Still Alive Today or, No, Just Wing It? Did Dave Ramsey Resuscitate the Budget?
The New Year calls for revamping financial goals, and nothing is better than establishing and maintaining a budget to achieve these goals. Personal finance expert and radio host Dave Ramsey has resuscitated the budget by emphasizing its importance throughout his career, and he offers sound financial advice to help you achieve financial success. Here are some of Ramsey's budgeting tips to consider:
Create a Budget
When you establish a budget, you're taking control of where your money goes instead of wondering where it went. Ramsey advocates making a money plan that utilizes money management software, or a budgeting system where you put the cash amount in separate envelopes for different expenses. Ramsey suggests using a zero-based budget, where you assign every dollar a name and subtract your income from your expenses so that it totals zero. By knowing exactly where every dollar goes, you aren't randomly spending and can have more control over paying off debts — or staying out of debt — and achieving your financial goals.
Pay Off Debt
This is a Dave Ramsey financial philosophy that is essential to being able to manage your money. Ramsey suggests using the "debt snowball" method to reduce your debt where you make minimum payments on each of your debts with the exception of the smallest debt you owe. After finishing paying off one debt, the payments would then go to the smallest debt. This cycle repeats until you finish paying off all of your debts.
Set Up an Emergency Fund
Set aside an emergency fund to handle unexpected expenses. This can be accomplished by saving in two stages. Ramsey suggests saving at least $1,000 in a bank to cover everyday expenses that may catch you off guard, such as an unexpected bill or a medical emergency. Alliant Bank is a great place set up an emergency fund for these types of expenses with its Regular Savings account. You can also set up a Club Savings account to save for special situations, such as setting up a Christmas Club account to help pay off Christmas debt.
The New Year offers a time for you to resolve old debts and establish new reputable habits for achieving financial success. Follow Dave Ramsey's financial tips on budgeting and start the year off right by getting financially fit.