How to get started with money management

[questions]

I am a blogging runner who realises she needs to face up to her (crappy) relationship with money. I need to get started. Where or how to get started? I've noticed Dave Ramsey - I've seen him quoted elsewhere but I really don't want to spend money on this right now (I'm trying to stop spending money right now). Any tips on free Dave Ramsey like advice out there? I would really appreciate any help you can offer me,

[maat55]

I have read The Total Money Makeover by Dave Ramsey and The Automatic Millionaire by David Bach and highly recommend both.

You might try to find these books at a Goodwill store. I buy them as gifts for less than three dollars.

[olga1311]

Well Dave Ramsey's baby steps go like that:
Dave Ramsey’s 7 Baby Steps
Step 1 – $1,000 to start an Emergency Fund: Before you even get started on the rest of the plan, you need to save up a little bit of cash just in case small emergencies happen. Things like flat tires, doctor visits, and flying somewhere for a funeral will usually be covered by this small emergency fund.
Step 2 – Pay off all debt using the Debt Snowball: You list your debts from smallest to largest. Pay the minimums on all of your debts. With any leftover money you may have you pay extra on your smallest debt until it is paid off. You then roll that amount over to the next smallest debt.
Step 3 – 3 to 6 months of expenses in savings: Save up 3-6 months of expenses in case of extreme misfortune like a job loss, illness or other long term problem.
Step 4 – Invest 15% of household income into Roth IRAs and pre-tax retirement: Save for your retirement.
Step 5 - College funding for children: After saving for retirement you can save for your children’s education and college expenses.
Step 6 – Pay off home early: Make extra payments on the mortgage to pay it off early.
Step 7 – Build wealth and give! (Invest in mutual funds and real estate): Continue building wealth through mutual funds and real estate, and give, give give!

PS: You can also get his book in your local library but honestly his book is great as an inspirational tool to get you fired up and put you on a right track. I think it will be a great investment in your future.
However the steps are summarized above.
The most important part - make a written budget, on paper (or computer) where every dollar has a name and a purpose. And strictly adhere to that budget. You do the budget in the beginning of every month (it shouldn't be static).

[buildmybudget]

You need to start with your budget! The key to sound financial management is to simply spend less than you earn and to maximize the gap between your income and expenses. Once you have identified the gap, it's time to pay down your debt and build an emergency fund. You don't need Dave Ramsey to start doing those things. =)

[maat55]

A quest without a plan can be fruitless. Most people need a plan to follow, DR provides this in his baby steps.

It is better to have a map when you are on a path. Many will just wonder off path if not lead in a certain direction.

[olga1311]

maat55 - I think as you do. I think the plan especially important when one just begins the journey to financial freedom. Of course most people on this forum do not need Dave Ramsey's baby steps. We are all more or less financially savvy and get our direction from reading pf blogs. However we have basics to build on. A person who is in the beginning of that path does need direction and motivation and inspiration knowing other people have been in the same or worse mess and have gotten out of it - and Dave Ramsey does just that

[creditcardchaser]

Write down your goals, write down your goals, write down your goals - and then stick to your plan to make it happen. Whether you follow a plan by Ramsey or your grandma most people fail by not setting goals and not tracking their progress.

[Radiance]

[someone...]who realises she needs to face up to her (crappy) relationship with money

This was me back in June! Not there yet but I can share what has worked for me so far:

1) as creditcardchaser said: Write down your goals! I add: write them down, write them again, share them with trusted family and friends (but don't let them tell you it can't be done) Write them again, post them somewhere you can see them.
(Building a good relationship with money can be a goal)
You don't have to get them right the first time and it is ok if you go blank. See my first blog post where I started very general:This is a journey to into self-abundance. The more I have, the more I have to give.Manifesting Abundance from the Heart


2) Dive into budgetting. There are more than one correct way to do this, try a few things and see what works for you. It is ok if you don't get the categories right, they can not be wrong anyway, they are your categories.
Do your homework; don't know how much you spend on gas? You'll need to figure it out.
This is my budget if it helps you get started:
A budget is born, and Thank you!


3) Remember those goals you write down in number one? Time to start braking them up in tasks and executing!

