disappearing by doing this! It really is quite the thrill, you just have to start baby stepping and believe me - it goes a lot quicker than you think. It is also an amazing feeling to be in control of spending and able to do things -like actually give. Which really was a reality check for us - and a continuing reminder that all this time we could have been doing good for God's kingdom instead of wastefully spending on burgers and french fries. So what about you? Do you need a financial reality check this month? Come join us as we tighten up our budget, remodel our finances and enjoy the peace it brings!
Check out this link for Dave Ramsey's Baby Step Plan for getting out of Debt!
"Now it is required that those who have been given a trust must prove faithful"
1 Corinthians 4:2