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Back to basics: the fundamentals to Financial Peace

Dave’s website is full of quick little newsletter type articles. It’s all common sense advice that is reiterated, or somehow complementary to what has already been said. Yet, it isn’t unnecessarily repetitive. Why? Because sometimes we (i.e. I) need it said a variety of ways before we get it. Even when we do “get it”, we need someone reliable to say it again. and again. and again. Secretly, I have lofty dreams of moving to Nashville and becoming a writer for Dave. Maybe then I would actually REMEMBER the advice Dave dispenses. Today J and I took the fam to the local COSTCO with no budget, or even plan in mind. We spent $137 without even planning to do so. Not much of it was wasteful spending. However, it is still disappointing because we know better. I even used my debit card because we’ve fallen out of habit of using cash. Actually, that isn’t true. I continue to use cash, I’m just not using the envelope system.

Why oh why do I fall away from what I know works? It doesn’t require copious amounts of energy. But what’s comfortable, or “the way I’ve always done it” is hard to let go of, even if it is making us miserable. I know, it doesn’t make an ounce of sense. Before Financial Peace, I was not so blissfully ignorant of how better my financial life could be. I assumed it would be hard to be responsible. The truth is that it is in fact so simple that my ignorance is hard to swallow when I must confess to irresponsible financial behavior. Less stress is the result when you have an accurate and truthful screen capture of your financial life. It is hard to let go of the bad financial habits. We are absolutely light years of where we were when our minister first said the words “Financial Peace” in a sermon last January. Now at least I know better and have a little disappointment- even shame- when I don’t name every single one of the dollars in our income and outgo. I know now that I can blow all my hard work in one shopping trip, and that shopping trip might make the difference in how long it takes us to break free from Financial Peace. Dollars that are being frittered away because of poor planning aren’t going to pay down off our dept.

I hate balancing the checkbook. I hate paying bills (if you do like it, you’re weird). I spend more energy dreading doing the tasks than it requires to do them, and since starting Financial Peace, it’s never as bad as I feared. I’ve been conditioned to think the worse. But the truth is that the lessons really are sinking in, and one day of less than perfect (not necessarily bad) choices doesn’t throw it all away. I’ve just got to break the budget forms out again and sit down and have our budget committee meetings. We need a Financial Peace Check-up. It’s been our 3 months (actually a little less )or 30k miles.

There are a number of ways to get back on track. The easiest for me is to go to Dave’s website and do some reading. Today I read of How to Become a Stress-Free Shopper. There’s nothing new learned because the steps to Financial Peace are consistent and Biblically based. It isn’t a gimic, or membership dues. In fact, it is possible to take Dave’s advice for free. Check the books out from the library, download the budgeting forms for free. His radio shows and TV show is also free. The FPU course is reasonable, and it’s a lifetime membership. It’s necessary for hard heads like me to have accountability. I can’t begin to quantify the stress that we’ve let go of since making the commitment to start the program. I’m grateful that now, with Dave’s help, I have the common sense to know when I’m making bad decisions and can be responsible and accountable to my self. I have the fundamentals that are important to our financial plan, and must be in place in order for us to obtain Financial Peace. How long it takes us to get there is dependent on how well we stick to our plan.

~Manda

November 30, 2008 | Filed Under Dave Ramsey Financial Peace University (FPU), Financial Freedom Journey Pep Talk, Financial Goals, Financial Peace Baby Steps, Life Goals | 2 Comments

Debt indentures: work diligent to break free and obtain Financial Peace

Proverbs 21:17

17 He who loves pleasure will become poor;
whoever loves wine and oil will never be rich.

This verse in Proverbs doesn’t expressly explain will those who love rich will become poor, but it can be studied and applied to several scenarios. In the context of Financial Peace, I believe that we can safely infer that someone who spends all his money on things that gratify him will not obtain Financial Peace. Dave says over and over that a mature adult delays gratification, children do what feel good. We’re a country of poor people because we love pleasure. We see it, we want it, we get it. So what if we can’t afford it.

