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Living, Learning, and Teaching financial peace

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I watch very little TV outside of what my toddler watches on PBS.  Even so, it is impossible to escape news of the bailouts.    I’m very pessimistic that these will do anything but worsen the Nation’s economy.  You can’t fix what’s broken by- as Dave says- doing what broke people do.  The cold, hard, plain truth is that people need to start living their Wage.  The entire country needs a lesson on maturity, and the government needs to stop enabling it’s citizens by creating a false sense of security with these bailouts.  Where is this money coming from?  If my business is doing badly, and I borrow large sums of money from the bank in order to keep that business afloat, and continue to make bad business decisions, what changes?   I wonder how our country would have changed if the Government had bailed out the railroads- instead of allowing the car industry to monopolize transportation.

My grandmother died on the 2nd of this month.  She was a child of the Great Depression.  She grew learning to live with nothing.  She never had a credit card, but did do the old Southern thing of extending credit at stores.  She had credit for gas, for groceries, for her furniture, as was the way of life in small towns.  When going through her papers after she died, I did find a credit rejection from Ford Motor Company when she was co-signing a loan for a cousin that was taking advantage of her unwillingness to say no.  My grandparents had been living on nothing but my grandfathers social insecurity for years.  I imagine that the rejection was devastating and embarrassing for her.  She was raised in a very different financial age when people just didn’t borrow huge sums of money and commit to 5 years of repayment.  Perhaps she kept that rejection letter for a reminder. She died with nothing.  She sold her house years ago and spent it on nothing, and the aforementioned cousin all too willing to take advantage of her.  To my knowledge, I don’t think she ever had a savings account.

I’ve been turned down for credit plenty of times.  It’s no big deal to me.  I can do it in the privacy of my own home, taking off the sting.  Growing up, my mother bought everything on credit cards- groceries included.  More than a couple of times we were standing in the check-out line in Wal-Mart with enough groceries to keep four teenagers fed for a week, and the credit card was denied.  I was humiliated as we had to walk out of the store, everyone staring at our abandoned carts.  From that I learned not to rely on credit cards.  I use debit cards, and the few times my card has been rejected, it’s often been due to bank errors -satellites down, or what ever reason.  Once I was in the drive through for Starbucks and my card was rejected, and I was mortified.  It was probably my first clue that all was not well with our financial picture.  But sweet J was stupidly trying to create a financial picture to make me happy.  I have to confess that I was drinking STBX once, sometimes twice a week, and buying milk for me then 1 year old on top of it.  I was easily spending $75 a week at STBX.  I don’t even want to do the math.  I’ve matured so much financially in that one year, actually since starting Financial Peace in June.  Now when I crave STBX I do Dave math in my head.

When my grandmother died, I didn’t have to worry about where we were going to get the money to travel 900 miles to Alabama.  I had my emergency fund, but I also had my blow fund.  This is where I put J’s tip money.  We still weren’t able to afford to fly down, and had to live for 4 days traveling in our car, but now we don’t have to chose which bills won’t get paid next month.  This is on top of additional Christmas spending, which has been more excessive than I’d like to admit, but I am learning.  I’m being an example to my children.  I’m teaching them the use money wisely, to save for emergencies, not to be reliant on credit cards, and never need to be humiliated or embarrassed because of their financial situation.  I am living- learning- and teaching.  Financial Peace.

December 10, 2008 | Filed Under Dave Ramsey Financial Peace University (FPU), Financial Freedom Journey Pep Talk, Financial Goals | Leave a Comment 

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 

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 

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