When we all think about it, we need some form of help with our finances, big or small. I knew I needed it, at least. I didn’t want to admit it, but I did. So when I received the opportunity to try out Dave Ramsey’s Financial Peace University pack, I was reluctant, but I tried it.
“We all need a plan for our money. Financial Peace University (FPU) is that plan! It teaches God’s ways of handling money. Through video teaching, class discussions and interactive small group activities, FPU presents biblical, practical steps to get from where you are to where you’ve dreamed you could be. This plan will show you how to get rid of debt, manage your money, spend and save wisely, and much more!” –daveramsey.com/fpu
Now that you know a little about FPU, the next question would be, do you know Dave Ramsey? Well, below it explains a little bit about him:
“I have an unusual way of looking at the world. My wife, Sharon, says I’m weird and truthfully—I am weird. But there’s a reason. Starting from nothing, by the time I was 26 I had a net worth of a little over a million dollars. I was making $250,000 a year—that’s more than $20,000 a month net taxable income. I was really having fun. But 98% truth is a lie, and that 2% can cause big problems, especially with $4 million in real estate. I had a lot of debt—a lot of short-term debt—and I’m the idiot who signed up for the trip.
The short version of the story is that debt caused us, over the course of two and a half years of fighting it, to lose everything. We didn’t tell anyone what was going on, but if we had to do it again, we would learn from the wisdom of others who have been through it. We soon learned that we were not the only ones at the bottom. Barbie and Ken (you know, the couple who appearto be perfect—perfect clothes, perfect car, perfect house) are broke, and I don’t take financial advice from broke people anymore.”
I had actually heard about Dave Ramsey through my ex husband, who listened to talk radio very religiously. Of course the first thing that really came to my mind was that Dave Ramsey was a joke and was all about “getting rich” schemes, just like every other one. My ex husband got the FPU packet and started talking to me about it. Again, I was very reluctant. I honestly didn’t think it would work.
Some of the main things that Dave Ramsey talks about in his discussions are that people DO think that his money-saving plan won’t work for them, but not because it DOESN’T work, but that they don’t want to change their own lifestyle to make it work. All it takes is putting forth the effort and placing your priorities in the right order.
Baby Step 1 is simple enough, saving up $1,000 in your savings account for emergencies only (or $500 if your income is under $20,000/year). It doesn’t matter how long it takes to get there, just put it in there.
But why, you ask?
Think of it like this: You end up getting $1,000 in your savings account and it’s just sitting there. All of a sudden, you get a flat tire. It’s gonna cost you $100 and you have to replace it because you desperately need your vehicle to get to work, school, etc. Now you don’t have to worry about spending anything out of your checking account and being late for any bills that you have. Your mind will be at ease!
Why not just apply for a credit card, you ask?
Great question! Although it would be used for the same thing (emergencies), instead of that $1,000 sitting there, possibly adding money to your account, that $1,000 credit card has an interest rate and is actually costing you more to use. Makes sense?
This is definitely NOT a “Get Rich Quick” Scheme. Building wealth takes time, patience and discipline!
I love the Envelope System, shown here! Have you noticed that you’re least likely to spend money when you have the cash on you? That’s because the majority of Americans have those plastic things we call Debit cards. When you can’t see the money, it’s easier to spend. Dave talks about when you see the money leave your purse and into someone else’s hand, it’s a bit harder emotionally to see that. The Envelope system is to help you visually see what you have. You write your different misc. bills (such as groceries, date night, car maintenance, etc.) and then you place as much money as you have budgeted for, for each of them. The key to this system is that you can ONLY spend what you have in that specific envelope.
For example, you put $200 in your Food Budget Envelope for the month. You can ONLY spend $200 in your food, if that means going grocery shopping, going out to eat, ANYTHING that has to do with food, it has to come out of THAT envelope. It’ll teach you discipline.
The reason why I love this system is because it really showed me how much I was ACTUALLY spending on food without this. On an average month, including take-out fast food and grocery shopping, my family and I was spending well over $750 on it. We were wondering where most of our money went and we were flat broke by the end of the month…THAT was why! It taught me to be frugal and be smarter when it came to food purchases.
If your car need an oil change, you put $40 in your car maintenance envelope, so you don’t use that money for anything else BUT your oil change.
It gives your money a name, basically. If it doesn’t have a name, who knows what you’d spend it on, right?
“DEBT IS NORMAL. BE WEIRD.” -Dave Ramsey
Are you the nerd (money-saver) or are you the free-spirit (spend money when you got it)?
Dave helps both parties with any money situations in this packet! When I first started this program, I was a free-spirit. Now in my current marriage, I’m the nerd and my husband is the free-spirit. It’s my job to say, “Honey, we don’t need to spend money on that.” My goal is to make him the nerd with me. He and I are continuing to do FPU and he’s really enjoying it, which is what I was hoping for.
Another reason why I love FPU is that Dave Ramsey speaks so highly about giving to others. I’m a pretty devout Christian and have been taught that service is one of the best things to show God’s love. So when I saw that it was part of his Baby Step plan, I was more intrigued. He talks about working on yourself, so that when you’re able to, you can give to others in need. That doesn’t mean throwing your money around, saying “Take it! It’s yours!” It means tithing, it means buying a pack of diapers for a neighbor who can’t afford to buy her baby any. It’s doing something thoughtful for someone else.
This is honestly a great program for anyone who is wanting to learn to “live like no one else, so that later you can live like no one else”. I highly recommend The Dave Ramsey Financial Peace University Program! Not only does he talk about the stuff that I discussed in this review, but there is MORE! And he makes the discussions so interesting, with stories and jokes. When my ex. husband I were involved in this program, we managed to get rid of $15,000 worth of $30k debt that we had within the first year! Yes, our minds were blown when we found that out. Now, taking this journey with my new husband, we don’t have much debt, but I know even we could still benefit from it. And we’re both in it 100%. It has changed my outlook on money and I’m sure it’ll change yours as well. Also, you can check him out on Facebook and Twitter!
(Disclaimer: Dave Ramsey Financial Peace University sent me their FPU pack to review. I was under no obligation to give a positive review. The opinion I gave was 100% my own.)