When you think about your finances, do you feel overwhelmed?

Or do you feel confused about how to live, even while you have a budget in hand?

After all, the money only comes in every now and again, and that credit card payment is due…what do I pay right now? I don’t want to ding my credit… I want that credit collector to stop calling…

Where do I spend the few dollars I’ve got today?

When you’re just getting started with budgeting, and you feel overwhelmed, it can be tough to decide what’s smart to pay first and what last. In this video, I try to lay out Dave Ramsey’s idea of the Four Walls and how to apply it to your budget.

To help you win, I created a PDF covering the details of the 4 walls. Download that here:

Watch the video below:

(Click here to watch on YouTube)

Are you Feeling Overwhelmed?

When I made this video it was September, and at that time of year, just like the new year, many people think

• “Ok, time to grow up and get myself back on track financially!”, or
• “I’m goin got start dealing with my budget”, or
• “I’m gonna get this debt paid off,” or
• “I’m gonna get a plan for the first time”…

And then real life hits.

September hits, and the kids are sick on the first day of school…

• Or the car breaks down the first week of school…
• Or creditors start calling because you’re late on that credit card bill that hasn’t been paid in forever…
• Or you get the first letter warning you that if you don’t pay your mortgage, there’s gonna be proceedings – they’re going to start to foreclose on your home!

All scary and frustrating, and enough to make you feel like there’s no hope – that there’s no point to doing this “budgeting thing.” It won’t work anyway.

Are you feeling out of control in your financial life?

Don’t worry – you’re not alone. Tons of people in North America today feel exactly the same way. Millions of people just figure this “budget thing” just isn’t for them.

If that’s you, I want to give you HOPE.

You CAN do it. You just need a PLAN.

So Here It Is.

The main focus is, of course, a budget. But since that seems overwhelming to many, we can start even earlier: what are the most important parts of your budget?

The Four Walls

This is what Dave Ramsey refers to as “The Four Walls.” These are the areas of your financial life that you actually NEED – the absolute essentials to surviving to fight another day.

These are the bedrock foundation for creating a budget. They are:

1. Food
2. Shelter and utilities
3. Clothing
4. Transportation

Let’s go into more detail on each of these.

1. Food

Rule number one or wall number one is food. You need to eat. Your family needs to eat.

If all else fails you need to eat.

But what is eating mean?

It means eating and that’s it. It does not mean eating out.

The first thing to make sure happens before everything else is food, that you have food to eat. That your kids have food to eat. That you’re family has food to eat. That’s groceries.

Why no eating out? Because, if you’re at this point of trying to figure out what’s most important to spend your last dollar on, and you went to McDonalds rather than pay your outstanding mortgage payment, and then you got foreclosed on…well…you just got foreclosed on partially so that you could eat at McDonald’s.

That doesn’t make sense.

So, if it needs to be pasta instead of steak okay, if it needs to be cheap food from that grocery store you usually turn your nose up at, do it. Whatever it takes. A nice cheap budget on food gets the food budget done.

2. Shelter

You actually need to keep the roof over your head – it’s hard to do much else when you’re homeless.

So, what does shelter looks like? You need to pay for things that allow you to keep your household up and running. For instance,

• property taxes,
• house / renters insurance,
• your mortgage payment / your rent

Whatever it takes to keep a warm dry roof over your head. If you’re renting, pay your rent on time. Shelter is the #2 priority after food.

3. Clothing

After that, we all need clothing. Now when I say clothing I don’t mean:

“Well, I’ve only got 37 shirts, but I need 3 more because I don’t like how these ones look”

Again, if you buy clothes you don’t NEED while your car is getting repossessed, that’s silly. But to buy diapers for your child and let the car get repossessed might be something we could talk about. If you’re at that point where you’re in freak out mode you’ve got to be looking at these as the absolute minimum you need. So, clothing is just basic needs. If there are clothing needs in your household – clothing necessities – buy those next.

4. Transportation

Now that you have a full stomach, you’re warm and dry, and you’re dressed, being able to get to work is the next most important thing to make sure everything stays that way! You need to be able to get around, whatever transportation looks like for you.

If you’re able to take the bus okay, do it. But what is the minimum for you and you’re in your life right now that you need to get around? This could include things like

• A car payment,
• Maybe gas,
• Probably car insurance
• Anything else you NEED to be able to get around.

The bottom line: the 4 Walls are those things that are absolute necessities, and nothing else.

Now that these are in the budget, how do you feel?

When you spend the time and buy these things first,

• you’ve got a roof over your head;
• you’ve got food in your belly;
• you’ve got gas in the car to get to work; and
• everybody is clothed.

How does that feel?

You’re on solid ground, and that feels good (especially if you haven’t been there in quite a while).

Everything else is a game

At this point, everything else is a game…It might be a game you’re behind in, but everything else in comparison to the 4 Walls is on the level of a game.

What does this look like if, for instance, you have a credit card bill? Well, it certainly comes after the above.

If a cable bill comes in, it comes after those.

Any other bill at all that comes due, you pay for the 4 Walls FIRST.

It does not make sense to miss a rent payment ever, except if you can’t eat if you pay your rent. It’s the number 2 thing to pay for! Everything else matters less.

It’s way better to not pay a credit card on time then not pay your rent on time. It makes no sense to pay a bill to a creditor when your house is getting foreclosed on.

It’s all about priorities.

What does this look like?

We want to get a secure footing, we want to get you to a place where you’re not so freaked out. We want the emotions to be able to be brought down, and let you start working from a solid foundation – to feel like you can CHARGE on your goals and work towards them BOLDLY.

Once you have these 4 Walls taken care of, you can feel solid. Everything else is a game. You might be losing the game right now, but it’s still a game. You are alive, you have food in your belly, you have a roof over your head, you have heat if you’re in a cold place and you have air conditioning if you’re in a crazy hot place.

Moving Forward

So, if you’re struggling with this, I want you to download the PDF below. This is a list of all the details, all the things that you could possibly put into The 4 Walls:

The next time you sit down to make a budget and you’re struggling with where to get started, grab this list, print it out, and fill out these items FIRST.

Also, be sure to check out my other video on How To Make A Budget You’ll Actually Stick To:

But these four things, the 4 Walls, are the first things that go in your zero-based budget.

They have to go in first, they are the most important and then everything comes after that.

Hope That Helps!

If you download the PDF, on the Thank You page there’s a link there to join our private Facebook group. This is a place you can come to get help, find community, and find people who care and understand what you’re going through.

Feel free to hit me up as well if you’re really struggling, if you’re at that place where you’re freaked out. I was frustrated with our finances for a long time and can relate to many struggles. Shoot me an email rob@wepayoffdebt.ca and let me know what I can do to help.

Thanks so much, good luck to you and we’ll talk to you again soon!