PDA

View Full Version : anyone use the Dave Ramsey method??


Carmell226
05-17-2010, 07:35 AM
If you do, please tell me if you think it works. We are looking into it and I am just curious what others have to say.

bored
05-17-2010, 08:00 AM
Yep used it. Now owe nothing but mortgage, two paid for cars, no credit cards, 6 months reserve in savings. It's nothing but common sense he teaches, but sometimes you need to just hear it a different way for it to get thru your head. Best thing that ever happened to my family.

DrMomof3
05-17-2010, 08:07 AM
We're in our 1st month of Dave Ramsey and we're big fans! I really think the Dave Ramsey plan is a life-saver. We're working together on our budget and enjoying the "game" of not spending $$$. It has brought us together and helped us see the light at the end of the tunnel!

Amanda

JumpinJ
05-17-2010, 08:45 AM
I didn't follow the 'Dave Ramsey' method exactly... a little over a year ago when I was extremely stressed about the consumer debt I had racked up I discovered a website called Enemy of Debt. HE was following the total money makeover. I did some reading about zero based budgets, downloaded his awesome budget spreadsheet and took it from there.

I followed my own 'modified' version of it, which worked for me. Paid off all my debts (except my car which I am making extra payments on now) in about 7 months.

It was tough, required much self sacrifice and self control, but definitely worth it. The most important thing is the motivation!

Julie

sumertime
05-17-2010, 08:51 AM
We also did a modified version. We didn't do the envelope/cash system, but we did the debt snowball and paid off a student loan and 2 cars in 6 months. Our only debt is our house, and we refied to a 15 year loan so it will be paid off before my first goes to college. We also have a large chunk in savings and maxed out a ROTH IRA this year. I only wish that we had started it earlier.

castleview
05-17-2010, 09:08 AM
Modified Dave user here also. Yes, he's great for getting out of debt. As far as stocks advice, I'm not sure.

disneylove69
05-17-2010, 09:14 AM
Debt free but mortgage as of last month and more then 6 months of expenses saved. Now in the investment period. It definatley works if you work it. All common sense. If you have debt you can't afford to buy anything. CASH IS KING. No credit.

StacyMarie
05-17-2010, 09:20 AM
Faithful follower! No debt. Cash is the only way!

Vaughn4380
05-17-2010, 09:23 AM
I don't use his methods (mainly because I don't keep a balance on my credit cards and only have vehicle and home loans), but I have friends who have used his method and speak highly of it.

sydneysmom
05-17-2010, 09:24 AM
:cloud9:We've been on it for over 3 years now. It's truly the best thing that we've ever done. When my DH and I were dating, he was already doing it and introduced me to the system. ( I had a car payment, cc debt...it wasn't good). But then I went on a budget, did the envelopes, etc. It took all the pressure of bills off.

We continued it when we got married. We refinanced the house to a 15yr mortgage and we're working hard at paying that off. Honestly, I wouldn't live without our budget or the envelopes again. :goodvibes it's a RELIEF not to panic everytime the mail comes and there's a bill in there. I used to be scared to balance my checkbook, open a bill.....not anymore. we don't fight about money at all. The only thing we might have a "disagreement" over is how much we're putting into savings this particular week. That's not too bad of a disagreement !!

Once you get going, it's actually kind of fun. Because you'll see your savings grow. We just did a HUGE bathroom remodel on both bathrooms and paid cash for everything. While some people might take out a home equity loan or put it on their CC....we're done and it's paid for. :cloud9:

I would totally recommend using it. It's a very liberating way to handle your finances and brings such a sense of peace. I can't talk highly enough about Dave Ramsey. :hug: Good luck !!

smkiya
05-17-2010, 09:32 AM
I've been following his advice since January and I wish I'd known of him sooner (I'd be debt free by now). I don't do envelopes either, but I have been using a budget spreadsheet, knocked down monthly expenses, and have been throwing snowballs left and right. I've been selling stuff and working OT to help do it. I will be taking a vacation this August (which isn't recommended), but have modified it to be super cheap, and will work beaucoup OT for a couple weeks specifically for this trip and will only use the money over my normal pay for that paycheck to pay for it. We were originally scheduled for a Disney Cruise with a couple days at the parks. I cancelled that and now we're doing Hilton Head Island, SC at Disney's resort. Sooo much cheaper, especially with the discount I got! I haven't used a credit card in over 5 months and will never use one again! We will be debt free except for the house in 12 months! It feels great having a plan!

Jennifer823
05-17-2010, 09:39 AM
I've been using a website called whatsthecost.com, it's a website that you plug in your numbers and it will give you a plan on how to "snowball" your debt. Went there this morning to plug in my monthly progress and the site wasn't there! :confused3 Any better ones out there? Does Dave Ramsey have a spreadsheet program?

I've got to say, the snowball program is great though. You can see your progress on your debt and it really gives you hope!

PatsMom
05-17-2010, 09:41 AM
I am not a Dave Ramsey fan but his system seems to work for a lot of people. I disagree significantly with some of his advice like attacking the smallest debt first - I believe you need to attack the highest interest rate debt even if it is larger. But getting debt free is sound advice no matter how you achieve it.

ICF
05-17-2010, 09:49 AM
I am not a Dave Ramsey fan but his system seems to work for a lot of people. I disagree significantly with some of his advice like attacking the smallest debt first - I believe you need to attack the highest interest rate debt even if it is larger. But getting debt free is sound advice no matter how you achieve it.

yep I'd agree with that.

He's also wrong on credit cards being evil......

AmongMadPeople
05-17-2010, 09:53 AM
I am not a Dave Ramsey fan but his system seems to work for a lot of people. I disagree significantly with some of his advice like attacking the smallest debt first - I believe you need to attack the highest interest rate debt even if it is larger. But getting debt free is sound advice no matter how you achieve it.

I have to agree with you to some degree. When we started paying down debt less than a year ago, we had 3 high balance debts, one small car loan, and a student loan in forbearance. I think the snowball method only works if you have lots of debt scattered across many sources - then I can see the benefit. But it made no sense for us to work on paying off my car when we were racking up 20% interest on CC debt.

mrudman
05-17-2010, 10:14 AM
I do sort of a modified version of it... but so wish I had started it years and years ago! It's actually kind of fun once you start.

We do the envelope system, started it in October, and that alone has taken so much pressure off the way we see our finances.

We have 6 monthly bills, and 4 of those we don't keep envelopes for (electricity, water, phone, tv)... they just get paid as they come in.. I know exactly when they arrive, and I just make sure to leave that money in the bank.

The 5th monthly one is our house loan, so most of one paycheck per month gets transferred to the bank that we have our house loan at...we both get paid every other week, so we usually use one of the paychecks that falls closest to the due date of the house loan.

The 6th monthly one is our Visa..that's one area where we differ in Dave Ramsey... we bought a camper using the Visa... but got a decent APR on it, and should be paid off by the end of the year.... have paid off about 6k in 8 months and have 7k to go.

We also do not use cash for car gas.. we leave enough in the bank to cover that, so that we can both just pay at the pump.

Every payday I go to the bank, withdraw all the excess money (money not mentioned above), and divy it up into all our envelopes. We keep envelopes for all bills that are bi-montly/every 3-month/yearly/and incidentals. Our list includes car insurance, house insurance, sewer bill, trash, license plates, my nursing insurance, kid's activities (bowling, gymnastics, piano, psr), memberships (zoo, AAA, girl scouts, weekly newspaper), school pictures, and also do envelopes to cover co-pays (for prescriptions, doctor appts, dentist appts), car repairs, house repairs/improvements, and entertainment.

At this point we're also keeping an envelope that we're using as a savings.. we're going to Alaska in 2 months, so have been saving up for that since we started this system...this is another thing Dave Ramsey would say never to do... we could've probably had the visa almost paid off with the money we have put toward the cruise, but I disagree that you should not be taking vacations unless you have no debt. My daughters are at the age where I want them to experience things, and if it takes me 1 year longer to pay off our visa so that we can build memories like this, so be it, :).

Like I said above though, i really wish I had thought to use this system years ago.. we could've been in so much better shape financially.. but I guess better late than never, :).

Disneefun
05-17-2010, 10:30 AM
Someone on another site I hang out on just finished the class and blogged about it for the duration.

http://www.savingadvice.com/articles/author/maggie-ellis/page/2/

It gave me a good idea of what the class might be like and the whole philosophy behind it.

smkiya
05-17-2010, 10:42 AM
As many people will mention, his system of smallest to largest debt payoff is based on behavior modification. We all know the math, but we need to change our behavior. It helps to encourage and motivate people to STAY out of debt and pay cash. Most people who need Dave Ramsey have problems balancing finances and need a behavior change. Small victories encourage bigger lifestyle changes. It's not just about paying off debt. So what if you save a bit of money by doing it another way, if you're just going to fall back into the same hole right after.

