Dave Ramsey - question

[JDUCKY]

If you were to go back and read slowly, you'll find that absolutely nothing in this post answers the OP's question in the least.

I guess you had fun posting that though, right?

Au contraire.

The OP posted:

"My question is do I need to attend a class to use his method?"


I answered that in detail. Not my fault you don't like my answer.

 

[JDUCKY]

I find all the "Dave Hate" on the budget board pretty interesting.

In our case, we never really needed Dave Ramsey until we had a job loss, a relocation and an extended hospitalization for one of our kids in a short period of time. These three things wiped out our savings, and still left us with too many bills to cash flow. We were in a really tight spot, and it felt pretty hopeless for a time.

The one detail that JDucky is missing is the "common sense" thing we were trying to do and not making a lot of progress - going after the highest interest rate debt first. Dave Ramsey actually recommends the opposite, and that is attacking the smallest debt first. This one change made a huge difference for us, because we got the "snowball effect" going much sooner than if we had been focusing on our larger, higher-interest rate debt first. I've seen the numbers laid out before, and the difference in time to the payoff is negligible between the two approaches.

All I can say is that Dave Ramsey provided a concrete plan that I could put into effect right away and it made a big difference in dealing with our personal financial crisis. I'm really grateful to him, and I'm glad he's available to those of us that don't have all the answers.

Credit card companies apply any payment over the minimum payment amount to the highest interest bearing charges on your account.

Sure, paying off a small debt may seem like a victory but all that's doing is increasing the overall amount of money that will be paid out by letting the higher balance accounts continue to accrue more and more interest.

http://credit.about.com/od/reducingdebt/f/payhighinterest.htm

 

[HHSTigerFan]

When we had a lot of CC debt we didn't need Dave telling us to pay off the lowest APR cards first...

It was simple, instead of looking at us having 9 CC's, we looked at it as one amount, our moral victories were when we first got it under $25K, then $20K, then $19K, $18K etc...

 

[bumbershoot]

Paying that quack any of your money is like paying on an interest-only loan.

Since you just said most of what he says, calling him a quack is an odd decision for you to make.

And if you read ANY of the replies, you would see that no one actually said you needed to take a class or spend anything on his stuff.

All I can say is that Dave Ramsey provided a concrete plan that I could put into effect right away and it made a big difference in dealing with our personal financial crisis. I'm really grateful to him, and I'm glad he's available to those of us that don't have all the answers.

You said that very well.

Sure, paying off a small debt may seem like a victory but all that's doing is increasing the overall amount of money that will be paid out by letting the higher balance accounts continue to accrue more and more interest.

http://credit.about.com/od/reducingdebt/f/payhighinterest.htm

If a person gets so freaked out about paying and paying and paying on their highest interest card/loan, and *doesn't finish it up*, if they stop, if they just can't continue it until it's done, then it doesn't matter what your link says. If you can't do it, it's not going to get done.

And THAT is why, for many people, starting with the lowest balance, starting with the one you'll get finished the quickest, makes sense because they'll DO it. They will get that early victory and *keep going*.

Most people don't get into debt by making totally sound financial decisions. Getting those people OUT of debt doesn't always make the most perfect absolutely minimal amount paid out sense, either.


now for us the decisions were easy...the lowest debts had no interest (medical bills, that sort of thing), and then when we got to the big stuff, the lowest balance WAS the highest interest...

 

[Bob NC]

Au contraire.

The OP posted:

"My question is do I need to attend a class to use his method?"


I answered that in detail. Not my fault you don't like my answer.

Sorry, I missed the part where you told the OP whether or not to attend the Dave Ramsey class after they decided to use his method.


Oh wait, I missed it because it's not there.

 

[KShopshear]

His program is worth it. We paid off $80,000 worth of debt in two years on it! We are now debt free but the house. 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?

