Here's the deal: when I learn something new or get excited about something I feel like I need to tell everyone I meet. So when I stumbled onto Dave Ramsey and started telling people about my new-found who-ha I mostly got the same response, "oh, the get-out-of-debt guy, sure I've heard of him..."

At that stage of the game, that description worked for me. But now, as I've been doing this stuff for a while, I've come to realize that calling him the "get-out-of-debt guy" is just not good enough. Besides being a turn-off to people who think that debt is okay - or to people who don't have debt - so they don't think they need his help, it really just describes one piece of what he does.

Look at his 13-week class, Financial Peace University. Only one of the 13 classes is on debt elimination. Granted, it is the centerpiece of financial peace... But my point is this: He's not the get-out-of-debt guy, he's the personal-finance guy.

Soup-to-nuts personal finance. This is the education we should have all received as a condition of graduating high-school. This is the education you need if you're doing well or if you're not.

We (my wife and I) have about 18 months to go before we're out of debt but the house. But because of what we learned in FPU we've avoided some huge financial set-backs. Two examples I'd like to use here happened in the last couple weeks... but thanks to what we learned a couple years ago, these example will be just examples not catastrophes.

Prior to going through FPU we thought that the ideal way to have any kind of insurance was to pay the LEAST possible to satisfy the bankers and the law. We figured that if a car is paid off - drop everything but what is required. For our home, just get enough to keep the bankers happy and keep our cashflow as high as possible. So, needless to say, those are both the wrong way to do it. After taking the classes, we adjusted our homeowners insurance and our car insurance. AND, even after paying off the cars, we kept full coverage.

Example one:
There was an ice storm a month or so ago and our huge elm in our back yard could not hold up under the weight.


I called our insurance company and they're paying for the tree removal, the damage to the siding and - because the adjuster found hail damage and was able to determine that it was from just a couple months ago, they're replacing our whole roof. Total damages, about $10,000. Out of pocket for me? $2000.

Example 2:
Then, a few days later I woke up early for some reason and left for work at about 6AM. Just a mile or so away from home, at ~60MPH I ran into a deer.


Total damages about $3,000. Out of pocket for me? $250.

Had we not been doing all this Dave Ramsey stuff, this would have been a huge set-back. Our insurance would not have been adequate and we would not have had any idea where the money would have come from to fix everything. Instead, we're paying cash for the car repair out of our emergency fund and we're saving up to pay the $2,000 for the roof repair in the spring when we can get a roofer to do the work.

Thanks Dave!

Labels: Dave Ramsey, emergency fund, financial planning, insurance