What is the Zero Based Budget? - It's is where you take your take home pay and litterally spend every dime you have before the month begins Every Single Month. Essentially you're telling your money what to do. No surprises, no "let me pick up pizza tonight instead of cooking", no spur of the moment trips... Neccesities come first, then debt, Thankfully, we don't use credit cards so that's one debt we don't have to tackle.
We're litterally running from Debt and have made a promise to God, ourselves, and the girls that we will "owe no man anything but love" and that we are going to become Debt Free!
Here's some Myths to ponder over- taken from the FPU workbook
Myth: Playing the lottery and other forms of gambling will make me rich
TRUTH: The lottery is a tax on the poor and the people who can't do math!
Myth: Cash advance, rent-to-own, title pawning, and tote-the-note car lots are needed services for the lower income people to get ahead
TRUTH: These are horrible, greedy, rip-offs that aren't needed and benefit no one but the owners of these companies.
Myth: "I pay mine off every month with no annual fee. I get brownie points, air miles, and a free hat."
TRUTH: A recent Dun and Bradstreet study found that when you use plastic instead of cash, you spend 12-18% MORE because spending with cash hurts. So what if you get 1% back and a free hat!
Myth: You need to take out a credit card or car loan to "Build up your Credit Score."
TRUTH: The FICO score is an "I Love Debt" Score and is NOT a measure of winning financially.
Did you know that Dave Ramsey doesn't have a FICO score? Seriously! So in this CrAzY world, he couldn't walk down the street and rent an apt because his FICO score doesn't exist....
He can buy the DERN place, but he can't rent from it! CRAZY!
You're inspiring me! We don't have much debt (well ... compared to most). We were covered up at one time and aside from house and car (URGH!), we only have one credit card that is used for emergencies only. It has a higher balance now than it ever has which is eating me alive ... but we could pay it off easily. That's my goal for the summer.
ReplyDeleteThis weekend, I'll be working on the budget. The kids are gone for the summer and now that we will only be paying afterschool care for both, we can begin eating away at the car and house.
Keep sharing words of wisdom. I love the Dave Ramsey podcast. Still don't know much about investing, but I'll keep listening until I get it all straight in my head :)
Stephanie,
ReplyDeleteHere's some Dave advice...Start small...Start with your smallest debt first and work your way up. You'll feel empowered this way. Once you're done with that, take that payment and add it to the next debt. This way the next debt in line will be paid off quicker. It's the "Snowball effect".
Another thing dave teaches is that saving/investing is done when you're debt free (not so much the house), but everything else. So attack the other debt with a vengance. Then once you've been freed from the chains that bind you, and you have a slew of money you can now create your emergency fund with every month! Cut up the credit cards, b/c those are not meant for emergencies. [wink]....Good luck girl!