Well, the new Bible class quarter is upon us. Last Sunday there was an insert in the bulletin that listed all of the Bible classes for the upcoming Spring 2012 quarter which covers Sunday March 4th through Wednesday May 30th. In case you missed it I have added the class schedule in the table below. This quarter is going to be a really great quarter. I wanted to highlight a few of the classes and encourage you to come out Sunday morning, Monday night, Tuesday morning, and Wednesday night. That is right we have classes going almost every day of the week. We know that the normal Sunday morning and Wednesday night time is not ideal for all of our members. So, we are now offering classes throughout the week. This summer we will be offering even more. If you have any questions about the adult classes being offered next quarter please email me at: jeff.ibbetson@mesachurch.org.

There are a few classes that I wanted to highlight specially. Please consider attending as many classes this quarter as possible. You will be greatly rewarded. Also, if there is more than one class going on at a time you should check our audio page. We might just be recording that class. We usually record the sermon on Sunday morning and evening as well as the auditorium class, Room 105, and Room 214 on Sunday.

Monday night we will be offering a great indepth study of the book of Jeremiah. This class is a Sunset International Bible Institute class. The class is free to attend but cost $90 if you want it to get credit for the class toward your degree in Biblical Studies. Not sure if you are interested in attending this class? See the top ten reasons. Not interested in Jeremiah but want to attend a Sunset class in the future? Then look at the curriculum and make a request.

Financial Peace University has made an impact on millions of Americans. I am one of them. Trust me when I say that this will change your life for the better. If you don't trust me then talk to some of the people at church that have taken it. Also, we will be having a preview lesson immediately following church on Sunday March 4th in room 104. Come by and see what the class is all about. If you have attended this class in the past then now is your opportunity to invite your family or friends to attend. You can come with them and encourage them as they change their life and start managing their money God's way. This can be one way to serve your friends and family.

Sunday morning we will be starting a new class on Genesis. This class will be taught by Steve. A little over a year of planning and preparation has gone into this class. If you are interested in Science and the Bible or the book of Genesis in general then this is the class for you.

Last week in FPU our lesson was titled "Clause and Effect". The entire lesson talked about insurance and the idea of "transferring risk".

So, what types of insurance do I need and why? Well, first let's talk about the why. Insurance is used to transfer risk in our life to someone else. Let me give you an example: Diana doesn't work outside the home. So, my income is the sole income for our family. If something were to happen to me then our family would face a difficult time. That means that there is a certain amount of risk that my family faces. In this example Life Insurance can be used to transfer the risk from our family to the insurance company. We can insure ourselves to cover my income just in case. So, that is the why for insurance.

What type of insurance should you get? Dave recommends the following:

1. Homeowner's (or Renter's) Insurance
2. Auto Insurance
3. Health Insurance
4. Disability Insurance
5. Long-Term Care Insurance
6. Identity Theft Protection
7. Life Insurance

Let's look at each of these individually.

1. Homeowner's Insurance – You need to have insurance on your home period. Do not assume that you can go with out it. When looking at plans make sure that your policy has "guaranteed replacement cost" and not "extended replacement cost". This used to be standard but may not always be in the plan today. If you are trying to keep costs low then raise your deductible (as long as you have your fully funded emergency fund of 3-6 months of expenses).

2. Auto Insurance – Carry adequate liability always and then consider collision carefully. Dave talks about this considerably in the lesson but generally the idea is that unless you have an old car keep your collision. Again you can save by raising your deductible (as long as you have your fully funded emergency fund of 3-6 months of expenses).

3. Health Insurance – This can be very tricky and is very dependent on your specific situation. Generally speaking if you are healthy you should check into a HSA (Health Savings Account). HSAs are tax-sheltered savings accounts for medical expenses that work with a high-deductible insurance policy. As always you can save money by raising your deductible, co-insurance amount, or by increasing your stop-loss. However, you should never decrease your maximum pay (keep at least $1,000,000).

4. Disability Insurance – Disability insurance is designed to replace your income if you become disabled and are unable to work. Long-term disability insurance is a must. Dave says to beware of short-term policies offering less than 5 years of coverage. You should get coverage for 65% of your current income. You can save money by increasing the elimination period. The elimination period is the time between the disabling event and the time when the payments actually begin. You can do this as long as you have your fully funded emergency fund of 3-6 months of expenses.

