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.