Budget and freedom are two words most would think are antonyms or words that should not be in the same sentence. However, I have found that budgeting in your personal finances gives you a freedom to spend without guilt or fear of consequence and gives you a level of control over your finances that is hard to find otherwise.
My wife and I have been through Dave Ramsey’s Financial Peace University, which is a 9-week (I think it might be shorter now) class that meets once a week and is designed to help you with your personal finances. The core of the class is a zero-based budget, where the goal is to tell your money what it will do for you each month, instead of looking back and wondering where it all went. “Every dollar, on paper, on purpose, before the month begins”. The class also covers important personal finance topics, such as retirement, investing, insurance coverage, etc.
I consider myself fairly competent when it comes to finances – I have a college education where I received a business degree with an emphasis in accounting and have taken many finance classes. I found the class and principles refreshing – they go back to the basics and are designed to get you debt free, protect your assets, and build your personal wealth, with the goal also to be a blessing to others through generosity.
The class goes through a series of “baby steps” to help you walk through getting your personal finances in order. The steps are clearly explained and are attainable goals that you can easily measure your progress against. As a bonus, the class helps get spouses on the same page as well, giving ownership of the process to both spouses, which can help improve communication and teamwork in a relationship.
For me personally, I like to have fun and spend money. The budgeting process allows me to figure out how much fun I can afford, and then plan each month’s fun activities knowing they are already paid for. There have been a number of times where we were under budget on the entertainment category, and have been “forced” J to go out and have some more fun – how can you argue with that! I also have many significant personal financial goals that I hope to achieve, and can say that these principles have helped give me targets and ways to measure my progress against my larger financial goals.
Some people may argue with me that Dave Ramsey’s principles are too basic/unsophisticated, and I honestly can’t say that I have followed all of his recommendations (for example, I am more aggressive in my investing though I fully understand the risks, can afford to lose the money, am ahead of schedule for retirement/other goals, etc) but it is hard to argue with the lives and family trees he has helped change with these basic principles, which he refers to as “God’s and grandma’s ways of handling money”.
Classes are available in many places (often at local churches), cost around $125 for materials and are led by people who have gone through the class before. If you are interested, Dave Ramsey’s website can help find a class near you.
Even if you do not look into the class, adopting a zero based budget each month can help you get traction on your personal finances, help you reach your personal financial goals, and give you the freedom to spend without guilt – 2018 is a great year to give it a try!
Let me know if you have taken Financial Peace University (or something similar) or are on a zero based budget already and how the results have been for you… I would love to hear your stories!
Brian
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