The Total Money Makeover - Dave Ramsey

[Wireman]

Have any of you heard of this? I haven't read a book in nearly 10 years, but I got started into this book and I am 2 chapters short of completing it.

[theguru]

Great stuff. I listen to his radio show a couple of times a week.

 

Cut up your credit cards, create a written budget, give every dollar a name, pay your debts off from smallest to largest, and no eating out. LOL

 

Also, if you can't pay cash for something (besides a place to live) you cannot afford it and this includes cars.

[Wireman]

Great stuff. I listen to his radio show a couple of times a week.

 

Cut up your credit cards, create a written budget, give every dollar a name, pay your debts off from smallest to largest, and no eating out. LOL

 

Where can I hear his radio show at? If one could suck it up and do what he preaches for 2 years, he would be all set for life.

[ladiesbballcoach]

96.5 in Cincy 1 to 4.

 

Great program. And it is Christian based. He reads a proverb almost every single day concerning money and life on his show.

 

A lot of churches run the program. Mine has done it twice and another local church is presently doing it.

[bugatti]

*snip* *snip*

 

"I"M DEBT FREEEEEEEEE!!!!!!"

[cshs81]

Great stuff. I listen to his radio show a couple of times a week.

 

Cut up your credit cards, create a written budget, give every dollar a name, pay your debts off from smallest to largest, and no eating out. LOL

 

Also, if you can't pay cash for something (besides a place to live) you cannot afford it and this includes cars.

 

I don't listen often but my impression from those times that I have listened is that he's a bit unrealistic. If you're saying he thinks you can only pay cash for a car (ie not finance it), that would only support my thinking.

 

Can you or someone explain his logic on this particular point?

[stickymitts]

I don't listen often but my impression from those times that I have listened is that he's a bit unrealistic. If you're saying he thinks you can only pay cash for a car (ie not finance it), that would only support my thinking.

 

Can you or someone explain his logic on this particular point?

 

Or, of course he has a car like mine...

[ladiesbballcoach]

I don't listen often but my impression from those times that I have listened is that he's a bit unrealistic. If you're saying he thinks you can only pay cash for a car (ie not finance it), that would only support my thinking.

 

Can you or someone explain his logic on this particular point?

 

That it is his view. You pay cash for the car, let's say a $1,000 car. Save the money that you would have been paying in car payment for a new car. $300 a month for 1 year, gives you $3600. Trade in the $1,000 car for about $300 and buy the approximate $4,000 car with your savings.

 

Save the payment for another year and you have another $3600 in savings. Trade in the $4,000 car for approximately $2500. And now you have $6100 to buy a better car.

 

That is better than buying a $20,000 car that you cannot afford.

[Wireman]

I don't listen often but my impression from those times that I have listened is that he's a bit unrealistic. If you're saying he thinks you can only pay cash for a car (ie not finance it), that would only support my thinking.

 

Can you or someone explain his logic on this particular point?

 

Well, I haven't started yet, but my family and I are going to try it out. He wants you to start with creating an emergency fund of $1,000 - anyway you can get it but try to get this in the first month. If you don't have the extra money, then sell something. No matter what, get that $1,000 and put it away in a place that is easily accessible but NEVER used for anything other than emergencies.

 

Once you have that, you prioritize your non-recurring bills from smallest to largest (If you owe a buddy $5, you put that #1 and if you owe student loans of $100,000, you put that last). This does NOT include your mortgage and it does NOT matter what the interest rates are. NOTE - if you have any past due payments, you deal with those first before doing anything else. You then pay all your recurring bills (utilities, etc.) and ONLY the minimum payments on everything except for the bill at the top of the list. You do everything you can to pay off bill number 1. Then you move to bill number 2. The thing is, you make the minimum payment of the bill that you just paid off and add it to the bill you are now on. In other words, you're paying the same amount, but applying a higher payment to the current bill. This is called his "debt snowball" - you get a snowball effect rolling and swiftly pay the bills off until all of your debt it gone. Supposedly, this will typically take 18 months or so, depending on each situation.

 

At the end of that phase, you will have a $1,000 emergency fund and no debt, excluding your mortgage. The next goal is to increase the emergency fund to $5,000-$10,000, to prevent any disaster. Again, this is easy to get to but NEVER used for anything besides emergencies.

