What is Financial Peace University About?
Dave Ramsey wrote down his philosophy of managing money and began selling it by mail and out of the trunk of his car in 1992.
Financial Peace University as a program was created by Dave Ramsey in 1994. He began teaching families his philosophy using an overhead projector. Today, over 4.5 million people have attended Financial Peace University.
For a full review of Dave Ramsey, please see Is Dave Ramsey a Scam? further down in this post.
Get a full picture of the history of Dave Ramsey’s company, Ramsey Solutions.
The main philosophy of FPU is that debt can end your dreams and make you a slave for life. Don’t be a slave into your retirement.
By eliminating your debt, you can catapult you and your family to a life where you are in complete control of your money, life and retirement.
FPU teaches the steps to get there, and that ANYONE in ANY situation can use these techniques to WIN and to take back control of your life. These steps have been proven over and over again to work.
I know, because it worked for me!! I have no debt now except the house. It will be paid off in 2 years and then I will retire inspired.
Two Steps at the Beginning
FPU is a program that features two very important points right up front: Create a beginning emergency fund of $1000 and then begin your debt snowball. The debt snowball is a method where you list all of your monthly debts in order of the smallest to the largest.
You begin by paying the minimum on all of them except the one at the top of the list, the smallest debt. You pay off that smallest debt with a vengeance!
Next month, there’s one less debt on your ledger and you have a NEW-smallest debt to attack! So you add the amount that you WOULD have paid to the first debt to the amount you need to pay off this one and keep paying the minimums on the rest until the list is gone.
The reason this works to eliminate your monthly debt is that you create momentum (remember how to build a snowball?) and you begin to see real progress. You become excited about it very fast!
It’s all about behavior modification, not about math equations. If it was a math problem, we wouldn’t get into debt in the first place! It’s a behavior problem that demands a behavior-based solution. Before you know it, your debt is no more!
And then you will begin to realize the full power of your income.
The Rest of the Steps
In Financial Peace University, you are on a program called the Baby Steps. You don’t progress to any Baby Step until you’ve passed the previous.
I just outlined Baby Steps 1 and 2 above. Here they are: 1. $1000 emergency fund, 2. Debt Snowball except the house, 3. A fully funded emergency fund of 3-6 months expenses, 4. Save 15% for retirement, 5. Save for College, 6. Pay off the home early and 7. Build wealth and give generously.
See a complete explanation of the Baby Steps.
FPU is all about debt reduction and saving. It does address investing, however it does not stress particulars about investing except where Dave believes that a certain type or vehicle is wrong or wrong for you.
All in all, FPU is not about investing, it is about saving and about eliminating debt so you and your family can live and give like no one else. Can you imagine what you can achieve with no debt? Can you picture the power of your income with no monthly payments of any kind??
How Much Does it Cost?
$119. Attend local group meetings, nine 90-minute meetings. Or online, anytime any device.
Is Dave Ramsey a Scam?
I’m not sure how anyone can make that assertion with the results he has given.
You might not agree with everything he says, but you don’t ‘throw the baby out with the bathwater’ just because he’s a conservative Christian, (or whatever you don’t like about him), right?
I know that we judge whether people are worth listening to if we agree with them, but are you willing to listen to a learned man even if you don’t agree with his religion?
Is There Any Reason You Should Listen to Him?
I found reason to. But I agree with some of Dave’s conservative ways. I’m not here to tell you about that, though. I just want to share that I believe you should listen to the man because of his experience in life.
Dave was a young real estate entrepreneur who made millions by the age 26. But soon, the very nature of the leverage in real estate reared it’s ugly head and Dave was bankrupt. He designed a way for him and his wife to get out of debt and it worked really well, really fast.
He went back to his first business love, real estate. But along the way, he devised a plan to help folks do exactly what he did to slay the debt dragon. Read his full story here.
Here is a man who went through very tough financial times and devised a plan to not only rise out of it, but to flourish beyond it. He decided that money was not going to control him, HE was going to control IT. You should think about doing that as well.
Can What He Says Be Trustworthy?
Ok, here’s something that irks you about Dave Ramsey: he claims that, overall, the stock market has returned near 12% over the last 50 years. There are plenty of financial gurus out there that ‘throw the baby out with the bathwater’ because they think that the 12% figure is way too high, therefore, Dave Ramsey must be lying to you about everything else.
Or, he’s not an expert in investing so therefore he’s covering up facts so you’ll listen to the rest of his spiel and buy his products.
Understand this. It doesn’t matter whether Dave says 10 or 12% (take the time right now to read that article here at this site)! The entire idea of getting out of debt is to dramatically magnify the power of your income. How about that for an inflation killer, hmmm??
How do you dramatically magnify the power of your income with Financial Peace University? Let’s say that you have a monthly paycheck of $1000. If all of your paycheck is going to pay debts, how much is left over for you to save, spend, invest and give??
If you get out of debt, you just gave yourself a pretty big raise.
The future investment return number on your money doesn’t mean a thing if you’re losing money on other debt and interest payments. The idea is to retire inspired and to retire the way that YOU desire to, not to make 12% on your money.
If you understand the basic premise for the reason to be debt-free and to save, then you don’t have things like inflation and a percentage point or two stand in the way of your dreams.
Don’t Miss the Point
To hound Dave on the 12% thing is to miss his point entirely. Take whatever stock market gain number that you like over the last 50 years. The numbers mean very, very little compared to the new-found power of your income. You’ll have more to invest. More to save. More to spend on the things and people that you love.
The maximum power of your income completely annihilates any difference in a percentage point or two. It devastates the cost-of-living rises. It negates any rise in the rate of inflation.
Your financial situation is further degraded by the paralysis that comes when you have the angst that tells you that earning x% is somehow magic, and that some percentage of return is going to save you. What WILL save you is to get out of debt. Now. YOU need to be in control of your money destiny.
Don’t insist on leaning on mythical monetary mathematicians — those folks who are the experts yet have their numbers vary far and wide between each other.
You’ll have to come to reason that the world needs both theory people and numbers people to find a real-world average … so you can make up your own mind.
To not realize the investment and living power of your full income is to hamper your every financial move.
The investment gurus will tell you that the stock market earning track record over the long haul might be 10%, but it’s MUCH less when you factor in that you’re losing money every month by having to pay someone interest for the privilege of borrowing money from a bank.
You might think that our financial ways in the Western world depend on you borrowing money, but that is far from true. Our economy exists and flourish on the exchange of goods and cash. The financial world of borrowing money is what they call Financialization and is a separate sector from the real economy.
You don’t need the financial sector, you need to control your own money destiny.
If you want more money in your pocket to invest in the business of your dreams or to retire inspired, then listen to Dave Ramsey and start on the Baby Steps. You don’t have to like him. You don’t have to invest like him. But you really need to listen to him when it comes to the steps to eradicate debt. They work. I am living proof.
Now you know what Financial Peace University is about. It is definitely worth your time investigating.
I am not an affiliate of Ramsey Solutions, and receive no commissions from any of the links above that take you to his site. But I am very proud of being an FPU graduate, and I hope that I have shown you the importance of being debt-free. If this has been helpful to you, please visit my Wealthy Affiliate links below.
If a part of your financial dreams include having your own home business, then consider joining me at Wealthy Affiliate (full review here at this site).
You’ll find much freedom and that WA is very real. You can use WA as a launching pad for affiliate marketing or for your own products and services.
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A working guitarist, guitar designer, songwriter, worship leader and online entrepreneur, I have discovered that the key to online success (and success is more than money) is simply to focus on helping people be successful.