Budgeting for your new life

A few months ago, Ben and I started thinking very seriously about our finances and decided to go through Dave Ramsey’s Financial Peace University. I was skeptical at first – annoyed by the Monday night classes after a long day at work, wary of a potential marketing ploy and unsure of my own ability to stick to a strict budget plan, but thankfully Ben is a stickler for following commitments so he (politely) dragged me there the first few weeks.

We started the class as an engaged couple and combined finances shortly after. Since we were living together, it made sense to start budgeting together as well. Our class was taught by two tremendous couples who walked us through each lesson and shared their own stories about budgeting their way to financial freedom by sticking to Dave Ramsey’s 7 baby steps. During one of the first classes, the teacher shared that he’d paid off everything, including his HOUSE. Ben and I just looked at each other thinking, “Can you even imagine?!” We’re focused on paying off student debt and then my car and paying off our mortgage early had never even crossed our minds. House debt is good debt right?!

Our eyes were officially opened and I now had good reason to actually pay attention and not just day dream about the glass of wine waiting for me as soon as class let out.

In one of the first classes, a video version of Dave walks you through a basic budget example and then you’re tasked with completing it at home. It’s a simple block-and-tackle overview with a breakdown for things like groceries, restaurants, hobbies, etc. but it took us forever to fill out. The hardest part was tracking our previous expenses so we’d have an accurate projection for the next month. More to come in a later post on how we do this now…thank you, Mint.com. Spoiler alert: We spend way too much money eating out.

As class progressed, video-Dave walked us through the baby steps I mentioned above.

1. Build a $1,000 emergency fund

2. Pay off all of your debt using the debt snowball

3. Save 3-6 months of savings

4. Invest 15%  of household income into Roth IRAs and pre-tax retirement

5. Start saving for your children’s college funds

6. Pay off your home early

7. Build wealth and give!

We’d already completed step #1 at the time of the class, but were far from step #2. Thus began our journey to pay off debt and crush those student loans into oblivion. Because Ben is a math genius and loves spreadsheets, he spent a Sunday forecasting our finances for the entire year, following an aggressive payment plan that would have us out of debt (minus the house) by the end of the year. While it meant sacrificing a few things, it helped us realize that finally paying off Ben’s time at Georgia Tech and fully owning my Volkswagen were not such far fetched goals.

We’re now knee deep in following Dave’s debt snowball plan and the end is near! We should be in the clear by August and moving into Baby Step #3.

The moral of this story is that financial planning and budgeting for every day expenses is not as inconceivable as I once thought. It’s opening up doors for us for future plans and has helped us start our new lives as a married couple on the same foot. We attend semi-regular “budget meetings” held on our couch and talk through the cost of things like upcoming trips, the many weddings we are a part of this year and our out-of-control Chick-Fil-A habits.

I’ll share updates on the tools we are using, some of the pitfalls that have come up and our progress over the next few months. In the meantime, I’m going to go cook dinner using groceries that we budgeted for this week.

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