Dave Ramsey

stormi glam

Im looking into starting it! But he has several books and I was wondering if any of you guys have read his books, and if so, which one would you recomend?

brij2006

We bought Total Money Makeover to get started with his program.

hoffse

Total Money Makeover is the one that gets talked about on these boards a lot.

I'm not a follower, so I would suggest independently researching some of the stuff he says to do.  Personally, I think his advice is excellent for people who have credit card or other very high interest debt. He's also great for people who really need a set plan because they are drowning financially and don't know how to right themselves. However, for people who have low interest debt or who manage their budget just fine, I don't like his advice as much.  He's very anti-debt-leveraging, and I really dislike the fact that he wants you to pay off things like student loans before beginning retirement contributions.  That could cost you hundreds of thousands of dollars in the future.   So I think his advice is really good for certain situations and really needs to be taken with a grain of salt for other situations. 

Also keep in mind that this book was published in 2003 and hasn't been updated post-financial crisis.  The financial world he was writing about back then is very different from the one we are in today, particularly when we're talking about interest rates.  He also went bankrupt before he made his millions, and that almost certainly influenced his views on credit card use, credit lines, and other forms of debt.  Just keep these things in mind when you read the book so you have some context for his advice.

In short, read it.  It's a good book, and he has some very practical/solid advice for many many people.  I just don't think there is a one-size-fits-all approach to money, and that's really the downfall of any financial adviser who has a complete "system" that they advocate.  There are folks on these boards who follow him 100%.  There are others who are soft followers.  Then some, like me, don't follow him at all.  There is no "right" answer because we all approach money differently.  But it's definitely worth a read to come to your own conclusions.

lifeonthehill

The total money makeover. It was a huge kick starter for H and I. Even though we don't follow it exactly it has been a nice guide.

Xstatic3333

DR is not as big a deal in my area as he seems to be in most of the country, but I checked out his podcasts out of curiosity after hearing so much about him here.  Now, though like @hoffse I disagree with a good deal of what he teaches (using CCs while sticking to a budget, pausing retirement during debt payoff, some of the investment advice, etc.) I've kept listening because I find his show 1) interesting and 2) good inspiration to be financially responsible.  I do agree with his advice that freeing up cash flow by avoiding debt is a good financial strategy, particularly for middle-income families.  

I should note that I'm not following his plan, however.  According to him you can't follow his plan half way, it's all or nothing, and I think all or nothing is tough with finances.  If you're looking for a jumping off point to get started with your finances, however, Total Money Makeover seems like a good way to go.  It's not the right fit for my H and I, but I'm sure the ladies here following TMM can be great support for you if it is the right fit for you.

Wulfgar

I agree with what others have said, Dave Ramsey is good at teaching one way to do things to get fiscally responsible.  I do like him a lot better than Suzi Ormun on CNBC who wants everyone to have an 8 month emergency fund prior to doing anything and to have not only a will but a living trust even if you are single.

I follow what I like from both of them.

vlagrl29

hoffse said:

Total Money Makeover is the one that gets talked about on these boards a lot.

I'm not a follower, so I would suggest independently researching some of the stuff he says to do.  Personally, I think his advice is excellent for people who have credit card or other very high interest debt. He's also great for people who really need a set plan because they are drowning financially and don't know how to right themselves. However, for people who have low interest debt or who manage their budget just fine, I don't like his advice as much.  He's very anti-debt-leveraging, and I really dislike the fact that he wants you to pay off things like student loans before beginning retirement contributions.  That could cost you hundreds of thousands of dollars in the future.   So I think his advice is really good for certain situations and really needs to be taken with a grain of salt for other situations. 

Also keep in mind that this book was published in 2003 and hasn't been updated post-financial crisis.  The financial world he was writing about back then is very different from the one we are in today, particularly when we're talking about interest rates.  He also went bankrupt before he made his millions, and that almost certainly influenced his views on credit card use, credit lines, and other forms of debt.  Just keep these things in mind when you read the book so you have some context for his advice.

In short, read it.  It's a good book, and he has some very practical/solid advice for many many people.  I just don't think there is a one-size-fits-all approach to money, and that's really the downfall of any financial adviser who has a complete "system" that they advocate.  There are folks on these boards who follow him 100%.  There are others who are soft followers.  Then some, like me, don't follow him at all.  There is no "right" answer because we all approach money differently.  But it's definitely worth a read to come to your own conclusions.

This is what I dislike most about his program.  I don't think you should ever pause retirement contributions.

CuriousKiddosMama

Read the total money makeover. We follow his system, but I will admit we didn't have a ton of debt when we started- and most of it was 2 mortgages so we didn't change retirement or anything. I have found the envelop system very helpful. It keeps me from overspending, because when the $ is gone, it's gone and you just have to figure out how to deal for the rest of the month.

brij2006

I want to make sure you get advice from the other end of the spectrum....

