Cash Only Budgeting

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      I found Dave Ramsey’s books in the public library. “Financial Peace
      Revisited” is a very good book, and a quick read (probably because of
      the big type!). Dave Ramsey has a syndicated radio show, and does a
      lot of financial counseling and seminars through churches.
      Consequently, he tends to couch things in terms of basic Christian
      ethics, of tithing, stewardship, and debt as a form of servitude.

      If
      you don’t have a problem with this approach, it works well. (Suze
      Orman takes a psychological approach to get to the same places.)

      Anyway, he advocates setting a spending limit for each major
      category: groceries, entertainment, car maintenance, etc., and then
      withdrawing that amount in cash. Each category has an envelope. If
      you go grocery shopping, you grab the grocery envelope.

      If you want
      to go out to eat, check the entertainment envelope. Once the money’s
      gone, it’s gone. This way you’re spending real money instead of
      tracking figures in a check register.

      Makes you think more about
      what you’re spending on, and how to stay within a limit.

      Then there’s the debt snowball: First, build up a cash reserve of
      perhaps $1000. This is your emergency fund. Rank your debts in order
      of smallest to largest, irregardless of the interest rates.

      Make
      mimimum payments on each debt, and focus on paying off the smallest
      one first. This frees up cash. Take the minimum payment from your
      first debt, and add that to the minimum payment on the second debt
      until that one is paid off, and so on down the line until all you
      have to pay on is your house. He advocates getting mad at your debt
      so you’ll pay it off faster.

      Right now we’re in the process of
      building the emergency fund. I can’t wait until I can start paying
      off the debts.

      Anyway, get to your public library and start looking. “Financial
      Peace Revisited” is worth the read.

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