Today I’m going to review the United First Financial The Money Merge Account® Program; also know as a MMA for Money Merge Account.

They say, “Eliminate Your Mortgage.
The Money Merge Account program pays off mortgages faster using an interest-cancellation strategy. While many homeowners realize that they can save money by reducing the interest rate they pay on their loans, few think about the length of time they will be paying. The Money Merge Account program combines innovative software with traditional banking systems and personal coaching to drastically reduce your mortgage term and minimize your interest.”

So far so good; I totally agree with paying off all debt.

So how does the MMA system work?

First buy their system for $3,500.

Then they say the user will

1. Need a deposit account; usually a  checking or a saving account.
2. What they call a Facilitating Account which is a savings account or a Line of Credit.
3. Need their software to tell them when to transfer money between accounts.

What I’m not liking here is the idea of using debt to pay off debt. Not to mention that banks aren’t really excited about Home Equity Lines of Credit at this time.

What I’m seeing is that if you were spending less than you make the software might have you fill the facilitating account with surplus money and then pay off debt with that money.

Or as I saw with friends who bought this program, for $3,500, the software told them to pay off a higher interest rate truck loan with their Line of Credit and then there was nothing they could do until the paid down the Line of Credit.  All that advice for $3,500?

One of the reasons they say you can’t do this yourself is that it’s too complicated and requires very sophisticated software.

I just don’t agree – you could do this with a pencil, paper and calculator and some basic personal finance principles.

My opinion is save the $3,500 and do it yourself.

Here are the steps I teach in my personal finance class:

1. Save a $1000 Emergency Fund
2. Establish a budget
3. Start using the cash envelope system
4. Begin paying off your non-mortgage debt from smallest balance to largest
5. Consider selling anything that will take longer than 18 months to pay off
6. When your done paying off your non-mortgage debt, grow your emergency fund to equal 3 – 6 months of living expenses
7. Begin saving for financial independence
8. Begin saving for college, if you have kids or someone you want to send to college
9. Begin saving a $20,000 major medical fund
10. Begin paying off your home aggressively

I tend to put paying off your home last in the the process, but that is because I value peace of mind over not having a mortgage.

Don’t get me wrong – I want that mortgage done ASAP too.  I just don’t happen to believe in magical software and borrowing to pay off debt.

I ran into a friend of mine this morning and as we stood talking on the sidewalk I noticed that he had a Porsche keyring in his hand.  While we’d been talking I’d been admiring the Porsche Boxster parked right in front of us.

I asked him if it was his – knowing that he’d been wanting a Porsche for some time.  He’s retired and can well afford one.

What surprised me was that he said, “Matt, I did just what you said to do. I paid cash!” You need to understand that this is gentleman became financially independent with no help from me, but he loves my class Creating True Financial Independence and the concepts I teach.

He went on to tell me how he’d saved for three years for this car.  Three years ago he’d looked at a new one priced at $44,000.  The one I was looking at was a 5 year-old Boxster with just 16,000 miles.  He paid $26,000 for this one; instead of $47,600 for a new 2010 model.

He went on to add that he carries liability only insurance.

Here’s the three lessons from this story:

1. Financially independent people got that way by saving for their purchases.
2. Buying used cars is important.  Cars go down in value in the first few years of ownership.
3. Insure only what you can’t afford to replace.  This goes for electronics, cars and all other possessions.

Congratulations friend you deserve this Porsche!

Take This Job and Shove It became more than a song when JetBlue Flight Attendant Steven Slater made his grand exit and became a working-class hero.

So why did he become a working-class hero to some people?  Because those people feel stuck in jobs that are less than satisfactory.

There are 3 steps be getting out of a job you hate.

1. Get out of debt by paying off all non-mortgage debt.  It will take you about 12 – 18 months if you are really motivated.  A great way to get the help you’ll need is to take a class like Creating True Financial Independence or Financial Peace University.

2. Establish an emergency fund equal to 3 to 6 months of living expenses.  This will give you the freedom to try something new without having to worry about short-term income.

