Early in our relationship, Scott and I discussed money; and it wasn't pretty. We both realized that our finances were a mess and we were carrying a lot of debt. We also both desired to better for ourselves for out future family. We wanted to do whatever it took to control our spending, save money, get out of debt (for good) so that we could have the freedom to bless others. We did not want to continue to live our lives avoiding the reality of financial hole we had each dug ourselves into. Between student loans, credit cards and a lot of bad decision making we had amassed some serious debt. Scott had brought up Financial Peace University (FPU), a biblically based financial planning program created by Dave Ramsey . I had never heard of FPU or Dave Ramsey but, after looking over the website I suggested the FPU kit to my dad as his Christmas idea for us.
Melissa and Scott, Christmas day 2010
We immediately enrolled in the first available class and fully committed ourselves to the program. What we really learned through FPU was that financial principals are simple: save money and you’ll have money, don’t spend more money than you make, don’t buy things you can’t pay for. We also learned that Budget is NOT a dirty word, it’s a way to make the most out of your money. Now, I cannot imagine living without a budget.
Financial Peace consists 7 baby steps:
Baby Step 1
$1,000 to start an Emergency Fund
An emergency fund is for those unexpected events in life that you can’t plan for: the loss of a job, an unexpected pregnancy, a faulty car transmission, and the list goes on and on. It’s not a matter of if these events will happen; it’s simply a matter of when they will happen. Learn more
Baby Step 2
Pay off all debt using the Debt Snowball
List your debts, excluding the house, in order. The smallest balance should be your number one priority. Don’t worry about interest rates unless two debts have similar payoffs. If that’s the case, then list the higher interest rate debt first. Learn more
Baby Step 3
3 to 6 months of expenses in savings
Once you complete the first two baby steps, you will have built serious momentum. But don’t start throwing all your “extra” money into investments quite yet. It’s time to build your full emergency fund. Learn more
Baby Step 4
Invest 15% of household income into Roth IRAs and pre-tax retirement
When you reach this step, you’ll have no payments—except the house—and a fully funded emergency fund. Now it’s time to get serious about building wealth. Learn more
Baby Step 5
College funding for children
By this point, you should have already started Baby Step 4—investing 15% of your income—before saving for college. Whether you are saving for you or your child to go to college, you need to start now. Learn more
Baby Step 6
Pay off home early
Now it’s time to begin chunking all of your extra money toward the mortgage. You are getting closer to realizing the dream of a life with no house payments. Learn more
Baby Step 7
Build wealth and give!
It’s time to build wealth and give like never before. Leave an inheritance for future generations, and bless others now with your excess. It's really the only way to live! Learn more
source:http://www.daveramsey.com
We are gazelle intense about getting out of debt. Now, I’d be lying if I told you that it hasn’t been hard at times. It's never fun to deny yourself, and it has been especially difficult having to turn down offers to go out with friends on occasion BUT, in the big picture it has been pretty easy. I’ve found that I don’t miss my recreational shopping trips as much as I’d have thought. I REALLY enjoy seeing them impact being intentional with our money has made. Since we started the program, and while enduring a cumulative 16 months of unemployment, we have paid off nearly $15K in debt, paid for our wedding and honeymoon entirely in cash and are now in the process of purchasing our first home. Having financial peace isn't just being able to pay your bills, it's about regaining the peace and security in your life, preparing a future for your family and ultimately being able to bless others through giving.
One of the great things about the FPU program is that it's a life time membership! The class has recently been updated and now includes material from one of my favorite bloggers, Jon Acuff and shortened to a 9-week session. The classes meet once a week and include an entertaining video presentation followed by group discussion. We decided this would be a great time to take the course again as a refresher. We invite you to join us for a special preview night on Sunday, January 20, 2013 @ 7pm. Click here for more information.
