Dave Ramsey and Your Thoughts

[Raisecapital01]

I have been on Dave Ramsey's Financial Freedom program for the past year. If you are not familiar with Dave Ramsey, he preaches about using the envelope system, and stop using credit cards. Buy used cars, and other means to stay away from debt. Have you had any good or bad experiences with his system?

[Diolla]

I use his envelope system and zero based budgeting.

I agree with
Not using Credit cards if you are in debt
Using cash where possible if you are in debt
Not loaning money or co-signing loans
Saving for retirement before college funds for children
Giving all your dollars a name and purpose
Saving up to pay cash for larger purchaes
Always understand what you are investing in

I disagree/have problems with
Never use credit cards, depending on your personality they can be a great tool
Save 15% for retirement, although a fine starting point each person's situation is too variable for a one size fits all here.
I think his investment info is too vague and uses terms that are not common in the investing world.
Debt Snowball, I think you should look at all the information on your debts and not just the amounts. Sometimes I prefer to kill off little debts before buckling down on big ones, sometime interest rates are a big factor. When I was paying off debts it didn't matter because my bigger ones were the ones with the lowest interest rates but again it is not a one size fits all situation.

As I became more informed and pro-active with my situation I found it was bext to use what worked for me but Ramsey was my starting point and at least he got me working on it. The more I read the more I realized that the advice was pretty much the same from all the "Financial Guru's"

1-Budget, know what you want to spend and how much you have to spend
2-Pay off high interest credit card debt
3-Have an emergency fund for unexpected expenses
4-Save for retirement
5-Live below your means

Duh.

[creditcardfree]

Personally, I am a fan from the standpoint of paying off debt. If you are in debt and use his system it will get paid off. The hardest part is staying out of debt. I'm not saying it can't be done, however.

We had to buy a new car after my husband totalled one of ours (medical issue). We did have $10K in our EF, but I wasn't willing to use all of it towards the car since I didn't have a place in our budget to replace those funds QUICKLY at the time. We bought an 8K used vehicle, put 3K from the EF and financed remaining $5K. I know DR would have advised a less expensive used car with what we were willing to spend...but my husband wasn't on board with that one. I think because of DR we looked at less expensive vehicles though. Before DR, we might have bought brand new. Because we moved and had equity in our home we used some of that to pay off the new debt.

One other bad experience...using only our debit card...my husband lost his while out of town for three weeks. Luckily he was already getting meals and had transportation, but he had no means of getting cash or paying for things he might have wanted had we also had a credit card.

I agree with previous poster on her 5 list...those are the basics of any finanical plan. Our plan is a mix of many different methods, but DR did have an impact.

[aurielle]

A couple years ago when I decided to get serious about getting my financial life more in order and pay off all my debt I read in a message board about baby steps and snowballing (with no reference to DR) and it made good sense to me so I started doing it. A few months later was when I found out this was actually DR stuff.

When it comes to information and advice, I take what I need and leave the rest. Some of DR's stuff makes good sense to me and some doesn't. I'm not a fan nor a critic of his.

I am using a modified version of his baby steps because they're working for me.

[Raisecapital01]

I found the most difficult part of the program is having a couple do it together. It is hard to break another person's habit. Working with a partner is most difficult part of the program.

[Ima saver]

I like Dave but I don't use all his ideas. I do use a credit card and so far, it has earned me over $600 this past year in cash.

[rduell]

I like Dave too, and quite often listen to him on the internet when I'm the only one in the office. I'm loosely following his suggestions, with a little variety thrown in.

[beebop25blue25]

The only problem I have with Dave is you have to pay to be a member and even read his forums!! I think Dave is for sure getting rich! I really feel that this site is just as good and it's FREE!! Asking people who are in deep debt to join his site for $89.95 is ridiculous!! I say apply that $$ to your debt, come to this site and get great tips and support! It's just my opinion!

[disneysteve]

I agree that DR makes some good points and some not so good. Like Ima, I think credit cards, used properly and responsibly, are an excellent financial tool that should be part of everyone's toolbox. I earn hundreds of dollars in rewards each year. Our total charges for 2006 were over $31,000. Even 1% of that would be over $310, but many of our purchases earn more than 1%, so our actual reward total is probably more like double that much.

The other DR item that I kind of disagree with is snowballing, but I recognize that it isn't financial advice, but rather psychological advice. Snowballing is not the way to repay debt that will save you the most money, but it might provide the motivation some people need to get on track and stay on track, which I think is great.

