According to Get Rich Slowly founder J. I was making a solid middle-class salary, but I lived paycheck to paycheck. My money habits were terrible. I was amazed to find that I had eliminated most of my smaller debts in just six months. Over the next two and a half years, I paid off the big debts too. First, he describes the dread of living paycheck to paycheck with mouths to feed, and instantly you can relate.

Then you learn about his success, how he lost it all, and the utter resignation of not knowing how to fix it. It requires sacrifice, hard work, and focus. This is awesome stuff. By following these in order — and not moving on to the next until the current step is complete — readers gradually progress from debt to wealth. They get rich slowly. This money is to be used only for emergencies: At first you might think you could skip this step.

In fact, it can help you recover more quickly. You do this with the debt snowball. Critics note that it makes more sense to pay off high-interest debt first. Accumulate three to six months of living expenses. The easiest way to do this is to simply take the money you were applying to your debt snowball and convert it into a savings snowball. He saves investing for last, once good habits have been established.

He recommends diversifying evenly among several broad categories of funds. Invest anywhere you have an employer match first, of course, and then put money into a Roth IRA. Put the rest of the 15 percent wherever it makes the most sense. Ramsey also emphasizes that kids can work their way through college in an effort to minimize the loans they need to take out.

One of the best pieces of advice, however, is to seek scholarships. The students who know this are able to fund most of their education through scholarships instead of going into debt. Ramsey advocates prepaying your mortgage. For more on this subject, see our article on prepaying your mortgage. But with the final step, you can enjoy the fruits of your labors.

Reading the testimonials in The Total Money Makeover , they might remind you of a late-night infomercial. But three years into his own money makeover, even J. But his steps work because they are simple, and because they provide tangible results. The debt snowball is built around quick wins, which give you the confidence to continue.

Your local public library probably has a copy or two. Go borrow it today. GRS is committed to helping our readers save and achieve their financial goals. Savings interest rates may be low, but that is all the more reason to shop for the best rate.

Find the highest savings interest rates and CD rates from Synchrony Bank , Ally Bank , and more. This article is about Debt Basics Books Debt Gurus. I learned in at 23 that I NEEDED to have a credit card, when my purse with the cash for my airplane ticket, was stolen 30 minutes before leaving for the airport.

I borrowed money for the ticket, and have been using credit cards ever since. I have it for emergencies, and buy all large purchases with it. BUT I would pay it off every month— have NEVER paid interest.

Why would I want to pay to take out my money, and why stand outside and let bad people see me making a transaction? We did the money make over about 10 years ago, we now only owe a mortgage.

When I was single, I did this without knowing who Dave Ramsey was maybe I should have written a book, ha! I graduated from college in a very mediocre mids economy and was not making that much money.

But I hated the idea of debt. I rented a small apartment to save costs. Once I had a decent cushion, I focused on the debt. First I knocked out my small car loan, then my student loans.

Then I started socking money away for a house. I ended up getting married which meant some compromises to the original plan diamond ring, paying for wedding, larger house to buy in anticipation of having kids someday, etc.

But it was what I did between ages 22 and 28 that helped set us up so that we could have kids and afford to have my wife stay home with them. It also helped that I married someone who, while not as OCD about finances as me, still was very good with finances herself.

I have read his book before. I think it is an absolutely phenomenial book with some really inspiring stories that motivate. His debt philosophy really works. I have never felt so free and unburdened in my life. However, I think his financial advice is pretty much dead on. Dave reminds his listeners almost every day that working together with your spouse is essential to winning long-term with money, and that money fights and money problems are the number one cause of divorce in this country.

Having a joint account forces spouses to communicate, organize and work together on their money. Running your family finances is a lot like running a business. Can you imagine how difficult it would be to run a business well with half the company running revenue and expenses through one account and the other half running through a second?

There have been multiple studies that found that people spend more with credit cards and debit cards to a lesser degree than with cash.

Add on attractive gimmicks like cash back, points and airline miles and that temptation to overspend gets worse. For precisely this reason Dave recommends using cash for several budget categories that are easy to overspend on, like food and entertainment. For things like online purchases, hotels reservations and other things where it would be difficult and impractical to use cash, using a debit card works exactly like a credit card and has the exact same fraud protection.

Using a debit card has nowhere near the level of protection a credit card has. The credit card has the power of the company to suspend, stop and reverse charges. I refuse to own a debit card for those reasons. No credit cards, period. Maybe debit cards have a place then, but that would be the only way I see any value in them whatsoever.

Ramseys down side is that cash is the easiest method of theft loss and that factor must be considered for the weak, elderly and infirm shoppers of the world. Go ahead,, pull a wad of cash out at the checkout and sooner or later you might end up being a victim.

[Download] Dave Ramsey - The Total Money Makeover: Classic Edition eBook PDF mobi ePUB : thetotalmoneymake

Our debit card info was stolen last year and several hundred dollars were charged in another state. While we ultimately recovered the money, it took over 30 days to process and could be disastrous to someone reliant on that money for food or housing. Shan, did your pin number get stolen along with the debit card?

Do you remember what your bank told you when you notified them the card was stolen? Did you also call Visa or MasterCard and notify them of the theft? They can be used as an ATM card by using your pin number. You are correct that that offers little protection beyond whatever the issuing bank offers.

They are required to immediately reverse the charge to your bank account until the disputed charge is resolved. Additionally many banks, including mine, have additional safeguards and stop-loss policies in place for debit cards. That has NOT been my experience in using my debit card. The cash was taken out of my bank account although my pin number was not stolen and the bank took weeks to get the money back and told me that it was not necessarily guaranteed if they would need to remove it again, depending on how the fraud department decided the matter.

