Our Debt Free Family

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Is Financial Peace University Worth the Money?

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financial peace university

My husband and I have been toying with the idea of starting Dave Ramsey’s Financial Peace University in the new year. Both of us are just tired of being in debt and have listened to Ramsey’s show quite a bit. While we are aware of the seven baby steps he suggests to help you get out of debt and on the road to financial freedom, we can’t help but think fully devoting ourselves to the FPU lessons and lifestyle change might help us even more.

This has driven us to start researching more into what FPU is, how much it costs, and whether or not it’ll be worth the investment for our family (and yours).

What is Financial Peace University?

If you haven’t already heard of it, Financial Peace University is a series of lessons put together by Dave Ramsey, Rachel Cruze, and Chris Hogan to help people budget, become debt-free, and financially independent. It includes a plethora of budgeting tools, livestream videos, and pre-recorded money lessons from experts.

FPU uses these tools and videos to help people navigate Dave Ramsey’s baby steps and has helped millions already. You may be thinking, “I’ve seen the baby steps online for free.” However, FPU provides additional resources and support to help you stay on track. So, how much does it cost and would it be worth the investment for your family?

How Much Does It Cost?

Financial Peace University costs $129 the first year. After that, it renews at $99 per year. If you’re on a tight budget, that may seem like a lot of money (I was a bit turned off by it at first). The results of the courses provided by FPU can’t be argued though. It has really helped a lot of people.

Included in the price are nine video lessons that you can watch at home or join a local group. You’ll also get access to EveryDollar Plus (a $99 value), Ramsey’s Debt Snowball Calculator, access to coaches for questions, livestreams from experts, as well as additional benefits and courses.

On top of that, there are different bundles for different situations. For instance, there is an FPU Marriage bundle we are considering that is $139 for the year. This includes some literature about how to manage the baby steps as a married couple. Other bundles include an EveryDollar Budgeting bundle, FPU + Total Money Makeover bundle, and an FPU + Everyday Millionaires bundle.

The Baby Steps

If that pricing seems a bit steep, Ramsey gives out his seven-step program essentially for free. You can find the baby steps on Dave Ramsey’s site without paying a penny. Here they are…

  1. Save $1,000 for your emergency fund.
  2. Pay off all of your debt (outside of your mortgage) with the debt snowball method.
  3. Save three to six months’ worth of expenses to fully fund your emergency fund.
  4. Invest 15 percent of your income into retirement.
  5. Put away money for your child’s college fund (if you have children).
  6. Pay off your home early.
  7. Build wealth through investments and give to charity.

These steps have helped more than 5 million people get out of debt and better manage their money. The $129 price tag on FPU can make some people a bit uneasy. If you’d prefer to start out with something smaller, Ramsey also offers a Baby Steps bundle on the site. The bundle includes the following:

  • A hardcover of Ramsey’s book The Total Money Makeover
  • Chris Hogan’s Retire Inspired Audiobook
  • Rachel Cruze’s Love Your Life, Not Theirs Audiobook
  • The EveryDollar Guide to Budgeting – a PDF ebook
  • A starter envelope system
  • 1 free month of the EveryDollar Plus budgeting app ($10 value)

However, it isn’t the entire program. With Financial Peace University, you get additional resources and help to reach your money goals. But it is worth the money?

Is It Worth the Money?

Whether FPU is worth it or not for your family really depends on what keeps you motivated. Financial Peace University helps guide you through the seven baby steps through video lessons and pep talks. As mentioned above, you also get access to other tools to help better manage your money. But you have to take it seriously for it to really work.

For us, the tools, access to coaching, and regular live streams (as well as Facebook support groups) may be worth the money. We are motivated by engaging with others around our goals and could use new tools to help center our focus on managing our money. That being said, $129 is a fairly small investment if it works for us and helps us get out of debt and start living our lives.

Do you think it would be worth it for you?

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What is the Best Debt Advice?

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debt advice

People are pretty much always willing to offer up advice, even when you haven’t asked for it. Throughout my debt freedom journey, I’ve received advice from a number of individuals, but how do you decipher what advice is good and what you should let go “in one ear and out the other?” Here’s how to determine if the debt advice you’re receiving is something to consider or not.

What is the Best Debt Advice?

So, there’s no best advice when it comes to paying off debt. Everyone’s finances are different, therefore, their approach will need to be different. However, there are certain pieces of debt advice that have consistently helped people.

