Financial Peace University Update (Session 13)

On Sunday afternoon, we had session 13 of Financial Peace University, our final week! This was the bonus lesson and "graduation day" for those that have gone through the class. Session 13 is on the topic of "The Great Misunderstanding." This lesson covered giving and stewardship.

Here's what Dave Ramsey's organization has to say about this 13th session of FPU:

Week 13 - The Great Misunderstanding

Dave teaches us the importance of being good managers over the blessings we have been given and the need to share them. Congratulations on finishing the class!

Key Points

1. The Great Misunderstanding, the paradox, is that we believe that the way to have more is to hold on to what we have more tightly.
2. A steward is a manager, not an owner.
3. Give the first 10% of your income to your church or favorite charity.

This was an awesome lesson taught by Dave. It was a very emotional time for many of us, especially after Dave set us up with stories about his middle daughter and son. Thanks for making me cry, Dave!

Financial Peace University Update (Session 12)

On Sunday afternoon, we had session 12 of Financial Peace University. We were off last week due to the Mother's Day holiday. Session 12 is on the topic of "Real Estate and Mortgages."

Here's what Dave Ramsey's organization has to say about this 12th session of FPU:


Week 12 - Real Estate & Mortgages

Dave teaches us the best way to buy and sell a house, the difference between 15- and 30-year mortgages, and the best ways to finance a home. Tuck this lesson away somewhere safe for when you are ready to buy or sell a home.

Think keeping your mortgage for a tax deduction is a good idea? Think again! The tax "savings" isn't really worth it in the end.

Key Points

1. When selling a home, think like a retailer.
2. When buying a home, think like an investor.
3. Never get more than a 15-year fixed mortgage. Don't tie up more than 25% of your income in house payments.

Financial Peace University Update (Session 10 and 11)

On Sunday afternoon, we had to combine sessions 10 and 11 of Financial Peace University due to the Mother's Day holiday this coming Sunday. Session 10 is on the topic of “From Fruition to Tuition.” Session 11 is on the topic of "Working In Your Strengths." Our class seemed to really enjoy Dave's teaching on session 11; it really is a great one!

Here's what Dave Ramsey's organization has to say about these tenth and eleventh sessions of FPU:

Week 10 - From Fruition to Tuition

Dave takes the confusion out of retirement investing. He teaches about the Roth IRA, how much to put into various plans (i.e. SEPP, 401k, 403b), and how to best fund our children's college education. There are many ways to save for college - the ESA, 529 Plan and the UTMA/UGMA Plans.

Key Points

1. Independence in retirement is up to you. Don't depend on Social Insecurity.
2. Fund college education only after you are funding your retirement.
3. If you don't have a will, get one TODAY!

Week 11 - Working In Your Strengths

In this lesson Dave teaches the importance of doing with our lives that which we love. Do you look forward to Monday? If not, how can you work toward that dream job that doesn't feel like a job at all?

Key Points

1. The average job in America is now 2.1 years in length.
2. The key to power in our careers is to first look at ourselves.
3. Plan your work around your life rather than planning your life around your work.

Financial Peace University Update (Session 8)

On Sunday afternoon, we had our eighth session of Financial Peace University. Session 8 is on the topic of “That’s Not Good Enough: How to buy only big, big bargains.”

Here's what Dave Ramsey's organization has to say about this eighth session of FPU:


Week 8 - That's Not Good Enough!

Dave teaches us his personal techniques on how to negotiate and get the very best deal when buying something. This is a fun lesson because it helps open our eyes to the advantages of being able and WILLING to negotiate, especially on big-ticket items.

Find a Deal!
Looking for a deal? Check out these great places online for good prices and peer reviews!

1. www.froogle.com - Google’s search engine for hot deals!
2. www.pricegrabber.com - Comparison shopping from all over the web!
3. www.epinions.com - Great real-world product reviews and opinions.
4. www.ebay.com - You can find just what you need—in someone else’s attic!

Key Points:

1. Don't be afraid to negotiate. Be willing to walk away.
2. Always use the power of cash.
3. Remember the places where you can find great deals.

Financial Peace University Update (Session 7)

On Sunday afternoon, we had our seventh session of Financial Peace University. Session 7 is on the topic of "Clause and Effect."

Here's what Dave Ramsey's organization has to say about this seventh session of FPU:

Week 7 - Clause and Effect


There are tons of different types of insurance: health, homeowner, car, life, disability, among many others. You have to make insurance a priority for you, learn what you need, and get it now. One of our best tips is to shop for a policy with a higher deductible and bank the extra for an emergency.


Dave recommends Zander Insurance for your term life, disability, and health insurance needs and also for Identity Theft Coverage.