Then I had to fight with police officers to file a crime report on the matter. I have had a credit card number stolen in Mexico and my signature forged. Although we disputed it and signed all the paperwork demonstrating that we were not in Mexico at the time of the charge and we had not traveled to that city, the credit card company denied our dispute because the signature matched.

However, there are some redeeming qualities about it and I think it would definitely add something to my reading plan for the year. Thanks for sharing your thoughts about it. My spouse and I apply all of those — and more. Simple, but not always easy to apply.

Luckily it can be learned. It depends on your age mostly. Of course assemble it in blocks of one thousand and put them into a 5-year CD or something similar. Unless you completely understand stocks, bonds and mutuals, I advise you stay away from them until you do. You cant go wrong either way. I agree, however credit has been around longer than money and if anything credit cards have reduced usury since there is regulatory overhead.

Taking responsible users out is not going to reduce irresponsible users…it could hurt them more since a disproportionate amount of forgiveness or bankruptcy on accounts could cause rates and fees to go up.

Many people benefit from credit cards, and with no fee, and promotional cards, those who need temporary credit can get it for free. Regarding merchants, I agree credit cards have not been so nice. They also know that they will get more customers with multiple payment options. There are worse things affecting small business, like lax monopoly and big business zoning laws. I like concise lists and so the baby steps were attractive to me.

Luckily for me I was young and debt free, and so therefore had no hole to climb out of. I did however have a lot of goals and while there was no hole, there was a bigass mountain. What I am going to say is probably going to upset a few people, but I consider it part of my economic mantra: The people that can afford it the least will pay the most in life. Now for the bothersome thought: There is a caste system in America; it has been in place for centuries. The haves and the have nots, and I'm not talking about the Rockefellers either.

I'm talking about a society that spends recklessly. We always had the poor and the rich. The rich can't exist without the poor and the poor can't exist without the rich. Argue with it all you want but it is the foundation of the American economic system. The good news is that not all can or will be 'saved' by moving to the 'rich' side Financial independence can be considered 'rich' now, I guess.

Oops, the 'good news' is that some can with discipline and motivation. If it were possible for all of us to get to where TMM says we should be we'd all be poor again, trying to not only keep up with the Joneses but to outdo them.

So the caste system will survive even with those able to move up the ladder. There simply will be no time lost in somebody else filling the shoes of the former debtor. Those that can afford it the least will pay the most. To Ramsey's credit, he throws a method, a lifeline to those who will listen and ACT on it. Some system, ANY system is better than none. So for those who need Ramsey, I say follow his advice as best you can.

But remember even Noah's Ark couldn't hold everybody and … the poor are going to be with us for a long time. If they're working poor, I have no issue with them. If they refuse to work even though able, I do have a problem with that, but that's another subject. FWIW, I grew up 'poor' but got a decent high school education.

I learned a skill and wasted no time going on my own to sell it to those in need of it. I made money and moved up the ladder. I left the profession a long time ago was my last day and have done various things since, but I always remembered where I came from and that I was a heartbeat away from returning if I got stupid in my spending habits.

On this you can be sure of: Because of the 'me' and 'want it now' mentality of this generation, the working poors continued existence is virtually guaranteed. Credit cards are like a scalpel: In the hands of a skilled person they can be lifesaving and in the hands of a thief they can kill you. Regardless of regular use or not , how does one get by in a society that almost demands you have one hotel room, car rental etc?

Saving money and paying down and eventually off debt without running up any more works every time. Of course there will be those that do not make responsible decisions, and correct, they will always be stuck in the financial doldrums. The wealth gap in this country is much more significant than in other places, with lots of people at the very bottom, but not all countries are like that and have poverty like we do.

Even in the U. Yes, the book is an excellent starting point and provides good guard rails and provides basic financial common sense. The things that bother me are separate checking accounts and the recommendation of not using credit cards at all.

The first thing I did when I married Sarah fourteen years back, was to take her to the bank, and add her as a joint account holder. Both of us work today. Some years she makes more than I, some years I bring in more. Do we have loud discussion?

Yes, but we come to an agreement every single time. It may take a while sometimes to come to a mutual agreement on major purchases. This is a blessing and it keeps us from making mistakes. Sorry, I have to be honest and blunt.

You share the same bed. That does not make any sense to me. That is how I look at it. They are plastic and now the new ones have a chip in them. They are not evil. I make few hundred dollars a year just being a responsible credit card user. If you are responsible about making monthly payments and living within your means, I say go use credit cards and collect the cash back.

When I purchase something, it is an objective decision. How I choose to pay for it — real cash or credit card has no bearing in that decision.

LOVE THE TOTAL MONEY MAKEOVER AND DAVE RAMSEY!!! Our lives are completely changed. Thanks for this great article!

There are a lot of comments about using credit cards. I have a few that I use for arbitrage purposes. The next step is to transfer the exact amount spent on the credit card into a bank account that pays interest. What you have left is the interest that is yours to keep.

We have our house and cars paid off but because of unforeseen circumstances and no savings we have credit card debt. I have ordered The Total Money Makeover and hope to be debt free soon.

In we had to sell our home due to poor money management and lack of self control. We became homeless for the next six weeks and truly hit rock bottom. It was the lowest point of our lives. We were able to borrow money and move into a town house. It was about that time that I remembered a woman talking about how she was a single mom with two kids and she had just paid her last mortgage payment.

She said her life was changed forever by a man named Dave Ramsey. I looked him up and started doing research. Read the Total Money Makeover and was absolutely hooked! God willing, we will pay our last mortgage payment within the next six years. We are FOREVER grateful to him for changing the trajectory of our lives. Thank you Dave Ramsey. So 5 years later and a huge upset in the general finances of many people, how is it going? I ordered the book and need to do some of this myself.

