MARCH, 2010
LIVING IN FINANCIAL PEACE

The winter Financial Peace class is in progress! We are happy to have nine families working through the 13 week class.  This week, we completed the lesson on dumping debt. Did you know that debt has only become accepted as normal in America over the last 25 years? It’s important to remember that debt is a product not a privilege. Lending institutions are in business to sell you that product – debt. It is estimated that the credit card industry has gross profits of $150 billion per year. They take in $11 billion per year in late fees alone. That’s our hard earned money! Are you ready to get gazelle intense and get rid of those debts?!  To eliminate debt, you must remember that it’s 20% head knowledge and 80% behavior. You always spend more with plastic. Cash hurts! Commit to never using credit cards again—the first and most important step to dumping debt.  

Next, try using a method Dave Ramsey calls The Debt Snowball. List your debts (all but your mortgage), smallest to largest. Pay off the little ones first to get that pat on the back…the “atta boy”. These quick wins build momentum.  I can do this!  Is it mathematically correct? Probably not, but remember that it’s 80% behavior. It’s about changing your behavior.

Here’s an example of how the Debt Snowball works.

Item                                        Total               Minimum        New

                                                Payoff             Payment          Payment

JC Penney                                $150                $15                  (Sell something)

Sears                                        $250                $10                  $25

Visa                                         $500                $75                  $100

MasterCard                              $1500              $90                  $190

Car                                          $4000              $210                $400

Student Loan                            $4000              $65                  $465

You pay the first one off with all the money you can scrape together each month while making the minimum payments on all the others. Then, when the first one is paid off, you take the payments you were making on the first one, add it to the minimum for the second one. And so on down the line. Each time you knock out a debt, the snowball rolls over gathering more snow and picks up speed and momentum.

Thank you to our church family for your support of Financial Peace University. We have 4 families this term who have taken advantage of our scholarship fund. Thank you to everyone who gives to the FPU Scholarship Fund. Submitted by The Biggers.

 

 

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