Here's what came in my kit!
I'm supposed to be reading in this book, too. Not that I don't want to, but I have a lot going on right now! Oh well, I'm the one that signed up for the class, might as well give it the due diligence it deserves!
Tuesday, January 18, 2011
Sunday, January 16, 2011
1st Class Recap
Hi guys!
Well, I have officially completed the 1st class in the Financial Peace program. I wasn't sure what to expect but I did enjoy it tonight, although I know I have a lot of work ahead of me.
This week my homework is to create a "quickie budget" with the guide provided in our kits. Before I dive into that, let me share with you what we covered.
We watched about an hour-long video session as a group and then had small group discussions with others at our table. I think the best thing about the program so far is that it covers topics we've all heard about or wondered about but weren't sure how to put into action. Now we have a step-by-step guide of how to really make the most of and do the most with our money.
There are 7 baby steps to start with. Tonight we covered steps #1 and #3 (coming back to #2 later):
Step 1: Build a $1,000 emergency fund (or $500 if your income is under $20,000/yr)
Step 2: Pay off all debt except the house utilizing the debt snowball
Step 3: Put 3-6 months expenses in savings
Step 4: Invest 15% of your household income into Roth IRAs and pre-tax retirement plans
Step 5: Put aside college funding (for children/grandchildren)
Step 6: Pay off your home early
Step 7: Build wealth and give!
So first to hit on Baby Step 1: Basically we learned that saving money is one of the most important things you can do. I guess I've always heard this my entire life, but never fully listened to it and acted on it, and I've been lucky that no super huge "emergencies" have happened to me. I've attempted to save many times in the past but once I get to a few hundred dollars I somehow seem to spend it. That's why I know that Step 1 is going to be challenging for me. After I save up that initial $1,000 I need to put it somewhere I can't get to easily on a daily basis, but can get to easily if there truly is an emergency. According to Dave Ramsey, we all need to learn how to make our money behave. AMEN to that! We as a whole cannot continue to spend more than we make. What we need to realize is that it's not about IF the emergency happens, it's really about WHEN it's going to happen!
There are 3 basic reasons we should all be saving:
Build our Emergency Fund
To make purchases
Build wealth
I will share with you all as I build my own Emergency Fund. I'm only using my income to do this (not taking my boyfriend's $ into account) so I can prove that I can do this on my own. Apparently saving this $1,000 only takes the average person 1 month... we shall see! I will definitely be doing my best! And just to clarify, this money is not to be used to pay monthly bills (that is what we save for in the next step) but is here in case your car breaks down, you have a medical emergency, etc.
Lauren's Emergency Fund as of 1/17/2011: $250.00
Dave suggests you put this fund money is a Money Market Account from a mutual fund company. Look at this money as your INSURANCE. Emergency money is not for purchases, yet it's your FIRST savings priority and it needs to be done quickly.
Let's also hit on saving for Purchases: You should never be borrowing to make purchases so you also need to consider saving for that almost as important as your emergency fund.
The best example used was that maturity is learning to delay your pleasure. We need to make a plan for how to get the things we want and then follow through with them! Not only will it feel great, it can also end up saving us money in the long-run. Here's a great example he used:
If you want to purchase a $4,000 dining room set and you borrow the money at 24% interest (an average for a furniture/credit card company) you'd end up paying $5,064 over 24 months. Where on the other hand, if you SAVED up the money ahead of time for this purchase, you could "pay" $211 into a savings account for 18 months and have allllllmost enough to pay for the dining set in cash. Heck, if you can do that, who's to say they won't give you a break on the price?
Dave also gives great examples of paying cash only for cars. Who needs an insanely expensive car that you can barely make the monthly payments on? Just because you want it? I want lots of things, but they aren't worth worrying over my money every month... I've done enough of that in this life already! I will say, I am super lucky that my parents purchased the car I drive, so I have no car payment. It's a 1999 Honda CRV. Not my dream car, but definitely not a clunker! It does the job and it's what I'm sticking with for now. When I want a newer, nicer car I am going to figure out a way to pay cash for it by doing the following:
While I don't have a monthly car payment I will still "pay" one to myself into the purchases savings account. The average American's monthly car payment is $464. Ugh! Not for me!!! So what if I put $400/mo away for 12 months? I'd have $4,800 to use along with my car trade-in, to get approx an $11,000 car to replace it with. I just did a quick car search on CarMax and see that I can get an array of other cars for that... a 2009 Chevrolet, 2009 Chrystler, 2009 Ford and more! I'll take it... one day. :)
Imagine if you never had a car payment???
