Wow, our last FPU class. For some reason, ending this series of classes was very emotional for me. I found myself sad that the experience was over. During the 9 weeks, we learned so many new things, things I wished we’d learned years ago. The information provided was very valuable and increased the communication on finances between me and my husband. We now view budgeting in an entirely different light, and have begun using cash for more items. Before taking this class, it was a rare day to see either of us with cash in our pockets. Why carry cash when you can use your debit card for nearly any instance? But Dave Ramsey is right – paying cash for some things really opens your eyes to how you feel about that money (and how quickly it can escape if you if you aren’t careful).
This class made me feel some hope. Hope that we can payoff our student loans aggressively. Hope that we can successfully save for retirement and save for our son to go to college. Hope that we will both be protected in the event of one of us being injured or disabled or even passing away. The other one of us will be okay, financially I mean. It’s tough to think about and plan for our own lives ending. But Dave explains that it’s a way to say “I love you” to your family, by having certain things in order so that the other person is not left high and dry, without an idea of where to start when things go wrong, and emotions are running high.
My only regret is that we weren’t taught some of these fundamentals about personal finance years ago. I can tell you right now that my husband and I would have done a few things very differently if we had learned this stuff when we were 18, or even 25.
This final FPU class was about what to do with the wealth when you get there. Baby Step 7: Build Wealth and Give. If you’ve continued to follow the steps that Dave & Co. lay out, you’ve saved a starter emergency fund, then paid off all of your debt. Then you went back and saved a larger emergency fund, and began investing in retirement. Because you’re saving for retirement from that point forward until you stop working, you’re always saving, and you’re always in baby step 4, technically. Once you have retirement underway and worked into your budget, you can also work towards saving for your kid’s college fund(s). Since your retirement savings should always stay at 15% until you reach the financial goals of some of the later baby steps, whatever money is leftover in your budget after saving the 15% for retirement can be budgeted to save for your kid’s college funds. Once you have college funded or at least an annual plan and budget of how much to save for college until your child is 18, then you can begin throwing extra money at the mortgage. So you’re saving or paying towards three things simultaneously in baby steps 4, 5, and 6. If you have no kids, well then baby step 5 doesn’t apply to you. If you don’t have a mortgage, then of course that doesn’t apply either. But since your retirement savings is only 15% of your income (yes, I said only, you still have the other 85% to work with, although 15% of your income just for retirement savings feels like a lot), and you have no more debt and are only paying things like insurance and utilities and your mortgage, you should have quite a bit of residual income leftover to fund the college account(s) and throw some money at the mortgage balance too.
So what do you do when that’s all over? Your kid’s college account is fully funded or they are already off at school. Then, one day you make that very last payment on your mortgage, and you’re then completely, fully, totally debt free. You don’t owe a single cent to anyone except your monthly utility or insurance providers. So now you have a lot of money to work with, and the question is, what to do now?
If you’ve been following Dave’s plan, you’ve had serious financial goals for years. Most people don’t just skip ahead to baby step 7 in a short amount of time. This is years of work, sacrificing, budgeting, and making the decision to say NO to a lot of things, to reach those financial goals. So imagine how that would feel to have reached all of them? Those years of hard work and planning are behind you, and suddenly, what are you working for financially? What’s your next money goal?
Dave believes that your final, everlasting money goal is to create a legacy. He has books and teaches a separate class on what he terms “The Legacy Journey”. The idea is that now that you’ve reached all of your financial goals to secure your future, what comes next is securing the future of others. Of course you’ll probably want to leave an inheritance for your children, and perhaps even their children. But the rest is about leaving a legacy for others, of how you’ll be known, donating to causes you are passionate about. Of course since Dave is a Christian and the teachings are as well, he believes in tithing to your local church, a tithe being 10% of your income. But think about all of the other causes that one can donate to? To support the homeless, widowed, underprivileged? In our class, children of incarcerated people were mentioned, and that’s a whole group I hadn’t even thought of. The idea is to think of how your wealth and generosity at that point can bless others, and make their lives, outlooks, and futures brighter and better as well. And sometimes, that doesn’t even involve a far-away mission, although some people might choose to do that too. Sometimes, the causes that also could use some help are right here at home.
So of course, Baby Step 7 is also about enjoyment. You’ve worked hard, maybe you’re already retired by the time you reach that baby step. It’s time to travel, find new hobbies, make sure that you enjoy life. But also, find a way to use that wealth, generosity, and spirit to bless others.
I’ll admit that I’m a little sad about this class ending, about going and learning about something that interests me, doing it with my husband by my side, and also in a group setting with people in similar circumstances as us. There aren’t any other Dave classes taught in our area, but I’m going to keep checking to see if I find one that we can take in the future. In the meantime, we’ll also keep using the skills we earned in FPU to get ahead of our money, budget, pay cash for those certain items, and make some progress with our financial goals. This is going to be a great journey. Yes a difficult and long road, but that is reality, and I know we can do it.
In short, I clearly recommend the FPU class to anyone who thinks they need a little encouragement, help, or guidance in the personal finance area. I guarantee that you’ll learn SOMETHING, but my guess is that you’ll learn many things. This class has the ability to help you organize your finances, learn what’s important to a well-rounded financial plan, create goals with your money, understand how your spouse operates with regards to finances, and gives you a new way of looking at things that you wouldn’t have otherwise. For the approximate $90 that the class is, figure that’s $10 bucks a week, and the $90 includes all of your materials too. You can’t even go get a fast food dinner for 2 on $10 bucks a week! And this class is much better for you, it feeds your soul and wallet instead of your tummy, and without heartburn to boot 🙂
This post completes my series on the experience of attending Financial Peace University, but stay tuned for more posts in the future as my husband and I continue on the path towards debt freedom using the debt snowball tool!