My Financial Peace University Class and My Mission to Get Out of Debt!

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financial peace university kit

Hey everyone!  This is Jill.

As I mentioned previously, I have the opportunity to take Financial Peace University Classes as part of Zions Bank  Eliminate Needless Debt (END) program, and last week I got my kit and attended my first class! I’ve been a long time listener to Dave Ramsey, and have read his book Total Money Makeover. I try to follow his principals, or at least I THOUGHT I was trying. Let me explain.

After the first class, I was fired up! We’ve been whittling away at student loan debt for YEARS and I’m pretty darn sick of it. We didn’t REALLY need to take out the student loan debt and have often kicked ourselves for making such a stupid financial mistake. But we did, and it was a pretty good chunk of change. Maybe some day I’ll have the guts to edit this post and actually tell you how much, but for now, let’s just say we have a lot of work to do.

I thought I was in pretty good shape, other than the student loans. I’m a deal blogger, for goodness sake! I know how to save money, right? We don’t have a car loan (although one of the reasons we took the student loan was to pay off a car loan and have a lower interest rate on it), and I used credit cards but paid them off just about every month. I didn’t need to follow Dave’s advice about cutting up credit cards and just not having them “for an emergency” or for their rewards (he frequently mentions millionaire’s didn’t become rich because of a credit card’s rewards program). At least I WAS paying them off. Then one month I couldn’t quite make it, but that was okay, because I knew I would be able to the following month. But then I couldn’t. Then another month went by. Then another. Now we’re in quite a pickle. Right before Christmas.

quick start budget

So last night we did our FPU homework, which was to complete a Quick Start Budget. I quickly tallied how much we’d spent on groceries and “this and that” with random trips to Smith’s, Walmart, and shopping online at Amazon. I was seriously SHOCKED at how much we spend. I recently heard that about $40 per person per week is a reasonable grocery budget. That would put my family of 6 at $1,080 per month. I figured my family probably spent about $800/month. We’ve been SO good about not eating out for the last couple months, but apparently not that great at spending money on just random stuff. I’m not sure what all the charges were for and didn’t take the time to REALLY look at it, but we spent nearly $1,300 in the last 4 weeks. And my kids are little and don’t have big appetites! We were shocked. There is really  NO REASON we should be spending that much. No wonder we weren’t making headway on our student loan and credit card debt.

our plan

Dave often talks about becoming “gazelle intense” when you’re working to pay off debt. We’re ready. We’re SO ready to do this! These are the steps we’re taking right now:

