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Financial Peace University

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This is a compiled list of methods the GPCC congregation is using to save money during baby steps 1-3 of Dave Ramsey's Financial Peace plan.   See the Dave Ramsey site for more information about financial peace.
Financial Peace Baby Steps
0 Start tithing!
1 $1000 in an emergency fund
2 Pay off all debt with the debt snowball
3 3-6 months of expenses in savings
4 Invest 15% of income for retirement
5 College funding
6 Pay off your home early
7 Build wealth and give!
"...the borrower is servant to the lender."
- Proverbs 22:7 (NIV)
Combined amount of debt paid off: $??,???!
Listen online to archives of Dave's daily shows here
KEY POINTS:
  • Necessities First: Provide your family with food, shelter, clothing, utilities, and transportation
  • Follow the baby steps in order
  • Create and maintain a monthly budget, one that your spouse agrees to
  • Stop borrowing money!

    FOOD
    - Stop eating out - "If you see the inside of a restaurant, you better be working there"
    - Stop picking up fast food & cook at home - "Rice and beans, beans and rice"
    - Shop at discounted grocery stores - Aldi, Eagle
    - Use a filtered water system or filtered water pitcher instead of buying bottled water
    - Use coupons when possible

    UTILITIES
    - Use less A/C by opening windows when possible
    - Reduce TV package or get rid of cable/satellite TV
    - Use Vonage or similar VoIP phone service in place of land line phone (requires high-speed internet)
    - Pay bills online (see mycheckfree for example) or in person to save on postage costs
    - Rent movies (DVD and VHS) at the public library for free.

    HOME
    - Refinance out of an ARM to a fixed rate mortgage, preferrably a 15 year (rates are low now - look for ~5.00-5.5%)
    - Put off fixing expensive cosmetic problems
    - Put off major home improvement projects
    - Monthly mortgage payment of 15 year fixed should be only up to 25% of your take-home pay
    - Consider renting to save up the money for your downpayment; put 20% down to avoid PMI
    - Raise your home insurance premium to reduce cost (once you have an emergency fund)

    CLOTHING
    - Hold off on new clothing purchases for adults or shop consignment stores
    - Budget for children's clothing by saving throughout the year - give outgrown clothing to other members in the church

    AUTO
    - Sell your car and drive a reliable beater!
    - Avoid the car "fleece" (leasing a car)
    - The total cost/value of your vehicles should be less than half of your yearly income
    - Learn to do your own basic car maintenance - oil changes, tire changes, etc.
    - Raise insurance deductible to reduce monthly premium (once you have an emergency fund)
    - Ride your bike for local errands to save on gas costs

    BUDGET-BUSTERS
    - Hold off on vacations or take local vacations to reduce cost - save ahead of time as needed
    - "Crafts for Christmas" - be sure to save during the year for any Christmas costs

    INCOME GENERATION
    - Have a garage sale
    - Sell stuff on ebay (great for brand name items, for electronics, collectibles, lighter weight items)
    - Sell stuff on craigslist (great for larger local pickup-only items)
    - Get a second job - deliver pizza, clean houses, mow lawns, etc.
    - Temporarily stop contributing to retirement and children's education funds
    - Increase number of allowances on your W-4 so you have the additional cash flow now, assuming you normally get money back - make sure to research it carefully so you won't owe money at the end of the year - see the IRS Withholding Calculator
    - Sell your car and drive a reliable beater (cosmetically challenged)


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