Our very economy is based on borrowing. Debt is our National Product. What would happen to our economy if everyone quit loving pleasure, and bought things that they could afford with cash. According to the book of Proverbs, we would be a rich nation. Driving home tonight I heard on WTOP News (although I can’t find a link to it and couldn’t write it down), that the ultimate cost of this bailout will be more than all previous major government purchases and bailouts (Lousianna Purchase, New Deal.. etc) combined, even factoring in inflation. Yowzaa. The bailout is to keep stimulating our economy, so that… we can continue to borrow. So that we the Government can continue to be our master. Debt indentures you to your creditor.

Proverbs 22: 7b

and the borrower is servant to the lender.

When does the Government run out of money?

To continue the Proverbs lesson:

Proverbs 11:5
He who puts up security for another will surely suffer,
but whoever refuses to strike hands in pledge is safe.

Proverbs 17:18
A man lacking in judgment strikes hands in pledge and puts up security for his neighbor.

Proverbs 22:26-27
26 Do not be a man who strikes hands in pledge
or puts up security for debts;
27 if you lack the means to pay,
your very bed will be snatched from under you.

Security in today’s context is credit. In Financial Peace, Dave gives the generational evolution of how credit in the country. Henry Ford gave no credit in his lifetime, but now the auto industry is now holding out its hand. Our economy is broken beyond repair. Those who have given credit will suffer Proverbs said. The government has designated industries that “can’t fail”. They can’t fail, to complete the cycle, because the Government needs to keep the country in a state of servitude.

The truth is that the country can survive without debt, because it has. Only in the last 2 generations has the country become reliant on credit. Our grandparents thought debt was stupid. Our great grandparents were embarrassed and ashamed of debt. Our country now relies on it, to the point that we borrow from the citizens in order to pay the industries so that the citizens can borrow {?!?}. We freak out when we can’t gladly pay you on Tuesday for a hamburger today (apologies to Wimpy). Perhaps not in our lifetime, but even perhaps during our lifetime, these “can’t fail” industries can fail, or in the vary least must be reformed into an industry that we no longer recognize. We should work diligently to break free from their indenture and obtain Financial Peace and the Freedom that comes with it.

On this Thanksgiving Day, I’m thankful that God led me to Dave Ramsey’s Financial Peace, and I’m happy that I can live as an example (of not only what to do right, but the struggle, and what can go wrong), and that hopefully, one day, I’ll no longer be indentured to my debtors and I can work in order to help those willing to rip up their contracts, and break free.

~Manda

November 27, 2008 | Filed Under Dave Ramsey Financial Peace University (FPU), Financial Freedom Journey Pep Talk, Financial Goals, Life Goals | Leave a Comment

Ownership: let go of a lie and create a financial truth

I’ve cheated on Dave. I’ve seen Suze Orman on television while flipping channels, and finally watched last week. Admitedly, I don’t know much about her, but her financial advice seems sound. Her guest was a woman whose husband wanted to declare bankruptcy. Their income was 9k a month. Their outgo was 19k a month. You see the problem. Suze gave her advice, which meant letting go of her 6k a month mortgage by doing a short sale on her house. The woman was adamant that she didn’t need to do so. I shook my head, and wondered why Suze Orman was wasting her breath. I found myself wondering how Dave would handle the situation. I speculated that he wouldn’t waste his breath. He’s about helping people who WANT help. The first step to financial peace is to resolve to never borrow again. The guest on this show was holding on to her lie. She kept making excuses, they could get 2nd jobs, she didn’t want to sell her “stuff”. She was probably the most clueless woman I’ve seen. Finally Suze told her that she didn’t have any stuff. She didn’t own anything. She’d created this lie, and was working to maintain it. I jotted down this comment “you have to let go of the lie and create a financial truth”.

Dave says the same thing when he gives the advice to live your wage. J and I have worked over the last 5 months to create a financial truth. We’ve let go of the things we couldn’t afford. Some days I do miss my van, and I know he misses his truck, but, honestly, they were not ours. We let go of that lie, and created a financial truth. Instead of being behind in our utilities and juggling which to pay. Our utilities weren’t getting paid because we were spending money we didn’t have. We’re fortunate to not have credit card debt. We’re fortunate enough not to have a house that we can’t afford. We still have some decisions to make. My student loans are monstrous. Do I go back to work, or stay at home with my babies. With Dave’s help, we’ve let go of the lie and are living a financial truth. We have that truth to be able to make informed decisions. We’ll be able to consider the cost benefit. Only time will tell which way we’ll go, but as Dave says, prayer does work, and we’ll rely on it to assist us in making decisions. This is a stark contrast to the lies we were trying to perpetrate. It’s less stressful, and more peaceful.

