Just wondering if anyone here has done the Total Money Makeover by Dave Ramsey? I have been listening to him in the afternoons and got his book from the library. There are so many people who have become completely debt free after drowning in debt. Just wondering if anyone here has tried it?

Real Debt Help - Get out of debt with Dave Ramsey's Total Money Makeover Plan.

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"GO HOKIES!"

My DH is hooked. He bought 10 copies of his book for $10 a piece for our family and friends. My sister called to thank me and DH with big hugs and kisses because she feels more in control. She is very excied about paying off her debt and she will have her house pd. off in 4 years if she sticks with her plan. My Dh's sister called and thanked him because she has extra money in her bank account already. She is selling most of her books on half.com and said she has another bookcase to go yet. We started three months ago and knocked off 1 and 1/2 ys.of our mortgage. And we have $600 cash of the $1000.00 saved. Good Luck!

I think he has some good theories and practices, but people DO need to have credit, just to keep the credit history and scores alive. My main complaint with Dave Ramsey is that he teaches/preaches that you should not have ANY debt or use credit cards, but yet, he accepts credit cards for his materials!!!

Most 'experts' say you should have a mortgage, even if it's just for the tax deduction on interest, and auto loans are a great way to boost your score. Credit card debt is the one most people can do without! If you have one or two cards, charge small and pay in full every month.

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"It's not about how much baggage you have, it's about whether or not you can carry your own baggage with grace and dignity."

We just refinanced our house last month. Our credit is perfect and our credit score is near perfect. We asked the mortgage broker why it wasn't perfect. The answer? We only have one credit card that we pay off every month. The ratio of the amount of credit that we HAVE versus the amount of credit we COULD have is too low. She suggested opening another credit card (which we were thinking about doing anyway, so we are going to).

My BIL is hell-bent on being debt free. They've paid off everything but their house and they're working on that. I worry that if they ever need credit, they will not be able to get it or will have very high interest rates.

Oh well, not my problem. But I find it interesting how it all works.

Lisa

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"It's not having what you want,
It's wanting what you've got"

"The happiest people don't necessarily have the best of everything;
they just make the best of everything they have."

If he is following Dave Ramsey and following the steps in order, he would have a baby emergency fund of about $1000 in place and a fully funded emergency fund of 3-6 months expenses in place before he started working on completely paying off their house, and would be thinking of future non-emergency purchases to save up for, thus eliminating the need for credit.

For those of you not familiar with Dave Ramsey, he has 7 Baby steps to financial peace.

Copied from the total money makeover website forums:

Baby Step 1.0 Save $1000 In baby Emergency Fund (EF)

1.1 Chop up CC's (You have an EF now, no NEED to keep those CC's !!)

1.2 Amputate cars that you can't pay off within 24 months (You have an EF to fix the "bondo buggy" if something should happen)

1.3 Consider raising insurance deductibles to $500 or $1000 and dropping full coverage on paid for "bondo buggy" (You have an EF ya know)

2.0 Do debt snowball
Make a list of all of your debts, lowest to highest. Pay off the lowest balance first while paying minimum payments on the other debts and "snowball" the payment of the debt that you just paid off onto the next highest debt. Soon you will have a snowball effect where all of the minimum payments on the previous debts really start adding up and your debt starts diminishing quickly.

2.1 Start car replacement fund (do not PURCHASE car until step 3 is done or old car dies)

3.0 Save 3-6 months EXPENSES in EF

3.1 Start furniture or other non-essential stuff replacement fund

3.2 Move up in car if you still feel the need to (must pay cash for it)

4.0 Contribute 15% to retirement

4.1: Take your first vacation since finding Dave if you can pay cash for it (no using the EF !!!)

4.2 Save up 20% for home purchase OR pay down existing mortgage to the point you can drop PMI.

5.0 Save for kids college fund

6.0 Pay off house

7.0 Live like no one else since you have lived like no one else


I'm mostly all for what Dave says, but I do think it is smart to keep one cc open for credit history sake, preferably the one you have had the longest, just cut up the card so you don't start using it again. If you run into something that really requires a credit card, you can always call the company and have them send out a replacement card.

