Originally posted by: quikah
His advice is aimed at people who cannot handle debt, which is a pretty good portion of the US. As an example, zero interest, zero payments for 12 months on say a TV. That is great for certain people, take that money put it in a 12 month CD, profit. But it is BAD for a lot of people who will forget the debt or just not plan for it, then month 13 comes along and they are hit with 12 months of finance charges. These are the people his advice is aimed at. These are the people who should NOT be doing these sorts of deals, they are bad with debt.
The only real questionable advice I hear from him is the paying the home off early. I think it is unnecessary, and may be bad advice depending on the situation.
Not exactly. His teaching in this case is, "if you can't afford to pay cash for something, you can't afford it. PERIOD." Obviously a house is the sole exception, and there he teaches guidelines like "no more than 25% of your net income monthly on a 15% fixed mortgage".
With regard to the debt snowball (paying off the smallest debt first, disregarding interest rates), it is more of a psychological thing than strictly a dollars-and-cents thing. Sure, it might cost you a few hundred bucks extra in interest over the course of a few years it takes to pay the debt. But if you start out with 7 debts, then pay one off in a few months, then take the money you've been throwing at that debt at the next smallest, then get it paid off, then take the money from those two debts and go at the next one, etc., you will see a very tangible reduction in debt, moreso than if you purely attack the highest interest.
I don't have any debt currently other than my house and it will be paid off in just a few years, so his show isn't generally targeted toward people like me. When I first listened to Dave, I agreed with most of the sentiments above. However, after a few months of hearing what he has to say, it really does make sense and I can see how it helps so many people.
I haven't done the FPU plan, Boomer, but I think you can get the same advice from his "Total Money Makeover" book for a fraction of the price. The benefit of FPU is that generally you have a group of people (usually a church group) meeting regularly to talk about issues so it's almost like a "support group" mentality.