Category: Money

Book Review: Financial Peace, Revisited

I just finished Financial Peace, Revisited by Dave Ramsey with thoughts by Sharon Ramsey (Viking, 2003). I blasted through this book, both because of its readability and since the subject matter is very practical. I have been listening to this guy’s podcasts recently and his conservative Puritan view towards money (hard work ethic, no borrowing, giving/tithing, saving) resonates with what I feel is the right way to view finances. He has quite the following on his radio show and in his live events. He has also taken the American church by storm, offering his “Financial Peace University” curriculum at a church or school near you.

In his book, Dave shares how he lost BIG in real estate in his twenties – nearing bankruptcy, only to gain it all back again using the money principles about which he now teaches. Has what he calls the “Baby Steps” to financial freedom – starting with things like saving up an emergency fund and getting out of consumer debt. Then he encourages people to save for retirement and college – and then pay off the house. He teaches that ideally, nobody should take out a mortgage but should buy a house with cash. But if people area already in a mortgage, then they should “get mad” until it is completely paid off. We work harder at something, he says, if we get mad and let our emotional desire for peace and security kick in. Once the house is paid off, then they can live prosperously and philanthropically. None of this comes overnight. Financial peace is the result of hard work at our jobs and disciplined saving over the long-haul. It also means that we as consumers must curb our selfish desires to “have it all” and “have it now.” We must live well beneath our means and use the excess income to save and give.

I love this kind of teaching because it is the opposite of the “get rich quick” myths out there. We have all seen those infomercials and seen the ads: “Earn ten times the income for one-fourth of the work!” Maybe some people have achieved that. But most people cannot – because that is not reality. Work hard, give, save, spend. And make sure every penny – and no more – is allocated to one of those three categories (giving, saving, spending).

I recommend this book. We all need to deal with money in this world. This book helps up to better deal with it so that we are no longer enslaved by the money, but rather we have control over it.

The Money Envelope System


My wife and I have heard about budgeting money using cash in envelopes that separate different categories of spending, but I guess we never though it was “for us.” The more I thought about it, I figured that if it saves money in the end, why not do it? So I went to the bank and got out some cash for three main categories of spending (plus one for “other”) that are categories that are not “fixed” each month. These three are groceries, dining out, and gas. These three categories usually end up fluctuating each month because my wife and I have no budgeted goal for keeping those expenses down. With these envelopes, we know we can only spend “x” amount of dollars at the grocery store this month. Whatever is leftover we can put into savings and then start all over again next month.

If you think about this, it will save money and give more freedom. We will save money because we won’t just impulse buy – we actually have to think about our purchases before we put them in the grocery basket. It also produces more freedom (ironically) because we know we can go out to eat and spend money from our “dining” envelope at some nice restaurant at the end of the month because we held back from dining fancy at the beginning of the month. We often go out to eat and feel somewhat guilty that we are spending money frivolously. But now that we have a budget, we can feel the freedom of spending what we budgeted.

The reason why many people have financial wealth in this world is because of a simple principle called “delayed gratification.” They shop at JC Penny and maybe even Thrift Stores. The other reason they are wealthy is because they spend less than they earn. And that is a principle that can apply to anyone of any income level.