I’m ditching my debt.
I signed up for a debt management course called Financial Peace University. I realize the irony in spending a hundred dollars to be told how to get out of debt, but I have a personal guarantee from a friend who recommended the program that it would be the best hundred I ever spent and that if I didn’t get any benefit she would personally refund my money. Sounds good to me. Plus, I can take the class as many times as I want for the rest of my life.
My mom and friends have expressed skepticism, saying that they’re sure I can just find this information online and do it myself. Well yeah. Obviously I know things about budgeting and debt. I’m staying afloat. The problem is that I have no one watching me and keeping me accountable, and that’s something I personally need when it comes to money. I need a buddy. This class is going to help me.
The local class starts September 16 but I am not wasting any time trying to get my finances under control. I crunched some numbers and found that my biggest pitfall – no surprise – is food purchases. I spend entirely too much on groceries and I eat out more than I can really afford to do so. I know that the program uses a cash system, using cash instead of cards because people spend less when they have to buy with cash! So, to start September off on this idea of using cash instead of cards, I will be taking $150 CASH out of the bank for two weeks in the end of August, to give me the entirety of September’s grocery budget. My other biggest pitfall is not planning my money carefully. All of my bills come due in the first 15 days of the month. Naturally, those first two weeks are pretty tight. When low on cash, I’ll transfer money out of savings (bad!) and then forget to put it back in (worse!), enabling me to spend more money LATER on crap I don’t need (Chipotle!). So my savings is super low and disappoints me every time I look at my account balance. NO MORE.
I’m paying future-me NOW (like it’s a bill that MUST be paid) so she can buy some groceries LATER. I am very optimistic about this system. I think the cash will help a lot. In college, I budgeted my cash using envelopes, and I was able to save up $1200 in a short amount of time. Working 8 hours per week. I can totally rock this!
My grocery budget is $300 a month, which is more than average but we all know I am very persnickety when it comes to food. I have allotted $100 for meat and eggs (assuming 8 dozen eggs, 2 steaks, 2 pounds of ground beef, 3 pounds of bacon, and two whole chickens). Another $100 for fruit and vegetables. The third $100 for nuts, fats, grains, and “other” or overflow spending (like if I want to get salmon, which isn’t in the standard meat budget). My goal is to spend not a penny over $300 for the month’s groceries ($75-80 per week). My hope is to spend around only $200 (about $50 a week), by using coupons and strategic meal planning. (And probably buying less meat than that, I just estimated big). I will be paying close attention to the grocery budget for September to see what I can realistically budget. I know that $300 is a very liberal budget for a single person (with a cat). It should also be noted that the grocery budget includes cat food, cat litter, and non-food things like toilet paper.
I also figured that if I do six hours per week freelancing and apply that income to debt repayment, I can afford to pay off my smallest student loan (which is loan B, if you’ve been following along since I paid off the first smallest loan in my “snowball” plan) in ONE YEAR. One year! Not four! ONE!
The average family participating in Financial Peace University pays off $5,300 in debt and saves $2,700…
in the first ninety days of the program.
Being single and not a “family” I am sure those numbers will be different for me, but I am very optimistic about this program’s ability to help me wade through the chaos of debt management.
I’ll be updating weekly about the classes once they start. I hope you’re ready to learn a lot about money. I know I am, and I hope to impart wisdom to my readers experiencing the same things!
Have you ever used FPU, read Dave Ramsey’s books, or done another debt program? Tell me all about it, I want to know everything!
Caitlin Liz Fisher 
I did FPU a few years back and loved it!
I’ve never had much debt anyway–no student loans due to scholarships and working almost full-time while in school, no car payment or high insurance due to driving something old with only liability coverage, no real credit card debt other than maybe a couple hundred bucks. I did have a loan I had taken out to have a breast reduction (because my insurance wouldn’t cover it–which is bogus IMO) for about $7,000 and a $700 Best Buy credit card debt from a camera I needed to purchase to help me get through art school at FSU (go ‘noles!).
When I started taking the class, I think I owed around $4,000-$5,000 on the surgery loan and probably $400 on the camera. Not much debt, but I still hated it. I took the class with my roommate at the time, who was over $30,000 in debt, I believe (and if I’m correct, that WASN’T including what she owed on her house). I know we both had success with the program, and Dave made it fun to go every week.
It only took me about a year or so to pay off everything, which was great considering I was single and not making very much money at the time. This was all before my minimalism days, but the argument could be made that this change in perspective over finances was what started my move towards living with less.
I learned to budget, STICK to the budget (also important–haha!), and felt OK with going without things to help me arrive at my final goal. It felt awesome to be able to make payments 3 times the size of what I had been making before. I could see the number on my balance shrinking rapidly.
