Dave Ramsey - question

[HHSTigerFan]

LOL, if you are a little naive, let me clue you in on something: Most successful financial people ARE marketing machines.

Really??? The guy that I listen to has the personality of a rock, couldn't sell a pair of gloves to a naked Eskimo.. but when it comes to financial advice he is golden!

 

[KShopshear]

Illinois? They are about as equal to one of those mail order degrees.

Proud grad of U of Illinois... thank ya much

Have zero problem with a mortgage, right now VERY cheap money..

 

[windycitymom]

No, you don't have to take Financial Peace University in order to follow his program...but should you take his class? YES! My DH & took the FPU class together ($99 inc. supplies) in Fall 2010 and for the first time in our marriage we are on the same page financially. It's an awesome feeling to be on the same page and share the same financial goals. Even if you don't have any cc debt you will still learn from his class - it's about much more than cc debt - it's about overall financial health. Our small group class bonded and we plan to have a reunion.

I think I want to facilitate a class. I've always been a personal finance junkie, and I've read a ton of personal finance books, but I'm totally hooked on Dave.

FPU should be a required class for all couples before they get married. The number one reason for divorce is fighting over money.

 

[Bob NC]

Really??? The guy that I listen to has the personality of a rock, couldn't sell a pair of gloves to a naked Eskimo.. but when it comes to financial advice he is golden!

And nobody would act condescending and berate you for who you listen to. Nobody here would tell you the guy you listen to gives bad advice and his books should be thrown away. Why do you insist on doing it to others?

 

[SaraJayne]

Illinois? They are about as equal to one of those mail order degrees.

You must be a loyal DR follower. That sounds just like something he'd say.

 

[DawnM]

Sure, you can do it by yourself. You can even just do it from borrowing his book from the library for free.

I have not done DR but have done a similar program. I have also read DR's book.

What I did find was that when I did the class, the discussions, accountability, and relationships built during the class were invaluable to our success. However, some people can do it just fine on their own.

We have never really had credit card debt, but we did have student loans and cars to pay off and we had no emergency fund to speak of.

We now have all debts other than the mortgage paid off and have a good savings should we need it. Our only regret was buying what I think was too much house before we did the Financial program. We switched from a 30 year to a 15 over a year ago though and are making it work.

Dawn

 

[2disneyboys]

I don't understand all the "anger" directed @ Dave's program in this and other Dave threads. I mean, I get not agreeing 100% with Dave or other financial programs, i just dont get the "anger"....that's so weird to me. There are a lot of things or people or groups that I don't agree with, but I don't feel the need to belittle or demeaning to the people that says the system works for them. I take what works for me and drop the rest. I dont judge or critize others for taking advice I thought was silly or common sense.....I figure they dont walk in my shoes and i dont walk in theirs, kwim?????

To answr the OP, u can get the vast majority of the info u would need on dave (or anyones) program free between the web, library, Twitter, Facebook etc. My husband and i did take the class, and as I have posted before, Daves process helped to change our lives. We could have done it without taking the class, but we dont regret taking it.

I also don't agree with all that he says, but do agree that if even a fraction of the people in the world took just a fraction of his advice, we would all be in a better place, and honesty, what does it hurt you if someone follows a plan that helps them? I don't see where there is any impact on you, esp enough to justify all the self righteous anger?

God luck op whatever you decide.

 

[Luv Donald Duck]

I by no means wanted to start a debate or arguement. I am just looking for a way to get out of debt. Unfortunelty I am not in a position to pay off my credit cards monthly, if that were the case I would not have used them. thank you all for the advice and information. After looking at the Ramsey webstie I believe his snowball effect is great and am going to try to apply that to getting out of debt! Thank you all again.

 

[DaniB]

Don't worry about it. There will always be people wanting to argue, no matter what the post/thread is about. Heck, I know I have fallen into that same trap as well.

