I’ve always considered myself to be smart with money (I mean, I do work in accounting). That was until I met my husband (AKA Mr. Super Saver). While we were dating, he pushed me to pay off my student loans (and therefore not spend my money on anything I didn’t absolutely need). With his encouragement, I was able to pay off my $15,000 worth of loans in just two years, but I have to say I did so grudgingly! I resented him everytime he would talk me out of buying a soda or splurging on some item of clothing I felt I couldn’t live without.
Since being married, I’d have to say money has still been the number one culprit for initiating fights between us. Whenever Daniel would bring up money, I would instantly shut down and put my defenses up. I felt like I wasn’t allowed to spend anything, and Daniel felt uneasy about spending without a budget in place. We both agreed that we needed to get on the same page when it came to money, so we enrolled in a Financial Peace University class being held at a local church.
As Daniel and I began the class, I immediately noticed a change in the way we talked about our finances. I suddenly felt more open to discussions, even excited about it! I actually began to feel good about my decisions not to buy something instead of feeling resentful – what a concept!
Here are the top five things that really stood out to me over the 9 week class:
1. We were spending a small fortune on eating out.
One of our first assignments in the class was to make a “Quick-Start Budget.” As Daniel and I began to work on it, we started looking back at what we had been spending in each of the provided categories (i.e, clothing, utilities, transportation). We were shocked at the total of our restaurant and fast food purchases over the previous month. We hadn’t eaten out THAT much, had we?? But it really does add up quickly. We had to take a step back and realize that as convenient and fun as going out was, we couldn’t continue as we had been. Something needed to change.
We decided on a much smaller amount to spend on restaurants and fast food in our budget. Now, whenever we consider eating out, we first ask ourselves: “Is it in the budget?” We also split meals a lot more often, which saves on both money and calories 🙂
2. Instead of wondering where our money went, we should be telling our money where to go.
I don’t know about you, but every time that W-2 comes at the end of the year, my heart drops when I see my total wages for the year. Because, withholdings aside, I then realize that I had somehow misplaced a significant amount of money. I wondered where in the world all that money I had worked all year earning had gone.
In Week 3 of Financial Peace University we learned that “if you don’t tell your money where to go and what to do, it will definitely master you the rest of your life.” And that is what a budget is for – to tell your money where to go instead of wondering where it went. Each month, Daniel and I now sit down and fill out our zero-based “Monthly Cash Flow Plan.” We take into consideration everything we have going on that month and give every dollar of our income a name. Doing this helps remove any money fights and guilt about spending. It shows us what areas we might be overspending in. And most importantly, it gives us a sense of power and control over our money.
3. Everything has an opportunity cost.
This is something my husband would always remind me of even before the class, but it never quite clicked until week 3 of Financial Peace University. Everything has an opportunity cost, meaning that the money that I spend on something is money that could have gone towards something else. Daniel and I could spend $5,000 on a new bedroom set, or we could invest it into a Roth IRA where it will grow over time (tax free!) Therefore, before making any significant purchases (which Dave Ramsey defines as anything over $300), we ask ourselves: “Is there something else we should be doing with this money or will later wish we had done instead?” Dave Ramsey also suggests waiting overnight to make a purchase to discourage any impulsive buys.
4. Know your WHY.
Budgeting is not easy, and repeatedly postponing gratification until you reach your goal is a major sacrifice. So why do it? Why not just buy that designer bag or shiny new car? These decisions are not easy, and our culture tends to lean towards the instant gratification that comes with buying whatever we want. But to be successful with your finances, you must have a goal. You must have a WHY.
For me and Daniel, it’s a house – a house to call our own, a house to raise our children in, a house that’s not going to take us 30 years to pay for. Your “why” could be anything – a trip to Hawaii or helping your children through college. Your “why” is what makes all your sacrifices worth it. As Dave says it, “Live like no one else so later you can live and give like no one else.”
5. We need to give freely in order to truly have financial peace.
This is the last step of Dave’s 7 Baby Steps to Financial Freedom. Before taking this class, I had a really hard time with tithing. I clammed up at the very idea of giving 10% of my gross income. Daniel and I always talked about how we needed to start tithing, but month after month it didn’t happen. But during week 9 of Financial Peace University, Dave talks about how we are asset managers for God, so we aren’t actually giving our own money away. We should be giving as a reminder of ownership as well as a part of worship.
So Daniel and I finally started tithing, and it almost felt like a weight was lifted off my heart once we gave that first check. I felt joy at this small act of worship, something totally unexpected at the prospect of giving away a chunk of my paycheck.
So, is Financial Peace right for you?
These are just a few of the many important lessons I took away from the class. No matter what stage you are at in life, I would highly recommend taking Dave Ramsey’s Financial Peace University. Daniel and I got so much out of it. You can find more information on the class here.