Key Points:

1. Make insurance coverage a priority to avoid a financial disaster.
2. Learn the types of insurance you really need and get them NOW!

Financial Peace University Update (Session 6)

On Sunday afternoon, we had our sixth session of Financial Peace University. Session 6 is on the topic of "Buyer Beware: The Power of Marketing on Your Buying Decisions." I think this DVD is the most humorous so far that we have viewed, but it was also very eye-opening to how marketers prey on our emotions.



Here's what Dave Ramsey's organization has to say about this sixth session of FPU:

Week 6 - Buyer Beware!

You are being marketed to and you need to develop power over purchases and the various marketing methods that businesses are using on you. Phrases like "90 days same as cash" and "No interest until 2009" are meant to lure you into debt and you could end up paying substantial stupid tax - mistakes with ZERO's on the end! Also, for major purchases (larger than $300) ALWAYS wait 24 hours and if you are married, ALWAYS communicate with your spouse.

Financial Peace University Update (Session 5)

On Sunday afternoon, we had our fifth session of Financial Peace University. Session 5 is on the topic of "Credit Sharks in Suits." This session is a combination of humorous stories from Dave when he has dealt with creditors in the past, but also some disturbing testimonials from other people that have gone through difficult times with bill collectors. In this DVD, you can definitely tell that Dave loathes the majority of bill collectors, and his business is doing all it can to push for tighter restrictions on this industry.


Here's what Dave Ramsey's organization has to say about this fifth session of FPU:

Week 5 - Credit Sharks in Suits

Dave teaches us how to check and clean up our credit report and deal with collection agencies. Knowing how to deal with creditors gives us the confidence to work our Debt Snowball.


Stop those annoying telemarketer calls! Use the government's National Do Not Call Registry to protect your number from unsolicited calls.


Stop all of the "pre-approved" credit offers that fill up your mailbox! You can have the credit bureaus turn away companies who check your credit report in order to send you unsolicited credit offers.


One in 12 Americans will fall victim to identity theft today. Anyone can be a victim, costing valuable time and money. Zander Insurance has designed the “Identity Safeguards” plan to protect you.

Key Points

1. If you are unable to pay the minimum payments, use the Pro-Rata plan.
2. Always budget for your necessities before paying off any debt.
3. Check your credit report for errors every two years.

Dave Ramsey Live is coming to Kansas City

About 3 weeks ago, my wife and I attended a luncheon here in the Kansas City Metro area put on by Dave Ramsey's organization. The purpose of the luncheon was to encourage metro area churches to promote the upcoming Total Money Makeover Live event on Saturday, May 3rd. The two representatives from the Lampo Group explained that the desired progression for getting Dave's message into churches was this:

1. Drive as many church members to the Live Event as you possibly can in order to give them an overview of Dave's financial program.
2. After church members have attended the Live Event, promote additional new classes of Financial Peace University.

After hearing Dave's representatives say this, the light bulb went off in my head regarding the future of Financial Peace University at First Baptist Raytown. Even though we had just begun one class of FPU at the end of February and have had an incredible response (approximately 86 students!), my own personal desire and goal has been to offer multiple classes during the week all year round. I started to get the vision of getting hundreds of our church members down to the Live Event and then enroll them in FPU immediately afterwards.

We have begun initial promotion of the Live Event, yesterday, with hall posters, a small article in the church bulletin, and a lobby sign-up table. This coming Sunday, we are going to hit it even harder with a video promotion at the end of both services, a plug from the pastor, and I have the privilege of writing the "pastor's bulletin article" this week. I would love to see 200-300 of our church members attend and catch the vision of getting their financial houses in order.

Churches receive a special $23.00 rate per ticket for general admission, so this really is a good deal!

Larry

Financial Peace University Update (Session 4)

On Sunday afternoon, we had our fourth session of Financial Peace University. Session 4 is probably the longest DVD in the FPU program, 100 minutes, on the topic of "Dumping Debt." This makes sense, though, since dumping debt is really Dave Ramsey's signature topic and what has made him a multi-millionaire.

Here's what Dave Ramsey's organization has to say about this fourth session of FPU:

Dumping debt is one of the most straight forward lessons, but it is usually one of the most difficult. Debt has only become accepted as normal in America over the last 20 years. The key to eliminating debt is remembering that it is only 20% head knowledge and 80% behavior. Remember that you always spend more with plastic- cash hurts more! Make a commitment to never use credit cards again. This is the first and most important step to dumping debt.

