Dave Ramsey hates me
June 16, 2013 7:20 PM   Subscribe

I am really bad with money and I'm about to start making a ton more which is great, yay! But I want to make sure I stick to my budget because I've got a ton of bills to pay off. Here's what I'm considering, tell me if you think it's nuts:

- I have an "online only" bank account that all my bills get paid out of.
- I have a local bank account that I transfer money to for groceries, gas, eating out, misc shopping, etc. Invariable, I'll transfer $200-$300 and expect it to last the better part of a week but on day 3 it's gone and we still haven't bought groceries or gas. Instead we went out to eat 3 times and went to Target for crap we don't need. And it takes 2 days to transfer money down during the week or up to 4 days if there is a weekend involved. I'm getting real tired of counting out change to go get gas.

The is the part where I say, "if I could manage to not go out to Target or not eat out then I wouldn't be in this mess".

What I need is a foolproof way to live within my budget goal. What I'm thinking of doing is transferring $X amount every single day. Like maybe $60 each week day - or $50 Mon-Thu and $100 on Fri. This would cover the items mentioned above: gas, groceries, dinner out but the good part would be that 1) I would have money every day (so no getting stuck on a friday afternoon with no chance of money until Tuesday) and 2) Theoretically, I wouldn't be able to spend more than the daily deposit unless I save up from previous days.

What I'd prefer is an envelope of cash on my doorstep every day but I don't think that's going to happen.

Does anyone else have a good, unusual hack for keeping themselves from spending every last dime they have every week? I'd really like to hear about some radical and unusual ideas because, for some reason, doing it an off-the-wall way appeals to me much more than the money envelopes or YNAB, etc.

(p.s., I actually do have a bit saved up now so it's not like I spend every bit of my money but I know I could do a lot better)
posted by dawkins_7 to Work & Money (22 answers total) 12 users marked this as a favorite
Check with your online bank- some limit how many withdrawals you can make in a month.
posted by ThePinkSuperhero at 7:24 PM on June 16, 2013

What if you take out the weekly amount in cash and then separate it out into daily envelopes yourself? It requires some discipline yes but you need to learn that anyway.
posted by magnetsphere at 7:36 PM on June 16, 2013 [5 favorites]

Take your spending money out in cash at the beginning of the week. If you overspend, well, you're out of luck. Eventually, you'll force yourself to stick with a budget. With the amount of transfers you're proposing, you're basically just going to an ATM every day for money, and it's easy enough to convince yourself that you need a little extra "just this once."
posted by xingcat at 7:37 PM on June 16, 2013 [2 favorites]

Make a "to do" list and go get gas, groceries, etc FIRST. Then you can piss away what's left with minimal consequences.
posted by Michele in California at 7:38 PM on June 16, 2013 [6 favorites]

well, there isn't any substitute for not going shopping, but here is what I did until I built new habits.

Set down and decide what you want to buy over the next 6 months, all the big stuff especially. Like a new TV or a home reno project or a specefic item of clothing-whatever and how much it costs. Then when you leave for the store, look at that list and remember that every dime you spend that you don't need to makes it tougher to meet those goals. The second thing is to make a list before you go to the store and STICK to the list, no matter what. Walk around your house before you leave and write down what you need. And then decide if you really need it or just want it. And then buy what you need, no more. Dont visit the parts of the store that has stuff you might see and want-for me it was visiting the clearance items and buying stuff that was neat and half price. Turns out half price is too much when you don't actually need that thing. Since i started shopping consciously I have managed to save money much more effectively and I discovered all that material crap was really just clutter and kept me from enjoying the things I had.

Also find a new way to kill time that doesn't involve shopping. Shopping for nothing in particular is a surefire way to waste money and then you also have stuff you will never use and you just have to find a place for. The last part of changing my habits was decluttering possessions for a big cross country move. If you can do it, go through your stuff and make a pile of everything you haven't used in a year. Then give it away/sell it/liight it on fire-this will show you all the crap you have instead of money that if all together could be spent on something big that might cahnge your life-the car you always dreamed of, a trip you have hoped for, whatever.

It ain't easy and it has taken me about 6 years of effort of getting to the point of having money left over every month after paying off student loans, mortgage, groceries and home reno project. Having a good job with enough income is also great.
posted by bartonlong at 7:42 PM on June 16, 2013 [3 favorites]

Do not get a cart when you go into a box store. If you can't carry it out in your hands, then you have bought too much and you must put something back.

Make eating out an treat instead of the norm. Set aside one night a week for date night. Reward yourself for good spending habits during the week by going to a nice restaurant or doing something that you have been looking forward to. Instead of denying yourself a treat on Monday by telling yourself that you must save- you will be denying yourself a treat on Monday by telling yourself that you are worth a bigger treat on Friday.

