Dave Ramsey - question

[mackeymouse4eva]

Approximately 12 years ago I randomly picked up Dave Ramseys " Financial Peace Workbook". It was a wakeup call!! I have never read the actual Financial Peace book , however the workbook has everything and explains everything!! I have given the workbook to several friends because although I do not follow it as I should ( still vacation way too much ) I recognize the truth & value in his theories. Three years ago I found a local church that was offering the class. I did take the class and enjoy it, it also provided the materials to use at home. HOWEVER all of the material offered was well covered in the original Financial Peace Workbook. The class was a nice opportunity to share from others but I do not feel that you need to invest in home classes or community classes. Maybe purchase the workbook and do as previous posters suggested, use your local library.


Good Luck - it is a life alterning experience!

 

[Carlyzmom]

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.

I'm not sure what you mean? Don't agree with what? I'm just saying that the plan worked for us. Usually people say his plan doesn't work, are the ones that don't follow it as he says.

 

[disneychrista]

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.

And if you hadn't saved up that emergency fund what would you have done? There is a reason why it is recommended to have this emergency fund, it is so you don't go into debt deeper because you don't have money for the emergency.

 

[ICF]

. I would bet that most of the people on here that bash him are up to their eye balls in debt. Probably still paying for the first Disney vacation they took back in 1999 because it is still on their credit card. I would also bet that if you were to ask 100 different millionaires how they made their money, not one would tell you that they did it all with the 5% cash back, or the airline miles their credit card company gave them.
It is a fact that 70% of consumers do not pay off their credit card balances every month, despite what they may say.
It is proven by marketing research that on average people tend to spend more when paying for things with their credit cards than with cash. Paying with cash hurts more than credit. Go to is website and do a free trial. What could it hurt to try it?

Can we please make that bet, cause I'm pretty sure you would lose?? I dont have charges open from Feb, much less last century.

My CC's are paid in full every month and have saved me thousands in free hotels and the like. Paying cash or using a debit card all these years, would have really just been stupid.

 

[palavra]

And if you hadn't saved up that emergency fund what would you have done? There is a reason why it is recommended to have this emergency fund, it is so you don't go into debt deeper because you don't have money for the emergency.

If you read my post, I said that. But, if you never get off baby step one, how if that helping anyone? Imagine that a person has one emergency after another. Some money situations are just not easily fixable with a program. The two emergencies we've had came out of nowhere. They weren't preventable and were not our fault.

 

[disneychrista]

If you read my post, I said that. But, if you never get off baby step one, how if that helping anyone?

It helps you NOT going into more debt. If you had not had that money in savings you would now be in debt an extra $2k.

 

[KShopshear]

You may be the exception. Do you really think that credit card companies would stay in business if everyone paid off their credit cards every month and they just gave away hotel stays and airline miles without taking in money from the 70% who do not pay off their bills? Now that is just stupid. I can do anything with my Visa debit card that you can do with your credit card and i do not owe anyone anything. Credit card companies are in business for one thing and that would be to make money. They are not in business to let people borrow money interest free and give those people free hotels and airline miles.

Can we please make that bet, cause I'm pretty sure you would lose?? I dont have charges open from Feb, much less last century.

My CC's are paid in full every month and have saved me thousands in free hotels and the like. Paying cash or using a debit card all these years, would have really just been stupid.

 

[disneychrista]

Do you really think that credit card companies would stay in business if everyone paid off their credit cards every month and they just gave away hotel stays and airline miles without taking in money from the 70% who do not pay off their bills?

They still make up to 3% on every transacation that I make with my credit card.

 

[dawsons]

I have seen on this board alot of Disers who love the Dave Ramsey program. I know nothing of this until I saw someone on this board talking about him. I have looked him up online. My question is do I need to attend a class to use his method? I see online that I can find a class near me but I would prefer to do it at home in my spare time each night if possible. Has anyone bought his product and done it at home sucessesfully?

We live by his envelope system and I love it! I can't do without my envelopes.

 

[KShopshear]

3% wont even cover the cost of postage for all the credit card offers they send out to everyone in the mail. Bottom line is that most people do not pay off their balances. They count on people charging on their cards with the intent of paying it off each month, then things come up and they dont make all of the payments.

They still make up to 3% on every transacation that I make with my credit card.

 

[HHSTigerFan]

I can do anything with my Visa debit card that you can do with your credit card and i do not owe anyone anything.

