Author Topic: Has anyone followed Dave Ramsey's Money Makeover?  (Read 34650 times)

Blonde Lawyer

  • Pencil Stache
  • ****
  • Posts: 735
    • My Student Loan Refi Story
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #50 on: February 07, 2015, 09:11:46 PM »
Many bag on DR but he is directly responsible for steering millions of people towards smart money management.   He definitely needs credit for that.   

That said, his investment advice borders on the immoral.    He's basically a liar and pushes his "endorsed local providers" to line his wallet.

Yeah, I've seen that criticism frequently in my research.  I really need to get more "hair on fire" about my student loan debt as most of it is with a private bank and the interest is pretty high.  I've been paying it off for five years now and the emotional toll of being in debt is grinding on me.  I want that money to put toward real estate and ultimately FIRE.  I just need a little old-time discipline to get out from under the debt.

Have you considered a refi? See my sig / blogpost about mine.

SwordGuy

  • Walrus Stache
  • *******
  • Posts: 5780
  • Location: Fayetteville, NC
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #51 on: February 08, 2015, 09:26:49 AM »
A goodly number of you have complained about the religious component of Dave Ramsey's materials.

It's not really that bad.   Parables from the bible are just stories about folks.  It's no different than using examples from the Overheard on Facebook or the Anti-Anti-Mustachean threads on this forum.

As to personal bias, I'm a guy that wants to gag every time a fundamentalist Christian starts preaching, so if it doesn't bother me...

YoungInvestor

  • Bristles
  • ***
  • Posts: 397
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #52 on: February 08, 2015, 09:47:29 AM »
I don't have any debt and I don't have kids, so I guess I'm on step 7.

The snowball idea seems really dumb to be: just pay the debt with the highest rates first to maximize your money... But then again, I've never been huge on mental accounting bias.

MoneyCat

  • Handlebar Stache
  • *****
  • Posts: 1754
  • Location: New Jersey
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #53 on: February 08, 2015, 09:49:10 AM »
I got my start on the "Road to Financial Prosperity" by reading Suze Orman's books and watching her TV show on CNBC and her advice was similar to Dave Ramsey.  If you are a person starting out in a bad place psychologically, which is where most people with bad debt and credit currently live, then their advice is very helpful.  I used the snowball method to wipe out my credit card and car loan debt and it really did help to see the loan tradelines vanish one-by-one.  Once you get past debt and credit emergency status, though, their advice isn't as useful anymore, which is part of the reason why I ended up on this forum.

I tend to give copies of Suze Orman's "Money Book for the Young, Fabulous, and Broke" to relatives when they head off to college along with a copy of the graphic novel "Poorcraft".  Those books are a good introduction to positive money management and frugal living.
« Last Edit: February 08, 2015, 10:19:18 AM by MoneyCat »

Exhale

  • Pencil Stache
  • ****
  • Posts: 824
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #54 on: February 08, 2015, 09:53:44 AM »
Good if the problem is a spending habit of psychological issue.

+1 because I think so many people feel powerless in the face of money. Therefore, if Ramsey can motivate them to be more in charge of their finances, that's a good thing.

That said, I don't agree with much of his style and recommendations, but then again I'm more of a MMM and voluntary simplicity kind of person.

Exhale

  • Pencil Stache
  • ****
  • Posts: 824
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #55 on: February 08, 2015, 09:57:45 AM »
No need for envelopes if you and your spouse know how to not make unplanned spending

To ensure that I stay on track with my very frugal grocery budget, I buy a gift card to my grocery store (so I still get the points on my credit card) in the amount that I've allotted for the month. Kind of like an envelope, but with the bonus of earning my CC points.

clarkfan1979

  • Handlebar Stache
  • *****
  • Posts: 1889
  • Age: 40
  • Location: Pueblo, CO
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #56 on: February 08, 2015, 07:02:51 PM »

Disclaimer: I have taught his Financial peace class and really like the core message, but I feel the people on this forum are the 1% of the population that don't need his principles because they are willing to go farther than DR suggests for the general public.

+1

MetalCap

  • Stubble
  • **
  • Posts: 114
  • Location: Washington DC
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #57 on: February 09, 2015, 06:59:19 AM »
DR was a good intro to taking stock and communicating with my brand new wife about finances.  It was a good first tool to learn how to have tough conversations.

I started veering of DR when we had an employment scare and I realized I had a 3rd preference towards debt reduction (the first two being balance size and interest rate), Risk aversion.  I learned to consider that if one of us was laid off/ dead/disabled, which loans would be forgiven and which ones would be a burden for others.  That was my first departure from Dave which lead me to MMM and Mad Fientist, etc.

