Dave Ramsey

[TLO]

What do you think of him/his program?

I'm trying to take my finances more seriously, and want to start paying off debt and getting my financial house in order.

Let's hear your thoughts.

[Demonpenz]

He is always talking about dating leading to marriage. He doesn't acknowledge **** buddies or **** roomates or poly-dating scene at all. Some of us would rather just have a roomate we **** and keep our finances seperate, he wants it always to be a marriage

[HonestChieffan]

He does a great job talking to people who are desperately dumb. His approach is so spot on if you are living paycheck to paycheck. If you are somewhat smart, clearly debt is not evil, but dumb debt is really dumb. Borrowing $ to buy a new car is super stupid. Borrowing tobuy a house is not stupid. Credit card balance is way ignorant He does a very nice job teaching

[arrwheader]

Originally Posted by Bearcat

What do extra payments on the car and/or student loans look like? That's probably where I'd start, just doing the math on how much, say 1 extra payment a year or every 6 months, to each of those saves you in interest in the long run.

So, maybe you're not paying them off as soon as humanly possible, but could save hundreds in interest over time. If you have a decent rate on the mortgage, I wouldn't worry about it.

Messing with 401k/retirement investments is only something I've done in very short term and targeted situations, so I agree it's probably not worth going that route.

Yea we can add extra payments to the loans and plan too. That’s kinda where we ended up. That’s the same advice on the 401 stuff I got from others. I get a 50% match up to 10 percent so it’s tough to not contribute the full ten and use it to pay down any debt quicker so that’s part of it. It’s free money so I feel I can’t do less than that for the opportunity cost.

It’s just about patience and that’s something I need to get better at lol. If I’m throwing money at it I’d like it to go quick but throwing nothing extra doesn’t make it go quicker at all.

[arrwheader]

Originally Posted by JimNasium

If you have a low mortgage rate I’d be focused more on paying it to schedule and investing my money. I’d also not be stacking money in a savings account unless it’s a high-interest account.

Also, find a way to payoff those vehicle loans. Financing a depreciating asset is less than ideal if you can keep from it.

Right our mortgage is below 3% so not too worried about that. The vehicle loans need to go and we can pay extra on them we just need to start a plan with that and I probably need to accept I’m not going to be able to get super aggressive there and just do some and speed up the plan and save some interest there.

Definitely wouldn’t want to just hold onto a load of money without investing but have a decent cash reserve is nice and helps keep you out of debt in the future. Need a new car ok pay cash instead of getting another loan or something that comes up.

[Bearcat]

Originally Posted by arrwheader

Right our mortgage is below 3% so not too worried about that. The vehicle loans need to go and we can pay extra on them we just need to start a plan with that and I probably need to accept I’m not going to be able to get super aggressive there and just do some and speed up the plan and save some interest there.

Definitely wouldn’t want to just hold onto a load of money without investing but have a decent cash reserve is nice and helps keep you out of debt in the future. Need a new car ok pay cash instead of getting another loan or something that comes up.

FWIW, a Discover Bank savings account runs ~3-4% interest and I believe you can get to your money quickly (if not immediately) if needed... at least better than sitting in a bank account or probably money market accounts these days (and it's more secure than having all your money in an account that's linked to debit cards or entered into other company's websites to pay bills, etc.).

[JimNasium]

Originally Posted by Bearcat

FWIW, a Discover Bank savings account runs ~3-4% interest and I believe you can get to your money quickly (if not immediately) if needed... at least better than sitting in a bank account or probably money market accounts these days (and it's more secure than having all your money in an account that's linked to debit cards or entered into other company's websites to pay bills, etc.).

Exactly. Lots of options that remain liquid but yield better returns. Sitting on a big pile of cash in a traditional savings account is a no no IMO. Have enough for an emergency and put the rest to work.

[Bearcat]

Originally Posted by JimNasium

Exactly. Lots of options that remain liquid but yield better returns. Sitting on a big pile of cash in a traditional savings account is a no no IMO. Have enough for an emergency and put the rest to work.

