Sunday before the big Super Bowl game we attended the 4th week of Financial Peace University, or FPU as it is commonly called.
Week 4 – Dumping Debt
This Financial Peace University class really rocked my world and got our blood pumping even MORE vigorously for this journey with money. Dave’s weekly video lesson was filled with passion; at one point I found myself tearing up with emotion and anticipation of the life we have ahead of us now that we are gaining even more control over our money. Another point I had goose bumps because I knew that the things he was saying could actually come true. No gimmicks, no lies – just a commitment to “live like no one else so that later we can live like no one else“.
Week 4 was centered around dumping debt and why debt is actually a product that is sold to us by banks, credit card companies and retail stores. We learned about how the Debt Snowball method can help you work your way through debt. Credit card debit, student loan debt (lordy I can not believe the huge amounts of student loan debt people have!), car loan or toy (snowmobiles, ATV’s, campers, etc) debit and mortgage debt – it is all a big clog in the path to financial freedom. Dave gave us some sobering statistics during class about the business of debt including the fact that many national retail stores make more money on the sale of credit applications than they do on the actual merchandise they sell. And we all fall for it!
Years ago we wised up about credit card debit and thankfully we do not have any and have not had for over 4 years. Do you have credit card debit?
We do have 1 small personal loan and a balance on our new (to us) Captiva we bought in June of last year. Those 2 debts are what we are focused on in our Debt Snowball and working through debt is Baby Step #2 in Dave’s 7 Step plan. (Find out more about the Baby Steps on Dave’s website).
We also learned about some credit card myths including:
- You do not need a credit card to rent a car, you can do it with a debit card (same goes for online shopping).
- More than 100 million people do NOT pay off their credit card balance each month.
- Credit card companies are targeting teenagers aggressively
And car and lending myths too including:
- A new car loses about 60% of its value in the first 4 years.
- Leasing your car is the most expensive way to finance and operate a vehicle
- You can’t borrow your way out of debt with a debt consolidation loan.
Once you pay off your debt and stop using credit your credit score is naturally going to drop or to disappear. Do you need a credit score? Dave says no. His analogy that a FICO score is an “I love debt” score really made sense. You have a good credit score because you have have debt. You don’t “need” a FICO score…you don’t “need” debt.
We also heard the theory of Gazelle Intensity and we are 100% going Gazelle intense. This really made us think and be inspired so check out Dave’s gazelle intense story here if you want to know more. I love that story!
We’re excited for week 5, and to keep plugging away at the steps for financial peace. If you want to find out more about FPU classes in your area visit the FPU locations page.
