Instapundit links to this article on budgeting and Dave Ramsey’s budgeting process. Since my wife and I are in our second month of the budgeting process, I have some thoughts about the article I wanted to share.
Yes, the envelope system is constrained, but Dave only suggests that for certain categories. Things like groceries and eating out are two excellent categories for envelopes for example. But a lot of categories aren’t suited to the envelope system. My wife and I are doing a budget every four weeks. We do the budget in pencil because we have to make changes. Within 15 minutes of making our last budget, we came up with a list of three things we hadn’t included. We’ll be revising the budget to handle those. We can always rearrange our budget to handle unexpected events. Dave Ramsey’s budgeting process isn’t as constrained as the article would have you believe.
I read this post by Elie Mystal about why $250,000 doesn’t make him rich in his town. I’ve been thinking about his post for some time. I have long said that $250,000 in a big city is like $100,000 in the town where we live. Upon further reflection, that may not be right. It is possible to live in our town with a $100,000 per year income and not live in a place that looks like it was just robbed. It’s also possible to live in our town on $100,000 per year and have assets that aren’t judgement proof.
My wife and I have a decent income, but we seem to be experts at spending 105% of our income. We finally decided to do something about it and have enrolled in Dave Ramsey‘s Financial Peace University. So far we have made a budget, and are sticking to it. Our next step is to get rid of our non-mortgage debt. We have a plan to do that, I’d just like for it not to take four years.