Dave Ramsey's Baby Steps...?

FrankieM

I've been looking at this guys site. He seems to pin everything on 7 Baby Steps, which are...:
$1,000 to start an Emergency Fund Pay off all debt using the Debt Snowball Three to six months of expenses in savings Invest 15 percent of household income into Roth IRAs and pre-tax retirement College funding for children Pay off home early Build wealth and give!
Invest in mutual funds and real estate



It'an American site, but I've found some stuff interesting..

Anyway, I was wondering if anybody else had heard of him or was doing his plan....???

georgiasmum

I have been following Dave Ramsey's site for awhile and it is very interesting to note his tough 'anti-credit' 'all debt is bad' stance. He also advocates working 2nd and 3rd jobs to pay off debt. I have 3 jobs and feel conflicted about debt, his views and my overdraft. Very interesting stuff and very intense.

DeniseNZ

I just found his site the other day, and have downloaded a couple of his podcasts where he answers peoples questions on the radio. It's makes for interesting listening, but very americanised, naturally.

I've been trying to get through to my OH how important an emergency fund is, and this site reinforces that.

FrankieM

I've been looking around the forum on his website...
I'm still undecided about the emergency fund cause so many people say there is no point having savings if you have debt....?
But I can also see the point of not adding to the credit card etc..

Do you find that you follow his 'plan' or just take bits from it??

Buffythedebtslayer

I had a look too and thought he was very dedicated? sort of extreme. I like the idea of the emergency fund - would have been handy !! but its hard to know there is money just sitting there when it could go on a debt!

I think Frankie I would just take bits, although to be honest I find the mse way works well for me at the moment.

xx

georgiasmum

He is very extreme. His website is www.daveramsey.com. The forums are not as good as here and it has a definite fundamentalist Christian slant being from Tennessee (I believe this is biblebelt heartland - could be wrong though.) I like what he has to say and is very forthright with people who have done stupid things (aka STUPID TAX)... I have been debt free and got into a bit of a mess due to poor planning and my husband being seriously ill. I am working 3 jobs to clear it and he went back to work last week after 5 months so we are on the up. Interestingly about the 3 jobs Dave R would advocate this kind of 'gazelle intensity' (note my US lingo) but others in my acquaintance are kind of critical of it so I keepit quiet. By December I will be all but mortgage debt free...

Jacks_xxx

I like him.

I disagree with his version of the snowball - pay the smallest debt first - but I understand his reasoning.

Our plan is pretty similar as his.

We have a low interest credit card waiting for emergencies that are too big to manage with just a bit of belt tightening but so far we haven't had to use it. When the car died, the roof needed repairing, and my daughter's school changed the uniform entirely etc we were able to manage.

Feb 2009 We will have snowballed all our debt - but highest interest first.

May 2009 By now we will have generated some savings - at least 3 months of mortgage bills and food worth.

April 2012 By now we will have saved £50k for essential structural work on the house so that we can sell it and move. (Otherwise nobody would buy it because it is quite literally falling down.)

2014 Then we buy a new house and save for youngest's Uni

2016 Then we hammer the mortgage and save for retirement as my hubby retires in 2024.
Blimey. :eek:

Love Jacks xxx

ltm07

Hi all. Not checked out his site yet but can see his reasoning behind having an emergency fund. We are saving to get married & are stashing as much as possible into an ISA & another internet account & also 'piggybank' other cash we manage to save. It feels good to see our debts go down slowly each month rather than pay alot off only to have to dip into overdrafts,CC's etc. again & again IYKWIM.

FrankieM

Interestingly, I was thinking about the 'gazelle intensity' thing.
We have a loan that we need to pay off, we had work done on the house. I was looking at his baby steps and doing it his way means paying it all off before doing any extra work to the house...I couldn't decide whether that was the best way..
Alot of MSE-ers try to have a life as well as pay off debt and so I have got myself in that place that I can't decide whats best!
I think I'm probably with Jacks, in regards to an emergency fund and will probably 'cash flow' any emergency or use a low interest card...or do without if possible!
There are so many different ideas out there, I can find myself paralysed.....

Jacks_xxx

I'm the same Frankie. Sometimes trying to work out what's the best thing to do stops me doing anything!

It doesn't help that hubby's default setting is "If in doubt do nowt". :rolleyes:

I am the queen of gazelle intensity though - only I call it rather less poetically "kicking [EMAIL="the@r$e"]the @r$e[/EMAIL] out of the debts"

We've got a loan that somehow got missed in the great debt add up and I'm still prevaricating about what to do about it now - and I've known about it for a few months.

It's a [EMAIL="!!!!py"]!!!!py[/EMAIL] loan, all front loaded and we save nothing by paying it off early - so I'm tempted to just carry on paying it and get on with the next stage.

But on the other hand we're not debt free all the time we're still paying it.... which pees me off! :rolleyes:

Love Jacks xxx

FrankieM

So does that mean you haven't done what Dave suggests and worked stuff through with your DH?
I tend to do financial stuff. I don't really explain what I'm doing, just get on with it...and I certainly haven't sat down with DH and worked it out together..!
I would love to be a debt @rse kicker too.....perhaps I need to do some reading up and get focussed...