I currently have almost $300 in Disney reward dollars on my Chase account... can you do that?

 

[KShopshear]

I currently have almost $300 in Disney reward dollars on my Chase account... can you do that?

LOL... Uh yeah considering I received nearly $500 in cash deposited into my account from my PNC Debit Card account last year, $300 in Lowes giftcards, and an IPod....all from my DEBIT CARD rewards.

Oh ... and, someone mentioned Target Visa gives you 5% off all transactions - I have the Target Red DEBIT card linked to my checking account - same thing..I get 5% off without selling my soul to a ridiculous 18% Marketing Machine.

And yes, Gas? You ask... someone mentioned that also..... Well... Hooking my Speedy Rewards card to my Debit Card earns me $ off EVERY gallon I purchase EVERY time, again... without selling my soul to the bankers.

You all can say what you want.. heres the thing. I dont have creditors that will be breathing down my neck if I want to walk into my job tomorrow and tell em all to take their job and shove it... I will still be taking Disney Vacations PAID FOR IN CASH... and .... have a house, food, nice cars, and ....sending 2 kids to college.

Everyone can do what they want... You wont make me believe that using credit cards is a good idea, EVER. You must not realize how your credit score is calculated. If you prefer to be in debt - so be it. I realize there are a handful of people who are disciplined and pay their cards off every month... but what position would they be in if they (or both income earners) lost their job? im guessing they wouldnt be able to pay it off... and so the cycle begins.

You dont have to Love Dave, or his stuff... but ya know what? When we were living paycheck to paycheck... and when we were fighting about money - we followed his plan and it worked. We paid off nearly $80K in debt... and August 2010 took an amazing vacation to Disney, and we leave a week from today for another Amazing vacation to Disney. We are giving more than we ever have, and we are saving more than we ever have.

 

[HHSTigerFan]

but what position would they be in if they (or both income earners) lost their job? im guessing they wouldnt be able to pay it off... and so the cycle begins.

I would be in the same position as you...

 

[bellarella]

You all can say what you want.. heres the thing. I dont have creditors that will be breathing down my neck if I want to walk into my job tomorrow and tell em all to take their job and shove it... I will still be taking Disney Vacations PAID FOR IN CASH... and .... have a house, food, nice cars, and ....sending 2 kids to college.

Everyone can do what they want... You wont make me believe that using credit cards is a good idea, EVER. You must not realize how your credit score is calculated. If you prefer to be in debt - so be it. I realize there are a handful of people who are disciplined and pay their cards off every month... but what position would they be in if they (or both income earners) lost their job? im guessing they wouldnt be able to pay it off... and so the cycle begins.

You dont have to Love Dave, or his stuff... but ya know what? When we were living paycheck to paycheck... and when we were fighting about money - we followed his plan and it worked. We paid off nearly $80K in debt... and August 2010 took an amazing vacation to Disney, and we leave a week from today for another Amazing vacation to Disney. We are giving more than we ever have, and we are saving more than we ever have.

It's great that you realized that credit cards don't work for you and that you found a program that got you out of debt, but your arguments don't make sense.

You say credit cards can't stay in business if they give rewards and you don't owe. But then you say you get every reward on your debit card that credit card people do.

I agree a lot of people can't handle credit. I can. I am not alone. I use my credit card like a debit card, but rather than opening up my bank account each time I make a purchase, I let my credit card company give me an interest free loan and take the risk of fraud. I've had my credit card number stolen. Rather than needing to wait to get my money back, the charge was simply deleted from my account. No hoops, no needing to move money from savings, etc.

If my spouse or I (or and I) lost our jobs, we'd be in the exact same position as if we'd been using a debit card. Things don't get charged if there isn't already money in the bank. I am no more in debt to my credit card company than I am to my utility companies (another system where you pay in arrears rather than ahead).

I do know how credit scores work. I've been using credit cards for about 20 years now. I have paid interest for approximately 6 mos out of that time. Five of those months were when I graduated college and needed a bed to sleep on and clothes to wear to a new job. I bought the minimum I would need and made sure I had it paid off in 6 mos (I paid it off earlier than I had planned). The other month was the result of an error on my part where I accidentally charged something as a cash advance rather than a charge. My mistake, and I learned my lesson.

