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Financial Peace University Lesson 11 – Working in Your Strengths

December 29, 2009 · Filed Under Financial Peace University · Add a Comment 
Just in case you were wondering if I really had FPU class the week of Christmas, we did actually finish a few weeks ago. I started off running each post about a week after the lesson, but I’ll admit that over time I’ve drifted a bit farther behind than that! Anyway, Two more lessons to debrief after this one…

Careers and Extra Jobs

This week’s lesson centered around your career and here it is in a nutshell: You should really enjoy your work (at least for the most part) because you spend so much of your life doing it.  Check out these statistics from Ramsey: the average job lasts on 2.1 years in length.  That means that a worker could have as many as 20 jobs in their lifetime!  He also stated that 98.3% of employees work for small businesses (defined as those having less than 100 employees).  The backbone of our economy is truly the entrepreneur!

Some more myths

Apparently Dave Ramsey really loves debunking myths as this is the third lesson (I think) where he discussed commonly repeated myths.  So, let’s indulge him…

Myth: As you grow you change

Truth: You might grow, but you won’t outgrow your personality

Myth: You will learn and grow most in the areas where you are weakest

Truth: You grow in your strengths.  You grow the most in areas you already know and love.  Think of your passions – those are the areas that you care about the most and find interest in and therefore those are the easiest to drive you to grow even more.

Remember that money is never ultimately enough of a motivator for doing a job indefinitely.  If you hate your job, eventually that salary, no matter how large, will not be enough to get you out of bed and out the door each morning.  Therefore, Ramsey recommends that you seek a career that blends your skills, abilities, personality traits, values, dreams, and passions.  I’m sure you’ve been around people that really enjoy their job – it’s hard to tell if they are working or playing;  that’s when you know you are in the right career.

The DISC Personality Profile

Ramsey then spent a few minutes explaining the DISC profile and touching on the characteristics of each type.  There is too much information to even get into here but I do agree that going through a personality profile, be it DISC or Myers-Briggs or whatever, is a helpful exercise.  I’ll at least tell you what the four profiles DISC are:

  • Dominant
  • Influencing
  • Stable
  • Compliant

Job Hunting

Dave spent the remainder of the session presenting some tips on job hunting.  I won’t recount all of them here but I will hit on some of the ones I found most useful.  First of all, remember that a company is not looking for you, rather they have a problem and they need someone to solve it.  Therefore, approach your job search from that perspective – that you are here to solve their problem.

When you are getting ready to contact a company, approach it the way you would when starting up a new relationship with a person (maybe even like you are trying to get a date with someone).  Dave recommends contacting your potential employers at least three times – first to send an introduction letter, then to send a resume and cover letter, and finally a phone follow-up.  He reminds us that interviews and job offers come from networking and persistence.

When interviewing, treat it like you are the product and you want to present that product as the best one available.  And after an interview, tell them that you will follow-up with them on a certain date (and then make sure you do it!).  He also recommends sending a handwritten thank-you note to your interviewers.

What about extra jobs?

As opposed to raising your income for the long-term through a new job or career change, it is typically much easier to raise it in the short-term by finding an extra job (or two).  It will typically take a significant sacrifice on your part to work an extra job – but if you need to do it and you really want to win with your money, then you must be willing to make that sacrifice.

I found his next tip a very good one – he recommends that you have a detailed plan for your extra job(s).  In other words, create a plan for how much you will work, how much you will earn, and how long you will be doing it.  That way, you can see the finish line and know that though you are sacrificing, it is only for a certain period of time.  And finally, do not give up!

A final word of caution from Ramsey

Although we spent the entire class discussing careers and jobs and the like, he ended class by reminding us to not allow our career to be the all encompassing source of our satisfaction and self-worth.  This is a very important tip but sadly it is one that is often forgotten in our culture.


I didn’t find a ton of new information in this class as I’ve heard most of the job hunting tips and done numerous personality profiles.  To be fair, I was able to pull out a few tips that I will use the next time I need them.  That being said, this was a very inspirational class.  You know, Dave is right, we spent too much of our short-time here on earth working.  Therefore, you should really strive to enjoy your work.  That might mean changing your attitude about your current job or finding a new job that you fit into better.  Dave mentioned during class that if you work for him and you don’t enjoy your job, then he’ll fire you.  It’s not good for them to have you working there and it’s not good for you to be working there either.

Now, don’t do anything rash, but if you are unsatisfied in your current position, I urge you to take some time and reflect on why that is.  It might be just a matter of you changing your approach to your job or finding another role at your current employer.  Or you may need to change to a different company or to an entirely different career to find that satisfaction and enjoyment.  And I know this is a really bad time to be considering looking for another job (see a few sentences up: “don’t do anything rash”) but you owe it to yourself to at least consider your options if you’re not in the best position for yourself at the present time.

