I should say we don't use his plan down to the bone, we don't cut down to the bare bones, we have picked up second jobs here and there to get over the hump on a few things, but haven't in the last year.

 

We still have extras we don't really need, but we do NOT CHARGE anything, except for house and cars.

 

I even refuse to set up an escrow account for property taxes and homeowners insurance we pay it all by cash.

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!

 

But didn't you buy a new Scion?

But didn't you buy a new Scion?

Yes I mistyped up there, we put nothing on credit in 3 years except house and cars.

 

That's the only debt we have.

 

Like I said, we don't follow the plan to a "T", but we did and do do the debt snowball he teaches.

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.

 

My guess is the "car theory" is his least followed. Its unrealistic.

 

I'm a big advocate of buying late model pre-owned vs new but the "cash only" theory doesn't work. I'm not tying up dollars that I can invest simply to avoid an 5% to 8% loan on a car I actually trust .

 

I'd also argue that the concept of paying off the debt with the lowest balance is foolish if you have other debt with a higher interest rate. THAT's what you should be attacking.

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.

 

 

This guy is making money off this stuff? My dad lived by this, and taught me this since I was a kid. I couldn't live up to the no eating out part.

Yes I mistyped up there, we put nothing on credit in 3 years except house and cars.

 

That's the only debt we have.

 

Like I said, we don't follow the plan to a "T", but we did and do do the debt snowball he teaches.

 

While you're on this plan, does DR advocate investing money in an employer's 401k or employee stock plan OR does he want you to pay off your debt first?

I couldn't live up to the no eating out part.

 

Don't be confused. DR is eating out.

My guess is the "car theory" is his least followed. Its unrealistic.

 

I'm a big advocate of buying late model pre-owned vs new but the "cash only" theory doesn't work. I'm not tying up dollars that I can invest simply to avoid an 5% to 8% loan on a car I actually trust .

 

I'd also argue that the concept of paying off the debt with the lowest balance is foolish if you have other debt with a higher interest rate. THAT's what you should be attacking.

 

I seen the numbers worked out, and paying of the debts with the higher interest is really irrelevant if you make huge principle reductions. It worked out to being basically even.

While you're on this plan, does DR advocate investing money in an employer's 401k or employee stock plan OR does he want you to pay off your debt first?

Debt. He advocate's being debt free first and foremost.

 

Under his plan with a reasonable income anyone can be debt free except for the house in 2-3 years.

Don't be confused. DR is eating out.

My wife and I did not for an entire year. It's very possible.

While you're on this plan, does DR advocate investing money in an employer's 401k or employee stock plan OR does he want you to pay off your debt first?

 

Definately pay off debt first. What's the use in saving when you are in debt?

I seen the numbers worked out, and paying of the debts with the higher interest is really irrelevant if you make huge principle reductions. It worked out to being basically even.

 

I owe my in-laws $1,000 at no interest.

I owe $3,000 on a 0% interest loan on my car.

I owe $5,000 on a 4% student loan.

I ower $12,000 on my 18% credit card.

 

I can afford to put $100 per month to one of those 3.

 

Tell me how his numbers work out. I don't see it. It defies logic.

What if you can't afford the book?:bunny:

This guy is making money off this stuff? My dad lived by this, and taught me this since I was a kid.

He says that at the beginning of every show.

 

He didn't make this system up, he is passing along the way your grandma and grandpa lived.

 

He's a very humble guy, and is very faith based, of course he's making money but he is selling more than a system, and it works.

Definately pay off debt first. What's the use in saving when you are in debt?

 

 

That type of teaching is short-sighted, simple-minded, and is costing people money long-term.