Wednesday, May 13, 2009

financial peace university

with the addition of baby #2 and the subsequent hospital bills and ER visits, etc., we just can't seem to get ahead. seems like everytime we turn around, we have another bill. (not to mention outgrowing one car which happened the same time the other one practically died...) anyway, nathaniel heard about dave ramsey's financial peace university which (i'm not sure if he realized this), but it is a biblical based way to do finances (plus some advice from mr. ramsey). nathaniel missed the first class, so just i went to it. it is a 12 week class (once a week) and is held at one of the local churches (the one that i like to go to, faith baptist). anyway, i thought i'd share a bit of what we learned last week for any of you who were interested in the program. the first step is to save $1000 for emergencies. this has to be a priority. fortunately we already had this in place so that wasn't a big deal. he called this the "GOK" fund (god only knows) and should never be touched unless there really was an emergency. (incidentally, if you make under $20k/year, you should only save $500. this is for my semi-unemployeed newly-graduated sister.) some of the points and quotes he used for this lesson were: 1. building wealth is not evil or wrong. money is amoral (i.e. the LOVE of money is immoral) "for the love of money is a root of all kinds of evil" 1 timothy 6:10 2. saving must become a priority. and, the difference between saving and hoarding is attitude. he used a visual with this one that i particularly liked... money clinched tight in a fist: hoarding. the tight fist represents anger. money lying in an open hand can come and go freely. even a dog can understand the open hand (treat in the open hand). "in the house of the wise are stores of choice food and oil, but a foolish man devours all he has." proverbs 21:20 3. if you get a raise, don't raise your standard of living - save more. "if riches increase, do not set your heart on them" psalm 62:10 the next two steps were not covered in this lesson, but he hinted as to what they were: step 2: pay off all debt except the house. (the more you pay off, the more you HAVE to pay off - get it??? he calls it the debt snowball.) step 3: save for 3 to 6 months of expenses (which you may think will be hard, but without any debt to pay each month ( payments, hospital bills, college loans), you have a lot more money left over at the end of the month to put towards savings!) so our homework was to make a quicky budget. really it wasn't much of a budget but more a list of where our money goes PER MONTH. i recommend each of you doing one today. include: mortgage (plus the payoff) any extra you pay on mortgage 401k gifts/donations/all those 5k fees! church tithing electricity (i did a 6 month average since our rates just went up) water gas internet cell phones home phone trash security system cable/satellite *food car payment(s) plus the(ir) payoff(s) *gas and oil (which is hard since you don't change your oil each month plus you travel more some months than others) *car repairs and tires (our cars are new and under warranty so i didn't put anything here) car/home insurance *clothing college loan(s) dental insurance health insurance life insurance medical expenses (doctor visits, medicines, etc.) child care entertainment pool dues/fitness club fees/etc. hospital bills credit card bills other loans


  1. P.S. this program is not for anyone who has NO debt. if you are already debt free, don't even read this stuff. it is a waste of your time. maybe you should start your own class though, you can call it "john doe's financial freedom with/after kids" or something. but, as for the rest of us normal [middle class] folks, this class IS really helpful!

  2. "i'm not sure if he realized this"

    Yes, I realized it was a biblical based financial program.

    1. Christine told me about it because we were talking church one day.

    2. What impresses me is the thought process of eliminating debt, saving and having more money to donate to worth causes.

  3. oh wait. i forgot to mention the whopping $2000 vet bill that started the whole no-getting-anywhere ball rolling in january.

    by the way, everyone, bo LOVES life outside. i saw him stalking a squirrel this morning. ;)

  4. Yep, all great ideas.

    One thing I have to credit to my ex husband (excuse the credit pun) is paying off debt/not obtaining any more debt except mortgage.

    Luckily, Mr. B is of like mind when it comes to money.

    I've been keeping a budget spreadsheet (more like expenses) for 5+ years now. This came in real handy when our FPs wanted to know what we would want to live on in retirement (BTW, they thought our monthly goal was "very reasonable"; I'd thought it was sorta on the high end, they told us some people come in with 2X or more that amount).

    Here is another tip for saving (after you've paid of debt. IMO, a person has no business saving money (save for the GOK fund) unless their debt is paid off).

    Keep track of how much you save using coupons, store cards, promos, etc.

    At the end of the month, transfer that amount into a savings account.

    I've been doing this for our Italy savings account for about a year and a half and have over $2,000 already. Just from doing this!

    You're both very wise to be thinking about all of this NOW when you are young (yes you are young) and have a lot of years to build up your accounts.

    Good luck!

  5. I LOVE LOVE LOVE Dave Ramsey. Used to listen to him on the Radio when we lived in Kentucky and saw him live in Louisville. He's da bomb!



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