Michael & Liz are Bloggable

As most of you know, Liz and I follow the financial advice of Dave Ramsey. I can't claim that we follow it as closely as he'd advise us to, but for the most part, we follow a lot of what he says. We "officially" started his plan back in November 2008 and we are close to claiming "we are debt free(except the house)" by the end of June. In fact, we are planning on our celebration dinner being the same date as our anniversary, July 7th. This post isn't meant to convince you to follow same plan, but I'll get to my point in a bit.

When we were planning on starting his plan, around October 2008, we cancelled our 3 credit cards leaving us with only a debit card. We had no balances on them, but Dave's plan was to not have any debt, and credit cards create debt, so we went ahead with it. I honestly was not all for doing this and I don't think Liz was either. We just were told this is what you should do, I couldn't find a strong reason why we needed them, so we did it. The main claim for keeping credit cards was that it builds your credit and your FICO score. My feelings now? That's total bologna and not worth it at all. The logic behind using credit cards is just so incredibly backwards to me now.

In February of this year we decided to refinance the house to a 15 year mortgage instead of keeping our current 30 year mortgage. The math behind the decision was so solid I could fill an entire post with it. All things considered, we'd save $3500 within the first year and almost $30,000 in 5 years. I was nervous though: "We have no credit cards, what will our credit score be? What if it's super low because we have no credit cards and we can't get a good rate? We've never missed a payment on anything though so maybe we'll be OK?" What did our scores come out to be and did it effect our refinance? I'm not going to say what our scores were, but I don't think it's possible for us to get them any higher. So yes it did effect the refinance... positively. Dave 1 - Us 0. In my opinion, the main claim for having a credit card was completely debunked by our refinance.

While his plan has been a huge blessing on our life, one way in which we did not follow Dave's plan was by immediately going cash on everything. I started out saying "oh please, we have a debit card, it's the same thing as having cash". After 12 months of using our debit card and only hitting our food budget 2 of those months, we got fed up (pun intended) and in December 2009 we went to ALL CASH on food. $700 a month on food. It's not a huge sacrifice, but there were previous months where we spent a good $1000 or more with ease! So we started on the cash plan for food and since then we have never gone over on the food budget. We've hit it EVERY single month since. Dave was right, paying with cash hurts sometimes and knowing you only have $100 and you have 10 days left in the month, really makes you think about your budgetting. Dave 2 - Us 0.

But we're stupid, we were not on cash for anything else in our budget. How'd that go? Not well... we then got fed up at the beginning of May this year and went to cash for EVERYTHING else. Our personal spending budgets were the number 1 target. I can't remember the last time we did well with our personal budgets, we constantly went over and April was the worst, which is why we put our foot down. How are we doing this month? It actually has been a huge sigh of relief. We have no chance to miss our budget. I have the cash in my wallet and when it runs out on the toys I want to buy or fun I want to participate in, I have to wait until next month. We are right on track for the budget this month because honestly, we have no choice. You can't spend next month's cash if you don't have it on hand. Dave 3 - Us 0.

Now my main point of this post wasn't to promote the Dave Ramsey plan, it's really to say that this month I feel like Liz and I have truly, finally understood the definition of "No". Often times Dave Ramsey says "children do what feels good now, adults are able to delay pleasure". Every other month we'd swipe our card, get what we wanted, and slightly ruin our financial plan for the month. When you think about it, it's really a child's reaction to toys. "MOM I WANT IT NOW!" I kind of feel that's why people (me) gain weight. Eat, eat, eat, and then think about what you did. But in order to reap the fruits of your budget, we've had to learn how to say "No" to ourself.

There has been SOOO many things this month that I've wanted to pay for or do, but I have my precious cash and it's important to me that I spend it wisely. Lets see... things I've passed on this month that I don't think I normally would have:

• $100 - Demarini Rayzr softball bat online. That's a pretty low price for it, and in my church league, this bat is RIDONKULOUS! Home runs galore. I have 3 other bats in my bag though.
• $45 - 2 25 pound dumbbells. I started the P90x workout program again and my elastic bands broke during workout #3. I can run for a few months instead, I don't need the bar bells right now.
• $20 - Seeing Pat McGee in downtown Raleigh this Saturday. I'm not a big fan of concerts or standing in crowds of people.
• $40 - Inside-Out Sports Classic Half Marathon this weekend. This was tempting, but I'm still getting over a pulled calf muscle, and I don't want to push it.
• $40 - Skirt Chasers 5K in downtown Raleigh - This was also tempting, didn't really feel strongly enough to want to do it.
• $20 - 3 classes for a fitness bootcamp in Raleigh. I've always wanted to do a bootcamp of some kind, but we have a gym membership for a reason.
• $20 - Durham Bulls visor at the game last night. I have 2 visors I currently wear that are perfectly good visors.

Obviously we could afford these things, but that's $285 of stuff I really wanted but it wasn't important enough to spend from my personal budget. That money right there is a car payment! There is no doubt in my mind we'd over spend this month if it wasn't for going all cash. Without being able to say "no", the month would drive us crazy. I'd have been done with my cash by May 3rd, but it's starting to come pretty easy. And the best part about it is that we might even fall under budget this month.

This is probably obnoxious to those of you who rolled your eyes a bunch during this blog post, but here are a few more awesome Dave Ramsey quotes:

"On paper, on purpose, before the month begins."
"Take control of your money or your money will take control of you."
"You tell your money where to go instead of wondering where it went."

One more thing, we're totally getting rid of satellite in June. Going back to bunny ears. Amen for simplicity.