  1. Make a budget and stick to it. Believe it or not, budgeting for repaying your debt makes it easier to stay on track. Not to mention, having a solid budget will keep you from overspending, which is what causes most people to go into debt in the first place.
  2. Avoid taking on any new/additional debt. If you have become accustomed to swiping your credit card for things, this can be difficult. Consider hiding it or even cutting it up. Additionally, you shouldn’t take out any loans to consolidate your debt. It will almost always prevent you from making significant progress towards your goal.
  3. Set realistic goals for yourself. Many people fail at making realistic goals when it comes to their finances. If you stretch yourself too thin, you’ll cave under stress. Be sure to budget money for fun things and set realistic time frames for debt and savings goals based on that.
  4. Contact your lenders if you’re having trouble paying. We’ve all had issues making payments at some point. The best thing you can do if you’re struggling to repay a lender is to give them a call. Most will work with you on repayment and some will even give you a break on late fees, etc.
  5. If you can’t pay cash, you can’t afford it. Cash is king. If you don’t have the money in the bank, or you haven’t budgeted for the purchase, you can’t afford it. It’s that simple.

While these five pieces of debt advice are solid, not everything everyone tells you is going to help you pay off your debt. Here are a few things to consider.

How to Determine What Advice is Good

Be wary of anyone telling you there’s a “cure-all” to your debt problem. No single approach is good for everyone. You’ll need to cater your debt freedom journey to your personal needs. It may be worth looking into certain approaches if what you are doing isn’t working, but what works for someone else won’t always necessarily work for you.

Additionally, don’t listen to anyone telling you that taking out more debt to consolidate or further your progress is a good idea. You will only be hindering your ultimate goal of being debt-free. Instead, consider ways you can cut spending or earn more to help pay off your debts.

The Best Piece of Advice I’ve Ever Received

Since starting my own debt-free journey, I’ve received all kinds of advice from several different people. Some individuals have suggested consolidation loans, others have said to use all of my savings to pay off my debt, and one person even told me that I didn’t have to pay certain debts off (seriously).

The best piece of debt advice I’ve ever received, however, was this: be patient with yourself. There is no roadmap to debt freedom. The journey looks different for everyone and we all have to feel our way through things. For us, we’ve had to learn to live on one income, hide the credit cards, and focus on living a cash-only lifestyle. That may not work for everyone, especially for families with children.

It is easy to get frustrated when you aren’t seeing progress and it is even easier to simply give up. Finding patience for your journey and yourself is key to becoming debt-free.

Readers, what is the best piece of debt advice you’ve ever received? 

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Debt Counseling Pros and Cons

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debt counseling pros and cons

Not everyone can tackle debt without professional help. Sometimes, finding a counselor is the best option. However, it certainly isn’t for everyone. Here are a few debt counseling pros and cons to consider before you make a decision.

Debt Counseling Pros and Cons

When it comes to debt counseling, there are a number of things to consider. Most importantly, is counseling the right option for you?

Cons to Consider

Before delving into the ways debt counseling can be beneficial, let’s take a look at why debt counseling may not be the best option for you.

First, credit counseling services cannot manage all of your debts. For the most part, they can only help handle unsecured debts.

Not to mention, enrolling in debt counseling services can actually hurt your credit score. Being enrolled can also hinder your score from rising for some time, despite your best efforts.

A debt counseling program typically lasts five years. You cannot miss a payment within that five-year period because you may slip into default. This will mean your debt will remain on your credit report, despite any progress made paying.

These services aren’t free either. In many cases, there is a monthly fee to manage your debt. If you pay $50 a month for five years, you’ll wind up paying $3,000 in monthly fees alone. Most people who enroll in debt repayment programs also don’t wind up repaying all of their debt.

Lastly, most credit and debt counseling services have quotas they must meet every month. There will always be a conflict of interest between what’s best for the company and what is best for the client. In some cases, counselors will enroll someone in the debt repayment program when bankruptcy may have been a better choice for the consumer.

Pros of Debt Counseling

There are far fewer pros to debt counseling than cons, unfortunately. One plus is that if you are looking for more counseling in other areas, say housing or pre-bankruptcy counseling, many of these companies offer those services as well. Their bottom line, however, is to enroll consumers into a debt management plan.

Once you are enrolled in a debt management plan (DMP), you only have to make one single payment a month. When you make that payment, the debt counseling agency then distributes it to the lenders you owe.

Those payments may be lower and help you in the immediate future with financial trouble. Enrolling in a debt counseling program can help you lower your monthly payment and interest rate. You want to keep in mind that you’ll be making those payments for five years. So, in the end, it could be more of a burden than anything.

Of course, there’s nothing wrong with enrolling in a debt counseling program. However, you’ll want to fully consider each of these debt counseling pros and cons before you do. Be sure to think about all the debt repayment options available to you and try getting advice from a financial advisor before taking on a DMP.

Readers, what is your take on debt counseling?

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Tips to Help You Find Financial Focus

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financial focus

There is no secret that becoming debt free requires a fair amount of focus and determination. Sometimes it can seem like the entire universe is against you getting back on track or paying off your loan, credit card, whatever it may be. Here is how I’m able to re-center and find my financial focus after a setback.