5. Long-Term Care Insurance – This is to cover nursing home, assisted living facilities, or in-home care. This is one of the most over looked insurance areas. In addition to being overlooked it is something that most of us will have to face (current stats are 69% of those over age 65 will require long term care). It is expensive but you don't need to purchase it until you reach 60.

6. Identity Theft Protection – Identity theft is one of the fastest growing criminal activities. Dave says not to buy ID theft protection that only provides credit report monitoring. That you can do yourself by requesting your free annual credit report from the 3 credit agencies. If you request from a different agency every 4 months you can really keep track of your credit report. Make sure that you get protection that includes restoration services that will actually assign a counselor to restore your credit.

7. Life Insurance – This is the most recognizable type of insurance and the easiest to understand. Simply do not buy anything other than low-cost level term life insurance. One of the most common mistakes is over/under insuring. Typically you should look to get 10 times your annual salary. So, if you make $40,000 then get $400,000 of coverage. Children should only receive enough coverage for funeral and burial expenses. Stay away from all of the fancy options and just stay with the normal policy. Lastly don't forget about your spouse. Even if your spouse doesn't work you will still have to replace all of the work that they are doing. If you are single and have no children then you probably won't need life insurance.

I hope that you noticed one of the trends that was recurring throughout all of these different types of insurances. You can save on costs by raising deductibles if, and only if, you have a fully funded emergency fund. As always make sure that you are hitting the baby steps in order. They are not meant to be done simultaneously.

Have you ever had “buyer’s remorse”?  You know, that nagging feeling that whatever it is that you just bought just isn’t going to work.  Being the nerd in our family I don’t usually make many purchases that haven’t already been well thought out.  Two weeks ago though, I decided to use some of my blow money to buy a new journal.  I had it in my mind that I would get it on Sunday so I could start using it that night, at the beginning of the week.  I went to Target, picked out one that I liked and happened to be priced just right.  When I got up to the register I found out that this perfect journal had been misplaced and was actually twice as expensive as I thought.  Ugh.  I went back to pick out something different, but couldn’t find anything I liked better.  So I got the expensive one.  After all, it’s really nice, it’s my blow money and I deserve it.

Later that night, after I had filled a few pages with favorite quotes,  I was digging through a book shelf and found an old prayer journal.  A really cool, faux crocodile skin journal.  A journal from Ross that still had the price tag and had cost a third of what I paid at Target.  Enter: buyer’s remorse.  It’s not that I don’t love my fancy schmancy journal, it’s just that maybe I could have gotten a better deal somewhere else if I hadn’t created that self proclaimed deadline for myself. 

Last week, Dave Ramsey’s Financial Peace University class was entitled, “Buyer Beware”.  Dave presented five simple steps to having power over purchases and yes, avoiding buyer’s remorse:

1. Wait overnight before making a major purchase.

While the journal may not have been a “major” purchase, I have no doubt I would have been resourceful enough to find something better if I had been willing to wait a day or two.  The other day I told Roshelle that whenever I want to get my hair cut I mark that day’s date on the calendar.  If in a week I still want a haircut, I call and schedule the appointment.  Perhaps I should take my own advice with my spending!

2. Carefully consider your buying motives.

Am I shopping because I’m bored or because I feel lonely?  Personally, I can think back on a summer in college where I was living away from home and was both bored and lonely.  That summer my shopping got out of control!  It started with window shopping.  I was bored so I thought I’d go walk around the mall.  That led to purchases I didn’t need which led to some guilt.  I hope you won’t fall into this trap too!

3. Never buy anything you don’t understand.

In the lesson this referred specifically to financial products like insurance, investments, etc. 

4. Don’t forget about opportunity cost.

Opportunity cost is all of the things your money could be doing instead, if it isn’t spent on the item you want to purchase.  I like the way one of my professors explained opportunity cost.  Think about your favorite famous person, athlete or political figure.  In my example this will be Dave Ramsey himself!  Is Dave capable of mowing his lawn?  Definitely.  How much does it cost Dave to hire someone to mow his lawn?  Let’s say $50/week.  Dave his to decide which is more valuable, the $50 he would have to pay the landscaper, or the extra hour of his time each week.

