Dollar bills, y'all
July 27, 2013 12:04 AM   Subscribe

Piggybacking on this question: I've had several friends who have had success with Dave Ramsey/FPU, but I don't like the emphasis on "biblical principles" (among other things). But because we get easily overwhelmed by too many options, I think we'd benefit from a really specific financial program that tells us exactly what to do, step by step. Other suggestions, or should we just suck it up and, uh, go with God?

We're not so much paying down debt (though we have a bit of that -- not a ton) as trying to come up with a down payment for a house and needing to rein in our general spending in preparation for having a family. We've had so many years of working with whatever we have, in the present; now that we've got actual careers and something more than just getting by is a possibility, we don't really know where to start. So something that breaks things into shorter-term, visible, achievable goals would be great.

I've seen a rec for Gail Vaz-Oxlade, but I'd like something that's not just a bunch of worksheets. I am also somewhat familiar with JD Roth/Get Rich Slowly, but does he have anything that takes a specific set of advice and puts it all in chronological order?

Just reading a book will likely not be super helpful; something more interactive would be good.

posted by Madamina to Work & Money (7 answers total) 22 users marked this as a favorite
I've had a good experience with YNAB. I haven't used the forums but I hear they've been quite useful for others, with the added benefit of being able to use the advice without spending money getting the software (since that's just a convenient package on top of the rules). I see other people recommend YNAB in that other thread you link to, too. They have stuff on their method here:

My boyfriend likes Mint but that's too automatic for me. I like putting in each transaction into YNAB manually so each purchase really registers in my thought process --I catch up with all my main accounts every few days at least, and slower moving ones like my retirement funds once a month. I like the software because:

* I find the interface cheerful. Trivial reason, but it helps when faced with a sometimes difficult subject.
* I like the reporting I can look at. My net worth graph (which is increasing despite missteps) is like feel-good catnip on months that have been rough. Income vs expense gives me a good idea of the fluctuation between months.
* I like how it has me routinely looking at how to budget out the months ahead, instead of only thinking about getting through the current month.
* It's flexible about making adjustments to budget categories and there's a minimum of self-flagellation.

I can't say I've been perfect about the method/rules, really--a heck of a lot of budgeting for what I spent instead of spending what I budget--but the biggest difference is that I know whether or not I've been doing well budget wise, and what I actually spend money on. I had a windfall recently, and if I wasn't tracking things with this program, I wouldn't be paying good attention to how all that money should be distributed to make sure I am on a good solid footing, instead of just feeling/assuming like I could make some big ticket purchase and it would all work out. (Which, in general in my life, pretty much has mostly worked? But I shouldn't rely on that kind of luck to last, and it's not as effective for building the foundation for a better, more stable future.)

When I started I knew I had been "riding the float" (a term where you pay off your credit card when it's due but are using it to cover this month's expenses), but in my budget I prioritized getting cash savings up instead of wiping my float out ASAP, which I felt was okay and did successfully. And now I know exactly how much of my windfall went to wiping out my credit card float, which will let me focus on starting to get one month ahead. *And* I know how much of the money in my accounts is actually long term savings. And how much is taxes likely due from income from my contract work come next April (which I now have the option of turning in much earlier without even pinching that month's budget), how much is saved for my upcoming car insurance payment, how much is for that check I wrote ages ago that somebody is dragging their feet on cashing. On the non-budget side, I routinely adjust the recorded balances of my retirement accounts so I can keep track of my overall net worth. Soon I'll know how much is available to plan the current month's budget using income already earned, and then I'll feel quite pleased and keep adding excess to savings.

None of this is particular with YNAB the software; it's not magic, it's just been the easiest way for me personally to get there.
posted by foxfirefey at 1:54 AM on July 27, 2013 [6 favorites]

The Simple Dollar website might be worth looking at.