Look at why you are spending what you are spending. Is it a stress relief activity? Are you just bored? Find other things to spend your time on, things that don't cost anything, like walks around the park or helping a neighbor with yard work. Read more books. Get rid of television- all those advertisements only work to make you want to spend your money.
posted by myselfasme at 7:47 PM on June 16, 2013 [1 favorite]

I have gotten to be a huge fan of YNAB over the past few months. It's sort of a digital set of envelopes, like magnetsphere mentions.

It requires stopping before each purchase, taking out your phone, checking, and saying, yep, I have some money left for going out to dinner this month. Even better, categorizing purchases forces to look and realize you explicitly went over-budget in a category.

It's good about encouraging you to set aside money for rare expenses like car insurance, or unexpected expenses.
posted by supercres at 7:49 PM on June 16, 2013 [1 favorite]

Best answer: Switch to a mostly cash economy. Go to the bank teller to get money. Leave your credit and debit and ATM cards at home frozen in ice blocks in the freezer. Someone mentioned in an old AskMe converting all their money into dollar coins because then 1. they were easier to sort of see in aggregate all stacked up there 2. it was harder to carry them around in big hunks, you could only have enough for groceries, certainly not "buy shit at target" amounts.

Also you mention a "we" in your question. It's worth making absolutely sure that you and your partner are on the same page. Two people can be really great in mutually supporting each other, or one person can undo the others' good habits. The thing that you can fond TOGETHER that works at all will be better than whatever you individually come up with if it's supposed to be for both of you.
posted by jessamyn at 7:57 PM on June 16, 2013 [8 favorites]

I think a daily allowance will result in spending more money, not less. You have major problems anticipating your future spending and adjusting your current behavior to account for those plans. A daily allowance will not solve that problem UNLESS you're giving yourself a very artificially low budget.
posted by acidic at 8:03 PM on June 16, 2013 [1 favorite]

Response by poster: Thanks everyone, I like the suggestions so far but I like the gold coin one the best. Those are the kind of unusual ideas that I'm looking for.
posted by dawkins_7 at 8:08 PM on June 16, 2013

I deal with Target (aka... The Devil) and restaurants, etc., by trying to save it for the day before paycheck. I pay my bills and my savings account and my allowance the day of paycheck, which for you could also include gas and groceries. So you don't have to say "Don't go to Target, etc.". You just have to put off your fun until the business is taken care of. For me, it turns out knowing that I'm doing the right thing can be just fun and satisfying as blowing all your money on stuff you think you need.
posted by bleep at 8:12 PM on June 16, 2013

We've been through a number of budgeting schemes 'round these parts, here's the latest which is similar to what you are proposing.

We have an online bank which allows us to have any number of accounts. We logged our spending and developed a budget for everyday expenses that helps us save and keeps us from overspending (mostly).

With each paycheck, we know exactly how much money needs to go out. Here's our accounts right now:
FIXED EXPENSES (CHECKING/DEBIT CARD) -- our monthly, regular, recurring expenses come out of this. This also happens to be a checking account which is sometimes not the best thing but we're making it work.

VARIABLE EXPENSES (DEBIT CARD) -- with each paycheck, we've figured out exactly how much needs to get transferred for our expenses like groceries, eating out, paying for gas, etc. -- we have to keep our "walking around" spending within this amount

IRREGULAR EXPENSES (SAVINGS) -- with each paycheck, we deposit an amount (based on our tracking) to cover random expenses -- auto repair, home repairs, unexpected medical bills, etc.
Then we've got a separate account that takes a little time to move money back and forth and that's our cash reserve for real big emergencies like losing a job...or an arm, or something.

So, that seems a little nuts, right? (We actually have more accounts but those aren't important). You need the first three. Anything beyond that to suit your needs. The key is to manage these at every paycheck -- to check in weekly (or more) to track your spending and not go over. We are only allowed six transfers each month per account, I think, before getting charged so it's important that we move the right amount of money at each paycheck and (most importantly) not go over.
posted by amanda at 8:14 PM on June 16, 2013

Best answer: Does anyone else have a good, unusual hack for keeping themselves from spending every last dime they have every week? I'd really like to hear about some radical and unusual ideas because, for some reason, doing it an off-the-wall way appeals to me much more than the money envelopes or YNAB, etc.

I sometimes buy monthly gas and grocery gift cards. It's hard to find something other than gas to buy with a Citgo gift card or something other than groceries to buy at Stop-n-Save.
posted by Snarl Furillo at 9:24 PM on June 16, 2013 [2 favorites]

I agree with jessamyn: the "we" caught my eye in your answer. If this is a partner, then you really have to get on the same page. My partner and I have joint budgeting set up in Mint. We have a budget for groceries, eating out, gas & parking, etc. Then we each have a personal budget (we just called it "Pompelmo personal" and "Mr. Pompelmo personal" in Mint), which goes for discretionary spending. If we go out to eat together, that comes from the restaurants budget. If we go to Target together, that comes from the home or groceries budget, depending on what we buy.

It's on us to check Mint weekly or more to see where we are relative to our budget. We definitely have the freedom to go over it if we don't make it a habit to check in. But it really helps that we sat down together to make the budget and allocate the size of each part. And we periodically decide together to change the relative sizes of things if we find our original plan was not practical.