 

[mydisneyobsession]

It's even more than just the "emotional victory" of paying off the smallest debts first (which is an awesome feeling, and does help motivate you to continue - no doubt about it.) At one point we had so many payment arrangements for small amounts that it took up all of our take home pay. We had a lot of trouble paying off that first debt because we had no extra money to do it. But once we got that first debt paid off, then we were able to take what we were paying to that first creditor and roll it into our next greatest debt payment. If we had been paying on our largest debt, we wouldn't have been able to increase the payment amount for years, probably. We would have kept spreading our money across all of those mimimum payments, rather than being able to dig in to the next debt with an increased payment.

I do understand that the math works out slightly in favor of paying off highest interest first, but the peace of mind of having one less required payment each month, and a little more wiggle room in our budget if we really needed it was really wonderful. And the difference only works out to a few months more. If I'd done it the other way, my sleepless nights over finances would have lasted a lot longer than they did, and that's worth the few months on the other end.

In the end, you have to find the system that works for you and stick with it. Whatever system it is, it doesn't really matter that much, in the end. Just get started and keep on working on it!

 

[KShopshear]

It's even more than just the "emotional victory" of paying off the smallest debts first (which is an awesome feeling, and does help motivate you to continue - no doubt about it.) At one point we had so many payment arrangements for small amounts that it took up all of our take home pay. We had a lot of trouble paying off that first debt because we had no extra money to do it. But once we got that first debt paid off, then we were able to take what we were paying to that first creditor and roll it into our next greatest debt payment. If we had been paying on our largest debt, we wouldn't have been able to increase the payment amount for years, probably. We would have kept spreading our money across all of those mimimum payments, rather than being able to dig in to the next debt with an increased payment.

I do understand that the math works out slightly in favor of paying off highest interest first, but the peace of mind of having one less required payment each month, and a little more wiggle room in our budget if we really needed it was really wonderful. And the difference only works out to a few months more. If I'd done it the other way, my sleepless nights over finances would have lasted a lot longer than they did, and that's worth the few months on the other end.

In the end, you have to find the system that works for you and stick with it. Whatever system it is, it doesn't really matter that much, in the end. Just get started and keep on working on it!

I totally agree, it is what works for you individually. We all know that the paying off the large debts first makes sense mathematically, but if we were doing math in the first place you would have never used credit cards! Paying off the smallest debts first gives you a sense of accomplishment and motivates you to keep going.

 

[HHSTigerFan]

If I would have followed Daves plan figured it would have cost me $1300 more in interest and didn't need to spend $25 on a book or set of envelopes to figure that out..

My suggestion on Dave... he motivates people to get out of debt, but does so with bad advice, but if people need that, so be it.. and the very second you get out of debt, throw his book away because he has perhaps the worst financial advice out there when it comes to investing..

 

[MsDunny]

First off, let me begin this by letting you know that I am a Financial Peace University facilitator. I have taught this class 6 times, and will teach it again in the fall for both adults and homeschoolers. So, I believe in Dave's program and methods - yes, they are supposedly 'common sense', but unfortunately a lot of people aren't taught financial common sense! We are taught to spend, that we 'deserve' to have stuff, and that debt is the way to get that stuff!

That said, I was successful with Dave's methods before I ever took a class. I read his books, used his budget forms, and our family was able to pay off all of our debt in about 14 months. I was so gung-ho at that point that I decided to train to be able to teach FPU to other folks who needed help. I have had people from every class thank me for introducing them to these concepts.

So, to answer your question - you DO NOT need to take FPU in order to be successful. You just have to GET MAD at your debt and work hard to get out from under it!! And for those against Dave and his methods, please remember that not everyone is taught good financial skills to live by. Give folks a break!

 

[KShopshear]

I will give you one last piece of advice that will sum all of this up..... Don't take financial advice from broke people.

 

[Bob NC]

If I would have followed Daves plan figured it would have cost me $1300 more in interest and didn't need to spend $25 on a book or set of envelopes to figure that out..

My suggestion on Dave... he motivates people to get out of debt, but does so with bad advice, but if people need that, so be it.. and the very second you get out of debt, throw his book away because he has perhaps the worst financial advice out there when it comes to investing..