We started his plan a year ago and follow it to a T.  It has changed our lives, our goals, and our financial picture.  We started out with $0 in credit card debt, had a 3 month emergency fund, were putting into retirement, and our only debt was low interest student loans and car loans.  However, we had so many financial goals between the 2 of us that we couldn't figure out how to leverage debt payoff, saving, and spending to make both of us happy.  That's where his plan came in and gave us a guide as to what to do.  We have since paid off $30k in debt, and have $40k left.  In the meantime we have slowed down our retirement contributions, but I still put 5% into my Roth each year and H still does 1% into his 401k (that's the lowest he can go).  So we're still contributing some, but not the full 15%.  However, before we were only contributing 10% and it was a struggle to slowly increase it to the 15% (we were on a 7 year plan to finally get to 15%).  By doing his plan, we're only contributing 6% total while paying off debt, but once the debt is done (2 years total), then we can easily contribute 15-20% because we no longer have payments.  So really, in the end we're going to be contributing more to retirement, sooner, because we followed his plan.

Some people are anti- Dave Ramsey and that is okay.  However, I will attest to the fact that following his plan 100% is worth every bit of sacrifice.  If we had kept following our own "financial plan," we would have only paid off $12k in debt this year instead of $30k.  It really gets you thinking about what it is that you're doing with your money and how you want it to behave.  Do you want that student loan payment lingering over your head?  For us, we did not at all.  We only had $45k left in student loans before doing his plan, but our monthly payment was $700 on those alone.  We kept saying things like "when our student loans are gone we'll start a family, when the student loans are gone we can afford to move up in house, we'll put more into retirement when those are gone, etc."  It got to the point where we realized that even though making that $700/month payment wasn't strapping us, the idea of having that payment for another 5 years was hindering some of our more important long term goals.  That's where Dave Ramsey stepped into our lives and made it possible for us to now say "our student loan payment is down to $360/month, we are starting our family on our timeline instead of the timeline of our checkbook, and we will be kicking Sallie Mae out entirely by the end of 2015!"  Even though the interest rates on those loans were 2-6% interest.  

vlagrl29

brij2006 said:

I want to make sure you get advice from the other end of the spectrum....

We started his plan a year ago and follow it to a T.  It has changed our lives, our goals, and our financial picture.  We started out with $0 in credit card debt, had a 3 month emergency fund, were putting into retirement, and our only debt was low interest student loans and car loans.  However, we had so many financial goals between the 2 of us that we couldn't figure out how to leverage debt payoff, saving, and spending to make both of us happy.  That's where his plan came in and gave us a guide as to what to do.  We have since paid off $30k in debt, and have $40k left.  In the meantime we have slowed down our retirement contributions, but I still put 5% into my Roth each year and H still does 1% into his 401k (that's the lowest he can go).  So we're still contributing some, but not the full 15%.  However, before we were only contributing 10% and it was a struggle to slowly increase it to the 15% (we were on a 7 year plan to finally get to 15%).  By doing his plan, we're only contributing 6% total while paying off debt, but once the debt is done (2 years total), then we can easily contribute 15-20% because we no longer have payments.  So really, in the end we're going to be contributing more to retirement, sooner, because we followed his plan.

Some people are anti- Dave Ramsey and that is okay.  However, I will attest to the fact that following his plan 100% is worth every bit of sacrifice.  If we had kept following our own "financial plan," we would have only paid off $12k in debt this year instead of $30k.  It really gets you thinking about what it is that you're doing with your money and how you want it to behave.  Do you want that student loan payment lingering over your head?  For us, we did not at all.  We only had $45k left in student loans before doing his plan, but our monthly payment was $700 on those alone.  We kept saying things like "when our student loans are gone we'll start a family, when the student loans are gone we can afford to move up in house, we'll put more into retirement when those are gone, etc."  It got to the point where we realized that even though making that $700/month payment wasn't strapping us, the idea of having that payment for another 5 years was hindering some of our more important long term goals.  That's where Dave Ramsey stepped into our lives and made it possible for us to now say "our student loan payment is down to $360/month, we are starting our family on our timeline instead of the timeline of our checkbook, and we will be kicking Sallie Mae out entirely by the end of 2015!"  Even though the interest rates on those loans were 2-6% interest.  

I think all that is GREAT.  I couldn't imagine having that much of a student loan payment every month.  Mine is minimal.  Getting our HSA figures together last week made me realize that we can contribute even more to our retirement.  DH had so many chiro bills this year due to his back and my hernia repair wasn't cheap either.  Starting in Jan. we are going to bump those up.

Erikan73

If you aren't sure if DR is the right fit for you, go the library & check out his book & review it before spending any money. Lots of great tips. Some people will find it works perfect for their situation and others will find that certain things he recommends works for them. I like his envelope system and found an app that allows me to do the envelop system without having to deal with putting actual cash into actual envelopes. You have to find the system that works best for you that you will stick with and will get you to your goals.

Xstatic3333

Erikan73 said:

If you aren't sure if DR is the right fit for you, go the library & check out his book & review it before spending any money. Lots of great tips. Some people will find it works perfect for their situation and others will find that certain things he recommends works for them. I like his envelope system and found an app that allows me to do the envelop system without having to deal with putting actual cash into actual envelopes. You have to find the system that works best for you that you will stick with and will get you to your goals.

What app? I've been thinking of trying some envelopes but don't like carrying too much cash.

Sisugal

Total Money Makeover is a great motivator for those with a lot of debt and need help in digging themselves out of the hole.