Our FPU week 3 class was so very interesting – probably the best class so far in the 9 week lesson plan. This week was focused on cash flow planning which is a fancy term for budgeting.
FPU Week 3
Dave is adamant that you must work off a a budget so that you tell your money where to go, instead of the money just disappearing and leaving us all questioning where it went. I admit, that has happened to us at times; we stop and think “what did we spend that $XX on“? Can you relate to that feeling?
Luckily during Dave’s video presentation he thoroughly explains the reasoning behind using a budget as well as how to implement it into your life. Dave recommends a zero based budget, meaning you assign every dollar a purpose. Every single dollar! As members of FPU we are able to access his easy to use downloadable budgeting forms which we found to be very straight forward. It’s a little trickier for us because we don’t have regular income because we are self employed. Most of you know that on Friday (for example) you will receive a check for $XX. We don’t have that benefit but Dave addresses irregular income in his lesson and gives us tools to adapt into our monthly budget process. It is going to take at least 3 months to work out the kinks in the budget process, but that is perfectly normal.
After FPU week 3 class our heads were spinning with ideas, and we were excited. Genuinely excited about the budgeting process! When we sat down we filled out the form and added and subtracted items as we adapted the form to fit our life.
Another of Dave’s recommendations is that you stop using debit cards (and credit cards) and use cash. Cash is king is one of his favorite sayings. Cash? I am usually lucky to rustle up $2 in my wallet and now I am going to be using cash?
Apparently according to FPU, using cash makes more of an impact on the feeling of spending money, making it more personal and more though provoking. It is so easy to mindlessly swipe the debit card to buy items that we fail to “feel” the impact of spending the money. This makes total sense to us both, so we are going to embrace his cash envelope system. We are going to be using cash a lot, and have decided to start with these envelopes to budget from:
- Groceries
- Restaurants
- Entertainment (movies, etc)
- Auto gas
- Fun money/pocket money
- Gifts (like birthdays during the month we have to buy for)
Yesterday I went to the bank and withdrew cash so that we could fill our envelopes for the month with the amounts we budgeted for each category.
And – I actually used $11 in cash to pay for my purchases at the meat shop. I thought the lady would faint when I gave her cash instead of my well worn debit card! That $11 comes out of our grocery envelope and I marked the transaction down so we can see where our money is going.
This system is going to take a bit to get used to, and it won’t be easy. Will it be worth it? Without a doubt we know it will be worth it.
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