Because we have accepted the debt myths that society has taught us, many of our families, churches, and even government institutions have been handcuffed by debt! It's time to lead a money revolution and push back against what "normal" is now. As Dave talks about, I want to be weird! I'd rather "look" poor right now, and be a millionaire by my 50s and 60s so that I can live and give like no one else!

Larry

Financial Peace University Update (Session 3)

On Sunday afternoon, we had our third session of Financial Peace University. We had another great day with beautiful weather and fairly decent attendance. I'm wondering, though, if the time change slightly affected us, or was it this week's lesson "Cash Flow Planning" (the dreaded "B" word - budget).


Here's what Dave Ramsey's organization has to say about this third session of FPU:

Dave teaches us step by step how to put together a zero-based monthly budget and how to complete all of the financial management forms. Taking control of your money takes time, effort and patience. Check your progress at LEAST once a week and give your budget 90 days to really start working. Plus, get a refresher on how to balance your check account!


Key Points:

1. Spend all money on paper before the month begins.
2. Use the Envelope System for successful cash management.
3. Give your budget 90 days to really start working.
   

Putting together a detailed budget is hard work, but it is so worth it in the end. Dave is right on track when he speaks about people out there selling books that basically tell you not to even mess with budgets because they don't work (i.e. David Bach). I love some of the principles that people such as David Bach teaches, but on the concept of budgeting, Ramsey is right, Bach is wrong (and this is speaking from 5+ years of experience doing it both ways!)

“If you go to work on your goals, your goals will go to work on you. If you go to work on your plan, your plan will go to work on you. Whatever good things we build end up building us.” - Jim Rohn (American Speaker and Author. He is famous for motivational audio programs for Business and Life. )

Larry

WE'RE DEBT FREEEEEEEE! - more of the Jones' Family Story

On Friday, June 15, 2007, my family and I finally became completely debt free! It's a powerful feeling of release to be out from under the thumb of the banks that you owe money to!

Getting to this point, though, has taken some sacrifice, especially in our culture of buy now, pay later. First we sold our house. We had to be on a strict budget and monitor our cash flow on a regular basis. Part of the debt we wracked up was due to starting and launching my business, so I had to put the business on hold and place it on a slower growth track, while I back tracked to clean up our mess!

Now moving forward from this point, we have more available cash flow to sink into the business to make it more profitable, plus we have more cash flow to work on Baby Step 3 - large emergency fund of 3-6 months of expenses.

You know, being debt free really is a spiritual issue. Here are the ways I believe becoming debt free is relevant to our spiritual walk:

1. It shows the Lord we are good stewards of what He has given us.


2. It helps us grow in our reliance and faith in Him to provide for our needs.


3. It breaks the god of materialism in our lives.


4. It frees up more available cash flow to give to your church, the poor, and to those in need.


5. It makes us wise, according to the book of Proverbs.


6. It teaches us patience and self control (fruits of the Spirit).


7. It teaches us to be on the same page with our spouses on family finances.


8. It places us in a better place mentally and physically because we are no longer stressed out about having enough money to pay the bills!

I'm sure I could list even more, but you get the idea. Being debt free is awesome. As Dave always says, just get gazelle intense about it and create a plan to win with your finances.
For more information on Dave Ramsey and becoming debt free, visit DaveRamsey.com.

Financial Peace University Update (Session 2)

On Sunday afternoon, we had our second session of Financial Peace University. We had another great day with beautiful weather and good attendance.


The second session/DVD viewing is titled "Relating With Money - Nerds and Free Spirits Unite."



Here's what Dave Ramsey's organization has to say about this second session of FPU:



The importance of working together in relationships and how we handle money is the key to this lesson. Men and women think very differently about money. The "nerd" and the "free spirit" must learn how to work together. Write your budget down, iron out the wrinkles, budget together (with your spouse or with someone who will hold you accountable), and set boundaries. The most common pitfall people face is trying to get out of debt without doing a budget. Always discuss changes with your spouse in a "budget committee meeting."


Another key component to this lesson was a discussion of how to educate your children in dealing with finances. Dave Ramsey's company has a number of resources to help educate your children about money, including his Financial Peace, Jr. kit for kids (which includes a chore/commission chart and Give, Save, and Spend envelopes) and his Junior book series. My wife and I purchased all of these items, and they have been helpful in imparting financial wisdom to our daughters.

Larry

Financial Peace University Update (Session 1)

Yesterday afternoon, we had our very first session of Financial Peace University and it has become a huge hit in our church and community!

We currently have 91 people registered to take FPU and 84 people were in attendance, yesterday! What an awesome way to kick off the very first class of FPU at First Baptist, Raytown, MO. A lot of people in the class are already pumped about making some big financial changes in their lives.

