Week #1 Review of FPU
As I mentioned, I want to walk you through my experience with Dave Ramsey’s Financial Peace University (FPU). It is a 13 week course designed to teach you everything you need to know about personal finance. I am basing this review on the audio version of the DVD’s, which I am watching and discussing with a small group organized by the church that I attend. I missed the first week of small group due to my Ten Year wedding anniversary cruise, but I watched the DVD on my own time, and will provide you with an overview of the main points below.
This lesson was titled “Super Savers” and it dealt with the benefits of saving and having an emergency fund. He describes the emergency fund as an “umbrella for a rainy day” because at some point for everyone “its going to rain.” Dave provides examples of how “it rains” in all of our lives with “unexpected emergencies,” and that many of us are in the habit of pulling out our credit cards to cover these emergencies. Knowing that these emergencies are inevitable, Dave’s point is that we should have a certain amount of readily available money set aside to cover these costs without needing to turn to credit cards. Some examples that Dave cites as “emergencies” are really just regular occurrences in our lives that we forget to plan ahead for, such as car repairs, kids growing out of their clothes, and Christmas. We should really budget for the above examples, and save our emergency fund for instances that are truly unexpected.
Dave’s main point in this lesson is that credit cards are being used in place of emergency funds and that this is a plan that costs us a lot of extra money in the long run. He suggests starting with the creation of a $1000 emergency fund, which is his “baby step number one.” The emergency fund should be kept in a money market account or a savings account, and should not be expected to make you money since it should be considered “insurance”. In his opinion, insurance costs you money and shouldn’t make you money. Dave also mentioned the emergency fund is not a “new couch fund,” and should not be tapped into for anything other than an emergency.
With regard to saving for retirement, he provides great examples of the power of compound interest, pointing out that investing at a young age can easily make you millions by the time you retire. For example, he demonstrates how a person who invests $2,000/yr from ages 19 to 26 years, and then never invests another penny, will outperform at the age of 65 someone who invests the same $2k/yr beginning at 27 and continues to invest until age 65. In simple words, START INVESTING NOW!
Mostly, the lesson was a good primer into the overall goals of FPU, which are to be prepared for emergencies and retire with dignity. Personally, after listening to and taking in his stories and anecdotes, my spirits were uplifted and I felt inspired to accomplish the goals that were set out.
As homework for the class, we were instructed to begin doing a Quickie Budget, using the forms in the membership kit. Also, we were to begin trying to scrape together a starter emergency fund of $1,000 as quickly as possible for Baby Step #1. Fortunately, I have been following this plan for some time, and have accomplished these steps. It will be interesting to listen to my fellow small group partners’ descriptions of their struggles and successes with accomplishing these steps. Hopefully I can help them along in their journey.
Financial Peace University
I have ju
st started attending a Financial Peace University class at my local church. It is a 13 week class taught with a 60 minute DVD and 60 min discussion of the material. The class is suppose to teach you how to handle your money and put you on a path to “financial peace.” The membership kit advertises that the average family eliminates $5,300 in debt and saves $2,700, while in Financial Peace University (FPU).
I would like to share my weekly experiences and the progress that I am able to make over the series. I do consider myself very knowledgeable on the “Ramsey Plan” having attended his live “Total Money Makeover” event this past September, listening to his radio show and reading some of his books; but I am sure there will be more in depth discussions in the DVD as well as the small group discussion after the DVD’s that will really complete my understanding of finances.
I purchased the kit through my church for $93 which is discount from the Ramsey website. Inside the kit are the following:
Dave Ramsey’s book – Financial Peace University
FPU envelope system wallet – with additional envelopes
13 Audio Lessons on CD – audio versions of the DVD shown in the class
Budgeting Forms
FPU workbook
Bonus CD with financial software and resources (one for you and one to share)
Debit card sleeves, and tip calculator cards
Unfortunately, I will be missing the first lesson, but will do a review based on the audio portion of the DVD that is provided in the FPU membership kit. I thought this might be useful to others to determine if the class is for them.
New Year’s Thoughts
Well 2009 has come and gone. And just like every year before, we are amazed at how quickly it passed. Some years seem to evaporate and are never thought of again; while some years provide moments and events that will be storied benchmarks in our lives. 2009 will be remembered by for the latter.
I want to wish everyone a Happy New Year and I hope all your resolutions become real habits. 2010 will be a fresh start for many; so let’s not waste it!
Dave and Suze on Life Insurance
Many people are ignorant when it comes to what type of Life Insurance policies are best for them. Listen to Dave Ramsey and Suze Orman explain what life insurance is best for you and which type of life insurance is a “ripoff.”
How slack are the reins in your life?
In previous posts, I have talked about how I have been able to take control of many facets of my life since I began to flex my financial muscles. Specifically, I am talking about my weight and my fitness level. Over the years, I had become sloppy in many ways. Sloppy in my finances, my family life, my self-control, my spirituality, and my health.
As I was tightening the slack reins I had created over my young adult years, I begin to think more about issues I had ignored in my earlier years. I had previously been denied a life insurance policy at work due to elevated liver enzymes. I never really got too involved in the enzyme issues. Earlier this year, I began to research individual Health insurance plans and HSA’s to see if I could save money from the insurance I was being provided at work. When I went to apply for the insurance, I was again confronted by a similar enzyme issue. 
At this point, I was not the same person who 7 years before just ignored this issue. I took charge and went to a specialist to figure this out for once and for all. The doctor basically said my weight was probably contributing to the abnormal test results. So I made a point to focus on my weight that had ballooned since I started my first desk job 10 years before. I begin running 3-4 times a week and to start focusing on my diet.
When I went back for my follow-up three months later, my doctor was amazed at my weight loss(17 lbs); and the fact that I listened to his advice. I had another test done and everything was back in normal ranges. I have since lost another 15 lbs and weigh less than I did on my wedding day.
Once you decide that to start making changes, you will see other differences in your life. It may not weight loss, but it will be something. Taking control of your life gives you the power to be the who, what, where, when, why, and how in your life. So quit being sloppy in your life, and pull those reins tight!
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