Over the last few weeks, I've been fortunate to be part of Dave Ramsey's Financial Peace University at our church. I may be the coach, but I'm really taking the class just like the rest of hem.
Most of us are wanting to get a handle on excess debt, the budget, and creating an emergency fund. Financial Peace University is a great way to do that. It's a great program that has served us well before.
Several years ago, Kathy and I used Dave's principles to pay off lots of debt and it really worked. But unfortunately, it's all to easy to slip back into the convenience of getting things now, and paying for them later.
Staying debt free is tough, even if you've done it before. It reminds me of people who've lost weight, but then put it back on. They worked so hard to get there, but then slipped back into their old habits.
That kind of debt is kind of like excess weight. Both lead to problems. Obesity often leads to diabetes, or high blood pressure, and then other things. But excess debt makes your life tougher too.
Too much debt means excess payments that can start dragging you down. Your margin of safety starts to shrink, and emergencies get harder to deal with.
Both types of excess tend to creep up on us, too. When we get lazy and inactive, we lose muscle tone and slowly replace it with body fat. Even though our weight hasn't changed, we're actually fatter. When it finally does start to go up, it happens more quickly.
On the personal finance side of things, we get comfortable when we're able to make our payments. However, if you're like me, we see something else we'd like to do, or want to have. It might even be a good thing, but even a good thing can bring you to the tipping point.
Rather than saving to pay for it, we take the easier path (or so it appears) and finance it. We might have even paid off and closed the account, but they're usually happy to reopen it for us, up to a point. Until things don't work out the way we expect.
We figure income will always be the same, but people get downsized. Spouses get sick. New bills come in, and old ones start to mount. Just like excess weight that endangers our health, runaway debt can spiral out of control, threatening everything, too.
So what can we do about it? Next week, we'll look at the steps to gaining financial freedom, as well as freedom from fat. Interestingly, they're quite similar. Now, I've got to go start my workout. And then I think I need to take a look at the bills!