*The Dave Ramsey 'Baby Steps' Thread*

[TDK44]

He addresses that in his talks, that people criticize him saying if you do the math, it's better to choose the highest interest rate debt first. He jokes and says if we were "doing the math" all along, we wouldn't be spending more than we can afford to pay.
Also, just doing the math ignores the huge psychological/emotional aspect of overspending.

Do the math is like telling someone who is obese to simply eat fewer calories than they burn each day. If it were that easy, no one would ever be overweight or in debt, certainly not morbidly obese or drowning in debt.

When I was paying down my debt, my smallest balance was $250 and the next one was $400. The rest were significantly higher but my highest interest cc had an $8000 balance. To start with that one would have been a certain failure. I only had a tiny bit of extra money each month to pay down debt, IIRC it was around $25-50. So paying off the smaller balances, seeing small amounts of success and more importantly applying those payments to the next debt, making the snowball larger, is what kept me motivated.
I couldn't wait to get another bill paid off and see my snowball get to the next level.

It worked so well, by the time I got to the card that was $8000, I was making extra payments of $800/month in addition to the regular monthly payment and it only took a few months to pay it off. At $25-50 extra per month in my early days, it would have taken yeeeears. By the time I was attacking the mortgage, I was paying an extra $1000/week.


I can accept other criticisms of him: he goes too far scorched earth, he says to cancel cable/tv subscriptions, he says to stop contributing to retirement, he's too religious, he quotes the Bible, he says to sell the expensive car, etc. but his recommendation for following the debt snowball is spot on. It absolutely works and I'm living proof. After years of struggling, trying to pay extra here and there, frustrated, disgusted, angry, the debt snowball is what straightened out my life. I will defend it to my death.

Anyone struggling with debt, follow it and it will work for you too.

He has to have a cute way to justify the bad tenets of his advice or else no one would listen.

I’m glad it worked for you, that doesn’t mean one-size-fits-all advice is always appropriate.

I saw someone on here advocating for paying off 0% interest debt before 24% interest and not refinancing or shuffling around super high interest debt for low interest debt. That is objectively horrible advice, and frankly insulting for people to assume others can’t learn so they have to stick to the rigid steps.

 

[ruadisneyfan2]

He has to have a cute way to justify the bad tenets of his advice or else no one would listen.

I’m glad it worked for you, that doesn’t mean one-size-fits-all advice is always appropriate.

I saw someone on here advocating for paying off 0% interest debt before 24% interest and not refinancing or shuffling around super high interest debt for low interest debt. That is objectively horrible advice, and frankly insulting for people to assume others can’t learn so they have to stick to the rigid steps.

Well, you just strolled in here today. You don't know the years of other advice we've been trying to give him such as try to refi the car, try to negotiate a lower interest rate on the 2 credit cards he just paid off. His credit score is very low so the only car loans he qualifies for were the predatory type. You're thinking like someone with good credit and access to good rates for loans and what you would do for yourself. He doesn't qualify for anything you would do for yourself. Shuffle it where? To a loan shark? For him, the only way out is to pay it all down asap while continuing to keep paying all his bills on time.

 

[barkley]

He addresses that in his talks, that people criticize him saying if you do the math, it's better to choose the highest interest rate debt first. He jokes and says if we were "doing the math" all along, we wouldn't be spending more than we can afford to pay.
Also, just doing the math ignores the huge psychological/emotional aspect of overspending.

Do the math is like telling someone who is obese to simply eat fewer calories than they burn each day. If it were that easy, no one would ever be overweight or in debt, certainly not morbidly obese or drowning in debt.

When I was paying down my debt, my smallest balance was $250 and the next one was $400. The rest were significantly higher but my highest interest cc had an $8000 balance. To start with that one would have been a certain failure. I only had a tiny bit of extra money each month to pay down debt, IIRC it was around $25-50. So paying off the smaller balances, seeing small amounts of success and more importantly applying those payments to the next debt, making the snowball larger, is what kept me motivated.
I couldn't wait to get another bill paid off and see my snowball get to the next level.

It worked so well, by the time I got to the card that was $8000, I was making extra payments of $800/month in addition to the regular monthly payment and it only took a few months to pay it off. At $25-50 extra per month in my early days, it would have taken yeeeears. By the time I was attacking the mortgage, I was paying an extra $1000/week.


I can accept other criticisms of him: he goes too far scorched earth, he says to cancel cable/tv subscriptions, he says to stop contributing to retirement, he's too religious, he quotes the Bible, he says to sell the expensive car, etc. but his recommendation for following the debt snowball is spot on. It absolutely works and I'm living proof. After years of struggling, trying to pay extra here and there, frustrated, disgusted, angry, the debt snowball is what straightened out my life. I will defend it to my death.