I had a lot of debt hanging over me, 28 different debts to be exact. These consisted of credit cards, car payments, personal loans, medical and dental bills, student loans, and the IRS. I have since paid off 16 of them to the tune of almost $12,000 in 4 months. That in itself is an accomplishment, but not the biggest that I've achieved with DR.

My biggest accomplishment is the change in behavior that I have experienced. I never ever had a budget. I always dreaded opening the mail, not because of the debt, but because of the normal expenses. We were always a month behind on something (gas, cable, phone, etc.). I spent about $800 a month in groceries and household items (family of 3, now 4), bought items I didn't really need on impulse, and was content as long as everything eventually got paid before it could be reported late on the credit report. I had no savings and relied on the credit cards to get me out of a jam. We have a very nice income but were always broke. Literally!

Now. I have a baby emergency fund (a little larger than he recommends) to cash flow real emergencies. I have sinking funds to cover medical, car maintenance, etc. I have a budget through October and every dime has a name. I use coupons. My monthly grocery and household expense went from over $800/month to a comfortable $350/month. If it's not in the budget, I don't buy it. I pay cash for everything! I no longer have an interest in keeping up with the Joness. We will keep our current vehicles until they fall apart, and then pay cash for the next ones.

It feels good when I pay something off. I scramble to find as many different resources for income (get Gazelle) just to get the rush of paying something off. In the amount of time it took me to pay off 16 debts, I would've only paid off 2-3 if I'd gone with the highest to smallest interest rate. But the thing is, I wouldn't have paid as much as I have. I would have soon lost interest and probably not have been so intense in working the massive amounts of overtime, and combing my house to find stuff to sell on Craigslist if my only result was a small dent in a large debt. I've had this debt for YEARS. I've already paid thousands of dollars in interest. I'd rather change my behavior so not to fall into this mess again EVER, than to worry about the couple hundred dollars I might save over the course of this one year of the many when it wasn't even an afterthought. Again, I say might, because I doubt I'd be as intense about paying everything off if I was only focused on the interest savings.

I look forward to the next step in the plan, and highly recommend DR to anyone who wants to change their family tree and live like no one else.

DCLbrideSept2009
05-17-2010, 11:25 AM
Yep, DR fan here too... started FPU about 4 months ago. AMAZING difference!! :cool1: Even though we make pretty good money, we were living paycheck to paycheck, had no clue where all our money was going. Now we're on a budget, don't worry about bills getting paid, and are even snowballing our debt and hope to be debt free in about a year and a half, maybe less. Now that we have a plan, we don't stress about the future quite as much. We pay cash for everything. (we haven't used credit cards in a LONG time, so that wasn't an issue, although we DO have CC debt... but we used our debit cards a lot, which got us into a lot of trouble too). Now we only use the debit cards for gas and use the cash/envelope system for everything else. It's been a LIFESAVER! Wish we had figured this out a LONG time ago!

bumbershoot
05-17-2010, 03:39 PM
I've been using a website called whatsthecost.com, it's a website that you plug in your numbers and it will give you a plan on how to "snowball" your debt. Went there this morning to plug in my monthly progress and the site wasn't there! :confused3

Aughhhhhhhhhh!

I think the snowball method only works if you have lots of debt scattered across many sources - then I can see the benefit. But it made no sense for us to work on paying off my car when we were racking up 20% interest on CC debt.

Well you can still do the snowball even if you're doing things out of order. And we only have two debts (we had more, but they were tiny and taken care of with DH's bonus at the very beginning of our own "total money makeover" so they don't really count), and we're on the first (which was the lowest AND highest interest so that worked perfectly) still, but once that first is done, the snowball is going to be AWESOME for the second debt. Because we take every last bit of "extra" (we aren't at a zero budget yet but the "slush fund" is only a couple hundred, and we almost always have it all left for snowball *extra*), AND we have an absolute above-the-payment amount we always put on top of the minimum...so in a few months when we finish the first debt, we'll have quite a bit to put towards the second debt. Big snowball!

And it would make sense to pay the debts off in that order if it is the only way for you to really do it. For people who just don't know how to do it, to get those "early wins", to pay off a few debts FAST, is absolutely invaluable, and can mentally and emotionally make up for the extra money you pay in interest, if you can actually get to the end.

belle41379
05-17-2010, 03:52 PM
We LOVE Dave!! Even teach the classes now. Can't say enough about him. :)

MaryēPoppins
05-17-2010, 04:15 PM
We were following Dave's plan before we ever read about him ... however, after reading him, we have been REALLY focused. The only debt we have is our mortgage and a HEL (which we used to build a vacation home). We are doing the reverse of his stragegy here by paying off our mortgage ... 55 months to go :banana: Then we start attacking the HEL loan. If we plan all correctly, we will be totally debt free in about 7 years! I wish we would have heard about him sooner.

Our only question about his plan is his take on investments. Be careful. He touts an average of 12% returns on your money ... not realistic in my mind. But ... sound advice on making sure 15% of your take home pay goes to retirement.

Good luck with whatever you decide.

Disney845
05-17-2010, 07:16 PM
We got on the plan at the beginning of this year and it has already paid off exponentially for us.

We do a modified version including a slightly higher amount in BS1, we do not use envelopes, and we incorporate the YNAB idea of using last month's income to pay next month's bills (so technically it is a modified zero based budget).

We have not taken the classes, nor did I read the books. I got all of the information I needed online. I also like to watch Dave on Fox Biz. I take from his approach only that which specifically applies to finances (i.e. the "religion" surrounding him was one of my biggest turn offs to begin with, but I eventually realized that while I do not agree with everything about him, that his financial ideas are sound).

Not only has this helped our current finances, but it has really improved our communication with each other and I would say has strengthened our relationship to be working toward this joint goal of our future.

bumbershoot
05-17-2010, 08:55 PM
Jennifer823, whatsthecost.com is back!

house_of_princesses
05-17-2010, 10:12 PM
My fiance and I just finished a 13 week DR study offered through our church. Provides practical advice to be modified as each family deems necessary. Great motivation to get the debt paid. Loved the lesson on learning how important it is to communicate about finances and work together on providing financial peace to your family. :goodvibes

Jennifer823
05-18-2010, 09:34 AM
Jennifer823, whatsthecost.com is back!

Yay! Good news :)

HHSTigerFan
05-18-2010, 10:22 AM
that his financial ideas are sound).



Telling people to pay off lower interest rate cards first is NOT sound advice.

bumbershoot
05-18-2010, 10:49 AM
Telling people to pay off lower interest rate cards is NOT sound advice.

Again, if it is the way to get people to actually PAY THINGS OFF, if it's the psychological trick to get the lower bills paid and put that money towards the other things, then it IS sound advice. If the alternative is continuing to mire yourself in debt, to pay the minimums because you can't see your way out, it's good advice.

DR doesn't work well for people who already have a clue! My brother and sis in law have been doing this stuff since they were in college...my brother helped his then girlfriend get herself out of CC debt while he was still a student. They are brilliant with money (and do very well for themselves), they paid for each of them to get Masters degrees (just for the heck of it, so they had them), then paid for sis in law to go through Duke Law with absolutely no grants, scholarships (well, it's possible she had those, but they never mention it), or loans. I told them how well we were doing since last year, and he was happy for me, but has absolutely no idea who any financial "guru" types are. They don't need them.

If you don't need them, if you have the mental and emotional ability to take a high interest, higher amount, loan/debt, and pay it down until it is gone...you hardly need him. Others don't have that natural ability, they get caught up in the total, and that's the person that this stuff helps.

Again, we were "lucky" because our lower total debt was also our higher interest debt, so I haven't had to deal with this, but it was DR that finally gave us a big huge clue on better ways to conduct ourselves financially. And that's a very good thing. He's helped others, who have had to deal with the issue that the bill they should pay first has lower interest than others, and that's a good thing.

mistysue
05-18-2010, 10:53 AM
I pretty much did his method without ever knowing it was somebody't method. The only glitch in it for me- I actually spend more if I'm using cash than a credit card. I know this is unusual, but time after time I've found that if I carry cash I just spend more money on things. Plus I get rewards for using my cards when I do. I'm better off getting $1 in bonus money than spending more and always feeling like I need more money.

HHSTigerFan
05-18-2010, 11:11 AM
Again, if it is the way to get people to actually PAY THINGS OFF, if it's the psychological trick to get the lower bills paid and put that money towards the other things, then it IS sound advice. If the alternative is continuing to mire yourself in debt, to pay the minimums because you can't see your way out, it's good advice.

