Finding financial peace the Dave Ramsey way
Derik and Sari Kraft had pretty average finances. They used credit cards for everyday expenses. They didn’t have a budget, but the bills always got paid … somehow, Sari said. They didn’t really talk about their money.By: Sherri Richards, INFORUM
Derik and Sari Kraft had pretty average finances. They used credit cards for everyday expenses. They didn’t have a budget, but the bills always got paid … somehow, Sari said. They didn’t really talk about their money.
About a year ago, they took Financial Peace University, a 13-week course developed by personal financial guru Dave Ramsey. Sari, who works as a 401(k) account manager for Alerus Financial, helped lead the class at Martin’s Lutheran Church in Casselton, N.D.
“Now we have a plan,” she said. “We have an emergency fund. We have security.”
And they have a budget, outlined on an electronic, color-coded spreadsheet. Sari admits it’s nerdy.
The couple with three kids also paid down more than $20,000 in personal debt since the course. They cut up their credit cards and operate on cash only. Derik paid off about $10,000 on a credit card for his kitchen exhaust cleaning business.
“It’s amazing how much less we spend each month,” Derik said.
“You can get a lot more out of (your money) by paying attention to it,” he added.
More local churches are offering Financial Peace University this fall in response to a downtrodden economy and requests from members seeking financial guidance.
A search on Ramsey’s Financial Peace University website shows 21 classes near Fargo’s 58104 ZIP code.
This astounds and pleases the Rev. Steve Burrell, a pastor at Fargo’s Metropolitan Baptist Church, which has offered the class for four years.
“That’s exactly what we want to have happen – get some of these financial principles out to the people,” Burrell said.
“I think for a long time we’ve been under the thought that we’re always going to have to have a car payment, we’re always going to be in debt,” he said. “It’s no way to live stressed out about finances all the time.”
The basic message of Financial Peace University is to get out of debt, save and give. It costs about $100 for the materials and a lifetime membership to attend the class anywhere. Because of its biblical basis, the class is most often offered in churches.
Local pastors point out that Jesus talked more about money than any other subject. And money matters affect all areas of people’s lives.
‘God’s and grandma’s’
Bethel Evangelical Free Church is the home to several of this fall’s local classes. The megachurch in south Fargo made it a priority to have as many church members go through the class as possible, said Greg Haugen, who coordinates the classes at Bethel. The classes are open to anyone.
Prior to this fall, the 120 households that had taken the class averaged $3,000 in consumer debt paid off and $1,000 put into savings per household just during the 13 weeks, Haugen said.
“This is a really good time to get people in a better place with their finances,” Haugen said. “This is a really effective program.”
Why? Because it’s simple, Haugen said. “The steps are very clearly laid out. … It’s almost like a recipe card.”
Ramsey has developed seven baby steps for getting out of debt. Through DVDs starring Ramsey, the 13 weeks cover topics like communicating about money, insurance, credit ratings, mutual funds, real estate, college and retirement savings and cash-flow planning.
Haugen said Ramsey has described it as “God’s and grandma’s way of handling money.” The class isn’t overtly evangelistic, Haugen said, but is based on God’s generosity and biblical principles.
Olivet Lutheran Church will begin a new 13-week course Tuesday. The church on University Drive and 13th Avenue South in Fargo has been offering it for at least six years.
Terri Hedman started leading the classes after taking one with her husband. It helped them track their spending, she said.
“By following his recommended baby steps, you can truly turn your financial life around,” Hedman said. “You must learn discipline. You must learn to say no to your inner child. Life with a budget and life without debt is a better life.”
A regular feature on Ramsey’s radio show is individuals or families calling in to shout “I’m debt free.” A couple who had recently finished a course at Olivet made that call.
“I was lucky enough to hear them on the radio. I had to pull over, I was so emotional,” Hedman said.
Applying it individually
Patrick Vander Wal, a financial adviser with Waddell and Reed Inc. in Fargo, has recently had quite a few clients mentioning the FPU program to him. One client was going to bring in the workbook so they could go through it together.
“I think it’s a great idea. It can complement some of the things I’m trying to do and work with my clients on,” Vander Wal said. “I think it helps people make good decisions with their money.”
He said its basic principles of planning ahead, not going into debt to make purchases and saving are important in an instant-gratification society.
“Some of the things can go to the extreme. Everyone’s situation is different,” Vander Wal said. “That’s why I think it’s good. People who do attend can apply it to their own life.”
The Rev. Paula Mehmel of Martin’s Lutheran in Casselton agrees. She doesn’t apply all of the principles to her life. For example, she would still take out a car loan.
“It’s just giving people basic tools,” Mehmel said. “It’s not the gospel according to Dave Ramsey.”
About Dave Ramsey
Dave Ramsey started his career as a personal finance teacher offering one-on-one debt counseling in 1991. He’s now written five best-selling books and created Financial Peace University. Ramsey’s nationally syndicated radio show airs locally 7 to 10 p.m. weekdays and 6:30 to 9 p.m. Saturdays on WDAY 970 AM. He also has a TV show on the Fox Business Network.
7 steps to become debt free
Dave Ramsey’s Financial Peace University lays out seven baby steps to get out of debt:
1) Keep $1,000 in an emergency fund.
2) Pay off all debt, excluding the house, starting with the smallest balance.
3) Have three to six months’ expenses in savings.
4) Invest 15 percent of income into Roth IRAs and pre-tax retirement plans.
5) Have college funding for children.
6) Pay off your home early.
7) Build wealth and give.
www.daveramsey.com/new/baby-steps
Readers can reach Forum reporter Sherri Richards at (701) 241-5556
Tags: dave ramsey, financial peace university, business, finances, money, fargo, debt
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