Financial peace:'The only fights we've ever had were about money'
January 12, 2011 - Goodrich- Phil and Shawn Cramton were living a fairly easy-going, comfortable lifestyle two years ago, like many other people.
Phil had a good paying job in management with General Motors. Shawn is a CAT scan technician. When they wanted something, they bought it— including a boat, jet skis, a fancy $7,500 lawnmower, a cottage up north. But when Phil was forced into retirement in August 2009 as GM downsized, they knew changes were in order.
Two months after his retirement, the Hadley Township residents attended Financial Peace University at Goodrich United Methodist Church, a 13-week course that teaches finance guru Dave Ramsey's methods of managing money. The course teaches participants to live like no one else so later they can live like no one else. A new class, from 6-8 p.m. Sundays, starts tomorrow, Jan. 16, at GUMC, 8071 S. State Road (M-15).
Following the advice they learned in FPU, the Cramtons paid off two vehicles, the $7,500 lawnmower, are paying cash for their daughter's college tuition, and established a savings account that has enough funds to cover five months worth of expenses, something they'd never had before.
"I can not tell you how happy I am with what we learned, and it's all common sense," said Shawn Cramton. "Before, we never had extra money, we spent everything. My husband and I were certainly not anything close to the financial ruin that some people go through, but we were always just spending. Savings meant $1,500... We were not disciplined to save. Now the thought process is, when we want something we allocate so everything is paid for in cash."
Shawn Cramton makes a budget for every month now in which every single bill is written out. She budgets for everything that must be paid for, including groceries, gas, even her husband's hunting and fishing fund and her fund to get her hair cut and colored. They use the envelope system advocated by Ramsey. They don't eat out as often and she misses it, but she enjoys more the security she has from not worrying about how much money she has in the bank.
After the class, Shawn said she and her husband finally agreed on money. Before, he didn't know what the bills were and she was the one who stressed over money.
Melissa, 37, a mother of two, also had better communication with her husband over finances after they took the course and they paid off $14,000 in debt as a result.
"The only fights we've ever had were about money," she said. "The communication aspect of the course really helped us to budget and see the other person's side better. It helped us as a team to approach our finances together."
Melissa and her husband sold things on eBay, did side jobs and used the debt snowball, in which they paid off debts from smallest to largest, as well as used the envelope system and paid cash for everything. They took a trip to Chicago and paid cash for everything. They still have about $8,000 in debt to pay off, but she knows now they can do it and not incur the debt again. "It just takes discipline, motivation, and commitment to your own financial success and own peace," she said. "You can do it if you want it badly enough. You're not deprived so much as in, 'Oh, I can't get that,' but you see long-term goals and it's OK to forgo immediate gratification."
Craig Fiederlein, an attorney from Grand Blanc who counsels clients going through bankruptcy, took the course to help his clients, as well as benefit himself and his wife. Through the course, he paid off his car loans as well as two credit cards and he now pays an extra $400 per month toward their mortgage, as well as maxes out his 401K at work and makes the maximum contribution to his Roth IRAs.
"You find once all the credit card payments are gone and the car payments are gone, you always have money left over every month," said Fiederlein, 39. "One of the things we learned in class is everyone wants to live like the guy next door to you that's driving the Mercedes-Benz. But in all likelihood, the bank owns that Mercedes. The essence of the class is to live within your means."
Cramton notes that getting out of debt is one of the first steps in the program, but it's not just about getting out of debt.
"Don't hesitate (to sign up for the class), the sooner you do it the better," she said. "I wish we would have taken this class 10 or 15 years ago."
Susan covers Brandon Township and Ortonville