Lastly we have Wealth Building (sounds like a good plan to me!). Such true words: Building wealth is a marathon, not a sprint. We saw some insane examples of how the earlier you start down this path, the more it pays off. Here's a tid-bit in our workbook I'll share:
Saving just $100 per month, every month, from 25-65, with 12% interest earned will build to over $1,176,000. Excuuuuuuse me? Who couldn't use that when they retire!!?? Don't get me wrong, I don't know where in the world I'm going to get emergency cash, save for purchases and money to go towards building up wealth, but I'm willing to try to figure it out! I know that you just have to be disciplined with yourself. I've already proven that I can do that because last year I paid off a huge credit card in just a few months by basically limiting myself from doing much of anything. It hurt like heck at the time but now that it's done, looking back it doesn't seem as bad as it was at the time.
The big deal with making money with your money is knowing that your interest rate is extremely important. You (obviously) want to earn as much as you can on your money as it's sitting in your account. We will be covering more of how to do that in later classes and I will s-h-a-r-e!
Baby Step 3 consists of putting 3-6 months of your monthly expenses in a savings account. Uh.... whaaaat?? How am I going to do that???? (That was my first thought!! haha) Now don't get me wrong, I am DYING to have this much money in savings for the "what-ifs" in life. Like, what if I get laid off, what if my company gets bought/sold, what if I get super sick or have an accident and am out of work? Or what if one of those things happens to someone I love and I want/need to help them?
All I know is, this is a good idea, and I'm going to do it.
My homework for the week is to make a basic Quickie Budget. Who likes to budget? Not me, normally... but I do work well with rules and limitations, so this may be just what I need! I'm off to get started!
Well, I have officially completed the 1st class in the Financial Peace program. I wasn't sure what to expect but I did enjoy it tonight, although I know I have a lot of work ahead of me.
This week my homework is to create a "quickie budget" with the guide provided in our kits. Before I dive into that, let me share with you what we covered.
We watched about an hour-long video session as a group and then had small group discussions with others at our table. I think the best thing about the program so far is that it covers topics we've all heard about or wondered about but weren't sure how to put into action. Now we have a step-by-step guide of how to really make the most of and do the most with our money.
There are 7 baby steps to start with. Tonight we covered steps #1 and #3 (coming back to #2 later):
Step 1: Build a $1,000 emergency fund (or $500 if your income is under $20,000/yr)
Step 2: Pay off all debt except the house utilizing the debt snowball
Step 3: Put 3-6 months expenses in savings
Step 4: Invest 15% of your household income into Roth IRAs and pre-tax retirement plans
Step 5: Put aside college funding (for children/grandchildren)
Step 6: Pay off your home early
Step 7: Build wealth and give!
So first to hit on Baby Step 1: Basically we learned that saving money is one of the most important things you can do. I guess I've always heard this my entire life, but never fully listened to it and acted on it, and I've been lucky that no super huge "emergencies" have happened to me. I've attempted to save many times in the past but once I get to a few hundred dollars I somehow seem to spend it. That's why I know that Step 1 is going to be challenging for me. After I save up that initial $1,000 I need to put it somewhere I can't get to easily on a daily basis, but can get to easily if there truly is an emergency. According to Dave Ramsey, we all need to learn how to make our money behave. AMEN to that! We as a whole cannot continue to spend more than we make. What we need to realize is that it's not about IF the emergency happens, it's really about WHEN it's going to happen!
There are 3 basic reasons we should all be saving:
Build our Emergency Fund
To make purchases
Build wealth
I will share with you all as I build my own Emergency Fund. I'm only using my income to do this (not taking my boyfriend's $ into account) so I can prove that I can do this on my own. Apparently saving this $1,000 only takes the average person 1 month... we shall see! I will definitely be doing my best! And just to clarify, this money is not to be used to pay monthly bills (that is what we save for in the next step) but is here in case your car breaks down, you have a medical emergency, etc.
Lauren's Emergency Fund as of 1/17/2011: $250.00
Dave suggests you put this fund money is a Money Market Account from a mutual fund company. Look at this money as your INSURANCE. Emergency money is not for purchases, yet it's your FIRST savings priority and it needs to be done quickly.
Let's also hit on saving for Purchases: You should never be borrowing to make purchases so you also need to consider saving for that almost as important as your emergency fund.
The best example used was that maturity is learning to delay your pleasure. We need to make a plan for how to get the things we want and then follow through with them! Not only will it feel great, it can also end up saving us money in the long-run. Here's a great example he used:
If you want to purchase a $4,000 dining room set and you borrow the money at 24% interest (an average for a furniture/credit card company) you'd end up paying $5,064 over 24 months. Where on the other hand, if you SAVED up the money ahead of time for this purchase, you could "pay" $211 into a savings account for 18 months and have allllllmost enough to pay for the dining set in cash. Heck, if you can do that, who's to say they won't give you a break on the price?
