Don’t tell Dave Ramsey, but, we just got back from an awesome Black Hills South Dakota vacation.

Actually, you can tell him that. While your gossiping, tell him since we don’t have credit cards, we paid cash for the whole thing AND had $150 left over.

What you can’t tell him is, most of our emergency fund was depleted after we threw that party, and we went on vacation anyway. That breaks his precious Baby Step laws. Tragic isn’t it? I hope he doesn’t send the money police.

If your not familar with his Seven Baby Steps for getting out of debt, here they are…

1. Baby Emergency Fund. One-thousand dollars in the bank for true emergencies.

2. Debt Snowball. Pay off your debts (except for the house) smallest to largest rolling payments together as you pay off debts, until you are debt free except the house.

3. Fully Funded Emergency Fund. Three to six months of expenses in the bank, for true emergencies.

4. Retirement Fund. Fifteen percent of gross income saved in a retirement fund.

5. College Fund.

6. Pay Off The House Early.

7. Build Wealth.

We were on Baby Step 6 until it rained. When it rains and you spend some of your emergency fund, you are supposed to stop everything and replenish what you spent. We didn’t. We already had our cabin reserved and it would have cost us $500 to cancel. (Cabins are different than motel rooms in this regard.)

So what do you do? Tell Dave Ramsey to pound sand and take your vacation anyway…If you’re a sinner like me.

If your not, then you probably aren’t reading this anyway, so never mind.

I’m glad there are only seven baby steps and not twelve.

Stand by for some more money tips and budget-friendly vacation tips.

Simply,

Sis

Here we are, at another crime scene. It looks Mrs. Jone’s checkbook is in the red and is bleeding out. I was afraid this would happen, click here, to learn how she can stop the bleeding and get some hope. If you are just getting to this crime scene and want to check out our personal story of becoming debt free click here.

As with any crime scene, we must start with the facts. We’ll have Mrs. Jones list all thier bills and other things they spend money on in a month. 

“Mrs. Jones, it’s time to come clean with yourself and with Mr. Jones. Everyone knows, you can’t fix what you won’t admit.”

I hand her a free, down loadable, form to follow from the Dave Ramsey’s website.

Mrs. Jones is surprised at the amount of money they could have after bills, but, is left to wonder where it has gone. I start looking for more clues. I take a look at the past few months, and follow the tell-tale signs. I find big time money gobblers: lunch with the girls three times a week, Starbucks coffee every morning, a candy bar and diet coke with gas, miscellaneous ATM withdrawals, Mr. Jone’s golf games five time a week, and shopping with credit cards. It’s all beginning to add up.

Mrs. Jones makes a break for the scissors and then to her purse. Holding the scissors to the credit card she says, “Don’t move, or the credit card gets it.”

Mrs. Jones, lets discuss this rational…

“No, it’s too late for that. I’m going to cut these up before they ruin my life.”

And just like that, my investigation goes from an injured checkbook to a murder.

Put the scissors down and back away. Do you have anything to say for yourself?

Mrs. Jones is crying like a baby, “I was in fear for my life, it was either him or me. Now, bankruptcy is the only way out.”

I understand the credit card killing was in self-defense, but you’ll still have to go to debtors prison until we can get all this figured out. You’re far from bankrupt, Mrs. Jones. You can work through this. The judge has mercy on those who try to help themselves.

Will Mrs. Jones’s case be thrown out? Or will she get a jail house tattoo by a lady named Alice while learning to play poker for cigarettes. Stay tuned as we follow this case through court. In the mean time, fill out your quickie budget form.

Too be continued…

Crime Scene Investigator

Sandhill Sis

I receive emails like this one quite a bit. The diagnosis is simple: Too much month left and at the end of the money. If this sounds like the boat you’re in, you’re not alone. Dave Ramsey says seven out of ten families live paycheck to paycheck. Eight out of ten of upper income earners live paycheck to paycheck. What does that tell you? Most people make enough, they just don’t manage it. If left unmanaged, your financial boat will sink unless you find and fix the problem.

Luckily, the remedy is even simpler than the diagnosis.  In fact, the answer is in the above example, “I don’t know where all my money went.”  just means their money GPS is broken. They have a tracking problem. The Captain and First Mate need to get together and figure out where their dimes and dollars are dashing off to, before they have to bail into the life raft.

So where do you start?

Track your spending.  One of my clients was shocked to find out they were blowing $1200 a month here and there. Wow, $1200? That is a pile of money. Since then, the leaks in thier money boat, have been found, patched up and they are  floating to financial freedom.

Write it down. To find your leaks, look back at past records or balance your checkbook . If you don’t have records, you may be on the Titanic headed for a iceberg. Start keeping records. Keep in mind those $5 coffees five days a week add up to $1300/year.  Eating lunch out at $7 a day during the week is $1820/year. Little things add up BIG time. I’ve found people who frquently use ATMs and ask for cash back when checking out have tracking problems.

Talk to your accountability person about what you are going to change. If that person is your spouse, ask them what they are willing to change to get closer to a money plan.  This should be a polite conversation, not an attack or a nagging session. I’ve found those don’t work. A sense of humor always works better for me.