DR doesn't work well for people who already have a clue! My brother and sis in law have been doing this stuff since they were in college...my brother helped his then girlfriend get herself out of CC debt while he was still a student. They are brilliant with money (and do very well for themselves), they paid for each of them to get Masters degrees (just for the heck of it, so they had them), then paid for sis in law to go through Duke Law with absolutely no grants, scholarships (well, it's possible she had those, but they never mention it), or loans. I told them how well we were doing since last year, and he was happy for me, but has absolutely no idea who any financial "guru" types are. They don't need them.

If you don't need them, if you have the mental and emotional ability to take a high interest, higher amount, loan/debt, and pay it down until it is gone...you hardly need him. Others don't have that natural ability, they get caught up in the total, and that's the person that this stuff helps.

Again, we were "lucky" because our lower total debt was also our higher interest debt, so I haven't had to deal with this, but it was DR that finally gave us a big huge clue on better ways to conduct ourselves financially. And that's a very good thing. He's helped others, who have had to deal with the issue that the bill they should pay first has lower interest than others, and that's a good thing.

Then perhaps you should have said "he offers sound financial advice for idiots"... :)

When we were deep in CC debt, I simply thought of it as one debt, not 9, in my mind I never owed Chase $1500, Discover $4500 etc.... I just owed $27K in credit card debt, paid minimums on all cards but one and paid as much as possible on the one currently charging the highest APR..

Caitsmama
05-18-2010, 11:17 AM
How do you know (as a newcomer to DR) which program to follow?? I checked out his site, but it's a lil' overwhelming!! I would like to learn more - but not sure where to start. I don't want to shell out crazy money for a course - i would rather start with a book or online info..

bas71873
05-18-2010, 11:21 AM
I pretty much did his method without ever knowing it was somebody't method. The only glitch in it for me- I actually spend more if I'm using cash than a credit card. I know this is unusual, but time after time I've found that if I carry cash I just spend more money on things. Plus I get rewards for using my cards when I do. I'm better off getting $1 in bonus money than spending more and always feeling like I need more money.


ME TOO! I'm glad I'm not alone. I use my Discover card for everything and pay it off each month :)

Caitsmama
05-18-2010, 11:27 AM
Then perhaps you should have said "he offers sound financial advice for idiots"... :)

When we were deep in CC debt, I simply thought of it as one debt, not 9, in my mind I never owed Chase $1500, Discover $4500 etc.... I just owed $27K in credit card debt, paid minimums on all cards but one and paid as much as possible on the one currently charging the highest APR..

And perhaps some need to think a little before hitting the "reply" button so fast. :scared:
It's great that you saw YOUR debt that way, but others like to see that they are taking care of one at a time, it's a personal conquorer thing for some (me included)..
So, if i follow his advice, and pay my lowest debt first, am i an idiot??? :sad2::rolleyes1

Again, maybe think before you reply with remarks like that.

donalduck
05-18-2010, 11:29 AM
How do you know (as a newcomer to DR) which program to follow?? I checked out his site, but it's a lil' overwhelming!! I would like to learn more - but not sure where to start. I don't want to shell out crazy money for a course - i would rather start with a book or online info..
Just listen to him on the radio or at daveramsey.com you can listen to the day before for free without buying anything. He is also on the Fox business channel everynight at 8
I have never bought his book or took his class. I just followed what he talks about. I am debt free after 30K in credit cards. CASH IS KING. AND YES ICF CREDIT CARDS ARE EVIL.

donalduck
05-18-2010, 11:30 AM
ME TOO! I'm glad I'm not alone. I use my Discover card for everything and pay it off each month :)
If you play with snakes they will bite you.

ICF
05-18-2010, 11:31 AM
Then perhaps you should have said "he offers sound financial advice for idiots"... :)


:rotfl2: very true...

It amazes people the people that swear by this guy, when all he tells you is common sense.

I guess my wife and I were blessed with plenty of that, but telling you to budget and not spend more money then you have is something my 10 year old knows.

donalduck
05-18-2010, 11:32 AM
yep i'd agree with that.

He's also wrong on credit cards being evil......
credit cards are evil

ICF
05-18-2010, 11:34 AM
CASH IS KING. AND YES ICF CREDIT CARDS ARE EVIL.

You again?!?! You're like a bad penny.

We've done this game before, and you're just as wrong now as you were a month or two ago when we played this game so I dont really want to waste much time on you.

However, just to remind you...

People being irresponsible and stupid due to not knowing how to use a CC, doesnít make them evil.

minnie1928
05-18-2010, 11:35 AM
credit cards are evil

Oh, geesh...do we have to have this conversation AGAIN!:headache:

How about if we simply agree to disagree on this topic?

Caitsmama
05-18-2010, 11:39 AM
:rotfl2: very true...

It amazes people the people that swear by this guy, when all he tells you is common sense.

I guess my wife and I were blessed with plenty of that, but telling you to budget and not spend more money then you have is something my 10 year old knows.

Then congrats to all of you - including your ten year old.. but, talk to us when your 10 year old turns 16... see if he/she is still so money smart. ;)

I guess from seeing the replies on this thread lately , of those who have so much self proclaimed "common sense" - makes me glad to have more respect for others rather than so much "common sense". :)


I don't believe CC's are evil, i for one use my debit for everything - b/c i earn cash back. YEs, it's not a cc, but i know i could do the same for a cc, i just choose not to.
My debt is due to my former business closing, and me trying to hold together my family...... so although, i am blessed that my debt is not high, it's still debt, and i want to have the motivation that i need to take care of it - my goal is to be debt free in 2.5 years or sooner, except house.
So, what some need to understand is that there are other reasons for some who have cc debt, other than just being wasteful, and racking up huge bills... most of us have it b/c of other circumstances. The cc's did not spend the money, we did. So, we really can't blame the plastic.

minnie1928
05-18-2010, 11:44 AM
How do you know (as a newcomer to DR) which program to follow?? I checked out his site, but it's a lil' overwhelming!! I would like to learn more - but not sure where to start. I don't want to shell out crazy money for a course - i would rather start with a book or online info..

If you get Total Money Makeover from the library, it will tell you everything you need to know. Much of Dave's information is repeating the same thing, so you only need to pick one source and then you'll get the hang of it.

Caitsmama
05-18-2010, 11:46 AM
If you get Total Money Makeover from the library, it will tell you everything you need to know. Much of Dave's information is repeating the same thing, so you only need to pick one source and then you'll get the hang of it.

Thanks Kelly! I will check that out then! :thumbsup2

HHSTigerFan
05-18-2010, 11:55 AM
And perhaps some need to think a little before hitting the "reply" button so fast. :scared:
It's great that you saw YOUR debt that way, but others like to see that they are taking care of one at a time, it's a personal conquorer thing for some (me included)..
So, if i follow his advice, and pay my lowest debt first, am i an idiot??? :sad2::rolleyes1

Again, maybe think before you reply with remarks like that.

Not an idiot, but I do think you are making a mistake, and its certainly not sound financial management..

HHSTigerFan
05-18-2010, 12:04 PM
:rotfl2: very true...

It amazes people the people that swear by this guy, when all he tells you is common sense.

I guess my wife and I were blessed with plenty of that, but telling you to budget and not spend more money then you have is something my 10 year old knows.


This is what drives me nuts about his advice...

Using my current situation, if I called in and said we had $27K in credit card debt plus our $102K mortgage he would call us stupid, regardless of our income...

But if I called in and said we had no credit card debt and a $129K mortgage with our income of around $100K, he would say we are doing awesome..

Our entire cc debt is with one card, right now the APR is 8% and we could easily move it to a HELOC anytime we want or need to (which would also make us doing well according to Dave)...

But then later on he preaches that moving debt from one credit card to another isn't solving the problem, just changing who a person owes...

I guess I am a big picture fan, before I accuse a person of being stupid, I want to look at the big picture... big picture, we are doing ok, not great, but ok and slowly paying that CC debt down in case the APR gets jacked..

garydeb
05-18-2010, 12:39 PM
Caitsmama,

The best thing that we did was read Total money makeover and read some of the other budget website. We used different parts from each to make our own plan. We first saved our $2K. We then paid the largest and highest interest rates first to the smallest. We both know how much money we have budgeted for all expenses. We put everything on the CC card and pay it off every month. We use the reward points toward our vacations. You have to come up with a plan that works for you so that you can stick with it. If the plan is too difficult most people will only use it for two months. We were debt free until we purchased our new house. We have budgeted to have it paid off in 10years instead of 15years.

Good LUCK!!!!
Debbie

Carmell226
05-18-2010, 12:40 PM
I actually just went to his website and learned as much as I could there. I am not going to pay for the FPU or anything like that. We are going to follow a modified version. I think that the cash system is a good idea for us, because we rely to heavily on our debit card and that can get you in trouble. I will be paying off my higher interest rate debt first and I will not be following his advise as far as investing is concerned.
I think alot of people swear by Dave Ramsey because his program motivated them and helped them to get out of debt, I don't see what is so wrong with that! Just because you don't agree with his methods doesn't mean they haven't helped alot of people and if anything trying to get out of debt makes them smart, not idiots!

