Financial Peace University

About a year ago, the hubby was listening to talk radio and heard this show called The Dave Ramsey Show. It was all about managing your money and telling where your money to go, how to get out of debt and stay out of debt. If you have ever wanted to really be financially at peace, then this is the program for you! He purchased the Financial Peace University kit and I reluctantly sat and watched one of the DVDs. I have to admit it, I was quite the skeptic. I wasn't sure if it was the right program for me -- mostly fear set in, I think! Well, lo and behold, a year later -- I've become a believer. I am SO ready to be debt free so I can enjoy life and be able to do the things that I want to do, not because I have to. I've been listening to Dave on the radio in the evenings and the stream from his website (totally free, by the way, go check it out).

So here I go on my journey to be debt free. I have read My Total Money Makeover (hubby bought this one separately) and Financial Peace Revisited which comes with the kit, gone through 3 of the DVDs and will begin listening to the audio CDs this week (there are about 13 of them). I also am going to implement the 7 Baby Steps suggested and use the envelope system (which means cold hard cash!) for food purchases, entertainment and clothing purchases. I'm almost done with my May budget sheets. The hilarious part is that there is an entry line called "BLOW". This means you have to put something in there because we all blow money for no reason. It is a zero budget sheet, so every dollar is accounted for. He does caution that the budget might not work for the first 3 months (esp. if you haven't really done a budget in a long time), but to keep at it, keep adjusting it to work for you. It makes total sense. I have done budgets for work, for civic organizations....I just never though I needed to do a REAL budget plan for our household! Ridiculous, that it has taken me that long to figure it out. With the kit, we got the budget software that makes things even easier to JUST DO IT!

What the heck are the 7 Baby Steps you ask. Well, here they are: Baby Step 1: Save $1000 in cash. Stash it somewhere convenient like a savings account. The reasoning behind this is that one will reach for the credit card for emergencies (that was US!). OK - so I've completed the first step. Baby Step 2: Pay off all debt using the Debt Snowball. How this works is you list all your debts on the debt snowball sheet, listing your lowest debt first (don't include your mortgage or home equity loan yet). Make minimum payments on all the other debts, but roll in as much as possible to the lowest debt first. It doesn't matter what the interest rate is. When you have completed paying off that debt, you take that money and add it to the minimum payment of whatever the next debt is and so on. So you might be making double or triple payments by the time you are at the end of your debt snowball; most likely much more than that. So I'm on Baby Step 2 right now. I am about 1/4 through this stage. I think by next year we'll be completely debt free by next January, I hope. Now, if you have some kind of emergency -- say your car breaks down and you have to fix it, you'd use your emergency fund for that. Since your balance will fall below $1,000, you'll stop your debt snowball but pay your minimums, boost up that emergency fund back up to $1,000. When that is done, you'll continue the debt snowball. In the meantime, you'll sell everything you don't need to find extra cash to apply to your debts, take an additional job or work overtime. I have decided to sell our 3rd car, clear out and sell some of my craft items I'm not using, and any other item in the house I don't really need. I've also decided to cut back on my newspaper subscription to Sundays and cancel Netflix. Sounds drastic, but really it is doable. We have to have gazelle intensity that Dave talks about in his My Total Money Makeover book and just nip this in the tush. Stop spending on the credit cards -- in fact, he says to cut them up/shred them since you have your emergency fund. I intend to cut them up and paste them in my scrapbook! LOL. One day I'll look back and laugh at it all.

So here are the other Baby Steps: #3 - Save 3-6 months of expenses in your savings; #4 - Invest 15% of your household income into Roth IRA's and pre-tax retirement; #5 - Fund the college fund for each kid (or yourself!); #6 - Pay off home early; #7 Build wealth (mutual fund/real estate) and give! I can't wait to reach #7!

If you are interested in Financial Peace University, it is taught locally. Visit Financial Peace University and enter your zip code. If you can't find it locally where you live, you can also purchase the kit and do it online. I am looking at going to a class here locally, if we can find someone to watch the kidlet for us. Also, there are a few free downloads via PDF of the Quickie Budget form, etc. Check those out while you visit the Financial Peace University site.

So what else is new? Well if you looked at my last posting, it has been awhile. The kidlet got chicken pox from her preschool. I've been home for about a week (minus one day that hubby stayed home with her) and really it's not that bad because she got the chickie pox shot. Looks like small baby pimples. Nothing like the welts I had as a kid. Fever finally went away, and she's saying she doesn't itch anywhere.

Hubby is doing better at the new job in the Deli. He still says it's frickin' cold, but I think he's getting used to it. He has cut the waste in his department by half and should be running smoothly with little or no waste by next week. He's applied for a staff manager position and we'll find out by the end of the month whether he got it or not. Stay tuned...

Well it's nice and sunny today, high 70's they say. Thank goodness; I was beginning to turn into a duck with all that rain we've been having. I am going to go outside today and plant some bulbs and some starters for the veggie garden.

Have a great weekend; I'll have to post some crafty stuff later!

J-