Looking for help with quickest way to get out of debt

DandelionPatrol

The_Only_Girl wrote: »

.... I have recently bumped into an audiobook by Dave Ramsey called The Total Money Makeover and he has good things to say about snowballing and paying off debt without going into bankruptcy or DMP. My friends call it the game changer and it has changed our perspective about debt and how to get rid of it. As mentioned on previous comments above, there is no quickstep to get out of debt. DRamsey says the best way to eat an elephant is one bite at a time; he calls it the baby steps, of which there are 7. We used his baby steps towards the end of our journey and we are now on baby step 3. I hope you'll find it useful.

Without having read Ramsey myself, I cannot comment on his 'baby steps'.

Baby steps may be fine for reigning in a mild overspending situation. However, I have heard the term used in the context of some of the more serious debt situations and I must say that I do not like the term one little bit.

Often, a debt situation requires some very rapid growing up in the time span of a Light Bulb Moment and some very radical initial changes to put a plan in place, after which smaller adjustments are made.

The trouble is that often a term like 'baby steps' becomes associated with a topic such as becoming debt free and people understand 'baby steps' in the general conversational sense rather than in the sense intended by the original author. In turn this might throw people off from making radical changes to become debt free, because they think it must be done in tiny steps.

SeduLOUs

Well, I just googled these baby steps, and apparently "step one" is to build up an emergency fund of $1000 as quickly as possible.

Absolute rubbish. No use building up a worthless emergency fund when you have expensive debts accruing more and more interest.

In the early stages of debt clearing, the best thing you can do is throw every spare penny you can at the debt. The cleared funds on credit cards then function as the 'emergency fund' but obviously this does require a lot of self control and should only be used in genuinely dire emergencies, not a desperate need for a new pair of shoes.

Step 2 is then clearing the remaining debt in order from lowest balance to highest.

It's like this guy actually wants the debt clearing process to be as expensive and long winded as possible? I guess anything that helps him sell his $149 home study course with his "Financial Peace University". It's vomit inducing.

By the end of step 2 you're debt free (how easy was that!), and now it's time to build a nice big fat buffer and start saving for retirement. Baby steps these are not. These are two ENORMOUS strides to go from dire straits to debt free.

By the final step 7 we're all loaded and giving our money away.

Sorry, I'm absolutely NOT convinced by this method. It seems to be a very vague set of ideals combined with some pretty awful advice and with no real meat on how to achieve any of it.

DandelionPatrol

SeduLOUs wrote: »

Well, I just googled these baby steps, and apparently "step one" is to build up an emergency fund of $1000 as quickly as possible.

Absolute rubbish. No use building up a worthless emergency fund when you have expensive debts accruing more and more interest.

And I just googled 'Dave Ramsey' and found this on Wikipedia

Ramsey supports the debt snowball method, where debtors pay off their lowest balance debt first instead of paying off their highest interest rate debt first. This approach has been criticized by ....

If this is true, it puts Ramsey firmly in the motivation and inspiration camp, rather than into the camp of pragmatists who want to get you out of debt as quickly and cheaply as possible

SeduLOUs

DandelionPatrol wrote: »

And I just googled 'Dave Ramsey' and found this on Wikipedia

If this is true, it puts Ramsey firmly in the motivation and inspiration camp, rather than into the camp of pragmatists who want to get you out of debt as quickly and cheaply as possible

In the motivation and inspiration camp? Motivating you to spend money you don't have learning about his carp method. It's bordering on a scam.

StrugglingYouth

SeduLOUs wrote: »

In the motivation and inspiration camp? Motivating you to spend money you don't have learning about his carp method. It's bordering on a scam.

His methods dont make financial sense, but then I dont think they are supposed to. He isnt selling a 'quick fix' method.

His product is a series of steps that people who have little idea of what they are doing can easily manage. The positive reinforcement from completing the first easy step can then be used by purchasers as justification for their purchase.

Debt reduction is like a ten piece jigsaw that hands you a piece each month but all the pieces are the same colour but different shapes. His guides turn it into a twenty piece jigsaw, but all the pieces are brightly coloured so its much easier to slot them into place, but it takes twice as long to finish.

rockm87

I listen to Dave everyday...it's worked for me, and it works for others.

isnt that the point?

no point being negative if it actually helps someone.

SeduLOUs

StrugglingYouth wrote: »

His methods dont make financial sense, but then I dont think they are supposed to. He isnt selling a 'quick fix' method.

Exactly. He's trying to teach people to get out of debt by getting them to pay for financial advice that doesn't make any financial sense.

Debt reduction can still be broken down into pieces, but those pieces can be done in a more logical order, and in a way that actually reduces debt faster.

And he shouldn't need to charge people. He should be able to make more than enough from affiliate marketing and appearances. Paying for seminars, books and classes from this guy could cost people thousands in the long run - and the people who are falling for it are the people who are in debt and can't afford to be wasting money!

Look at the difference between him and Martin...

rockm87

oh i give up!! i cant say anything without being shot down!

I listen to dave...FOR FREE...ive never paid for advice, and im getting out of debt...finally thanks to his method.

SeduLOUs

rockm87 wrote: »

oh i give up!! i cant say anything without being shot down!

I listen to dave...FOR FREE...ive never paid for advice, and im getting out of debt...finally thanks to his method.

I wasn't shooting you down. If you listen for free and it helps and motivates you, and you're aware that while his method may have psychological advantages but overall it will be more costly then that's great. You are taking on board the information he offers and making your own informed decisions.

I'm shooting HIM down for his method of attempting to weasel money out of people who need it the most, when the advice he's selling isn't even savvy. If you start reading his website he's taking about how his University of Financial Peace is teaching God's way of handling money. A lot of the people who fall for it will just keep paying him, won't look elsewhere for advice, and just follow precisely what he says to the letter like some sort of weird debt cult.

I'm sure those people feel like they are being helped. But are they? Really? It's all just a big con.

ReadingTim

rockm87 wrote: »

oh i give up!! i cant say anything without being shot down!

I listen to dave...FOR FREE...ive never paid for advice, and im getting out of debt...finally thanks to his method.

Good for you: doing something is better than doing nothing, but this is a money saving site, so people will point out if there's a less expensive way of doing something. Snowballing is cheaper, and that's a mathematical fact, whereas the psychological benefits of having cleared at least one debt (even if it's the cheapest/smallest) can't be as easily quantified.

But to go back to the original question - there's no easy and quick way to be debt free - it's a long, hard journey which may require major changes to lifestyle, outlook etc. If was easy, everyone would do it. And anyone who tells you it is, is lying.