Dave Ramsey Chapter 7 Budgeting Envelope system O

Dave Ramsey Chapter 7 Budgeting

Envelope system O Used to pay cash for planned monthly expenses

Bounced check O Is a sign of crisis living

Budget O A cash flow plan.

Zero-based budget O Spend every dollar on paper before the month begins.

Budgeting Forms O Irregular income form O Lump-sum payment form O Monthly cash flow form O Consumer equity form O Breakdown of savings form

Irregular income form O Someone that does not have a “fixed” salary amount. O A real estate or commissioned salesperson uses this.

Lump-Sum payment form O Payments you make on a non-monthly basis. O Helps plan for quarterly insurance payments and taxes.

Monthly Cash Flow form O Every single dollar of your income should be allocated to come category on this form. O Telling your money what to do.

Consumer Equity form O Shows your total equity or net worth

Breakdown of Savings form O Shows what your savings account is being used for.

Budget scenario O Create a zero based budget O Compute net pay (approximately 80% of gross pay). O Must include giving and saving as funded categories. O Make sure that the car upkeep and repair categories are funded appropriately. O Remember, the point is to spend every dollar on paper before the month begins.

Budget scenario O Marcus works at the lumber yard and makes $7. 50 an hour. With his academic and sports schedule, he is able to work 25 hours a week. He can pick up extra hours, but not consistently. Marcus lives at home, so he has very few bills, one of which is a cell phone, which is $45 a month. He is responsible for car insurance, which is $1, 100 a year and he has to pay for gas, maintenance and repairs. His parents also provide him with a food allowance and meals at home. He has health insurance under his parent’s plan.