Leshaface
05-18-2010, 12:43 PM
What are these envelopes that some of you posters are speaking of?

ICF
05-18-2010, 12:45 PM
So, what some need to understand is that there are other reasons for some who have cc debt, other than just being wasteful, and racking up huge bills... most of us have it b/c of other circumstances. The cc's did not spend the money, we did. So, we really can't blame the plastic.

I fully appreciate that some people might have ran into financial problems due to 'emergencies' of some type.

However, if a 1 time medical or other crisis came around that shouldnt cause you to have to become a follow of Ramsey and his type. If it were TRULY a 1 time issue, then you would have had good money managment before this issue and should at somepoint into the future hopefully be able to overcome that issue without cutting up your CC's and sticking money in envelopes.

It's people who say that he turned their lives around and such that are leading others to believe that their issues were more of a personal choice rather then a crisis situtation which led them to needing someone to tell them that it really is a bad idea to spend more than you make in a given week/month.

donalduck
05-18-2010, 01:25 PM
O YES it's me again. I am not wrong your wrong. Why is it that you say that I am wrong when you could be wrong. Have you ever thought about that?


You again?!?! You're like a bad penny.

We've done this game before, and you're just as wrong now as you were a month or two ago when we played this game so I dont really want to waste much time on you.

However, just to remind you...

People being irresponsible and stupid due to not knowing how to use a CC, doesnít make them evil.

donalduck
05-18-2010, 01:26 PM
Oh, geesh...do we have to have this conversation AGAIN!:headache:

How about if we simply agree to disagree on this topic?
I can agree with that. But you need to talk some sense into ICF.

TheRatPack
05-18-2010, 02:12 PM
Just listen to him on the radio or at daveramsey.com you can listen to the day before for free without buying anything. He is also on the Fox business channel everynight at 8
I have never bought his book or took his class. I just followed what he talks about. I am debt free after 30K in credit cards. CASH IS KING. AND YES ICF CREDIT CARDS ARE EVIL.


Can I ask you how long it took you to get rid of 30K in credit card debt...and how much you put toward them every month?

abmitch01
05-18-2010, 02:36 PM
I got the Total book from the library just to see what everyone is raving about. Some of it doesn't work for me- I definitely spend more when I have cash. Like I carried very little cash in Disney to reduce impulse purchases. I knew if I bought us sodas on credittoo many times, I'd see it on Mint and regret it later. Once the cash is gone, I don't get that same feedback, it's easier to just blow it, kwim?I have had credit cards for 22 yrs and never have I not paid in full each month. I put everything I can on one card and track it and use Mint so I know exactly where every penny goes. I use the rewards from Discover to buy landsend overstock or their sale clothes for my family and myself and shop through Discover.com to get extra rewards. So to me, the benefits outweigh the "evilness" of it. I keep some reserve cash in savings in case the snake someday bites, as one poster mentions. But even if it bit, the reserve would cover more than one month's bills and I'd be able to use what I contributed to my Roth with no penalty to cover longer periods of difficulty. I've had downturns, like a divorce, but was still able to keep my head above water, luckily.

I agree that his advice could be lifesaving for those who need to hear it, though. Whatever it takes to change your mindset as long as it isn't some crazy get rich scheme. And the basic stuff is what I try to teach my kids now.

One part I don't get, is the paying off the house before saving for college. I worry about then not qualifying for financial aid. And I haven't quite maxed out my 401k and Roth contributions. I believe in maxing out those contributions before saving for college or paying off the mortgage. It sure is tempting, though to aim for that goal!

does anyone else not keep a budget per se, but monitor spending on sites like Mint instead? it works for me to just keep an eye on where I stand each month than to put it all in a spreadsheet.

donalduck
05-18-2010, 02:51 PM
Can I ask you how long it took you to get rid of 30K in credit card debt...and how much you put toward them every month?
It took a few years. It was worth it though. It really depends on how much you make. The amount that I put on the creditcards was any money that I had left over at the end of the month after paying all of my normal bills. That is the debt snowball that dave talks about. Say you have 10 creditcards you pay the min payment on all of them execpt for the creditcard that has the lowest balance on it. Then all of the money you have left over after you pay all of your bills you put on that lowest balance. Good luck. You can do it. Let me know if you have any other questions.

donalduck
05-18-2010, 03:02 PM
I got the Total book from the library just to see what everyone is raving about. Some of it doesn't work for me- I definitely spend more when I have cash. Like I carried very little cash in Disney to reduce impulse purchases. I knew if I bought us sodas on credittoo many times, I'd see it on Mint and regret it later. Once the cash is gone, I don't get that same feedback, it's easier to just blow it, kwim?I have had credit cards for 22 yrs and never have I not paid in full each month. I put everything I can on one card and track it and use Mint so I know exactly where every penny goes. I use the rewards from Discover to buy landsend overstock or their sale clothes for my family and myself and shop through Discover.com to get extra rewards. So to me, the benefits outweigh the "evilness" of it. I keep some reserve cash in savings in case the snake someday bites, as one poster mentions. But even if it bit, the reserve would cover more than one month's bills and I'd be able to use what I contributed to my Roth with no penalty to cover longer periods of difficulty. I've had downturns, like a divorce, but was still able to keep my head above water, luckily.

I agree that his advice could be lifesaving for those who need to hear it, though. Whatever it takes to change your mindset as long as it isn't some crazy get rich scheme. And the basic stuff is what I try to teach my kids now.

One part I don't get, is the paying off the house before saving for college. I worry about then not qualifying for financial aid. And I haven't quite maxed out my 401k and Roth contributions. I believe in maxing out those contributions before saving for college or paying off the mortgage. It sure is tempting, though to aim for that goal!

does anyone else not keep a budget per se, but monitor spending on sites like Mint instead? it works for me to just keep an eye on where I stand each month than to put it all in a spreadsheet.
Once you pay off the house then you take all of the money that you where paying on your house and then start saving for your kids college and pay CASH FOR IT. That way you don't have to take a LOAN from the goverment and make them rich. Why in the world would you want to pay 10 yrs of interest on a college loan?

ICF
05-18-2010, 03:11 PM
I have had credit cards for 22 yrs and never have I not paid in full each month. I put everything I can on one card and track it and use Mint so I know exactly where every penny goes. I use the rewards from Discover to buy landsend overstock or their sale clothes for my family and myself and shop through Discover.com to get extra rewards. So to me, the benefits outweigh the "evilness" of it.

shhhh....dont let Donald Duck hear you....

They're EVIL cant you see it?!?!?! Pay no attention to the interest free loan and rewards you get every month....THEY'RE EVIL and one day will cause your downfall. :lmao:

abmitch01
05-18-2010, 03:16 PM
But can you realistically max out your retirement savings every yr and pay off your mortgage at the same time? I'd feel like I was flying without a net if I backed off on retirement savings, kwim?

not sure on how much loan taking for college would be reasonable. was hoping to use the Roth contributions (not earnings) and then a combo of aid, grants, scholarships, loans for me and the kids.

donalduck
05-18-2010, 03:22 PM
shhhh....dont let Donald Duck hear you....

They're EVIL cant you see it?!?!?! Pay no attention to the interest free loan and rewards you get every month....THEY'RE EVIL and one day will cause your downfall. :lmao:
Your right ICF they will cause your downfall. I am glad your listening to me for once.
If credit cards aren't EVIL then why can't they set up there tables on collage campus anymore? If credit cards aren't EVIL why did the GOVERMENT have to step in and put regulations on what they can and can't charge for. You need to wake up.

HHSTigerFan
05-18-2010, 03:35 PM
Your right ICF they will cause your downfall. I am glad your listening to me for once.
If credit cards aren't EVIL then why can't they set up there tables on collage campus anymore? If credit cards aren't EVIL why did the GOVERMENT have to step in and put regulations on what they can and can't charge for. You need to wake up.

So the airlines are also evil?? Automotive industry? tourism industry? doctors are evil? They MUST, considering Big Brother regulates them as well...

The need for regulation says more about the citizens of this country than it does about a few banks..

donalduck
05-18-2010, 03:51 PM
So the airlines are also evil?? Automotive industry? tourism industry? doctors are evil? They MUST, considering Big Brother regulates them as well...

The need for regulation says more about the citizens of this country than it does about a few banks..
Yep they are all EVIL. Speaking about this country where are we headed for?

ICF
05-18-2010, 04:21 PM
Your right ICF they will cause your downfall. I am glad your listening to me for once.
If credit cards aren't EVIL then why can't they set up there tables on collage campus anymore? If credit cards aren't EVIL why did the GOVERMENT have to step in and put regulations on what they can and can't charge for. You need to wake up.

If listening = mocking then yes I am......