If this is not a partner, but you find yourself going out to eat or shopping with friends, you need to practice saying no. "I'd love to get together, but I'm trying to stick to a budget this month. Instead of eating out, do you want to come over and cook with me?" Or, keep a list of nice ways to spend time together without spending money: go for a walk in an interesting part of town, boardgame party, offer to help your friend with their gardening, whatever. If you have friendships built around eating out/spending money, it can be hard to make the shift. But you have to speak up for yourself or you'll never change the habits you're trying to change.
posted by pompelmo at 11:06 PM on June 16, 2013

Best answer: Have you figured out an actual budget? You need to sit down and figure out what your expenses actually are, what you want to pay towards your debt and which debts you want to pay off first, and how much you'll want to have on hand. Yes, big box stores and shopping for entertainment are dangerous (even Value Village -- I spend *scads* of money there) but it's possible that you're not earmarking enough for the daily expenses of life.

Also, living on very very very little money sucks, and leads to tendencies to splurge: I found that I spent less (much less) when my income tripled. It was bizarre.

I like Gail Vaz-Oxlade aka the "Till Debt Do Us Part" lady for money management matters: the website explains the system (aka 'jars' and tracking every penny like a mad thing) but the budget builder is a downloadable Excel spreadsheet under 'Tools'. Before you can keep to a budget you need to be sure that it's reasonable, or it's like going on a 500 calorie a day diet -- alright for about a week, and then you go mad and buy everything in sight.
posted by jrochest at 11:49 PM on June 16, 2013 [1 favorite]

Pay yourself first. Get a savings account and have the bank transfer an ideal amount into it every paycheck. When you have enough saved to qualify, put the money in a place that pays better interest. When you see yourself actually growing wealthy you may turn into a skinflint miser and never blow your money again.
posted by Cranberry at 11:55 PM on June 16, 2013

Yeah, I agree with figuring out why you're dropping money there and fixing that first. Are you eating out because you don't have food at home? Buy groceries. Because you don't really know how to cook? Take a class, buy a book, find some YouTube videos.

As far as Target goes, what are you actually spending the money on? I used to assume I was buying crap at Target, but when I actually look in the cart it's stuff like allergy medicine, toothbrushes, cleaning products... sure, some of it is crap, but some of it is stuff I actually need and maybe forgot to budget for. So now I plan for the allergy meds. Do that.
posted by pie ninja at 4:26 AM on June 17, 2013 [1 favorite]

Yeah, Dave Ramsey hates me too, especially after that escapade at the car dealership on Saturday. But, I digress, his book, The Total Money Makeover is pretty great though.

He talks about the envelope system, where you portion out your cash in various envelopes and then pay expenses from them. When the envelope is empty, you can't spend any more.

Check it out (I think you can buy it at Target!) See if the advice isn't solid and specific. Try it for a month and see where you are.

Good luck, nailing down the money thing is super important for "financial peace."
posted by Ruthless Bunny at 6:17 AM on June 17, 2013 [2 favorites]

Best answer: One thing I did for a while (and may have to do again) is I didn't buy anything that wasn't on a list. Not anything. I had to know I wanted to buy it before I went to the store. If I got to the store and realized I needed vanilla and vanilla wasn't on the list? Too bad, no vanilla that day, guess I'll be making a different kind of cookies. Individual decisions like that were really stupid and frustrating, but it did stop me from buying a lot of stuff I didn't need.

If you're shopping for entertainment, think about going to the movies instead. It seems like wasted money because you don't get to bring home "stuff," but you can spend a lot more than the cost of a $10 movie ticket if you go to the mall for 2 hours.
posted by mskyle at 7:26 AM on June 17, 2013

I've used the envelope system and it's very effective. We even had what I guess you'd call a pissing away at target category, because having a little fun money is nice. Funny thing is I'd carry that envelope around in my handbag with me in case I saw something nice, but knowing that's all I had to spend and once it was gone it was gone I actually tended not to buy anything. Knowing I could spend it made it so much easier to stick to the rest of my budget though, and I ended up taking to saving up the money in my fun/pin money envelope and getting myself something really nice with it instead of just more crap. It really helped me get out of the habit of just buying stuff.
posted by wwax at 9:19 AM on June 17, 2013 [1 favorite]

I find it really helpful to track my expenditures. You can do this with YNAB or just with a spreadsheet. Set up categories, classify every dollar you spend, and record it. Every week or so look through it and see how you're doing.

When you really SEE the fact that you're spending, say, 10% of your income on eating out, it's shocking enough to stop you in your tracks.

Also, you'll need this information anyway to make a workable budget.
posted by gerstle at 6:30 PM on June 17, 2013

Response by poster: Thanks everyone! I think I'm going to do a combo of gift cards and money envelopes and see how that works out.
posted by dawkins_7 at 6:58 AM on July 3, 2013

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