“If finances were all about math, then all mathematicians would be millionaires.” In 2015, I was hit with a realization: The reality that finances are more about behavior modification, then about numbers. It is more about suppressing wants and purging your life of debt (like a disease).
When my wife and I entered the class, I had a feeling that I had a pretty good handle on our family's finances. We thought we were on pace for being financially independent and were “ahead of the game.” However, after about the third or fourth week, we both realized that we had a lot of work to do on our family's finances.
Things I learned
Insurance – my insurance was way underfunded and I needed to significantly increase both my wife and I's insurance policies. No one had ever sat me down and explained what is a good multiplier for both of our life insurance policies. With my wife being a stay-at-home wife it was very hard to quantify what $ value she is providing our family, and what it would cost to replace her services if she would pass away. Also, I had no clue about how much car insurance was a “safe” amount and the value of umbrella insurance. In calling my existing insurance agent, I found that increasing my car insurance to 300/500/300 and purchasing the umbrella insurance was about a net even. Meaning, it didn't cost me anything to increase my car insurance when I supplemented with an umbrella policy.
Things I didn't expect
I didn't expect to feel so far behind on our college savings. To be brutally honest, we are on track for step 4, skipping 5, and on going right to step #6. I'd estimate that we are on track to pay off our home in the next three years, and our oldest is set to enter college in eight years. Based on our above scenario, I‘d love to hear other peoples' opinions on whether it is a good idea to delay step #5 until after our house is paid off? I know Dave has a method to his steps, but I want to feel so liberated in having our house paid off. In addition, after we have our house paid off, then we'll be able to save for 5 years until my oldest enters college. So in theory, this should give us enough time to save up a nice chunk. What are your thoughts? What would you do?
Financial Peace Benefit #1 – point blank, Financial Peace gives you a biblical perspective on handling your family's finances and living your life with legacy purpose. A purpose that will change your family's financial trajectory. In a culture so ingrained with “acceptance” of being in debt up to your eyeballs, Dave passionately lays out steps to show Christians and non-Christians alike that we don't have to live like everyone else. He is like a fish that is swimming against the stream, and it is so refreshing to see someone providing easy to understand steps. If I had been given this class when I was 22 (right out of college), I think I would have had a lot better understanding of how to get to financial peace and a healthy perspective on debt.
Financial Peace Benefit #2 – it provides you steps to get your finances under control, but in a way that doesn't make you feel overwhelmed in the poor choices you've made in your past. Honestly, my wife and I got in a lot of heated discussions (which most of you may), but that is alright. It is alright to come together and logically discuss what is good for your family. Your finances deserve this attention. Your family deserves a change in altering your financial course. Put in the time! Do it with passion!
Financial Peace Benefit #3 – finally, I loved hearing the experiences others would go through with their own finances and learn from older or younger people on what they are doing. It gave my wife and I an understanding of what works and doesn't work, and sometimes applies those same principles to our family. It was just great to have a feeling that I'm not alone in this journey. I'm not the only one that feels “perceptually” behind schedule according to Dave. At the same time, everyone was encouraging to each other and motivating! Loved this aspect of community in going through the course.
Overall, I LOVED Financial Peace University and highly recommend it to anyone. No matter whether you are 18 or 65 years old, it provides a great structure to get your family finances to a more peaceful state. One that motivates you to pay off debt, and “live like no one else, so you can later live like no one else“!
Update since 2015 class
It has been three years since we took this course and it has forever changed the financial trajectory of our family! To name a few things it has:
- Helped motivate us in getting out of debt
- Encouraged us to use cash for purchases to help “feel” the transaction of paying for merchandise
- Made us realize the importance of having the proper insurance levels
If you are at all interested in taking the course, then realize that your life will never be the same! Get started by buying the book below in getting started on Financial Peace University!
What are your thoughts on the course? What is your hesitation in taking the class?
