By contributing writer, Jennifer Roberts. Since becoming a stay-at-home mom, Jennifer Roberts has channeled her architecture and design experience toward fostering a luxurious but affordable home life for her family, friends and readers. You can find her writing at JenSpends.com and on Facebook.
Saving money and paying off debt are two of the most common New Year’s resolutions. If you are one of the many people who vowed to improve your financial situation this year, Dave Ramsey’s Financial Peace University program can provide the direction you need to help you reach your goals.
Although Dave Ramsey is a popular radio personality and best-selling author, it wasn’t until I started to read frugal living blogs that I learned about him. It seemed that many of the people who really knew how to stretch a dollar and stick to a budget had attended Financial Peace University classes, or had read one of his books.
I decided to read Ramsey’s Total Money Makeover last year, and it really changed my perspective about money. My husband and I didn’t have an awful lot of debt, but it was enough to keep us living paycheck to paycheck, and I felt like our situation would never change.
I used to wish that I could somehow pay off my car loan early to ease our burden. After reading Total Money Makeover, I realized that I could pay off my car and our student loans in one year if I changed my thinking. I am happy to say that as of January 2013, my husband and I are debt free except for our mortgage!
Dave Ramsey’s book provided the inspiration I needed to get out of debt, but I knew that his Financial Peace University would provide greater detail, and hopefully even more motivation to accomplish our other financial goals. I was very happy to have the opportunity to review the nine-week course and see how it could help.
Class in a Box
The Financial Peace University Membership Kit arrived neatly packed in a nice box, which I received as a free review copy, and I was impressed by the quality of the various materials it included:
- Financial Peace University Workbook
- Hardcover copy of Dave Ramsey’s Complete Guide to Money
- Set of lesson CD’s in a nice case
- Envelope budgeting system in a holder
- File folder for budget forms
- Progress Chart
- Pencil case with pencil, eraser, sharpener, bookmark, membership card and two free lesson tickets for friends
The particular kit I received is really geared toward people who will be attending a Financial Peace University class in person. A typical class would include viewing a video and taking notes in the workbook, small group discussion and maybe even some refreshments. I was unable to find a class that worked with my schedule in time for this review, but I would definitely like to attend a class in the future— with the purchase of a membership kit you may attend a nine-class series at any time.
The CDs included in the kit are audio versions of the videos shown during a live class. I listened to the Lesson 1 CD, took notes in the workbook, and then completed the assigned homework. One of my tasks was to read the first chapter from the Complete Guide to Money, which proved to be rather redundant after listening to the CD and completing the workbook, but it definitely helped to reinforce what I had learned.
I was able to make do without attending a live class, but the in-class discussion portion would have been nice to experience. The membership number included in the kit also allows for online registration where you can access copies of worksheets to print, bonus articles and class video (available to view only if you have signed up for a live class).
Financial Peace University is based on Dave Ramsey’s famous “Seven Baby Steps,” a system that breaks down the process of paying off debt and building wealth into manageable phases. Although the baby steps should be completed in order, I was interested to find that the classes jump around a bit. For example, the first lesson, “Super Saving” talks about saving money for Baby Steps 1 and 3, and also delves into retirement savings. This approach really worked for me, because I like to think ahead and have some idea of how I am going to accomplish future goals.
Ramsey is a proponent of using an “envelope system” with cash in order to manage outflow of money, improve self-discipline and reduce wasteful spending. As someone who almost exclusively uses a rewards credit card (paid off each month) rather than cash, this is a concept that I have been reluctant to try. However, the nice envelope system included in the kit and the first lesson I completed both convinced me to try using cash-filled envelopes for some budget areas, such as groceries.
I hope that dealing with cash will help prevent silly impulse buys. I also like the idea that any money left over can remain in the envelope to reduce the amount I will need to withdraw from the bank for the next month’s budget. With a strictly electronic system, that extra money often gets lost in the shuffle and tends to be spent on things we don’t really need.
The zero-based budget is another important underlying principle of the course. Dave Ramsey teaches that every single dollar should have a specific place to go. Although there are many computer programs, websites and apps for creating budgets, he really emphasizes the good old-fashioned pencil and paper approach. A budget worksheet in the back of the workbook (also available on the website to print) provides space for just about every category imaginable, and also provides ballpark percentages so you can make sure your budget is on track.
