Let's talk about saving!

Our son Simon's first piggy bank

Saving at a young age is the hardest thing to do. As a 20-something only a few years out of college I can attest to the difficulties of trying to save when you've never been able to before. Our family strongly believes in Dave Ramsey's plan for getting out of debt and staying out. I started reading about him while I was still in college, was able to teach my wife and look forward to teaching our children about being fiscally responsible. Here are a couple of rules we live by:

• Use cash or debit, never credit.
• Keep a well-managed budget.
• Always talk before making 'extra' purchases.

Using cash is difficult, but the main rule here is to never use a credit card.I fell into the trap while in college and had a few that I didn't need. Next thing I knew I was paying more in interest than the cost of my original purchase. This is no way to live. Once I got a better paying job I kept one card for emergencies, then I payed off the rest and haven't used them since. 

The toughest part for us is keeping a budget. I'll be honest, we don't always do it. What happened was we kept a great budget for about 2 years that gave us the good habits we still use today. You can make an easy budget in any excel spreadsheet with one column being income and another being expenses. Anything left over goes into savings, not extra spending!

An extra purchase is anything not in the monthly budget. These are usually your impulse buys. We see something we want and we'll just throw it in the cart and think nothing else. Our family has gotten into the habit of always talking about the extra purchases before buying. This causes us to put more thought into the purchase and gives the other person a chance to provide their input.

Living these rules has led us to a life of saving and never letting emergencies keep us down. For us this included when our car computer went out and we had to pay to have our car towed to the dealer followed by $700 for a new computer. Being able to manage our finances have made other parts of our lives that much easier.

I will be making weekly posts about how I have lived this. There will be difficult weeks and there will be successful weeks, but I will write about everything that our family encounters and how we approach all the financial decisions we make.