Debbie
05-18-2010, 04:43 PM
What are these envelopes that some of you posters are speaking of?Well, I don't know anything about Dave Ramsey but what I have seen here. When I was a little girl....many decades ago....my Mom and Dad had a grey box. In that grey box were envelopes marked: groceries, gas, utilities, clothing etc. When Dad brought home the paycheck, the envelopes got filled. When the bills came in, the envelopes got emptied. When there was no money, there was nothing to spend.

I use Quicken to budget, and I pretty much "envelope" my bills.

I don't know if DR's advice is similar to Dave Bach's Automatic Millionaire, but the key is to pay yourself first. ie retirement doesn't wait.

We have a show up here in Canada called "'Till Debt Do U$ Part" with Gail Vaz-Oxlade (http://www.gailvazoxlade.com/) Gail doesn't use envelopes, she uses jars. Same principle. When the money is gone, there is nothing to spend.

BTW, I do envelopes when I go to Disney. $100 a day, marked say-Monday, Tuesday,.....Saturday. Each day I take out the money. When the money is gone, there is no money to spend. If there is money left over, it goes in the next day's envelope.

Leshaface
05-18-2010, 05:04 PM
Well, I don't know anything about Dave Ramsey but what I have seen here. When I was a little girl....many decades ago....my Mom and Dad had a grey box. In that grey box were envelopes marked: groceries, gas, utilities, clothing etc. When Dad brought home the paycheck, the envelopes got filled. When the bills came in, the envelopes got emptied. When there was no money, there was nothing to spend.

I use Quicken to budget, and I pretty much "envelope" my bills.

I don't know if DR's advice is similar to Dave Bach's Automatic Millionaire, but the key is to pay yourself first. ie retirement doesn't wait.

We have a show up here in Canada called "'Till Debt Do U$ Part" with Gail Vaz-Oxlade (http://www.gailvazoxlade.com/) Gail doesn't use envelopes, she uses jars. Same principle. When the money is gone, there is nothing to spend.

BTW, I do envelopes when I go to Disney. $100 a day, marked say-Monday, Tuesday,.....Saturday. Each day I take out the money. When the money is gone, there is no money to spend. If there is money left over, it goes in the next day's envelope.

Thanks for replying!

That's a great way to divide your money among different areas. Whenever I charge things, I don't ACTUALLY see what I'm spending, but if you're using the envelope method, this allows you to see where you're money's exactly going! :thumbsup2

minnie1928
05-18-2010, 05:43 PM
I got the Total book from the library just to see what everyone is raving about. Some of it doesn't work for me- I definitely spend more when I have cash. Like I carried very little cash in Disney to reduce impulse purchases. I knew if I bought us sodas on credittoo many times, I'd see it on Mint and regret it later. Once the cash is gone, I don't get that same feedback, it's easier to just blow it, kwim?

I'm totally the same way...I put my spending money in cash and I run through that fairly quick. But, other expenses go on my credit card (I budget $x per month to various categories, so I already have the money when I make the purchase) and those are more painful transactions.

I also don't agree with paying off the house before retirement/college. I live in a very high cost of living area. Realistically, we won't be able to do it. However, I can invest money for retirement/college and let that appreciate. I understand the whole "don't pay interest on the house thing" but the accountant in me is wondering why I would payoff a loan with an after tax interest rate of about 3.5% when I could invest the money and get a much better return. Saving for retirement also reduces my taxable income, so there's that to factor in too.

Miss SD
05-18-2010, 08:40 PM
Dave doesn't say to pay off the house before saving for retirement/college. He says to put away 15% of your income toward retirement, then start saving for college. (I haven't heard him be that specific about college savings.) Any money left above and beyond that should be used to pay off the house.

I live in a costly area, too, and I disagree with his saying to take out a 15-year mortgage that doesn't eat up more than 25 percent of your take-home pay. That's not realistic here. I can see how that works for most people where houses are $200,000 or so. That's not the case here, even in the current real estate market.

donalduck
05-19-2010, 04:50 AM
Dave doesn't say to pay off the house before saving for retirement/college. He says to put away 15% of your income toward retirement, then start saving for college. (I haven't heard him be that specific about college savings.) Any money left above and beyond that should be used to pay off the house.

I live in a costly area, too, and I disagree with his saying to take out a 15-year mortgage that doesn't eat up more than 25 percent of your take-home pay. That's not realistic here. I can see how that works for most people where houses are $200,000 or so. That's not the case here, even in the current real estate market.
Move out of California that state is going under anyway.

donalduck
05-19-2010, 04:51 AM
If listening = mocking then yes I am......
I like you ICF.

Balt ravens fan
05-19-2010, 07:10 AM
We're Debt Freeeee "Freedom!" .. (just a little qoute for all you Ramsey fans)

anyway ... saving for College is before house in his plan .. Here are the steps from his web site:

Baby Step 1
$1,000 to start an Emergency Fund
An emergency fund is for those unexpected events in life that you canít plan for: the loss of a job, an unexpected pregnancy, a faulty car transmission, and the list goes on and on. Itís not a matter of if these events will happen; itís simply a matter of when they will happen. Learn more

Baby Step 2
Pay off all debt using the Debt Snowball
List your debts, excluding the house, in order. The smallest balance should be your number one priority. Donít worry about interest rates unless two debts have similar payoffs. If thatís the case, then list the higher interest rate debt first. Learn more

Baby Step 3
3 to 6 months of expenses in savings
Once you complete the first two baby steps, you will have built serious momentum. But donít start throwing all your ďextraĒ money into investments quite yet. Itís time to build your full emergency fund. Learn more

Baby Step 4
Invest 15% of household income into Roth IRAs and pre-tax retirement
When you reach this step, youíll have no paymentsóexcept the houseóand a fully funded emergency fund. Now itís time to get serious about building wealth. Learn more

Baby Step 5
College funding for children
By this point, you should have already started Baby Step 4óinvesting 15% of your incomeóbefore saving for college. Whether you are saving for you or your child to go to college, you need to start now. Learn more

Baby Step 6
Pay off home early
Now itís time to begin chunking all of your extra money toward the mortgage. You are getting closer to realizing the dream of a life with no house payments. Learn more

Baby Step 7
Build wealth and give!
Itís time to build wealth and give like never before. Leave an inheritance for future generations, and bless others now with your excess. It's really the only way to live! Learn more


We are on Steps 5 and 6 :) Can't wait for Step 7!

thistle922
05-19-2010, 08:12 AM
We have a show up here in Canada called "'Till Debt Do U$ Part" with Gail Vaz-Oxlade (http://www.gailvazoxlade.com/) Gail doesn't use envelopes, she uses jars. Same principle. When the money is gone, there is nothing to spend.




They show that here in the US, on CNBC...I freaking LOVE Gail! She's awesome. We DVR it every week.

bettymae1121
05-19-2010, 08:45 AM
I do wish he'd up his baby emergency fund amount. $1k doesn't cover a whole lot anymore. For a single person it's probably fine, but for a couple or a family, I personally feel that more in the emergency fund is a good idea. I know the idea is to start paying of debt ASAP and the more you need in your emergency fund, the longer it takes to start, but it doesn't do you any good if a $1.5k or $2k bill comes a long and not only wipes out your fund but forces you to put the rest on one of those dreaded CCs. I say save up a bit more first, and THEN go full tilt boogie on the debt snow ball.

Speaking of the snow ball and the debate over smallest balance vs. highest rate first. While purely on the numbers, it makes more sense to pay the highest rate first, if paying a few small balances the first few months gives a person the confidence and positive feed back to keep going on the debt pay down, then in the long run the person is better off. We're talking about changing bad habits and human behavior, sometimes number crunching needs to take a back seat to get the job done. Besides, if it bugs a person that much, they can always just modify their own plan and just pay the higher interest first. It's not not DR is going to show up at your front door one day and slap your hands! :)

Miss SD
05-19-2010, 08:59 AM
Move out of California that state is going under anyway.

Making friends and influencing people.

dizkids
05-19-2010, 11:53 AM
We're Debt Freeeee "Freedom!" .. (just a little qoute for all you Ramsey fans)

anyway ... saving for College is before house in his plan .. Here are the steps from his web site:

Baby Step 1
$1,000 to start an Emergency Fund
An emergency fund is for those unexpected events in life that you canít plan for: the loss of a job, an unexpected pregnancy, a faulty car transmission, and the list goes on and on. Itís not a matter of if these events will happen; itís simply a matter of when they will happen. Learn more

Baby Step 2
Pay off all debt using the Debt Snowball
List your debts, excluding the house, in order. The smallest balance should be your number one priority. Donít worry about interest rates unless two debts have similar payoffs. If thatís the case, then list the higher interest rate debt first. Learn more

Baby Step 3
3 to 6 months of expenses in savings
Once you complete the first two baby steps, you will have built serious momentum. But donít start throwing all your ďextraĒ money into investments quite yet. Itís time to build your full emergency fund. Learn more

Baby Step 4
Invest 15% of household income into Roth IRAs and pre-tax retirement
When you reach this step, youíll have no paymentsóexcept the houseóand a fully funded emergency fund. Now itís time to get serious about building wealth. Learn more

Baby Step 5
College funding for children
By this point, you should have already started Baby Step 4óinvesting 15% of your incomeóbefore saving for college. Whether you are saving for you or your child to go to college, you need to start now. Learn more

Baby Step 6
Pay off home early
Now itís time to begin chunking all of your extra money toward the mortgage. You are getting closer to realizing the dream of a life with no house payments. Learn more

Baby Step 7
Build wealth and give!
Itís time to build wealth and give like never before. Leave an inheritance for future generations, and bless others now with your excess. It's really the only way to live! Learn more


We are on Steps 5 and 6 :) Can't wait for Step 7!