I enjoyed putting pencil to paper, and was happy to see that all of our budget categories were indeed within Dave’s recommended guidelines. I used to treat any leftover money as a bonus that could be spent on anything; now that money is assigned a specific purpose.
A Team-Based Approach
Did you know that financial problems are one of the leading causes of divorce in the United States? Financial Peace University is designed in part to strengthen relationships by involving both partners in every aspect of financial planning. Parents are even encouraged to bring teenagers along to the class.
Although my husband and I have never argued about money, management of our finances has been very lopsided. I have calmed my fears and stress about money by becoming something of a control freak with our budget and bank accounts, but it didn’t make me feel better—instead, I found that it was a large burden for one person.
My husband is not a big spender, but every once in a while he would make a surprise purchase that I wasn’t prepared for, and I would need to scramble to rearrange the budget to accommodate him. Sometimes I wonder what he thinks about the non-essentials he sees me buy for myself with our shared money. I don’t want him to feel as though his job is to bring in the funds without having a say in how they are spent.
We haven’t had problems in our relationship because of finances, but we can do better. I’m looking forward to improving our communication and working as a team—that alone will bring me peace of mind.
Interacting with fellow class attendees is another important aspect of Financial Peace University. In Dave Ramsey’s Complete Guide to Money, he writes “The accountability of a group environment causes people to change their behaviors.” Following like-minded bloggers has done wonders for my self-discipline and my determination to live a frugal lifestyle, so I completely understand the benefit of a group class approach.
The books also include success stories and quotes that help to motivate and inspire. It’s helpful to know that other people are in the same boat, and to see that others have been there and found a way to meet the same goals that I aspire to. I like to refer to the success stories when I’m feeling overwhelmed.
Although there are Financial Peace University kits geared toward at-home study (DVD or internet-based), I think being able to interact with others through a live class is a great opportunity.
Christian Touches, but Not Preachy
Much of the word-of-mouth I had heard about Dave Ramsey emphasized the Christian aspect of his teachings. Although I am religious, it’s something I’m private about, and I am wary of people forcing their beliefs on me or using religion to sell a product. I will admit that I was initially hesitant to read Total Money Makeover due to the perception I had developed, and the fear that Ramsey’s lessons would be too closely tied to specific religious beliefs that I might not share.
After reading Total Money Makeover, I found that my fears were unfounded; although Ramsey does quote from the Bible often, strongly encourages tithing, and speaks about how God wants us to be good stewards of our money, I did not find his book to be overtly religious or proselytizing. I feel the same about the Financial Peace University course. The common-sense concepts that Ramsey teaches are sound, often echoed by other leading financial experts, and do not depend on shared religious beliefs.
In fact, some of Dave Ramsey’s assertions fly in the face of conventional Christian wisdom. You have no doubt heard that “money is the root of all evil”, but Ramsey emphasizes that what the Bible actually says is that “the love of money is the root of all kinds of evil”. He argues that wealth building is not morally reprehensible, but instead enables us to give and help others like we never have.
Become a Success Story
Since its inception in 1994, more than one million families have successfully completed Financial Peace University. The system teaches clear steps and useful strategies to get out of debt and achieve financial goals at any age or income level.
The kit provides convenience by eliminating much of the legwork and confusion that can come with developing a financial strategy on your own, and the course’s emphasis on teamwork and camaraderie help inspire confidence and motivation. Total Money Makeover helped change my perspective, but Financial Peace University provided the added detail and structure that I needed.
The kit I reviewed, which includes attendance of a live nine-week class, currently sells for $99 on Dave Ramsey’s website. For a little bit more you may choose a home-study course with DVDs (which also includes live class attendance if you like), or you can opt to save some money with a basic internet-only version. Use the class finder to locate an upcoming Financial Peace University class near you.
When she isn’t busy creating “the good life” for her family, Jennifer Roberts shares her creativity, passion for good affordable design, and love of quality products through her blog, Jen Spends. Her mission is to help others relax and realize that they can do more than they thought possible with the resources they have. She lives with her English immigrant husband, their fun, precocious son, and assorted pets in central New York.