J uses money to show affection. I use it as a form of therapy. We’re a recipe for disaster, if you’ll pardon the cliche. Once you’ve come to rely on money- ie debt, it’s hard to change those behaviors, because, fundamentally, you have to change YOU. I keep forward thinking in 2 years when we’ll be debt free except the house. My hunch is that we’ll have less stress, and less need to use money to show affection, and not need therapy! We’ll be able to focus on our marriage, our grieving, and our healing instead of spiraling debt. Now that I have an idea of what life could be like, I start to want that for others I care about. It’s so wonderful, I want everyone to have it. I feel the same way about following Christ. I would love nothing more for everyone I love to follow Christ, but it just isn’t something you can force on people. I can however, live my life in order to open up the doors for conversations. God and Christ have given me such a peace with the death of my child. To Them I give all the glory for those who wish or need such a peace.

The changes in my financial life are due to Financial Peace, which is based on the Biblical teachings of finances. Why our churches, for the most part, choose not to address the financial live of their members, I don’t know. Perhaps they think it too intrusive to talk about finances. It’s uncomfortable to talk about, and might even lead to people leaving a church, however, I don’t think this is an adequate excuse. Rarely is the right thing to say the easy thing to say. We’ve becomes consumers of Christianity in the US. We want to go to church, sit for an hour, feel good when we come out and not think again about our Spiritual lives again until next Sunday morning. Financial Peace is a component of Spirituality. Churches should be teaching it, to discourage their members from debt, and to encourage them to have faith in God concerning their titheing and charitable donations. The Bible tells us that God wants our First Fruits. That’s off the top folks. He gets our best, not what’s left over. Not what we can scrounge out of the bottom of our purses before the offering plate is passed around. It should be deliberate. This is why charitable contributions are at the top of Dave’s budgeting forms. Even as a Christian, I am tempted to give less, and months I give in to that temptation, I can tell the difference in my life. Hands that are open to give are also open to receive. Honestly, J and I aren’t at the 10% we’d like to be at for our charitable donations. We are at 5%, however, it feels really good to be able to know that there is a set aside amount in our budget to give away. This month, our donation went to The Compassionate Friends, a non-profit organization for grieving parents. Next month, it’ll be for the Ronald McDonald House, where we lived for months when our daughter was in intensive care. Such organizations do not survive without charitable donations.

I grew up in the church, and don’t remember a single sermon on money. The Bible is packed full on financial teachings and ways to succeed financially. If you are a Christian, why not take a look at them? Dave says that after reading the book of Proverbs, you’re almost read for a degree in finances. It is indeed a great book. I’m on my 3rd reading of it. It’s 31 chapters, making it perfect for once a month readings. With the economy in shambles, I think more churches might take on teaching finances from the Biblical perspective. I’m fortunate to have been led to a church who does teach finances. I’ve been thinking about starting an FPU in the community outside the safety of the walls of my church.

For those who aren’t Christians, it doesn’t mean that you can- or shouldn’t – take the common sense approach to finances. You can- and should give regularly. You should run from debt. I haven’t read it, but I believe that Dave’s Total Money Makeover is less focused on the spiritual and more on the common sense. Regardless, it takes stick-to-it-ness. Recognizing and changing behaviors. Small victories win the war.

The great part about this budgeting software is that it calculates everything for you. So you just enter the numbers and then the software takes care of the rest. Percentages are also automatically calculated for you.

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There are some other tools that are useful as well. In the Tools section of the CD-ROM you can use the Financial Calculators, Glossary and Check Register. The software is fairly simple (as opposed to too complicated that you get frustrated and don’t bother with it) but very useful. The Debt Snowball program is one of the best features. Enter in all your debt balances with monthly payments and it will calculate how long it will take for you debt to be paid. The Debt Snowball features also allows you to view your progress in charts and graphs.

The software is $24.95 and totally worth it. I like having my budgeting software on my computer since it’s with me just about everywhere I go. You also have the choice of downloading the software straight from the website. No need to wait on getting your budget started. Check it out! Dave Ramsey’s Personal Finance Software.

