Financial Peace University: LESSON TWO

The second lesson taught by Dave Ramsey in Financial Peace University was titled "Relating with Money". This lesson is about the importance of working together in relationships and how we handle money. How you manage your money (or how it manages you!) affects your personal relationships, especially those with your closest family members.

Dave gave us four key points:

1. Men and women think very differently about money.
2. The nerd and free spirit must learn how to work together.
3. If you are single, find an accountability partner with whom to discuss your finances.
4. Teach your children how to manage money so they avoid our mistakes.

I will try to explain these points in my own words:

Men vs. Women
In a very over-generalization, Dave gave us the difference between men and women when it comes to money:

To men, money usually represents a scorecard and their self-esteem depends on how well they do financially.

To women, money usually represents security; they face fear or terror if there are financial problems or they feel secure if things are going well for them financially.

Dave said, "Guys, always be aware of the woman's security gland. When it tightens up, it will affect the whole relationship".

The number one cause of divorce in America is money fights.

Dave stressed the importance of both husband and wife sharing the financial decision making in a family. You need to have a budget committee meeting with both of you involved so EVERYONE knows what's happening with the family money.

Nerd vs. Free Spirit
A nerd is someone who is very detailed oriented, who likes to be in control, who likes to keep a budget and is good at it, and who likes to feel they are taking care of loved ones.

A free spirit is someone who spends money without thinking about it, who does things on a whim, and who is just fine with someone else taking care of money matters.

Dave stresses the importance of both Nerd and Free Spirit (if they are husband and wife) working together to make financial decisions. He says the partner with the natural gift can prepare the budget, but the decision making must be done by both. That means compromise from both parties. That means the free spirit must be more concerned about the budget and the nerd must give up some control to the free spirit when creating a budget. Both parties must be in attendance at the family's budget committee meetings each month.

Singles and Accountability Partners
This section was the most applicable to my situation right now. Dave says, "Beware of impulse buying, which can be brought on by stress or even by the "I owe it to myself" syndrome. A written plan gives the single person empowerment, self-accountability, and control. Singles must have an accountability partner who loves them enough to be brutality honest. This is someone to discuss major purchases and even your budget.

Kids and Money
Teaching your kids how to handle money is not the school's responsibility, it's YOUR responsibility. Dave suggests to pay commissions, not allowance. He says we have enough people in our society who expect to be made allowance for. If you work, you get paid; if you don't work, you do not get paid. You should teach by example. Show your children how to handle money. If they are old enough to understand, show them your budget and make them a part of that process. And make sure in your training, you show them how to budget for tithing!

Lessons Learned:
This lesson was more informational for me to store away for a future date. The biggest thing I learned from this lesson was to start a budget. I am pretty careful with my money, but I do not have an official budget I live by month to month. I really don't want to get an accountability partner, so I don't know if I will. I think I am my hardest critic when it comes to making major purchases. I agonize over it for weeks, months, and sometimes years before I actually purchase a new TV, or a couch, or a new car. I am guilty of impulse buying for little things, especially at Target or Costco...those stores can get dangerous for me. :o) Another thing I learned from this lesson is I am more of a NERD than a FREE SPIRIT. I don't know if that's a good thing or a bad thing, but that's how it is.