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I've had a Foreman Grill for about six years. I've done about 85% of my cooking on it, but I've never burnt myself. Probably because I don't use it as a pillow.

"I have been listening to him in the afternoons and got his book from the library." Good for you no cc used even LOL! You can also watch him on the internet also if you don't have cable like us. Dave Ramsey speaks common sense and you can take from it what you want. I still have a few cc's but we rarely have a balance. Then there are people who do need to cut up their cards until they get thier finances in order.Two people we gave the book to need it the most and want to put only negative spins on Dave Ramsey. They don't want to give up their lifestyle. Eating out, buying on the whim etc. One had their car repossessed the other has all cc's maxed and giving blood for money! Ridiculous! So Sad! "Don't try and keep up with Joneses, because the Joneses are broke!"

I have always loved that saying!

Lisa

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"It's not having what you want,
It's wanting what you've got"

"The happiest people don't necessarily have the best of everything;
they just make the best of everything they have."

"Budgeting is people telling their money where to go instead of asking where it went."
"Everybody wants their ship to come in, but not many are willing to swim out and tow it to shore."

"If you want something you've never had, you'll have to do something you've never done."

We can do this! One bite at a time! Go for it!

I don't believe he accepts credit card on his website.

Last I knew, the only way he sells through his own company is via check or debit card.

Of course you can buy his books through Barnes and Noble w/a cc... but that's not buying *from* him.

ETA: Any financial *expert* who tells you to keep a mortgage for the tax deduction is no financial expert and not worth listening to.

Say your house payment is $1,000/month, of which $700/month is interest.

That means you pay $8,400 in interest annually.

That means when you file your taxes you won't pay taxes on that $8,400.

There is no tax bracket as high as 50%, but if there was, you would save $4,200 in taxes thanks to having a mortage.

Great! You saved $4,200!

How much did you have to pay to save $4,200? $8,400!

Spending $8,400 to save $4,200? Is that a savings? Ummmm... no.

Pay off the house, and pay Uncle Sam $4,200 rather than paying Bank of America $8,400 and getting a check back from Uncle Sam for $4,200.

Just buy a safe CD with the $4,200 you *aren't* paying to Bank of America anymore. In ten years, your CD will probably have doubled and be worth $8,400. In another ten, you'll have over $17,000. And that is just from ONE year of NOT paying interest. Imagine if you did that every year for the next twenty years, rather than dutifully paying $8,400 worth of interest every single year to the bank, all so you could get a $4,200 refund.

We paid off our house five years ago. I haven't looked back on that decision in regret once.

From his debit card policy on his website:

* The Lampo Group, Inc. and Dave Ramsey recognize that the Visa and MasterCard virtual monopoly on the debit card industries prohibits merchants from only taking debit cards. As such, it is impossible for us to ensure that every order has complied with our debit card policy. We trust that all of our customers hold EXCEEDINGLY high levels of INTEGRITY and maintain EXTRAORDINARILY high standards of TRUTH and HONESTY. Basically, anyone ordering from us who does not follow this policy is a shady and dishonest character. Don't put yourself in this group. You're better than that. Stick to our policy, NO CREDIT CARDS, and make us all happy.

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I've had a Foreman Grill for about six years. I've done about 85% of my cooking on it, but I've never burnt myself. Probably because I don't use it as a pillow.

It's not just about the interest deduction. What you are supposed to do is take the money that you would be using to pay off your house (at a low interest rate) and invest it in options that will make more.

IE: our house is currently at 5.25%. (A pretty low cost to use their money). Instead of taking extra money to pay that mortgage down, you are supposed to invest it. We have made way more than that (5.25%) on our investments.

Of course, it takes the discipline to actually make the investments and not spend the extra money.

We will pay off the house we plan to live in at retirement, but it's not worth it yet. Because if we paid our house off now, our money would be sitting in an asset saving 5.25%, instead of earning 15%-20% or more.

