Some Thoughts on Personal Finance Coaching

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Financial Peace RevisitedSeveral people have written to me recently asking questions about programs such as Dave Ramsey’s Financial Peace University and other such personal finance coaching programs.

What You Get
Financial Peace University (and other programs like it) collect together a lot of useful pieces of personal finance information into one place. Usually, these programs provide a step-by-step plan for recovering from a poor financial situation (intense debt, bankruptcy, etc.) and offers pointers towards building a strong financial situation once you’ve recovered.

Usually, these packages are delivered as a large package, containing books, workbooks, CDs (sometimes), DVDs (sometimes), and seminars with live speakers. These packages try to reach out to all types of learners – those who learn from reading, those who learn from watching, and those who learn from listening to speakers (and asking questions). I tend to be a reading-oriented learner, for example, so I’m usually content to see the written materials.

Quite often, such coaching packages revolve around a series of seminars which function a lot like college classes: there are “assignments” of reading (or DVD watching) outside of class, as well as other personal finance tasks. The “classes” themselves usually reiterate the material but focus on cheerleading and positive thinking – encouraging you and reinforcing the idea that you can do this, even if it seems overwhelming.

Although I’ve not investigated many of the packages out there, the mainstream programs (like Dave’s Financial Peace University) do package worthwhile information with motivational techniques. It can have much the same impact as a trainer at the gym, providing good basic techniques along with motivation and encouragement.

The Drawbacks
Given that, there are several drawbacks to any such package.

First, it’s expensive, and if you’re already in financial trouble, another three-figure outlay of money is often not helpful at all. For example, the Financial Peace University package costs $149 – you get worksheets, books, a journal, and some software, as well as the opportunity to attend any FPU seminars you want. The version with DVD materials is even more – $249.

For a lot of people, that’s prohibitively expensive. If you’re working a minimum wage job, that’s a week’s pay – even if you’re earning more, that’s more cash than you can probably easily pinch out.

Second, most of the information you’ll get from such courses is already out there. Such courses rarely provide any significant new information that can’t be found for free on the internet by searching for “debt help” or reading through the “debt” category at a good personal finance blog.

In fact, you can often get the same materials from such classes at your library for free (without the seminars, of course). I was able to check out Dave Ramsey’s Financial Peace Revisited and the associated workbook from my local library, which contains a lot of the material in the course.

My Take
If you’re simply seeking out the information from these courses, I recommend looking for other sources, such as the library or the internet. You can find all the information you need for getting out of debt without the cost.

The value of such programs comes from the coaching itself. Many people simply thrive on having a person motivate them to make better choices – dietitians and personal trainers are two examples of this.

Of course, you also have the option of seeking out your own motivation. Find a “money buddy,” for example, who can serve as a watchful eye and a cheerleader for you (as you do the same for him/her). Alternately, talk about your situation with the people in your life who do the best job of inspiring you to better things – and you’ll feel driven by their knowledge of your situation to improve things.

Of course, for some, good old fashioned direct coaching is the best option, and if you’re in that boat, programs like Ramsey’s can be a godsend.

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31 thoughts on “Some Thoughts on Personal Finance Coaching

  1. On a whim I grabbed Ramsey’s “Total Money Makeover” from the library and it didn’t cost me a dime. He manages to squeeze a lot into that book. In my opinion, a good book from the library is just as good as any package deal that you have to pay for. If there is a “coach” that interests you, first check out any books they have written. You might find that it’s all you need.

  2. I agree with you Trent. Unless you really need someone to think and decide for you, you really can find all the inforamtion on the internet for free.

    If someone diggs through your old posts, the knowledge there is sufficient to obtain financial peace.

    The only thing such Universities can give is an additional push to take action and stick to it.

  3. I have to confess I do not understand the appeal of Dave Ramsey. This is a guy who says he overinvested, overspent, then declared bankruptcy, and now he is selling financial advice?

    Honestly, I learned more from my frugal parents, grandmother, and great aunt. They never declared bankruptcy, so I guess they are not financial whizzes! I feel fortunate to have such great examples. And I am very happy I didn’t buy Ramsey’s book — from what I read in my friend’s copy, and as you say, Trent, there is not too much new there. It’s mostly repackaging.

    I think it is best to save your money and interview your family and friends — maybe start with the ones driving older, sensible cars?

