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by
Dave Ramsey
Started reading
February 29, 2020
Men, for example, use money like a scorecard and lose self-esteem when money problems pop up. Women, on the other hand, experience fear—my wife actually says terror—when money problems come up, because money represents security to them.
women are traditionally more verbal than men.
Men love to share facts; women love to express feelings. 2. Men connect by doing things; women connect by talking. 3. Men tend to compete; women tend to cooperate.
4. Men tend to be controlling; women tend to be agreeable. 5. Men tend to be independent; women tend to be interdependent.
Nerds like doing the budget, because it gives them control, and they feel like they are taking care of their loved ones.
Free Spirits are looking for a party, and the thought of a weekly budget summit is like death to them. They aren’t necessarily sloppy or lazy, but they often appear irresponsible to the Nerd.
Each marriage also has a Spender and a Saver—and that is separate from the Nerd and Free Spirit.
Budget Committee Meeting. In a marriage, the committee has two members: the husband and the wife. Both have to be there, both have to participate, and both have to actively engage the process.
The key to winning with money in marriage is teamwork.
The Budget Committee meets once a month. The goal is to write out a budget before the month begins.
Budget Committee Meeting: NERD RULES 1. Write up the budget draft beforehand. Then, bring it to the meeting, have your say, and shut up! 2. This is a meeting, not a weekend summit. You’ve only got the Free Spirit’s attention for about seventeen minutes, so make them count! 3. You have to let the Free Spirit mess with your budget! This isn’t your time to tell the Free Spirit what the budget is; this is your time to work with your spouse to make a budget you both agree on. Budget Committee Meeting: FREE SPIRIT RULES 1. You must COME TO THE MEETING! 2. You have to talk in the meeting. This means
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Budget Comitee Meeting Rules
You don’t want to be manipulative.
Take the time to write out exactly what you’re concerned about in your current financial plan and how you believe life could be different for your family if both spouses were engaged in the process.
If there’s no one else depending on your income, it’s easy to let busyness keep you from even balancing your checkbook, let alone doing a written plan for your money every month.
Another issue I’ve seen with some of the single adults I’ve worked with over the years is unplanned expenses due to loneliness.
Those are the times, single moms or dads, when you’ve got to take a deep breath, drive the chanting kids home, and spread some peanut butter on some bread. Those are the moments that make or break you. You’ve got to live to fight another day.
The two best tips I can give a single adult at any age, whether they have kids or not, are to do a written budget every month and to find an accountability partner.
Accountability relationships are also critical. Find someone with some experience, somebody with gray hair or no hair who has some cash in his or her pocket. Ask this person to walk with you, hold you accountable, help you with your budget, and talk about purchases with you.
Parents, you need to understand something: someone is going to teach your kids about money. It will either be you, or it will be a shady car dealer, a credit card pusher on your child’s first day at college, a get-rich-quick infomercial pitchman, or just some clown who’s after their money. If you want to protect your kids, you need to send them out into the world with some knowledge.
my kids are watching me. They’re going to do what I do. They’re going to handle money the way I handle money.
There are four main areas of money that children need to learn:
1. Work. Money comes from work, not from other people, the government, or dumb luck. From an early age, your kids need to feel that emotional connection between work and money. That’s why my wife and I paid our kids commissions, not allowances. You work; you get paid. You don’t work; you don’t get paid. It’s true for parents—it should be true for kids. 2. Save. Teach your kids early on how to save up for purchases. If they learn how (and why) to save up for a Barbie today, they’ll know how (and why) to save up for a car or house tomorrow—with no debt. 3. Spend. Let your kids have some fun with
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Rules Children (and you) need to learn.
You’ve got to customize your coaching based on your kids’ ages and maturity levels.
Here follows each age group
It’s time for the eagle to leave the nest; otherwise that eagle will get comfortable and turn into a turkey pretty fast.
it may be time to kick some kids out—for their own good! We’re not helping this generation by wrapping them in their old baby blankets. Instead, we’re killing their future success and stealing their dignity!
A pain-free life is a life without victory, risks, or hard-learned lessons that really make a man grow up.
The bottom line is that everything in my friends’ and family’s lives is not my responsibility.
First, I tell people to stop giving these needy friends and relatives an endless stream of money! If they don’t change the behaviors that keep getting them into trouble,
Second, I tell people not to be scared to put conditions on a financial gift.
they accuse you of butting in, just remind them that they are ASKING you to butt in by giving them money. If they want your help, they need to take all of your help, not just your money.
Third, I remind people that they can only help others if they have the cash on hand themselves.
I’ll try to help in other ways, but I can’t violate my principles in the name of “helping.”
If I don’t believe in debt, I’m certainly not going to become a lender. If I’m in a position to help, I just give the money.
I’m not going to go into debt for myself, and I’m not going to go into debt for you.
There are a few ways I’ve found to get people to ask for my help. One of the best ways is to clean up your own financial life. Nothing speaks louder than a transformed life.
You have the chance to turn back the tide of generations of financial mistakes and carelessness.
KEY POINTS Men and women think differently about money. Every marriage has a Nerd and a Free Spirit, and they must work together. Singles should work with an accountability partner, someone with whom to discuss their finances, purchases, etc. Parents must actively teach their kids about money with age-appropriate strategies. Children must be taught from a young age that money comes from work, and that the three main uses of money are giving, saving, and spending.
You, Inc.
without writing down what money’s coming in and what money’s going out every month, we’ll never have any idea what’s going on in our finances, and we’ll never make any headway for the future. To win with money, we’ve got to embrace the dreaded B word: the budget.
If you don’t have a target, if you don’t have a goal in mind, then you’ll never get where you want to go.
“A budget is just telling your money where to go, instead of wondering where it went.”
You cannot win with money by being passive. Money is active.
Starting this month and for the rest of your life, you need to do a written budget, or cash flow plan, every month. You’re going to write down all of your expenses and all of your income on paper, on purpose, before the month begins.
Your budget will not work the first month. You’ll forget some things and have totally wrong numbers for certain categories. That’s okay, and it is going to happen, so just expect it and don’t let it derail you. Just plan on having one big Budget Committee Meeting at the start of the month and then a dozen “emergency” Budget Committee Meetings throughout the month as you make course corrections.
The second month, it will probably start working a little better, but will likely still be a bumpy ride. You’ll have one month under your belt, so you’ll be able to hone in on some of those amounts you allocated for food, gas, entertainment, and other things you’ve never tried to anticipate before. The third month, things will start to smooth out, but it still may not be perfect. But by then, you’ll be on your way. It usually takes about three solid months of budgeting to get this right. So whatever you do, do not give up when you get frustrated in the first ninety days.
Don't gve up the first 90 days!
Along with the monthly budget, there’s something else you have to do every month starting today: balance your checkbook.
Overdrafts are a sign of crisis living and sloppy, lazy money habits.
Having a budget doesn’t mean you can’t order a pizza when you want one. It just means that you have a plan for your money. If you like pizza that much, then put a “Pizza” line on your budget! It’s your money. I don’t care what you do with it; I just want you to do it on purpose!
Budgets will help me channel my money wisely
A budget is a method by which you make your money behave; it is not a method by which you make other people behave.
One last reason why people often fail to do a budget is a big one: paralysis from fear of what they’ll find. That’s called denial. They’re just afraid that if they actually balance the checkbook and write down all of their expenses, they’ll have to face some things they don’t want to face.