Interested here as well. Are these steps on the website as well as a book and if so which book? Thanks!

Caitsmama
05-19-2010, 12:08 PM
Yes, they are on his site -- i saw them yesterday.

I also found the podcast, and listened on my way to work today, and will listen to the rest of it on my way home.. i enjoyed it.

Leshaface
05-19-2010, 12:14 PM
Question about Step 5...what if you won't be saving for a college fund? What would you put that money towards then? Your retirement or mortgage?

bas71873
05-19-2010, 12:16 PM
OK, so I have a few questions about DR's "baby steps". BTW, I am going to check out his book this week at the library so I can get my head wrapped around this before I decide if it's right for our family or not. See my ?'s w/in your quote (in bold) and I hope someone can answer for me :confused3

Along with my questions below, am I supposed to forgo any and all "saving" until after all debt is paid off? I don't know that I'm comfortable with that. As you can see, we already have an emergency fund, and living expenses, and we do contribute to IRA's and DD's college fund. I'm not sure I could stop those.

Also, am I suppose to cut out all activities? Examples, DD's dance and swim lessons?

I realize the whole point is belt tightening, but no one has spoke on DR's take on "entertainment" and anything other than paying living expenses and paying off debt?

TIA for any clarification I can get!

We're Debt Freeeee "Freedom!" .. (just a little qoute for all you Ramsey fans)

anyway ... saving for College is before house in his plan .. Here are the steps from his web site:

Baby Step 1 - We have this covered (and a little more). My ? is, do you keep this in a totally seperate account? $1,000 to start an Emergency Fund
An emergency fund is for those unexpected events in life that you canít plan for: the loss of a job, an unexpected pregnancy, a faulty car transmission, and the list goes on and on. Itís not a matter of if these events will happen; itís simply a matter of when they will happen. Learn more

Baby Step 2 - Sounds simple enough, although we really don't have any debt other than the house, 1 car and a 0% interest loan for the new flooring we put in the foreclosure we bought last summer (30 months to go on that).Pay off all debt using the Debt Snowball
List your debts, excluding the house, in order. The smallest balance should be your number one priority. Donít worry about interest rates unless two debts have similar payoffs. If thatís the case, then list the higher interest rate debt first. Learn more

Baby Step 3 - Again, we have this covered already :thumbsup23 to 6 months of expenses in savings
Once you complete the first two baby steps, you will have built serious momentum. But donít start throwing all your ďextraĒ money into investments quite yet. Itís time to build your full emergency fund. Learn more

Baby Step 4 - We do invest in IRA's, but not the full 15% right now. Plus, I didn't think you could invest 15% in IRA's? I thought it was capped at around $5/6K a year??? I love to know otherwise if I'm missing something here.Invest 15% of household income into Roth IRAs and pre-tax retirement
When you reach this step, youíll have no paymentsóexcept the houseóand a fully funded emergency fund. Now itís time to get serious about building wealth. Learn more

Baby Step 5 - We have a 529 set up for DD6 and put $$ in that automatically each month. She also has a basic savings account that $$ goes into each month.College funding for children
By this point, you should have already started Baby Step 4óinvesting 15% of your incomeóbefore saving for college. Whether you are saving for you or your child to go to college, you need to start now. Learn more

Baby Step 6 - That would be so nice wouldn't it. Only 29 years to go :goodvibesPay off home early
Now itís time to begin chunking all of your extra money toward the mortgage. You are getting closer to realizing the dream of a life with no house payments. Learn more

Baby Step 7 - Again, a goal to have.Build wealth and give!
Itís time to build wealth and give like never before. Leave an inheritance for future generations, and bless others now with your excess. It's really the only way to live! Learn more


We are on Steps 5 and 6 :) Can't wait for Step 7!

donalduck
05-19-2010, 02:30 PM
Hey bas71873 I quess you could make a entertainment category. I never did. I never wanted to spend any money on entertainment because I wanted to pay off my credit cards fast as I could. The whole thing what Dave saids is Live like no one else so later you CAN LIVE LIKE NO ONE ELSE. He is right. Now because I paid the price to win and paid off all of my credit cards I don't care how much I spend on entertainment or anything else. I never worry about it anymore because I AM DEBT FREEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE EEEEEEEEEEEEEEEEEEEEEEE

mimicat
05-19-2010, 02:45 PM
Absolutely - actually listening to him as I write. Two more car payments and will be debt free except for mortgage using his method. It works if you are motivated.....rice and beans....beans and rice. Give it a try.

donalduck
05-19-2010, 03:04 PM
Yep I am glad I am not that only one here that thinks CASH IS KING. congratulations on almost being DEBT FREEEEEEEEEEEEEEEEEEEEEEE


Absolutely - actually listening to him as I write. Two more car payments and will be debt free except for mortgage using his method. It works if you are motivated.....rice and beans....beans and rice. Give it a try.

bas71873
05-19-2010, 07:00 PM
Hey bas71873 I quess you could make a entertainment category. I never did. I never wanted to spend any money on entertainment because I wanted to pay off my credit cards fast as I could. The whole thing what Dave saids is Live like no one else so later you CAN LIVE LIKE NO ONE ELSE. He is right. Now because I paid the price to win and paid off all of my credit cards I don't care how much I spend on entertainment or anything else. I never worry about it anymore because I AM DEBT FREEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE EEEEEEEEEEEEEEEEEEEEEEE


OK. I get that. But I don't want to deprive my daughter of her dance lessons. Just not something I'm willing to give up. And it's already budgeted for in my day to day budget anyway. I have been tracking ALL of my spending this month so that I can actually see where my discrestionary spending is and work on that. I've done really good this month, but there are areas for improvement.

But as to my other questions, with regard to my accounts that I have already set up for IRAs, 529, etc. Does DR suggest NOT contributing to those at all until all debt is paid for? Again, just don't know if I can go that far???

I need to go check out that book :)

ICF
05-19-2010, 07:33 PM
Yep I am glad I am not that only one here that thinks CASH IS KING. congratulations on almost being DEBT FREEEEEEEEEEEEEEEEEEEEEEE

I have no debt except my mortgage either and we know my feelings on your evil CC's! ;)

minnie1928
05-19-2010, 08:05 PM
But as to my other questions, with regard to my accounts that I have already set up for IRAs, 529, etc. Does DR suggest NOT contributing to those at all until all debt is paid for? Again, just don't know if I can go that far??

And that's one of the reasons some people do what they call a "modified Dave Ramsey". They find the pieces that they are comfortable with and use those.

While we were paying off our debts, I continued to invest in my 401k in order to get my employer match. I didn't think I should let free money sit on the table, so I modified my plan to work for me. I also use credit cards to earn rewards (please don't flame me donaldduck...we already agreed to disagree on this), but I pay them off every month. I think the important thing is to find a plan that you can stick with...if it's too harsh, you won't want to stick with it.

mrsklamc
05-19-2010, 08:42 PM
I love DR, we are debt free except mortgage and made $600 paying off our credit card in full every month last year. Even Dave doesn't bother arguing with people in my situation. He will use the line about snakes and being bitten, but if someone's been paying them off in full for years, he acknowledges that if it's working for them they aren't going to change on his say-so.

mrodgers
05-19-2010, 09:45 PM
The problem I have with all these financial gurus that I read about and the various sites I have read, articles and forums, is they all look to me to assume that you have the money and are just using it wrong.

There is no help out there that I have found when you don't have the money. When you are in credit card debt and you are living paycheck to paycheck, no amount of budgeting will help you. You have X amount of dollars and need to pay X+Y amount of bills, you can't do it. When you are paying minimum payments on credit cards because you don't have the money to pay more, there is no snowball effect. There's no snowball anywhere.

If you have a $700 house payment, need groceries to feed your children, and have an $800 heating bill due and get a $1000 paycheck, someone please explain how you budget that? No amount of envelopes covers this.