3. Find your passion. The is a wonderful book called The Passion Test and there is an online Passion Test.

These 3 steps will change your life.  Are you willing to do whatever it takes to get what you want?

Today, I received this message from a friend and thought I’d answer it here.

Hey Matt,I thought I remembered that you had been doing something with Dave Ramsey… I was curious as to your thoughts on his program, etc.
L.

Dear L,

Yes, I helped pilot Financial Peace University at First National Bank of Durango. It’s the class that helped Cheri, my wife, and I pay off $165,000 in debt and save $20,000 in 15 months.

For us it was an amazing and transformational class. It offers sound advice on how to get out of debt.

Financial Peace University (FPU) is a 13 week class taught primarily though churches by volunteer class organizers. The cost of FPU is about $100.

Each class in 2 hours long an consists of watching a Dave Ramsey DVD and then small group discussion.

To review FPU I’ll offer Pro’s and Con’s and how my class Creating True Financial Independence differs.

FPU Pro’s:

• Material is easy to follow
• It’s works if you commit to change your behavior

FPU Con’s

• Dave Ramsey is an Evangelical Christian and he quotes Bible verses (may be a con depending on your views)
• 13 consecutive weeks is a big commitment
• Many of the lessons don’t apply specifically to getting out of debt
• Success of the discussion portion depends on a volunteer facilitator
• Dave’s big goal is for you to become Mega Rich
• The 13th week is all about tithing to the church (again depends on your views)

How Creating True Financial Independence is different from FPU.

• No religious agenda
• Class is 4 weeks instead of 13 weeks
• Class is focused on helping you succeed at getting out of debt
• Class incorporates concepts from many other books and teachings
• Class is taught by me; a professional coach and facilitator who has successfully gotten out and stayed out of debt.
• A personal finance coach is available outside of class to answer your individual questions.
• My goal is for you to live your dreams and for most people that does not involve becoming Mega Rich.

I hope this helps you understand Financial Peace University and my class Creating True Financial Independence.

Now more than ever companies are evaluating the credit reports of job candidates.  But why?

Because personal finance stress causes employees to waste up to 20 hours per month worrying about their money problems at work.

What about the current employees?  Their personal finances may be in disarray too.

You could:

• Do nothing – except that impacts your business
• Pay employees more – except that won’t change anything

Or better yet… you could begin a systematic plan for personal finance coaching. With a class like Creating True Financial Independence.

A survey of 10,000 employees who took a personal finance class reported:

• 89% were using a written budget to manage their money in the future.
• 91% felt more confident about their financial futures.
• 94% stated the personal finance class had been beneficial to them.
• 95% were establishing an emergency fund
• 98% recommended personal finance education to fellow employees.

Team members who aren’t worried about their personal finances are far less likely to have unplanned absences. They are better able to engage and concentrate while at work.

Their productivity and loyalty increases, while their stress and money problems decrease.

So why wouldn’t you want to help your team members through tough financial situations? Not only are you helping your workers, but you’re also helping the company as a whole.

Check out these testimonial emails I received from a alumni of Creating True Financial Independence.

Date: Fri, 21 Aug 2009
Hey Matt . . .I wanted to give a quick status update.  I took your class back in February . . . at this time last year, I owed just over $43,000 on two credit cards and a loan.

I just paid off one of the credit cards and now my debt is just over $31,000 !!!   Its been hard work, but I am making headway.  Still playing with the budget, but I think I have found a system that works for an irregular business income plan.

Thanks so much for the class and the shift in perspective!  I am not sure when I will have everything paid off, but I am heading in that direction and am hoping by May of 2011 I will be debt-free!!  I tell people about your class when/where I can.  I hope that it still works for you!   Take good care and be well.

With less debt,

M

Then on Friday I received the following update.

Date: Fri, 9 July 2010

Hey Matt, This is M again.

I wanted to piggy back on an email I sent you last august.  At that point my debt was just over $31,000.  Today, i can proudly tell you that my debt is $13, 576.14 ! I think that I can get it all paid off before my goal of May, 2011.  I feel great about this.

Thank you so much for that class.  Feel free to pass this story on to your classes if you want.

With even less debt,

M