Drive Free Cars for life!

While taking part in Dave Ramsey's "Financial Peace University", we heard a great example of how you could turn traditional thinking around, and make your money work for you.

They started the lesson out by talking about how the average new car payment for 1/3 of car buyers is $475 with a loan term of 6 years (for a $26,000 car with 9.6% interest). Most people will just assume that they will always have a car payment, and that having a car loan and payment is just a part of life. It's something that you can never get away from!


According to Dave Ramsey, if you turn that thinking around, within that first six years you can get to the point where you'll never have a car payment again!

How it works

Let's say the car you're driving now is worth $1500, and instead of paying a dealer $475/month for a new car like most people do, you save that money for 10 months. At the end of 10 months you'll have $4750, along with another $1500 from the sale of your old car. With that money you can buy a new car worth $6250.

If you keep going along those lines for another 10 months, you'll have another $4750. At the same time you'll probably be able to sell your new $6250 car for just about what you paid for it. That means you'll have $11,000 to spend on another new car, just 20 months after you started with a $1500 car!

Let's say you decide to keep that new $11,000 car for the full six years it would have taken to pay off a new car with a loan. Continue paying yourself that $475 payment every month for the remaining 52 months, and put it into a good mutual fund. If you receive an average return of 12%, then you'll be sitting on over $32,000 dollars after the 6 years is up.

You're home free - free cars for life!

If you go now and buy a nice used car for $12,000, you'll still have 20 grand sitting in your "car replacement fund". If that fund continues gaining 12%, even if you never add more money to the fund, you'll be able to buy $14,000-18,000 cars every 5 years from now on! The interest you're gaining in that account will pay for your new cars for the rest of your life!

How do I retire rich?

Here's the fun part. Once you've established your car replacement fund, from then on you'll be ok to take that $475 you would have used to pay for your new car loan, and invest it in a mutual fund. If you gain 12% interest, here's how the numbers work out if you invest that amount for 10, 20, 30 and even 40 years:

• 10 years - $100,000
• 20 years - $470,000
• 30 years - $1,600,000
• 40 years - $5,588,385

So there you go, Dave Ramsey's plan to drive free cars and retire rich. While it does depend upon you earning a good amount of interest through your mutual fund, as well as some other assumptions about car values, it doesn't sound impossible to me. I know we would never pay $475/month for a car, but at the same time this example really brings home the idea that the returns of compounding interest are something we all need to strive towards gaining.

Let me know what you think about this plan in the comments!

Just a friendly reminder - from now until May 15th, if you sign up for a new account for Revolution Money Exchange, you'll also get a $25 sign up bonus. To sign up all you have to do is click on the button below, and you'll be taken to the first page in the sign up process. If you sign up through my link, I'll also get a $10 bonus.




I signed up for and received my $25 bonus almost instantly, as well as several referrals for friends. I transferred it directly to my local checking account. Free money - can't beat that! Don't miss out - sign up today!

LINKS:
Revolution Money Exchange

Time to dig deeper

I've been blogging about personal finance now for several months. During that time one person I've heard about time and again is Dave Ramsey and his baby steps. I've gotten a basic understanding of his program through posts that other bloggers have had on their sites, but I always wanted to delve a little deeper.

A couple of weeks ago my wife and I got that chance. Some friends in our church small group decided that over the summer months they would be hosting a Dave Ramsey "Financial Peace University" class at their home every tuesday for 13 weeks. It sounded like a great chance to examine his ideas a little more in depth. We paid the $100 for the class and materials.

Opening the package - what's inside?

We got our package this past week, and today I decided to do an unboxing of all the things in the box, kind of like they do with new tech gadgets on a lot of the technology sites.

So when you sign up for "Financial Peace University", what do you get? First, you get this box:



Once you open the box, this is what you see that it is chocked full of stuff:



Inside you'll find audio CDs, CD-Roms, books, workbooks and more.



Although we'll be watching the lessons on DVD with our group, the lessons are also included on CD in a nice CD wallet.



The package also includes a nice faux-leather wallet to use with the enveloping system. This promises to be a challenging thing to do for my wife and I. We're used to just paying our bills, and then saving/spending whats left over without any kind of an organized budget. Looks like we'll have to use a bit more discipline now!





And finally, they give you a couple of credit card sleeves with a nice reminder printed on it:



Stay tuned

So there you have it, that is the unboxing of the Dave Ramsey "Financial Peace University" membership kit. Lots of great stuff, all of which we'll be getting into over the next 13 weeks.

During our 13 week journey I'll blog about our experience with "Financial Peace University", and update you on some of the tips that we get from the great mind of Dave Ramsey. Stay tuned for more!