Most of my debt comes from gas in the car to get to work, groceries, heating bills, and repairs that are needed on the house or car. We do not have family help and we do not have astronomical incomes. Living expenses exceeded income by extreme numbers for a very long time.

Emergency fund? Pffft, I haven't seen money sitting in the bank since I was making minimum wage of $3.35 an hour in high school.

I've read a lot of financial sites about credit cards, debt, living-below-your-means, etc and they are all about folks who make a ton of money. None of it helps when you are sitting in the working class making peanuts. If you are making a combined income of $150k-175k, debt is no one's fault but your own. But when you are making $40k, what do you do when you have to buy food, shelter, and other necessary living expenses? If my roof falls in, it needs to be fixed. There is no budgeting for it when you make $40k. If it is -15F outside, I need heat in the house and when the cost of heating goes from $200/month to $800/month in the same winter, there is no budgeting for that. If the car needs gas to get to work, then the car needs gas to get to work. Budget or no budget, these things need to be paid for, thus the credit card debt. I can't call up my boss and tell him I'm not coming to work until Friday because I don't get paid till Friday to have the money to pay for the gas.

All these financial sites and people just tick me off. They are just getting rich over telling people that they should sell the 2 BMWs and move out of the McMansion because they are in credit card debt. No information will tell you how to pay living expenses without extras when the income is only 75% of those living expenses.

We didn't need someone to tell us that we needed more income. We also didn't need someone to explain how the cost of transportation, child care, insurance, and other stuff would exceed what my wife would make getting a job while the kids were home anyways.

mrsklamc
05-19-2010, 09:53 PM
If a person has a 700 house payment and a $1000 paycheck, they need to sell the house, or get another job. No matter what someone's income is, they need to learn to live within it.

I'm not making criticisms of you, or any of your personal decisions. I'm just saying, you are right, those numbers don't add up. I don't know if they are really reflective of your situation or not, I'm just saying, it's not about income. Anyone, no matter what they make, has to live on less than they make or they will always live paycheck to paycheck. It's very hard to pay a mortgage that is that high a percentage of income.

bas71873
05-20-2010, 04:47 AM
And that's one of the reasons some people do what they call a "modified Dave Ramsey". They find the pieces that they are comfortable with and use those.

While we were paying off our debts, I continued to invest in my 401k in order to get my employer match. I didn't think I should let free money sit on the table, so I modified my plan to work for me. I also use credit cards to earn rewards (please don't flame me donaldduck...we already agreed to disagree on this), but I pay them off every month. I think the important thing is to find a plan that you can stick with...if it's too harsh, you won't want to stick with it.

Thanks minnie1928. I might try a modified version and see how that goes. I use my Discover card for everything and pay it in full every month (have been doing it for years) and that works for me. I use the cash back for either vacation or holiday shopping. It works for us :)

donalduck
05-20-2010, 04:52 AM
And that's one of the reasons some people do what they call a "modified Dave Ramsey". They find the pieces that they are comfortable with and use those.

While we were paying off our debts, I continued to invest in my 401k in order to get my employer match. I didn't think I should let free money sit on the table, so I modified my plan to work for me. I also use credit cards to earn rewards (please don't flame me donaldduck...we already agreed to disagree on this), but I pay them off every month. I think the important thing is to find a plan that you can stick with...if it's too harsh, you won't want to stick with it.
LoL I won't FLAME ya this time.

donalduck
05-20-2010, 04:57 AM
The problem I have with all these financial gurus that I read about and the various sites I have read, articles and forums, is they all look to me to assume that you have the money and are just using it wrong.

There is no help out there that I have found when you don't have the money. When you are in credit card debt and you are living paycheck to paycheck, no amount of budgeting will help you. You have X amount of dollars and need to pay X+Y amount of bills, you can't do it. When you are paying minimum payments on credit cards because you don't have the money to pay more, there is no snowball effect. There's no snowball anywhere.

If you have a $700 house payment, need groceries to feed your children, and have an $800 heating bill due and get a $1000 paycheck, someone please explain how you budget that? No amount of envelopes covers this.

Most of my debt comes from gas in the car to get to work, groceries, heating bills, and repairs that are needed on the house or car. We do not have family help and we do not have astronomical incomes. Living expenses exceeded income by extreme numbers for a very long time.

Emergency fund? Pffft, I haven't seen money sitting in the bank since I was making minimum wage of $3.35 an hour in high school.

I've read a lot of financial sites about credit cards, debt, living-below-your-means, etc and they are all about folks who make a ton of money. None of it helps when you are sitting in the working class making peanuts. If you are making a combined income of $150k-175k, debt is no one's fault but your own. But when you are making $40k, what do you do when you have to buy food, shelter, and other necessary living expenses? If my roof falls in, it needs to be fixed. There is no budgeting for it when you make $40k. If it is -15F outside, I need heat in the house and when the cost of heating goes from $200/month to $800/month in the same winter, there is no budgeting for that. If the car needs gas to get to work, then the car needs gas to get to work. Budget or no budget, these things need to be paid for, thus the credit card debt. I can't call up my boss and tell him I'm not coming to work until Friday because I don't get paid till Friday to have the money to pay for the gas.

All these financial sites and people just tick me off. They are just getting rich over telling people that they should sell the 2 BMWs and move out of the McMansion because they are in credit card debt. No information will tell you how to pay living expenses without extras when the income is only 75% of those living expenses.

We didn't need someone to tell us that we needed more income. We also didn't need someone to explain how the cost of transportation, child care, insurance, and other stuff would exceed what my wife would make getting a job while the kids were home anyways.
Hey mrodgers, That's when dave tells them to stop paying on there creditcards. They won't take action for years. Because you couldn't afford it after you keep food on your table and lights and house payment.

donalduck
05-20-2010, 04:58 AM
And that's one of the reasons some people do what they call a "modified Dave Ramsey". They find the pieces that they are comfortable with and use those.

While we were paying off our debts, I continued to invest in my 401k in order to get my employer match. I didn't think I should let free money sit on the table, so I modified my plan to work for me. I also use credit cards to earn rewards (please don't flame me donaldduck...we already agreed to disagree on this), but I pay them off every month. I think the important thing is to find a plan that you can stick with...if it's too harsh, you won't want to stick with it.
I never stopped my 401K either. You don't have to stop it. You don't have to do everything he tells you to.

donalduck
05-20-2010, 05:01 AM
I have no debt except my mortgage either and we know my feelings on your evil CC's! ;)
congratulations ICF it's nice not having any payments but a mtg.

abmitch01
05-20-2010, 07:42 AM
I'm a nurse and my ex is a respiratory therapist. I'd say we are both working class. I think the books helped me. I started out reading Financial Planning for Dummies right out of college when I was making very little. It's 20 yrs later and I look back and think thank God I read those books young. It got me to start saving for retirement right away. We bought a sm house below our means. We worked different shifts when the kids came to avoid daycare costs and to keep both our salaries (I was part-time for a bit). When we got divorced I went back to work full time, I bought a sm townhouse well below my means because I wanted to be sure I could cover the mortgage if anything happened. I bought clothes for me and the kids at garage sales and thrift shops or by using my discover rewards. I couponed like crazy and made my last pennies beg for mercy. I got out of these habits a bit as my salary rose over the yrs. But now I'm trying to reinstate them. I think those books taught me good habits, things high school and college never did.

Could one of you do shift work so you could both work? That's really hard on a family and marrige, though. Maybe just to see you through this rough time? It's probably really hard to find a place to live with rent or mrtgage less than what you are paying now.

ilovediznee
05-20-2010, 08:07 AM
mrodgers - I truly understand your frustration as I felt the same way. We live paycheck to paycheck and I have racked up a ton of cc debt, partially because I had to have surgery and then other stuff.

This is what I did and my DH and decided this together - I was able to get another job that is closer and paid me more, but before I did that, I got another job. I work retail three to four nights a week and that has helped pay for food and started a small snowball effect to help pay things off. If you haven't, consider this or your spouse doing this. Yes, I miss my DD, but it has to be done. We also try and do a garage sale once or twice a year. Even if I make $100, that is helping to pay off some of my medical stuff. I started in December 2008 with a ton of medical bills and they should be paid off by July or December depending on how things go. Really look and see what options you may have. Call your credit card companies and see if they will reduce your payment or interest rate. Same thing for the cars and even your house. Most wouldn't for me, so that is why my extra job has been so essential.

Good luck and you WILL find a way.

Diane:)

dvcgirl
05-20-2010, 08:14 AM
The problem I have with all these financial gurus that I read about and the various sites I have read, articles and forums, is they all look to me to assume that you have the money and are just using it wrong.

There is no help out there that I have found when you don't have the money. When you are in credit card debt and you are living paycheck to paycheck, no amount of budgeting will help you. You have X amount of dollars and need to pay X+Y amount of bills, you can't do it. When you are paying minimum payments on credit cards because you don't have the money to pay more, there is no snowball effect. There's no snowball anywhere.

