Tuesday, November 22, 2011

Financial Peace University

Tomorrow is a big day for us.  We will officially have two, paid-off cars.  As in, no car payments.

I can't remember exactly when I listened to Dave Ramsey's Financial Peace University.  Last summer, maybe?  In 2010?  A friend of mine went to the class and spoke so highly of the program, that when she offered to let me borrow her FPU CDs I took her up on it.

I've always been good with money.  So has Mark.  Or we were what we considered to be good with money.  We paid every bill on time.  We used credit cards but usually paid them off, or paid them off within a couple of months.  We saved money every month, and contributed to our retirement plans, and we have college savings accounts.

But we were guilty of spending more as we made more.  Mark got a raise and so we bought a new SUV to celebrate.  One that would take us six years to pay off but hey.  We could afford the payment!  We could afford it! 

Seriously?  Listening to this Financial Peace University totally changed the way that I think about money and debt in particular.  This is the set that I borrowed from a friend.

I don't know if you've ever read or tried to read the books, but I found them to be boring.  Like any other book about finances.  But the CDs were totally different.  I actually enjoyed listening to them during my morning and afternoon commutes.  Dave is very funny and every lesson is no-nonsense and entertaining.

Since listening to FPU in the summer of 2010 (I think?  I seriously can't remember!) we have paid off both of our cars.  We paid off a total of just over $36,000.  In a year and a half.  No car payments frees up an extra $840 per month. 

Nothing makes you feel like you are good with money like paying of $36,000 worth of debt, eh?

And once you get started it is almost like an obsession.  The next target is my student loan, which, after grad school topped out at around $30,000.  And then our house.  And then we will be debt free. 

I should admit that we don't follow his plan exactly as we should.  We don't live on a "beans and rice" budget.  His plan is that you should live very lean until every debt is paid off.  "Live like no one else now, so that you can live like no one else later."  Be the crazy cheap ass budget person now so that you can be the independently wealthy and debt-free person later.  We do not do that.

We also don't do his cash/envelope system, but I plan to try that when life settles down.  Right now I just can't get past the ease of using my debit card.  Really the only part of the plan that we followed was the Debt Snowball.  Pay off one debt - put the monthly payment from that debt onto the next debt until it is paid off, and so on.  It builds up faster than you'd realize. 

Since I'm sure it will show up in the comments, I should mention that there are lots of Dave Ramsey critics out there.  But hey!  There are lots of Jen Knepper critics out there, too.  And do they make some valid points sometimes?  Sure!  Sure they do.  But overall, I think this is an easy to follow plan.  And I'm not getting anything at all for saying it.  I'm actually just using today to attention whore my budgeting abilities.  You're welcome!

I say, give them a listen.  And then research on your own and make your own decisions.  But it is a great jumping off point for sure and a great way to get motivated to pay off all of your debts.

So anyway.  Tomorrow is a big day for us. The real challenge will be NOT spending our free $840 per month at GAP or on Etsy.


28 comments:

alison said...

JEN! I had NO IDEA that you were a Dave nerd tooooo! This makes me love you even more (and who knew that was possible?!). I'm thrilled for you to make that last payment tomorrow, so freaking exciting! Dude, you guys are kicking ASS. We've paid off about $20k since Jan 2010, and have a ways to go to get through these stoopid student loans. Totally doing the debt free dance over here with you, you're WINNING!

CJ said...

Still trying to convince my hubby :(

eggsinarow said...

Make sure you tell your car insurance, because your rate will go down now that you are done. Seriously. Best news ever, right?

JoDee said...

Our only debt today is our mortgage- which we plan to pay off in less than 5 years. A year ago I would have thought that was crazy, and now I'm thrilled about it! Dave changed our lives. For the better. Period. Critics be damned!

Allison said...

Congratulations to you and the Mr.! I think Dave has a lot of really, really sound ideas and adhere to about half of them. We aren't so good about food budgeting, but otherwise do well. I'm impressed you're able to do it all while dealing with the crap you've been dealt recently. That's awesome!

Carrie said...

Congratulations! That is amazing! I just recently heard of Dave Ramsey - I'd love to learn more about him.

Laura said...

I like dave ramsey too, but unfortunately I can't justify spending the 100 bucks on the cd's to tell me how to save money. I dunno, just me being irrational, just like I cried over not having enough Christmas and Halloween decorations. Someday we'll be debt free, if I stop going to Hobby Lobby and Michaels and trying to be the next craft diva.

clearness said...

Our cars have been paid off for about 5 or more years now and I really want a new car.

Just the Tip said...

