$1625 a month in non-expensive cities is hellaeasy to live off of if you need to. Get roommate and split $800/month apt (add $300/mo for apt expenses). Buy $200 food/month. $325 left for other stuff. Plus he could sell the car. Is he going to be living the good life? Of course not. But you buckle down to make up for the stupid choices you make previously.

Plus as mentioned, if too much free time is a problem, get a job as a bartender on weekends.

Ramsey would have you sell the car and knock out the $6k in CC debt leaving you with the one large debt.

He'd tell you to continue living (from an expenditure standpoint) like a broke college student and pickup a second job to accelerate the paydown. The second job not only provides income but eliminates time you have to spend money.

It's a painful couple of years but worth it in the long term.

Congrats...I wouldn't call my self a naysayer exactly....For me, responsibly using credit is a benefit to me somewhat like responsibly using alcohol. But totally eliminating those things is much better than using them irresponsibly.

(and to be honest, i feel the danger in alcohol alot more just because i've never really had debt problems but i've had some awful hangovers )

It's actually pretty easy to understand if you graduated/went to college during the 2000's. I was class of 2004 in my high school, and was told pretty much the entire way go to college or you won't ever become anything in life. I did work as a lab tech in college, but even then it wouldn't have been able to fully cover tuition and living expenses (tuition doubled at my state school through 2004-2008). The people who took out 100k on undergrad though are really in a league of their own though.

Plus there was the standard credit card booths and things like that. It is most definitely predatory, I had one person tell me that I wouldn't have to start making payments on the card until after college (lol). Really this wouldn't be too bad if there was a basic personal finance class in high school, you can't really say their parents should be teaching it since obviously a majority of people in the country are terrible at it.

This sounds legit. Congratulations on your success on being debt-free! I too am trying to do the DR baby steps. Just out of curiosity, what type of savings accounts does DR recommend putting your 3-6 months of living expenses in? I'm all new to this so I'm trying to figure this out. Thanks.

Cwilli thanks for the update. I agree the debt treadmill is not one you want to be on. About 30 years ago I read a book that stated some of the same tenets as DR and that book likely had the greatest impact on my life of any book I read. The first six years I was married my wife and I lived in a one bedroom apt. with $600 rent...this let us sock away some decent savings into our 30's while paying off student loans.

like i said schools should teach this
its still not an excuse though

I dunno, I don't blame 15-19 year olds who aren't experienced enough with the world to be skeptical. They have been ingrained to just trust adults blindly for 15-19 years, and suddenly they are supposed to be skeptical and think for themselves? The entire school system is based on "shut up, don't think, just follow what I tell you to do". It's no wonder why they can so easily get themselves into bad situations.

Might as well leave it in a checking account, interest rates being what they are.

The emergency fund as you accurately stated is a savings account -- not an investment account -- and the funds need to be readily accessible. He recommends a money market account at a local branch of your bank or credit union.

Yeah, I explored the program very high level about 10-12 years ago and blew it off. I'd be a multi-millionaire already if I would have gotten on board then. Oh well, I'll still get there relatively soon.

Is it really a good idea to pay down your mortgage like suggesting?

With interest rates being so low, and the housing market what it is in some locations I would think a long term mortgage is the smartest thing if you have a low rate.

You can put extra cash into a better returning vehicle then your house.

This has been debated about 10 different times itt. It basically boils down to personal preference. Would it help you sleep better at night not having a mortgage? Or would you sleep better remaining more liquid and having the money invested? With interest rates so low, you probably would be better off having the money invested, but no one knows that for sure. In the last 10 years, you would have been better off paying down the mortgage. In the next 10 years that may change. No one knows. It's a question of personal comfort more than anything else.

DR would ask, "Would you take a loan against your paid for home to invest?"

Most would say no as would I.

My wife and I are investing 15% of our gross income into our Roth IRAs and 401(k) and pounding down the mortgage with the rest. There is just something really attractive about not having a rent/mortgage payment every month.

It sounds like you and your wife make, and have been making decent income.

What has dramatically changed in your lifestyle and spending by switching to this type of system?

Were you just over spending constantly or had no financial plan or budgets in place?

Our household income actually declined about 25% between August 2008 and September 2011 due to me being laid off and taking a much lower paying job after being unemployed 6 months. It was during that layoff we started the program.

We never did a monthly budget. We leased new cars every couple of years. We spent tons of money on restaurants, bars, gambling, travel, etc. We were just living the good life making a bunch of money but not really controlling it.

Putting the budget in place and following it is the single biggest factor. We still have plenty of fun and travel and stuff, but we also know that as we approach our mid-40s we need to become more serious about our long-term financial goals.

Of course not. That's why Dave Ramsey advice is so bad.

Good argument. Nice add to the conversation.

This is a site for intelligent people. Ramsey is great for someone who has a problem gambling. They go and blow all their money on the ponies, slot machines, the roulette wheel, etc... So you tell them "don't ever go to a casino, they are evil, gambling is evil". The advice works good for those incapable of thinking for themselves, controlling their own behavior, or even using logic. You tell one of these people "wtf, you are one of the best poker players in the world, you should play poker" "but dave ramsey said gamboooling is baaaad! I lose all my money!!!!!"

Same thing with the completely anti-drinking positions people take because they are too stupid to stay in control. They don't understand that most people can actually have self control and get the benefits out of something without being a complete ****** about it and destroying their lives. But the thing is, there are always ******ed things that people can do to ruin their lives when they don't have self control.

