Here we are again with Dave Ramsey’s Financial Peace University. This week we are reviewing week 2. If you missed it last week you can go back and read the review of week one.
The Class
This week at Financial Peace University was called “relating to money”. I really liked this lesson a lot. Dave talked about getting on the same page with your spouse financially. I was taking notes so that I could write this review and I have a page and a half of scribbles. One note I wrote says “If you agree on spending you agree on values. You will feel like a team, which means a happy marriage. You must work together.” I wanted to stand up and yell in the class “YES!! Are you guys listening to this!! Write that down!” But I didn’t of course.
That’s the jist of this lesson. You must work together. You must work out a budget that works for both of you. You both have to be on board 100%. The payoffs are more than financial. The payoffs and consequences are HUGE. Your marriage is on the line. Your life is on the line. How can you NOT do it??
Dave talked about the Nerds and the Free Spirits. Nerds like making the budget and Free Spirits feel suffocated by it. He talked about having Budget Committee Meetings where you sit down and work the budget out together. He said the Nerd in the family should work out the budget and then present it to the Free Spirit. The Free Spirit can then give their input and make changes.
He also talked about how to teach the kids about money. He talked about not giving the kids an allowance but instead having paid chores they can do. I agree with this point and this is how we do it in our house too. They had a whole section at the end of the video where his kids talked about their upbringing which was very touching.
The Sharing
As much as I was looking forward to the video I even more pleased with the sharing the other people in the class did. Everyone felt a bit more comfortable this week and it was nice to hear their stories. We went around the room and each said what we do for a living and what we were wanting to get out of the class.
There were two couples who I would call typical Dave Ramsey students. This is who I expected to be at this class. They both just received big downgrades in income and are now faced with too much debt and too little income. I’m going to give these family code names so I can talk more about them. I’ll call them… The Pinks and The Blues. (Reservior Dog style code names… yup!)
One of the single ladies, we’ll call her Mrs. Brown, said she just moved here from Germany and wanted to learn about the “American” way of handling money. Which was funny to me because I don’t think Dave Ramsey teaches what would be considered “American Money Techniques”. But maybe she was getting overwhelmed with credit offers and needed a way to deal with it. If so, good for her!
One single lady’s, we’ll call her Mrs. White, parents just died and they had been handling her money for her. She was not especially young either. So I’m curious to know this story. But she came to the class to learn the skills that she should have learned a long time ago.
There was one couple who came in late so I didn’t get to hear their story, but they are very vocal so I’m sure I’ll get plenty of info on them as the class goes on. We’ll call them Mr. and Mrs. Orange.
Best of all, we’ve already had some success in the class. The Blues have already cut their grocery budget in half!! That’s awesome. The Pinks asked specifically what is a reasonable budget for a family of 5? She talked about her in-laws that in her eyes are too frugal. She’s nervous in order to be successful in this money management thing she is going to have to go to extreme frugality. So we talked A LOT about that. The idea being that you have to decide for yourself where you want to spend your money. That as you go through the process of cutting back you will find things that you can cut without any pain, and you will find things that you love and can’t cut. A successful budget isn’t the same for everyone. Your individual priorities will shine through, and that’s great!
I’m sad that I’m going to miss next week because I’ll be at the Financial Bloggers Conference. But it’s a sacrifice I’ll just have to make. I will watch the video of the class online, but I’ll miss out on all the sharing.
This was the most empowering part of this program. I’ve always budgeted, but this helped me really break things down. I’m the “nerd” : ). My husband had always supported my budgets, but wasn’t as sold out to the need to be totally debt free. After this course I had a true convert!! It’s been 17 months since we began this course and even with an International adoption and wedding for our oldest thrown into the budget, we are on course to pay off all, but our mortgage by the beginning of 2012. There is ALOT to be said for being in agreement and making it a true team effort.
You asked how much to spend for a family of five? Matt Wegner from FinancialExcellence.net says the best answer is about $150 per person per month. I am sure he will comment here shortly so I will let him link you up with a blogpost he wrote about it.
I can’t believe you are going to miss Week #3! It’s about “Cash Flow Planning”. But you have the audio lessons on CD and I am sure you packed them for your trip. Have a great time at FinCon11 ! I am so jealous!
I’m gonna hook her up Steve! 😀 Not only will she be able to watch it but she’ll be able to watch it over and over again as much as she likes to soak it all in. Haha! 😀
Too bad you’re not going to FinCon man! It would have been great to meet ya! Maybe next time? 🙂
You know, for the life of me I can’t find the blog post. It must have been a podcast where we answered a listener’s question. I know I did cover it in a Financial Literacy Month video. Anywho, I do usually recommend $150 per month per person in the household. It’s a good rule of thumb and it works for most families I’ve worked with.
I agree Matt. I know some who say $100 per person but that was basically before grocery prices skyrocketed. Personally my wife and I used $125 per person to figure out grocery expenses, but now, especially with rising food prices $150 is a good starting point. I don’t know how anyone can do it for $100. 😀 They’re pretty hardcore! 🙂
This lesson irritated me only in the fact that it is geared for *most* people taking the class, which are mostly couples. I am single parent (and intend on staying single), so learning about the budget committee meeting didn’t really apply, no matter how much I agree that I have an enlarged “security gland”!
At least he touched on singles, and I completely related to the story of the single mom and the rough day and the kids chanting “McDonalds! McDonalds!” in the back seat. (Was that this lesson or a later one? Oops!) I learned something every lesson, so it doesn’t matter if some of the material doesn’t apply. 🙂
I’m looking forward to your future posts about the class!
I can understand why you felt that way, Jerri. The lesson was definitely geared towards couples/ families. I noticed that in the last lesson also. In fact, I’ve heard that complaint about financial planning teachings in general, even outside of Dave Ramsey. I think it is harder to find fitting advice when you are in a different position than just married with children.
I understand Jerri, it is definitely much harder to do this stuff alone, but I think that’s precisely why most financial advice is geared towards families. When it comes to relationships the only thing you can really say to someone who is single is that accountability and having someone to help you with that is important. Outside of the relationship part of finance everything else is generally the same.
I think in some ways it’s more challenging by yourself but it has its advantages too. For instance someone who is single doesn’t have to worry about their spouse being on board and can get down to business much quicker without sabotage. 😀
On the other hand it also means one less income in some cases so I definitely feel for you. Hang in there and do like you said; take the advice and apply it to your situation when you can. Everything else may not apply to you but you’d be surprised at some of the things you are able to take something away from although it doesn’t apply to your specific situation.
Jerri, being an FPU grad, here is my take on this. It was more of a lesson to say what type of person are you. A nerd (holder of money) or a free spirit, a giver of money. To be both is hard for one person to learn to be. Its part of the team approach, since your by yourself, you need someone to balance you out. It does not have to be a relationship. I could be as simple as a coach, a brother, sister, father, mother or friend. My wife has several friends that I now get to be their bounce off person. They text and say we need to talk, I say come on over, and we sit down, and run the logic and emotions. I have insight that they don’t have from my experiences, and they have insight I don’t get.
Jerri I feel like you have been cut deep, I get that, but you still need someone you can trust to talk you off a ledge every now and again. And it goes both ways, I’m a free spirit, man I will buy a round at a bar, feed 20 people or give you a computer and not think a thing about it. My wife balances me, and we need each other. You need that too, so just find your opposite, in a for advice. Funny thing is I get to play the role of the nerd for most my wives friends. Thats kinda fun at times, and hard, but it helps me understand where my partner is coming from.