Financial Peace Revisted by Dave Ramsey (Book Review/Notes)

One of the books I was looking forward to reading that Dave Ramsey wrote was Financial Peace Revisited.

There were some helpful parts, but - for the most part - I didn't feel that this book had as many suggestions and guidance as other books he has written.

Nonetheless, these are some things I found informative and that I wanted to remember:

Have 3-6 months of expenses in liquid savings just for emergencies.

Extreme amounts of money or extreme lack of it magnifies character.

- Larry Burkett

If you start to save at age 25 with the idea that you will withdraw your money at age 65, you will for 40 years. Let's say that you put $1,000 in a savings account one time at age 25 and you never deposited or withdrew anything from that account until age 65.

At 6% per year you would have just over $10,000 at age 65. If you doubled the interest rate, you'd have over $93,000 at 12%at age 65.

At age 20, you save for 45 years until age 65, saving only $65 per month at 12% average annual return. In 40 years, you would accumulate $1,394,555.

The key suggestions are:

- Avoid "Stuffitis" - or the worship of stuff.

- Plant Seeds - give money away to worthy causes.

- Live Substantially Below Your Income.

- Sacrifice now so you can have peace later.

- The borrower is the servant to the leader.

- Check your credit report at least once every two years.

- You must save money.

- Take time to prioritize your life daily.

- Keep your spiritual life healthy

The ultimate measure of a man is not where he stands

in moments of comfort and convenience,

but where he stands at times of challenge and controversy.

Major Components of a Healthy Financial Plan:

- Written cash flow plan

- Will and/or estate plan

- Debt reduction plan

- Tax reduction plan

- Emergency funding

- Retirement funding

- College funding

- Charitable giving

- Teach my children

- Life Insurance

- Health Insurance

- Disability Insurance

- Auto Insurance

- Homeowner's Insurance

The rich rule over the poor and

the borrower is servant to the lender.

- Proverbs 22:7

Consumer Equity Worksheet

(Value - Debt = Equity)

Real Estate

Car

Cash on Hand

Checking Account

Savings Account

Money Market Account

Mutual Funds

Retirement Plan

Stocks or Bonds

Cash Value (Insurance)

Household Items

Jewelry

Antiques

Boat

Unsecured Debt (Negative)

Credit Card Debt (Negative)

Other

Income Sources:

Salary

Bonus

Self-Employment

Interest Income

Dividend Income

Social Security

Pension

Annuity

Disability Income

Cash Gifts

Trust Fund

Other

Set aside money for lump sump payments:

Real Estate Taxes

Homeowner's Insurance

Home repairs

Replace furniture

Medical Bills

Health Insurance

Life Insurance

Disability Insurance

Car Insurance

Car Repair/License Plates

Replace Car

Clothing

Tuition

IRS (Self-Employed)

Vacation

Gifts (including Christmas)

Other

Monthly Cash Flow. At some point in the future, see if Dave Ramsey's website has a copy that can be downloaded and modified.

Recommended Percentages in a budget:

Charitable Gifts 10-15%

Saving   5-10%

Housing 25-35%

Utilities 5-10%

Food 5-10%

Transportation 10-15%

Clothing 2-7%

Medical/Health 5-10%

Personal 5-10%

Recreation 5-10%

Debts 5-10%