The first session/DVD viewing is titled "Super Saving" which deals with Baby Steps 1 and 3 in the Dave Ramsey approach:

Here's a quick summary of The "Baby Steps" (taken from http://www.mdmproofing.com/iym/babysteps.html)

1. Make minimum payments on all your bills. Squeeze your budget until you've accumulated $1,000 cash. This is your beginner Emergency Fund.

You'll never make headway in your quest to get out of debt if you don't have at least a little something to fall back on. That "little something" is called an Emergency Fund, and that's what this first $1,000 is for (or $500, if you make less than $20,000 per year). Put everything else on hold. Make only minimum payments on all your debts; take on a second job if necessary; fore go retirement-plan contributions (temporarily) if you can. Get your emergency fund together first. Get it together fast.

If you already have more than $1,000 in savings, and in anything other than a retirement account, withdraw everything except the $1,000. Use these proceeds for Baby Step #2, regardless of penalty (if the money were in CD's, for instance, there would like be a penalty for early withdrawal).

Once you have accumulated the $1,000 (or $500), keep it someplace where you cannot easily get at it.

It must be available, but not easily available.

It must be available, but not easily spendable.

Why?

"Sometimes," Ramsey instructs, "you have to protect yourself from you."

2. Pay off your debts in order of smallest balance to largest. "Snowball" the payments as you go.

Write down all your debts except your home. (If you're into spreadsheets, something like my DebtTracker spreadsheet will come in really handy here!) Arrange them in order from smallest balance to largest. Do everything you can to pay off the smallest debt listed (take on a second job, or sell stuff if you have to!) while making minimum payments on everything else.

Once that first debt is paid and gone, then "snowball" that monthly payment money: Apply it to the next-smallest debt (in addition to that debt's normal payment) on your list. When that one is paid off, then take that monthly payment amount and start applying it toward your next debt. Get the picture? The more debts you clear off, the more your "snowballed" payments are increasing, and the more headway you'll make — faster — on your larger balances.

Check my Debt Snowball page for a more thorough discussion of this part of the Baby Steps. And take a look at ExcelGeek's Debt Snowball / Rapid Payoff Calculator spreadsheet if you want a kick-butt way to set up and track your Snowball.
What's the rationale behind paying off your debts in this manner? Ramsey writes: "The reason we list the debts from smallest balance to largest is to have some quick wins. sometimes behavior modification is more important than math. This is one of those times." Furthermore:

When you pay off a nagging $52 medical bill or that $122 cell-phone bill from eight months ago, your life is not changed that much mathematically yet. You have, however, begun a process that works, and you have seen it work, and you will keep doing it because you will be fired up about the fact that it works.

One important caveat: If you're working on this second Baby Step and some emergency arises which forces you to spend any part of your emergency fund, immediately stop this step and return to Baby Step #1. Stay there until you've refunded your Emergency Fund in full.

3. Create a full-fledged Emergency Fund containing 3 to 6 months' worth of expenses. Bad luck and rainy days are a part of life. Expect them. Prepare for them.

If you'll keep three to six months' worth of bills and living expenses in a savings or money-market account, then you'll have gone a long way toward erasing the "what if" stress from your life. The emergency fund allows your family to always be ready for whatever life hurls at you. Sure, that Murphy guy might still stop by your residence every so often, but he won't be able to run roughshod over your financial life the way he used to. Ramsey takes the analogy a step further: "Don't forget that the emergency fund actually acts as Murphy repellent."

You must also flip a mental switch regarding your e-fund: It is there for bonafide emergencies. Nothing else.

Ramsey elaborates: "Beware not to rationalize the use of your emergency fund for something that you should save for and purchase. Something on sale that you 'need' is NOT an emergency. Prom dresses and college tuition are NOT emergencies," he says. [Aside: This, of course, is where Mary Hunt's Freedom Account concept enters the picture.]

In any event, get your full e-fund together, and you'll be in a financially-elite class. You won't need your credit cards any longer ... even for emergencies. And the next time your car's alternator detonates?

"What used to be a huge, life-altering event," Ramsey says, "will now become a mere inconvenience."

4. Direct 15% of your annual pre-tax income into your retirement plans. Utilize tax-advantaged accounts such as 401ks and Roth IRAs, if eligible.

Now it's time to get your retirement funds in shape. Contribute the maximum amount you can, your target being contributions of a full 15 percent of your household's gross (pre-tax) income. If you have tax-advantaged plans (401k or Roth IRA, for example) available to you, then exploit them to their fullest extent. If your company matches any part of your contributions, do not consider this as part of your 15 percent. Additionally, do not include expected Social Security benefits in your retirement calculations. "I don't count on an inept government for my dignity at retirement, and you shouldn't either," Ramsey says.