~Mona

As I listened, I tried to pay attention for something for which to write about for my last post of the month. In lesson 4, dumping debt, Dave says that he knows that he can often identify callers who “have it”, and those that don’t. Those that “have it” are angry, and ready to get out of debt. They find no excuses, have no reason to delay it. They get on board, and they get on board quickly. I would be one of these callers. J would not. He’s a bit more inclined to not own up to things right away. He needs to be knocked around a bit before he sees things accurately, which is why we’re a perfect match. For every bully, there is a wimp.

Our Baby Emergency Fund has a little gremlin that we call Dave Murphy. Any time it gets funded, something happens, and he takes all the money out. We’re 4 months into our Financial Peace journey, and are back to Baby Step 1.. re-again. We’ve had 2 yard sales, we’ve sold a jet ski, cut out our retirement, sold our van, gone to the bare bones for insurance, cut out trash service. We’re still holding onto our cable services. I’m in my final semester of my graduate degree, and internet service is a necessity for us at the moment based on our circumstances. But we have to dig deeper. We have to find a way to get it funded again. We’ve been trying to sell our hot tub, and hopefully, since hot tub weather is nearly here, it will sell. So, I’m going to cut the price again, and all but give the thing away to get our Baby Emergency Fund re-re-funded.

J has a meeting with the manager of the local Domino’s tomorrow. He’s to take in his driving record, and we suspect he’ll be hired on the spot. That will certainly help in getting it funded. We’re also looking to sell Jason’s truck to knock out the 8k debt, leaving us with only one left from the medical bills of our daughter.  My comprehensive exams are next week, and once that is over, I’m going to see about getting a job at Kohl’s as a seasonal employee.  We’re starting to prepare for July. In July, my student loans will come a knockin’. My girls will definitely not graduate from college in debt. Through FPU, I’ve learned about ESA’s, and as soon as we complete Baby Step 3, we’re going to start funding these college funds. Current law allows a 2k year contribution. Our oldest is 2, which seems awful young, but each year we aren’t contributing is a year that her fund will miss out on the compounded interest that would make the 2k per year starting at age 0 until age 18 nearly 200k. There are many steps to get from here to there, but it is important to keep an ear to the ground to be ready, to have a game plan.

One thing that Dave said in the same lesson about those that are going to “make it” is that when your broke friends are making fun of you, you know that you’re doing it right. Some family members have been a little worried, accusing us of joining a cult and such, but I guess I have great taste in friends, because my broke friends are checking out Dave’s books, they’re funding emergency funds. I’m such a convert, so determined to get out of debt as soon as possible, that I’m going to be co-teaching FPU starting in November. It’s offered through my church, but anyone can attend. The next session is going to start on the tail end of a sermon series on debt- in anticipation of the holidays. It is my hope and prayer that my broke friends will join me at least for the FPU. It’s the best $93 I’ve ever spent. 10 years from now when I’ve changed my family tree, and I’m giving like no one else, in the memory of my daughter, I’ll be even more thankful of the small investment. After I’ve co-taught a lesson, then I’ll start teaching my own FPU courses. The lessons learned during the 14 weeks don’t end at the 14 weeks. After listening to the DVD’s (which come with the $93), I’ve learned more, and I know that as I do the course as an instructor, I’ll learn even more. J and I are a bit deficient in the life insurance part. I have none. Nada. Zip. What he has is what is offered at work.

Very quickly, before I close, in speaking of the Holiday’s, I noticed that the Coinstar at our grocery store doesn’t charge if you get an Amazon,com gift certificate from your coins. So, we’re emptying Piggy Banks. We got… ha… $93 out of one. No trips to the mall. It eliminates impulse purchases, and “gotta have its”. We’ve got 2 more to empty so that we can go get plastic stuff for our kids.

