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Category Archives: Financial Peace University

Financial Peace University – Week 9

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Guys, I finished FPU! Can you believe that it’s already over? I can’t. I feel like I’m still such a beginner but at the same time I have all this knowledge. It’s pretty bizarre. I’m still working on making my budget the best it can be, with the help of my accountability partner! It’s definitely a trial and error process and Dave tells us to expect that.

Anyway, the last lesson was on giving and wealth building. The main focus was on giving though, everything from tithing to offerings to charity. The one thing Dave preaches from the beginning is tithing. It’s one of the first things that is supposed to come off of your budget. He recommends tithing (tithe means 10) of your gross income! I hope to get there someday when I’m debt free. Right now, I give what I can and I’m okay with that. It’s another goal to attain to.

Our leader encouraged us to do a random act of kindness this week. I still have to do mine. But it could be something as simple as buying coffee for the person behind you in the drive thru or helping your neighbor. This is something that is so encouraging and makes you feel good for doing it, especially since they have no idea who you are or why you did it. That’s the best.

The last class was kind of bittersweet. I’m not sure what to do this week with no small groups except for Sunday mornings before Service! It’s going to be a change that’s for sure.

Have you been the recipient of a random act of kindness? Have you given a random act of kindness? How did it make you feel?

Are you interested in learning more about Financial Peace University? Visit www.daveramsey.com/fpu and find a class near you or take it online.

Financial Peace University – Week 8

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We only have one more week of FPU! I cannot believe how much I’ve learned in this short amount of time. It will be invaluable for my future and my family’s future.

This week at FPU we learned about how to buy a house. There is a right way and a wrong way and it is very important to do this the right way, so that you are living the American Dream not the American Nightmare. It can be done the right way with some hard work and dedication. I plan to use some of Dave’s techniques when I purchase my first real house. I currently have a single-wide manufactured home that is completely paid off and I rent the lot it is on for $235/month. WAY cheaper than rent here in Billings.

In the lesson, we learned that you should be through Baby Step 3 before you start saving for a house. Which means you should be debt free and have a full emergency fund of 3-6 months of expenses. He calls saving for a house at this point Baby Step 3b. It’s a great plan. I have told my family that when I go to buy a real house I will have no debt, a fully funded emergency fund and a mortgage of $100k or less.

Dave talks about financing a house with 100% down aka paying cash for a house. This is the ultimate goal, and would be really awesome, however, not always attainable in the time frame we’d like. So he recommends a 15-year, fixed rate mortgage. And if you go through this class he provides awesome examples of why. He also discusses the other types of mortgages available including FHA, Veterans, ARMs, interest only, and so on. He also talks about the Private Mortgage Insurance (PMI) and how if you have 20% down or 20% equity in your home you do not need this insurance. It is for protecting the lender, not you, from default.

Dave also talked about short sales, foreclosure, and willfully defaulting on your mortgage. It was a very enlightening lesson. I really enjoyed this one and will adjust my goals accordingly. Current goal, debt snowball (Baby Step 2).

Are you interested in taking Financial Peace University yourself? Visit www.daveramsey.com/fpu and find a class near you or sign up online!

Dave Ramsey’s Financial Peace University – Week 7

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Last night at Dave Ramsey’s Financial Peace University we learned about investing.  Investing 15% of your income is also known as Baby Step 4. This is after you have paid off all of your debt through the debt snowball (Baby Step 2), and put 3-6 months of expenses into an emergency fund (Baby Step 3), then you start your investing, which is also how you grow your wealth for retirement.

We did a fun little exercise of drawing what our picture of retirement would be and also our why. The why is very important. The why is what keeps you motivated to blast through your debt with gazelle intensity and get that emergency fund fully funded. Then you can really start to see your money grow.

Now of course I’m still on Baby Step 2, but knowing what I’m working so hard for is really helpful. This way I don’t lose sight of the bigger picture when I’m bogged down that I still have debt. I had been toying with the idea of printing out a picture of my dream house and Germany and posting them on my fridge to look at every day.

Here is a picture of my why:

brick home

germany_map

So what does your picture of retirement look like? Is it changing the family tree so future generations are strapped with debt? Is it traveling the world? Is it freedom and control over all of your money? Is it so you can give like you’ve never given before? What is your why?

Are you interested in learning more about Financial Peace University? Visit www.daveramsey.com/fpu and find a class near you.

*Click on images to see sources!

