Dave Ramsey’s Financial Peace University Week 4

If you’re just tuning in, I’m taking the Dave Ramsey Financial Peace University classes and giving you a review of each class. If you missed a week you can catch up by clicking on the week you’re missing. Week 1 Week 2 Week 3

The Class

This week’s lesson was “Dumping Debt”. Which everyone says is the best lesson. Maybe it had been built up too much but I was actually a little disappointed and bored. (Don’t shoot!) I was expecting more of a motivational speech about getting rid of your debt, but instead it was “myth busting” of debt myths. Which maybe was boring for me because I’m already fully on board with debt free living. I don’t need my myths busted. There was some powerful stuff at the end with clips of people sharing how they are living debt free and how amazing it is. At the end Dave yells at the top of his lungs “I’M DEBT FREE!!!!” which pretty much made you want to leap out of your chair and yell “YEAH!”.

Like I said above, the presentation was mostly about debt myths. They were as follows:

  • If I loan money to a friend or relative, I will be helping them.
  • By c0-signing a loan, I am helping out a friend or relative.
  • Cash advance, rent to own, title pawning, and tote the note car loans are needed services for lower income people to get ahead.
  • Playing the lottery and other forms of gambling will make me rich.
  • Car payments are a way of life and you’ll always have one.
  • Leasing your car is what sophisticated financial people do.
  • You can get a good deal on a new car.
  • I’ll take out a 30 year mortgage and pay extra. I promise.
  • It is wise to take out an ARM or a balloon mortgage if “I know I’ll be moving.”
  • You need a credit card to rent a car or to make purchases online or by phone.
  • I pay my credit card off every month with no annual fee. I get brownie points, air miles, and a free hat.
  • I’ll make sure my teenager gets a credit card so he or she can learn to be responsible with money.
  • The home equity loan is good for consolidation and is a substitute for an emergency fund.
  • Debt consolidation saves interest and you get just one smaller payment.
  • Debt is a tool and should be used to create prosperity.

That’s a lot of myths! Some of those I think are obvious, even to people who aren’t crazy about being debt free.

The Sharing

We actually started the lesson with discussion about everyone’s budgets. Everyone was excited and the conversation was flowing. So much so that we got started late on the video and I ended up missing the very end. My husband and I had to leave to go relieve the babysitter. Hopefully next week we can hear about people’s debts. I’m interested in that part!

The Blues (the couple that cut their grocery budget in half two weeks ago) asked about how to account for non-monthly budget items, like car registration. So we talked about how to budget monthly for non-monthly items.

The Pinks (our other “traditional” Dave Ramsey class couple) asked about ways to make significant cuts to their budget. Mrs. Pink joked that the best way is to get rid of an expensive spouse. Mr. Pink asked if he should get rid of their rental properties which shows the level of debt we are dealing with here. I’m assuming it’s significant.

There was a new couple we’ll call them “The Red’s”. They talked about a financial counselor who told them to stop tithing. Which they felt was crazy so they stopped seeing him. I guess that is a personal decision. But we talked about how you can give back by donating time instead of money when things are tough. It’s something to think about.

Next week: Credit Sharks in Suits.

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9 Responses to “Dave Ramsey’s Financial Peace University Week 4”

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  1. Therm says:

    I agree, I was all built up to find out about week 4 too. All the myths are the myths from the TMM book…old school stuff. Still good stuff all and all.

  2. Brad Chaffee says:

    The myth busting is really for those who haven’t yet bought into the debt free lifestyle yet. I think that part is important but the part that makes this lesson the best is when he gets pumped up and starts pacing the stage leading up to the moment you mentioned where he screams at the top of his lungs “I’m Debt Free!”

    When I watched this video (and when it excited me the most) was when we were in debt which most people are who are watching it for the first time as well. I have seen this lesson (in the 3 times I have led FPU) be the catalyst for change for a lot of people so I still think it’s the best lesson for most people going through FPU. ๐Ÿ™‚

    With that said I think each lesson has value and takeaway that real people can use and apply to their lives, but when it’s all said and done it is a course about managing money. I do think Dave Ramsey does an excellent job at making finance as interesting as possible to people who probably have never thought about it for longer than 3 seconds before.

  3. Lynda says:

    What is interesting in these classes is what you are finding out, others reasons for being where they are. It’s valuable because we can learn skills or aquire tools for change we hadn’t really thought of before. There is the opportunity for celebrating with those who are like minded even with small achievements that move us along. It’s why people join all sorts of support groups. The one’s I found the most interesting were those who paid for the course, regularly showed up, but argued for their bad habits that created and kept them locked in their situations of debt.
    You found yourself realizing that they weren’t going to make it and wondered why they showed up at all. It’s as if they thought that just by investing time and money all their problems would magically disappear.
    I actually took this as more incentive to discover in myself what needed to change in order to not only reach my goal ( which I’m still aiming for and why I check into support systems like this) but to not get back into old habits that would lead me into the same place I started.

  4. I’d be interested in knowing what the answer was to Mr. Pink’s question about selling the rental properties. I assume Dave’s answer (if asked in person) would be to sell it until you get out of debt and can pay cash….? But what did the group think?

    • Ashley says:

      The leader (facilitator? presentor?) said that was something that would have to be looked into while taking their whole situation into account, but the overall feeling was yes, it’s probably likely that they would have to be sold.

      • Brad Chaffee says:

        I’ve heard Dave on the radio many times tell his listeners to sell rental properties if they have debt. I imagine in a climate like we are experiencing now that might be hard for some to swallow since they might be underwater on their mortgage due to the warp speed free-fall of housing market.

        His take seems to be that if you have debt you have no business owning rental properties but keep in mind he also doesn’t advocate going into business debt either which would likely be someones argument for not selling a “business” rental property. Being a landlord is a pretty big financial responsibility and having that responsibility while having debt is a recipe for disaster.

        Life doesn’t stop happening just because someone is a rental property investor. ๐Ÿ™‚

  5. Jerri Lyn says:

    I found this lesson useful not so much because I needed to learn the stuff, but because it gave me better ways of explaining to my friends why certain ways of thought are wrong. ESPECIALLY the air miles myth!

    • Brad Chaffee says:

      Great point Jerri Lyn! I liked this lesson for that reason as well. It’s good to hear why the beliefs we’ve grown up hearing from EVERYONE around us are no more than regurgitated lies. lies that banks were happy to put out there too. ๐Ÿ™‚ They sure are good at marketing and making you want their product. It makes you feels special and warm because you have something no one everyone else has, at least that’s what they wanted us to feel like. LOL

  6. I never believed that playing the lottery or any other form of gambling, for that matter, will make me rich. well, you may win at first, but once you get hooked on it, you will start losing your treasure… and maybe your insanity, too.

    Points… rewards.. air miles… I agree that they will not make us rich as well, but the savings will definitely help us a lot.

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