In any case, you do not need to purchase anything. Borrow the book! It is a good read and motivating. In our case, the lowest item to pay off first happened to also be our highest interest rate. Even if it hadn't, I still would have chosen the lowest item. It's a great feeling watching the balance get lower & lower and knowing there's just 1 more month left.

A PP mentioned "GET MAD"! Yes, get mad and get angry! Our Visa has had that $6,300 balance for 3 years. Always making nothing more than the minimum payment. While I was reading "Total Money Makeover", my mom happened to mention (strongly) that she felt we should put our Disney money toward paying off the Visa and taking our trip in a year or two. I tell you, that scared the heck out of me! I was afraid she would do the mother thing, and refuse to look after our kids in our best financial interest. With my grandparents declining health and my mom's health, there's no way a kid-free trip would happen after this year. Fear and anger make good motivators!

It's amazing how many things you can really do without when determined. In 4 months, we still made all our mtg, car, insurance, food, utilities, etc. payments. Plus purchased our airline tickets, all-season tires, kids' monthly tutoring, swimming lessons, soccer lessons, kitten shots & spaying bills - all adding up to about $3,200. Plus was able to pay down $4,900 on the Visa.

The hardest part for the kids was learning Mommy & Daddy are NOT going to buy them something small when we are in the store, and no we are NOT having fast food for dinner tonight!

 

[2disneyboys]

Don't worry about it. There will always be people wanting to argue, no matter what the post/thread is about. Heck, I know I have fallen into that same trap as well.

In any case, you do not need to purchase anything. Borrow the book! It is a good read and motivating. In our case, the lowest item to pay off first happened to also be our highest interest rate. Even if it hadn't, I still would have chosen the lowest item. It's a great feeling watching the balance get lower & lower and knowing there's just 1 more month left.

A PP mentioned "GET MAD"! Yes, get mad and get angry! Our Visa has had that $6,300 balance for 3 years. Always making nothing more than the minimum payment. While I was reading "Total Money Makeover", my mom happened to mention (strongly) that she felt we should put our Disney money toward paying off the Visa and taking our trip in a year or two. I tell you, that scared the heck out of me! I was afraid she would do the mother thing, and refuse to look after our kids in our best financial interest. With my grandparents declining health and my mom's health, there's no way a kid-free trip would happen after this year. Fear and anger make good motivators!

It's amazing how many things you can really do without when determined. In 4 months, we still made all our mtg, car, insurance, food, utilities, etc. payments. Plus purchased our airline tickets, all-season tires, kids' monthly tutoring, swimming lessons, soccer lessons, kitten shots & spaying bills - all adding up to about $3,200. Plus was able to pay down $4,900 on the Visa.

The hardest part for the kids was learning Mommy & Daddy are NOT going to buy them something small when we are in the store, and no we are NOT having fast food for dinner tonight!

sometimes I really wish the DIS had a "LIKE" button like facebook does... I would totally "like" this comment... PERFECT POST!!!

 

[mrudman]

I by no means wanted to start a debate or arguement. I am just looking for a way to get out of debt. Unfortunelty I am not in a position to pay off my credit cards monthly, if that were the case I would not have used them. thank you all for the advice and information. After looking at the Ramsey webstie I believe his snowball effect is great and am going to try to apply that to getting out of debt! Thank you all again.

You've done the most important step already, and that's admitted you have debt and want to get out of debt.

I wish I had taken that step years ago, lol! But at least my eyes did open 18 months ago, and my life has been so much less stressful since then.

Like I said in my original post, I use the envelope system now.. and that alone has been probably been the biggest factor in helping me see where my money is going... before then, I wouldn't hesitate to run to Joann's (love to sew) and drop $100 on fabric, etc. to make outfits for dd's.

My system may not work as well for other people, but this is what I do for us, and i love how it works:

First, with each paycheck (both dh and I get paid every other week), I transfer 1/2 of our mortgage payment to the bank we have our loan through (have our accts under second bank).

Second, I pay the monthly bills (have 4 of them, 2 get paid with 1st pay of the month, other 2 get paid with 2nd pay of month).