Purchase Financial Peace University
Ok everyone i know is talking about this financial peace. We serve at 3 churches, i’ve been reading online about better ways to budget and his stuff keeps coming up. My husband and i are in our 30s. we were raised old school. everything i hear about this system is just plain old school stuff. i havent yet found any reason to shell out $200 for the seminar. It’s not that i’m against it, that is why i’m reading reviews – im trying to find that hidden nugget that makes people rave but also everyone seem to keep its secret. So that’s my question what is this hidden nugget? what is the schtick? We’ve already got the insurance set up as you’ve mentioned, got the college funds, got 401k, roth ira, savings. Our struggle is monthly debt we have more obligations than income. We’re not in a position for me to work, so its a single income. We’ve already ditched all the extras, tv, high phones, any “convenience” services, no frivolous shopping. We limit eating out to sunday brunch. we don’t live a lavish life. But we have student loans, medical bills and housing here is expensive. —- so tell me how ramsey fixes that… these bills don’t just go away. and money doesn’t just appear? when you’ve already bare-bonesed it – an envelope system isn’t going to fix it, when you’re tracking every receipt anyhow (i’ve done both)…. i’m super confused? (I am just asking, not criticizing the product, i’m asking here because this site has had them most helpful information so far) TIA
Hi Danielle. Thanks for stopping by. Ramsey’s whole “shtick” can be summed up in one of his favorite sayings, “live like no else, so later you can live like no one else.” In essence, to get on the right financial path after you’ve struggled to make ends meet – you have to really examine your financial picture and make sacrifices (nothing new here of course – and he readily admits that he offers no new advice). This could mean taking on another PT job, side-gig if you aren’t making enough to cover expenses. Selling the house? He advocates the snowball method of paying off debt (paying off lowest amount debt first and then snowballing that payment into the next highest after its been paid off and so-on). If you don’t want to pay for his course, you can take our free 2 Checking Account System course which can also help you get on the right track.
Hi Danielle, others may have also mentioned, but part of going through the steps would include going in order, and reallocating the money you have. For example, it may not make sense to have both a 401K, and a Roth, and savings if you’re drowning in credit card interest. Why pay 15% on interest on a card if you’re only earning 1% on a savings account or 10% on an investment? If you’ve got the emergency savings (step 1, $1000), then stop contributing to savings and focus on the snowball debt approach. stop contributing to retirement until the credit card debt is under control. What I did, and what may be helpful, is for you to read the book “Total Money Makeover” first…and then take FPU. You may even be able to borrow it from a library. That may address some of your questions. The other way I’ve started to look at it is this: when I realized I didn’t know what I was doing (as evidenced by my debt) then it was time to get a professional’s advice. Even if I didn’t understand the ‘why,’ he/she could tell me the ‘what’ and ‘how.’ And if I knew better…then I wouldn’t be in the position in the first place. Since I didn’t know better…it was time to listen to someone who did. I wish you luck!
It may hurt, but stop or slow your contributions to retirement. Dave would moat likely recommend a complete stop to retirement and a complete stop to Sunday brunch, sell all you can, and use all that to throw at your debt using the snowball.
You are not working. So you might have to go to work part time.
We are debt free including two homes with a fully funded retirement. My wife is to retire in February and I intend to work an additional four to eight years.
How would the class benefit us?
Tom – that is a great question! Obviously you have been a great financial steward and living a path to an early retirement or one that can be easily enjoyed. Financial Peace is primarily geared towards helping people get out of debt and not living like everyone else in America (again you are probably the exception here). It really helps modify your financial behavior and get a gauge of where you are at. Debt free, fully funded retirement, fully funded college education, giving 10% to the church, and being properly insured. With all that said, If I were you I’d still take the class, because it can continue to give you focus on staying the course you are on. It was helpful for me to see that I was under funded with my insurance, and continue to stay focused on debt freedom. Who knows…maybe it would help you get to retirement in 2-6 years!
Great blog! Congratulations on being so close to paying off your home! My thought is continue to follow the baby steps in order. Time value of money is why you should be putting money away for college at the same time you are paying off your house. Remember Dave’s example about the two brothers–one put $2,000 per year for 10 years and then stopped investing while the other waited ten years and then put $2,000 per year in for the rest of the time until he retired. The first brother ended up with more money because he started earlier.
Dave Ramsey is sharing the same financial “gospel” that us old-timers learned from Larry Burkett and Ron Blue 30 years ago. It’s still the truth, and it still works. As a result of following their advice, I am retired at 63, own a small interest in a bunch of oil wells, 4 homes, and am able to spend a few years ministering in Europe. Oh yeah, and give hilariously!
Ron Blue said it best: “How do you get rich? Spend less than you make and do it for a long time!”
Pops – thanks for reading and sharing. Your story is extremely motivating and gives me an idea of what is possible. Hopefully I can leave a legacy like you are already.
My husband and I have been following the steps for many years. While we were very strict following Dave’s exact plan in the beginning, we have since begun to make modifications to fit our family. At first I felt like we would lose the benefits of Dave’s steps, but now I can see that our modified plan gave us plenty of benefits: benefits that were exactly what our family needed.
That is important to do what works for your family!
I’m glad you had a good experience! I’ve been curious about the course and will hopefully take it someday! I don’t have kids or plan to, so I slightly modified Dave’s steps for my own personal situation. I don’t 100% agree with everything he says, but overall he puts down a strong foundation for getting finances in order. And congrats to being so close to paying off your mortgage!
Thanks for the encouragement, Heather! Hopefully we can pay off the house soon.