He's got a free ebook that could be useful (but I've never read it - just found his site useful in the past).
posted by backwards guitar at 4:11 AM on July 27, 2013

The Dave Ramsey stuff is really helpful to most people, and--if it makes any difference to you--it's not like he's sitting down and drawing these principles out of the Bible. The Bible never tells you to invest 15% of your salary in index funds. He wraps some of his presentation in a faux religious veneer, but that's just marketing. I don't recall as much of it in his early stuff, like Financial Peace University, but it doesn't bother me so I might have glossed over it.
posted by Pater Aletheias at 7:19 AM on July 27, 2013

Response by poster: I forgot to mention: I "use" Mint (have an account set up) and it seems to give me the exact opposite of what I need. It's constantly sending me notices that my "extra" checking account is low (duh) and telling me I owe $FULL ORIGINAL BALANCE on my credit card.

This is the second time I've tried to configure it the way I wanted, and I recall thinking that the interface was not so much giving me guidance as letting me visualize it. Which I already do at my credit union, and -- again -- feels like too many options.

Anyway. As you were.
posted by Madamina at 8:08 AM on July 27, 2013

I really like the approach in Elizabeth Warren and her daughter's book All Your Worth. (A review at Get Rich Slowly.) I read it through all the way first, then went back and did all the worksheets after, so it is interactive though it is still a book. They lead you step-by-step through figuring out how you are spending your money now, figuring out what your spending should look like based on your actual income and obligations, and then setting your goals from there and moving on them. (I actually put the worksheets into Excel so I could redo them whenever I liked, and I'll share them if you're into that sort of thing.) They come at it from the perspective of being poor and unhappy, and trying to solve both problems - so there's no "you have to never have fun again, to have true financial freedom!" stuff, although they might try to convince you to move into a cheaper place to make that possible.

Basically, they have you slice up everything into three categories: Must-Haves, Wants, and Savings/Debt, and then fit them all into certain percentages of your income. Once your Must-Haves are reasonable (under 50% of your income), and your Debt/Savings obligations are covered (about 20%), the Wants (30%) is your fun money. It really helped to cut through the "but I neeeeed Netflix" vs "but I never do anything, can't I even get a stupid coffee? *sadface*" stuff. I use Quicken Essentials for Mac to track all my accounts, and it's super clear and obvious now that I have only three budget categories to look at. I come at budgeting from the angle of someone with debt, so the idea that I actually could make progress on that and still have guilt-free fun money was pretty wild. So I think this approach could help you with, especially, the reining in your current spending part you mention, just by making it visual how you are portioning things out now, and then shifting the proportions to accommodate your down payment/family savings goals.

And since other folks are throwing out comments on software, I'll mention this: I use QE for Mac, like I said, and I think it's basically OK. But it's really superficial (basically shows you your current holdings at this moment in time - no history data whatsoever) so if you want to see if, like, your savings is actually increasing over time, or how well you stick to your budget month to month, you're out of luck. I use an Excel sheet that I manually update monthly to graph performance data. I refused to use QE for several years because even with constant crashing, Quicken Deluxe 2007 was superior. Eventually I got to a point where QD would no longer run, and I tried a couple of options, and basically everything else sucked even more than QE (looking at you, iBank), so I gave up. During that time period, I also tried going without financial software, just using online banking stuff, and it made things worse, because it turns out I really need to be able to check my accounting several times a week to stop myself from flaking out. So now I use a combination of QE, Excel, and whining to Intuit with the other old Mac cranks about when they're going to give us a real Quicken again, to satisfy my personal financial needs. I set it up so my budget just has the three buckets as categories, categorize all my downloaded transactions with those, and it works out pretty well.
posted by sldownard at 9:39 AM on July 27, 2013 [1 favorite]

I've gone through Financial Peace University, and if I recall correctly he has more secular versions that are used thru public schools and such. But in all honesty, what is taught is not really churchy in the regular version, unless that you consider being responsible with your money is churchy.
posted by St. Alia of the Bunnies at 10:41 AM on July 27, 2013

Seconding foxfirefey's recommendation of YNAB's method (and the software is great!). I tried Mint and a few others before, but YNAB really does the trick without feeling like I'm doing much work at all.
posted by evolvinglines at 1:19 AM on July 28, 2013

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