Check out my previous FPU posts:

Weekly Bible Verse – Christmas Edition

December 21, 2009 · Filed Under Weekly Bible Verse · 2 Comments 

For a child will be born to us, a son will be given to us; And the government will rest on His shoulders; And His name will be called Wonderful Counselor, Mighty God, Eternal Father, Prince of Peace.  Isaiah 9:6 (NASB)

This is the new memory verse that our kids are learning this week and I thought it would be apropos to share it with you.  What does it have to do with personal finances,  investing, long-term planning, or getting out of debt, you ask?  Well, nothing…but there is much more to life than just money.

At this time of year, with all the hustle and bustle (and money being spent), remember to pause periodically and focus on the original reason for this season.  There is certainly not much wondrous about fighting traffic, grappling for parking spots, and then trudging through the snow (big snow storm in Virginia this week!) to the mall to buy stuff.  But there was one wondrous night that took place about 2000 years where something happened that had never happened before and has not happened since…God sent us our very own Wonderful Counselor to actually live with us here on earth.  Reflect on how amazing that is as you go through this week.

God bless and have a Merry Christmas…

Financial Peace University Lesson 10 – From Fruition to Tuition

December 18, 2009 · Filed Under Financial Peace University · 4 Comments 

Planning for Retirement and College

This week Ramsey introduced Baby Step 4 (and #5 but more on that later) to us

Baby Step 4:  Invest 15% of your household income into Roth IRAs and pre-tax retirement plans.

After you have paid off all your debt, except maybe your mortgage, and fully funded a 3-6 month emergency fund, it is not time to start thinking about and planning for your future.

Always save for long-term goals in tax-advantaged plans

Ramsey recommends that you should do all of your retirement savings using tax-favored money.  Such tax-favored plans include the IRA, 401(k), 403(b), 457, and SEPP.

Dave really likes Roth IRAs which are funded with after-tax money but grow completely tax-free.  There are many choices of investments in Roth IRAs, you can effectively invest more money than a standard IRA because you are using after-tax money, and if you do everything that Ramsey teaches (or at least most of it) you will probably end up in a higher tax bracket in retirement so having a Roth IRA is great at that point in time.  Furthermore, you can use your Roth IRA as a last resort fall-back if you are in a very dire situation as you can make tax-free and penalty-free withdrawals at any time up to the amount of your contributions.

Remember that there are income limits to using Roth IRAs so check with the IRS or your tax adviser for the current limits. For those that don’t qualify for a standard Roth IRA, you might want to check with your employer to see if they provide a Roth 401k option.  It works generally the same as a Roth IRA but there are no income limits and is subject to the higher yearly 401k contribution limits instead of the Roth IRA limits.

Ramsey’s suggestions for funding your retirement

  1. Fund your 401k (or similar) up to the maximum employer match amount (if applicable)
  2. Above that amount, fund Roth IRAs.
  3. After maxing out your Roth IRA contribution, complete the 15% of your income by funding your 401k again.

One big no-no

I know it sounds like a great idea, but Dave recommends that you should never borrow money from your retirement plan.  Sure, you will be paying yourself back the interest, but that rate will be much lower than you might earn over time in a diversified, long-term portfolio.  The most important consideration, however, is if you happen to lose your job, you must pay all the money back in a short period of time or else the IRS treats it as an early withdrawal and you will pay taxes and penalties on the money you borrowed.  And how are you going to pay that money back within the time limit when you no longer have a job?

Baby Step 5: Save for your children’s college using tax-favored plans

Once you get baby step 4 setup, you are ready to start saving for your children’s college education (of course, if you don’t have kids or they are grown and finished with college, you can skip this step).

Start with the ESA

Ramsey recommends using the Education Savings Account (sometimes referred to as the “Education IRA”).  You can save $2,000 per year, per child into an ESA and this money grows and can be used for education expenses tax-free.  Similarly to the Roth IRA, there are income limits for using the ESA that you should check into.

Next step is the 529

If you want to do more saving that the ESA allows or you don’t meet the income requirements, he recommends using a 529 plan.  He recommends, however, that you use the type of 529 that leaves you in control of the mutual funds in which you are invested.  He warns to never invest into a plan that freezes your options or automatically changes the investments as your child ages.


Dave wrapped up this week’s lesson by laying out a few “nevers” to follow (or avoid, as it were) while saving for college:

  1. Never save for college using insurance products
  2. Never save for college using savings bonds – the rates of return are too low.
  3. Never save for college using prepaid college tuition plans – the college tuition rate of inflation is 7%, so you will effectively earn that rate on your investment when you could be earning more in a diversified portfolio of mutual funds.


This lesson was very interesting to my wife and me – this is where we’re at right now.  We are trying to ratchet up our retirement savings such that we can retire one day and also trying to save up to fund at least some of our kids’ college education.  For retirement, we are actually pretty close to investing 15% (14.8%) if you include my company match…interestingly Dave didn’t really mention in the lesson whether he includes the company match in that 15% figure.

