I screwed up!! I decided to just let it slide and hope it all worked out. So, while we were gone on our 28 day road trip across America, we didn’t sit down with our trusty budgeting tool, the pink legal pad. We have used the legal pad in shades of yellow, white, and now pink for 13 of our 14 years of marriage track our money. We Dave Ramsey our money and give every dollar a place. We pay ourselves first in our IRA’s and then pay mortgage, electric, and so on in order of importance. We have never had student loans, credit card debt, and other big no-no’s, but we have budgeted our car payments in the past to pay off quicker. Now, we budget our mortgage to get paid off much faster by paying three or four mortgage payments every month.
So, the problem isn’t that we missed a bill or our one mortgage payment, since they are all automatically paid, or we forgot to put money in our IRA’s, also automated, it is that we missed a bunch of extra mortgage payments for the month, and we don’t know exactly where the money went. The money went wild and now we are having trouble finding where it went. It didn’t go into my savings that’s for sure, so I’m guessing since it all is deposited in our checking account, that somehow we spent some just living life and not caring like a normal American couple.
Again, this is the first time we have broken the Dave Ramsey rule of budgeting and giving every dollar a home. I can see how it is easy to just look up one day and realize I have no money in my account, because I spent freely without a plan. I can now see why people rack up $2,000 credit card debt in less than three months, because they don’t pay attention to their money. So, here are the lesson’s I have learned from my month of no budget.
1. Every dollar needs a home
It’s true! Dave is right on this one (but not on travel rewards cards). You have to categorized your money and give it a place to work. If you don’t they just loiter around on the corner and finally they disappear. I even put my budget in order of must pay to live and pay as a luxury item (IRA’s are must pay to live/ Extra insurance luxury). But, make sure you have all money accounted for. I do keep $300 in checking for my bad habit of being lazy (eating out, pay car wash) or just seeing something that looks too awesome to pass up (Slinky’s and Slip n Slides).
2. You have to plan to have a financial future
“You can hope and wish in one hand, and crap in the other. But, only one hand has something in it.” Great quote I was told in 7th grade from Coach Stan Shannon. A lot of people just hope and wish their finances work out, usually they don’t. But, with a plan you actually have a great financial future and that future starts with a budget. That is where you meet with loved ones and plan how much you need to save each month to reach a great financial situation in ten to forty years. You have to plan and keep talking about the plan every month for it to work.
3. Spending freely is too much fun
Holy crap! I do like to buy a bunch of Jell-O mix and a baby pool and just sit in the Jell-O, but I got goals that don’t allow such things. Spending is fun, and science has shown you get a spending high, but we have to curb that high and stay focused. I learned that I really did enjoy walking around in Las Vegas and dropping a dollar on an arcade game here and there with my kids. By the time we were done I spent a good $60 on stupid midway and arcade games one dollar at a time. I have to be more careful and know that sometimes spending without a plan is too fun. So ye be warned!
4. Debt ridden people need my empathy
I have in the past had trouble understanding other people, and how they could rack up so much debt ,or just start saving for their future when they are in their 50’s. This lesson of not budgeting has taught me to understand how easy it is to get yourself into those situations. If you were never taught to budget or plan for your future when you were young, then your money is just going wild from the first pay check. I feel their pain and lack of financial knowledge a little better. This allows me to help and understand others.
5. I need to start budgeting with my children for a better family budget
This month of not budgeting also woke me up to realized I have children who don’t know how to budget. I need to start gathering the whole family for budgeting and that way we can all learn from the experience, and add to the budget. They can add in youth sports fees, school clothes, an upcoming field trip, or whatever they know they are doing that month. This will also help keep those items from just popping up in the middle of the month. Starting your kids out with a strong knowledge of budgets can’t hurt at all.
So, my next pay day is in a week and you better bet I will have the budgeting pink legal pad out and ready to go. I also, need to find a way to make up the missed mortgage payments, so I can achieve my bigger goal of paying off the mortgage in time for my 12 year old to be driving. It will also be a family affair this time around as we will be budgeting for August with school supplies, clothes, shoes, random school fees, and other nonsense that we can all learn from.