I have a tendency to immediately over-think and over-complicate things, but when Danielle and I first started budgeting I forced myself to be intentional about keeping it simple. In fact that's one of Dave Ramsey's key points in Financial Peace University. He calls it KISS: Keep It Simple, Stupid.
So, first, we followed the plan. Simple.
Then we wrote our entire budget out on paper to make it easier to work with. I even used a pencil instead of a pen. Simple.
When we compiled our budgetary needs we put them into a small number of categories. For example: instead of having budget lines for cleaning supplies, tools, and home repair, we have one line item called Home Needs. See? Simple.
We found that a successful budget needs three main things in those first few months:
- Discipline. You've got to keep at it. You've got to do the work. You've got to set it up and make your money work for you.
- Realistic expectations. Unplanned expenses are going to happen, and the money to cover them has to come from somewhere.
- Flexibility. A budget is rarely going to work properly from the get-go. It will need adjustment.
After about six months we had the budgeting thing down to a science.
Spend Less, Earn MoreWhen it comes to paying off debt, Dave Ramsey points out that the two things that contribute the most to attacking debt are spending less and earning more. I'll give Danielle the most credit when it comes to earning more. That girl can work like a dog when she's got a goal. She took a lot of extra jobs on top of her full time job to earn extra money.
And when it came to spending less we both made a lot of sacrifices. We didn't cut out restaurants and movies at first, but over time we cut back at these things more and more with the understanding that we couldn't give them up forever.
That's what sustainable sacrifice is all about—sacrificing unnecessary expenses to accelerate progress for a period of time. The idea is to stay motivated as you see your sacrifice enabling you to get ahead in other areas financially. If you can get debt free in one year by sacrificing deeply, go for it! Otherwise, take a good look at your budget and determine what expenditures you can cut back and for how long.
In our case, we knew we'd have to sacrifice for about five years at least, and we made decisions based on what we thought we could handle for that amount of time. Had we gone into it without a determined timeframe we—mostly I—would've gotten too discouraged and probably given up.
I Gotta Have My CookiesSustainable sacrifice isn't about depriving yourself of everything you enjoy. It means being intentional about telling your money where to go. If you want to spend some of it at Dunkin Donuts, that's fine, just make sure you plan for it. Otherwise you get fat.
Oh, wait. Wrong topic. Well, it still sort of applies. See, now that my wifey is into being a Beachbody coach, and now that I've seen the tremendous success she's had with eating right, I've decided to work on adding a better dietary plan to my workout routines. But, like my personal spending money, if I don't have some junk food to look forward to I'm going to get real discouraged real fast.
So I prepared an entire batch of chocolate chip cookies and divided them up into little freezer bags of three. Every Saturday I know I have that beautiful, chocolaty sweetness to look forward to. If i didn't have that, I wouldn't keep track of what I was eating. A candy bar here. A brownie there. I wouldn't know from one week to the next how much junk food I was eating.
Knowing I've got cookies coming on Saturday makes the sacrifice during the week sustainable.
Now, just as a quick side note, the types of sacrifices that move the debt needle the fastest are monthly sacrifices like cable TV, subscriptions services, and the like. Maybe for this summer you decide not to purchase a golf membership. (I know, heresy!) Or if cutting out television entirely isn't an option, maybe a cheaper package with fewer channels is the way to go for the next year.
Making sustainable sacrifices will help you make progress, which will help keep you motivated to make more sacrifices to keep on keeping on.