Duh moment

[lajes]

Okay -- I have been a lurker on this board for many years. I paid off $60K in credit card debt by lurking and using the Suze Orman / Dave Ramsey Methods. I inter-changed the interest rate vs the "feel good by paying off methods" and it worked. I had to drag DH through it to get everything paid off.

I am now down to student loans and it hit me -- I don't have a handle on my budget -- We over-spend on incidentals because we don't have as much savings at the end of the month as I figured.

I opened another checking account (at another bank) three months ago and transfer the grocery, gas, eating out, vet appt, hair appt, etc. money that I budgeted to this account each time I get paid. Guess what I found out? We spend way more on these things then I could have guessed.

We end up short at the end of each pay-period. We eat PBJ's and eat out of the freezer to make this up and don't buy items we used to buy (name brand soap, toilet paper,etc.) . This is the visual that DH needed to stop spending. It works -- We are now living within the budget. DH even works to save money so we can have $ for fun.

I haven't seen this method on the board -- I have seen the cash method which seemed too extreme to try -- DH would have balked at this.

Has anyone else tried this?

[Sam_2.0]

We don't do it for a budgeting visual, but we do have one separate account that's just for the bills. Almost everything gets paid automatically from this account. Then we each have our separate checking accounts for fun & gas money. Its kind of lazy budgeting - whatever hits our accounts is free for us to spend, and we know the bills are always covered first.

But yeah, we had a come-to-Jesus meeting about our budget too. Or lack thereof. Good job on paying off all the debt and not digging back in, even if the budget details were not firmed up.

[Wisconsin Beth]

Way to go on paying off the debt! I'll karma you in about 45 minutes.

[Clever Username]

Sept 13, 2011 19:52:06 GMT -5 lajes said:

I paid off $60K in credit card debt
I don't have a handle on my budget
We over-spend on.....

I think it's a fallacy that everyone needs a buget.
And that every penny that can be saved must be saved.

I think you've got a bad definition for "handle on your budget."

If you are building wealth at a rate that will accomplish all of your goals.
Who cares what you're doing.
Keep doing it.

[haapai]

It may be true that some folks can live without budgets, but if you're paying down debt or saving for a goal, you usually need one in order to calculate how long it will take to reach that goal.

[dragon2008]

Congrats on paying off so much debt, lajes! I also separate out bill money from free spend, although I use a budget to track it (because I am naturally a free-spender!). Maybe you don't need to go all out on a budget, but just know where you might have a tendency to overspend. Have you tracked your spending for a month, just to see where your leaks are?

[blackcard]

Karma 4 U for that debt paydown. How do we save money in our EF? We treat it just like a bill, and send a fixed amount to our EF every month. Same amount, every month, always. Have only needed to dip into it once so far in 7 years.

[blackcard]

There U go. Lucky 7 for your Karma. ;D