Whoever loves money never has money enough; whoever loves wealth is never satisfied with his income. This too is meaningless. Ecclesiastes 5:10

Let your character be free from the love of money, being content with what you have; for He Himself said, "I will never desert you, nor will I ever forsake you. Hebrews 13:5

Christian Carnival CCXXIII - Tabernacle Edition is up over at http://www.deepbiblestudy.net. This week's carnival uses the theme of the tabernacle of God to categorize the posts, and is quite an effective metaphor. Check it out for further explanation!

My article, Money and your prayer life: Do you pray about your finances? was chosen as one of the articles for this week's carnival. Please check it out, and the rest of the great articles. Here are a few of my favorites:

• Rodney Olsen presents Keeping Pets in Perspective posted at RodneyOlsen.net. As Christians, what should our attitudes be towards pets?
• Crystal Nichols presents 7 ways to live in harmony with your coworkers posted at Christian in the Corporate World.
• Diane R presents Angry Young Christians? posted at Crossroads: Where Faith and Inquiry Meet. Why are there so many angry young adult Christians nowadays?

Don't forget to check out some of my top posts from this last month!

1. Paying for Pets: When is it too much?
2. Should parents pay for their kid's college expenses?
3. 5 ways to make some extra money
4. Money Hacks Carnival #6: Famous Hackers Edition
5. The bible and Tithing Series
6. Revolution Money Exchange - $25 signup bonus!
7. 3 weeks with Buxfer.com
8. 5 Budget Busters Challenge
9. How to make a million dollars at any age
10. 3 weeks with Mint.com

Enter our book review and giveaway contest! Enter by doing the following and leaving us a comment:

1. Subscribe to Bible Money Matters by RSS
   
2. Subscribe to Bible Money Matters by email
3. Follow me on Twitter.com

Big money on the way

So now that you've got your rebate on the way, you may find yourself with an extra cash that you can use to buy that new TV, save for retirement or use to pay down debt. If you're not sure of when you'll be getting your payment, check out our post titled, "Economic Stimulus Rebate: When will you get your rebate?"

My wife just got out of the hospital after a 3 week stay for a blood clot in her left leg. It was a major health scare and we're just thankful that she made it through alive. Because of her long hospital stay, however, we will have to deplete part of our emergency fund to pay all the bills. Luckily we had good insurance and we'll only end up paying about $2000 of a total bill that will probably be in the hundreds of thousands of dollars. For us, finding a way to spend the $1200 economic stimulus rebate will be easy. We'll be just sending the check directly to the hospitals.

7 ways to use your economic stimulus rebate

Besides medical emergencies, what are some good positive ways to use your economic Stimulus rebate besides just spending it on a big flat screen TV?

1. Pay down debt: This can be a great way to snowflake your way out of debt, although its more of a large snowball. Pay down your smallest debts and work your way up!
2. Bulk up your emergency fund: Take the money you've received and put it in a high-yield savings account to begin building (or continue growing) your emergency fund. In uncertain economic times like these it's a good idea to plan ahead and make sure you're ready in case you lose your job, have health issues (we know about this one) and
3. If you haven't already, start a Roth IRA: Use the money to purchase a long term investment. The earlier you start saving for retirement, the better!
4. Pay for a needed home upgrade or repair: Use the money to replace your old crumbling driveway or to update your kitchen countertops. Try to use the money on things where you'll see a return on your money when you sell, things that will improve your home's value.
5. Donate your rebate: We all have good intentions of donating to our favorite causes, or giving more to the church we attend. We have good intentions but rarely have the money to follow through. Take the rebate that you received and send it to your favorite good cause! Not only will you be helping out a good cause, but you'll get a great feeling from it as well!
6. Go on a mini-vacation: Everyone gets stressed out and sometimes a few days off is just what you need. Instead of spending your whole rebate on a vacation to Hawaii or a cruise in the Caribbean, take a mini-vacation for the weekend to a resort nearby, or stay in a fancy hotel for a couple of days. Take the rest of the money and save it, pay down debt or invest.
7. Make an extra mortgage payment: Make an extra payment on your mortgage and get it paid off sooner. The more of these you can make, the more years you can cut off the life of the loan.

What positive ways will you use your rebate?

So there are a few ideas of some positive things you can do with your economic stimulus rebate. Let me know in the comments what some of your ideas are as well and I'll update the post with your suggestions as the bottom. If you've posted about this topic on your own blog, let me know and I'll add you to the "related links" below as well!

