Reviews

Dave Ramsey claims to teach people how to manage finances, get out of debt, save money, and make good investments. He is the author of a number of books on personal finances and has a syndicated prime-time radio show in which callers describe their financial situations and get free advice. The first website linked above is the home page of what is surely becoming an empire. I’ve tried just one little fiefdom in the Dave Ramsey financial advice empire: Financial Peace University (FPU).

It’s a 13-week course, complete with textbooks, homework, and class sessions. The class meets one night a week for two hours and teaches the basics of money management. FPU’s main claim is regarding the past success of its 300,000+ students:

On average these families have paid off over $5,300 in debt and saved $2,700 during this 91-day program!

I was skeptical. But my money management skills are those of a 12-yr-old (ooh, something shiny! Me buy now!) and I have the debt and saving rate to prove it. In short, I had little to lose. So if I could just meet the advertised averages of savings and debt reduction, that would help a lot. And I just might learn something. So I paid my $90 and enrolled in what is certainly the cheesiest-sounding university I have ever attended. The first class was last night (check back later for pictures of the materials and my first impressions). I’ll keep you posted.

Update 1 | Update 2

Financial Peace University’s promotional website claims that its participants have on average saved $2700 and paid off $5300 in debt by the end of the 3-month course. Having nothing to lose (except money, and I lose that all the time), I paid my $90 to enroll in Financial Peace University and will tell you all about it here at I’ve Tried That. To read prior posts and updates in the Financial Peace University review, click here.

The second class last night covered cash flow planning. It’s budgeting, but Ramsey calls it “cash flow planning” to give the process a business flavor so that people will take it more seriously. For people like me, that slight change in mindset makes a big difference. Dave Ramsey puts it bluntly:

If you were in charge of managing the finances for the Corporation of You, and you managed money for the Corporation of You like you do for you, would you fire you?

I have to say that I would fire me. It’s the same idea Sabrinasmoneymatters was getting at when she said, “You are the CFO of your Household Corporation.” So, yeah, little shifts.

Last night’s lesson included something that is as close as I ever expect to get to a magic elixir for those with chronic diarrhea of the wallet: a practical system for tracking and controlling money. A way to actually make the budget work, and maybe even to get me to stick to it (the jury’s still out on that one). It’s not a new plan, and it may be a no-brainer for folks who already discipline their money (rather than it disciplining them). The super secret anti-diarrhea system? Envelopes.

It’s simple, really. At the beginning of every month, you plan out when money comes in and give every dollar a name by deciding beforehand where it will go. Straightforward budgeting stuff so far, right? But here’s the magic part: when the money comes in, you take the cash out of the bank and put it in envelopes labeled with your budget categories. The FPU kit included a booklet with envelopes, and my household budget has enough categories that we needed to use some regular ones from our closet. The effect is, for me, magical because it takes the budget out of the realm of the abstract and theoretical and puts it in the realm of the real and practical: I have envelopes and cash in my hands. I can smell it and touch it and watch it as it flows out of the envelopes in the directions we have designated. We no longer wonder where the money went; we now tell it where to go. And that’s a powerful difference. I’m optimistic about the prospects. If we can get this system to work for us, that alone will have been worth the $90. As always, I’ll keep you posted.

Update 1 | Update 2 | Final update

Click here to read my first post in the Financial Peace University review.

The first class was last week and I’ve had time to let my impressions gel.
As you can see from the materials shown here, the fee (mine was $90, but prices
vary) is not for materials alone. The paper inside the fancy box is worth maybe
$25. There’s an overpriced, cheaply bound book, a mind-numbing fill-in-the-blank
“workbook,” an envelope binder for keeping the recommended envelope
system organized, some CDs to supplement the weekly class, and some materials
with which you can order lots more from Ramsey’s website.

The rest of the value comes from the class, by which I mean the video presentation. I met in a room with about 40 other people and watched a DVD of Dave Ramsey teaching the first week’s lesson. It’s a little bit slick for my taste. Too glossy, too much of a performance and a production. Ramsey is quite the performer—the presentation is interesting and entertaining to watch—but it’s spoon-fed education. There’s no exploration of ideas, no exchange. And maybe there doesn’t have to be. It’s not philosophy, after all. People who take the course paid the money because they want to know what Dave has to say, not because they want to engage in discussion. Still, it goes against every educational bone in my body. All four of them.

All that said, I am actually enjoying Financial Peace University, to my surprise. It occurs to me that I didn’t pay to get my money’s worth out of the box, or even in classroom experience. I was willing to pay $90 for the chance that Ramsey would motivate me to do what I already know needs to be done: budget, save, pay off debt, invest. As Sabrina at SabrinasMoneyMatters might say, I’m paying to create some accountability. Good information and an easy-to-use system are just icing on the cake.

I’ve Tried That | Update 2 | Final Update

Hi, my name is Joe and I’m a slacker. I promised regular updates to my review of Dave Ramsey’s Financial Peace University (FPU), in which I am enrolled, but have failed to deliver.

I am ashamed.

To make it up to you, I’m offering a bonus: until the end of July, all new RSS subscriptions are free. That’s right, free, as in zilch. Sign up quick and take advantage of my remorse. Subscriptions after the bonus period will be at least triple the bonus price!

If you found us through a search engine and are looking for the full Monty on Ramsey’s FPU, you’ll want to start here. The 13-week course is almost half over and I can say with a straight face that I’m happy with the content and the price we paid. I’d do it again, and recommend it to others. In fact, I will do it again because my membership fee entitles me to attend refresher courses anywhere, anytime, at no additional charge. It will be good to go back again later and brush up on the things I’m less interested in right now, such as college and estate planning.

My interest wanes
The first few weeks of FPU courses were very good for me: the importance of saving, how men and women think about money differently, how to plan cash flow (or how to make a budget that works), the evil of debt and how to get out of it (not necessarily in that order). But now that we’re moving on to more advanced topics, such as insurance, investments, and estate planning, I am less engaged in the content. Don’t get me wrong—the information is just as good and just as well presented, but my personal investment in it (my motivation) is smaller. There are reasons for this, and I understand the reasons, and it’s not a fault in the course itself.

The members area
I should have mentioned in an earlier post about the Members Area that those enrolled in FPU get access to (image used with permission). It’s full of good resources to supplement your reading and course content, such as budget spreadsheets, debt reduction calculators, discussion forums, and so on. There is a downside: you only have access to it for as long as your course lasts and then you have to convert to a paid membership if you want to keep getting in. It would suck to do all of your budgeting and debt-reduction planning online, only to lose that work when your free access is cut.

I recommend it
My results have not been as dramatic as those in FPU’s marketing, but they are positive results. We are saving money now (weren’t before) and have a workable plan to get out of debt. No magic unicorns that poop $100 bills, but good information that will serve us well for a lifetime. In my opinion, you can head over to Financial Peace University and sign up with confidence that you’ll get your money’s worth.