If you only do one of these steps, opt for retirement savings

One final thing to remember – while both steps are important, saving for retirement is more important.  If you can only do one, do the retirement saving.  Think about it – you can get a scholarship or work-study or, as a last resort, a student loan to go to college.  There are no scholarships for retirement, however.  It is certainly a noble pursuit to scrimp and save to put your children through college.  I just hope that they get a good job so they can afford to take care of you because you were lax in your retirement planning.  At the very least, you want to be able to invest your time and energy in your grandkids; you don’t want to be forced to divert that time because you have to work full-time at Wal-Mart when you are 75 years old!

Check out my previous FPU posts:

Guest Post: Do you Qualify for Obama’s Refinance Program?

December 15, 2009 · Filed Under Random · 2 Comments 
About the author: Terry Henson is a contributing writer for various mortgage rate comparison websites operated and powered by Kanetix. If you live in Canada and wish to learn more about mortgage refinance, visit, where you can compare personalized mortgage quotes from up to a dozen top Canadian lenders, allowing you to select the provider with the lowest rates, and the best terms for your unique situation.

In March 2009 President Obama launched a mortgage assistance program designed to help struggling home owners keep up with the mortgage payments and avoid painful foreclosures. The program got extended due to its success, and you may still qualify today.

How to know if you are eligible for the Making Homes Affordable Program?

Just answer 4 simple questions:

  • Is your home your primary residence?

  • Is the amount you owe on your first mortgage equal to or less than $729,750?

  • Are you having trouble paying your mortgage?

  • Did you get your current mortgage before January 1, 2009?

If you answered yes to all, you will most likely qualify for a Home Affordable Refinance Program (HARP).

Keep in mind that vacation and commercial properties are not included in the program. The property you are refinancing must be your primary residence, such as a house, a condo, a town house, a co-op or a manufactured home.

Mortgage refinance rates with the Home Affordable Refinance Program go as low as 2% – the lowest in the country.

To learn how to save on monthly mortgage payments with refinance visit the Making Homes Affordable website at

Will I Save Money with Refinance?

In order to reap the best returns on refinancing, make sure that the new interest rate is at least 2% lower than your current rate; you must also know in advance that you will live in your home for the next several years. If you are planning on moving out in a year or two, then do not refinance, since the process will not save you any money, and may actually leave you with a negative. Mortgage refinancing is a long term savings strategy, not a quick fix, although an instant difference in monthly payments can be felt right away.

To calculate the amount you will save on a mortgage refinancing, find out your closing costs. Once you know the closing costs, combine the monthly savings until you reach the closing costs sum. Then count the months it took your new savings to cover the closing costs and you will know the break even period.

For example, if your old mortgage payment was $1,442 and your new payment is $1,003, then your monthly savings after mortgage refinancing are $439. If the closing fees were $4,500 it will take approximately 10 and half months to break even, after which you will truly start saving money.

Your Home is NO ATM

A big mistake many people made, is they used their home like an ATM machine to pay for fancy cars, vacations, renovations and other joys of life. It is all fun, no doubt, but if it’s not your money – don’t spend it, because in the end the debt will come back to bite in your bottom. It has in fact bitten thousands of people, who were either reckless with their home equity or who opted for high risk mortgages such as interest only and balloon home loans. Don’t touch your home equity, unless you really have to (kids education, medical bills, or emergency issues).

Weekly Bible Verse – Little with God or Much Without?

December 14, 2009 · Filed Under Weekly Bible Verse · 2 Comments 

Better a little with the fear of the LORD than great wealth with turmoil. Proverbs 15:16 (NIV)

As we enter the Christmas season, now is a good time to consider what our main focus in life should be. This verse reminds us that even possessing “great wealth” is no substitute for a healthy fear of God that leads to respecting God, attempting to follow God’s commandments, and seeking a relationship with God that ultimately leads to eternal life in heaven.  Gaining great wealth but not ending up with a saving faith in God is therefore much worse than having but a little money accompanied with that faith.

The verse uses the term “turmoil” and this could apply to many things.  Maybe it simply means that sometimes great wealth brings many responsibilities that are absent without that great wealth.  Maybe…but I tend to view the verse from an eternal perspective.  And frankly I consider the uncertainty that comes from not knowing that you are secure in your eternal destination (with the specific desired destination being heaven, that is) to lead to a bit of turmoil.

I used the phrase “much worse” above in contrasting life with and without God, but really there is no appropriate term for the stark difference.  Consider that we are people who will either spend eternity with God in heaven or separated from God in hell.  When reflecting on that, does the fact that you have a little money or a lot of money during our very brief stint here on earth even factor into the decision as to whether you should pursue a saving faith in Jesus Christ that leads to eternal life in heaven?

So, focus on what is important as we enter this most hectic season of  the year.  You will probably spend a lot of time fighting traffic, fighting crowds, fighting your schedule to try to cram a bunch of activities into very little time, and so on and so forth.  Try to take time to not get completely caught up in all the holiday hoopla and reflect on the real reason for the entire Christmas season – that God sent His Son to be one of us and live among us and ultimately die as a sacrifice for us.

God bless and have a great week…

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