The last thing that I re-heard, not for the first time, but I was like “Oh yeah”, was that Prayer really does work. It does. It does. I’ve no doubt that God led me to Dave Ramsey’s program because I prayed for help with finances. If there are any two people that are a testimony to how much things can change in 14 short weeks, it is us. I can’t even begin to tell you of the denial that I was living in, and of the lengths J was going to hide it from me. After 14 weeks, J and I are caught up on our bills, and are working with one another, not against one another. More importantly, is that Jason has become a Christian. The promise and the proof that he was seeing after doing it God’s way, not only financially, but in every aspect of our lives was the evidence he needed.

~Manda

One of the reasons that J and I are excited to acheive Financial Peace and to build wealth is that one day, I know that I am going to be responsible for the finances of my parents. My mother works to pay her credit card debt and car payment. My dad is going to seek retirement soon, and I assume my mother will keep working. They’ve worked hard over the years, but they will not be able to retire with the dignity that two such hard working people deserve. Hopefully, when the time comes, I’ll be able to give them that dignity. I’d like to help my dad pay off their home. They live in rural Alabama and have very little left on it. Then I’d like to have my dad pay “rent” into a savings account and invest that money for them on top of his military retirement and social insecurity. The hard part will be to get my mother to start spending money instead of credit. But hopefully, I can use our Financial Peace Journey as a motivator. I believe that as Christians, we are called to take care of our family. The Bible tells us in 1Tim 5:8 that even unbelievers take care of their family, and to not do so, makes us less than an unbeliever. It is that important, and something I take seriously. I’ve always known that it will be my responsibility to care for my parents when they get older. I’ve just had no idea how I would be able to do it. With Financial Peace, it becomes possible. With Financial Peace, taking the God-given responsibility of caring for my parents will not be a burden on top of many other burdens. It will be a pleasure because I’m no longer dealing with life as it comes. I’m thinking forward, taking responsibility for my actions and decisions, and being mature enough to delay gratification.

On the flip side, I hope to build our wealth to change our family tree. I know that if I am diligent and continue to apply the principles taught in Financial Peace, and continue to pray for the guidance of God in our lives, that my children will be able to go to college, and will be able to start their first jobs newly educated and debt free. I want to raise them to be responsible with money so that they will make mature decisions about the wealth that J and I will build over the years. In changing our family tree, my daughters will be responsible for us and our money, but in managing it, and not providing for us.

Preparing for the senior years of our parents, and changing our family tree are but a few of the examples of what we’re looking forward to through Financial Peace. We’d also like to build Accessible Playgrounds in memory of the infant daughter, Aleah, who died 18 months ago. Looking forward to giving is exciting. But, it means living the lessons that we’ve learned. We’ve already planned to listen to the CD’s on our trip this weekend, to re-motivate, to remember, to not lose our focus. Even if we stopped with baby step 2, the positive impact Dave Ramsey and Financial Peace has had on our life is remarkable. I’m happy to report that we have a balanced check book! I know that this is minor stuff for some, but it’s been 5 years for us. All of our bills, with the exception of our trash service, are caught up, and it will be paid in full on the 25th.

It’s tempting at this point to cut back our titheing in order to have the extra cash flow to pay down some debt, but after hashing that decision out in my head, I know, in my heart, that titheing is an important component of my spiritual life. It’s me showing God that I trust him with my finances. He led me to my church, which in turn led me to Dave Ramsey’s Financial Peace. I know that God blesses those that have Faith in him and “put aside” for his glory. In our case, it may not be a financial blessing, but I think that the change in my marriage over this process can be a testament of the blessings God has promised us in exchange for our giving. I’ve always believed that giving is an important part of Christianity that is often overlooked. J and I missed the last FPU lesson on giving, but I’m excited to hear it this weekend during our road trip.

As Mona said earlier in the month, quitting is not an option. I understand that some may get discouraged because Baby Step 2 takes so long, especially if there is a lot of debt. Even for those who pay their debt with no intensity are better off if they stick with the resolve to QUIT BORROWING, because that is a step in the right direction. No matter how quickly or slowly you travel, having the proper orientation, although basic, gets you to your destination. Christmas is just right around the corner, and J and I have absolutely no money budgeted for it. None. We aren’t willing to go back into debt this year, and spend the first few months of the New Year recovering. But, I trust that it will be a joyous holiday regardless.