Dave also gives great examples of paying cash only for cars. Who needs an insanely expensive car that you can barely make the monthly payments on? Just because you want it? I want lots of things, but they aren't worth worrying over my money every month... I've done enough of that in this life already! I will say, I am super lucky that my parents purchased the car I drive, so I have no car payment. It's a 1999 Honda CRV. Not my dream car, but definitely not a clunker! It does the job and it's what I'm sticking with for now. When I want a newer, nicer car I am going to figure out a way to pay cash for it by doing the following:
While I don't have a monthly car payment I will still "pay" one to myself into the purchases savings account. The average American's monthly car payment is $464. Ugh! Not for me!!! So what if I put $400/mo away for 12 months? I'd have $4,800 to use along with my car trade-in, to get approx an $11,000 car to replace it with. I just did a quick car search on CarMax and see that I can get an array of other cars for that... a 2009 Chevrolet, 2009 Chrystler, 2009 Ford and more! I'll take it... one day. :)
Imagine if you never had a car payment???
Lastly we have Wealth Building (sounds like a good plan to me!). Such true words: Building wealth is a marathon, not a sprint. We saw some insane examples of how the earlier you start down this path, the more it pays off. Here's a tid-bit in our workbook I'll share:
Saving just $100 per month, every month, from 25-65, with 12% interest earned will build to over $1,176,000. Excuuuuuuse me? Who couldn't use that when they retire!!?? Don't get me wrong, I don't know where in the world I'm going to get emergency cash, save for purchases and money to go towards building up wealth, but I'm willing to try to figure it out! I know that you just have to be disciplined with yourself. I've already proven that I can do that because last year I paid off a huge credit card in just a few months by basically limiting myself from doing much of anything. It hurt like heck at the time but now that it's done, looking back it doesn't seem as bad as it was at the time.
The big deal with making money with your money is knowing that your interest rate is extremely important. You (obviously) want to earn as much as you can on your money as it's sitting in your account. We will be covering more of how to do that in later classes and I will s-h-a-r-e!
Baby Step 3 consists of putting 3-6 months of your monthly expenses in a savings account. Uh.... whaaaat?? How am I going to do that???? (That was my first thought!! haha) Now don't get me wrong, I am DYING to have this much money in savings for the "what-ifs" in life. Like, what if I get laid off, what if my company gets bought/sold, what if I get super sick or have an accident and am out of work? Or what if one of those things happens to someone I love and I want/need to help them?
All I know is, this is a good idea, and I'm going to do it.
My homework for the week is to make a basic Quickie Budget. Who likes to budget? Not me, normally... but I do work well with rules and limitations, so this may be just what I need! I'm off to get started!
Tuesday, January 11, 2011
Financial Peace University
This coming Sunday, January 16, 2011 I start my first financial course - "Financial Peace University" by Dave Ramsey. Now personal opinions aside (both mine and yours), I'm excited to take this class. I will spend the next 13 Sunday nights driving back and forth from Greenville (where I live) to Spartanburg (about 25 min away) to attend these classes with my mother. She and I live very different lifestyles and have access to vastly different amounts of money (aka mine is a LOT less! ha!) so I'm interseted to see how well the program works for each of us.
The overview says we will have the following classes/lessons:
The overview says we will have the following classes/lessons:
- Super sving
- Relating with money
- Cash flow planning
- Dumping debt
- Credit sharks in suits
- Buyer beware
- Clause and effect
- That's not good enough (finding deals!!)
- Of mice and mutual funds
- From fruition to tuition
- Working in your strengths
- Real Estate mortgages
- The great misunderstanding
I'm so glad you're here!
Hi and thanks for joining me on this little ole blog of mine! I'm Lauren and I started this blog to learn more about saving money, paying off debts and getting great deals and share it with you!
I've always loved couponing and I'm getting better and better at it. As I learn more, I want to pass it along to you in the clearest most straight forward way I can. I certainly don't know it all about the savings game, especially compaired to all the mentors out there I've been following and learning from over the past two years, but I hope to grow and learn more with each post on here. We can do it together!
Thanks for visiting my site and I'll look forward to seeing you back soon!
~Lauren :)
I've always loved couponing and I'm getting better and better at it. As I learn more, I want to pass it along to you in the clearest most straight forward way I can. I certainly don't know it all about the savings game, especially compaired to all the mentors out there I've been following and learning from over the past two years, but I hope to grow and learn more with each post on here. We can do it together!
Thanks for visiting my site and I'll look forward to seeing you back soon!
~Lauren :)
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