Living pay check to paycheck is a struggle. If you attempt a monthly budget when you live this way and spend too much in a week, you will overdraft your account making your situation worse. 76% of Americans are living paycheck to paycheck. That’s a lot. It’s very unfortunate that many of us fall in that percentage, including Daniel and I.
That percentage wouldn’t be as high though if there was more knowledge about money management. Think about it. Schools don’t teach you how to manage your money. I don’t know about you, but my parent’s certainly didn’t teach me how to budget. They didn’t teach me their secrets of how they stayed “afloat” when money got tight. I had to learn that on my own and it didn’t happen until I left the nest. There is hope though. There is a way to get rid of debt and stop living paycheck to paycheck.
Money Management: Dave’s Financial Plan
Let me introduce you to Dave Ramsey. Dave is America’s trusted voice on money. He saw a need for a relatable and proven plan for getting your money in shape. So, he wrote the Total Money Makeover. It skyrocketed to #1 on the New York Times best-seller list in it’s first week, and has gone to spend more than 200 weeks on their list. Today, more than 5 million copies of the book have sold worldwide, giving people the hope and strategy they need to take on their own money makeover.
Beginners Guide to Start Managing Your Money
Get on a written plan. A budget is telling your money where to go instead of wondering where it went. You don’t have to start with a perfect month. Start now, where you are, with what you have. Write down what you have today for income and expenses and spend your income on paper before the month begins. You can get free, downloadable budget forms here.
Also, try using an envelope system to help you spend cash where you have budgeted it to be spent. Take some envelopes, write budget categories on them, and only use the allotted money to purchase specific things. When the envelope is empty, don’t buy anything else in that budget category. Some bad habits need to be replaced with good spending habits. The envelope system is a great solution. You must quit overspending in order to quit living paycheck to paycheck and being broke.
So create your budget either on paper, or electronically based on your preference. Dave created a free budgeting website and App- EveryDollar which follows his Total Money Makeover plan and allows you to take your budget with you where ever you go. But, I will cover Every Dollar in a future post. But, create your budget first, on purpose, before the month begins and include your spouse and family! Then you will have a game plan, and you will start to understand what Dave means when he talks about having financial peace.
Spouse and Family Involvement
You cannot skip this part, it is very, very important. Don’t go at this alone. You will need support, an accountability partner, and everyone needs to be on board and on the same page. This will add a sense of unity to your relationships with your spouse and family and make the journey a little easier.
Communication is equally important. You should have monthly discussions about your budget, plans, goals, upcoming events, etc. with your spouse and family. You don’t want to destroy relationships while you take on the makeover. It’s also a great thing to teach your children. Remember, schools don’t cover this subject. Start your preparing your kids for the future now, so they will not make the same mistakes.
Life doesn’t stop when you decide you are going to change your life. It never fails, the moment you decide “I’m going to lose weight” or “I’m getting serious about achieve financial peace”, a curve ball gets thrown at you. During these times, you will need an accountability partner to guide each other through it and make the proper decisions. It’s going to be tempting to just give in at first. So keep that in mind. Just because life gives you a lemon, doesn’t mean you have to fall further into debt or stay in debt.
You can break the vicious cycle of living pay check to paycheck and being broke. It’s not going to be easy and it’s going to take time, but it is possible. Read the Total Money Makeover! Start today and start your journey to financial peace. You deserve it.