What do you guys think of him? I read his book The Total Money Makeover and am listening to some of his classes on CD right now.
Dave Ramsey
- Thread starter pstylesss
- Start date
Yup. Zero tolerance for debt works for some people, but if you can manage your money, there's no reason not to use debt for some purchases.
If it helps you more power to you, but I find a lot of his advice to be of the "No sh--" variety.
It all depends on what variety of financial help you are looking for. If you just want to know how to not screw yourself up it'll work.
If you're looking for taking things a step further and pinch pennies I'd suggest the following:
the Ultimate Cheapskates Road Map To True Riches by Jeff Yeager - Ultra cheap dude. Gives a bit of "duh." advice but a lot of it is really motivating and gives you a good inspiration to cut back. He gives a lot of advice that can be adopted but you also have to consider that he's probably in his early 40's or so with a wife and no kids (at least he doesn't mention any). Two incomes and no children is a pretty good way to get ahead.
A Million Bucks by 30 by Alan Corey Post-college guy with a lousy job moves to NYC and sets his heart on being a millionaire by 30. The later chapters of the book deal with flipping houses and such and aren't as helpful if you aren't looking for that kind of risk but the first half is fantastic. Just remember: It's not an instruction manual so much as it is a "Here's how I did it."
It all depends on what variety of financial help you are looking for. If you just want to know how to not screw yourself up it'll work.
If you're looking for taking things a step further and pinch pennies I'd suggest the following:
the Ultimate Cheapskates Road Map To True Riches by Jeff Yeager - Ultra cheap dude. Gives a bit of "duh." advice but a lot of it is really motivating and gives you a good inspiration to cut back. He gives a lot of advice that can be adopted but you also have to consider that he's probably in his early 40's or so with a wife and no kids (at least he doesn't mention any). Two incomes and no children is a pretty good way to get ahead.
A Million Bucks by 30 by Alan Corey Post-college guy with a lousy job moves to NYC and sets his heart on being a millionaire by 30. The later chapters of the book deal with flipping houses and such and aren't as helpful if you aren't looking for that kind of risk but the first half is fantastic. Just remember: It's not an instruction manual so much as it is a "Here's how I did it."
I'm finding much of what he is saying as pretty basic rules also... but its funny how easy it is to not live by those simple rules. I know most people here won't have that problem...
I'm looking at that book you suggested now.
lokiju
Lifer
- May 29, 2003
- 18,526
- 5
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I think he's great for giving people a kick in the ass that they need sometimes.
One thing that helped myself and my wife was realizing that using credit for anything other than the big stuff like a car or house isn't necessary if you make a budget.
I know there's a lot of infallible people on here but the reality is that a lot of people out there have run into issues with debt. I myself was in a great position, had a very high credit score and a good paying job, I payed off my debt every month if I ever had any and was doing fine until one day I was rear ended by a Ford F-350 while working and put on forced leave by doctors orders from work for 6 months. I was paid 1/2 my normal pay through workers comp and there was no way possible to cut my cost of living in 1/2 over night. As a result I'm still paying down debts from 3 years ago when all that happened.
I'm back to making decent pay at a decent company but I learned a lesson the hard way and what he teaches helps set people up to not allow themselves to get into the situation I was in, should something similar happen.
One thing that helped myself and my wife was realizing that using credit for anything other than the big stuff like a car or house isn't necessary if you make a budget.
I know there's a lot of infallible people on here but the reality is that a lot of people out there have run into issues with debt. I myself was in a great position, had a very high credit score and a good paying job, I payed off my debt every month if I ever had any and was doing fine until one day I was rear ended by a Ford F-350 while working and put on forced leave by doctors orders from work for 6 months. I was paid 1/2 my normal pay through workers comp and there was no way possible to cut my cost of living in 1/2 over night. As a result I'm still paying down debts from 3 years ago when all that happened.
I'm back to making decent pay at a decent company but I learned a lesson the hard way and what he teaches helps set people up to not allow themselves to get into the situation I was in, should something similar happen.
PricklyPete
Lifer
- Sep 17, 2002
- 14,582
- 162
- 106
Of course all fundamental financial concepts are "No shit"...but so many people have problems with their finances anyway. People need guidelines no matter how straightforward they are. If you are already responsible...than you don't need his over-conservative guidelines. If you have problems being consistently responsible with your finances...then his guidelines might do the trick.
I DEFINITELY do NOT agree that Dave Ramsey's methods are necessary to live a financially responsible existence. I do think that his concepts are very helpful for the many people who continually show financial irresponsibility in their life. If you're already responsible...his advice does not apply to you.
I'm 20, own a house I'll be renting soon in this new renters market and am working on getting out of debt which was accumulated remodeling the house some. Don't have much debt, but its amazing how much waste there is even with just a little bit of debt.
Kaido
Elite Member & Kitchen Overlord
- Feb 14, 2004
- 49,992
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I know some people who followed his system and got out of debt, so obviously it works. It all depends on your situation and what your needs are. If you are in debt and struggling, it's a great system to follow. He gets hung up on some financial points that fall into opinion-land, like not leasing a car, which I don't agree with. But the point of the system is to help people who are struggling with their financial situation and need help, so it's designed to help you make better decisions when you're behind the curve.