Everyone has their own way of doing things, but our financial planner tells us the same thing...not to pay off our house at this point in our life. (And he's a great financial planner). We're doing well with him.

Lisa

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"It's not having what you want,
It's wanting what you've got"

"The happiest people don't necessarily have the best of everything;
they just make the best of everything they have."

Lisa,
I agree with you and your financial planner. We are at 4.75% on our mortgage and although we aren't nearly close to paying it off (we are fairly young and it's only 3 years old), we would invest extra funds (as we do now) that yield more than that 4.75% over time. Heck, even a local bank offers more than that in interest on a checking/savings account. I also think it's a matter of what you are comfortable with. Some people are just not comfortable investing or finding ways to better use their money. Hey, that's cool. It's just not where I am at

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Proud to say I haven't shopped at a Wal-Mart since Sept 2003

I gave the CD example just because it's got a very low rate of return, so it's the more conservative thing to do with money not being put towards interest.

For us, when I look at what our money has done over the last ten years, our real estate investments have held steadier than anything we've had invested in the market. We started investing in earnest over ten years ago, and in that time, it first dropped big-time after the first two or three years thanks to the tech sector tanking. We had just regained those losses when bam - this economic crisis we're now in hit, and so now we're back down. I realize that over time the stock market has done better than other investments, but in 12-13 years, even going with a diverse range of investments (mutual funds like Oppenheimer, American Funds, etc.) right now, none of that looks very good in terms of what we have put in overall. Not good at all.

We've got a fair amount of real estate, though, and it has gained in value over time.

While there *are* reasons to keep a mortgage, the tax savings on the interest really isn't one. The interest costs more than you save.

Whether you decide to become debt- free and invest or keep your mortgage and invest, the bottom line is to become proactive about your finances. I just know the positive change that has happened with me and my sister and sister-n-law. We have hope and a cloud has been lifted. So, read 3 or 4 planners ideas and go with what works for your family. In the meanwhile, save and try and get rid of unneccessary things that are costing you.

I bought this book for someone who needed it too. I don't think he opened the cover.
Fortunately, I don't need a money makeover....I might need some other type of makeover, but not a money one.

cj/

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I was walking home one night and a guy hammering on a roof called me a paranoid little weirdo. In morse code. -Emo Phillips

We just wanted to make sure what we are currently doing is right so we are taking the Financial Freedom University course at our church.

We finish up right at Christmas time. That should keep me in line for this year's spending!

Glad to see so many had encouraging things to say about it.
We felt we were so blessed as a couple. We do not fight about money. We have the same long term goals and know we can work together towards them.
Some of the introductions in our class made us go WOW!
DH and I did come home and wonder out loud, "hmmm, wonder what percentage of people taking this class will *succeed* in the end?"
Even Dave "had it all" and "lost it all" once.


X

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A thousand times I've failed
Still Your mercy remains,
And should I stumble again
Still I'm caught in Your grace

What local bank offers "more than 4.75% in interest on a checking/savings account"????

I want to transfer to that bank

That's exactly what I was thinking ! ! My last statement reads .01%

And, I'd like to know which investments have been / are returning at 15 /20 %. I just got statements yesterday and I can now see mine starting to crawl back up in value after the awful dive they took. Yes, I am diversified.

My financial planner too, says not to pay extra on the house. Each person has to balance what their entire financial situation is and remember that if you pay extra on the house, it's less for the financial guy to have! wowitsdark gave a great explanation about supposedly saving on taxes vs what a person is paying in interest. I've been paying extra on principal because we owe nothing else and will have my house paid off in about 10 years total, not the original 30.

I haven't read the DR thing because we don't need it. Common sense would dictate to be careful about need/vs/want, pay off the higher interest first ( or never get there to start) have savings to see yourself through a layoff, medical emergency, etc., as well as plan for college, retirement, etc. as these things apply to your life.

Now back to work to support all those with their hands out, constantly getting filled

dl