Anyone struggling with debt, follow it and it will work for you too.

I absolutely get the psychological/emotional aspect but some people get into debt due to circumstances absolutely out of their own or anyone's control and it's not a matter of some kind of psychologically motivated overspending. stuff happens and 'the best laid plans of mice and men...' hits you square in the face. our hh didnt plan for me to become fulling disabled out of the blue in my early 40's and for it to take months and months on end for the ltd coverage to be processed and finaly kick in, certainly didn't expect it to happen to dh a handful of years down the road, my co-worker who was a few weeks out from delivering her first child didn't expect to find her 30'ish dh deceased in their bed from a massive heart attack, people get into auto accidents, have debilitating illnesses, need to care for Ill children/parents...the list goes on and on. if you've got savings it goes pretty quickly for just the basics, even faster if you've got to pay for co-pays, meds, newly added childcare (cuz you can no longer drop off or pick up the kids as school starts and ends cuz you can't drive and you're not capable of caring for them alone).

in cases where it's not voluntary overspending that's created the debt and you've finally got the basics covered without resorting to credit cards/home equity loans...to meet those needs such that you can work towards repayment it DOES become a math thing. you want to get out of debt as fast and inexpensively as possible b/c you know that $1000 'emergency fund' isn't so much a drop in the bucket in a real emergency-it's evaporated before it's hit bottom so every extra penny, every dollar you can save in interest means paying off that debt sooner.

 

[barkley]

For him, the only way out is to pay it all down asap while continuing to keep paying all his bills on time.

knowing the person's history I absolutely agree that doing the traditional baby steps ARE in his best interest based on his household's individual circumstances.

 

[TDK44]

For him, the only way out is to pay it all down asap while continuing to keep paying all his bills on time.

Completely agree, it’s like you’re making my point for me!

 

[trenty]

Anyone struggling with debt, follow it and it will work for you too.

I second this. We didn't (don't) follow all of DR's teachings, but we did use the debt snowball and babysteps exactly as he outlines them. We had some savings and A LOT of debt. We took our savings down to $1000, stopped investing in retirement temporarily, and paid off some of the debt. We then followed the babysteps and paid off everything else.

Today, we live debt free, but use credit cards. We pay the cards off monthly (sometimes more frequently).

Also, I started using the Everydollar app when we started the babysteps. Years later, I still use it.

 

[ThereYouSeeHer]

curious-has anyone else's radio stations been dropping DR's radio show? two of the majors in our region initially went (a year or so ago) from multiple hours per day to a single noon hour (full show re-run in the a.m. overnight hours) to now entirely eliminating.

It's still on in our area. The show is 2-3 hours depending on the station, during the afternoon and evening commute.

I haven't listened on the radio in years, though, unless I accidentally catch it. I usually use the app to watch clips.

 

[WDW_fan_in_TX]

It's still on in our area. The show is 2-3 hours depending on the station, during the afternoon and evening commute.
I haven't listened on the radio in years, though, unless I accidentally catch it. I usually use the app to watch clips.

It's on from 8-10 at night here in DFW. But I don't listen to it. Mainly cause I try not to be on the road that time of night. I do, however, watch it almost daily (not on the weekends) on Youtube while I'm working. And i learned the other day, you can listen to it live on some channel. But it's just listening to it. You don't get to see the people doing the talking.

 

[WDW_fan_in_TX]

I second this. We didn't (don't) follow all of DR's teachings, but we did use the debt snowball and babysteps exactly as he outlines them. We had some savings and A LOT of debt. We took our savings down to $1000, stopped investing in retirement temporarily, and paid off some of the debt. We then followed the babysteps and paid off everything else.

Today, we live debt free, but use credit cards. We pay the cards off monthly (sometimes more frequently).

Also, I started using the Everydollar app when we started the babysteps. Years later, I still use it.

That is so awesome. Congratulations. We're just starting Baby Step 2, and I can't be more excited. It's going to be a years-long journey, and I'm okay with that. I'm even thinking about stopping my 401k contribution, but I'm 50 and have basically nothing in my 401k. So I'm kind of at an impasse on what to do there. I know what DR says, but I also know I'm 40. And I contribute about $150/month with a 4% company match. So I hate to give away that free money.

 

[Willow Ufgood]

I just want to jump in and say that I think @WDW_fan_in_TX is doing a great job in tackling their debt. It's not easy to go before an online forum and confess your weaknesses and shortcomings. While I would have taken a different approach (like canceling last fall's trip to WDW, and going hard at getting that car loan paid off), what he's doing seems to be working for him. And that's the most important part! It might not be the beans and rice, rice and beans DR approach but he's getting it done dollar by dollar.

Keep at it, @WDW_fan_in_TX ! You might be getting tough love from posters but we're all behind you! You've got this!