Related links roundup
Economic Stimulus Rebate @ BeingFrugal.net
What to do with your economic stimulus payment @ Consumerism Commentary
IRS Economic Stimulus Check Promotions: 10% Bonus @ My Money Blog
15 Things To Do With Your Economic Stimulus Check @ freefrombroke.com

Calculate your rebate


Enter our book review and giveaway contest! Enter by doing the following and leaving us a comment:
Subscribe to Bible Money Matters by RSS
Subscribe to Bible Money Matters by email
Follow me on Twitter.com

Enter our book review and giveaway contest! Enter by doing the following and leaving us a comment:

1. Subscribe to Bible Money Matters by RSS
   
2. Subscribe to Bible Money Matters by email
3. Follow me on Twitter.com

my God will supply all your needs according to His riches in glory in Christ Jesus. Philippians 4:19

This verse is encouraging for us to know that all our needs will be supplied, even as we're going through hard times, and times where we know we'll be having lots of bills to be paid. Because we had followed the scriptures about planning ahead, we were able to get health insurance and save an emergency fund, and be supplied by God in advance.

Either way it is very calming and satisfying to know that with God we never need to worry, he will provide.

April was another great month for BibleMoneyMatters.com! We were able to keep the site growing, did a complete redesign, brought in some new visitors and made some new friends. Here's a recap of April 2008:

Top 10 Posts from April

1. Paying for Pets: When is it too much?
2. Should parents pay for their kid's college expenses?
3. 5 ways to make some extra money
4. Money Hacks Carnival #6: Famous Hackers Edition
5. The bible and Tithing Series
6. Revolution Money Exchange - $25 signup bonus!
7. 3 weeks with Buxfer.com
8. 5 Budget Busters Challenge
9. How to make a million dollars at any age
10. 3 weeks with Mint.com

Top 10 Referring Sites in April

We had a lot of great sites and blogs referring traffic our way this past month. Please return the favor and check out these great sites now as well!

1. stumbleupon.com
2. entrecard.com
3. google.com
4. gatherlittlebylittle.com
5. wisebread.com
6. moolanomy.com
7. frugalhacks.com
8. mrsmicah.com
9. beingfrugal.net
10. pfblogs.org


Other BibleMoneyMatters.com Stats

• Subscribers - The site has seen a substantial increase in subscribers in the last month or two. We currently have 127 subscribers enjoying BibleMoneyMatters.com via the RSS feed, and another 17 receiving updates via email. If you haven't subscribed already, you can do so clicking here for RSS or here for email updates.

• Traffic- The site had around 7,746 visits this past month, with 11,761 page views. That means we're showing a steady increase in users from the last couple months when we had 4,046 (Feb '08) and 6,651 (Mar '08) visits. Hopefully we can keep the growth going!

• Google Page Rank Update - This site has been at a page rank of 0 since it launched a few months ago. After Google updated page rank this past week Biblemoneymatters.com now has a page rank of 4! Hopefully that will mean some increased exposure for the site.
  

Thanks are due..
A special thanks goes out to Lynnae of Beingfrugal.net for helping me keep BibleMoneyMatters.com updated during my wife's battle with a blood clot in her leg. She's still in the hospital today, but we're hoping that she'll be home sometime this week. Give Lynnae's site a visit, and thanks for stopping by!

The following is a guest post by PT of Prime Time Money. If you like this post, consider subscribing to Prime Time Money via RSS or email.

Because most of us can't take a two week vacation to Hawaii every season, I present some frugal ideas for those quick weekend getaways. The biggest expenses of the weekend getaway are usually the airfare and hotel charges. These ideas focus on limiting or eliminating those big charges.

Friends Are Friends Forever

Some of my favorite vacations have been to places where an old friend is now living, like my recent trip to Calgary. Most of us have a friend from our past that lives in a different city now. Truth be told, if they're new to the city, they probably wouldn't mind some company. After all, you said you'd go visit them when they moved away. Now is the time to take them up on their offer.

Mention to your friend that you are thinking of visiting the city and would like to know the best place to stay. They'll likely offer up their pad for free. The weekend trip just got a few hundred dollars cheaper. Be sure to honor their generosity by picking up a few of the meals when you dine out.

Staying with a friend has plenty of non-economical advantages as well. You essentially have your own tour guide to the city. You'll know the best places to dine, what things are worth seeing, and you'll know the quickest way to get there.

A Camping We Will Go

Forget the long lines at the airport and the nickel and dime charges of the hotels. Break out the tent and go camping at your nearby State or National park. Some parks even have cabins, so you don't even need a tent.

State park fees are usually extremely reasonable and the parks themselves are very well maintained. Your tax dollars go to build and maintain these parks; you might as well get some use out of them. We do this once or twice a year and have a blast every time.

Close Only Counts...

If camping isn't your thing, then choose to stay at a hotel in either a city that you can drive to in a few hours or simply stay at a hotel in your own town. If you're just looking for one night away from the kids, this can be the best option.

Take this opportunity to explore the town you live in and to discover new dining and entertainment spots. If you're like me, there are hundred of places and attractions you haven't seen in your own town.

Your best bet on a hotel is to look for deals at the high-end business sector hotels near downtown. These often go vacant on the weekends and prices drop considerably. You can usually get a nice hotel room for a decent price.