I just got done reading Dave Ramseys book and I am very excited. The debt would get paid off, but not very fast. Now, I have the missing steps I needed for a long time. I can hardly wait to see in 1 year how much I have paid off. Now I know I can live debt free and go back to the way I use to be, pay everything in cash! Also, his book is very easy to read and understand. No big words or him trying to make himself sound intelligent.

He cuts right to the point. I disagee with Dave on a few points. I learned about him when I browsed his book in Borders. I then Googled his name and found his website and radio show archive. The rest is history…. So he includes his worldview in his teachings…. You ALL live out of your religious or non-religious world view.

Some of you who talk from an atheist view want no criticism for that, so give him the same respect in return. In other words, its okay to recognize the difference, without giving negative criticism to his beliefs. If you called on his show, he would NOT criticize ANY of you for having agnostic or atheistic views…he would seek to help you with your debt problems!!! The truth of his financial steps works because it is truth, not because his listeners are Christians of not. Hey, no need to criticize his Christian world view being reflected in his writings.

If you had written this book from your atheistic views or agnostic views, and you stuff worked, people are going to focus on the information that works rather than giving judgements about the non-religious nature of the author. Save the anti-church, anti-God, anti-Christian discussions for a place where they belong…a discussion board about religion.

Please note, tithing to a church and believing in Jesus Christ are not part of his Baby Steps. These principles are universally applicable to financial freedom.

Just a note from a pastor who has read excellent financial comments on here from the Christians and the atheists and everyone in between. Take what you can from this clown and leave the rest. Seems to me Dave does not like people that do not believe his way. I can tell by his tone toward a Jewish guy that called about his daughters Bat Mitzvah.

Dave was all businesslike wiht no sense of humor. He did not even wish the guy to have a great Bat Mitzvah for his family. I listen to him during work because it gets me thru the day..

Still waiting to him , to say just once HAPPY HANUKA. I am an atheist and I will never give 10 percent money to a church. I would give to other charities but not a church. My finace and I are both early in our careers and make 50k each a year me 27k her 23k. I had read almost every book on finance. I used detailed spreadsheets, planned, and really thought I was doing things right. I know alot of this stuff, just not like this… A light came on. It has made a huge difference in my life.

In just 6 months I have paid off If you need the peace- read ramsey! He wants us to get in the habit of NOT owing money to anyone. At one point all the major religions were anti-usury.

Today, only Islam has the courage to continue to preach that belief. I believe that Dave is trying to resurrect that belief both in the Christian culture and in the US culture.

The Dave Ramsey show is really part of a serious movement to create strong empowered people…mostly Christian…that can have enormous impact on this modern world. Dave speaks of not only getting out of debt, not only of becoming wealthy, but how important it is to pass on this wealth and wisdom to children. I think you have hit on something very important: I know we certainly had ours. First, I think it is great that you can look so far ahead.

Knowing and accepting that you will be working at this for years in advance is a very positive step. Second, just to be clear, you mentioned that paying off the house is step 4, but step 4 is saving for retirement:. Third, I definitely appreciate the idea of funding the emergency fund earlier.

The question always comes up about what you would do in cases of extreme emergency during the Debt Snowball. The answer is you stop the Snowball and use those funds for the emergency.

You can always return to paying debts later. Both of us getting laid off and living off savings and UI was an eye-opener for us. We are now pretty much die-hard TMMOs. I look to be debt free except for the mortgage in March And this is the market to be doing that in for sure. Then baby step 4 is actually paying off the house…. Dave is not for everyone. It took a crisis to open our eyes. Dave Ramsey has been a great source of inspiration for both my wife and I.

We love him and what he does for people. However, everything practical you could get from him is through his book, Total Money Makeover. All his other books, programs, seminars, classes and website subscriptions are a waste of time and money — that is unless you like being told the same things over and over again.

Thoughts on Dave Ramsey. I am so sorry that you and your children have to go through this. I agree with Joel in that it can get a lot worse than this, though. I am sure that you, your husband and your kids will come through this tough time in fine shape, as long as you take it one day at a time and set yourself up for success from here on out.

I am very sorry to hear you are going through this terrible ordeal. It may not mean much now, but the first thing that comes to mind is that you are fortunate things are not much worse. What I mean is that because you are not liable for the mortgage or his credit cards, you have a leg up on other people in your situation.

It is also good that you have some savings: This is hard for many people: But remember that your household paid plenty of good taxes in previous years to fund these programs, so you are just as entitled to them as anyone. Again, pride is the enemy: But remember, some is better than none! Unfortunately, in your situation what you want is essentially irrelevant: And who knows, a job like this may be a spring board to great things.

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You could move into management or find a corporate position with the company. No more mortgage payments out of your money: I know you already said you moved out, but he will quickly become desperate and unpredictable, and you will be his lifeline. You may even seriously consider a restraining order until he has himself back under control. You need to use your money to take care of you and the kids. You need to conserve every dollar to that goal and that goal alone.

Shop at Goodwill, clip coupons, buy generic. If you can move in with family, I would recommend that while you get your life back in order. Even if it means moving, it may be a good thing to get away. It sounds like the only real thing keeping you there is the past. The last thing you need is an anchor of debt around your neck dragging you further into the abyss.

Renting is better than owing. I completely understand his logic, but as a parent I also understand the intense drive to provide as much as possible for our kids. This comes after being debt free except for the house , having an emergency fund, and saving for retirement. Your first obligation is to ensure your own future, then you can try to help with theirs. Welcome to the miracle of compound interest.

Now, I know that sounds like a lot, especially while trying to raise two small children, but if you make 45K, here is how it breaks down: Obviously, 10K would be What you do NOT see above is leeway for DEBT: There will not be a lot of eating out, going to the movies, or vacations. The only way you can save at an adequate rate is if you have every dollar of your own at your disposal.