Third, I make sure our envelopes for 3-month/6-month/yearly bills are filled for the month..

Fourth, I take out cash to fill our cash envelope (usually give myself about $300 per 2 weeks).. and that's the money we can spend on anything we want through the 2 wks.. no questions asked.. use that money for groceries also.

Fifth, I make sure to leave $100 every 2 weeks in our bank account.. for car gas money.. both dh and I agreed we just like the convenience of paying at the pump, and not worth it to me to try to stop doing that.

Lastly, any money left over after I've done the 5 steps above gets transferred right into our savings account.



Doing this approach has been wonderful for us.. we know exactly where our money is going each time.. no big surprises for when we get the yearly bills (car insurance, house insurance, etc.). Life's been much less stressful,

Oh, and when did have our CC debt (bought a camper using our Visa just before we started this system), all the money that we now put into savings went toward paying that CC off.. ended up paying just under 14k off in about 18 months,

 

[MommyBell08]

We didnt buy anything.. just checked out the book at the library.. worked great we are alllmost debt free other than a little cc. No more car payments and our only loan is the house! Good Luck!

 

[AmberHeartsDisney]

we never did a real class. The books and website are helpful.

 

[bettymae1121]

I'm neither a DR hater nor a rabid fan...

I do in general like DR's get-out-of-debt step by step plan. For people who are drowning, having something simple and clear cut laid out for them can be a real life saver. When you're in panic mode it can often be hard to think straight. Plus, as I once heard said "Common sense isn't all that common".

True, paying lowest balance to highest isn't the best math, but if it's a choice between drowning in debt and beginning to pay it off, then a person is still better off in the long run even if it does cost a bit more in interest. Plus oddly enough, often (not always but often) the lowest balances are on the highest interest cards anyway, as smaller balances tend to be on high interest store cards.

I do in general disagree with his stance on never using CC's. For people with shoping or spending addictions, it's spot on, those people need to stay way from CCs the same way alcholics should avoid liquor stores and bars. But for the average person the use of CC's isn't an issue as long as they make a budget and stick to it. But the problem is that if he says "CCs are okay for some but not others" then many people who really should avoid CCs will just hear "CCs are okay..." and tune the rest out. It's just easier to say "CCs bad, cash good" at leave it at that. Those that have the disapline to handle CCs will likely figure that out on their own at some point and start using CCs again, if that's what they want to do.

To answer the OP's question, while many find the class and the materials sold on his website helpful, you don't need to spend a dime. Just check out his Total Money Makeover book from your library. It's a fast and easy read and all you need to know about his plan is in the book. You can either follow it 100% or pick and choose the parts that work best for you. While you're in the "finance" section of the library, I also recommend Suze Orman and Clark Howard (not sure if CH has any books but I know Suze does), also look for the book "The Millionaire Next Door", I can't remember the author but I know that book is also highly recomended.

 

[KShopshear]

If you PM me a shipping address i will send you a copy of his book for free. That is how much i believe in his program. I will put my money where my mouth is.

I by no means wanted to start a debate or arguement. I am just looking for a way to get out of debt. Unfortunelty I am not in a position to pay off my credit cards monthly, if that were the case I would not have used them. thank you all for the advice and information. After looking at the Ramsey webstie I believe his snowball effect is great and am going to try to apply that to getting out of debt! Thank you all again.

 

[Carlyzmom]

I by no means wanted to start a debate or arguement. I am just looking for a way to get out of debt. Unfortunelty I am not in a position to pay off my credit cards monthly, if that were the case I would not have used them. thank you all for the advice and information. After looking at the Ramsey webstie I believe his snowball effect is great and am going to try to apply that to getting out of debt! Thank you all again.

Like him or not....his baby steps plan WORKS!!! If you follow it like he teaches, it WORKS!!! We had MAJOR debt. Like $35K and paid it off in just over a year. I was able to quit my full time job and be home with my kids. That was just over 5 years ago. Still no debt. And now that my kids are in school, I work part time. I make my own schedule, so I can be there for my kids. Such a blessing. I Dave!

