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.

I have just 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.

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!

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.”

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!

One of the best things about this time of year is football season is here. You can use this to your budget’s advantage. The beauty of football season is that you can have a get together every weekend at yours or someone’s house where you can enjoy free football and cheap food and drinks. Do this instead of going out to eat with friends while not sacrificing the social time. Here are the advantages of home football watching parties:

• Most local football games are free on your tv packages.
• Football food is very cheap compared to eating out.
• More Beverage choices for less.
• No babysitters required.
• More hours of entertainment than just eating out.

So load up on the nachos and pull out that new Buffalo Chicken Dip Recipe. Get on the horn to your friends because there is probably game getting ready to kick-off.

Now don’t forget to enjoy the Georgia Tech-Miami game tonight on ESPN and watch Georgia Tech go “Reck Style” on Miami.

In honor of Dave Ramsey’s upcoming live show coming to Atlanta on Sept 19th, let’s discuss his system to winning with money. Seven steps to that will simplify your financial life. These steps are called the baby steps because they’re incremental steps to help focus you efforts. Well here they are:

Baby Step 1: Save $1,000 to start an emergency fund. This step should take between 1-2 months at the most. Tighten down the budget and get the dreaded 2nd job if necessary. This fund will help buffer you from Murphy in the short term. This is also where you would pause your long-term investments for retirement.

Baby Step 2: Pay off all your debt using the debt snowball. Order your debts (minus your home mortgage) smallest to largest and start throwing money at the smallest debt first and work your way down the list. You will build psychological momentum as your see those smallest debts get knocked out. If you have a 2nd mortgage, you include in this step unless it is over half your annual income.

Baby Step 3: Save 3-6 month living expenses for a fully funded emergency fund. Now that you have no debt but your house; take all the money that you were paying towards debt and stash it into your emergency fund. Now your talking serious Murphy repellent.

Baby Step 4: Invest 15% of your household income into Roth IRA’s and 401k retirement funds. Now your back on the investing train and  you have some breathing room in your finances. And I am sure you sleeping more soundly with the emergency fund in place.

Baby Step 5: Start a college fund for your children. Your kids will appreciate this one. You can do this concurrently with Baby Step 4.

Baby Step 6: Pay off your home early. Now is the time you systematically start paying extra on your mortgage. Who wants to pay off a house in 30 years?  10 years sound much better and think of all the interest you will save.

Baby Step 7: Build wealth and give! You have now achieved financial peace. You have a paid for house, no debt, and a fully funded emergency fund. Now you can invest your entire house payment per month. While your investing; how about giving to others; you can afford it.

These steps are simple, but effective. And if you follow these steps you will be in control of your finances and have financial peace.

The first edition of Lifetuner Chat Carnival is posted. Life’s Lessons Learned Hard is the theme and it seems that many folks have learned their best lessons the hard way. My post “Never Again” was included and I want  to give many thanks to Keith Morris for organizing the carnival.  So give their site a look and enjoy many of the great posts where people did “stupid with zeros on the end”, but manged to learn from it.

Tonight at 10pm EDT there will be a live podcast on Talkshoe where some of the posters will discuss their stories and take questions. You can follow this  link to join us tonight or check it out later via the download.

The  words “never again” reflect true pain.  The kind of pain where your DNA gets altered in the process. I can remember the day that I uttered these words. I will never again buy a house before I sell my existing house.

Now that I say it out loud, it sounds pretty obvious. And I wished that it had sounded that obvious the day we signed a contract for a new home without a contingency to sell our existing home (our Realtor said the builder wasn’t taking contingent offers). House fever was in full affect and my wife and I were getting ready to pay for it (literally).

Since I am telling you this story, you can probably assume that we were not able to sell our old house. So we had to make two mortgage payments a month; not for just one month, not for just two months, but for six long months!!! All this with a 9 month old baby and my wife was expecting our 2nd child. sigh.

Just writing about it brings back the fear, the stress, and the anger. My job suffered, my marriage suffered, my life suffered. We lived on credit cards during this time which did little to help my stress. So it was at this point I said it. “Never Again!”

I want to thank the nice, young,  married couple who eventually bought my old house and saved us from our stupidity. I should probably go by there and take them a nice dessert. But for all the pain we suffered, it did teach us a valuable lesson that I will always share with others.

Along this journey of mine, I have really pushed the bounds of my comfort zone. Whether it has been running, creating a budget, or just saying “no”; I knew that I needed to make changes in my life. Today, I continued the progress and once again yielded great results. I was able to replace my worn out brake pads and rotors on my wife’s (almost paid-off) minivan.

The mechanic, several months ago, had quoted me almost $650 to do the repair. Usually, this would have been something I would never thought to attempt. “What happens if I mess it up?” would have crippled me before I ever got started in my former “life”. Thanks to a co-worker (Ted, you are the man!), I was convinced that this isn’t just something I could do, but something I must do.

The obvious benefit to the repair was the immediate savings. A $650 repair job was pared down to $190 which saved me almost $500 as well as saving this month’s budget from total disaster. I think the best part was the confidence that I could make the repairs again when needed. Furthermore, other repairs will not be so quickly dismissed as un-doable.

It’s funny to me how something that just started as improving my financial lot in life has really become more about improving my entire life. But if nothing else, I have learned that leaving your comfort zones can yield unpredictable, but positive returns. So what are you waiting for? Try something new and have no fear.