If you have a $700 house payment, need groceries to feed your children, and have an $800 heating bill due and get a $1000 paycheck, someone please explain how you budget that? No amount of envelopes covers this.

Most of my debt comes from gas in the car to get to work, groceries, heating bills, and repairs that are needed on the house or car. We do not have family help and we do not have astronomical incomes. Living expenses exceeded income by extreme numbers for a very long time.

Emergency fund? Pffft, I haven't seen money sitting in the bank since I was making minimum wage of $3.35 an hour in high school.

I've read a lot of financial sites about credit cards, debt, living-below-your-means, etc and they are all about folks who make a ton of money. None of it helps when you are sitting in the working class making peanuts. If you are making a combined income of $150k-175k, debt is no one's fault but your own. But when you are making $40k, what do you do when you have to buy food, shelter, and other necessary living expenses? If my roof falls in, it needs to be fixed. There is no budgeting for it when you make $40k. If it is -15F outside, I need heat in the house and when the cost of heating goes from $200/month to $800/month in the same winter, there is no budgeting for that. If the car needs gas to get to work, then the car needs gas to get to work. Budget or no budget, these things need to be paid for, thus the credit card debt. I can't call up my boss and tell him I'm not coming to work until Friday because I don't get paid till Friday to have the money to pay for the gas.

All these financial sites and people just tick me off. They are just getting rich over telling people that they should sell the 2 BMWs and move out of the McMansion because they are in credit card debt. No information will tell you how to pay living expenses without extras when the income is only 75% of those living expenses.

We didn't need someone to tell us that we needed more income. We also didn't need someone to explain how the cost of transportation, child care, insurance, and other stuff would exceed what my wife would make getting a job while the kids were home anyways.


If you listened to the DR show, you'd hear a whole lot of people who are paying off a ton of debt making 40K a year. Sure, there a lot making twice that, or several times that, but the median income in this country is 50K, not 150K.

I've read your comments in another thread and it seems like you've been feeling a financial pinch for years now, due to your decision to have your wife stay home with your children. I commend that....it's a wonderful thing to do, but you have paid a financial price in doing so. I'm sure you think it's worth it....so be happy about that decision. But also accept the consequences of that decision.

As for finding your "snowball", well, you also mentioned that your wife just re-entered the workforce. Your wife is the "snowball"....now there's something you won't likely hear again ;).

Seriously though, if you waded into 25K of CC debt over the last 9 years because your wife stayed home, now you can get serious and use your wife's income to get out....and that sounds like your plan.

But you can't beat up on Dave Ramsey or any other financial "guru" who would listen to your situation and say..."you need to make more money." He's listening to your situation, but also looking at the numbers on a page. And the numbers don't lie. He would have told you that he thinks that there is nothing more important than having Mom home with those babies, but that you need to be able to afford that. And then he would have told you that you needed to get a second job or find a way to make more money. Harsh? I don't think so. Realistic? Yes. It beats sticking with a plan for 9 years that puts you 25K in CC debt.

Really though, I think that your attitude is your worst enemy with respect to getting ahead financially. I don't mean to pick on you, but you'll never get ahead with that "it's easy to pay off debt if you have *money*!" attitude.

I would challenge your idea "that there is no budgeting on 40K a year". There has to be. "Things just have to be paid for....thus the CC debt.".....well, that's not a plan.

I think you can turn things though. With your wife back at work, you should be able to do so quickly. Best of luck to you!

bettymae1121
05-20-2010, 08:24 AM
The problem I have with all these financial gurus that I read about and the various sites I have read, articles and forums, is they all look to me to assume that you have the money and are just using it wrong.

There is no help out there that I have found when you don't have the money. When you are in credit card debt and you are living paycheck to paycheck, no amount of budgeting will help you. You have X amount of dollars and need to pay X+Y amount of bills, you can't do it. When you are paying minimum payments on credit cards because you don't have the money to pay more, there is no snowball effect. There's no snowball anywhere.

If you have a $700 house payment, need groceries to feed your children, and have an $800 heating bill due and get a $1000 paycheck, someone please explain how you budget that? No amount of envelopes covers this.

Most of my debt comes from gas in the car to get to work, groceries, heating bills, and repairs that are needed on the house or car. We do not have family help and we do not have astronomical incomes. Living expenses exceeded income by extreme numbers for a very long time.

Emergency fund? Pffft, I haven't seen money sitting in the bank since I was making minimum wage of $3.35 an hour in high school.

I've read a lot of financial sites about credit cards, debt, living-below-your-means, etc and they are all about folks who make a ton of money. None of it helps when you are sitting in the working class making peanuts. If you are making a combined income of $150k-175k, debt is no one's fault but your own. But when you are making $40k, what do you do when you have to buy food, shelter, and other necessary living expenses? If my roof falls in, it needs to be fixed. There is no budgeting for it when you make $40k. If it is -15F outside, I need heat in the house and when the cost of heating goes from $200/month to $800/month in the same winter, there is no budgeting for that. If the car needs gas to get to work, then the car needs gas to get to work. Budget or no budget, these things need to be paid for, thus the credit card debt. I can't call up my boss and tell him I'm not coming to work until Friday because I don't get paid till Friday to have the money to pay for the gas.

All these financial sites and people just tick me off. They are just getting rich over telling people that they should sell the 2 BMWs and move out of the McMansion because they are in credit card debt. No information will tell you how to pay living expenses without extras when the income is only 75% of those living expenses.

We didn't need someone to tell us that we needed more income. We also didn't need someone to explain how the cost of transportation, child care, insurance, and other stuff would exceed what my wife would make getting a job while the kids were home anyways.

I don't know if the numbers you used in your post are actual numbers you work with, but my first thought is that anyone that makes $40k a year shouldn't own a home. Even if the mortgage is doable, the maintenance can kill you, just like in your post. If the roof leaks, you have to fix it! But in a rental, the landlord has to deal with it.

I don't know if you've read it or not, but DR's book Total Money Makeover does go over what to do if your income just isn't enough. When he says "rice and beans, beans and rice" he really isn't kidding. Obviously he doesn't promote mailnutrition but there are ways to cut way back on grocery budgets, there are ways to cut back on utilities, there are ways to cut back on clothing, on all sorts of true needs. He does not only address "sell the boat, sell the 3rd car" type situations.

As for your wife, true child care can kill a paycheck but there are ways for your wife to make money without leaving the house. There are several "work at home" threads on the Budget board that gives tons of legitamate ways to earn money from home. Your wife could even just babysit for other chilren who do have both parents working. Or she can work when you're home, even if it's just cashiering at Target on evenings and weekends. It may only bring in a few hundred more a week, that's better than zero.

You can get his book at the library for free, no need to add to his millions if you don't want to! :)

donalduck
05-20-2010, 11:14 AM
No one said getting out of debt is going to be easy. But it's worth it. I didn't have fun sending all of my money to the bank and living no kinda of life at all. But it was worth every penny now. You can do it if you really want to. If you don't really want to then you will stay in debt.

mrodgers
05-21-2010, 06:56 AM
Couldn't find this to get back to it last night.....

Just wanted to say, first, when I said $700 house payment and $1000 paycheck, I was meaning just that, a paycheck, not a monthly income. Obviously there is more expenses than just a house payment, which the 2nd paycheck takes care of. House and groceries on one paycheck, then utilities, insurance, gas, etc. etc. including groceries again on the 2nd paycheck. Then along comes winter and we found ourselves with $800/month heating bill.

To clarify on the heating bill, I had no experience with oil heat. When it cost us $150-200 per month for 5 months out of the year, it seemed reasonable heating cost to me. Then it climbed from $1.98/gallon or so in 2007 to $4.40/gallon in 2008 for heating oil, I was first shocked, then learned what others were using in oil for heat. I was using a tank (275 gallon) of oil per month and folks were telling me they used 1-2 tanks per winter. We did end up rectifying that with a big insulation project on the house, which we found just about no insulation in the walls.

And yes, the wife is working now, not making a large paycheck, but it pays the cc bills and the misc. bills catching up on everything and paying down the cards.

bwolfe
05-21-2010, 09:46 AM
I won't speak to others personal finance choices...however, we used the DR method. We paid off two cars, several credit cards, medical bills and students loans. We now use cash for everything. We spent about 18 months on rice & beans, then beans & rice. Dave is right, we lived like no one else and now we are living like no one else.

We will go to Disney three times between December of 2009 and November of 2010...all paid with cash. My wife and I are both teachers. This can be done! It takes work and commitment, but it is so worth it to make your money work for you...good luck!

donalduck
05-21-2010, 10:26 AM
Same thing with my wife and I. We went to Disney and stayed at the WDL and bought annual passes and we are going back this Novemeber all paying cash. It's worth it. Live like no one else so later you can live like no one else.