It seems like every day I get an e-mail or a call in to the radio show telling me it is impossible to save any money, dump debt or invest using the money one brings home each month. WRONG!

It seems like every day I get an e-mail or a call in to the radio show telling me it is impossible to save any money, dump debt or invest using the money one brings home each month. WRONG!


The problem is, most people don’t know where their money is going every month. The money came in, and the money went out, and only the names were changed to protect the innocent.


Changing how you handle money isn’t easy, but the problem isn’t the money. The problem is the person you see in the mirror every morning.


If you’re going to be “The Millionaire Next Door,” you have to put your money to work for you, not put you to work for your money. Every month you must spend every dollar on paper before the month begins. If you’re married, make sure your spouse is on the same page with you.


Start by adding up your monthly income, then list all of your monthly bills and subtract the total from your income. Be sure to include a monthly payment to funds for your non-monthly items such as car insurance, taxes and Christmas (it happens at the same time every year, so plan ahead and pay cash). The amount left after the bills are paid is your disposable money to use for eliminating the student loan you’ve had around so long you think it’s a pet, and that MasterCard bill that has mastered you.


“But Dave, there isn’t anything left over!” Well, then you need to look at your bills. Are you making payments on a car that’s $36,000 when your annual household income is $30,000? Americans spend a ton of money each year on their cars just to impress people they don’t know.


You may have too much car. Sell the car, sell the car, SELL THE CAR! Buy a used car that gets you around until you’ve had time to get out of debt, and save money so you can pay cash for your next vehicle.


After you’ve sold the car, start selling other stuff. Sell so much stuff that the kids think they’re next! Use the money from selling your stuff to pay your bills and start saving.


When you have your monthly budget, get out your envelopes. Label them for the expenses you pay monthly with cash — entertainment, groceries, eating out, etc. Put the amount of cash in individual envelopes that you budgeted for each item for that month. When the money in the eating out envelope is gone, you stop eating out. It’s that simple.


Don’t be discouraged if your first budget isn’t perfect. It typically takes a few months.


Find syndicated columnist Dave Ramsey online at daveramsey.com. You can also see him at 8 p.m. EST weekdays on Fox Business and hear his radio show weekday afternoons.