Any Dave Ramsey fans here?

Believers here! We did his program 7 years ago & it was a God-send for us - today I can proudly say the only debt we have is our house & student loans (lower interest than what we get on our savings & we now have enough in savings we could pay off tomorrow if we had to). We loosely follow his recommendations now but the debt snow ball really worked. We payed off credit card, 3 cars, a boat & built a modest savings account. We purchased a larger home with land in the country & have accrued a small retirement nest egg & some college money for our boys. We managed to take my parents & my in laws each on trips to Disney with us, all expenses paid cash... memories we will have forever. We have successfully weathered my being laid off & my husband being injured / out of work for several months along with the regular travel to another state for treatment of the injury. We are able to tithe at church, freely help others when we want & give to charities. It has been amazing.
 
On again and off again Dave guy. Like has been stated up thread, what he says is simply common sense. Budget, pay off debt, don't buy what you don't need, save money. I stopped listening regularly for two reasons: (1) three hours a day is A LOT!; and (2) his political rants, which I don't agree with.

However, he did get me through a really terrible time in my life about ten years ago and I continue to do a budget for every single paycheck...and a master finances workbook which tracks end of month balances...well, every single month.

I also used one of his ELP's to double check my investments. That program works well. :)
 
I don't understand his "no credit cards" stance either.
@Budzooka put it best I believe with the recovering alcoholic analogy. Debt is an addiction for many people and credit cards enable that. Those of us who get awesome trips and lots of cash back are in the minority- the reality of that is the people who are addicted to debt are funding our awesome trips and cash back. What the bank loses on me they can make on one person who goes into debt. Some debt recoveries can utilize debt fine with a firm foundation (see examples above) but to others the mere availability brings up their old addiction and they will be up to their eyeballs in credit card debt again before they know it. That's why I believe he takes such a strict stance. It is up for everyone to analyze if it's right for them after they are on a firm financial foundation again.
 
We started the plan after our first child was born and I really wanted to stay home with her. We were in debt, driving cars we "thought" we could afford but we actually had no business owning and there was no chance we would survive without my income. We are debt free other than the house and we have a nice college savings account for the kids. It's a life changing plan! I know plenty of people who poo poo Dave Ramsey but his methods work. That said, we do use credit cards now. We just pay them off each month. Learning how to manage our money was the big difference and knowing where the money goes each month is the key. Good luck!
 


Hi all!
My husband and I just finished reading Total Money Makeover. We both think it seems like a good plan for us considering we have a substantial amount of student loans from undergrad and grad school and credit card debt.
So I am curious if anyone here has followed Ramsey's program/steps and how it worked out for you.

Thank you for any info you share on your experience.

I didn't read the books but I did follow his Baby Steps ideas to pay down debt with great success! I completely agree with the $1000 emergency fund so that you don't easily fall back on using a cc the next time a pet has a big vet bill. I also agree 100% with the Debt Snowball, starting with the smallest debt. Debt accumulation from overspending is psychological, not a matter of rational thinking. Obviously, we've all passed 2nd grade math. :teacher: If we were taking the time to do the math, and pay attention to where our money goes and how we spend, the debt would never have accumulated. Of course, from a mathematical POV it makes more sense to start with the highest interest rate debt. Often though, that particular one has a high balance too. It can feel like you're climbing a mountain and progress is slow because you still have so many other debts to pay on as well.:snail: Slow progress makes it hard to stick with and very easy to just give up.:badpc:

By having a very systematic plan of attacking a small debt first, it's knocked out quickly and you get a taste of success. In my case, it was a Sears bill from when our lawn mower died and we charged a new one, prob $275 balance when we started with a $25 min payment with 0% interest. By really focusing, it was gone in less than 2 months. I felt like Rocky at the top of the Art Museum steps.:yay:
The key is taking that $25 min that no longer gets sent to Sears and making sure it gets applied to Debt #2, hence the term snowball because the amount that gets applied to debt keeps growing every time you pay something off.
By the time you get to the mountain size debt, you're experienced, pumped to see it all gone, and you're cruising right up with mountain in 4 wheel drive with a big fat snowball of $2000/month. So even a huge debt doesn't take long with big payments.
The last debt I paid off was a Parent Plus loan for ds20 who changed his mind about going to college after 1 semester. It was $15k last summer and paid off in April. If I had started with that big debt (my highest interest one) with my little $25/month payments, I would still be chipping away at it for years to come. All of the rest would still be there.