  1. We realized that our income is needing a boost. Fortunately my husband’s degree in architecture and experience in drafting and graphic design allows him to pick up a lot of freelance work, and he’s already contacted a friend to design his house plans. If you’re planning on building a custom home, let me know and I’ll put you in touch with my husband! He’s also looked into picking up some freelance jobs for some extra money. He’s highly skilled, and we hate to have him away from home even more than he is doing something like delivering pizza, so we’re going to try this route first and find jobs in his niche.
  2. I’ve consigned a bunch of toys and kids clothing to The Divvy Up sale in Cache Valley. This is an amazing sale with over 30,000 items this year! I’m certainly not going to become rich by doing it, but I’ll get rid of some stuff that’s been cluttering up closets and the toy room anyway, and make some extra cash doing it. If you’re needing clothing for your kids, I highly recommend checking out this sale and buying my stuff (ha ha!). 🙂 Seriously, there are some super sweet deals on gently used children’s clothing, and this can be a great way to save money on your own clothing budget. Now, I’ve always WAY overshopped at this sale (I’m talking like $100 for a bag stuffed FULL of clothes…some of which my kids then never wore), but I’m putting this out there now: “I will not spend too much money at the sale this year.” In fact, I’ll get more specific. I’ll only spend $50. And to hold myself accountable, I will let YOU all see my receipts to know exactly how much I spend (Update: See how I did in THIS POST!). I’ll post them here! There are a few items we do need for our kids, and if I can get it at the Divvy Up for a great price instead of paying full price elsewhere, I will!divvy up sale
  3. We’re also looking for other items that we can sell, and will either post them on KSL Classifieds or possibly have a yard sale before the snow flies.
  4. We’ve been trying to sell our home, but we took it off the market this morning. WHAT? How is that supposed to save us money? Well, we realized we’re in no position to be building our dream home right now. We were fortunate to have money available to purchase a beautiful lot, and had hoped we could sell quickly, move into a rental while we build, and then move into our new beautiful home. Our home has been listed all summer and we haven’t had a single offer. We realize we are listing it too high, but we purchased it on the housing bubble and for the moment we aren’t willing to lose money on it. We’re not upside down in a loan, but we want to come away with a bigger down payment for a construction loan for our new home, and we can’t do that with what the market is currently willing to pay. We have a lot of our stuff stored in a storage facility, and we’ll be bringing that home within a month and cancelling our rental fee on that to save $50/month. Hopefully a lot of the stuff in the storage unit will go into the yard sale, too!
  5. On the other side of the equation, we’re also going to be EXTREMELY tight on our spending, much to our children’s dismay. Dreams of perfect Halloween costumes are out the door, kids. We’ll make do with what we have (don’t feel too bad for them, we  have 2 totes full of old costumes and dress ups). I do feel sort of sad, but I’m also determined that in this process the kids will learn that being in debt SUCKS, and will avoid it in their own bright futures. I’m also fairly sure they’d be willing to give up a Halloween costume for a special Christmas gift, though. Sacrifices will need to be made by the entire family, and we’ll include them in our decision making
  6. We still plan on having fun, though! FREE FUN! We are fortunate to live in a community where there are a lot of free activities. Now we do have a trip to Ringling Bros. and Barnum & BaileyCircus XTREME already planned for later this week, and we considered canceling it so we don’t spend the money on the gas to get there, or overpriced hot dogs when we’re there. We decided that since the tickets are already covered, we’ll still go, but pack snacks and sandwiches for the trip down to Salt Lake, and let the kids know in advance that we’ll be spending NO money once we’re in there. We have some other free stuff planned, which I’ll post about later.credit card
  7. So, have I cut up my credit cards yet? I’ll be honest. No. I’m scared to! But they’re out of my wallet tucked away in a secure place, and all direct billed monthly expenses have been transferred to our bank account. Believe me…I’ll definitely post a picture when I finally get the courage to break out the scissor and snip these buggers into a gazillion little pieces.
  8. I’ll be starting the envelope budgeting system for grocery and “this and that” expenses. This will be sort of difficult since I will still be purchasing a lot of our household items on Amazon, but for now I plan to take the cash out of the envelope for groceries when I make an Amazon purchase, and depositing it back in my bank account at the end of the month.

My next FPU class is tonight. I’m excited to hear what our fellow classmates have planned for their own situations. All of us in the class are different. There are several newlyweds, a mother and her son, a couple even older than we are, and then us, a family with 4 young children. But I truly believe Dave’s money management plan can be applied to all these unique situations to help us all come out ahead.

 

 

15 Comments

  • Good for you! I can’t recommend the software “you need a budget” enough. It’s AMAZING! It’s basically the envelope method but digitized so it is even easier. It has changed my life so much. I know that spending money to buy budgeting software seems counterintuitive but it is worth every. single. penny.

    Here is my link:
    http://ynab.refr.cc/G26J6MK

    you’ll save $6 by using it. Watch the video on the home page. They offer free online classes several times a day ( and they give away a copy in every class)

    • Thanks! I’ve tried Mint before (since it’s free), but didn’t really pay much attention to what I was spending still. I’ll look into your recommendation, and also Dave Ramsey’s “Every Dollar” (which is also free). πŸ™‚

  • Way to go Jill! I’ve been listening to Dave this past year and trying to implement some of his principles, but without the “gazelle like focus.” Frankly it’s not working very well. I’ll be interested to hear how your experience goes. Good luck!

  • This is awesome! Such fantastic information I don’t even know where to start. We have really been bogged down by student loans as well. We are slowly getting through the grime, but it will be a few years before it is completely behind us. These budgeting tips are wonderful! I need to start doing this on a daily basis. I’m terrible when it comes to buying groceries, clothes and other luxuries. I more look to convenience than saving and that is really bad. I need to change those habits. Great info!

    • Meagan, if you can take an FPU class, do it! You can take the online, too. I haven’t looked into it myself yet, but Dave recently started this Every Dollar budgeting site. I think it will be a great tool to get spending under control. πŸ™‚

  • Good for you Jill!We are completely debt free (aside from our car lease) but still need to get better at not spending as much on “stuff”. If you are looking to sell things the Facebook yard sale groups are an awesome avenue to use. We usually list a few things every month and make $100 or so.

  • That’s awesome that you’ve put together a plan for you to be able to get out of debt. The envelope budgeting system has really helped me to keep my grocery budget in place. Once the money is gone, then I can’t spend anymore. And what a great idea to do more free activities as a family. A lot of the time the free activities are just as fun for the kids and it’s nice not to fork out all that money for an activity.

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