FPU Lesson 4: Dumping Debt.

By Anna D. Banks

In Lesson 4, Dave Ramsey gives us a plan for getting out of debt and also staying out of debt.

Most of us know, first hand, that debt destroys, marriages, families, friendships, communities and even countries. However, the statistics that Dave shared are positively frightening:

• 25% of American families have a NEGATIVE net worth now


• more young adults file bankruptcy than graduate college now


• colleges lose more students due to massive debt loads than academic failures


• last year credit card companies collected $90 BILLION in penalty fees alone


• last year, credit card companies reported profits of over $150 BILLION

Steps to getting out of debt:

1. Quit borrowing more money. Don’t take on any more debt.


2. Cut up credit cards. Go cold turkey. Credit cards can mess up your budget on many levels.


3. Sell stuff. Go crazy. You have way more than you need or use anyway.


4. Get an extra job. Take side jobs to accelerate paying off your debts. This can be temporary.


5. Debt snowball. Pay off the lowest debt first, then use the amount you were paying for that debt and roll it over to the next debt.


6. The debt snowball debt reduction plan is one of the best plans available for paying off debt. It helps people to see immediate results and gain momentum in their plan to be debt free.


7. Go ahead and start your own debt snowball reduction plan and begin your journey toward financial freedom and financial peace.

Praise Reports:

• All families have started saving toward Baby Step 1 – $1,000 Emergency Fund.


• More than ten families have completed Baby Step 1 - $1,000 in the Emergency Fund


• One family has fully funded Baby Step 3, having SIX months living expenses in the Emergency Fund.


• Six families cut up their credit cards - 10-12 cards in total!


• It was especially exciting when the rest of the class began applauding after each family’s “plasectomy”.

Next week: Lesson 5 -

Credit Sharks in Suits...Understanding Credit Bureaus & Collection Practices