~Manda

Regardless of your FICO score, in order to achieve Financial Peace; QUIT BORROWING. We live in a society of instant gratification. We have a sense of entitlement. We work hard, we need big houses, big televisions, designer clothing, cell phones that have manuals thicker than the phone book of my home town (Marion, Alabama,) and a new car every few years. Count the number of commercials for cash advances, title loans, check cashing… etc. In case you didn’t know, these loans are a BAD idea, no matter what the “emergency” is. These commercials have women with shopping bags talking about sales that couldn’t be missed, young couples waving fistsfull of cash while driving off in a car from the title pawn saying “We even got to keep our car”. Guess what. You just pawned your car. It’s now THEIR car until you repay the loan. The interest rates that these places charge are criminal, and more often than not, you will struggle to pay it back, or you will lose the car. It will NOT be worth it. Payday loans work the same way. Additional loans are needed to pay off the first loans. Quit borrowing. No matter what society, or some marketing team tells you: you can not borrow your way out of debt.

The most alarming to me is cashcall.com. The “whatchu talking about Willis” former child star is crying that he tried to auction his clothes, and even his car, but then Cash Call gave him the money he needed. The rates on these loans are ridiculous, and vary from state to state. The way to stop this kind of indebtedness, is to #1 QUIT BORROWING, and #2, use common sense. As a resident of Virginia, to borrow $1,500 from cashcall.com, after the “loan fee” of $500, I’d walk away with 1k. After 12 months of monthly installments of $159.83 for a total of $1917.96, nearly 100% of the amount I walked away with. If I were to borrow $2600, the loan fee goes down to a mere $75 but I’m paying $216 a month for three and a half years. My total repayment would be $9095,10. The premise of the commercial is that poor Gary Coleman needed to sell his stuff to get money. Despite the message, that’s exactly what he should do! Calling cash call is the dumbest thing that could be done. Even if I needed this loan to keep my lights from being cut off, I’m paying them the equivalent to a light bill for the next 3.5 years, putting myself in additional financial stress for the next 3.5 years. I’m just extending my financial burdens. If you’re getting these loans to buy something you can’t afford, think about what you could have afforded. Think long term.

Desperate times call for desperate measures. When your finally desperate enough you will quit borrowing. QUIT BORROWING. But, they’re going to repo my car. Sell it, don’t title pawn. Sell it for blue book. They’re going to take me to court and get a judgment and destroy my credit. Okay. Since you’re not borrowing anymore, my FICO doesn’t matter to me. Being a mature adult means delaying gratification, being responsible for the consequences of my bad decisions, and making restitution. Continuing to make bad financial decisions isn’t going to save me from a judgment in the future. It will only prolong financial stresses which branch out into every aspect of my life. Ever laid in bed at night and worried about money? In the shower? Do you get a pit in your stomach when you check the mail, or screen calls because you’re tired of talking to collectors? Get out of it. Quit borrowing. Save 1,000 in cash for “emergencies”. Pay yourself first. Pay for your shelter, food, utilities, and transportation. If there is any left over, pay your unsecured debt using the debt snowball. You can not borrow your way out of debt. No matter how cute the commercials, it will only cost you more in the long run. Cut your lifestyle and live your wage.

You can not borrow your way out of debt.

You can not borrow your way out of debt.

