Dear Dave,

I made a resolution to start following your plan in 2021. I talked to my parents about this, and while they like some parts of your teaching, they don’t think living on a budget is necessary if you make good money. They also said budgeting is extremely difficult. Are they right?

Jensen

Dear Jensen,

For whatever reason, I’m afraid your parents are way off base on this one. A lot of people trash talk the idea of budgeting, and make up all kinds of excuses for not living on one. The truth is a written, monthly budget is essential when it comes to beating debt and winning with money—period. It’s the map you need to get where you want to go in your financial journey.

There are lots of myths, and just some bad information, out there where living on a budget is concerned. Making a budget isn’t rocket science. If you can do basic math, you can create a budget. Your income minus your outgo needs to equal zero. That’s it! You might spend a couple of hours tallying all your expenses when you first start, but the process soon becomes faster and easier. All it takes is a little practice.

If you think doing a budget is only for people who have trouble making ends meet, think again. My wife and I have lived by a written, monthly budget every single month for about 30 years. It doesn’t matter whether you’re a multi-millionaire, or if you have just $100 to your name, knowing exactly how much money you have—and where it’s going—is an essential part of managing your finances accurately and successfully.

Believe me, I hear dozens of other excuses, too. You’d be amazed at how many people don’t make a budget every month because they think it’s “boring.” Others claim they can do their budgets in their heads. I don’t think so! For a budget to really work, it needs to be something you can track down to the last penny. And if you’re married and saying you can do a monthly budget in your head, that means only one of you is involved in the decision making. That’s a recipe for disaster in your finances and your relationship.

A budget represents your financial game plan for the upcoming month and years ahead. As Benjamin Franklin said, “If you fail to plan, you are planning to fail.”

—Dave

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Dave Ramsey Show, heard by more than 16 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.

Dear Dave,

I’ve got so many things I want to address and change about my life, both personally and professionally, in the coming year. Do you have any advice or practices for helping people be successful and achieve their goals?

Tim

Dear Tim,

Goals are dreams, but you can’t stop with just dreaming. Examining your goals inside and out, and by thoughtfully constructing small, achievable steps toward them is the key to creating change in your life. Remember, too, that it’s your responsibility—not someone else’s—to fix things in your life. If you’re waiting for someone or something else to make things better, you’re going to be disappointed.

When it comes to setting and achieving goals, be specific about what you want to achieve. Vague, unspecified ideas will only cause you to feel overwhelmed, and this will likely lead to you giving up. Also, make your goals measurable. If you want to lose weight, don't simply write down "lose weight" as a goal. How much weight do you want to lose? How many pounds would you have to lose per week in order to see the desired result in a specified amount of time?

This one may sound silly, but are the goals you have in mind your goals? If a spouse or friend sets goals for you, you're probably not going to succeed. Creating a goal, and taking ownership of it, will give you more incentive to meet your goal. Setting a time frame will help you develop more realistic goals, too. And last, always put your goals in writing. Write them down, and review them often. This will provide you with added motivation to make your goals a reality.

Successful people examine and reassess their lives on a regular basis. When they realize changes need to be made, they start living intentionally, in writing, on paper, and on purpose!

—Dave

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Dave Ramsey Show, heard by more than 16 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.

Dear Dave,

One of my resolutions this year was to start living on a budget, and gain control of my money. I never realized how easy it would be to get discouraged early on. Can you give me some encouragement to help make my financial resolutions stick in 2021?

Collin

Dear Collin,

The secret to making a goal into a reality is getting started. It’s really that simple. You also have to be realistic and accept the fact that nothing—especially things you’ve never done before—works out perfectly the first time around. That leads to the next step, which is patience. Most people think about losing 20 pounds, and immediately feel it needs to happen in the next month or so. It doesn't. And mostly likely, it won’t. Like almost everything else worth doing, it’s something that requires sacrifice and focus each day over an extended period of time. Crash courses are usually painful and rarely work out well. But once you've done something a few times, it becomes an easier and easier part of your daily routine. Pretty soon, it’s not a chore or something you’re afraid of.

Making a budget and gaining control of your finances works the same way. When you first create a money plan, it probably won't work out exactly as you hoped. That’s okay. It will barely work the second month, but it won’t be as scary, because you’ve already done it once. By the third month, you’ll have a much better feel for it, and your stress levels will go way down because you already know the basics. It just takes determination, patience, and intensity to get through the rough patches that go along with starting anything new.

A new year is just around the corner, Collin. Don’t fall into the same old trap. Give yourself a little grace, but keep your eyes on the prize. Start preparing yourself now. You’ve got plenty of time to begin laying out a plan, and have a solid budget ready when January 1^st arrives. It may feel like things are beginning slowly, but you can make this happen if you’ll just stick with it!

—Dave

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Dave Ramsey Show, heard by more than 16 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.

Dear Dave,

My husband and I usually have a few disagreements around the holidays when it comes to Christmas spending. Do you have any advice for eliminating this kind of thing, and making the financial side of Christmas a little less stressful?

Kellie

Dear Kellie,

I imagine every couple has a few disagreements over Christmas spending. The trick is in how you handle them, and come to a compromise you each feel is fair, smart, and affordable.  

One of the keys is to start talking before you start shopping. Being on the same page—and creating a plan and sticking to it—are great ways to bring peace and togetherness into the picture. Honestly, Christmas spending can be part of your monthly cash flow plan the whole year. Get the picture? I’m talking about living on a written, monthly budget. You know Christmas is December 25^th every, single, year, so why not set aside a little each month leading up to the holidays?

If you haven’t planned ahead, now is a great time to become a unified team. Huddle up, not only to talk about Christmas priorities, but devise a game plan moving forward so that this doesn’t happen again next year. Together, figure all your regular monthly income and expenses into a budget. If you’ve saved anything at all for Christmas, include that, as well. We’ve all got necessities, so take of those first. Then, make a general list of everything you’d like to spend money on for Christmas—I’m talking about the things we often overlook like food, cards, party expenses, and decorations. Now, make a gift list.

Write a dollar amount beside each name or expense on your lists, and if the grand total is the same as—or less than—your Christmas budget total, you’re ready to roll!

If you can’t agree, or the numbers don’t work, run through things again. This doesn’t mean to repeat your positions until you get what you want. It means both of you acting like mature, responsible adults, finding some middle ground, and making sacrifices. If you really want to show your commitment, you and your spouse can sign your new budget. Signing your name is a simple, psychological signal that means you’re committed to your agreement. Then, post it somewhere you’ll both see it regularly.

Give it a try, Kellie. It just might help reinforce your commitment to the budget—and each other—when the shopping frenzy sets in!

—Dave

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Dave Ramsey Show, heard by more than 16 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.