Cheaper By the Dozen

Have some really cool friends? Take your next quick getaway with them. I remember doing this as a kid with my parents and their friends and loved it.

Weekend rental houses and cabins can be had at the fraction of the cost of hotel rates per person. Carpool to get there, group your meals and activities, and your savings really start to increase. Be sure you plan only a few group activities and meals though. Leave some time open for just your spouse and kids.

Have fun!

Can you think of other ways to create a more frugal weekend getaway? Share your ideas in the comments below...

If you're anything like me you're probably wondering when you'll be receiving your economic stimulus rebate check or direct deposit. After checking it out today I found that the IRS has setup a payment schedule based on people's social security number. My wife and I opted for the direct deposit, which means we will likely see our money by the 16th of May (based on my SSN). To get an idea of when to expect your own stimulus rebate, please see below.

DIRECT DEPOSIT

Last two SSN digits:	Payments will be transmitted no later than:
00 through 20	May 2
21 through 75	May 9
76 through 99	May 16

PAPER CHECK

Last two SSN digits:	Payments will be mailed no later than:
00 through 09	May 16
10 through 18	May 23
19 through 25	May 30
26 through 38	June 6
39 through 51	June 13
52 through 63	June 20
64 through 75	June 27
76 through 87	July 4
88 through 99	July 11

The past few weeks I've been reminded in a bunch of ways of just how woefully inadequate I've been when it comes to praying to God in all things. As Christians I feel we constantly need to be in relationship with Christ, seeking guidance, asking for things we need and praising him for all the blessings he has given us. This includes praying about our financial life.

A couple of weeks ago at church our pastor talked about prayer in his message. He said that we need to approach God in prayer, and not just with generalities, but with specifics. A lot of times we don't see the need to be specific in our prayer because we figure that "God already knows what I need". But God likes specifics. Look at the story of the blind man that was healed by Jesus in Luke 18:

He called out, "Jesus, Son of David, have mercy on me!" Those who led the way rebuked him and told him to be quiet, but he shouted all the more, "Son of David, have mercy on me!" Jesus stopped and ordered the man to be brought to him. When he came near, Jesus asked him, "What do you want me to do for you?" "Lord, I want to see," he replied. Jesus said to him, "Receive your sight; your faith has healed you." Immediately he received his sight and followed Jesus, praising God. When all the people saw it, they also praised God.

The blind man asks Jesus to have mercy on him. While it may have been obvious that the blind man wanted his sight, Jesus asked him what he wanted - he wanted him to be specific in his prayer, and step out in faith and ask for what he needed. When he told Jesus what he wanted specifically, and had faith he would receive it, Jesus healed him.

In the same way, I think we need to step out in faith, and ask Jesus for what we need in our financial life - and be specific. Of course we need to make sure that what we are asking for fits within the will of God, but when it does, pray specifically about it.

Do not be anxious about anything, but in everything, by prayer and petition, with thanksgiving, present your requests to God. And the peace of God, which transcends all understanding, will guard your hearts and your minds in Christ Jesus. Philipians 4:6-7

So this is what I've been reminded of this week:

1. We need to be in prayer "in everything".
2. We need to present our requests to God, and be specific.
3. We need to be thankful for what he's already given us.
4. We need to praise him for who he is, and what he's done for us.

So there it is - pray about your financial life and God will hear your prayer. Whether or not your request is granted is up to Him, but Philipians says that when you pray to him, no matter the outcome, he will give you a peace that transcends all understanding. To me that's better than anything that money could buy.

For another complimentary viewpoint on this subject, please see:
Have you prayed about your money situation?

Enter our book review and giveaway contest! It may be taking longer than I had hoped to do the review and giveaway because of my wife's illness, but we're still doing it! Enter by doing the following and leaving us a comment:

1. Subscribe to Bible Money Matters by RSS
   
2. Subscribe to Bible Money Matters by email
3. Follow me on Twitter.com

A sensible man watches for problems ahead and prepares to meet them. The simpleton never looks, and suffers the consequences. Proverbs 27:12

This verse really hits home for my wife and I this past couple of weeks as my wife has been in the hospital. Luckily we've saved up an emergency fund, and we had good insurance, so the medical bills will be manageable. Plan for problems, and when they come you'll be prepared.

The Carnival of Ethics, Values, and Personal Finance for May is now up over at Greener Pastures. Go check it out, the theme of this month’s carnival is“Shopping for a Better World.” !

My article Paying for pets: When is it too much? was chosen as one of the favorites this month as well, for which I am very honored. Please check out the carnival, and my article as well!

For all of those who are interested, my wife is still in the hospital, although she is now on the mend. She's got some hard days ahead of her, but we feel very blessed for the recovery she has had thus far. Please continue praying for us as she continues getting better.

I hope to start posting more regularly again soon!