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Thursday, May 29, 2014

61. FPU, ELPs, and Dave Ramsey

Recently someone asked the following questions:

1. After taking the FPU (Financial Peace University) class what did you change?

2. Are you investing on your own or using a one of the Endorsed Local Providers (ELPs)?

3. What areas do you disagree with Dave Ramsey?

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1. After taking the FPU (Financial Peace University) class what did you change?

We took FPU twice. Once with the CD's and a second time with the videos. Both times it was free to us (in-laws had the material already so we didn’t have to pay) through our local church. I’ve also listened to his radio show for about a year or two now.

After taking the class we started getting serious about getting out of debt. We (Mrs. Eagle and I) got on a budget and built up our emergency fund. We also now talk about money at least once or twice a month as a couple.

While Dave offers several methods of tracking expenses through his website (which cost money) we found http://www.mint.com is easy to use and free. 

I now have disability and more life insurance. Mrs. Eagle also has life insurance.

We also each wrote up a will. Need to update that come to think of it.

We’ve also saved up a little to start our kids college fund.

We got 100% out of debt before buying a house. When we did buy a house we put 20% down.



2. Are you investing on your own or using a one of the Endorsed Local Providers (ELPs)?

We invest on our own through Fidelity. We also are going to open accounts with Vanguard low cost index funds this year. We do not use Dave’s ELPs. The high fees associated with the ELP program seem inconsistent with Dave Ramsey's overall message. Therefore, some DR proponents find the ELP program difficult to reconcile within the context of FPU. 

That said, I realize Dave Ramsey is running a business and part of that business is income through ELPs. Nothing wrong with Dave making money but not everyone who goes through FPU uses his ELPs. Those who want to use them are free to do so of course.





3. What areas do you disagree with Dave Ramsey?

Things I disagree with Dave on:

1. Debt Snowball
Dave recommends the Debt Snowball (lowest balance) method. That (snowball) in some cases may be good advice to people who view money in an emotional manner. However, in many cases the Avalanche (highest interest) method is a better option and of course makes a lot more sense from a financial standpoint.

2. Credit Cards
Dave recommends everyone should get rid of their Credit Cards – I believe people who use credit cards responsibly (stuff they’d normally purchase anyway and pay off the card every month) can earn good rewards such as cash back or mileage.

3. Investments
Dave recommends ELPs and front loaded investments that cost too much in fees IMO. There are better investments out there. I don’t think Dave emphasizes the 401k and Roth IRA option enough.

4. Tithing

Dave strongly recommends charity (tithing) while in debt. He even recommends it when people are in bankruptcy. I disagree with this view specifically with people giving 10% of their income while in bankruptcy. Although I do think people should give to charity as they’re able or led by the Holy Spirit. But certainly not when they’re in bankruptcy.

What about you? Leave a comment!


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