How Our Crash-Diet Budget Crashed Our Budget (Part 1)

Wow how time flies.  It seems like its only been a few short weeks since we shared our first set of tips in Developing Your Family Economy by helping provide resources for your family to set their financial goals – and now its almost three months later.  Did you have a chance to sit down and work through the goals with your family?  As we’ve said before and will say it again, one of the most significant pragmatic tips we have for working together on your family goals is to be intentional – purposefully developing a plan together, intentionally scheduling time to meet as a family, and then carrying through are the biggest tips we can give.  Maybe I should be more intentional on writing these articles (next one scheduled for next Tuesday – I promise! :))

But now we want to share something that is close to our heart.  It may sound odd to discuss in terms like that when the topic of the day is budgeting, but it is.  Because you see, this plan is how we paid off over $100K in consumer debt in just over seven years.  This is the plan we used to motivate ourselves to keep going – even, and especially, when the going was tough.  But we don’t want you to think we developed this over night.  Not even close.

I will never forget the day when I was driving home for lunch.  It had been a long morning as I dealt with each and every frustration at work.  The line of work I was in was nothing but stressful – and nothing but a big question mark as to whether I would have a job the next day.  I was battling thoughts of hopelessness on that drive so I decided to turn on the radio to ease my thoughts.  As I tuned the radio I heard someone that I had never heard before – and he was talking to people and giving them financial advice and telling them to get out of debt.  He was telling people there was hope to get out of their financial situation.  I hurried home, turned on the radio and Cassie and I listened to his show – I can’t tell you how many time that tears were pouring down my face that day (yes, this is still Alex).  This is what we needed and at the right time!  I’m sure you already know we were listening to Dave Ramsey.

I’ll save more of the details for another article in our Deep in Debt to Debt Free series, but we knew we needed to write out a family budget.  We agonized.  We cut – and cut deeply – where we thought we could.  We decided to change our eating out habit (at a tune of hundreds of dollars per month) to one of eating fully at home.  No eating out – zip, zilch, nada.  We were going eat rice and beans (which ironically, we do now but for different reasons that we’ll share in another post).  We were so proud of ourselves because we were about to live like nobody else. – we had slashed up to 75% of our spending from the month before!  This was the ticket – in no time we would put a huge dent in our debt!

So the first month of trying to live by our new budget started off fine – at least for the first few days.  We met our budget just like we planned.  And then something happened – whether it was me working late or being out running errands for a long period of time we can’t remember – we ate out, thus making us immediately fail that month’s budget.  And if you know “all or nothing” people like us then you then know what happened next.  We knew we blew our budget so instead of trying to regroup we just stopped that month.  We would try again “next month”.

These months kept creeping up on just like this with little difference – for over three years which meant paying off just over $15K of that consumer debt.  And try as we might, we would fail.  We knew that everyone else in the Dave Ramsey system (so we thought) were having the time of their lives by paying off their debt.  We knew we couldn’t afford to continue living like everybody else.  After trying the Dave Ramsey way we knew we couldn’t live like nobody else.  So we knew after too many months of trying that we needed to come up with something else.

We realized that we were trying to slash our budget by using the crash-diet method.  You know the routine – when you try to cut out all of the carbohydrates, or protein, or cut out the caloric intake by thousands of calories – resulting in instant weight loss!  The mindset is always the same – you want to find that one instant solution that will solve all your problems overnight.  Of course we don’t want to mention the fact that you probably didn’t gain all that weight overnight or that you probably didn’t spend yourself into that much debt overnight.

With that, we finally developed our own system that worked for us – one we used to pay off that remaining $85K in just over three years.  We learned it would be easier to slowly incorporate better financial habits into our lives each month and then build on those each subsequent month. And you know what?  It did work! And its a system we have used to pay off our debt.  Its a system we’ve used to greatly increase our savings (so I could come home and work with our family businesses).  Essentially, its a system you could use to help you meet any of your financial goals.

Do you want to know what that system is?  We’ll be sharing more in part two next Tuesday.  Have you struggled with the “all or nothing” scenario?  Do you “fall off the wagon” when it comes to your budget?

Disclaimer:  We are truly thankful for finding Dave Ramsey, his radio program and books.  We know his ministry has blessed us and is truly one of the many reasons we can now live as The Thrifty Couple.