Sunday, February 19, 2012

Blessing: Financial Peace University

One of the biggest blessings to us as a couple has been Financial Peace University (FPU) by Dave Ramsey.  If you haven't taken the class before, I strongly suggest you do.  There are classes all over the country. 

A brief time-line leading up to our FPU journey:
  • 2003; Graduated college in May, Justin started his first "big boy" job in June, purchased a house in July, married in August, I started teaching in August.
  • 2004; Find out we are pregnant with Alexis in April and deliver her (3 months early) in September.  
  • 2005; Justin loses his job in January and we bring Alexis home from the hospital in February. 
  • 2006; We are in a financial tailspin, barely scraping by and putting things like Alexis' monthly perscriptions on credit cards.  Started FPU in September.
Dave Ramsey teaches seven baby steps to financial freedom.  Here they are:
  • Baby Step 1 – $1,000 to start an Emergency Fund
  • Baby Step 2 – Pay off all debt using the Debt Snowball
  • Baby Step 3 – 3 to 6 months of expenses in savings
  • Baby Step 4 – Invest 15% of household income into Roth IRAs and pre-tax retirement
  • Baby Step 5 - College funding for children
  • Baby Step 6 – Pay off home early
  • Baby Step 7 – Build wealth and give!

We dove head first into FPU.  During our first year we....
  1. Saved $1,000 emergency fund. 
  2. Downsized cars to eliminate payments.
  3. Paid off $18,000 in credit cards.

We were truckin' right along and on track to start our 3-6 month emergency fund when Justin lost his job in October of '07.  There goes the $1,000 emergency fund and we had JUST cut up all of our credit cards.  Yikes.  More stressful times.

Thanks to a recommendation from a great friend, Justin got a new job in January of '08 and we were back on track.

FPU Timeline from '08 to current...
  1. Saved the $1000 emergency fund again.
  2. Paid cash for Amy to get her Master's degree .
  3. Decided Justin would go back to school for his Master's degree.
  4. Start our 3-6 month expenses in savings.
  5. Move to Newell, rent out our Clive house.
  6. Finish and exceede our 3-6 month in savings.
  7. Decide instead of invest in Roth IRA's to hold off and save $$ to buy another house to avoid 2 mortgages.
  8. Purchase a house in Newell.
Since taking Financial Peace University in 2006, we have been passionate about living like no-one else, so we can live like no-one else.  Dave Ramsey taught us so many great foundational things that quite honestly saved our marriage.  Financially, we were going down a very wrong path.  We hope to someday have the opportunity to help others learn what we have learned.  It is life changing!


Anonymous said...

this is so exciting. i am eager to hear how you tackle the next steps!