We do still have our mortgage and a small home equity loan for a small addition we put on our home. (We are bursting at the seams in our small rancher but don't want more house: more mortgage, more taxes, more HVAC bills, more cleaning, etc. so this was a much better plan.) It's been 1 year since we got the HEL (out of 10 yrs) and we are 25% done. I am confident this will last no more than 4 years total, not 10.

For the past 3 years I have been able to set $3000 aside so Christmas shopping is no longer stressful. :cloud9:

This year, we're taking a tiny break and going to London & Paris, 9 more days!:hourglass but when we return we'll jump right back on it and attack the HE loan.

The things he recommended that I completely disagreed with:
1. Not contributing to the retirement account at work. I just couldn't bring myself to do this or suggest it to dh.

2. Gazelle intensity. It can only last so long. I know we could have paid down faster with no cell phones or cable but I felt like that was equivalent to fasting for a diet. I was afraid if we're miserable, we'd give up. We only go out to dinner on birthdays and anniversaries so that was cutting back pretty good right there.

3. No cc use at all. I completely understand the alcoholic analogy but I always felt I could handle it once we start paying close attention to spending. We do that now and enjoy all the rewards, new card bonuses, etc. This lets us take little trips here and there without spending a lot out of pocket. I absolutely pay it off every month and keep close tabs on spending so that it never gets to the point that I can't pay it in full. :cloud9:

Before I started following DR, I would just pay extra to various cards but still not making much progress.
I also feel that anything that is a quick fix, like a debt consolidation loan, doesn't teach anything about money management. It's equivalent to getting liposuction to lose weight instead of diet & exercise.

We don't have him on our radio stations so I don't have to hear any political crap.
As far as pointing us in the right direction and giving us a real system to follow, I'm grateful that I found him. :worship:
 
The truthful info he says is common sense (pay down your debt, etc)...the rest is a bunch of crap (you can expect 12% in mutual funds, debit cards have the same protection as credit cards, and so on). He tells people to go see "his" endorsed local providers, who are just financial advisors that pay him a commission to put you in loaded mutual funds (just pick a total stock market index fund at vanguard or fidelity and you'll be much better off). And then the political crap he spews....makes it impossible to listen to him.
 
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He's a quack who makes a lot of money by sending people to his endorsed local providers.

YES!!

I'm sure parts of his program work but any financial program will work. Just like with a diet as long as you stick with a program you will loose weight.

My issue is with him saying 1. You don't need a credit score. You will have a hard time getting a mortgage from a traditional bank without one but guess what??? Dave has a mortgage company that WILL give you a loan!!! They don't work for him of course...RIIIIIGHT! They are paying him a TON of money to promote their service. 2. You need a financial advisor- no you don't need one!! Of course he promotes the ones that pay him to be on his list. I read they pay about $1000 a month to be on his list.
 
The Total Money Makeover changed our lives. While we loosely follow it now, we really followed every word of it in the beginning. Before we started 6 years ago, my fiancé (now husband) owed 3 years of back taxes to the IRS, we had $24k worth of credit card debt between us, he had numerous things in collections (totaling $2-3k), we had nothing in savings, we had two car payments, and were renting. About 1 year after starting, we had paid off the back taxes and stuff in collections and had our $1k emergency fund. After 2 years, our credit card debt was paid off. After 3 years, we paid off both cars and had a 6 month emergency fund. After 4 years, we bought our first house with a 20% down payment. Now, we own 2 rental properties, 3 paid off vehicles, and a paid off used camper. The first house we bought will be paid off within the next 2-3 years.

When we first started, we made about $60k between the two of us (he was a real estate agent struggling during the housing market crash and I was a paralegal). Let me tell you, that first year or two was rough! We had one date night a week where we got a Little Caesar's pizza and a Redbox movie. Other than that, we watched every single penny. His Dad owns a DJ business (that's what my husband grew up doing) so he started working DJ gigs at night when he wasn't doing real estate stuff. I picked up legal transcription work (that paid next to nothing) and would work into the wee hours of the night to make a few bucks. We were both tired, but more tired of the weight that hung over us from the debt.

