Have you considered what your life would be like if you were debt free? Do you want financial peace?
To have financial peace you have to take control of your money. You have to give a name to every bit of your money. You have to tell your money where to go, or you will wonder where it went. You have to start winning with money. You have to get out of debt. To get out of debt you must stop borrowing more money, pay off debt and begin to save money.
This advice and much more is given by Dave Ramsey in his nine week Financial Peace University Course that is being offered through the Starkville School District’s Building Strong Families program. Since the beginning of 2014, almost 200 individuals in Choctaw, Oktibbeha and Winston County have enrolled and completed Dave Ramsey’s Financial Peace University.
According to Ramsey, in the Cash Flow Planning chapter of Financial Peace University, preparing and living with a budget is the key to success with money issues. Ramsey states that money makes a fantastic servant, but it is a horrible master. You must tell your money where to go and what to do or it will definitely master you for the rest of your life. Failure to learn to manage money ensures it will always manage you. He says that how we handle our money impacts every area of our lives. It is a huge factor in the failure of many marriages.
The key to financial peace, according to Ramsey is to give every dollar a name by doing a fresh budget (cash flow plan) every month. He stresses that your plan will not work if you: 1) leave things out, 2) overcomplicate your plan, 3) don’t actually do one, and 4) don’t actually live it. Ramsey states that the reasons we should have a cash flow plan are: 1) a written plan removes the management by crisis from our finances, 2) it builds up four walls of protection for your family by prioritizing food, shelter, basic clothing, transportation and utilities, and 3) managed money feels like getting a raise.
According to Ramsey, a written plan (if lived and agreed on) will: 1) remove many of the money fights from your marriage, 2) show if you are overspending in a certain area and, 3) give you a sense of power and control over money that you cannnot get any other way.
Ramsey teaches that personal finance is 80% behavior and 20% head knowledge. He further explains that taking control of your money is more about what you do than what you know. He identifies and discusses “The Seven Baby Steps” that lead to financial peace. They are as follows: 1) Save $1,000.00 in a beginner’s emergency fund; $500.00 if your household income is under $20,000 per year, 2) Pay off all debts (except the house note) using the debt snowball method-list all debts from smallest to largest by balance. Once the smallest debt is paid off, add the minimum payment (of the debt just paid off) to the minimum payment of the next debt on your list. Continue this process until all debts are paid off, 3) put three to six months of expenses in a saving account. 4) Invest 15% of your household income in Roth IRAs and pre-tax retirement plans. 5) Save for your children’s college education using tax favored plans, 6) pay off your house early and finally, 7) Baby Step “7” is build wealth and give.
Throughout the entire Financial Peace University course Ramsey stresses the importance of paying off all debt and remaining debt free. He recognizes the challenge, given that debt is the most aggressively marketed product in history and is sold by banks, credit card companies and national retail chains. Many national retails chains make more money on the sale of credit applications than they do on the actual sale of merchandise.
To learn more about the free Financial Peace University classes, contact Ethen Gillespie at the Building Strong Families office at 662-769-1769 or 662-615-0033. Building Strong Families is a federally funded grant awarded to the Starkville School District’s Department of Family Centered Programs.