Recent Setbacks

If you’ve been following our family for the past couple of years, you know I am no stranger to setbacks. After living in a motel for six months, getting into our apartment, racking up some debt, and losing one of our incomes for six months, you think I’d be ready for just about anything, right?

In the midst of wedding planning and my regular busy schedule, I got intensely ill in January and it really set me back. First, I was ill with the flu and then I was in the hospital for possible appendicitis (yikes). Then, when I returned to work I got a notification that the state would be garnishing my wages for my 2017 back taxes. I’d been attempting to work out a payment plan but didn’t owe much so they’ll be taking $460 a month until about May or June.

When this happened I spiraled a little bit. Forget the wedding, forget our savings plan, forget all of it. However, before I completely overreacted, I decided to take a step back and reset my financial focus.

Finding Financial Focus

Obviously, this isn’t the first time this has happened. Sometimes, it is hard to focus on the big picture when everything seems like it is going wrong. Because I have the tendency to overreact, I need a go-to list of things to do to recenter my personal financial focus.

  1. Set small, obtainable, short-term goals. If you put your mind in the now and set more immediate goals you won’t be able to be bogged down by the “what ifs” of six months from now.
  2. Write it down. After you’ve set these smaller goals, write them down. We do this with everything. Whether it is our debt payoff plan, weekly budget, or savings goal. Writing it down helps us set our mind to the task at hand. Then we walk by it daily and are reminded of what we’re working towards.
  3. Search for inspiration. I cannot say enough about following fellow debt-free folks! If you follow the hashtag #debtfree or #debtfreecommunity on social media, you will find loads of inspiration. People will share their stories with you, favorite inspirational quotes, and motivational tips to help you continue on your journey.
  4. Spend time doing things that make you happy but also make you feel responsible. I like to try and avoid spending money when I feel I need better financial focus. To do this, we have a list of things we enjoy doing that cost little-to-no money. For instance, we have favorite walking trails where we take the dog or scrape for free coupons and grab a coffee together.

Lastly, if you’re really struggling to manage your finances, consider speaking with a professional. There is no shame in reaching out for help if you need it. Some financial advisors will even offer up their services for free (or cheap) if you qualify.

Readers, how do you recenter your focus when it comes to your finances?

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Growing Your Home Business

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Are you finding good success with your part-time home business endeavor and you would like to expand operations to a full-time effort? If so, then you may wonder what you need to do in order to move to the next step. A logical search of the Internet will probably yield many success stories about similarly situated entrepreneurs who have been in your same ‘shoes’ and have undertaken such an expansion. The Internet probably would also be good for offering many tips to help entrepreneurs, such as yourself, navigate such a move. The following offers a few tips in order to successfully transition your part-time business into a full-time, home-based business success.

Use the Internet as a Resource

Many businesses, both large and small, utilize consultants to assist them with a particular project or an aspect of their operations. Hiring a consultant means that you gain a particular individual’s expertise and experience in helping you execute the vision for your business. However, as a small, part-time business, the cost of a consultant may be cost-prohibitive. But the expansive knowledge and well-documented experiences of these same types of consultants are available via the Internet for free. Thus, between the consultant articles and blogs, experiences of like-situated entrepreneurs and other pertinent information, you can gain some important assistance going forward just by knowing how to navigate and search the internet.

Financing Your Growth

As you attempt to grow your business, additional resources will be needed. These resources may require additional capital outlays. The cheapest way to finance this growth is with your own funds because there is no interest associated with a loan to yourself. However, if such self-financing is not available, then consider applying for a small business loan as soon as possible. Having the proper funding can be critical in the attempts to sustain the growth of your business.

Economies of Scale

An important concept to consider also as you try to ramp up your operations is that of economies of scale. Economies of scale say that as you produce more, you have to use fewer inputs to get more out. In order to transform your part-time business into a full-time business, you can look at areas where you can add in greater efficiencies to help the full-time version of your business succeed. Look at the things that you do well so that you can figure out how to do more of them. Likewise, look at the things that you might not be doing so great at and figure out what you can do to improve upon these areas.

Do a SWOT Analysis

The introspective review mentioned above actually goes a bit deeper with a full examination of your business’ strengths, weaknesses, opportunities, and threats (SWOT) analysis. Doing a SWOT analysis helps prepare a road map for what you want to see out of your business as this transformation goes forward.

Be Prepared to Revise as Needed

One of the keys to having success as you make the move from a part-time endeavor to a full-time effort is to be flexible. Flexibility is needed in order to help your business adapt to situations as they come up. Situations such as timely fulfilling customer requests, the need for additional financing/funds or re-evaluation of goods or services that you are offering are just a few of the areas that may require you to be flexible going forward.