You are in a tough situation, but it can be done, especially since you are beginning from a position of relative strength. My typical disclaimer is this: This will take a lot of forethought and planning backed up by tremendous discipline and self control. By all means, go to the library and check out TTMM, and ask lots of questions. This place is full of good advice.

Most of all, have faith and patience.

Let me first say that I have loved reading this forum and will try to get the TMMO book as soon as possible and read it. My problem is a bit different and I am hoping for some advice from all who can help. My husband was an executive in a Fortune company and recently abandoned me with 2 small children 5 and 3 in favor of drugs we are not divorced.

I am hoping he will hit rock bottom some day and get help and be back again with us. I suspect the amount may be more than what I am aware of. Luckily I was just an authorized user on all his credit cards and my name is not on the home loan either. The first thing I did was to dis-associate myself from all his credit cards and joint accounts. I tried moving some money into an account not under my name for the kids and have invested in short term CDs.

All I have left is a about 10K in my savings account. I had to leave the house with our belongings and kids since I could not find a job I have not worked in 7 years for 3 months although I kept paying the mortgage out of savings and could not afford to dip into my savings anymore. I know the house will end up in foreclosure. We are currently living with relatives.

I am almost 42 years old, and am afraid that I dont have much time to build up any sort of reasonable wealth for my retirement since I am responsible for putting my kids through college as well.

I want to buy a house for my children to grow up in. I dont see much need for a credit card but I have 2 just in my own name that I spend on no more than 50 dollars each and immediately pay the balance. I am ashamed to say, I trusted my husband so much with the finances that I never bothered to question him or learn anything about smart financial planning.

Can you suggest what I should be doing, if lets say I bring in 45K a year pre-tax as my starting salary? And how I can save the most so I dont waste money on rent but save for a down payment?

Please pardon me if I sound stupid…I guess depression and helplessness make people sound like me sometimes. On the credit card issue, think about this.

Why is it such big business? Sure, some people can master it for a period of time, I did for several years, but then emergencies hit and they WILL hit. The card is too tempting, and boom, debt problems. Like any system, there are ways to work it, but as with gambling, the odds always favor the house. Four-hour Workweek edition Mighty Bargain Hunter. I really like this book. The main branch of my library the one closest to my house has two copies, both checked out and one with a 6 person waiting list!

Now, when i sell my home for k, and only owe 80k on it, I can take a huge piece of that k and put towards a new home, without touching my savings. Not using credit can remove temptation to easily borrow from a faceless corp instead of momma or sweetie or buddy. I tried it and I was still treading water. Moving to a cheaper apartment that was cheaper to heat, selling unneeded furniture, eating out less, buying less stuff no room and getting ORGANIZED enough to not lose bills, balance my checkbook regularly, track every dime I spent, and so on — THAT let me make more than minimum payments.

Making more than minimum payments let me get out of debt and build an emergency fund. Sure, credit cards may be toxic for some. But it is SOOOOO not a substitute for spending less, you know? Here I was thinking that building an emergency fund, saving for retirement, paying off the house, etc was actually useful for EVERYONE ….

I posted a review of Financial Peace by Dave Ramsey yesterday. I thought it was a great book and am following it to try and organize my own finances. My husband works in a bad neighborhood. It would be downright stupid for him to be carrying cash around on his person—even just enough for a grocery order or a tank of gas. Plus, having to run home for money first every time he needed to do an errand would be ridiculous. A hybrid solution may be better: Pay off some of your low-balance debts first, for the psychological boost.

Best of both worlds! It sure sounded like most of the arguments were: Noone should have credit cards! There are NO good reasons to use credit cards. As a person with pretty good financial control, I find credit cards a valuable tool for managing my money. Your compulsions may vary! I also think that people can drink too much or drive drunk without being alcoholics.

I agree that irresponsible behavior does not necessarily indicate an addiction. Telling them to get out of debt and develop a responsible financial plan is doing them a favor, and that is what Dave Ramsey does in this book. I did not mean to imply it was you who were whining, so I apologize for that. I, too, was referring to the majority of people who are irresponsible with credit. What they need is an emergency fund, so they can repair their car when needed, instead of resorting to consumer debt every time their peace of mind is threatened.

Fear drives us to do stupid stuff, and having cash on hand to handle emergencies reduces fear. I can only speak from my own experience, having made many stupid financial mistakes in the past. Just adding on the the testimonials: His advocacy of personal responsibility is refreshing, smart, and what drew me to his theories in the first place.

Stephen — I think the alcoholic analogy only goes so far. They STILL end up living paycheck to paycheck with no buffer when they get laid off. I, too, had some trouble figuring out where the extra money to pay down the debts was supposed to come from.

The book should go into more detail about taking on a second or part-time job. As I remember, only one testimonial mentioned that the husband delivered pizzas in the evening. For instance, I own my car outright, and there is no public transportation in my city that would get me to my job every day. I rent a small apartment and obviously own no rental property or boats or anything of that nature mentioned in the book.

My point is that in my scenarios listed—debt is only used as a system to temporarily often, in my case, for a few hours to earn a reward. In either scenario, the money is already spent so it has no impact. I was hesitant to mention this without having seen the study myself. This is one reason I do not use my credit card for things like comic books and videogames.

I use it just for utilities, gasoline, and other expenses I would make anyhow. Thanks for linking to that article, by the way. Dave is writing and speaking to millions of Americans who are addicted to credit. They have bought shoes, groceries, vacations, and movie tickets on plastic and paid times what they cost in interest.

He is teaching them to end that habit and never go back by destroying the credit cards. This is sound advice, and is the exact same advice that any decent counselor would give someone coming off an addiction. There is no question that going drinking with his clients will give him an entry point into selling potential business, while refraining from alcohol may put him at a disadvantage to they other salesmen who takes the same client partying.

