Friend and freelance writer Les O’Dell shares this diary entry from the second session of Financial Peace University, a 13-week course from national talk-show host Dave Ramsey.

Looking forward

This was the Financial Peace University lesson that I had been most eager for and the most excited about: how to get rid of debt. It’s the reason we had signed up for the class. Our enthusiasm was contagious—our 16 year-old-daughter and her boyfriend agreed to attend the night’s session with us. She’s expressed some interest in a career in finance, so I thought it would be a great experience for her.


The evening’s DVD lesson featured Dave Ramsey popping the myths of conventional wisdom like balloons: 15 in all. Among the first were the beliefs that loaning others money or cosigning loans is a way of helping them. Sharing stories of people who’ve had to pay other’s debts as well as their own, he said to always refuse to “help” in this way. Instead, Ramsey added that if you have the money to give, then give it, but don’t ever expect it back.

From there, Ramsey explained the pitfalls of cash advances, rent-to-own, payday loans and car lots with on-site financing. He called these “services”  horrible, greedy rip-offs. He also called the lottery and other forms a gambling a tax on the poor and those lacking math skills.

On Auto Pilot

Next, he took on the myth that people will always have car payments. He shared how typical millionaires become wealthy partially because they do not buy new cars. He explained how a new car will lose up to 70 percent of its value in the first four years and how leasing is the most expensive way to operate a vehicle.

Despite our money mistakes, this is one area where we’ve been on target for many years. There are four cars in our family—all paid for! I can’t imagine what it would be like to have car payments and I don’t plan on ever having them again.

Financing a home

Ramsey shared how people take out a 30-year mortgage, saying they’ll pay extra on it each month, when the truth is that the “extra” rarely happens. Instead, he recommended never taking more than a 15-year mortgage and shared how a payment of just a few hundred dollars more each month (compared to payments on a 30-year note) translates into thousands—and sometimes hundreds of thousands—in savings.

Scissors Time

Dave Ramsey's FPU Week 4: Dumping Debt
Creative Commons License photo credit:

Then came the part of the lesson I so wanted my daughter to hear: the dangers of credit cards. She’s heard my wife and I preach this lesson so long, I couldn’t wait for her to hear it from someone else. Ramsey outlined the dangers of credit cards from the company’s marketing tactics to the fact that spending with plastic is psychologically less painful than using cash or a cash advance. With the largest pair of scissors I’d ever seen, Ramsey began sharing the alarming truths of credit cards and cutting through the offending Visa, Mastercard, Discover cards as well as a variety of retailer-issued plastic.

Finally, he shared the exciting truth of what life without debt can really be and, using the example of a gazelle intent on escaping predators, motivated his audience to become debt free using Baby Step 2 – the debt snowball: paying as much extra as possible on your smallest debt to eliminate it, then rolling over the amount of those payments onto eliminating the next smallest, etc.

On Fire

I couldn’t wait to ask our young guests what they thought of the lesson. I could tell during the session that it was making an impact. Our daughter’s boyfriend said he couldn’t wait to share what he learned with his parents. Our daughter came out on fire to never be in debt and to help others reach financial independence and freedom. As soon as we got home, she began investigating college programs to become a financial planner.

My wife and I came out of the class with a new resolve to dump debt and make good choices. Let the gazelle intensity begin!

Les O’Dell is a freelance writer living in Carbondale, Ill. His work can be seen in a number of newspapers, magazines, publications and websites. He is co-author of the popular “He Said, She Said” newspaper column. He can be found on the web at  Les is not affiliated or endorsed by LPL Financial.


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