I am trying to figure out why you even continue opening threads about Dave Ramsey. You don't agree with him, I know it, you know it, everybody knows it.

What is it about you that makes you open threads that don't pertain to you just to rain on others parade?

You don't agree with Dave, but, you obviously were in debt and spent a lot of time figuring out that Dave's plan would cost you $1300 more in interest than the plan you chose. Why did you take the time to figure that out?

Obviously Dave is popular. Obviously Dave has helped thousands achieve financial peace. Just WHAT is it about people finding happiness that makes you want to denigrate them?

What is it about a program that has been successful for many many families make you want to come here and tear them down?

Your posts here are saying more about you than about Dave's Financial Peace Plan.

I believe most would choose Dave over your childish rants.

 

[HHSTigerFan]

I will give you one last piece of advice that will sum all of this up..... Don't take financial advice from broke people.

And lets not forget, that when Dave started giving financial advice, he was broke but it didn't stop him...

 

[KShopshear]

He probably still is in debt and wants to keep others down there with him.
People love to bash what they can't or won't do.
Like I said, do what works for you and don't take financial advice from broke people.

I am trying to figure out why you even continue opening threads about Dave Ramsey. You don't agree with him, I know it, you know it, everybody knows it.

What is it about you that makes you open threads that don't pertain to you just to rain on others parade?

You don't agree with Dave, but, you obviously were in debt and spent a lot of time figuring out that Dave's plan would cost you $1300 more in interest than the plan you chose. Why did you take the time to figure that out?

Obviously Dave is popular. Obviously Dave has helped thousands achieve financial peace. Just WHAT is it about people finding happiness that makes you want to denigrate them?

What is it about a program that has been successful for many many families make you want to come here and tear them down?

Your posts here are saying more about you than about Dave's Financial Peace Plan.

I believe most would choose Dave over your childish rants.

 

[HHSTigerFan]

I am trying to figure out why you even continue opening threads about Dave Ramsey. You don't agree with him, I know it, you know it, everybody knows it.

What is it about you that makes you open threads that don't pertain to you just to rain on others parade?

You don't agree with Dave, but, you obviously were in debt and spent a lot of time figuring out that Dave's plan would cost you $1300 more in interest than the plan you chose. Why did you take the time to figure that out?

Obviously Dave is popular. Obviously Dave has helped thousands achieve financial peace. Just WHAT is it about people finding happiness that makes you want to denigrate them?

What is it about a program that has been successful for many many families make you want to come here and tear them down?

Your posts here are saying more about you than about Dave's Financial Peace Plan.

I believe most would choose Dave over your childish rants.

Because financial advice should be taken from financial people, not marketing machines.. JMO

 

[KShopshear]

You must have taken Financial advice from a marketing machine at one point if you had or have debt. The credit guys sold you on debt didn't they?
I guess you must be a weather man because you sure like to rain on others parade.
Where was your degree in finance from anyway? I bet you are one of those people that believe the myth that you must keep a mortgage on your house for the tax deduction or that you cant drive a new car without a payment .....

Because financial advice should be taken from financial people, not marketing machines.. JMO

 

[SaraJayne]

His program is worth it. We paid off $80,000 worth of debt in two years on it! We are now debt free but the house. 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?

I hope you aren't a gambling man.

I've purposely stayed away from this thread until the above comment.

And I'll now slowly back out again...

 

[HHSTigerFan]

You must have taken Financial advice from a marketing machine at one point if you had or have debt. The credit guys sold you on debt didn't they?
I guess you must be a weather man because you sure like to rain on others parade.
Where was your degree in finance from anyway? I bet you are one of those people that believe the myth that you must keep a mortgage on your house for the tax deduction or that you cant drive a new car without a payment .....

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

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

 

[Bob NC]

Because financial advice should be taken from financial people, not marketing machines.. JMO

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

 

[KShopshear]

I can't prove what I said obviously....but if there were a way to measure my statement I certainly would place a little wager on it. This is a topic that will never be solved.

I hope you aren't a gambling man.

I've purposely stayed away from this thread until the above comment.

And I'll now slowly back out again...