Wednesday, February 10, 2010

Financial Peace University: Week 1: Super Saving

Beginning the Class
My husband and I started the Dave Ramsey “Financial Peace University” class last night, hosted through our church.  I am the "moderator" or discussion leader.  We had about 25 people come!  Most were really enthusiastic and signed up for the full 13 week course.  We are repeating lesson 1 tonight for those who were not able to come last night.  The cost for the course is $99, so it definately isn't cheap, but everyone who has been through the course that I have talked to said they would have paid much more for it!   Dave Ramsey is an engaging speaker (he had our attention the whole time- and time went really quickly), and the video series we’re watching for the class is very professional.
Week 1
The format of this particular class we’re taking is:
  1. Watch the class video for the first hour
  2. Class discussion topics
  3. Assigned homework
So what was the topic for week 1?  Super Saving!

Super Saving
We watched the video, and learned that the first step is SAVING MONEY.  Several points were emphasized:
  1. Savings must become a priority.
  2. You must save for an emergency fund, major purchases, and wealth building.
  3. Decide and agree with your spouse on what qualifies as an emergency.
It amazed me that so many people do not save at all.  Alex and I have become savers, and we agree on what is an "emergency" in our household.  Dave talked about what is NOT an emergency: Christmas, new clothes, etc.   Emergencies could include car trouble, losing a job, medical problems, death in the family and many  other things. Needing a vacation is not reason to dip into our emergency fund.
The Baby Steps
To teach how to remove debt, save, and build wealth, Dave Ramsey uses his tried and true 7 Baby Steps. This week focused on baby steps 1 and 3, which both have to do with saving.
We will get to baby step 2 in another lesson.

Baby Step 1
The first step in the plan is to have a beginner emergency fund of $1000. Dave says this step needs to be done FAST.  Most people can have this step done in 1-2 months.  The beginner emergency fund helps to repel emergencies!  By having this, when something does go wrong, say the car needing to be fixed, it does not become a crisis. 

Baby Step 3
In Baby Step 3 Dave Ramsey talks about how once we’ve got our debts paid off (baby step 2- in another lesson), we need to save 3 to 6 months of expenses and put it in a money market account somewhere. Keep the money accessible. but not too accessible.  He stated you can even keep it in your drawer, but then it seems to disappear on non emergencies- like pizza.  He talks how this step when completed brings a sense of security to the marriage.  Women especially feel more secure knowing it is there, and men have a greater marriage because of the women feeling more secure financially.  Dave also gave an analogy of a brick.  By itself, the brick is amoral.  It is not good, it is not bad.  However, if you get a real jerk with the brick, he could throw it through a window and vandalize something.  If you give a brick to a good person, he may use it to build a home for charity.  Money is the same way, in an of itself it is neither good nor bad.  It is how the person uses it that is good or bad.
Homework for next week
Our group discussed the DVD and the principles that we were taught. This discussion included why we don't save, why we use credit cards for emergencies, and reiterating why the emergency fund is so important.  After the discussion, the homework was given to read several chapters out of Financial Peace Revisted, as well as to complete the "Quickie Budget" for next weeks class. 

Fpu Quickie Budget

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1 comment:

  1. My husband and I started a few weeks ago as well. Such a great class