Overall, I think DR is fine. I don't know that I've found any finance guru with whom I agree 100% with their advice. David Bach, Suze Orman and others have all written or said things that I didn't agree with. Offhand, I can't think of anything from Jean Chatzky that I don't like, but there might be. She has a book or two I haven't read. So read DR and use the advice that makes sense for your situation. But don't follow his, or anyone's, advice blindly.

[robex]

I really like Dave Ramsey. He really does focus on the basics, is easy to follow, and his plan works.

He doesn't go too much into where to invest your money, but his plan is so common sense that it will help anyone get out of the red and into the black.

[wannabefree]

What I like most about DR is that it is incredibly motivating. I agree with his basic principles ie don't buy crap you can't afford and if you can't pay for it you can't afford it. I think how much better off financially would we all be if we didn't waste so much money paying interest to banks & wasting money on depreciating assets.

[scfr]

I've not read any of Dave Ramsey's books or listened to his regular show, but I've read and heard about him and it sounds like he offers some good advice. I suspect I too would agree with some but definitely not all of what he says.

Put me in the camp of people who like much but not all of what several mainstream financial advisers say:
Dave Ramsey
David Bach
Suze Orman [I especially love her philosophy of "People First, Then Money, Then Things"]
Jean Chatzky
Michelle Singletary
Jane Bryant Quinn
Andrew Tobias
Etc.

What I suspect happens is that we all tend to become enamored with whatever good-common-sense financial adviser we first read when we decide to get serious about our finances. We read their advice, get ourselves on track following that advice, and become lifelong devotees. For me, it was Jane Bryant Quinn and her book "Making The Most of Your Money" that I read when I was 27 or 28. Back then, several of the current mainstream authors weren't around.

[Aleta]

I don't think that you're going to always agree with every book that you read. There is a saying in support groups that says "Take what you want and leave the rest". If you can pick up a little nugget from each book that you read that will change the way you do something, you've learned what you need to learn. Anyway, you can come back and reread the book down the road and see something in there you never saw before. They're all beneficial for the most part. I plan to try to read one a month this year.

[naturalwoman]

Originally Posted by Raisecapital01

I have been on Dave Ramsey's Financial Freedom program for the past year. If you are not familiar with Dave Ramsey, he preaches about using the envelope system, and stop using credit cards. Buy used cars, and other means to stay away from debt. Have you had any good or bad experiences with his system?

i used the envelope system before i knew it was the envelope system. early 20's..didn't have a checking account. cashed check and put everything in seperate envelopes to pay minor bills. it worked out fined. i agree with dave, i've stopped using credit cards and i haven't had any "emergencies" i could not pay cash for. but think about it, if you have no debt, only cash is left.

[QueenOphelia]

I find his religious preaching a real turn-off.

[Broken Arrow]

Excellent responses in this thread!

Hehe... Dave Ramsey's name seems to pop up every couple of months or so. I think it's good that people are discovering the importance and ways to keep their finances under control, and Dave Ramsey is a good starting point.

[Raisecapital01]

Originally Posted by beebop25blue25

The only problem I have with Dave is you have to pay to be a member and even read his forums!! I think Dave is for sure getting rich! I really feel that this site is just as good and it's FREE!! Asking people who are in deep debt to join his site for $89.95 is ridiculous!! I say apply that $$ to your debt, come to this site and get great tips and support! It's just my opinion!

I guess I never knew he was charging these rates. You are better off buying his book. Why not a subscription, so that people can can get a feel for it? I have to agree with you.

[mom-from-missouri]

The $89 gets you more than just being a "member of his site". We are doing this at our church. For the $89 you get, the CD set, book, workbook, and worksheets on the CD that you can print off for years to come. You also get assistance from them if needed. Most in our church group reported saving more than the $89 the first month. It is a 13 week program we are doing, 2 hours each Sunday night. (Could be done in 90 minutes, but we like to 'snack' also, and visit to hear each others successes and give support.) I recommend it. Also, on his site, you can look at see who is offering these classes and where, so you can join up with one. The classes don't cost--the $89 is for the materials.

[Aleta]

I would imagine that you could pick his books up in libraries as well. That's a big savings. If you find it helpful and would like to keep it as a reference book, then go out and buy it.

[LivingAlmostLarge]

If you were gung-ho you'd just google his baby steps, slap it on the fridge, and follow them. Basic summary don't spend money you don't have. Everything else is gravy.