Finding Financial Peace
by Roger Bruner
Using “church” and “money” in the same sentence sometimes draws the accusation that “all they do at that church is ask for money.” A sometimes-valid charge.
But not at Winn’s Baptist Church. Pastor Jeff Brauer is a strong believer in getting out of debt and staying there. He believes debt-free people will stand a better chance of weathering possible future financial disasters.
Regardless of future benefits, people who have their finances under control experience fewer day-to-day headaches now. And they enjoy having money left after the bills are paid, even after systematically saving some of it and perhaps even giving some to church or charity.
Pastor Jeff introduced Winn’s to Dave Ramsey’s “Financial Peace University” as a ten-week video and discussion seminar. Although each participating family was required to pay $100 upfront for the materials—a hardcover book, CDs of the video sessions, and a workbook that proved essential—the church refunded the cost to each family or individual that attended nine of the ten sessions.
Was this course something that would help us?
Our situation was anything but desperate. Not only did we have a working budget, we didn’t have any credit card debt. (We had two cards, but we were careful about what we charged and always paid the balance, not the minimum payment.) Our home was paid for. And we had at least a little money left at the end of the month.
Nonetheless, three loans hung over our heads—two car payments and the tuition loan for one of Kathleen’s daughters. And even though we had a $5000 emergency fund, we weren’t adding to it.
So we decided to take a chance.
Discipline may sound like a nasty word, but it’s probably the most important requirement for reducing debt. It’s impossible to get out of debt without cutting unnecessary spending. It’s amazing how many things most people—us included—can convince themselves they need.
So we soon realized that—if we had been better stewards of our money—we wouldn’t have bought my new car until Kathleen’s was paid for. It was a want, not a need.
We decided to snowball, as Dave Ramsey refers to it. We listed our debts in ascending order by the amount owed—Kathleen’s car, my car, and Katrina’s college loan. Then we applied some of our unbudgeted money toward paying Kathleen’s car loan off early while continuing to make normal payments on my car and the tuition loan.
Then we added the amount we had used to pay off her car to the normal payment on my car—we were still making normal tuition loan payments—and it’s amazing how quickly my still-almost-new car was totally paid for.
That just left the college loan. In case you haven’t guessed by now, we added the total amount we’d been using for my car payment to the regular tuition loan payment.
But we wanted to get that debt out of the way even faster. So we took advantage of another of Dave’s ideas. We checked our life insurance situation and decided we really didn’t need a whole-life policy. So we cashed it in, paid off the student loan, and bought a much less expensive term policy based on our age and the amount of money we expected to need when the time came.
That left us totally debt-free.
As great as that was, however, we still didn’t have an emergency fund of at least $15,000 (that’s the minimum amount we decided we needed, not a Dave-figure). So we started adding the amount we’d been paying out for the tuition loan to the $5000 we already had in savings. Easy enough.
But Dave Ramsey also strongly suggested that people our age—I’m sixty-nine now, eleven years older than Kathleen—look into long-term care (LTC) insurance. That’s not cheap, and he advised people over sixty to do it only if they could afford it. We didn’t feel we could at that moment.
Now that we’ve almost reached our emergency fund goal, we can handle the LTC. We’ll cut the amount we save by the cost of the LTC—we no longer plan to stop at $15,000—but continue to save the balance.
That’s our story, and we feel blessed to be debt-free, have more money left at the end of the month, and be growing our emergency fund. Not to mention being able to contribute to special needs we used to have to apologetically ignore.
Self-discipline, snowballing, and building an emergency fund are just a few of Dave Ramsey’s ideas. Here are a few of the others:
- Put cash for each line item in your “cash flow plan” (euphemism for “budget”) in a separate envelope and stop spending when you run out
- Food, shelter, basic clothing, transportation, and utilities must always come first
- Cut up your credit cards
- Avoid overdrafts
- Save for big-ticket items and try to negotiate a lower price by offering to pay cash
- A quality used car is often more economical than a new car
- Don’t feel guilty for dipping into your emergency fund for a true emergency; that’s what it’s there for
- Your credit rating is an indicator of debt, not of wealth; learn to ignore it
Dave Ramsey’s “Financial Peace University” is much more complex than I could possibly show you in a brief article, but you can see how following just a few of his basic ideas did wonders in zeroing our debt and allowing us to build a decent emergency fund.
Roger Bruner worked as a teacher, job counselor, and programmer analyst before retiring to pursue his dream of writing Christian fiction full-time. His most recent novel, The Devil and Pastor Gus, came out last November. A guitarist and songwriter, he sings in the church choir, plays bass on the praise team, and sings and plays guitar at a weekly nursing home ministry.
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