Like Him or Not Dave Ramsey Takes A Stand On Financial Freedom
Some suggest Dave Ramsey is a polarizing figure while others swear by his advice. Hopefully we can provide you with enough information to form your own opinion.
Dave Ramsey is widely known for his daily radio show and the "Total Money Makeover" book he wrote.
Dave's personal story began when, in his twenties, he had accumulated wealth in the millions, only to lose it all, declare bankruptcy and have to start over. Less than ten years later, he was a millionaire again. His road to wealth the second time was helping people out of the same credit experiences he had.
One very important point Dave makes about debt and wealth is: Winning at money, personal finance and wealth building is 80% behavior and 20% knowledge.
His new path to wealth is based on seven simple, common sense "Baby Steps". The video explains it quite simply and clearly.
Dave Ramsey on How to be Financially Successful
Dave Ramsey is a 'tough love' guy who 'tells it like it is', teaching how to get out of debt and accumulate wealth. Whether or not you like his style is not important. What is vitally important however, is his message.
Learn To Budget Your Money
According to Dave, (and we agree) you need to tell your money what it has to do. Use the free budget worksheets we've provided, or create your own to get started. In the video, Dave Ramsey suggests using a simple envelope system to manage your money but, if you want to be a little more sophisticated, you can consider a budgeting software program. Two highly rated programs are mvelopes and YNAB or "You Need A Budget". Neither is free but they do come with many free options and features.
The difference with YNAB is it provides you with a forward thinking budget that keeps you aware of your saving and spending activities in advance. Find out more details at the YNAB site where you can read more about how to create an effective budget.
What's In A Name
There are a number of variations to Dave Ramsey's Debt Snowball method of paying off debt. Some may refer to a roll-over plan. Whatever you call it doesn't really matter, because its effectiveness is in the fact that Dave's Debt Snowball takes into account the human psychology of debt and recovery. People don't get into debt because they are poor in math. It is the variety of human psychological triggers that cause people to use their credit cards, not pay the entire bill at the end of the month and go into debt. He gets that.
That is quite likely why his 'Baby Steps' to Financial Freedom is so successful.
His Baby Steps include:
1. Save $1,000 cash as a starter emergency fund
2. Start the debt snowball
3. Finish the emergency fund – accumulate 3-6 months of expenses
4. Invest 15% of your income in retirement
5. Save for college
6. Pay off your home mortgage
7. Build wealth – Invest, donate, enjoy life without going into debt.
It is time to take control of the human psychology that triggers YOU getting into debt. It comes down to motivation and celebrating successes.
For example, it makes more financial sense to put your extra cash into the debt with the highest interest rate. However, by paying off smaller debts, the number of debts you do have decreases. These successes give you the motivation to continue your payments and stay on track for a debt free life. You may want to watch that video again and purchase The Total Money Makeover: A Proven Plan for Financial Fitness by Dave Ramsey.
Which Credit Cards Do I Pay Off First? Our Debt Action Guide offers several creative payment methods.
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I have no desire to keep up with the Jones'...The Jones' are broke!
~ Dave Ramsey
Okay, folks, do you want to turn those fat and flabby expenses into a well-toned budget? Do you want to transform your sad and skinny little bank account into a bulked-up cash machine?...
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