Commit to change just one thing. If coffee is your money stealer, commit to brewing your own  for a week or a month. Coke is cheaper by the case. Try taking your own to work instead of stopping by the quick-stop. Pack your lunch or pack your children’s lunch. There is a ton of cheap date ideas out there, try one.

Put your boat shoes on, Captain, you are really close to setting sail. My guess is, you probably make enough, to get out of debt rather quickly (with a few adjustments). We’ll sail into a money plan, next, so don’t throw your tracking sheet away just yet. Your boat is fixing to come in, and guess what? With a little patching, your yatch will prove better than a government life raft. You can do this.

Simply,

Sis

PS Keep the email questions and comments coming to sis@reclaimsimplicity.com

I have to ask how were you able to live on the budget.  I try to stick to a budget, but stuff always gets in the way.  I’d love to know how you were so disciplined.

Discipline is a strong word for me, I don’t do well with it. Actually, I do better with a life plan, I wrote about it here. I don’t think money is much different than diet or exercise. I like the way I look and feel when I exercise, so I get up and do it everyday. I like the way I look and feel when I don’t over eat all the time, so maybe I won’t take that second helping. Money is the same way. I like the secure feeling when we have money left over at the end of the month, so we stick to a money plan.  

Money is nothing more than a tool in your life toolbox. A tool you have to have to survive in this world. Dave Ramsey says personal finance is 20% head knowledge and 80% behavior. So it’s a change in the heart, first. This is the hardest part because it involves emotions and relationships. Here is how the shoe leather meets the road…

Admit you need to change.  Before you start a budget or a spending plan, ask yourself, are you ready to change? Can you look yourself in the eye and say “I’m ready to change”! Until you want to change, it won’t happen. If you’re married, your spouse will have to get to that point too. Keep in mind, you can only change yourself, though. You can’t make others change with you.

Accountability. Whether married or single you have to have a partner who will hold you to your plan. If your married you need to be on the same page. If you can’t agree with your spouse on money, it may be a relationship issue, don’t be afraid to get some help. If you don’t know what your page looks like educate yourself: read a book, find a person who is out of debt and ask them how they did it, or email me (it’s what I do). There is lots of free help out there.

Get mad. I mean mad. If you are at a point in your life you can say, “I won’t EVER live like this again.” PERFECT. Use that anger at your past money mistakes to sling shot you into control of your finances. Where you have the freedom of choosing what your money will do for you,  instead of letting your money make those choices for you.

Forgive yourself. So you screwed up, your human. Leave the past in the past, learn from it and move on. Don’t waller in defeat when you can move on to victory.

Congrats! You’re 80% of the way, to sticking to your future money plan. If you want one, that is. Riddle me this! Do you even want a money plan? Or Are you happy with where you are financially? Why or why not? You can email your answers to me at sis@reclaimsimplicity.com or just leave a comment.

More to come!

Sis

It started back in 1995, right after we were married, living on one income near Camp Lejeune, North Carolina, where Ben was a Marine. We never had money left over at the end of the month. I was the bill payer and was always frustrated when there was never enough. My frustration didn’t do much for Ben, who was working hard at his military career, that he loved. Besides, I was the one who said, “I don’t care what you do, pump gas for all I care…just come home happy.” Which, he did, but, something had to give. So I bought a book called How To Get What You Want Out Of Life, With The Money You Already Have by Carol Keeffe. A book that started us on a budget and put me on a quest to help myself and others become better money managers.

Fast forward to 2007, a new career for Ben, two kids, two car payments, a mortgage and more…later. Our budget still in place, but tight again. Something was missing in our money formula and it was threatening our simple life. Then some friends told us about Dave Ramsey, a personal finance guru. Ramsey, a multi-millionaire who had gone broke and became a multi-millionaire again, but this time for keeps. I liked this guy already, he sounded like he may have something. We started listening to Dave on the radio and checkout every book in the library on personal finance, a total of five. Then we took his Financial Peace University class and nine months later we were debt free, except our house.

I don’t  want to reinvent the wheel, as far as money management goes…Instead I’ll share some real life case studies that you may see yourself in or someone you know…

Choosing to become debt free has totally changed our life and marriage. It has allowed us to put our hopes and dreams at the top of the budget, give more to causes that mean a lot to us, and keeps me at home where I can nurture these precious lives that surround me. I now coordinate Dave Ramsey’s Financial Peace University classes in our small town and give one on one help anyone who wants or needs simple budget advice. This is sick hobby of mine, I do this for free over coffee or over the Internet, that always makes my simple life richer.

I don’t  want to reinvent the wheel, as far as money managment goes. There are far too many experts in books, videos and blogs. Instead I’ll share some book reviews on money and life and some real life case studies that you may find yourself in or someone you know. If you have questions or comments about personal finances, email me sis@reclaimsimplicity.com or leave a comment. I’ll keep your identity out of it, but share some ideas and tips with everyone that might help. Lawd knows, most everyone is hurting in this economy, but together we can change that and embrace simplicity in the process.

Simply,

Sis