There is no logic to it. He can't explain good debt vs. bad debt to stupid people, they can't figure out the difference, and will screw up. They can't have anything beyond the most basic form of advice. So they just go with the simple mantra "debt is baaaad, don't go into debt! Credit cards are bad, don't use them!" If you are really bad at understanding things or have huge personality defects, then sure, it makes sense. But paying off a super low interest rate debt with any type of priority in anything other than the most extreme circumstances is a complete fish play, simple as that. There may be limited situations where it might make sense (you are so wealthy it doesn't matter, you are near retirement age and don't have anything better to do with the money, or you think that the money you have now to pay it down will be nearly impossible to get later, etc...), but the logic is all based around thinking like "it makes you sleep better at night!!" You know what makes me sleep better at night? Knowing I'll invest money and do very well in the future. And if I don't, I only have to pay 4% interest over 30 years.

Which is why you see Ramsey-bots basically unable to come up with any argument for any of his suboptimal advice other than "well, it works, herp derp, can't argue with results". He's basically like a weightlifting coach who tells you to lift weights then punch yourself in the nuts after each set. Someone suggests "why don't you just not punch yourself in the nuts and do the rest?" "herp derp, it works!"

TC: I'm pretty sure we've rehashed this somewhere in the course of the thread, but it's been awhile so we can do it again.

I'm not claiming his plan is optimal strategy in all situations. In fact, I agree that in its basic form, the plan is designed to help less sophisticated people manage their finances in a way that allows them to live a dignified financial life. And less people needing to be on the government teat when they're old is a good thing for you and me.

That said, I consider myself fairly well schooled in financial matters. I was simply lazy, disorganized, and disinterested in developing a long-term financial plan for my family. DRs plan is easy to implement and allows someone like me to cater it to my needs. Obviously, it has served me well.

To blindly state it is a plan for "bots" without a complete working knowledge of the plan is unfair at best and irresponsible at worst. Three plus years of living the plan puts me in a pretty good place in terms of knowing why he preaches the positions he does. Your reaction to those position, based on what I know, tells me that you are less than completely familiar with his teachings.

At the end of the day, this boils down to risk tolerance. If you like living on the edge or taking a moderate to aggressive amount of risk, Ramsey is not your plan. If you like to live conservatively and still be able to build a level of wealth that will be more than the average Joe, Ramsey is a fine plan for that person.

You obviously fall in to the former camp. And that's cool. What's not cool is begrudging other people's choices to follow a different, proven strategy regardless of your opinion of it's level of optimization.

If you can tolerate *any* risk, Dave Ramsey isn't your guy. And it's not even that, it's the idea that everything is based on psychological motivations. Pay the smallest debt because it "feels good". Pay off a .00001% debt because it "feels good". It's the same philosophy that "one sip" makes you a drunk. It's silly.

Now there are a ton of really good things in there that a lot of people don't do. Budgeting, actually planning for things, etc... are things a lot of people don't do and people are better off by doing it.

It's the absolutely stupid stuff he encourages (pay down debt based on amount first, destroy all credit cards, pay off mortgages as fast as possible, put money in envelopes to spend) that is worth criticizing.

It sounds like overall life after DR for you was better than before. But that doesn't mean something else would be even better.

But if it's that I'm uninformed about either what his horrible advice is or why it's not horrible advice, by all means, bring it to the table. I'm absolutely aware of tons of his advice that is either wrong, useful only for people who are really terrible with self control, or not very smart.

So you think that nobody on this board has credit card debt? Or if they do, there's a fantastically logical reason that they do?

I think people can be ignorant in the past but most are able to understand their mistakes when educated. What about my post thinks people are immune from making mistakes?

I'd bet a lot of people on here were losing poker players at one point but were able to be reformed and learn the game, rather than be just given the strategy of "quit playing".

Saying that it's only useful for people without self control and saying that it's stupid for this board implies that you think everyone on the board has self control. In general you come off as thinking that everyone on this board controls their money properly and therefore doesn't need any help figuring out the basics. My guess would be that assumption is incorrect.

People don't go from not managing money correctly to having tons of self control and knowledge about financial things overnight. Using DR as a bridge to get started may not be optimal, but it may be good for some people on this board. I think that stating that it's not optimal, saying why it's not optimal, but acknowledging how it may be useful to people is where we should be as a board rather than ranting about how awful it is and acting like nobody on this board could ever benefit from it.

I'm saying his stupid ideas are only useful for those people. A lot of his stuff is really obvious and correct for anyone.

Saying DR is a bridge to success is interesting, if he actually did that, and actually just did "simple, but suboptimal" strategies, but he does equally simple, but worse strategies in many cases. This is like saying Phil Hellmuth's book is good because people who are terrible at poker will play better. The better strategy is to read an equally simple book, but actually explains *why* and actually explains things correctly instead of polluting someone's mind with garbage that isn't useful and without explaining the reasoning behind it.

I'm all for learning the basics before taking on more advanced tasks, especially when overwhelmed. But the key is to admit what it actually is. Understanding why it's suboptimal (and in many cases, downright wrong), is an important part and in no way part of the Ramsey curriculum. Plus, LOL @ tithing 10% when you have severe debt problems. Probably his worst advice.

If you are incapable of thinking or logical thought or self control, Ramsey is your man, though, I'll admit that.