We’re the Ones Who Originally Failed Financial Peace University
Reading about all the success people have after they’ve completed Dave Ramsey’s Financial Peace University certainly motivates me. Doesn’t it you?
I’m a spreadsheet girl. All those rows and columns, numbers neatly lined up…ahhhh… the. Best. You’d think since I love spreadsheets so much, I’d be better at actually following a budget.
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There’s a difference between creating the perfect spreadsheet debt payoff plan and actually implementing it.
My spreadsheets were beautiful! Implementation, however, was not!
While we have been better with our finances since we first read Total Money Makeover and then attended Financial Peace University in 2007, we still have debt, don’t give as much as we’d like, and might have to work until we’re 90 if we aren’t careful.
In my quest to retire on time or hopefully sooner, I must get on top of every penny. Starting this next year, I plan to follow several specific strategies to pad my emergency fund plus pay off our credit cards.
In the post How to Get Your Debt Snowball Rolling, I share how we first managed to get through all debt except our mortgage. Unfortunately, we didn’t later stick to what we know.
With such a perfect plan given throughout Financial Peace University, you wouldn’t think we’d fail. Let me share our experiences with you so that you can hopefully learn for our mistakes and get back on track financially faster than we did.
How to Fail Financial Peace University
1. Don’t stick to a budget
While we made a 0 based budget and it looked good on paper (and computer screen), we frequently overspent in categories and then moved money around to cover. We would take money ear-marked for savings or our debt snowball and cover our deficits. Doing this kept us from saving and paying down debt quickly.
2. Keep your credit cards.
We vowed we wouldn’t use our credit cards, but we didn’t cut them up like Dave Ramsey in Financial Peace University suggested. Somewhere in the back of our minds we didn’t trust the process and thought we knew better. Bad idea!
So what do you suppose happened the minute we had expenses greater than our baby emergency fund could cover? That’s right…we charged!
3. Count Christmas as an emergency.
Dave Ramsey says frequently that Christmas is not an emergency. He’s right. We should all save for Christmas throughout the year. It’s not a surprise that it’s coming. Unfortunately, we weren’t disciplined enough following our budget. Then, when Christmas came we had to use our emergency fund, money from other budget categories, or our credit cards.
4. Don’t work 2nd jobs to earn more.
Until I started my first blog in 2012, I didn’t work a second job. My husband didn’t either. Even when starting my blog, money didn’t start rolling in right away like so many of the ‘pro’ blog instructors tell you. In fact, it took a couple years before I made significant income and even that wasn’t enough to make a huge difference.
That’s why you’ll want to start as soon as possible and begin building a blog if you someday want to make a decent part-time or a full-time income from it. Had we taken second jobs, we would have been able to pay things off more quickly.
5. Take on more debt.
When my son totaled his car on the interstate, we jumped in to help him out. By that time, our credit score had gone way up since we’d become debt free previously, and our debt to income ratio was in the right place. My husband had been driving an 11 year old, paid for Ford Focus. Rather than buy our son a new car, we decided to let him drive the paid for Focus and get ourselves a newer car for my husband to drive.
Because we’d learned a little, we didn’t buy a brand new car. It was about 6 years old. However, we financed it because we didn’t have enough in savings to pay for it. We got such a good interest rate due to our better credit score than we’d ever had that we ended up going ahead and buying a camper and a used Expedition to pull it. *yikes*
Okay, I know that wasn’t the smartest, but there’s a fine line between living our dreams and being debt free. I know, I know… sigh…
6. Don’t save for your kids’ college.
I don’t even know where to start with this one. As a teacher with a social worker husband, it simply seemed we never had enough to live much less save for college. Our kids made/make great grades and participated in a high school program designed to help them out with college expenses.
Even so, our oldest went to nursing school and took some loans which we are helping pay for.
Our 2nd oldest majored in French education and needed help along the way, so we cash flowed most of his which was better than loans but still tough.
And our baby will be graduating high school this year. She’s looking at two state universities as options and has a good chance of getting some nice scholarships. Of course, we hope for a full ride, but anything will help.
We’ll cash flow the rest, and hopefully she won’t take any loans at all out. That wouldn’t be possible if not for my first blog. It has opened up opportunities for us financially that I’m thankful for. Of course, we should have saved the money for our kids’ college but we didn’t, so we’re moving forward to the next best thing – simply paying cash for balances left over after scholarships and grants.
I am still a strong believer in Dave Ramsey even if we did fail Financial Peace University. It’s not his fault we didn’t follow all the steps.
If you haven’t attended Financial Peace University or at least read Total Money Makeover yet, I highly recommend it.
I don’t know where you are in your financial journey and how close you are to retirement, but I do know that you should NOT do as we did. Instead, follow the Dave’s expert advice, and you’ll get where you want to be so much sooner!