As a college student in America, I am destined for school debt and credit card companies to target us to spend more money equalling more debt to pay off. Wellllllll I’m trying to beat those odds! My parents have taught me since my senior year of high school how to follow Dave Ramsey’s idea for budgeting. For those who don’t know Dave is big on eliminating debt or being in a place where you don’t go into debt. Right now I only have my school loans to pay back and the fact that I don’t have a credit card really helps with no debt. Dave says that as soon as you start planning out your budget to see where every single dollar goes. He suggests using his app Every dollar and it works great for my parents but for me its harder due to my weekly paychecks. The app is set up for an overall month budget and for me its easier to do a weekly budget because I get paid every week versus biweekly. He also recommends having at least a 1,000 dollars set aside in your savings account for an emergency. My family calls this the “OH SHIT” fund and it’s for anytime that you have a bill that you weren’t planning on. Let’s say something like your car broke down or you go to the hospital. This money is set aside for times that you can’t pay for something that comes up. Now the main idea is you take your paycheck and allocate the money to different areas. But the biggest thing is Dave says you need to have the cash to pay for things, no cards unless its necessary to. Even if you use a card it has to be a debit card because that’s money you actually have to spend. Going along with the idea of using cash you need to have different envelopes labeled with what category it goes in. For instance, I have envelopes for rent, groceries, gas, Maya, eat out, to spend allowance and savings. For each of the categories you put in money to spend and what you have in there is all you have. If there isn’t money in the envelope you can’t get whatever it is you wanted. This requires a lot of self-control and discipline. At first, it will seem like a lot to take on and for me, it felt like I had no money to spend but that’s so far from the truth. Now I see that the money I do have its actually quite a lot and when I’m not just going out and buying things willy-nilly I have more money. Before the budget, I would go to my favorite place Target and just spend money because I saw it in my account. Now I have a limit and I have to decide, do I really need these 40 things from the dollar bin or should I save my money for something I really need? It really makes you sit and look at exactly where your money is going.
To help with my spendings I use fabric envelopes for the categories listed above to keep in my wallet so that I can see exactly what I can spend. Now mentioning the envelopes I get them made and have them customized to fit the categories. For example, my grocery envelope has veggies all over it and Maya’s envelope has little kitties on it. I get mine from the Etsy store Nana’s Magical Stitches that is linked here. Having the fabric envelopes you see the money, have it on hand, and it’s cute too. Seeing the physical cash going away and the envelope getting emptier and emptier really will make you think about how you spend money. Now aside from the fabric envelopes I also write down every penny I spend to track where my money goes. This is allowing me to afford things such as travel and new experiences. With my budget, I can afford to go crazy on Florida’s tax-free weekend on clothes, afford to go to Chicago, and out of the country to Auckland! It’s crazy to think as a 20-year-old being able to afford trips like that. And on top of that, I am still saving money to pay off my loan for school.
This sudden change is hard and you have to work at it. Budgets are always changing and sometimes even every time you get paid but if you have a little self-discipline and the drive to pay off debt or to afford that new trip you want to take it gets easier. Dave says to give it at least three months. You will start to see a change and figure it out or maybe this system isn’t for you. After three months decide if this is working for you if not find a new way to budget. This might not work for everyone and that’s okay. For now, it’s working for me and I’m happy my parents helped me figure out that money doesn’t grow on trees and take responisibtly in my life.