It is the behavior, not the tool that is the problem. If you don't like the tool, then don't use it. But don't say that the tool is the issue and all others who use it are irresponsible or don't understand how to handle money.

 

[HHSTigerFan]

LOL... Uh yeah considering I received nearly $500 in cash deposited into my account from my PNC Debit Card account last year, $300 in Lowes giftcards, and an IPod....all from my DEBIT CARD rewards.

Just looked at the PNC debit card, the rewards program is horrible compared to what CC's offered..

 

[bellarella]

OP, you certainly don't need to pay anything to get the ball rolling.

Your library should have DR books. It probably has Howard Clark and others of this sort right next to his on the shelf. I would read up on a couple of different methods and figure out which works for you. Any one of them that tells you they have figured out the only way to live is selling a product, not giving sound advice. In my experience, all methods are guilty of this. If one speaks to you and you think you can follow it, then go with it. Once you start the momentum going, then poke around and figure out what is snake oil and what is the real deal.

Also realize that there is a level of emotion in keeping your finances in good order. Let yourself put a dollar figure on that. Snowballing (a DR method) often costs people more money than if they were diligent about paying the highest interest debts first. But often the difference isn't huge and the satisfaction of moving down a list is worth the money lost. Likewise, paying off a debt can cost you money if the money is earning you more than the interest you are paying. But sometimes it is just too much stress to keep the debt open when you can close it. These decisions are all ok. You should just do the math and figure out how much they are going to cost you. If it costs $100 over the course of a year to do XYZ and it is worth $100 to you, then do it. But if a certain decision is worth about $100 to you and you run the numbers and realize it will cost you $1000 to do it, your attitude will probably change.

Good luck!

 

[ICF]

... without selling my soul to the bankers.

You all can say what you want.. heres the thing. I dont have creditors that will be breathing down my neck if I want to walk into my job tomorrow and tell em all to take their job and shove it... I will still be taking Disney Vacations PAID FOR IN CASH... and .... have a house, food, nice cars, and ....sending 2 kids to college.

people like you are so funny....i really enjoy watching your ilk get all worked up trying to say CC's are terrible.

Last time I checked, I still have my soul....so I guess the banks got ripped off if they gave me some $$ for it. I also have a house, ate some meals this week and while a college scholarship would be nice, I also have funds set up to pay for my kids college. Use of a credit card doesnt prevent any of that stuff....

If I were going to disney, it would be pretty stupid to walk in and quit my job just for the hell of it....paying cash for not for it or not. But....in your example, while I may charge all expenses to my CC to earn FREE STUFF, it's still paid for with CASH when I get home and pay the bill.

 

[HHSTigerFan]

If I were going to disney, it would be pretty stupid to walk in and quit my job just for the hell of it....paying cash for not for it or not. But....in your example, while I may charge all expenses to my CC to earn FREE STUFF, it's still paid for with CASH when I get home and pay the bill.

Exactly, we have 2 CC's, a Chase Disney and a Target card.. both bills are paid in full every payday.. do those that are so anti- credit card also call their utilities and prepay them? If not, they are using "gasp", credit, each and every month..

 

[mrodgers]

...do those that are so anti- credit card also call their utilities and prepay them? If not, they are using "gasp", credit, each and every month..

I see this brought up all the time in this debate over using credit cards and paying it off.

How do you pay utilities on credit? The truck comes and fills my oil tank for heat, I get the bill listed with how much oil they filled, and I pay it 15 days later. The electric bill comes listing how much electricity was used and I pay it approximately 15 days later. The phone bill comes and tells me how many calls I've made and approximately 15 days later, I pay it. How is this using credit? I pay utilities based on what I have already used, not what I am going to use next month.

 

[HHSTigerFan]

I see this brought up all the time in this debate over using credit cards and paying it off.

How do you pay utilities on credit? The truck comes and fills my oil tank for heat, I get the bill listed with how much oil they filled, and I pay it 15 days later. The electric bill comes listing how much electricity was used and I pay it approximately 15 days later. The phone bill comes and tells me how many calls I've made and approximately 15 days later, I pay it. How is this using credit? I pay utilities based on what I have already used, not what I am going to use next month.

Thats technically considered credit because you aren't paying for the service at the time its used, you are paying it later, often times 40-55 days later.. Thats why when you apply for services such as gas, electricity, cable etc they run a credit check..

And how does that differ from myself that puts as much as possible on the CC and then pays that off every 2 weeks?