You must make hard, common sense choices to get free of the debt you’ve incurred. After you’ve quit making excuses, rationalizing and making the decision to quit borrowing, reevaluate your lifestyle. What about all those necessities you can’t live without? If you’re serious about getting out of debt, if you’re tired of the stress that comes along with being in such debt, you’ll live without them. Go to the bare bones. Turn off the cable, do you need a land line and a cell phone? Cut down your groceries and buy generics. Don’t eat out. Don’t eat out. Don’t eat out. Cut all unnecessary spending. Starbucks got way too much of my money. Turn down invitations to birthday parties. Lunchbag it at work. Don’t eat out. Get a 2nd job or work overtime. Have a yard sale. Sell something. Come up with the money before you borrow more. You can not borrow your way out of debt. In the end, you have to make the decision either to keep living a lifestyle you can’t afford, and borrowing, or to live your wage, pay off your debts, and be free from these financial burdens. It isn’t forever. In fact, Dave estimates that it takes about 2 years for people to pay off their debt. Wow. 2 years of bare bones living or 5, 10, 15, 20, a lifetime of living in debt.

~Manda

I try to watch The Dave Ramsey Show on Fox Business as often as I can. If I could only watch 1 day, it would be Friday’s. Callers call in on Debt Free Friday’s and share their stories and scream “I’M DEBT FREE”. Dave probably won’t receive a call from us, because I haven’t the patience to try keep dialing, however, the shows are motivational.

Tonight Dave said that:

Part of achieving any goal is being willing to say no to things that are going to keep you from achieving [that goal].

It takes maturity to say no and discipline to keep saying no. Today I had the opportunity to practice several of the tips that J and I have gathered from our weeks at FPU. We have our cash flow plan (what we now call our budget), and if it isn’t “cash flowed”, it isn’t bought. If we NEED it, it comes out of the emergency fund. I have to plan to go to get my haircut. We’re planning for him to go to the men’s retreat at church. I got an email from Old Navy today that there is a Baby Sale. The kids NEED fall and winter clothes. I love on-line shopping. We’ve been so good, you see where I’m going with this. I was making excuses to fill that virtual shopping cart. So, I called Jason and had him talk me down. In the past, we’ve been enablers, but he said that we could go to Old Navy- cash in hand, if I still wanted to do so…. tomorrow. Now that the urge is past, I’m absolutely content to sit and wait until next week’s consignment sale. My kids have way too many clothes anyway. Clothes that typically goes unworn, although there is never a lack of laundry to fold.

I’m learning power over purchases through: maturity, discipline, a written cash flow plan, and seeking the counsel of my spouse[if you aren't married, Dave suggests getting an accountability partner]- all lessons that I have learned through the weeks during FPU. It’s nothing magical, even Dave says it. It isn’t remarkable. I’m sure there are people out there who know this stuff without Dave, but I suspect that most of us are the average American who wasn’t born wealthy; we believe that we’ll never have it if we wait until we can pay for it with cash. We believe that credit card debt is a necessary evil in our lives, or that we’ll always have a car payment.

This week will be our last week of Financial Peace. When we started we were behind in our mortgage, possibly facing foreclosure. One of our vehicles went into repossession. We had no communication in our marriage and J was struggling to hide our true financial situation with us. Deep down, I knew we were living beyond our means. It would have been simple to pull our credit reports, or even check our mailbox from time to time, but the truth is, I was scared to do so, and willing to let him struggle, all the while, self- righteously blaming him for the problems I’d help create. Sure, the death of our daughter and her medical bills played a big part of what we owed, but in the end, it doesn’t matter how we got in debt, just that we are in debt.

Our marriage was close to an end, and it is so hard to look back to that couple 13 weeks ago and realize that it was us. We’ve gotten rid of both of our vehicles and now drive two Dave Cars that have only liability insurance. We’re caught up on our bills. We have a written plan and we follow it. I don’t buy things that we don’t need, even when I convince myself that I NEED it. I know that it isn’t forever. We continue to tithe to our church, which is a big deal to us as Christians, and that feels good. Prayer really does work. I believe God led us to our church, we came to FPU through our church. So much has happened in the last 13 weeks that I can only imagine the wealth and peace that we will have in 13 years.

~Manda

Can you go one month without using plastic?