  4. I see your point Trent regarding getting all this information elsewhere for free. But I do have to say that a lot of people in debt (myself included) wasn’t because they mulled over the pros and cons but was because of hasty decisions. Meaning I’m not sure that these people will seek out material in their own time. I personally go to this class and what attracted me was because everything was at my fingertips.

    A couple of things about my class (not sure if it applies to all classes, but it is worth a try).

    1. The classes are free.
    2. We are not required to have the material, but can come to the classes to take notes and watch the DVDs (there are a couple of people in my class that are doing that).
    3. After I complete the program (13 weeks), I can go back as many times as I would like. i.e. take the class over and over again, till I see necessary.
    4. When attending a class the materials are actually cheaper – $99.

    The class covers a lot of material and I am going to be returning for a second time. Dave is very comical in this series and very helpful. He has a completely different attitude than on his radio show.

    All in all it is a very good program. It has helped me to pay off 2 credit cards and 3 personal debts. A pro of the program is that you meet people in the same boat that you are and they become your support group. Doing this by myself, I was paying off debt but within a group there is direction and accountability. My debts seem to be getting paid off faster. Also we all celebrate when we have come to a milestone in our road.

  5. I’m a Dave Ramsey fan, and went through his financial peace program. I read his book before going through the program, but found a positive benefit to the program was how it helped me keep focus over a 3 month period. Good financial habits take time to form, and the 3 month timeline of the program helped me more than reading a book in one week. The debt I have been able to get rid of and money I have been able to save since, was well worth the $150 investment.

  6. We found FPU to be invaluable. It really kick-started us into turning our finances around. Dave is a great motivational speaker and it’s great to be in a group of others who are also trying to get out of debt! Really, you can’t get the same experience by reading a book or surfing the web.

    We gained our $149 back a long, long time ago!

    BTW– I know it may sound like it, but I am not affiliated with FPU or Dave Ramsey in any way. ;)

  7. @Mikey -

    For people who are in over their heads, they often need a “been-there-done-that” authority to get through to them. That’s why many alcohol/drug rehab facilities are lead by recovering addicts.

  8. My husband and I are coordinators for Financial Peace University. If you can find a class in the area where you live, the price to attend is under $100. A major factor of attending an FPU class is having accountability with others. Accountability to others a a great motivator to change your life. I have to agree with George about having a “been-there-done-that” authority. You know it is possible to change your life, or as Dave would say, change your “family tree”

  9. A local church might be offering the seminar at a lower cost. Our church offers the Crown Financial seminar at $35 a couple for the materials. Child care if needed is provided and free.

    For those who do well with group support this might be a resource worth look into.

  10. @george, you are probably right. Still, I would argue that the “Millionaire Next Door” is a better role model. I bet everyone has a frugal saver in their circle, the problem is identifying them and getting them to teach you!

  11. the FPU program is often done at churches, where you can hook up with a group of like-minded folks who can become a long-term support system. Many folks really do need that support to get through the long haul process of getting debt-free. also, if your church is doing FPU, often it will subsidize the cost for those who need some help withit.I know ours did; and there is a small group of about 6 families who continue to act as accountability partners for each other as they, slowly and in their cases, rather painfully do what ya gotta do to get free.

  12. Mikey – you don’t understand Ramsey’s appeal, yet you are on Trent’s website? He has, admittedly, made some stupid money mistakes, but by talking about them and learning from them he is able to teach a lesson. Same with Dave Ramsey.

  13. I’ve learned the most by reading personal finance blogs, asking questions and taking advantage of the books available at the library–including Dave’s books.

    That’s a lot of money to shell out, especially if you’re in debt.

  14. I am studying to be a financial coach through the International Coach Academy. Life, executive, career, and spirtual coaching are fast-growing career paths. Why? Because people like to have a support system in place in addition to having the tools to change their lives. Also, many people have mental blocks in place that prevent them from changing, even if they want it very badly. Coaching allows them to explore why they are blocked without having to deal with judgements and criticism that often times come from sharing the issues with close friends or family. Why do self-help books continue to be so popular? Many people do have the desire to change and make themselves better but they don’t make the commitment to do it for very long. Coaching not only puts a goal structure in place, but the coach also makes you accountable for moving forward toward those goals. As far as Dave Ramsey goes, I like him because he failed and then he picked himself up and moved on. He didn’t let some very large failures stop him from realizing some big dreams. I like Suze Orman for that reason, also.

  15. I enjoy the fairness in which you present programs like this, Trent. People could get the major premises and excellent suggestions for getting out of debt simply by spending an hour each day reading through your archives, however you are good about presenting positive values for programs like Dave Ramsey’s and allowing readers to make up their own mind.