If your home-based business has been going well and you think moving to a full-time effort will be able to sustain you financially, as well as intellectually, then you will be joining the ranks of many entrepreneurs who have also made entering the business world a successful transition. Working from home and being your own boss has many perks associated with it. Having home-based business success affords such a wonderful business opportunity. If you have the idea, drive and passion to go for success, just remember to be flexible in pursuit of that goal. If needed, and the option is available, consider applying for a small business loan to help sustain your business operations as you attempt to grow its success. In general, remember to utilize the tools and resources that you have available to you, including the Internet.

Here’s How to Gauge How Long It Will Take You to Pay Off Debt

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how long to pay off debt

Anyone who has tackled paying off their debt knows having a timeframe doesn’t always work out. However, having an idea about how long to pay off debt can help drive you to meet your financial goals. Luckily, there are plenty of tools to help you put a finish line in your sights.

How to Determine How Long It’ll Take to Pay Off Your Debt

Of course, the key factor in how long it’ll take you to pay off your debt is how much debt you carry. To do this, I’ve opened a Credit Karma account. This gives me a snapshot of all my open accounts and the total amount of debt I carry. Once you get that number in your head, you know where you stand in your debt free journey.

Next, you’ll need to separate your individual accounts by amount and interest. Some people organize these by highest-to-lowest interest (how I do it) or you can organize it by lowest-to-highest amount owed. After you’ve organized your information, you can gauge how long it may take to pay off each piece of debt.

Tools to Gauge How Long to Pay Off Debt

There are a plethora of debt calculators on the internet. However, not all calculators were made the same and not all will give you the same information.

Most debt calculators have you enter some basic information:

  • Amount owed
  • Interest rate
  • Current/expected monthly payment
  • OR desired payoff timeframe

The last two bullet points are where the biggest difference is to be seen. If you are planning to only maintain the current monthly payment, rather than setting a timeframe for paying off your debt, your outcome may be drastically different. Here’s an example:

Auto Loan With Current Monthly Payment

  • The balance owed: $22,074
  • Interest rate: 4.8%
  • Current monthly payment: $488.74

How long to pay off debt: 50 months

Auto Loan With Timeframe

  • The balance owed: $22,074
  • Interest rate: 4.8%
  • Timeframe: 24 months

Expected monthly payment to pay it off in 2 years: $966/month

Debt Calculators to Try

If you want to find out how long it will take you to pay off your debt, there are two calculators I’d suggest checking out.

  1. Credit Karma: I can’t say enough about Credit Karma and the services they provide. Not only can you get your free credit score, but they also provide you with tools to help you pay things off.
  2. Calc XML: This site has a fantastic debt calculator that will help you figure out how long it’ll take you to pay off your debt based on your current or expected monthly payment.

When you look at paying off your debt, it is good to set goals. However, it is also important to not get discouraged when looking at the timeframe and monthly payments. You can use the tools above to determine a reasonable timeframe. Remember, everyone’s debt freedom journey is different!

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Why You Need Life Insurance

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Young people in their 20s don’t think of life insurance as something that’s a necessity for themselves. Yet they are at the perfect age to buy a term or whole life insurance policy to take care of outstanding debts in case they die prematurely. And because young people are far more likely to carry a heavy debt load straight out of college, they need something to protect family members who co-signed for the loan. Or leave money to cover any expenses including the funeral and unpaid credit card bills. These are thoughts that no one likes to think as they’re a bit morbid, but it is a reality of life.

Young adults have the benefit of being in what’s known as a low-risk pool for insurers. They’re far less likely to have serious or life-threatening illnesses, and insurers reward that with lower premiums. The same goes for term or whole life insurance. And even though term life insurance only lasts for so long, it’s still worth buying while young. One reason is that life circumstances change over time. Someone who’s single in their 20s may be married in their 30s and raising a family. In the event they have an untimely passing in their 50s, they may still have a term life insurance policy in effect that benefits those who survive.

Take the quiz below to see how much you know about the benefits of getting life insurance at a young age. You might be surprised at what you learn!

52 Week Challenge: Save $1,404 By Saving No More Than $52 a Week!

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Many of us struggle with saving money. If you are one that cannot seem to save money a 52-week challenge can be just the thing to teach you the discipline to be a better saver. But what is the 52 week money challenge and how can it save you a ton of money?
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A Big Change is Coming to Our Debt Free Family

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There is a big change coming to Our Debt Free Family!

Recently, I’ve had a huge revelation and because of this revelation, I have decided to sell Our Debt Free Family.

That means that there will be a new owner and writer on the site.

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The 5 Categories Missing From Your Budget

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Are you struggling to make your budget work but keep coming up short?

If your budget isn’t working, you might think that you’re just not trying hard enough to stick to it. But I don’t think that’s always the case.

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