Finding balance in a chaotic world

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December 2017
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A Need to a Want

So a few years back my wife, Amy, was concerned about our financial position. She had actually been Moneyconcerned for a quite a while but I never tuned into this. After all, we were doing ok. We had a little bit of credit card debt, but certainly nothing like the average American. We had one car payment that was reasonable, our mortgage, and my student loans for my MBA. Nothing too outrageous, but we were still running out of money each month. It wasn’t a lot but it still happened and it added up.

So she read Dave Ramsey’s Total Money Makeover and was convinced that that was the way we needed to head. She asked me to read, and I did. I felt his tone was a little too salesmany, but what he said made perfect sense. So we set off to follow down that path towards financial freedom.

For me, the crux of the whole book was the way he did his budgeting. Previous attempts at a budget in our house used monthly averages. This caused problems whenever things like our twice-a-year car insurance came up since the price of it was amortized over a period of months. It shouldn’t have been a problem if we had squirrled away that amount each month, but somehow it never happened.

The budgeting method that Dave recommended was to plot out the next month’s spending down to the penny. This includes things like savings as well as monthly obligations. If during the month things come up, we have a “budget meeting” and make the necessary adjustments.

Now those of you with accounting experience might notice that this is simply a statement of cash flows for the month. When a friend of mine pointed that out to me, I grew defensive and frustrated. After all, I have an MBA and have seen numerous statements of cash flows. I should have figured that out sooner and was embarassed by the fact that I hadn’t.

So the first few months using this budget were amazing. The normal stress that Amy and I had during the month when we paid bills or considered purchases was completely gone. Since we had already spent the money in our budget, making the actual payment became simplicity itself. Each month we would talk about how much we liked our budget and how it has lowered our individual stress levels tremendously. In fact I felt like Alfred Hitchcock. He had once said that once he was done with the story boards for a movie (little pictures that showed how each scene would play out) the actual making of the movie was a let down, since he already knew how it would come out.

Of course we also had to analyze what we spent our money on, after all we were trying to remove our debt. So we had do without some things and reduce our spending in other aspects. But along the way, a funny thing happened. The things that I once wanted, I no longer did. I came to realize that buying new things simply meant I had to find a place to put them. Soon my decision on whether or not to buy something was not how much it cost, but rather where I would store it. If I couldn’t figure a place to put it, than I didn’t buy it.

This was a complete 180 degree turn from my earlier purchasing habits. If I thought I might want something in the future, say a DVD, I’d buy it now just in case. Or if there was a great deal on something I didn’t even want before I knew of the deal, I’d pick it up because, hey it was a great deal. Is it any wonder we spent more than we earned.

Readers of financial websites like Get Rich Slowly know about this psychological phenomena. Once you break out of the cycle of consuming so many things, you get to be picky about what it is you actually want to spend your money on. Your needsbecome wants as your desires balance.

I’m so glad that Amy kept pushing us to work on our finances, I only wished I had listened sooner. After three years of eliminating debt and building wealth, we are debt free except for our mortgage. Talk about feeling balanced and free.


Comment from Amy Dewey
Time: April 25, 2008, 2:08 pm

I think your wife is a brilliant woman.

Comment from Ayrk
Time: April 25, 2008, 2:39 pm

And beautiful. 🙂