Now, he makes a lot more money in real estate with the market coming back around, but also he's able to be more productive without the pressure and stress of the bills weighing on him every day. Because he makes good money now and our lack of bills, it has afforded me the ability to go to school full time to become an RN and to pay cash for the school.

If you stick with it and follow it, it will work. You both just have to be very dedicated and keep your eyes on the prize. The freedom that comes from financial stability and security cannot be put into words. But you know what's funny? We both look fondly back at those first two years. Our date nights were cheap, but they are some of the best memories we have. If one of us hadn't been dedicated, though, it never would have worked. There were days where he or I would say "Come on, let's just spend $30 and go to the movies" and the other one had to be strong enough to say "No". It can all change, and rather quickly, if you work your butts off and dedicate (and watch) every penny.

Ok, enough of my novel! Good luck to you! You can do it! Live like no one else so that you can live like no one else!

ETA: We did pay off the higher interest rate stuff first. I can see the "small victory" feeling with paying the small balances first, but seeing $100-200 a month in interest on a credit card was killing me.

Thank you so much for sharing- this is amazing. My husband and I have only student loans- no other debt (about 75k between us though) and I reallly needed to see something like this today as we start the long journey to paying them off!
 
We followed Dave Ramsey's plan to a 'T' over 10 years ago. We went from high mortgage payment, two car payments, second mortgage payment, NUMEROUS student loans, credit card debt...all down to just a house note and we did this in just a couple of years. We did follow his instructions to pay off smallest loans first and not consider interest rates. Is that smart? Some say no but it worked for us and the psychological benefit of seeing loans get paid off was huge. We gained momentum each time we made a dent in our debt. We also used his envelope system of paying cash for everything. It was hard as we were used to credit cards but we learned a lot through that. How and where we spent our money was a powerful lesson.

We are now at a point that we loosely follow his teachings. We do use credit cards. BUT we always, always pay them off at when due. No carrying balances! I am taking my teens through the Dave Ramsey high school curriculum and we watch the dvd's together and discuss the material. I do tell them that I don't agree with Dave 100%. There are things I think he is 'off' on but until you can be financially responsible, then you must do as he says. Neither my dh or I really had good teaching regarding money growing up and we got ourselves in deep debt. I'm thankful there was a Dave Ramsey program to help pull us out!
 
As a personality, I think he's a raving lunatic. But if it gets some people to listen to the common sense bits he does champion, whatever works, I guess.


A lot of his more specific ideas just don't work for a lot of people. The car thing- you need a reliable car, not a junker, in most parts of America. I don't get that at all. Every junker I've had has cost me a lot more money than its sticker price to keep it running. Credit cards- man, you can live irresponsibly without credit cards and while I'll admit to some fiscal irresponsibility, a lot of my credit card debt in the past has been necessities, like medical bills. And before I had any credit at all, never mind bad credit, it was completely impossible to do things like rent an apartment.
 
A lot of his more specific ideas just don't work for a lot of people. The car thing- you need a reliable car, not a junker, in most parts of America. I don't get that at all. Every junker I've had has cost me a lot more money than its sticker price to keep it running.

I listened to him for a few years. I think the saying "buy a junker" is said for dramatic effect. It's a quick, get your attention way to say that you need a cheaper car - even if it doesn't look as cool as a newer one with all of the bells and whistles. What I think he means is buy something used, reliable, and that you can afford.

For instance - I am getting a new car next year. My husband is getting my current car. We will be selling his 2006 Accord. It has 45000 miles on it and has been well maintained. The book value on it is in the $4-5 K range. It can probably run reliably for at least another 50K miles - probably more. It's not fancy (no hands free cell phone stuff, back up cameras, leather seats, etc), but it is much more affordable than what most of the people who call into his show are driving. I call it a piece of junk (okay - I call it something much stronger than that), but it is excellent, affordable transportation. Dave would be all over that car.

Edited to add - It's like when he says eat beans and rice. I don't take that to literally mean eat beans and rice for every meal. He means cut food expenses drastically.
 