A good counselor would tell him to flee from scenarios that would lead him back into the temptation of drinking. Telling someone who just fought through the pain of paying off years of wasteful spending an addiction to keep credit cards — only use them wisely — is exactly like telling someone who is 6 months removed from alcholism to drink responsibly.

How to handle large purchases without a credit card: Sure, banks put limits on debit cards in order to protect the consumer. However, both banks I use will temporarily or permanently increase the daily approval amount with a simple phone call or letter. I have purchased thousands of dollars of merchandise — including large ticket items with my debit card and never had a problem.

Someone made a comment about it being impractical in our society to not have debt. I would agree if your concept of making it in society involves getting what you want, when you want it. The car I was driving was a Honda Accord with K miles, cracked leather, non-working door locks, rust spots on the hood, and embarrassing noises from the broken antenna whenever I turn the car off. As for my Honda: If I can drive it, so could you.

Questions on student loans and downpayments on the house: Student loans would be eliminated first. The thing he stresses, though, is that intense focus is required. A disbursed beam of light from a flashlight can shine light on something, but a highly concentrated beam of light like a laser can cut through metal.

His point is that every dollar you can scrape together should be used to eliminate consumer debt as rapidly as humanly possible — extra jobs, yard sales, Ebay, etc. From his Wikipedia article:. Dave encourages people to get into investment real estate, but advises them to do it on a cash only basis, and only if you have no debt.

Everyone arguing cash vs. Dave frequently cites a study that says people spend more per purchase with plastic than they do with cash. Fortunately, I found a page where someone else felt the same and had done the legwork:. In response to RacerX. Also, I canceled both my BOA and CITI credit cards and a Home Depot credit card last year and my FICO score remained above The BOA card dated back to Like you need a th comment! But Ramsey has been important to me. This hold is an arbitrary amount taken off at an arbitrary time and led to me bouncing checks.

Have one card for travel. Luckily I have a business travel card. I liked the book read a library copy , and his show can be fun to listen to too. But ultimately you do have to pick a plan that you can stick with and do the work that works for you. I have been married for 20 years and we have never had a joint account, or even considered one.

We use trust and transparency in the place of a joint account. Still the marriage has held. Which tracks with all the statistics about who gets divorced more than anybody. The guy comes across as being very genuine and likable, it works great for him. He gets praised a lot because he gets a lot of publicity and has a lot of outlets for his plans, but the reality is his plan has some areas that are obsolete. Get the max company match you can get from your employer. Invest in index and mutual funds.

One time the FICO score can matter is if you invest in real estate — for instance if you buy a property to rent out. I looked up religion on some online dictionaries and they say that it is basically a set of beliefs. Pretty much everything that Dave Ramsey says on his program are his beliefs from finances to the Bible. These are necessary to put both people on the same page. Why not just stay together on the checking account?

I want to pay off my 30 year mortgage in a lot fewer years than 30 hopefully 12 , but it is difficult with the amount of house we have. On Friday, my wife and I will pay off the rest of our student loans. While either way there would have been some living expenses to deal with as well, we could have had our school loans paid off in instead of if we had been thinking of school loans as being as bad as they ended up being for us.

This will be the first time in our lives that we will be living with no debt outside of our mortgage and it will be truly awesome. I do follow the Ramsey plan…to a point.

The total money makeover Summary at WikiSummaries, free book summaries

Until I get to the place where my emergency fund is fully funded and I have developed wealth, I will be sure to maintain my high credit score.

I Got out of debt in December and my car died in January. Nothing wrong with that plan. I bought a car that I will pay for by the end of the year that I feel will last me for the next 10 years the lenght of time I kept my other car. Since I was not paying any interest on the loans, I also slowly added to my emergency fund.

Admittedly, I could not have done that several years ago without abusing it. Dave Ramsey, religious references and all, is one of the top financial gurus I do read, listen to and follow. About the student loans and first-time home buying: My husband and I recently met with a budget coach who was a Dave Ramsey certified counselor or however you say it. We also would like to save for a house WHILE paying off our student loans. Every year, our rent goes up, and we will have less to devote to our loan payments.

As kids come into the picture, we have concerns about raising them in an apartment complex. When I listen to him on the radio or catch his Fox TV program I switch to something else if I find the level of preaching too high for me. TMM, especially Baby Step 2 — the debt snowball, really worked for us because we got so focused on our debt. Spending a year and 2 weeks focused on paying off our debt, not incurring new debt, budgeting, etc. Finish the emergency fund.

Actually, my wife and I plan to do the same thing. Though we have a mortgage currently, we are not in the house we ultimately want to be in, so we will not put that money on the mortgage for this house.

Rather, we will save in a high-yield MMA or the like to put a down payment on a new home that will better suit our needs. Student loans are definitely part of the Debt Snowball, even huge loans like those incurred by doctors and lawyers. The interest rate is irrelevant.

Again the key here is changing behaviour and developing good personal finance habits. Last time we bought a car with cash we had dutifully saved up I asked if we could just buy the car using AmEx to get the points. I have no other debt at this point yay! I have good financial habits at this point and my overall spending is well in control. Debt Snowball- If you pay off your high interest debts first but track all your debts VERY carefully as you repay them, you WILL see results in your overall debt level even if you are not knocking individual accounts off the list.

TosaJen 83 — you managed to sum up in lines what took me over Will you marry me? Thanks for that great write-up! When you are living a cash only lifestyle, how does one get expensive furniture or pay for vacations when a debit card usually have a low limit?

Joel 62 I think I can speak to this, as I have a Ramsey-style emergency fund. I also have a credit card and charge card. I also realize that my reasons for having them are only my reasons, and that others may value these things differently than I. AKA what I consider a feature, you might consider a bug, and vice versa.