Yup. The number 1 rule that ANY financial help person will give to you is to pay yourself first, which is one of the keys to being able to manage money.
For those that don't know what that means, it's pretty much how it sounds.
When you get your paycheck, before you start writing out the check for your utility bill or your credit card payment, pay yourself first. This doesn't mean go buy yourself some crap. This means pay yourself say... $100 every paycheck. Direct to a savings account. The problem a lot of people have with this is that they immediately think "I don't have an extra $100!" but that's exactly why people say "pay yourself first." Put the money in the savings account before you even consider other bills. Commit to a reasonable amount from the get-go and keep on it. Some banks actually have savings plans where you pay a set amount every month like you were making a car payment and you earn extra interest for doing this. Once you've put that money in the bank, you can start writing your other checks.
Why do this? It sounds like you're just screwing yourself over, right? Wrong. Think about the following:
- How often do you spend $5 on lunch instead of packing because you can afford it... all those times when people say things like "If I cut that out of my daily habits then I'd save a fortune!" The problem with saying this is that sure, you "save" the money in the form of not spending it on one item, but instead of hitting up the coffee shop in the morning do you go to the bank and deposit $3... or skip lunch and deposit $5... etc.? No. You don't. You leave that money in your wallet or in your checking account and you spend it on other crap. If you put the money you'd spend on these things in your account before you get a chance to spend it on anything else you're actually saving rather than fooling yourself.
- Have you ever been hit with an unexpected bill and your best plan of action was to just "work it out"? Yeah. Most of us do it. The problem with this is once we've "Worked it out" and we have money left over, we spend it on crap we don't need. When we've paid off all the bills and have that $100 left sitting in our checking account, we feel like it has to stay in there. Then it's just sort of "absorbed" into next week's paycheck and when the bills are paid next time we see that there is extra money in there and we do stupid things with it. Put it in your savings from the get-go and call it a day. You get over not spending money on useless crap real fast.
- Have you ever given up something while dieting and found that you don't miss it after a short while? You've just learned to deal with it, right? I stopped drinking a 2Liter of soda every other day and replaced it with water. It was to the point where I was drinking soda out of habit because it really didn't taste that great any more. I tried the "I'll just drink less" but in the end the soda was in the fridge so I drank it. Just like I cut the soda out... stopped buying it at all. I essentially just cut $100 out of my spending before I even got the chance to spend it. I lost weight when I stopped drinking soda, I stopped spending needlessly when I forced myself to save. Same concept, you know? Stop a problem at the root rather than playing yourself for a fool. If it's in the bank before you can spend it, you don't have to worry about f'ing up.
heh, typed a lot more than I intended but hopefully it helps SOMEONE.
The bottom line: If you want to save money (whether to prepare yourself for an emergency or for a financial goal), you have to make saving your FIRST priority. So pay yourself FIRST.
ultimatebob
Lifer
- Jul 1, 2001
- 25,134
- 2,450
- 126
Dave Ramsey's draconian ideas on Credit Card usage scare me. I think that he must have been molested by one as a child.
His basic concept to not buy things unless you have the money. Seems pretty fundamentally sound to me.
SearchMaster
Diamond Member
- Jun 6, 2002
- 7,791
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It's also based on studies that people tend to spend 10-15% when using CCs versus cash. I can't deny I've found myself guilty of this...it just hurts more to spend cash.
I read thtat book recently, too. Everyone is right that his advice is simple, common sense information - true wisdom usually is. If I recall correctly, Dave Ramsey says that himself and is the first to admit that he is not a top financial expert. The problem is that most people are not motivated enough to take the first step to manage their own finances in the right way, and his book helps many people to get started.
It's true some people can successfully manage credit and debt and use it to their advantage, but the surest method of avoiding spiraling debt is to not have any debt at all. His anti-credit card stance makes sense, especially considering his target audience. If you are financially successful, you probably shouldn't be reading his book, anyway.
If the nation as a whole followed his advice, we would be a lot better off.
I've read the book and have gone through his Financial Peace University class.
It is sound financial advice that is supposed to get you started in the right direction. He calls his rules "baby steps" for that reason.
Can anyone really argue with any of these?
1. Build a $1,000 Emergency Fund
2. Pay off your debt, smallest to largest
3. Expand your emergency fund to 3-6 months living expenses
4. Invest 15% of income into Roth IRA's and pre-tax retirements
5. College funding for children
6. Pay off mortgage early
7. Build wealth and give
What's dumb about any of these?
It is sound financial advice that is supposed to get you started in the right direction. He calls his rules "baby steps" for that reason.
Can anyone really argue with any of these?
1. Build a $1,000 Emergency Fund
2. Pay off your debt, smallest to largest
3. Expand your emergency fund to 3-6 months living expenses
4. Invest 15% of income into Roth IRA's and pre-tax retirements
5. College funding for children
6. Pay off mortgage early
7. Build wealth and give
What's dumb about any of these?
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