Nearly every sociological study identifies financial pressure as the leading cause of marital discord and, ultimately, divorce.
Whether it’s the husband spending too much money going out to eat and drink with friends after work or the wife getting too friendly with the “easy pay” online operators at QVC, poor money decisions can haunt a marriage from the start.
Recognizing that stark reality, the archdiocesan Office of Stewardship and Development, in collaboration with The Catholic Foundation, sponsored the Dave Ramsey Financial Peace University money management program at the Northshore Pastoral Center in Covington.
About 20 people participated in the nine-week course, said volunteer coordinators Kay and Frank Corriere, and those learning the financial strategies included several young couples who are faced with challenges unique to them: student loan debt, child care and education expenses, and the high cost of housing and insurance.
Student loans a big problem
Kay Corriere said young families in particular need to learn techniques about how best to budget their finances to keep small problems from mushrooming into serious troubles.
“Debt – whether it’s credit card or rearing children or medical bills – is the main thing that can cause pressure on a marriage and take you away from a belief in the Lord,” Corriere said. “This whole course helps people get back closer to the Lord and learn to love each other again. It’s basically learning to communicate and work together to achieve goals.”
One of the first “baby steps” is saving $1,000 for a basic emergency fund.
“The next time you need an oil change or your car breaks down, you don’t have to put it on a credit card,” Corriere said. “It’s also looking at insurance and making sure your family is covered and helping young people figure out how to pay off their student loan debt. Student loans are a big thing that keeps you from moving forward.”
Corriere bravely shared her own family’s difficulties with money management. Both she and her husband worked at well-paying jobs, but their spending habits – not paying off credit card purchases in full each month – over time had produced $140,000 in credit card debt, in addition to their house note, cars and a boat.
“We were very vulnerable,” Kay Corriere said. We started trying to get our life together, and we heard this guy on the radio when he was just getting started (in the late 1990s). Our amount (of debt) was so high, but we just started following his baby steps, and now we are at Baby Step 7 – which is debt-free, including the house.”
Now the Corrieres feel inspired to give back by leading the training course, which includes easy-to-follow workbooks and video presentations by Ramsey.
What’s even better is that the first course was monitored by a Hispanic volunteer in hopes of offering the course for Spanish-speakers in the future.
Disparity of intent
Quite often one spouse comes to the classes all fired up about changing their financial situation, while the other has to be dragged kicking and screaming.
“Dave likes to say one is the ‘nerd’ and the other is the ‘free bird’ – the spender,” Corriere said. “One will say, ‘Why do we need a budget?’ and the other will live by spreadsheets and pays the bills. The whole purpose is that the two have to come together and develop a budget. Budget is not an ugly word. A budget is freedom. You are telling every dollar you make where it’s going to go.”
Ramsey makes use of nifty visuals, such as “blow money” –a pot of money tha tcan be used on anything and does not have to be accounted for – and then the “snowflake.” That’s the small amount of money that grows over time into a significant “snowball.”
Ramsey advises people in big debt to “pay the smallest bill first, whether it’s a medical or credit card bill, and then use the money that had been directed toward that bill to attack larger debts.
Once the debts are paid off, Ramsey suggests building a three- to six-month emergency fund.
“That’s peace of mind in case there is a layoff or somebody gets ill and can’t work,” Corriere said. “That’s so you don’t have to stick something back on the credit card or take out a loan.”
Once a couple achieves that, they can start putting away money for retirement or starting a college fund. The home mortgage usually is the last debt to pay off.
“True freedom is when you get to Baby Step 7,” Corriere said. “That’s when you can give back to your church and your community. You don’t hoard your wealth. You can give it away.”
Corriere said one of the interesting wedding gifts she’s heard of is paying for the newly married couple to take the Dave Ramsey course “so that they start off married life correctly.”
“Dave says we’re like no one else when we’re in debt,” Corriere said. “We pare down and eat at home and don’t go out and the kids don’t get the latest Nintendo. We live like no one else so that later we can give like no one else.
“So if you see a waitress at the Waffle House, you can leave her a $50 tip. Or if someone at church is struggling financially, you can find a way to pay their utility bill for a month anonymously. It’s about being able to give back.”
Jar method for kids’ savings
Ramsey even has section for parents with small children, helping them navigate the minefield of what is appropriate for “allowances.”
“But he doesn’t call it an allowance – it’s a commission,” Corriere said. “An allowance means you’re entitled to it. The little kids 3 or 4 years old
do little chores for the family, but they don’t get paid for that.”
But over time, as they do more significant things, the children do get paid. Ramsey suggests the children have two jars – one for “saving” and one for “spending.” When they get older, Ramsey adds another jar – the “giving” jar – which holds money to give to church or other charitable causes.
“It gets them in the mind set of thinking about the community and the church,” Corriere said.
Gary and Lory Schwartz said they had picked up one of Ramsey’s books from the library and decided they wanted to learn more.
“We believe it is our responsibility as parents to make good decisions and prepare as best we can for our children’s future,” Lory Schwartz said. “While we work hard to send our kids to Catholic school, we have been struggling each month finding extra money to save for high school, college and our retirement.”
She said the program has helped the couple distinguish between “needs and wants.”