I regard my charge card green AmEx and credit card credit union Visa as useful tools because: Compared to a debit card: I like having something between creditors and my bank account.

Cash has no inherent records. The charge card details every dime in glorious detail did I mention detail? Stolen card the damages are limited. No way do I carry a checkbook! Compared to my emergency fund, since that was mentioned: They are in the lockbox at the bank. I prefer the charge card to the credit card because: The idea of not paying the entire bill in full each month does not even enter my head. This helps keep me on budget. I feel a fee is a more honest way to recoup the costs involved in administering the card than to advertise FREE, NO FEE CARD with the interest rate in little, little tiny tiny print.

This, of course, is entirely my opinion, and a no-fee reward-program credit card can be a net gain if used correctly. I also carry a credit card because: Accepted in more places. Neither an employer match nor the yearly contribution limits can be regained when you finally turn your attention to them. I consider debit cards rather risky, and we rarely use them. Your experiences may be different. I was going to say something good, but I see that it will be overlooked in all the other amazing comments here.

Finally, the Dave Ramsey thing is simple. Simple, and easy, are not the same thing. Best of luck everyone. Anne 44 I realized that using a credit card made it too easy to make unnecessary purchases. Good for you on noticing that! I find cash makes me spend more…frustrating, since I want to stop using the debit card.

Reducing debit charges makes me more likely to balance my checkbook. Dave Follower 35 Wise use of credit cards? You play with fire you will get burned. Electrical stoves are also dangerous. Knives can be deadly too; I use knives most days to chop food. Most people can learn safer ways to use knives and fire in the kitchen. Yes, some people only eat raw food.

The problem is not that credit credit cards, mortgages, car loans, etc can be dangerous. Most things are dangerous when misused. The problem is that we do not TEACH how to use credit wisely. If American culture woke up about what is and is not smart uses of credit, payday lenders would go out of business due to acute customer lack. It is the worst possible time to owe money to other people. And you are wise to say this is not for everyone. I think that most people who try this sort of thing, in the long run, do not have the discipline to succeed.

It sounds like you do, but I feel you are greatly in the minority. In either scenario above, this is still the case. Does everyone have it? Is it easy to know if you do have it? I feel that we have been sold by a bunch of Snake-oil salesmen to the point of endangering our entire society. I will try to tone it down a notch. You are absolutely right that discipline and personal responsibility are the keys, and I applaud you and the other like you for it.

You state yourself this only works if you keep it paid off, but what if you had a serious emergency that ate up all your reserves? What you are referring to is how he treats 2nd Mortgages. TosaJen — Those are all valid points, and except for the rebate, they can all be accomplished with a Debit Card. Obviously, this is a passionate issue. We Americans just hate the idea of not having a Credit Card.

Is it possible that some of us like Cara above can occasionally not get burnt? Apparently so — but the society as a whole is suffering, and likely to suffer for a long time to come because of these attitudes we have.

Remember that DR is dealing with hundreds and thousands of people a year. And you are certainly welcome to make your own choices when it comes to your involvement in what you believe is a corrupt industry. I consider myself lucky that I have the discipline to use a credit card, redeem my rewards points, and not pay a single cent in interest on that card.

You asked the question, so please try to be respectful in your responses to our answers. Not all of us have the goal to live a lifestyle in which we avoid debt in all its possible forms. The convenience of credit is simply not worth the risk of credit. Same goes for the car thing — why would you want to finance a depreciating asset when you can pay cash? And if you are trying to live a no-debt lifestyle, then a FICO score is meaningless. As for a home, if you have a sizable down payment, a solid income, and no other debts, a bank will happily sell you a mortgage.

Also, while the whole system may be corrupt, I can still make individual choices that limit my involvement. But the old axiom applies: And debt is NOT inevitable!

That is exactly what THEY want you to believe! I am out of CC debt but have a mortgage and a small car payment. I often have to pay for airfare, hotel, or creative materials for work, which I expense and am reimbursed for direct deposit within two weeks.

I use a miles CC for those purchases, and pay off the balance when the reimbursement comes through.

I did a kitchen remodel recently, and used the CC in a similar way. I had saved the money for the remodel in a money market fund. When I made purchases e.

Over the past two years I have racked up enough miles for a RT ticket to Mexico this year, with plenty left over to book a domestic RT ticket to see my family. I love to travel, and all of my family members live elsewhere, so these miles and perks make a difference for me.

So far this system is working well. But I spent years paying off credit cards and student loans that I had been irresponsible with; then I had to wait seven years for my credit score to reflect my wake-up call and subsequent efforts. I have excellent credit now, but I know credit cards can be dangerous. I treat them accordingly.

As for the flap about credit cards — they are only stupid if you use them as revolving credit. After listening to hours of DR on his radio program and struggling with this question, this is what I think his full approach is:. A responsible person who pays off their balance without fail thus not paying interest can actually make a decent bonus by using a reward-model credit card.

I went when there was a draw down — and no war. I also had a husband on the outside that called the military while I was in boot camp because they failed to fill out my college repayment forms correctly and he threatened them.

I got out 2. But you have to be careful in the military. Almost all buy a new car.

The Total Money Makeover: A Proven Plan For Financial Fitness - zuwywakybobu.web.fc2.com

It can be a valuable tool for times when you need to make a large purchase—such as a new home theater system or appliance. Carrying large sums of cash is not advisable and many banks place daily spending limits on debit cards. Responsible credit card use also builds credit. One of the areas that DR and I disagree on is that of the car payment. Under this scenario, how is borrowing or floating a purchase on a Credit Card somehow better or smarter than just paying cash or using a debit card?

