Monday, May 2, 2011


Recently I wrote how I am taking a 13 week class called FINANCIAL PEACE UNIVERSITY (FPU) with this guy....

.... Dave Ramsey. He is funny and very interesting to listen to. I had my first class last week...SUPER SAVING.

We went over the seven baby steps:

#1 $1,000 in your emergency fund DONE! And a little more...working on building this up...see #3

#2 Pay off debt except the house utilizing the debt snowball...except for one car and our fancy grass, this is DONE too. The grass loan is one year, same as cash, no interest and the car has about 2 years left on it. but I do want to pay these off as quick as possible.

#3 Three to six months expenses in savings....for us this would mean $9,000 -$18,000...WOW! This would make me feel so comfortable.

#4 Invest 15% of your household income in Roth IRA's and pre-tax retirement plans....Richard has a 401K and I have my teacher retirement, but really this is all we have done and I know it's not enough.

#5 College funding...We've already started a savings account for Sam, but Richard and I both had our folks help us, some loans which are long gone and we worked. So, although I would like to do some of this for Sam, we do feel it's his education and he needs to take ownership of it.

#6 Pay off your home early....this would be amazing too! I do want to refinance to try and get a 15 year loan instead of the 30 (minus the 8 years we've been in it...) year loan we have now.

#7 Build wealth and give....this will take some time.

Some of the AH-HAH moments for me last week:

1. Building wealth is not evil or wrong. Money is amoral. It depends on what you do with it.

2. Unexpected events do occur----expect them!

3. Say you borrow to purchase a $4,000 dining room set. Most furniture stores will sell their financing contracts to finance companies. This means you will have borrowed at 24% with payments of $211 per month for 24 months. So, you will pay a total of $5064, plus insurance, for the set. But if you save the same $211 per month for only 18 months, you will be able to pay cash. When you pay cash, you can almost always negotiate a discount, so you will be able to buy it even earlier.

4. Building wealth is a marathon not a sprint. There are no magic pills.

5. Just $100 per month, every month, from age 25 to age 65, at 12% will build to over $1,176,000.


Complete the Basic Quickie Budget...We have always had a budget so that was easy. To be totally honest, do I always stick to it....NO! We have a lot of expenses that are fixed like: housing (but I want to refi), car payment, cell phone, health insurance etc....but the website helps you look at every thing as negotiable. So we (I keep saying, "I" because I handle the finances and pay the bills...I have already talked to Richard about getting more involved...and Richard has to work so he is just listening to the audio tapes from each class. It's the same information, just no pictures.) are now going to be going through each line of the budget and seeing where we can cut.

I highly recommend this class and Dave Ramsey's website.


stART said...

Good for you! Keep it up!

Ashley said...

We love DR and took that class too. It helped us get in a great financial position. Last year my hubby lost his job and we chomped through our emergency fund and then used a credit card. He's now settled in at his new job and we're back at the "cash envelope system" and looking pay off that CC and car as soon as possible!

I look forward to hearing more about your journey. :)

R said...

I love Dave Ramsey's system. We are working on Baby Steps #4 & #6. (Hoping for step #5) It does give so much comfort.