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The Truth About Budgeting

Myths and truths about budgeting

from daveramsey.com on 03 Aug 2009

Myth: I don't have time to work on a budget.
Truth: You don't have time not to make a budget!

The dreaded "B" word. Budget. The only other word that starts with "B" that might generate a worse reaction in most people is the word bankruptcy.

Unfortunately, the word budget has gotten a bum rap – it is basically just a PLAN. When you budget, you're spending on paper, on purpose, before the month begins. But many people view a budget as a straight jacket that keeps them constrained. Freedom and budget just don't seem to go together.

However, when you see that a budget is just spending your money with intention, you'll actually experience more freedom than before. Many people say they've found even more money when they created a realistic budget and stuck with it.

Here are some pointers:

Give it three to four months to start working. It won't be perfect the first time you do it.
Spend every dime on paper before the month begins.
Over-fund your groceries category. Most people underfund that category.
Husbands (if applicable) need to loosen up and quit using the budget as a whipping tool on their wives.
If married, spouses need to do the budget together. The preacher said "... and you are ONE."

When you are spending your money on purpose, you will be on your way to a Total Money Makeover. You will be on the road to changing your family tree forever!

Create a sample budget online in 60 seconds!

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by ron at July 27 2009 4:32 PM

Always good to have a plan!

by JillsFavorites at August 28 2009 10:39 AM

Don't forget to budget even when you do have a good income... this is the time I pay the biggest "stupid tax".

by Teresa Nielson at September 14 2009 5:19 PM

Don't get discouraged. Keep going. Dave's plan works. Live like no one else so you can live like no one else. Do a monthly budget along with getting your $1000.00 emergency fund.

by Adam at September 24 2009 7:16 PM

Dave's plan is so simple that it will be the hardest thing you do. You are going to have to change you. Get your budget and your emergency fund. Start the snowball. We have so far paid off $14K in 10 months, having about $13K to go. Don't let Murphy or anyone discourage you; seeing the results are incredible. What makes me sick is the $3K I am now sending Chase, BOA and AE to get out, when I could be investing it. But the light at the end of the tunnel keeps getting bigger. Quicken says according to current salaries, I can get out of debt, put 2 kids through college, buy a $200K house in 2013, and retire in 29 yrs with $2.3million in investments. That is the result of Dave's plan. Thank you, Dave Ramsey.

by Noel at October 01 2009 8:49 AM

Today is the first day in my 12 years of driving that I have paid for my state inspection sticker on the day that it expired, and not 6 months later. Why? Because we BUDGETED for it! It's amazing that I didn't panic and flip out over "$68.00? How do they expect me to come up with $68.00?" Ahhh... Peace of mind. Come relax with me! It's great!

by Maggie at October 07 2009 8:23 AM

My husband has been out of work for two months now and it looks like it might be a long stretch of unemployment. The good part is that we started our TMMO in 2005, and paid off over $55,000 in credit cards and car loans. We have a good emergency fund (although I hate to have to dip into it), and prior to his layoff we were living on his paycheck. Mine went for savings and paying extra on the mortgage. I've had to cut back on contributing to retirement, but because we were prepared, life isn't so bad. Putting money in the envelopes works and even now we still have our blow money(although reduced), so I am not feeling deprived.

by Chris at October 08 2009 3:45 PM

Started Dave's plan in January, and I have paid off almost $15k in debt in 9 months with only 1 income! This plan works and it is too easy to not do.

by Tim at October 19 2009 8:55 PM

Once we faced our finances head-on, budgeting has allowed us to see & plan where our money is going. I don't have to worry about my debit card being declined because I thought we had enough to cover it. Our budget tells us exactly how much we can spend & no more, with the benefit of actually seeing how much extra we can apply towards knocking off that evil debt.

by danielle at October 28 2009 10:19 AM

Tears came to my eyes today when I did my budget and I had a $285 surplus after I accounted for everything. I love telling my money what to do!

by Quinn at October 29 2009 10:22 PM

I'm 17, and I make sure that I budget and save out of every pay check. It is usually complicated to get my friends to follow in my path, but come on! It REALLY works!

by Brenda at November 14 2009 10:57 PM

Just getting started. I have my budget in place and have payed off two small bills. I am excited and plan to pay off 25000 in two years. Thanks Dave. The first time things have looked up in a long time.