    Nice job.

  16. Sounds like a pretty good deal. I am in about $20,000 debt at the moment and I am working my way out by starting to make money online. The extra cash is really helping but I can always use more tips

  17. The public library, internet, and a notebook and pencil is all you need for personal finance success. If you’re high tech, you use an Excel spreadsheet.

    There’s still tons of people who need help with their personal finance skills. $149 can be scrounged up by some households just by canceling the cable bill. If they recognize they have a problem and are trying to fix it, I can’t see that as a bad thing. Sometimes people do need someone to kick their butt and make them do it.

    Personal finance is personal – I never shared my debt information with my friends – they still don’t know how bad it was. I’m a do it yourself kind of gal and I straightened myself out with lots of books and internet to motivate me and keep me on track. Many of my friends are more social, though, and do better if they have someone anonymous to talk to. Sometimes it can be easier to be honest about your situation with a complete stranger than with your closest friends.

  18. I think you hit the nail on the head. The value of these courses is less about the information and more about the motivation – especially if you go through it with a group. The information tends to be solid, but is available for free elsewhere. It is the coaching and community that can make the high cost worth it for some.

  19. I did participate in one of the Dave Ramsey seminars and enjoyed it. Yes, I had read the books and checked out other programs, but decided I wanted to investigate more. The seminar I took was held at Dave’s headquarters in Franklin, TN, and not at a church. That was important to me because I wanted to learn about financial issues without the extra concerns about other issues of religion entering the conversation. (I’m not anti-church/religion, just wanted to focus on one thing for this seminar.)

    I enjoyed the seminar, the interaction with the other group members, and the videos. I was already following the steps, but the seminar made them more real and brought some clarity.

    I’m not one of those who practically worships Dave Ramsey, there are other personal finance authors I read as well, and I follow bits of advice from each of them, but there is value in the in-person human interaction of the seminars that you cannot get from books alone.

  20. I haven’t taken FPU, but I listen to his radio show regularly and have read his book. Both are very helpful and very educational.

    Mikey… seriously? Can people not learn from their mistakes and change for the best? Come on! Besides, Dave did that dumb stuff when he was 20… you couldn’t have made mistakes you regret when you were 20, huh??

    One last thing – I’ve been to Dave’s live events and they’re AMAZING. I highly recommend it. You’ll get pumped, plus you can get his books there for $10 (although I’ve just checked them out from the library too).

  21. I do think it’s a little pricey, but it can be seen as a great investment if you are serious about getting out of debt. Dave is very motivating and entertaining. I was already out of debt when I first read his book, but I still found some of the information very useful.

    I climbed out of debt with the snowball method I read in the Tightwad Gazette. I applied it to our bills with the smallest one first. I did Dave’s method before I even knew he existed. I do find that each person has something different to offer. Trent you have a great blog which I love to read.

  22. Its true that all of this information is available online and found in many of these blog posts.

    Not everybody has the same learning style. For example, my wife doesn’t learn via reading articles online and I’d imagine that I’m not alone in this.

    I’d consider a course like this simply to help her to increase her financial IQ. I probably wouldn’t learn much at that I haven’t picked up by reading books and blogs, but just the effort to be on the same financial page as my spouse is worth it.

  23. Trent,

    Just like you stated. Coaching courses like this are really more about somebody keeping you motivated than they are about the information.

    The information is not really new, you are paying for someone to put the “thumb” on you and hold you to what you know you should do.

    And this, unfortunately is what a LOT of people need.

  24. I am currently enrolled in a Financial Peace University Course through a local financial advisor. Her total cost for us is $99 – that includes a brand new package(with dvds and there are a lot of those, the envelopes for the cash system, the book and the workbook) and the group discussion afterward. I LOVE this class, I have been debt free for 12 years and I did that with coaching also but after I was on a roll I “graduated” and continued on without need for assistance and dug out of close to 100K in debt. 12 years have passed and I have saved VERY little and when I do I am like an addict playing the stock market. I decided, once again, I need help. I enrolled in this class and within the first week had my 1K emergency fund together, and was able to skip his step of paying toward the debt snowball but currently I am diligently working to fund my 3-6 months living expenses. Things I have heard a million times on blogs and through books but can not seem to do with out help. I had recently read the “Automatic Millionaire” and was inspired but I keep raiding the kitty for some reason doing this with others seems to prevent me from doing so and no I am on such a roll that I know I won’t raid it. I will forever be grateful for this program but putting this in writing makes me sound pretty pathetic.

