Several years ago, I read a book called “Financial Peace” by Dave Ramsey.  At the time I was looking for a practical way to manage my finances.  I was deep in debt and was looking for a solution.  I had read other books on finances, but most of them preached the same thing:

  • Control cashflow
  • Eliminate debt
  • Build savings
  • Build wealth

The main issue I had with most of these financial books was their lack of a practical plan.  I needed a practical example to get me started on the road to financial recovery.  Dave’s book had a few extra bits of information that really helped me out.

There were four things that really made the difference.  First, was the “Envelope System.”  Talk about cashflow.  Nothing helps you get the picture like seeing actual cash flowing through your fingers.  You start to get the idea that cash is flowing away from you.  Second, was the “Spending Plan.”  Nobody likes the B-word, “Budget.”  The great thing about this plan is that you decide what you’re going to spend your money on.  You make conscious decisions on how the money is spent.  Third, was the “Emergency Fund.”  Once you have one, you can stop using your Credit card as an emergency fund.  This keeps you from getting further into debt.  Fourth, was the “Debt Snowball.”  A quick way to work through paying off your debts.

These tools when used together can really boost your financial traction in today’s economy.

Dave has written several books.  Another book I recommend is, “The Total MoneyMakeover,” which gives even more practical examples to follow.  To see what he says about finances in today’s economy check out his website Dave Ramsey.

Till next time, have positive cashflow