 

After the emergency fund is fully loaded, you move into investing 15% of your pre-tax income into mutual funds. If your employer matches, you do enough with them to get the maximum match (free money). If they don't match, you invest in a Roth IRA. Anything over the employer's match goes into the Roth IRA. This is setting you up for your future.

 

I am now getting ready to read the chapter on saving for the kids' college funds and dealing with the mortgage. I'll update after I get that far.

 

Its pretty good stuff :thumb:

[Wireman]

That it is his view. You pay cash for the car, let's say a $1,000 car. Save the money that you would have been paying in car payment for a new car. $300 a month for 1 year, gives you $3600. Trade in the $1,000 car for about $300 and buy the approximate $4,000 car with your savings.

 

Save the payment for another year and you have another $3600 in savings. Trade in the $4,000 car for approximately $2500. And now you have $6100 to buy a better car.

 

That is better than buying a $20,000 car that you cannot afford.

 

One of the top rules is NEVER buy a new car and never buy a car you cannot afford. Go to the used car dealership and buy a car with cash. Millionaires often drive used cars and that's why they are millionaires...

[ladiesbballcoach]

Well, I haven't started yet, but my family and I are going to try it out. He wants you to start with creating an emergency fund of $1,000 - anyway you can get it but try to get this in the first month. If you don't have the extra money, then sell something. No matter what, get that $1,000 and put it away in a place that is easily accessible but NEVER used for anything other than emergencies.

 

Once you have that, you prioritize your non-recurring bills from smallest to largest (If you owe a buddy $5, you put that #1 and if you owe student loans of $100,000, you put that last). This does NOT include your mortgage and it does NOT matter what the interest rates are. NOTE - if you have any past due payments, you deal with those first before doing anything else. You then pay all your recurring bills (utilities, etc.) and ONLY the minimum payments on everything except for the bill at the top of the list. You do everything you can to pay off bill number 1. Then you move to bill number 2. The thing is, you make the minimum payment of the bill that you just paid off and add it to the bill you are now on. In other words, you're paying the same amount, but applying a higher payment to the current bill. This is called his "debt snowball" - you get a snowball effect rolling and swiftly pay the bills off until all of your debt it gone. Supposedly, this will typically take 18 months or so, depending on each situation.

 

At the end of that phase, you will have a $1,000 emergency fund and no debt, excluding your mortgage. The next goal is to increase the emergency fund to $5,000-$10,000, to prevent any disaster. Again, this is easy to get to but NEVER used for anything besides emergencies.

 

After the emergency fund is fully loaded, you move into investing 15% of your pre-tax income into mutual funds. If your employer matches, you do enough with them to get the maximum match (free money). If they don't match, you invest in a Roth IRA. Anything over the employer's match goes into the Roth IRA. This is setting you up for your future.

 

I am now getting ready to read the chapter on saving for the kids' college funds and dealing with the mortgage. I'll update after I get that far.

 

Its pretty good stuff :thumb:

 

He was recently at Xavier and I believe is coming to Lex soon or was just recently in Lex.

[Wireman]

He was recently at Xavier and I believe is coming to Lex soon or was just recently in Lex.

 

He is coming to Lexington in March to the Southland Christian Church. I really believe that one could live very comfortably by following his plan AND still be able to give alot of your money to God and to other's that need it more. I have always wanted to help people out, but never had the extra money to do so. Perhaps that is why God led me to this book.

[ladiesbballcoach]

He is coming to Lexington in March to the Southland Christian Church. I really believe that one could live very comfortably by following his plan AND still be able to give alot of your money to God and to other's that need it more. I have always wanted to help people out, but never had the extra money to do so. Perhaps that is why God led me to this book.

 

I am trying very hard to live by the envelope principle but don't have everyone buying into it.

[98NCCalum]

My wife and I started following Dave's system about 3 years ago.

 

We have paid off over 15 thousand dollars in CC and student loan debt.

 

We now have one CC, and we pay it off every month.

 

The only debt we have is our house and cars.

 

We buy nothing with credit, if we don't have the money in our checking account we don't buy anything.

 

We have an emergency fund set away of 3 months salary for me and my wife.

 

I Love Dave Ramsey!

[98NCCalum]

Where can I hear his radio show at? If one could suck it up and do what he preaches for 2 years, he would be all set for life.

He podcasts online for free everyday too. http://www.daveramsey.com