You are the one who has become frustrated to the point of wanting to beat your head on the desk despite my reasonable tone and respectful discourse.

The first up is my credit card. A debt snowball is a great way for the psychological win, but so is getting rid of the debts that harass you the most. Keep up the good work! Of course as a person of faith I believe my faith is the ONLY way to peace in ALL aspects of my life.

And that if what I believe I know to be true than WHY would I ever tell someone to look elsewhere? And I am sure Muslims, Buddhist et al feel the same way. Also, many of the testimonials feature people who describe how they worked 80 hours a week for six months to get out of debt. This is a recurring theme: My own experience echoes this.

But many people were raised in families without this common sense. They were raised poor. Smart money management is more about mind than it is about math. I can do the math. I disagree with him, like you, on the credit card issue. I think paying cash for your home is out of reach for the average American… which requires a mortgage… which requires credit. I am looking to get a secured card, and use it to re-establish my credit. My method is to use the card to pay off a few regular expenses every month, then pay off the card.

One primary breadwinner, one bank account… and deviating from that represents some sort of issue… purely conjecture on my part. But Ramsey changed my life. However, I no longer live paycheck-to-paycheck. That has done WONDERS for getting rid of stress, and how well I sleep at night.

It motivates me to continue down this path. I mean come on, its not that hard. You work, see how much you make, and only spend what you have. Its crazy to me that people are in debt and everyone should look at those people as such, crazy. What a coincidence—I just finished TMM last week checked out from the library.

Would he recommend doing that before directing money towards retirement? It seems like a very big step is missing, especially since a 15 year mortgage is going to require a bigger down payment to keep the monthly payments affordable. Rob brings up a good point. Where do student loans fit into the equation? I have 40K in loans and I never know whether or not I should invest any excess money I earn or pay off my student loan.

All unsecured debt is paid off during Baby Step 2. Yes the interest rate was super low but the TMM plan, as many say, is not really about math its about emotional financial health and changing the way you live. The goal is to live a debt free life, think about that, and that is life changing. I have to add my praise for Ramsey and TMM. Yes the plan is simple and most everyone already knows the advice he suggests but something in his presentation and his ability to get people focused on their debt makes a difference.

I have 3 friends who are now working the TMM plan. Just today, husband called and said he was low on money and we had a 5 minute meeting about our finances. However, a few months ago I decided to go cash-only for most purchases.

Because I realized that using a credit card made it too easy to make unnecessary purchases. I was subconsciously spending more when I used credit. Since going cash-only, my discretionary purchases have been cut in half! As a compromise, I use the credit card to pay bills that I would be paying no matter what anyway. My cell phone bill, my internet service—they go on the card. I still get some rewards that way, but I save money by paying for groceries, clothes, books, and similar discretionary purchases in cash.

I listen to Dave several days a week on my way home from work and I have one concern: As an atheist, I also believe that people are quite capable of living in a financially sound manner without the influence of Jesus—or any religion for that matter. The only time Ramsey turns me off is when he injects religion into what is a wholly non-religious discussion. Wise use of credit cards? But some people are able to use fire constructively without getting burned.

When I make a credit purchase, I deduct the money from my bank account from within Quicken. I pay the balance in full every month. I think DR plan is fantastic! I just think once you get out of debt. The hardest part is to STAY OUT.

I listen to the Dave Ramsey podcast available on iTunes, for advice but also to listen to the horror stories to keep me scared of slacking off on baby step 2.

We went to the cash only plan and I was able to cut most areas of our budget in half. I finally read Total Money Makeover a few months ago, and I love the quote you mention: If you will live like no one else, later you can live like no one else. For those of you who may be hesitating to read this book because you think it may be overly religious—I also hesitated, but found the book to be balanced and readable.

I realized after his read, even though I knew a lot and had some strong habits and knowledge, I was still lying to myself — mainly because I still had revolving credit card debit. It is true once you make a decision to do things different, you are challenged, as a commenter above was with a vet bill and J. That almost wiped out our emergency fund.

Can you change your behavior when challenged? Although hard, every time you stand up to it, you win. I believe that what JD said is accurate. It may take a couple of years, but the credit card will nail you for more money than you intend to spend. The reason I am so adamant about credit cards, is I have seen families destroyed. You can become wealthy faster with no debt or little access to debt.

In the book, he talks about people who actually save up to pay cash for their homes! That said, I ended up doing the debt snowball in because I realized that IF I paid off the lowest debt — which was a little more than my annual bonus — I could stop paying minimum balance on my credit cards.

Yes, the motivation of having fewer debts was a big deal. But also the motivation of being able to pay more on other debts. As the credit cards had lower balances AND higher interest rates than my student loans and car loan, well, those were naturally what got paid off next. After the emergency fund, I hope, but before retirement investing? I have to say that I agree pretty much with everything DR says, even the no debt at all thing.

Even for airline miles. Ironically, I wrote about baby step 2 today… http: I am a Dave follower. I am a FPU teacher. I have found through countless couples, that the use of credit cards lands them back in my class in about three years. If you change this in any form, it is not a guaranteed method.

This book and his methods work. If this is not right for you, okay — great. Either they have finally gotten it, or they are too ashamed to return.

I had the same reaction as you the first time I had to hit the emergency fund. The perspective I finally came to is to look at the entire system as a whole. The only bills you should have at that point are your rent and your utilities. After a few years of working this way, I no longer limit myself to a cash only system, but I still primarily spend with cash instead of plastic. This book helped my husband and I turn around our finances last year.

Our library did not have this book, so I filled out a form to request that they get it … and they did. I read it for free and then we later took Financial Peace University.