~Manda

Google Dave Ramsey and new car you’ll soon see that everyone has an opinion. Some claim Dave is a clown and make the case that going in debt to drive a vehicle is a smart, or a good deal.  Through our experience with FPU, J and I have differentiated the definition of “affording it”. To the poor it means that the money can be found to make payments. To the rich it means that you pay cash. As Dave says, if you want to be rich, do what rich people do. Don’t do what poor people do. I’m really loving the idea that once we’re finished paying off our debt- once we are debt free, that our money will get to stay our money instead of going elsewhere straight away.

The cost of my new vehicle was over 50% of our yearly income. Wow. It almost hurts to type it out. I emphasized was because I sold my van on Sunday. I got Kelley Blue Book Value for it, which was about 5k less than I owed on it, but I figure the 18 months I drove it is probably worth that. The $550 car payment we no longer have to make is DEFINITELY worth it. Dave says that he can change the name of his radio talk show to “sell the car”. It’s pathetic really when a problem such as debt caused by buying cars we can’t afford can be applicable to a large percentage of situations. If we were to call Dave and ask him for advice, I’m sure he would say “sell the car”.

Prior to FPU J and I drove cars that we paid banks  $750 a month to drive and $134 dollars a month to the insurance company. J downsized his nice Ford F-150 for a dinged up, older model Chevy Silverado that has no payments.  We’ve recently sold the van and gone to just liability for just $60 a month until we can get another vehicle- this time without payments.  We’ve cheated- slightly- and have rolled the funding for the car over into the personal loan we had to get to make up for the negative equity in the van.   But with all the money we are now “saving”, that loan will be paid off in no time. I doubt Dave would approve, but I hope that he’d be a little proud that we have dumped some significant debt in these few weeks since starting FPU, about 40k.

We still have a ways to go. J is resistant to change, which is a typical for most people. A paper copy of a bill hasn’t been sent to our home in years. J checks everything on line and if he happens to remember to pay it, it gets paid. Or it is set up to come out automatically, and if we’ve overspent, there is NSF fees to pay, because we don’t keep track. We didn’t even have an idea of how much money we were spending. It’s a financially irresponsible and immature way to live. There has never been a balanced check book on our bank account. Someone could steal our debit card and we’d never know it. We could be overcharged for some service, and we’d never know it. We rely on the bank to tell us how much money we have. Hello?!?

The solution has been to start a new bank account and close the old one. In our digital society, this is more time involved and difficult than one might think. Direct deposits need to be changed, most all bills come out automatically, so all that information needs to be updated. Hopefully, this process will be punishment enough for us to grow up and start keeping some records.

So, where do we stand with FPU? We’ve excelled at dumping our debt. We’ve got our emergency fund re-funded. We’re fighting so much we’re certainly relating to money. Our quickie budget is still working for us, but we haven’t graduated to our cash-flow plan. Sure, we have it on paper, and we’re working from it, but the record keeping aspect is still lacking. Our debt snowball should be getting bigger with our new found wealth. After the vehicles are gone we have an 8k debt and an 11k debt. The larger has the highest interest rate, and although Dave says to pay off the smaller first, we’re going for the higher interest rate.

J and I are both excited about looking for a new[to us] vehicle. Since starting FPU, we’ve been serious about not occurring additional debt, and have cut out non-essential spending. It’ll be nice to buy something after a drought of non-spending. We’re putting much more thought to our “Dave Car” than we ever did for our van that was more than half our salary, because the definition of “affording it” has new meaning to us, and we’ve dumped our debt, are de-bunking the myth that car loans are just a way of life, and are choosing the financially responsible path of living our wage.

~Manda

We had a good group of people in our class. Everyone seemed to respond to Dave’s teaching very well. There wasn’t anyone in the class that was disagreeable. I was happy about that.

I think most of the class members have been dealing with rough times and so their weren’t any exciting financial transformations during our class. It seems that everyone got a lot out of the class. Everyone seems to come away from the class understanding new things about how to handle money. So overall I think the class went very well.

I wish I could have kept you up-to-date more on how each class went but I was really busy with other projects and barely had time for anything else. I will tell you that going through the Financial Peace University is completely worth it. We have taken it twice now and I would take it again if I had the choice.

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