Financial Peace University: LESSON THREE

The third lesson taught by Dave Ramsey in Financial Peace University was titled "Cash Flow Planning". In this lesson, Dave teaches us step by step how to put together a zero-based monthly budget and how to complete all of the financial management forms. Taking control of your money takes time, effort and patience.

Dave gave us three key points:

1. Spend all money on paper before the month begins.
2. Use the envelope system for successful cash management.
3. Give your budget 90 days to really start working.

What is the envelope system?
It is a way of keeping track when you pay cash for everyday items, like food, gas, toiletries, etc. Once a month, you put cash in labeled envelopes for specific categories. You only use that cash and cannot got beyond what's in the envelope. Paying cash for things makes you think twice about wants vs. necessities. It's harder to part with Lincoln, Hamilton, or Jackson than it is to swipe a card in a machine and punch in a code or sign your name.

As part of this class, we were given a nifty booklet with envelopes. It is very cool.

Some reasons why we SHOULD do a cash flow plan:

- Managed money goes farther.
- A written plan, if actually lived and agreed on:

• will remove many of the money fights from your marriage.
• will remove much of the guilt, fear, and shame that may now be part of buying necessities such as food or clothing.
• will remove many of the overdrafts from your life, consequently removing a lot of stress.
• will show if you are overspending in a certain area.

Cash flow plans DO NOT work when you:

- Leave things out.
- Overcomplicate your plan
- Don't actually do it.
- Don't actually live on it.

Helps from Dave

Dave gives us a lot of tips and tools to help us start our zero-based budget and lessons on how to balance our checking account, if we need the help. He gave us MANY forms to help us as we sit down for the first time and really create a zero-based budget.

Just with this lesson alone, it is worth enrolling in the class. You can check online on Dave Ramsey's web site to see when the class is offered next in your area. You can also take the course online now.

Lessons Learned
This class helped me learn the importance of making and keeping a budget. It really is a good idea, but I have to admit it has taken me a couple of months to really get started. This particular class was given in April and I have only now (in June) started keeping track of my money with a zero-based budget. So far so good, but it's a little difficult to find the time to do it. I know I will be better off as I get more used to this and am better able to know where every penny goes.