I think it's awesome! You should be super proud that's major to do in such a short period of time!

Hopeful Mother said...

Ironically, I'm listening to Dave's podcast right now... love him.

Good for you guys!!!

lparsons15 said...

Good for you guys! That is very exciting!

Holly said...

I love your blog - my only complaint is that you don't post often enough.

This comment goes back a few days, to where you asked for post ideas.

I'd love to hear more about your families. What are they like? Do they live nearby? How are they handling everything?

Jacalyn said...

I've been lurking on your blog forever and I love it and seeing this makes me love it even more! You are incredible!! My hubs and I are big DR fans too and I can't wait till we've done what you've done! Congrats on paying off your cars!! :)

areyoukiddingme said...

I've seen some Dave Ramsey shows, and his plans employ pretty good common sense (that no one seems to have). Regardless of what people think, you've followed his advice and it's helping. Results matter. Congrats on the car relief! Good luck on the student loans...

JP said...

Wahoo!! That rocks. MH and I are using the debt snowball ourselves. Our vehicles should be paid off in 9 or so months. Then we will only have our house debt. Very exciting!

andasbackpack said...

Congrats! We will be there in February - all wheels paid off and starting in on student loans. I've never read/listened to Dave Ramsey, though. We learned it all through unemployment and having no money - ugh. Now that we have it, we're trying to use it semi-wisely. I tied my Etsy habit to my weight loss, and now I may only have Etsy "treats" when I lose 5 lbs. So far I have earned one etsy treat in 11 weeks, because clearly I like chips and salsa even more than Etsy.

Kristy said...

All we have left is the mortgage! We do use the envelope system though, although I do miss my debit card.

Kate Giovinco Photography said...

That is awesome. I read the book and then never did anything about it. My debt isn't bad but it would be nice to be debt free.

Courtney said...

I get so excited when I see other Dave Ramsey fans out there. We just started the program this summer and we've paid off about 8K on our student loans. It's AWESOME. We aren't quite 'gazelle intense' either, our envelopes could probably be smaller and we could go a little faster, but I'm thinking it has to be live-able. That's so awesome to have a huge victory like paying off your car.
Oh, and the cash thing? My $.02 is that I LOVE using it. I feel so empowered when I go to the bank and pull out our cash for the month. All these years I've seen the numbers on the paycheck on my bank statement, but nothing is as cool as having that number in cash in your hand. If you try it even one month, you might find you like it (maybe you'll hate it, but that's fine too). I just have enjoyed holding my money in my hand, not letting my bank have all the fun.
congratulations!

Annabelle said...

Yay for you guys!! That is seriously awesome. We are down to one paid-off five-year-old car - we sold the newer one in May after we realized that we really didn't NEED two cars. It's lovely having that extra money every month! Haven't listened to Dave, but I might need to check out the podcasts.

Our Life In Cycles said...

That is so awesome. I have one of his books and yes.. it's boring. I'm going to check out the cds and try to get my hubby on board. I know he's all about saving money so I don't think it would be hard to do!

Amy said...

I'd so love to listen to them...but I can't afford to spend $99 on CD's. I actually find humor in the fact that it costs $99 to get a CD to help people get out of debt. I mean, isn't that just adding to the debt?

Laura Diniwilk said...

I find it a little ironic that he charges $100 for financial peace :)

Laura Diniwilk said...

Dangit, should have read the other comments first. Maybe your friend would let another Akronite borrow?

sheilah said...

I have never heard of Dave Ramsey but this sounds a lot like Mary Hunt's Debt Proof Living...pay off the smallest debt first - use what you were paying on that debt and add to next and so on until debt-free!

Congratulations...a great milestone.

Wiz said...

Congratulations! I love Dave Ramsey. Like you, I never followed his plan to a tee but my husband and I are debt free other than our mortgage and its a great feeling. I used to live in Nashville and worked by his Financial Peace Headquarters. There was an article in the paper that he bought like a $10 million dollar house. There was a lot of criticism, but guess what, he paid cash! Craziness. Congrats again!

Christina said...

What a great thing to have no car payments!! I haven't heard of Dave Ramsey's plan, right now we have no car payments and I'm just trying to keep it that way!

Angela said...

I too have been a recent lurker of your blog and this post made me love this blog even more! Congrats on the big accomplishment!
I am a DR fan and my husband and I actually attended in person the 13 week course FPU. $99 is NOTHING for the knowledge/encouragement to to win at money.Yes its common sense, but I swear, the course DVDs really should be advertises as "how to be a responsible grown up." Getting out of debt is just part of it...I learned so much from the DVD's/class. Highly recommend!