Probably within the next ten days or so, you’ll be getting your credit card statements in the mail. You may not have planned on making a resolution concerning money but you likely will, even if it’s simply, we shouldn’t let Christmas spending get away from us again. Maybe you’ll set a goal to get out of debt or start saving for college or for unplanned expenses.

Like any goal, however, you’ll need a plan or you’ll never reach it. When Cindy and I were working our way out of debt in the first six years of our marriage, we didn’t have much of a plan, which is why it took so long. If only I knew then what I know now.

Financial Peace University

You’ve heard me tout the wonders of Dave Ramsey’s Financial Peace University and its simple, though not easy, approach to building a solid financial foundation. Dave’s plan features baby steps, although how baby they are depends on your situation:

  1. Save $1,000 for a starter emergency fund.
  2. Pay off all your debt except your mortgage, smallest balance to largest. As you pay one off, roll that money into the next one. Dave calls it the debt snowball.
  3. Complete your emergency fund by saving 3–6 months worth of expenses.
  4. Put 15% of your income into retirement.
  5. Start putting money into a college fund. (Or teach them how to play an instrument so they can get a music scholarship.)
  6. Pay off your mortgage early.
  7. Build wealth and give like crazy!

I can’t encourage you enough to join a class this month. At my church we’ll be offering it on Thursday nights, starting January 20th. Look for a class in your area at Dave’s site. There are so many benefits, including getting on the same page with your spouse regarding finances. If you can take money fights out of your marriage, then you can fight about the really important things, like how you squeeze the toothpaste and how the roll of toilet paper should be installed.

If you can’t join a class right now, you could take FPU online. Or at the least, get Dave’s book, The Total Money Makeover. It’ll whet your appetite, and I’ll see you in class at our next session.

Among other things like insurance and how to deal with creditors, you’ll learn about how to create a spending plan. The dreaded B-word, budget, is simply telling your money where to go instead of wondering where it went. Dave provides fantastic forms for doing this on paper every month. But I’m a technical guy, so I prefer to use a computer. I came upon a program a couple years ago that I’d like to introduce you to.


Dave encourages—no, he exhorts FPU students to use cash in an envelope system, especially for things like food and clothing, entertainment and restaurants. These bust a budget—I mean spending plan—like no other. But c’mon, Dave, who uses cash? We have always used our cash-and-check cards, those bank cards with the Visa or Master Card label.

We still use cash for some of these items but for everything else we run it through Mvelopes, an Internet-based program that works on the envelope system. Every spending category is featured as a virtual envelope. I break down our paycheck and deposit “money” into these envelopes. When we make a purchase, we designate what envelope it’s coming out of, or split them into multiple envelopes. We can transfer from one to another if needed, like from the hair care envelope to the guitar strings envelope. This really helps toward saving for expenses that don’t come up every month.

For instance, we “deposit” into the piano tuning envelope $15 each month. A couple weeks ago, I had the piano tuned because I had enough in the piano tuning envelope, just in time for my mother’s visit. (She deserves a recital for all those lessons she paid for.)

Screenshot – envelopes on the left, bank accounts on the bottom left

Some of the features:

  • It’s Internet-based and highly secure, so you can use it anywhere, including on your smart phone.
  • It syncs with your bank accounts, though not the wad of cash under your mattress.
  • You can easily set up your monthly plans and fund your envelopes. (Dave recommends doing this every month.)
  • There’s online bill pay.
  • It’s quick and easy to learn.

I could say so much more about Mvelopes, but really, you should just check it out. I’ve used other programs before, like Crown Money Map (their updates were often unstable), complicated Excel spreadsheets, and even a double-entry accounting program—which is basically what Mvelopes is, just a lot easier. Programs like Quicken will never help you tell your money where to go, just where it went.

One thought on “Making Change #3 – Money

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