Advice from Nashville's Financial Guru Dave Ramsey
Dave Says
By Dave Ramsey
Author of Financial Peace and The Total Money Makeover
1/24/2005
Trouble getting on new budget!
Dear Dave,
A very good friend of mine just introduced me to your financial advice. She loaned me some of the books you’ve written and took me to one of your live events. I’m trying to work the baby steps you describe, including building up an emergency fund and creating a monthly budget. However, I’m having trouble transitioning to the new budget. I get paid in the middle and end of each month, but my bills are due at all different times of the month.
Brenda in Oklahoma City, OK
Dear Brenda,
When you sit down each month and create your written budget, I recommend a two column budget for your situation. Once column represents the first of the month and one column represents the 15th. Place the income for that pay period at the top of each column then work your way down the column spending every dollar on paper, for that pay period, until all of the money is gone. If your cable bill is due on the 10th, it would go under the first column. If your electric bill is due on the 21st, it would go under the second column. Then you can adjust the categories in which you might have more flexibility. Clothing is a good example. You can budget for clothing in whichever pay period has the least amount of bills due. So clothing may come from the paycheck on the 15th and not on the first.
Effectively, you’re not only spending every dollar on paper before the month begins, but you’re spending every dollar on paper for each pay period before it arrives. This is how a lot of people pay some of their bills already. They know the mortgage is due on the first, so they pay it out of the first check and the car payment from the second check so they don’t have those two bills eat up their whole first check of the month. They’re already dividing it up in their mind that way; I’m just suggesting that you plan it all out on paper instead.
-Dave
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