November 25, 2008 | Filed Under Financial Freedom Journey Pep Talk, Financial Goals, Financial Peace Baby Steps, Making More Money | Leave a Comment

Dave’s shopping tips for shopping during Christmas

When you take Financial Peace, you are a member for life. It really REALLY is a worthwhile $93 bucks. If you find yourself needing a refresher, find one in your area and GO. Regardless of whether or not you are an FPU member, you can sign up for Dave’s eNewsletter at daveramsey.com. November’s issue, of course, deals with the top 10 Christmas shopping mistakes.

J and I are working on keeping our Christmas at a bare minimum this year. Our children won’t go without because we have parents who overspend during Christmas, ignoring all practical financial advice. We’re working as examples to them and hope one day that we can bring them over to the peaceful side of finances.

The first mistake, Not Prioritizing, sort of hits a little about what I talked about in my last post. Dave suggests you differentiate between what HAS to be done, and what is just fluff. Holidays aren’t fun if you’re stressed out. Realized from the onset what is important, which is also his 10th mistake Forgetting Why We Celebrate. Family, friends, loved ones are more important than the material things.

The mistakes between 1 and 10 are Dave’s every day principles that have been translated into the holiday setting : make a list, make a budget, shop around, using credit cards. Number 4 Buying for Everyone is a common mistake. I’ve done it. In the past I’ve bought for my husbands nieces and nephews that don’t even know my name, and I’m hard pressed to remember theirs. Dave’s suggestions are to talk to people at work about drawing names for a gift. In the past, I’ve been in workplaces that do a month long secret Santa that really added up. In the current economic client, I’m doubt this behavior will decrease, and that spending limits for gifts will be decreased. For the past 3 years I’ve gotten to know a group of mothers in an on-line community, and exchanging Christmas gifts was part of the norm. This year, only 2 mothers signed up to participate. $30 is a lot to spend on a child not even your own. The decision was made to instead have an ornament exchange with a $5 limit. Before you get stressed out about the holiday, and you undo the hard work you’ve done in financial peace, stick to what you’ve learned and talk to family members and co-workers about realistic expectations. This economic crisis is not limited to a few, chance are, your friends and family members will welcome the suggestion.

So far, J and I are doing pretty well in our Christmas spending. I took all of our change buckets to the local Coinstar and got free coin counting because I redeemed my change for Amazon ecertificates. Until December 7, you can get a $10 bonus when you redeem more than $40. I just need to find my receipt and send it in. Before FPU, I wouldn’t have worried about losing “free money”, but now I really see the missed opportunity. J is working a 2nd job delivering pizza at night, and we’ve earmarked that money for Christmas, however, our hope is that we won’t use it and will make another big loan payment after the New Year.

Make a Christmas shopping plan and stick with it. Use all you’ve learned in FPU. Don’t use your credit cards at 18% interest to buy gifts for everyone you know. Make a list and stick to it. Shop sales. Study store flyers before going out so you know who has the best deal. Take sales papers with you to stores that price match. We live in a town with a handful of Wal-Marts. If you know that an item is cheaper at the Wal-Mart on the other side of town, be vocal about it and you’ll get the cheaper price. Stores want your business. I think Circuit City might be having some good deals because they declared bankruptcy and are facing closing their stores. I worry about shopping there because if their doors are closed, where do you take your returns?

When all else fails, bake something, make something, send a thoughtful handwritten card. I’m making a lot of gifts this year. I’m making my mother and mother-in-law a scrapbook. It really is the thought that counts.

~Manda

November 22, 2008 | Filed Under Bargain Hunting, Dave Ramsey Financial Peace University (FPU), Financial Planning | Leave a Comment

Budgeting Works!

To gain financial freedom you must take control of your money, plan for the future and Stop Borrowing Money!
Two families striving to gain financial freedom share their experiences.
Blog Author Mona Weathers (monawea)

Co-author, Manda C.
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Manda C. is our new contributing author. Welcome Manda!

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Back to basics: the fundamentals to Financial Peace

Debt indentures: work diligent to break free and obtain Financial Peace

Ownership: let go of a lie and create a financial truth

Dave’s shopping tips for shopping during Christmas

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