If you read my post about the new Financial Peace University, you know that we are starting to take on our debt this year in the Savings in Seconds budget.  Yes, we like to save money, but we also went through several years where we SPENT way more than we earned.   I justified spending money by saying that I was saving $x ….. not exactly saving if I’m paying for it with a credit card that won’t get paid off right away.  Don’t get me wrong, I always intended to pay it off, but something else would come up and the credit debt just built up over time.  Irresponsible but honest was my mentality for a long, long time and I am still paying for that mistake.  Literally.  Using coupons and finding deals only goes so far.   We tried the debt snowball in the past but never employed the whole system.  We always backslide and end up with more, not less, debt.  Our budget has become like a fad diet and in the end we always gain more than we lost.   It’s our behavior that needs to be corrected in our budget.  So Financial Peace University is going to help our family get there. 

We started Week 1 last night, which is basically an overview of why saving is so important.  If you’re unfamiliar with the program, you can look at the 9-week lesson plan here.  Ramsey has a unique approach to building wealth.  His philosophy is that you should get to the point that you can GIVE, SAVE, then PAY BILLS.  I’ve always done things backward, according to this plan…..and somehow there wasn’t always enough to save and give by the end of the budget.  I’m excited to learn how to get my upside-down system right again.  Financial Peace University is  based on Christian principles but can be applied by anyone.  Even if you’re not a church-goer, you still have money to deal with, right?  So don’t be put off by the fact that it’s based on biblical ideas.

Our homework this week is to create a $1000 cash “emergency fund.”  This is a step I’ve done before many times and it truly saved us from many scrapes.   Unexpectedly we had out-of-town guests at Thanksgiving and had to use our spare cash…..so I do need to get it restocked.  I have an idea of how I’m going to get that $1000 fast, I’ll share later this week.

My take-away message from Week 1 was that I want a different life for my kids.  I want them to start life with financial freedom, not seeking it in their almost-40’s like me.  My parents and my husband’s parents still live paycheck to paycheck.  I truly didn’t know there was another way when I was a child.   Ramsey used a chart to explain how saving early can result in an explosion of wealth.  His scenario involved a 19 year old boy who saved a total of $16,000 ($2,000 per year) starting when he was 19 years old.  He stopped saving after 8 years and didn’t withdraw the money. By the time he was 65, the savings had exploded into over $2 million thanks to compound interest.   His brother saved $2,000 per year also, but started when he was 27 years old and saved a total of $78,000.  His total was about $1.5 million by the time he was 65 years old, but he had invested MUCH more money to get much LESS return.  I was stunned by this scenario.  When I was a teenager, I had a job and used it to pay for the car I thought I needed.  I never saved a penny; instead, I spent everything I earned on going to movies with my friends and eating at Taco Bell in college.  Oh, how I wish I had known what a different lifestyle I could make for myself by just saving money!!   My best friend Christie worked all through high school and saved every penny she earned.  I used to tease her about it.   What a dope I was!  If I could tell my teenage self about this savings plan, I could have saved my husband and myself all this heartache and late nights over trying to make ends meet.   I can’t go back in time, and I won’t live with a life of regret, so moving forward I’m determined to teach my children better savings habits.  I want them to understand the importance of being a good steward and having contentment in financial peace.  I want them to have a better life.

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