Dave Ramsey

[Buehler445]

Originally Posted by Sassy Squatch

Huh? That's absolutely false about the emergency fund. That's only a starting emergency fund until you've gotten your shit a bit more together and then he advocates for AT LEAST 3 months of expenses, preferably 6 months.

OK. I haven’t done the Ramsey thing, but I’ve heard him talk about the $1,000 emergency fund that’s bad. If it changes down the road that’s at least positive.

[Bearcat]

Isn't the emergency fund step one of his plan, too?

You're in debt. Likely don't have any savings. You're getting charged insane interest on credit cards.

Just ignore that for a few months is step one?

[Buehler445]

Originally Posted by Bearcat

Isn't the emergency fund step one of his plan, too?

You're in debt. Likely don't have any savings. You're getting charged insane interest on credit cards.

Just ignore that for a few months is step one?

Meh. I'm not necessarily opposed.

People that get in REAL shit such that they need Dave Ramsey are probably compulsive/addicted/some other behavior that limits their capacity to look at the thing objectively. Accordingly, Ramsey's stuff is psychological as opposed to mathematical. It is not solving for optimal returns, it's designed to eliminate failure.

Accordingly, someone that is in a mess, then they have some sort of unexpected expense, and they have to stick something on a maxed out credit card, it can kick some people out psychologically.

I don't hate it. I heard someone say once that "not having an emergency fund is an emergency" Particularly the people that can absolutely not handle credit cards or debt. Again, people that can see their situation objectively don't need Ramsey.

I didn't know the $1,000 was only for early on stuff.

[Bearcat]

Originally Posted by Buehler445

Meh. I'm not necessarily opposed.

People that get in REAL shit such that they need Dave Ramsey are probably compulsive/addicted/some other behavior that limits their capacity to look at the thing objectively. Accordingly, Ramsey's stuff is psychological as opposed to mathematical. It is not solving for optimal returns, it's designed to eliminate failure.

Accordingly, someone that is in a mess, then they have some sort of unexpected expense, and they have to stick something on a maxed out credit card, it can kick some people out psychologically.

I don't hate it. I heard someone say once that "not having an emergency fund is an emergency" Particularly the people that can absolutely not handle credit cards or debt. Again, people that can see their situation objectively don't need Ramsey.

I didn't know the $1,000 was only for early on stuff.

Hopefully there's just some nuance to it (it's hard to give people/plans the benefit of the doubt whenever they have Ramsey's mindset)... like setup a savings account and if possible have your company direct deposit $100 into that account each paycheck so you never even see it, then make sure to pay at least the minimum credit card payment every month, etc.

I'd argue having debt accumulating at 18-24% IS the emergency.

I mean, his method apparently works for a lot of people and I've fortunately haven't been in the situation that his clients are in to say no no no, THIS is the way... I'd just think you account for every dollar out of your paycheck and automate as much as possible so you don't even have the chance to spend it (like if you have $1k in your checking account, heh), and get crackin' on the worst debt first while also throwing just a little into savings.

[mr. tegu]

Originally Posted by Buehler445

People that get in REAL shit such that they need Dave Ramsey are probably compulsive/addicted/some other behavior that limits their capacity to look at the thing objectively. Accordingly, Ramsey's stuff is psychological as opposed to mathematical. It is not solving for optimal returns, it's designed to eliminate failure.

There’s a lot of truth in this. I’ve spent years dealing with people in some of the lowest levels of society, mentally, emotionally, and with that financially. The way their issues all interact is so obvious to an observer, but getting them to alter their behaviors to improve their situations is often next to impossible. I’m talking people on disability payments (no other income) getting payday loans to buy a PS5 type of decision making.

[loochy]

Originally Posted by Buehler445

People that get in REAL shit such that they need Dave Ramsey are probably compulsive/addicted/some other behavior that limits their capacity to look at the thing objectively. Accordingly, Ramsey's stuff is psychological as opposed to mathematical. It is not solving for optimal returns, it's designed to eliminate failure.

Well this may be just what the doctor ordered for the OP. He has admitted in the past to have gambling issues, so he may do well with that type of guidance style.

[ThaVirus]

Originally Posted by mr. tegu

There’s a lot of truth in this. I’ve spent years dealing with people in some of the lowest levels of society, mentally, emotionally, and with that financially. The way their issues all interact is so obvious to an observer, but getting them to alter their behaviors to improve their situations is often next to impossible. I’m talking people on disability payments (no other income) getting payday loans to buy a PS5 type of decision making.

I had an old roommate whose little brother got a TV and XBox from one of those rent-to-own places. We were trying to explain to him that he was going to end up spending like $1500 for some shit that he could have just waited 2-3 months and bought outright for $600.

Thankfully he was a working dude but that sort of thing can set you back in a major way.

[TLO]

Originally Posted by loochy

Well this may be just what the doctor ordered for the OP. He has admitted in the past to have issues, so he may do well with that type of guidance style.

I'd be debt free if this wasn't part of my past. I've made great strides in conquering my demons with gambling, but son of a bitch I lost a lot of money over the years.

[jd1020]

I started digging into investing so I was asking a buddy of mine for some top books to read and he recommended some Peter Lynch books and my mother bought me a Dave Ramsey book one year, which none of it applies to me because it's his step by step book to debt free, but I read some of it... Most of it is common sense, but his stance on credit cards is criminally stupid. If you use a credit card responsibly, like you would with cash or a debit card, and pay it off every month, there's no ****ing reason to not use a credit card. Even the cards that dont have an annual fee have nice perks, why the **** would you not take advantage of that? Now if you think a credit card is free money, then stay the **** away. But to suggest you should never "borrow" money is just ignorant.

[ThaVirus]

Originally Posted by Bearcat

Isn't the emergency fund step one of his plan, too?

You're in debt. Likely don't have any savings. You're getting charged insane interest on credit cards.

Just ignore that for a few months is step one?

Agreed. Let me ignore my 24% APR credit card and 13% car note for 6 months while I ‘save’ up money..

But, like others have said, I suppose it is more psychological than anything. No offense to any in here, but people who are adults and unable to balance their budget are kind of.. special.

[tmax63]

Dave Ramsey's program is fairly simple. Live within your means. Build your emergency fund to break the cycle of debt. Make a budget to track every dollar. Pay off the smallest debt first. Don't forget to pay yourself (retirement fund). The basic principles are sound. Short term pain for long term gain. It's amazing how many people don't understand/follow this advice. My niece and her husband did the "debt-free scream" several years ago in their 30's and they're raising 2 kids and are getting along great. I wish someone had impressed on me 30 years ago some of this. I'm debt-free now and have been for a decade but if I'd gotten to this point 20 years ago the extra money earned in 10 more years would have made a big difference in my retirement account today. They should have a required class in high school to teach kids this stuff.

[Bearcat]

Originally Posted by tmax63

They should have a required class in high school to teach kids this stuff.

Yep, the biggest failure of all.

[loochy]

Originally Posted by tmax63

They should have a required class in high school to teach kids this stuff.

But they don't...so don't forget to teach your children and set an example

[cron912]

I don't dislike Ramsey, but for me it really comes down to setting a budget, and sticking to it. And if you're looking for an app (ie. Android, iPhone, web) to help with your finances/budget, Ramsey's app isn't very good, IMO. I use YNAB, and love it. It does cost like $100/year, but well worth it for me.

[Jewish Rabbi]

One thing I will say about Dave is that I’d bang his daughter