My only concern is what about college loan debt? That seems wrong, but perhaps I am missing something. Great review of a book, J. What about student loans? While I would say that Dave Ramsey changed my life, too, I agree with your few criticisms whole-heartedly. Dave is best when he sticks to money matters and stays out of marriage counseling beyond occasionally pointing out that someone may need professional marriage counseling.

Leave it for the professionals, Dave. If I cash out every assest I had I can pay for over 8 years of expenses. I discovered Dave Ramsey about four years ago. Before Dave, I figured that it would take me about a year to pay it off.

After I started listening to Dave, I realized that I needed to take a hard look at my lifestyle. I cut my lifestyle down to nothing and paid of the debt in a few months. After the debt was paid off, I quit following the debt snowball. I stayed out of debt for a couple of years but then I slowly started to accumulate debt again. About six months ago, I decided to get out of debt again. I know this time that it is going to take longer than a few months and I am ready for the long haul.

This may seem like something an elementary school teacher would say to her students but I think that a lot of adults need to hear this advice as well. I disagree with this stance on credit cards but pretty much agree with everything else he says. I have to disagree on something. I recently did his online course when he offered it free to veterans. Lots of good advice on all areas of dealing with money, buying and credit. I forgot to add that much of the value in TMM comes in teaching people to sit down and do a budget with their spouse — giving every dollar a name.

Personally, I respect Ramsey for not pretending that his religious convictions have nothing to do with his finances. I think whatever makes you most comfortable is better. But it is possible to set aside too much for emergencies. The months emergency fund is pretty much a staple with any personal finance program.

We save in our emergency fund, something unexpected happens, and we empty it and have to start all over again. Instead, we get a clean slate every month. The long term is paying off a certain debt. The short term is the amount we pay that month to get us there. We re-calculate our budget month to month. Paying off debt as aggressively as Ramsey recommends is exhausting, no doubt. Sometimes inserting a little flexibility into his step-by-step plan is exactly what you need to get over those humps AND stay on track.

The high interest savings account is an emergency fund that is meant to be liquid. Nor do lines of credit, as those are what get most people in debt in the first place. JD, do you think months of expenses or months of net income is a better choice as an emergency fund? A person trying to get out of debt should not have them.

However, if you really have taken control of your finances, then credit cards can be a valuable tool. But only if this is the case. I was very nervous last summer when I got a personal credit card again for the first time in ten years. I suspected I could, but I was worried. I have to admit this guy makes my skin crawl. I heavily disagree with a number of his steps.

I actually agree with his point about building motivation. I would invest in company match retirement accounts to get some free money and keep a secured line of credit as the emergancy fund. Talk about over insuring yourself against problems. In some cases some cash is a good idea, but each case is different. Depends on what you want in retirement and if you are going to retire early. Invest a little, but keep most of the cash for step 6. Decide for yourself what to do next.

Dave teaches behavior modification. Do you know why every quick mart and fast food restaurant takes plastic now? On average then, even if you pay your bill each month, unless you are extremely disciplined, it is likely you will spend more with plastic. My wife is adamantly opposed to having a credit card, because she never wants to risk going back to the debt-ridden life we had. He says it is hard, it requires changes in your behavior, and it will not happen overnight.

There is most certainly a Christian perspective. Ramsey quotes Bible verses frequently. This bothered me at first, too, but my recommendation is to read it anyhow, but just gloss over any proselytizing.

Last summer, I wrote about how to read a personal finance book so that you can filter the unimportant. Also, Ramsey recognizes that dipping into your emergency fund can be a mental blow. Sell something preferably something that costs money to keep, like a car. Do something to bring in some extra money in order to break the logjam. I do disagree with Dave a bit though in that credit cards can be tools those miles are hard to resist.

Like Dave says I never heard a millionaire say they got that way using airline miles. Why must all gurus be bald, middle-aged men with glasses and a fu-man-chu? Am I the only one that notices this? I feel like by charging that amount I would have at least saved myself anxiety. Hearing folks create success through hard work and sacrifice makes me look that much closer at my personal finances and question what else I could do without. His credit card stance drives me nuts, and is always a hot topic amongst PF enthusiast.

You can either abuse it or use it wisely. If having plastic encourages you to spend, avoid it. One part of the book that rubbed me the wrong way was his suggestions of military service in order to pay for college or avoid higher-education debt. Your story sort of reminds me of the inspirational story by Bob Proctor. Great review, as usual.

If you invest that much of your money and it builds over time, you could easily have a great retirement fund if you start in your twenties. That should get you pretty close to the same amount by the time you hit retirement. I think you are right to disagree on the credit card issue.

I think the best way to think about Dave is this. He needs to sell books, advertising time on his radio show, etc. So he has to take it to the most extreme level as possible. Many of the savings offers appearing on this site are from advertisers from which this website receives compensation for being listed here. This compensation may impact how and where products appear on this site including, for example, the order in which they appear.

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Home Savings Accounts CD Rates Mortgage credit-card-search. Cash Back Rewards Small Business Gas Rewards. We will contact you soon! Add Your Voice Ask the readers Share a personal story. We want to talk to you if: Updated on November 2nd, Comments. Don't miss out - Subscribe to our newsletter for more articles on personal finance. I have never felt so free and unburdened in my life loading Not there yet, but working on it.

The successful practice is contributing. The rest is just splitting hairs. Now tell me where I'm wrong because I'd like to be. Dave Ramsey changed the course of our lives forever. We are no longer lost. The rest is history… loading You know, Dave apparently has made a lot of difference to a lot of people on here. Stay on the subject. Here is my story: Hi Kym, I think you have hit on something very important: Second, just to be clear, you mentioned that paying off the house is step 4, but step 4 is saving for retirement: Great stuff — congratulations on turning the corner.

Good luck Zach loading Dear Worried, I am very sorry to hear you are going through this terrible ordeal.