Financial Peace University – Week 6

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Last night in FPU we learned about insurance. We learned what kind of insurance you need, what kind is a gimmick, and the best way to do insurance. We also were very humbled by stories that have happened to people before they got insured properly and after. It really puts things into perspective. It definitely made you want to run home and check your coverage to make sure it is adequate.

Here are a few key points from the lesson:

Auto Insurance
If you have a full emergency fund (baby step #3), raise your deductible.
Make sure that you carry adequate liability.

Homeowner’s/Renter’s Insurance
Homeowner’s should be guaranteed replacement cost if at all possible.
If you rent, you NEED renter’s insurance.

Health Insurance
See if an HSA is the way for you to go.
Increase your deductible, but never decrease the maximum pay.

Life Insurance aka Death Insurance
Replaces lost income due to death.
Try to get Term insurance and invest the rest of what it would cost for a cash value policy.

Disability Insurance
Designed to replace your income lost due to short-term or permanent disability.
Try to get own occ or occupational disability, therefore, if you are not able to do the job you were trained to do you are covered.
Always purchase with after-tax money, that way your benefits will be tax-free.

Long-Term Care Insurance
Only need if you are 60 or older.

Identity Theft Protection
Make sure that your coverage includes restoration services that assign a counselor
Need more than just credit monitoring.

Gimmicks/Not-needed Insurance

  • Accidental Death
  • Cancer Insurance
  • Credit life and disability (on debt)
  • Pre-paid burial policies
  • Mortgage life insurance
  • Policies with fancy options (return of premium, waiver of premium)

I can tell you, I had no idea about insurance before this. I knew it was a necessary evil in your life for things like auto accidents and crazy weather. But I didn’t know the value of insurance until this lesson. I will be looking into my policies and options as soon as I can. It’s definitely not something to put off. You never know when life will strike you down. I know I have health insurance, auto insurance, homeowner’s insurance, and life insurance. Other than that I’m not sure what I have. I also need to look into those policies to make sure that I have adequate coverage on all of them.

Have you been wondering about Financial Peace University? Visit www.daveramsey.com/fpu to find a class near you or register online.

All the opinions are mine, I am sharing my story. This should not be taken as advice on your situation. YOu should always consult with a licensed professional before making any changes to your policies.

Financial Peace University – Week 4 Debt Snowball

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In Week 4 of FPU we learned about the myths of debt. He went over the myths of car loans, credit cards, and other types of debt. It was really interesting and I’ve fallen into the marketing trap of car loans and credit cards. They have such good marketing plans. They totally get you, but that’s what they have to do. That’s their business model. And they’ve marketed their product so well that we beg for it, they don’t even have to sell it to us. That’s pretty crazy.

Anyway, this week we are to put together our debt snowballs (baby step 2). Mine will be 4 debts, 2 credit cards, a car loan and my student loans. So I don’t have a horrible debt snowball, but it’s going to take some time. According to the debt snowball software available through FPU I will be debt free by May 2020. I think it will be sooner than that but we will see.

My May budget starts today (payday!). That’s kind of exciting. So we will see how May goes. I have my mint.com account updated which is nice. So hopefully it will help me track my expenses and get a better handle on my spending. I’m planning to track where all my allowance goes as well. So that’s really good I think. I have budgeted in Mother’s Day gifts and mom’s birthday. So that’s something I’ve never done before. I really like that. I know that my spending is out of control and it’s time to do something about it.

My goal for this weekend is to get rid of a bunch of crap out of my house. The stuff that is cluttering my life, whether I sell it, donate it or throw it away, it doesn’t matter. I just need it out of my house and out of my life. So that’s the plan for this weekend, as long as the softball tournament remains cancelled for us.

What are you doing to help with your weaknesses? Are you decluttering your house and life as well? What are your tips and tricks for making the want for stuff less?

Are you interested in taking Dave Ramsey’s Financial Peace University? Visit http://www.daveramsey.com/fpu and find a class near you today!

Financial Peace University: Week 3

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Last night we had our 3rd Financial Peace University class. This one was really interesting; we talked about how to do the cash flow plan, allocated spending plan and what to do with irregular income. It was really good. I think this is the real meat and potatoes of FPU. I think besides being held accountable this will also be my biggest struggle. I can make budgets no problem, but constantly re-evaluating them and actually sticking to them is another story. I think this will really help.

I will be working with my accountability partner to establish my cash flow plan, my allocated spending plan and any irregular income plan. With all these plans it should be pretty bulletproof. I say that and this weekend I’m going to be putting about $200 into my car for maintenance. Oh joy, 100,000 miles. But I’m really excited that I have the money on hand to do the maintenance, I don’t need to borrow and I don’t need to put it on a credit card. That’s such a relief in my eyes. Thank goodness.