[MonkeyMama]

Well, you could start at the library. Automatic Millionaire and DR are good places to start.

I actually listen to DR all the time online (entertaining). Radiotime.com has free/streaming podcasts. You will learn a lot listening.

I am not a fan of DR for long-term financial planning, etc. BUT it gives you a place to start, and I definitely like that his plan is broken out into baby steps. The steps are posted are all over the internet. They are discussed in depth on his radio how.

Once you get on solid financial footing, I would read Automatic Millionaire, All Your Worth, Tobias' Only Investment Guide You'll Ever Need (I think that's it), etc. You can borrow them from the library. Suze Orman's Young, Fabulous & Broke has good financial advice as well.

[shultice24]

While I wouldn't recommend it as the best specific, how-to guide, Your Money or Your Life (Dominguez and Robin) is probably the best book out there on actually improving your relationship with money, instead of simply instructing you to do X, not do Y, etc.

Any local library worth its salt will have some Ramsey, Orman, and hopefully this book as well.

[kanjoh]

There are many great books out there, including Learn to Earn by Peter Lynch and I will teach you to be rich by Ramit Sethi. There are also hundreds of free articles and information to get you started online. One relatively unknown (but excellent) book is called the Oblivious Investor - definitely worth while looking at.

[kgloh_23]

Financial Management should be start with checking your financial status.
The first step is check your net worth and then proceed for cash flow analysis.

It is good to check your saving or investment return compare with your debt. Pay the higher charge debt first to reduce your burden. Try to reduce your debt as soon as possible.

[LuxLiving]

Shultice24 beat me to it - I second reading "Your Money or Your Life", also a good read is "The Richest Man in Babylon" and most everything by Mary Hunt. Any of the books mentioned here can be checked out at your local library. If they don't have it in already, they can get it for you by interlibrary loan. Just ask.

Read, read, and read some more here on Saving Advice dot com. In 2005 we owed on our house, two cars and an all time high for us CC debt of close to 8900.00. Today we're debt free including the mortgage. A lot of good advice and help came from the good folks here after I found this place in 2006. Search the archives, read the articles.

Another good place to read is at You Need A Budget dot com.

Keep coming back here and even try blogging here. It's a good way to be accountable to yourself and the good folks here are NICE and will help keep you on track without beating you up when you slip up.

[creditcardfree]

If you access to the internet and it appears you do, then listen to Dave Ramsey online. He has a website where you can listen to archives of his radio show. You can even find a local station near you that broadcasts his show.

Good luck getting yourself on the right track!

[jasonnoguchi]

I know many people don't recommend this but Robert Kiyosaki's books are a good start.

[Broken Arrow]

Um.... yeah, I don't recommend Robert Kiyosaki at all. To me, he crosses that line where he ends up doing more harm than good. There are plenty of other financial "gurus" you can follow and still do well enough.

[Ima saver]

I have to agree with broken arrow. I don't like Rober Kiyosaki's advice at all even tho I did buy and read his book.

[happygirl]

I've read so many financial planning/budgeting books over the years but for whatever reason, Dave Ramsey's plan made sense to me. You can check out the book from the library to see if it's a good fit for you. I didn't follow his plan to the letter. I modified it somewhat to fit my unique situation and it was very helpful.

He also has a website with a forum attached to it. I think only a few of the sections of the forum are free to view and I personally would not pay to join, but it is interesting to read. The people on that forum do tend to be somewhat fanatical though.

[sandrark]

While the Total Money Makeover site does charge ($10/month or $90/year) there is a free site devoted to the Ramsey Baby Steps.

Living Like No One Else - There's hope in your financial life!

The caveat is that they tend to be ... rabid about his precepts. It's a good place for general info and encouragement, but be prepared for heat if you deviate. For me, I refused to stop retirement investing, even though DR recommends that you do so. And I do maintain a credit card for work and travel expenses, although I pay it off each month. Both of these are considered heretical to the Ramsey-ites.

Sandi

[EconoMutt]

Dave Ramsey's advice is pretty good.
Although I don't agree with paying off all of your debts before saving 3 month's expenses.
In this economy I think you're better off holding on to cash.