^ Exactly. When I bought my most current car in 2014, I had two choices:

1) get a pimped out car with a loan or 2) get a basic model and no loan.

I opted for #2. My Jeep doesn't have air conditioning, power locks, power windows, power mirrors or bluetooth. I get made fun of by a lot of people (including my boyfriend), but I really don't care. I have no car payment and no one can ever take this car away from me for not paying the loan. My boyfriend bought a car two years ago and has a loan. He had to have all the gadgets and gizmos and he's "only" paying $471 a month.

Dave has good information everyone can use. Budgeting, for example. Monitoring your accounts to make sure what you think you have is what you actually have. Living on less than you make. Sacrificing now to win later. These are common sense items and things my parents taught me from a young age. But not everyone is as lucky as I was.
 
I listened to Dave for a few years in the car pick-up line. I like him, I think you can follow him and end up better off, and I like that he doesn't shy away from telling people the truth ("you don't have a tuition problem, you have a car loan problem - sell those cars").

I agree with some others here that he is wrong about credit scores and credit cards.

Credit scores are not just used in things like renting and insurance, some companies use them in hiring (which I think is illegal - but that doesn't stop them). Plus - he is okay with having a mortgage - which means a credit score will be important.

His stance on credit cards makes me almost angry. Credit cards give you great protection when buying things. They also can be really important in emergencies. For example, my mom got stuck in an airport during one of those computer glitches. I was able to get her a hotel nearby and to get her a ride to the hotel - all with my credit card. Yes - she could have slept in the terminal, but I think she's a bit old for that. Another example - we live in a city that tows you from the freeway if you break down. If you can't pay the tow truck on the spot, they impound your car. So - either have a credit card ready or always carry an extra hundred or so in cash or be ready to go to the impound lot and pay all of those fees. When they were teenagers, I would never let my kids leave the house without an adult if they didn't have some cash and a credit card on them. Yes - my kids had credit cards at 16. And they have been using them responsibly for over a decade now. Also - try renting a car without one. It is a difficult process. Also - rewards can be great. I have never carried a balance on a credit card. My annual cash back was almost $3000 last year. That is real money.

I was able to get a mortgage without worry about a credit score. It did mean that I used a local community type bank instead of a national bank - reason being was that the local bank actually looked at my finances, etc. instead of having to just use some set guidelines. They were able to see that I had no debt, look at my income, do some basic math and say 'hey, this person can afford the mortgage... there's no reason not to approve it.' So it can be done.

I realize that many here take advantage of the rewards offered on credit cards, but the reality is the credit cards wouldn't offer those rewards if they weren't making money -- and they make money from interest and fees. Which means most people are not the ones coming away winning. Kinda like Las Vegas... the casinos wouldn't still be around if everyone was leaving a winner...

I heard for a long time how credit cards help in emergencies, but I could do all of those things using my debit card and emergency fund (if I didn't have the money available in the normal everyday budget). Following his steps, you wouldn't need to rely on a credit card for any of the emergencies mentioned. And for someone that may already be in debt, you wouldn't want to have to fall into more debt because your car broke down and got towed.

So yes, it may sound like common sense (which he has never denied! lol), but sometimes a person just needs to hear it from someone else or maybe they weren't brought up with that 'common sense' and are trying to break a cycle. There's lots of reasons people use the Dave Ramsey plan. Good luck to all that are using it!
 
There's two other pieces to this that just came to mind.

(1) Dave speaks from a Biblical perspective. He goes out of his way to continually mention the borrower is slave to the lender. (I understand a mortgage falls under borrowing...) From what I understand, if you believe in what the Bible says, then you don't really get to pick and choose which passages/verses to follow. It's all or nothing.

(2) From a pure math perspective, if you are constantly paying your income to a bank to pay off a credit card, you reduce the amount of money you have to do other things, like investing and saving cash. If you pay cash, no one can take the car, house, boat or whatever away from you. You're also not going to potentially have a late payment, which increases your interest rate and tacks on late fees.

For the record, I do use a credit card. It gets paid off every single month and I am able to save about $1,400 a month between savings, 401(k) and HSA. But I don't use it when I'm bored to go shopping. It's strategic spending and I never carry a balance.
 

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