When it comes to an item we want to purchase, we each have to go through the same thought process.  Which is more valuable, the item I want or what I could do with my money instead?

5. Check in with your “spending accountability partner” before making any major purchases.  If you’re married, be sure to get your spouse’s input.

Your accountability partner might be able to help you see through your own flimsy justifications regarding numbers 1, 2 and 3 above. 

I thought I’d also let you in on a little marketing secret.  In our Intro to Business class, before we even got to Principles of Marketing, we learned the “the 4P’s” (sometimes called “The Marketing Mix”):

1.       Product – Insert any product or service here.  Also includes product packaging.

2.       Price – pretty obvious…how much does the product/service cost?

3.       Place – where can you find the product/service?  Or, how easily accessible is the product/service?

4.       Promotion – tv commercials, billboards, magazine ads, in store displays, etc.

At a very basic level, these are thought to be the four main “ingredients” that a marketer can blend to entice a customer and create brand loyalty.  The next time you’re out shopping, notice how much thought has been into the 4P’s.  There is no doubt that the product/service name, packaging color and materials, location of the display inside the store, etc. have been carefully chosen to appeal to the people they want to buy their product.

Have you ever realized you were so wrapped up in your own little corner of the world that you lost track of the big picture?  I had that moment last week. 

You all know that we’re going through Financial Peace University, learning how to use cash only and readjusting to living on a budget.  Full disclosure: the concept of “running out” of grocery money is a little disconcerting.  The month is just past half way over – should I have spent half of the grocery money?  What if we have a grocery related emergency (running out of Strawberry Whole Fruit popsicles) and the budgeted money is gone?  Seriously though…what happens if the budgeted grocery money runs out?  If I can get a good deal combining sales/coupons on something I don’t need this week, should I get it anyway because it is a good deal?  If the grocery budget is running low is it best to pick up regular old milk/eggs (instead of the organic/hormone/cage free varieties) or just wait for next month?

Read More

Last week’s lesson, entitled “Credit Sharks in Suits,” was more than a little disturbing. Dave talked in detail about how the debt collection industry should work – there are laws set up specifically to govern the activities of debt collectors. In reality, bad collectors often break these laws and are abusive towards debtors. In our small group discussion after the video one participant told a story of being harassed by a debt collector who called her repeatedly, sometimes 19 or 20 times before lunch. Anyone who is working with a collector should “arm themselves for battle” by knowing the Fair Debt Collections Practices Act. If you aren’t dealing with a collector yourself, it’s likely that one of your friends or family members is. You can check out a list of frequently asked questions here: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre18.shtm. Read More

This week we learned how to dump debit and some of the myths associated with debt.

1. Don’t loan your money to anyone.  This may not make much sense considering that we are supposed to help others. However loaning becomes more of a problem then a help. Close friends, that you loan your money to, will become distant when it is time to pay you back. Loaning will create a stress on any relationship no matter what the relationship. In the Bible it says “The rich rules over the poor, and the borrower is servant to the lender.” Proverbs 22:7 By loaning your money you will change the relationship you have with the person that is receiving the loan. So what do you do? If you are able, give them the money but evaluate the situation and be wise about it. Don’t expect the money back.
2. “Deliver yourself like a gazelle from the hand of the hunter, and like a bird from the hand of the fowler.” Proverbs 6:5  “RUN!!! CHEETAH!!!!” This should be our response to credit cards.
3. Car Payment – You will always have a car payment. This is a myth. You can save up and by a used car. It will get you where you need to go and you won’t be paying car payments on it. Besides, typical millionaires don’t even drive new cars. They buy reliable used cars. Also remember a new car loses a lot of value very quickly.
4. Mortgage – Don’t take out a 30-year mortgage and think you will pay it off in 15 years.
5. Credit Cards – You don’t need a credit card to make online purchase or buy a phone. Also do not give teens a credit card to teach them responsibility. Young adults are the main target for the cheetahs.