Anyway, I think having a plan for all my dollars will really help me to stick to my budget and really evaluate my spending. I’m hoping it becomes like a game, how much money can I have left at the end of the month to put towards debt and getting to be debt free? I’m really trying to stay motivated and the accountability partner will really help with that as well.

I started April without a plan. Since I’ve been working on the plan it’s opening my eyes to the ridiculous amount of spending I’ve been doing. Things that I didn’t even realize were happening. Now that my eyes are opened I’m thinking about what I’m spending my money on more than ever. Every purchase is evaluated with scrutiny. I will be using cash envelopes for my food, entertainment, and clothing budgets. I think this will be really helpful to keep things in perspective. We shall see how this goes. I’m really excited to begin learning the process to get out of debt.

What are your guys’ biggest struggles when it comes to a budget? What tools and strategies have you found to help you through those struggles?

Are you interested in finding a Financial Peace University of your own? Click here to find one near you.

Financial Peace University-Weeks 1 & 2

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FPUI’ve started Dave Ramsey’s Financial Peace University. We are about to go into Week 3 of the 9 week course. So far we have learned about Baby Step #1, Emergency Fund of $1,000 and Relating with Money. We took this quiz to find out if you were a nerd or a free spirit. My results were 80% nerd and 20% free spirit. I was not surprised by my results at all, you cannot get a degree in accounting without a certain level of nerdiness.

Now why am I taking FPU if I have a degree in accounting? Well you see, just because you know how to do things does not mean your behaviors reflect what you know. Therefore, I am taking the course to change my behaviors and thoughts of money. That’s the stuff not taught in school. It’s real world stuff, you don’t learn real world stuff from a textbook.

So Baby Step #1, a $1,000 Emergency Fund. This is a starter Emergency Fund, eventually we will have 3-6 months’ worth of expenses in the Emergency Fund, that’s Baby Step #3. I have my Emergency Fund already, it’s a little over, which I’m perfectly comfortable with and plan to keep it this way. Now this fund is for EMERGENCIES. A new TV or sofa that you just cannot live without is not an emergency. An emergency is when the car breaks down or you have to get a new fridge for the house because yours quit working. Those are emergencies. That is the only thing this money can be used for. This will be hard for me and one of the biggest factors in my success with FPU, changing how I view my Emergency Fund.

Baby Step #2 is the Debt Snowball. We are not there yet, but this is going to be a huge hurdle for me. I have 4 debts, 2 of which are credit cards. I want to annihilate this debt as quick as possible. I’m excited for the tools that FPU will give me to be successful at my goals of living debt-free.

I will write a weekly post about how I’m doing on the Baby Steps and how the class is going overall. The class is being given at the church I attend (Faith Chapel Billings). I’m really enjoying the class so far and I’m already seeing little changes in my thinking. I have noticed that I’m really starting to think through the need or want when I’m shopping and really starting to evaluate my spending. I see this being really helpful for me in the long run.

Quick story- I was wandering around Target the other day, killing some time before the gym opened and I was looking around at all the stuff and I realized how many things I thought I needed were actually wants. No one really NEEDS a piece of art for the wall, a decorative something for the shelf, etc. Those are all wants, but we live in such a consumer society that these simple things are disguised as needs. We need those to impress those people we don’t even like. As I’m walking around, and did not buy anything, I really began to think. What if I postponed my gratification for these things for after I paid off some debt? What if I put the money I would have spent on things that I don’t need towards the debts that I currently have? How much of a difference would that make in my debt situation? Let me tell you A LOT! So, that’s how I’m going to live now. I’m going to delay gratification until I can pay cash for everything. One day I won’t have to worry because I won’t have over 1/3 of my income going to debt and bills.

I have recruited my best friend to be my accountability partner. We have poured over my budget already and I think we are at a good spot. She is a huge Dave Ramsey fan and has been doing the Baby Steps on her own. I’m so proud of her. We’ve also made a deal that any purchases over $50 I must consult with her on if they are out of the realm of the normal budget. This is going to help me a lot!

In Week 3, we get to work on a Cash Flow Budget. This is where we budget every last penny. I’m really excited for this. That way I know where it is all going. I’m so excited. I think I will be able to knock out some serious debt quickly on this track.

Interested in learning more about FPU, go to http://www.daveramsey.com/store/financial-peace-university/financial-peace-university-membership-all-new/prod614.html?ectid=gaw.fpu-general2&gclid=COrE-brC-MQCFZGDaQodPLwA3w.