PASCO — Until a few years ago, Nancy Smith of Pasco had $25 in savings, $8,000 to $10,000 in debt and no retirement plan.
Smith is close to paying off her car loan and is investing in her 401(k) plan, thanks to the system of financial management she learned in Dave Ramsey's Financial Peace University program in late 2008.
"It's so nice when you control how you spend your money and make your money work for you," said Smith, who works as a dental assistant.
"I don't feel hopeless anymore."
She has given up her credit cards and relies on cash purchases using money she saves over time. And she's been teaching others what she learned, Smith said.
Taking Ramsey's 13-week program which was offered at Faith Assembly in Pasco sparked a transformation for her, Smith said. She learned to set priorities and develop a budget, eliminate unnecessary expenses and to shop smartly using coupons and bargain shopping.
Even her children now understand the basics of good financial management. They still may make a small impulse purchase occasionally, but understand they have to be responsible for their financial decisions, she said.
It's a difficult but worthy commitment to save money, said Jennifer Smith, 23, who has taken to heart the lessons from her mother. It's not easy to say "no" to friends when they invite you for shopping, she said.
Jennifer, a nursing student at Columbia Basin College, is saving money for a soon-to-be-born baby.
More than 1 million families have gone through Ramsey's Financial Peace University program since it began in 1994, said Meg Alcorn, spokeswoman for the program. More than 1,200 classes were held in Washington between 2007 and 2009, she said.
The program, which often is offered by churches and community organizations, helps participants learn about managing money using common sense principles. It includes work books and instructional DVDs that cover basics of saving and investing.
"On average, families reduce their debt by $5,300 and save $2,700 during the 91-day course," Alcorn said.
Ramsey's program is making people realize it's possible to be debt-free and live without credit, said Laurie Tufford, CEO of Consumer Credit Counseling Service of the Tri-Cities.
She and many of her staff members have attended Financial Peace University classes. The program's fundamentals are similar to the financial literary programs her agency offers, Tufford said. Services like hers can complement Ramsey's program by helping clients involved in a debt settlement process, she said.
Average consumer debt in the Tri-Cities area, not including mortgage debt, is estimated to be more than $47,000, while average annual income is $38,000, Tufford said.
Pastor Kristen Kuempel of First Lutheran Church of Kennewick is excited about offering the Financial Peace University program at her church for the first time in September.
She and her husband took the program last year through Central Church in Richland. They spent about $100, half of which was provided by Kuempel's parents, because Kuempel was jobless and her husband was working on his Ph.D., she said.
Kuempel said her initial skepticism soon vanished. "We found it to be a great common sense program that offers a lot of financial insight."
They learned how to balance income and expenditures and to cut superfluous spending, she said. By saving more, you can repay debt sooner than you think, she said.
The program also helped her understand her husband better, Kuempel said. Prior to attending the program, she found it hard to understand his budget ideas.
"He's a number-oriented person," she said, and the program made her realize where he was coming from. "Now we sit down and work on a budget together."
Kennewick's Tina Teagle, who attended the classes at Smith's home about a year ago, said she and her husband don't fight about money so much anymore.
"We're on the same page as far as spending money goes," she said.
The Teagles had a combined debt of $30,000 from an auto loan, credit card debt and time-share property payments, though they didn't feel they were struggling financially before they took the class. She works in the health care industry, while her husband is a warehouse worker.
Teagle said she wanted to learn more about investing for retirement. "Nobody tells you how those 401(k) plans work," she said.
Learning how to budget was the take-home message for them, she said. That meant fewer trips to restaurants and for shopping, but that has helped them reduce expenses and shave $20,000 off their debt, Teagle said.
She said it's hard to stay focused and not splurge. But the program helps you change your behavior because it explains why it's so easy to fall into debt and how that debt can snowball over time, she said.
Ramsey's program recommends using an envelope system to save money. You identify your expenses and put money in different envelopes, said Smith, who put together a $1,000 emergency fund by saving money over 10 months.
* Dave Ramsey explains his principles in weekly columns that run in the Tri-City Herald and ontricityherald.com. For more information on Financial Peace University, call 888-227-3223 or go to www.daveramsey.com.