Thursday, June 23, 2011

Goal #53 COMPLETE - What is True Financial Peace?

More progress on my Project 101 in 1001 list. Read about my journey here.  
Goal #53: Attend Dave Ramsey’s Financial Peace University class with Devin - COMPLETE

I am blessed to be married to a frugal man - which you've probably figured out if you've read my blog for very long. Devin and I both love a good deal, we both enjoy fun, creative, cheap dates and we're both content to live a simpler lifestyle in order to give more to others.

By American standards, we don't have a ton of money, but it has never really bothered us. Our frugality has less to do with our financial resources and more to do with our desired lifestyle, our passions, our personalities and our beliefs.

Devin and I had similar upbringings in the area of managing money and we each heard (often) the following tips (or commands - whatever) from our parents: "Don't go into debt." "Credit cards will get you in trouble." "Never take out a car loan."" Buy used." "Save up for the things you want." "Brand names don't matter." "Pack your own food for a vacation to avoid eating out a lot." (Yes, both of our families brought coolers full of food into the hotels we stayed in during family vacations.)

Devin and I grew up knowing these were smart ways to handle money and those lessons are ones I am grateful we both brought into our marriage. (Ironically, we learned recently that our parents did in fact have car loans and credit card debt during the time they were teaching us these money lessons, but were wise enough to instill a better way of doing things into the lives of their children.)

So you might wonder why a young, frugal couple with a savings account and no debt (I had school loans, but paid them off about 19 months after graduated - after I did the math on the devil that is compound interest and got my rear in gear paying off those suckers) would feel the need to take a course on handling money wisely and getting out of debt.

Mainly, because there are a lot of money-sucking situations that will be a new part of our lives in the next couple of years. Namely: two kids and a house. Thus, we wanted to learn how to wisely prepare for those circumstances before they arose. Which is where the desire to attend Dave Ramsey's Financial Peace University came from.

Overall, I would venture to say that this course is fantastic. Devin and I have learned more about finances in our thirteen-week class than we have in our entire 52-combined-frugal-years of life. We were given all kinds of useful knowledge on things we had hardly a clue about (life/health insurances, investments, retirement plans, mortgages, savings accounts, etc). I am glad to have learned what we did at this early stage in our lives.

(Plus - Devin took over managing our budget and he is KILLING IT! Seriously, that man understands the details, planning and discipline of a good budget way better than I ever could and I am so grateful that he has taken over this task for me.)

However, there are definitely some points of tension between what we learned in our FPU classes and our personal beliefs about money.

Dave Ramsey's steps to reaching "Financial Peace", when boiled down to the bare minimum, are three fold (and in this order):  
       1) Get out out debt and stay out of debt
       2) Build wealth
       3) Give generously 

These teachings are presented with plenty of common-sense wisdom, a challenge of integrity and a number of biblical principals. Still, I have a love/hate relationship with what Dave Ramsey teaches.

I endorse 110% percent the get/stay out of debt thing. I even think it is wise to have a small amount in savings for emergencies and retirement (retirement as in, "I can't work any more," not as in, "I'm choosing not to work any more so I can sit back and enjoy life.") I'm obviously down with the "give generously" part (though I was disappointed that this lesson came after all the lessons on building wealth).

But I have a sick feeling in my stomach when I look at the needs of the world around me and hear Ramsey talk about building wealth (in seven-digit figures no less). Even if he totes the motivation (in part) as "building wealth in order to give more," my question is: Why not just give more to start with and not worry so much about the building up wealth part?

Yes, there is financial peace in not having stressful money issues (such as debt and no savings). There is also financial peace in trusting in God's provision. Yes, financial peace can come through wise planning. It can also come through the wisdom of understanding that possessions don't matter that much. Yes, financial peace can come through taking care of the needs of your family. It can also come from making sacrifices as a family in order take care of the needs of those in more difficult situations then yourselves.

Like I said - tension.

All this said, I would still recommend this class to just about anyone, but would also recommend finding a balance between preparing for your own future while still meeting some of the here-and-now needs of others. It is a balance that each individual or family should decide on after reflecting on God's purpose for their life and how to responsibly use the financial resources He has entrusted them with. We will each be held accountable and we each have to make a decision that we can live with here and in eternity.

Thoughts? Comment? Rebuttals? I'd love to hear your take on this topic.

P.S. Many thanks to our parents for teaching us so many good lessons about money - your instruction has already made our lives so much easier and given us a great foundation for the things we learn in FPU.


  1. On our trip, I thought you were pretty cool, but now... I KNOW IT :)

  2. I like this: "Why not just give more to start with and not worry so much about the building up wealth part?"

    We should always be giving. If we get a raise, we give MORE.

    If you are planning on buying a house, may I suggest getting a 15 year loan instead of a 30 year loan? I feel like that is the biggest money-waster in our society. It's not much more a month (if you have a decent down payment), but you will be saving THOUSANDS and THOUSANDS (of money that you can give, not save)!

  3. @Bethany – Dave Ramsey ONLY recommends a 15-year mortgage with a large down payment (he flat out says 30-year mortgages are stupid). In fact, he says the best thing to do is to pay 100% cash for your home. How’s that for radical?! Yikes!

  4. Yes! 100% cash sounds perfect! We have a 15 year loan, but we are aggressively paying it off in *hopefully* 5 1/2 years--only 3 more years to go!


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