anyone use the Dave Ramsey method??

[Carmell226]

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]

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]

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]

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]

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]

Modified Dave user here also. Yes, he's great for getting out of debt. As far as stocks advice, I'm not sure.

 

[disneylove69]

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]

Faithful follower! No debt. Cash is the only way!

 

[Vaughn4380]

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]

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. 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.

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. Good luck !!

 

[smkiya]

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]

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! 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]

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]

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]

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]

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]

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]

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]

Yep, DR fan here too... started FPU about 4 months ago. AMAZING difference!! 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]

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!

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.