My Financial Peace University course doesn’t begin until September 16th, but I have already gotten started with my Total Money Makeover. I opened up my kit to find some great goodies!
- Welcome packet including a pencil, sharpener, eraser, stickers, two tickets to give to friends or family to attend a free FPU class to try it out, and a membership ID
- “Dave Ramsey’s Complete Guide To Money” book
- Cash envelope system
- CD audio library of lessons
- Member workbook
- Folder for keeping all forms
- Progress chart
I stand corrected after thinking that they were charging $100 for this class just for the fun of it… these are quality materials! Within a few days I had read the book cover to cover and started planning a budget. I have been through four excel spreadsheets in a week getting down to my format that I like the best. At the end of the month, I will post the budget and how well I was able to stick to it.
In the past week, I have:
- Planned a zero-based budget for September. I am starting my month two paychecks (I get paid weekly) before the calendar month to allow myself breathing room before bills are due between the first and fifteenth of the month. My September began August 23 and will end September 26. The zero-based budget means that you plan out your cash flow for the month with the goal of ending with 0 dollars. Sounds counter-intuitive to have no money leftover, right? Don’t worry, it’s part of the plan!
- Planned the use of my cash envelope system. This means that once I spend my designated cash amounts on groceries, gasoline, and “personal spending,” I’m done and can not spend any more. This system works because you can physically see your money as you spend it, and spending cash takes a more emotional toll on you than just swiping a card. I have already cut spending significantly by using this system… I just don’t want to spend the cash!
- Paid off my credit card balance. I gathered up all my cards (five in total) and will be cutting them up and canceling the accounts.
- Arranged to sell my artwork on consignment at a local craft and art store to bring in additional income.
- Cold-called (well, cold-emailed) two local businesses to ask if they would like to hire me as a blogger for their website blogs.
- Applied for three part-time jobs for more additional income.
- Arranged to sell my bicycle.
- Listed 13 items for sale on ebay.
- Thought really hard about canceling my cable internet service and Netflix. Decided to postpone this decision.
- Checked out “The Total Money Makeover” from the local library (note that I did not purchase it. 😉 )
EVERYBODY KNOWS DAVE
I was having lunch with a vendor at work today, and the conversation happened to provide me with an opportunity to mention that I am doing FPU to get out of debt. I asked her, “Have you heard of Dave Ramsey?” and she just reached into her wallet and pulled out her envelope system. Dave’s people are EVERYWHERE.
Part of the budget is a tithe and giving allotment. As the Financial Peace University course is based on Biblical principles of handling money, the first area in the budget sheets provided is for a tithe, which is money given to the church. A tithe means one tenth, so ten percent of income is set aside for a tithe in the basic principle of the budget. As I do not belong to a church, I modified the giving portion of the budget and allowed myself $100 for expenses related to giving. I counted my Zoo membership renewal ($57) as giving, because that helps contribute to animal conservation. The remaining $43 I donated to a 16-year old girl with a debilitating skin condition who requires full-body bandaging every two days. Medicaid has stopped paying for the bandages and she needs them to avoid infection and survive her daily life, as the slightest friction causes extreme pain and blistering prone to infection. (Interested in donating? http://www.gofundme.com/3ylz54). As I was pondering my giving budget, it occurred to me that a lot of people could benefit from Dave’s program and learn about financial peace. In future months, I plan to spend my giving budget to sign up friends, family, or even strangers who are willing to enter this class and change their lives for the better by understanding their personal finances. Maybe when they have their finances under control, they will do the same for others!
I promise I am not joining a cult.
If my calculations are correct, I should be able to pay at least $1,500 toward my smallest debt, the car payment, this month. It has a balance of just under $6,000. Though it has my lowest interest rate, I am doing the debt snowball by the book and tackling the smallest debt first. When the car is paid off (at this rate, in 3-4 months!), I will add that money to the payments on the next smallest debt, the $7,400 student loan. This should take another 4-5 months. My goal is to be rid of these two debts by August 2014 and then be facing my end-boss, the Stupidly Huge Loan, currently weighing in at $48,873.
DEBT AT WEEK 1
- Car: $5,956.29
- Loan: $7,402.98
- Loan: $48,873.24