Yeah, I've just never been much for the whole emergency fund thing when people say you need $x in your bank account so you can write a check today... how often do you need $10k+ in cash right the **** now, especially if you have a decent credit limit.... plenty of options even within 3-5 days to get money out if you really need it.

[Buehler445]

Dave Ramsey is good for the people that need it. Much like AA is good for alcoholics, but not so good for a dude that drinks 3 beers on a weekend. If youre a total tire fire gone financially and can’t see your decisions objectively, you need Ramsey.

If you can exercise discipline, you’re probably better learning some basic finance and make your own analysis based decisions. Much like alcoholics, some people can’t, so no judgement from me.

The main concepts you need to grasp are understanding compound interest (and returns), and then understanding where your money goes.

Compounding interest is easy as hell to screw with in a spreadsheet just balance * 1+rate. Amortization tables are super easy too. I can kick out 3 of them to compare terms and down payments in like 10 minutes. Then you know what’s happening. But it’s not just loans. Throw an 8% compounding return in for investments and then it changes your perspective on consumption vs investment.

No budget you set will work if you don’t track your money. Easiest way to start is abandon cash then whatever hits your bank account you can see.

If you want books, the psychology of money by Morgan Housel is good. Very good. The Algebra of Wealth by Scott Galloway is pretty a pretty good easy read (or listen).

Much like most things in the modern world it is impulse control and putting in the work. But some people can’t handle it and Ramsey is for those people.

[Buehler445]

A couple warnings if you go the Dave Ramsey route. He’s just flat wrong on a couple things.

He recommends a $1000 emergency fund. This is criminally low. Any emergency in 2025 is going to cost way more than $1000. Most places recommend 2 months salary. Some places 6. To me that’s a different thing. But more than $1000. That’s shitty dangerous advice from Ramsey.

He also recommends an 8% withdrawal rate in retirement. Also shitty dangerous advice. Most common recommendations are 4. The average return on the S&P is indeed 8%, but Ramsey doesn’t account for inflation, budgeting errors or things like sequence of returns risk (early losses in retirement can wreck a program).

Don’t do those things.

[Buehler445]

Originally Posted by Bearcat

Yeah, I've just never been much for the whole emergency fund thing when people say you need $x in your bank account so you can write a check today... how often do you need $10k+ in cash right the **** now, especially if you have a decent credit limit.... plenty of options even within 3-5 days to get money out if you really need it.

Yeah. Even if you have it a money market in a brokerage. If you mail a check it will get there after an electronic bank transfer.

[BWillie]

Originally Posted by Demonpenz

He is always talking about dating leading to marriage. He doesn't acknowledge **** buddies or **** roomates or poly-dating scene at all. Some of us would rather just have a roomate we **** and keep our finances seperate, he wants it always to be a marriage

O ya fk that

If I ever got married I would file separately

What is mine is mine. What is hers is hers.

Love shouldn't be about money.

[arrwheader]

Originally Posted by Bearcat

FWIW, a Discover Bank savings account runs ~3-4% interest and I believe you can get to your money quickly (if not immediately) if needed... at least better than sitting in a bank account or probably money market accounts these days (and it's more secure than having all your money in an account that's linked to debit cards or entered into other company's websites to pay bills, etc.).

Yea we have a MM for sure good advice though and I will check rate against that bank. Thanks

[Sassy Squatch]

Originally Posted by Buehler445

A couple warnings if you go the Dave Ramsey route. He’s just flat wrong on a couple things.

He recommends a $1000 emergency fund. This is criminally low. Any emergency in 2025 is going to cost way more than $1000. Most places recommend 2 months salary. Some places 6. To me that’s a different thing. But more than $1000. That’s shitty dangerous advice from Ramsey.

He also recommends an 8% withdrawal rate in retirement. Also shitty dangerous advice. Most common recommendations are 4. The average return on the S&P is indeed 8%, but Ramsey doesn’t account for inflation, budgeting errors or things like sequence of returns risk (early losses in retirement can wreck a program).

Don’t do those things.

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.

[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?