  25. The best kind of coaching I ever received was from a 2-cassette audio book: How To Get out of Debt, Stay out of Debt, and Live Prosperously. I am surprised not see it mentioned here.

    I was never irresponsible with money, except for being too trusting and ignorant. I left an abusive marriage with the shirt on my back,a surprise 52,000 debt to the IRS, and I had 2 children to support. I was such an oblivious wife.

    I used those casettes to learn how to make a budget, to cheer me on, and to avoid any pitfals on my climb to financial autonomy. I used it to help me broker my own OIC with the IRS- in the end I paid 4500, in increments of 50/month, and it was over. I now try to take frugailty to an art form, and consider the non-waste aspect almost something spiritual-good for my fellow man, and the planet.

    I did not, however, share the details of my situation with anyone other than my current husband. I found my accountability in my kids and my vanity, wanting to leave behind the humiliations of my first mariage and desperately needing to feel in charge of my own future.

    I’ve read Ramsey, and most others you’ve mentioned in your blog. Got them all at the library. Yes, it’s repackaging, but so is going to chuch isn’t it? You just need to hear the message over and over to keep you on track. And varying the speech keeps it interesting.

  26. I agree, all this information is accessible at libraries and online. However, some people seem to need to make a substantial financial investment in order to hold themselves accountable. It’s hard to motivate yourself to stick to free advice you’re looking up online in your spare time. If you have the money to invest, you’re more likely to take it seriously.

    I think another alternative is starting a personal finance group in your area to discuss the principles, do these worksheets and assignments, and build a sense of accountability and community that way.

  27. I’ve read Financial Peace and the Total Money Makeover. I have not attended FPU, but I can see how having the personal interaction and different presentation styles could be useful for others, as well as having the ability to interact with others.

    We got both books from the library. Also, there are ways to attend for less money, sometimes they will offer “scholarships”, or they offer it at lower rates through church groups.

    I got both TMM and FPR from the library. TMM is definitely the better of the two books, the writing and editing are better, and it provides a realistic action plan you can follow. FP is more about “why” you might want to do the TMM.

    As for “getting” Dave Ramsey, I find that learning from his life experience is valuable. He’s a straight talker and also he’s found a way to turn his self-inflicted misfortune into a viable business that’s run with incredible integrity and recognition of what it is. Not only can you learn how to manage your personal finances from Ramsey, but he has a lot of other material out there on entrepreneurship, leadership and so on. He also has material to teach finance to your children (both young kids and teens), too.

    I’m not a practicing Christian, but I don’t let Dave’s faith get in the way of learning valuable lessons from him. He’s been there and done that, and I find him to be an absolutely credible source. I can’t say I agree with all of his lifestyle advice, but I sometimes even disagree with myself, so I can’t really fault him for having a core set of beliefs and sticking to him.

    Also, you can get the podcast of the radio show for free to help with reinforcement. There are no archives, so you need to be sure to get it daily. They also cut out all the commercials, too, a huge benefit.

  28. As an addendum to my above entry, $249 is CHEAP compared to retaining a financial planner, or (God forbid) signing up with one of those sleazy credit/debt consolidation companies that in reality often do nothing and leave people in deeper debt. If you aren’t a person who can learn from books and digging around the web, and want to get results in your financial life, the $249 may be well worth it.

    Also, keep in mind that “looking around on the web” to find the “answers” is not a trivial thing to do for someone in debt — and it may in fact be the absolute worst thing you can do, I’m sure Googling for “get out of debt” is going to provide you with a lot of links to get-rich-quick schemes, Ponzi/MLM/pyramid schemes, sleazy debt consolidators, etc. Ramsey provides a course I would heartily recommend to anyone.

    Utilizing the web to find out how to fix your finances would be very similar to using the web to diagnose an illness, raise your children or fix your car. Sure you might find the correct answer out there, but you are also going to encounter a lot of crap. If you aren’t savvy enough to separate the crap from the good advice, then it really could be a disaster. Many people are not savvy enough to do this and are absolutely, positively desperate — and the get-rich-quick schemes are very appealing to them, and likely cost considerably more than $249.

  29. My son is a fan of Dave Ramsey; he will be debt free next month! I like to use Mary Hunt’s Debt Free Living site with its computer aided guide to prioritizing your debt for payoff.

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