It’s October 3rd and we’re now three days into our first month on Dave Ramsey’s Cash Flow Plan (budget) and the envelope system (using cash only). Confession: while the Cash Flow Plan isn’t new to the Clark house, we are first time envelope users. When we went through FPU two years ago we decided to skip the cash only system and stick with our debit card. This time around we decided we’d give it a try. It feels like the timing is right with news that Bank of America is planning to charge a monthly fee to use debit cards starting in 2012 (http://www.reuters.com/article/2011/09/29/us-bankofamerica-debit-idUSTRE78S4GQ20110929). We’re running a little behind and just picked up our cash today. Lesson learned – the 3rd of the month is not a great day to go to the bank. Apparently Social Security is delivered on the 3rd of the month and apparently a lot of seniors also use the bank our bank. I was actually somewhat intimidated about the bank visit – I’ve never walked up to the counter and asked for cash before. I usually just go to the ATM. I took a scrap of paper with the total amount I wanted to withdraw and the specific amount allocated to each of our envelopes:

I’ll definitely take this again next time – the teller didn’t need any further instructions about what I wanted. He actually wished me “good luck” with the system and said he’s helped other customers who were doing a similar program. He also offered to put the money allocated to each category into a separate bank envelope. We’re going to start off by using the Dave Ramsey envelope system, but I appreciated that he extended this offer. If you didn’t sign up for FPU but still want to do the envelope system, you may be able to get free envelopes at your bank too. Keep in mind that the categories above are what we decided to do. You could have more or less envelopes depending on what works best for you.

I had my first cash transaction today – I spent $4 of my blow money on a bean burrito. It wasn’t cumbersome like I imagined it would be and there is something to be said for having to hand over actual money instead of just swiping a card. I do have a short list of hesitations with the envelope system:

• What do I do with all of the change from the cash transactions? Do I dump into a “pot” and use as needed or do I keep it separated in the envelopes?
• What is the most secure way to maintain the cash I’m not using?

Hopefully I’ll have good answers to these questions by the end of this month.  What questions/concerns do you have about implementing an envelope system?

Last week’s FPU class was called “The Nuts and Bolts of Budgeting”. To be honest, the budgeting forms that are presented in the lesson are a little overwhelming. Ok…quite overwhelming. We already did the one page “Quickie Budget” (check out this post for more details about the Quickie Budget: http://4sixteen.wordpress.com/2011/09/14/summary-of-fpu-week-one/) but now we’re supposed to complete a massive “Monthly Cash Flow Plan” (available for free at http://www.daveramsey.com/tools/budget-forms/). Read More

This weeks topic was Relating with Money (Nerds and Free Spirits Unite!)

We first covered: men, women and money.

• Men are not all for emergency fund savings they find this boring and not sophisticated enough.  Women on the other hand think it’s the most important key to the financial plan.
• When it comes to shopping men are good at negotiating and women get the deals by hunting.
• When facing financial problems men lose self esteem and women face fear or even terror since money usually represents security for them.
• We learned about marriage and money. Sad fact that the number one cause for divorce in America is money fights. If you have an agreement on your value system you will reach unity in your marriage.  And both of you should do the financial decision making.
• Nerds are the people who keep a budget and are responsible with money, they are usually ahead of the game. Free spirits are those who love to spend the money and have fun with it and in order to get them to play the game you need to be right there behind them.

Singles and money is another point we discussed.

• The lack of time and fatigue can lead to poor money management, so don’t wait for tomorrow to do what you can do today.
• Be careful not to fall onto impulse or stress shopping, is not healthy for you or your pocket.
• A written plan gives the single person control, self-accountability and empowerment.
• Every single person should have an accountability relationship.  This is someone with whom you discuss major purchases and your budget. Make it someone responsible and not your shopping buddy. It can be someone at the church, parent, relative, boss, etc.

Kids and money was our third point.

• Teaching your kids how to handle money is your responsibility.
• Pay commission not allowances. 
• If you work, you get paid; if you don’t work, you don’t get paid.
• Teach by example.
• Be age appropriate.
• Three things you can help them to learn by using envelopes are: spending, giving and saving.

I don’t have an accountability partner right now. Yet, I can see the importance of such a person in my life since they can help me stay in track to reach my financial goals. I encourage you to find your accountability partner as soon as you can, it will make a big difference in your life.

Financial Peace University (FPU) started last week with a lesson called “Super Saving”. Two points that I think are worth sharing:

• Everyone needs an emergency fund! Dave Ramsey encourages $1,000 or $500 if your income is less than Read More