Financial Peace University (FPU) Class #1! Super Saving.

As you all can tell from my previous post, I’m pretty excited on starting Dave Ramsey’s Financial Peace University. Here’s a guy who’s developed a proven plan to help people get out of debt, build savings, save successfully for retirement and more. So I thought doing a post on what we experienced on Financial Peace University Class 1 would help any readers who are wondering what it’s all about.

I’ve been listening to Dave Ramsey’s podcasts for about nine months or so now. Therefore I felt like I already have a pretty good idea of Dave’s “Baby Steps” – 7 steps to put you on the path toward financial peace. The idea is that if your efforts are diluted, you’ll not really accomplish anything and just continue making circles around your money goals, but not really meeting them. For instance, if you’re trying to pay off debt, save for emergencies, save for retirement, plan for a big purchase, paying for car repairs/back to school shopping/a new couch, all at the same time, you won’t really gain a lot of traction doing all of those at once. Focus on one financial goal at a time, pour all of your extra residual income or savings at that one goal, and begin to feel a sense of accomplishment.

The above strategy makes perfect sense for me, still, I felt that by attending the class, receiving the proprietary information, and doing it with my husband by my side, we’d be sure to learn something different that’s not taught on the podcasts. Otherwise, why wouldn’t all the information be free?

Our first class, we arrived to a couple of minutes late. It’s held at a (large) local church in our town, and there’s a children’s nursery with (free!) childcare available, so that parents of little ones don’t have a reason not to attend the class when there’s available childcare. No babysitter, no problem. Our son was understandably a little apprehensive being in a new place with new people, but after a few minutes, eased into the room and began playing with some toys. Hubby and I hustled down the hallway after receiving directions, and entered the classroom as a video was playing. We quietly took some seats in the rear of the room and I realized the video was a Dave Ramsey seminar of some sort. I thought, great, this is a good way to ease us in, with some famous Dave antics and jokes, and then we’d begin the real instruction taught by the coordinator herself. That’s sort of what happened, except that Dave’s video was about 50 minutes worth of our hour and a half class time. I was pretty surprised by this. Yes I of course had some take-aways from the video. My husband and I both learned a few things and clearly understood what our focus was for the week (yes, there’s homework involved in FPU. If you want to sort out your finances and meet some financial goals of your own, you have to work on your own things individually in your own time).

After the video ended, the FPU coordinator asked us to move our chairs so that we were forming a circle. We had a group discussion around three short related topics/questions, and then she reiterated our homework for the week, and that was that.

It went by really fast. Almost a little too fast. I was pretty surprised by how much of the class was video instead of actual, tangible classroom group work.

So for our first week, the assignment/teachings are pretty simple. It introduces Baby Step #1 – which is to save a baby emergency fund. This baby emergency fund is to be in the amount of $1,000.00. Why do we need an emergency fund? Well, we all know that life happens, people lose jobs, there are medical emergencies, a plumbing problem. You name it and it’s bound to happen! This small amount of money set aside for nothing but emergencies is a little insurance on the things that life throws our way. It’s designed to help you sleep a little more comfortable at night knowing that if something happened, you have some funds to take care of it. This is not a new couch fund. It’s not for saving up for spring break vacations, and it’s not for investing either. It’s simply to sit in a savings account, earning next to no interest, but there in case you need it.

The remainder of the lesson surrounds why we should save, how your money can grow if you conscientiously save it, intentionally and with a purpose. It gives examples of saving regularly and frequently in order to set yourself up properly later in life. Compound interest is touched on, but we didn’t go over this in too much detail. The main idea of the whole lesson is that if you want to change things in your financial world and future, you have to change a little bit of your thinking. That means stop living paycheck to paycheck, be intentional with your savings, save up for large purchases instead of financing them, and start a budget to figure out where your money goes.

We definitely had some good take-aways from class #1 and our homework this week was eye opening. It began a conversation in which we’ll continue discussing our finances regularly and jointly. Stay tuned for what class#2 has in store for us!