I can’t remember if I actually did the emergency fund first or not (I THINK I did, but for me it would have only been $500), because I knew that if I happened to have some sort of emergency, I could borrow some cash from my parents to tie me over until payday. I know that most people don’t have this safety net there to catch them, so it’s definitely smart to have an emergency fund that you DO NOT TOUCH unless it is truly an emergency.
Anyway, I’ve rambled enough. Just wanted to say ‘good luck!’ and that I think you’ll really enjoy the program. I know it really helped me a lot! 🙂
Thanks for your glowing review!! I have heard nothing but good things about this program. So glad you were able to get out of your debt 🙂
I took FPU several years ago and really enjoyed it. The videos are very engaging and I looked forward to going to class each week. I was able to pay off my last $17k of student loan debt in 17 months, during which time my husband was unemployed, and then underemployed, so we were living off 1.5 incomes.
Once you make your budget and start tossing every spare dollar toward your debt, you’ll find that you quickly gain momentum.
What helps me most is keeping a detailed budget spreadsheet and tracking every penny we spend. I did this before I ever took FPU. It really opens your eyes to where your money is going and gives you a tool to help you decide if the way you’re spending really lines up with your values and priorities.
If possible, it’s also HUGELY helpful to automate your finances wherever you can. We just recently set up automatic bill pay. We also automate our savings so that a set amount transfers from our checking to savings each month. Once you have systems in place, you just sit back and let them work for you.
I love online bill pay! 🙂 I also have a scheduled transfer for savings each week, I save 10% of my gross income. Does Dave recommend saving more?
Thanks for your comments 🙂
It’s been a long time since I took the course, so I don’t remember if there was a percentage he recommended saving. I should probably listen to the CDs again to get a refresher.
He does recommend eventually building up an emergency fund of six to 12 months of living expenses. That’s my next big goal.
I really appreciate that he thinks you should pay off debt before you start saving the big emergency fund. My mom is constantly telling me to invest in an IRA and put together a ton of savings… but it’s so overwhelming! Most of my money goes to bills and debt right now. When I’m not paying off debt, I will be able to put so much into savings, it’ll be great.
This sounds like a good program. I look forward to your updates. I am in desperate need to take control of my finances. All the best.
I’ll be updating weekly with what I learn, so hopefully you can get some benefit and restructure your money too! 🙂 good luck!
Good for you! I totally get the need for accountability and motivation, and I think it’s really mature and wise to admit to yourself that, yes, I will spend money on this even though it’s likely I could find most of the information online, but I probably wouldn’t be as/very efficient on my own at this point. Imagine if everyone spent 100 dollars on a personal finance course before deciding whether or not to get into consumer debt?! Those 100 dollars could have ended up saving people thousands! I completely support you allowing for quality food in your grocey budget aswell – I think that’s so important. Even considering only finances – if our health fails because of a poor diet – that will be a lot more expensive in the end.
So true! I’d rather buy the better food than pay for medical care later. Thanks for reading!!
Really interesting to think about what would happen if everyone took a course like this before going into debt. I could kick myself over my school loans and buying a car I couldn’t afford!! Kiiiicccck myself. But when you know better, you do better. I hope 🙂
I am clearly catching up on some reading here if you can’t tell from all my comments haha. It’s so cool you’ll get to go to a local class with real people! Yes you can research online, but it’s so much better to have something keeping you accountable. Also, 8 dozen eggs? That seems a bit high? Or do you eat eggs a lot?
I eat eggs a lot, and sometimes use them in baking so I go through them. So far, 2 dozen has lasted me two weeks, so I won’t need the whole 8 dozen this month. I just wanted to aim high! As it is, I was halfway through grocery money in a week. :-\ I have been eating the same soup all week for lunch and most dinners! I have no problem eating the same thing all week, but I know a lot of people need more variety. I will have to be better about the grocery spending in coming months. The first month’s budget never goes perfectly anyway, it’s a learning curve 🙂
And I love that you’re playing catch up! 😀
Yes give yourself some relief in the first month for sure, it’s tough to adjust! And that makes sense, we usually go through a lot of eggs here as well (I don’t really like meat and it’s CHEAPER!) You’ll figure out the grocery budget. Eating vegetarian meals can really help!
This week has been stuffed pepper soup. Some ground beef (on sale!), green peppers (free!), and tomatoes (4.49 per container, meh). But it fed me literally all week. If I got 8 meals out of $20 of food, that’s doing great at $2.50 per meal. This weekend I will be making a chicken and vegetable soup and doing the same thing next week!
That’s amazing! And sounds yummy!! Soup is good and now that it’s turning into fall (sigh) soups are the BEST!
Yessss I love soup weather. I’m gonna save on groceries. AND electricity.