At this point, if you haven't already done so, it is time to begin seriously educating yourself about mutual funds, stocks, and the financial markets.

"Getting older is going to happen," Ramsey says. "You must invest now if you want to spend your golden years in dignity."

5. Take care of college funding. Fully fund Educational Savings Accounts and/or utilize 529 plans.

If you have kids, then you'll have college to worry about. The earlier you start, and the more attention and funding you're able to give to it, the better off you and your kids will be. Since college tuition inflation averages around 7 to 8 percent per year, your investments will need to (hopefully) do better than that. Always use tax-advantaged accounts (such as 529 plans or Education Savings Accounts) to their fullest extent to assist with this. These plans do have certain income limits and other restrictions and/or fees, so be sure to check the fine print before diving in.

Regardless of how you save for college, do it. Saving for college ensures that a legacy of debt is not passed down your family tree. Sadly, most people graduating from college right now are deeply in debt before they start. If you start early or save aggressively, your child will not be one of them.

6. Become financially "ultrafit" and 100% debt-free: Pay off your home early.

For most people, the mortgage payment is the single largest monthly payment they will ever have. Just imagine what you can do with that money when you've paid it off. Imagine how you'll feel when you make that last payment. Round up every spare dollar you can find and put it toward your mortgage, regardless of all the oft-quoted benefits of mortgage-interest tax detectability. (How wise is it to continually pay, say, $5,000 in interest to a bank each year, just so that you won't have to pay $1,500 in taxes to the government? The small minority of folks who own their homes debt-free probably don't mind paying that $1,500 a bit.)

For more comments regarding home, home loans, and their affordability, you might refer to my "Home, Expensive Home" article from Aug. 30, 2002.


7. Get to the point where your money works harder than you do: Build wealth (mutual funds, real estate, etc.), have fun, and give!

With every bit of your debt zeroed-out and your savings tanks on the full mark, you can finally reach for the "pinnacle point" — that moment in your life where your money works harder than you do. What would it be like to exit the Rat Race and live entirely off the returns of your savings and investments? Find out: Invest more, and more, and more. Invest more to continue to grow your wealth. Give more so that you can continue to grow your soul.


I realize that some people view the Dave Ramsey approach as too simplistic, but I believe for the "average" person, this approach makes a lot of sense. If you follow his plan, then over time you will build wealth. At retirement you will probably be in the top 5-10% of the wealthiest American citizens. As Dave mentioned in the DVD yesterday, there's a fine line between hording and saving, so you have to check your attitude your entire financial journey.


Larry

Financial Peace University Update

In an earlier post, I mentioned that I am in the process of coordinating our church's very first Financial Peace University class.

Our first class meets this Sunday afternoon, February 24, and I'm happy to announce that we have currently 72 people signed up, and I'm sure we'll have a few more enroll before Sunday! This number just blows my mind, but I know that even more people in our church and outside our church need this material.

The next 13 weeks is going to be an awesome experience, and I'm just blessed to be able to play a small role in Financial Peace coming to First Baptist, Raytown, MO.

Larry

Give me my points and miles!

Over the weekend, I went to a couple of social events where people know that I'm coordinating our church's Financial Peace University class. Inevitably, we end up discussing topics revolving around finances.

One topic that comes up regularly is purchasing items using a credit card in order to gain points or airline miles. For me, using a credit card to get airline miles is not a big concern because my family and I fly once or twice a year. I can't justify using credit cards to get cheaper flights for a couple of reasons:

1. It's a well known fact that if you pay for items using a credit card, you end up paying 18-20% more than if you were to pay purchases with cash. The full amount of the purchase doesn't register with us when we pay with plastic. There's more "pain" when we pay with cash; we feel it more.
2. You put yourself in a dangerous position by trying to "beat the system" with credit card companies. These ruthless companies are known for charging late fees (even if you weren't technically late with a payment) and changing interest rates on their customers. I think people are just playing with fire if they decide to use them, even if you are faithful in paying the balance each month.

It seems to me a better course of action would be to get on a solid budget, use a cash envelope system for purchases, and plan and save for future trips. In the end, I'm betting that you would save more money with this approach than using credit cards to gain airline miles.

Larry

Financial Peace University

Over the last week and a half we've been doing a little bit of advertising, but today was our big kick-off when we ran a 1:00 minute preview video in both of our services and I held a preview class. We didn't have an incredible amount of people come to the preview, but I'm confident we are going to have more people at the preview next week.

I'm looking forward to seeing what is going to happen when people within our church body get real about their finances.

I'll keep you up-to-date on how many people we get to enroll and how the class is going.


Larry