 

[Jeff_G]

I do in general disagree with his stance on never using CC's. For people with shoping or spending addictions, it's spot on, those people need to stay way from CCs the same way alcholics should avoid liquor stores and bars. But for the average person the use of CC's isn't an issue as long as they make a budget and stick to it. But the problem is that if he says "CCs are okay for some but not others" then many people who really should avoid CCs will just hear "CCs are okay..." and tune the rest out. It's just easier to say "CCs bad, cash good" at leave it at that. Those that have the disapline to handle CCs will likely figure that out on their own at some point and start using CCs again, if that's what they want to do.

He is taking a moral stance (one I agree with) against a corrupt industry who's main goal is to maximize their profits at their customers peril. They want to keep you in debt to them as long as possible and paying only the minimum payment.

Their tactics are why congress recently passed the CARD act to limit and expose some of their misdeeds.

 

[bettymae1121]

He is taking a moral stance (one I agree with) against a corrupt industry who's main goal is to maximize their profits at their customers peril. They want to keep you in debt to them as long as possible and paying only the minimum payment.

Their tactics are why congress recently passed the CARD act to limit and expose some of their misdeeds.

I can respect that if he, himself, doesn't want to use CC's, but I think better advice is to let people know what the pitfalls are with CC usage and for people to make up their own minds, rather than preach "CC use is always bad in all situations". I do think it's a good idea while in the early stages of his "baby steps" not to use CC's because at the beginning most are trying to get a handle on their cash flow, plus charging on cards you're trying to pay down isn't a good idea (your paying interest the second you buy something if you've got a balance). But once you've gotten a handle on things and assuming you don't have a shopping addiction, I don't see a problem with charging and paying off in full each month.

But as far as I know, he's the only major "financial guru" that preaches "no CCs ever" so people are still free to read other opinons and make up their own minds. Like I said, I'm no DR hater, I just disagree with him on that point.

 

[palavra]

Like him or not....his baby steps plan WORKS!!! If you follow it like he teaches, it WORKS!!! We had MAJOR debt. Like $35K and paid it off in just over a year. I was able to quit my full time job and be home with my kids. That was just over 5 years ago. Still no debt. And now that my kids are in school, I work part time. I make my own schedule, so I can be there for my kids. Such a blessing. I Dave!

I don't entirely agree with you there. We've been following Dave's plan for two years and have made a major headway on debt. We now have less than $1,000 dollars in credit card debt, two medical bills of about $1,000, a car payment ($8,000 left), and a mortgage. BUT, and this is where I do disagree with Dave, the emergency fund idea before you pay off debt has been all but impossible for us. Twice, we've saved up decent emergency funds (over $1,000), and both times we've had major emergencies come up and wipe out the fund. In fact, one was so major, that we had to take on payments because the emergency fund wasn't enough. Now, I'm so glad we had that to help pay, but starting all over again from scratch twice feels like a major defeat. So, we didn't. We did not wait until we had another emergency fund to keep paying on our debts. I'm glad we didn't. I love the fact that our debt is quite manageable now.

 

[DaniB]

When it comes to not having a credit card/using a credit card ever again, I have to admit I think that's just not do-able these days... So many places require a CC to hold deposit. Some places (ie, car rental) won't let you rent a car without a CC. I can't imagine ever not having one. However, I want our limit lowered and whatever we charge on it, paid immediately from now on. Currently I hold a Zellers with a small amount. I use it just for the double-points (which gets converted to air miles). I pay the cashier with it, then turn around and hand the cashier my debt card to apply the payment. Two years now and I still have a $0 balance on it!

As for the emergency fund & savings - this is where I disagree with DR's teaching. He advocates appying all your savings to debt, then building up a $1,000 emergency fund and no further until debt is paid off. Well... I'm not wiping out the small savings we have. I would rather pay a little more in interest to take a little longer to pay off the debt, then spend sleepless nights worrying if an emergency came up!