If you ever listen to his podcasts, its always people who just don't seem to get it.  I don't know if its education deficiency but everyone is stuck on debt payments and want to argue with him.  I do think, while trying not to sound elitist, that DR is working to pull the masses out of debt but knows theres little hope most of them would have the wherewithall to be FIRE.

frugaliknowit

  • Handlebar Stache
  • *****
  • Posts: 1671
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #58 on: February 09, 2015, 08:04:58 AM »
DR is great for people who are clueless; while not optimal in many ways, it will get someone who is "deep in do-do" out.  I don't like the "Churchiness" of it.  I have never heard him speak to a partnered/married same sexed, unmarried, or unmarried single Mom (obviously, those calls are screened out...).  Suze Orman gives pretty optimal advise, but I don't always agree with her.  I follow some of each as well as MMM.  I don't agree with MMM's (lack of) emergency fund advise, especially in this abysmal job market.

I get inspired by all.  I watch Suze's free video clips on CNBC.  I occasionally listen to Dave Ramsey and I follow these blogs.

Apples

  • Pencil Stache
  • ****
  • Posts: 917
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #59 on: February 09, 2015, 08:05:03 AM »
I'm keeping a "step 3" level emergency fund, and doing "step 4" saving for retirement while in "step 2" paying off student loans, and I'm using the avalanche method.  So I don't think I can say I'm doing his plan.  But every now and then I enjoy listening to his show; it's good motivation for continuing to focus on paying off debt.  And at the very least, some of the guests are super entertaining.  And he's good at reminding me how to firmly but politely set boundaries with others, which probably 1/5 callers ask about.

Overall, Dave Ramsey is a really good starting place.  I'm the "financial discussion" friend: my friends usually talk with  me about finance stuff, especially joint finances or figuring out what the heck a Roth IRA is.  So I bring up the "Baby Steps" as a good objective plan that gets ppl well on their way to be financially responsible.  Dave offers a simple, easy-to-discuss plan.  And this way, I can say "we don't exactly follow the plan, like we have a bit higher emergency fund than he suggests, but it's sooo motivating to really be able to check a step off!"  or "15% for retirement is what he recommends, and I think we save close to that, which is pretty good".  Etc.  I'm not presenting a plan that I think is the best way to do it, so the conversation doesn't turn into me preaching to the friend about my financial ideals.  And like other people have mentioned, it provides a framework to talk about finances.  Instead of "I want to pay down our student loans" vs. "but retirement is important" which are vague ideas, this plan allows a couple to sit down and hammer out their thoughts and feelings on money and come up with a game plan.  And I love to budget, so I'm on board with the "every dollar has a name" thing, even though I also have a Misc. category.

I'm in my 20's and I think DR is great for people just starting to get a handle on their finances.  And I like having an "objective" resource to reference with friends as a way to think about being responsible with money.

YTProphet

  • Stubble
  • **
  • Posts: 204
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #60 on: February 09, 2015, 08:08:03 AM »
PEOPLE, DAVE KNOWS THE SNOWBALL METHOD IS NOT MATHEMATICALLY OPTIMAL!

I don't see why everyone on this forum criticizes Dave for his snowball method other than the fact that they want to be know-it-alls. Do you honestly think that Dave Ramsey, a multi-millionaire who handles dozens of financial/math questions a day, doesn't know that from a strictly mathematical point of view it's better to pay off $1 that's accruing interest at 20% than $1 that's accruing interest at 10%? Of course he knows that. But, as others on here have stated, his whole program is geared to reorient people emotionally/psychologically when it comes to money. Most people aren't in a financial pit because they're bad at math. They're in a financial pit because they make poor, emotionally-driven financial decisions. The whole point of the Baby Step Method and Debt Snowball is to reprogram people psychologically and with regard to their money habits/impulses. It's not to teach people math. And people need to feel like they're winning from the get-go of the TMMO if they're going to push through 2, 3, 4, or more years of personal sacrifice in order to pay off their debts. 

Geesh. You don't have to be a rocket scientist to see what he's doing, and frankly, if he didn't advocate the Debt Snowball Method, I bet the success rates of his followers would decrease dramatically.

Apples

  • Pencil Stache
  • ****
  • Posts: 917
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #61 on: February 09, 2015, 08:12:19 AM »
DR is great for people who are clueless; while not optimal in many ways, it will get someone who is "deep in do-do" out.  I don't like the "Churchiness" of it.  I have never heard him speak to a partnered/married same sexed, unmarried, or unmarried single Mom (obviously, those calls are screened out...).  Suze Orman gives pretty optimal advise, but I don't always agree with her.  I follow some of each as well as MMM.  I don't agree with MMM's (lack of) emergency fund advise, especially in this abysmal job market.

I get inspired by all.  I watch Suze's free video clips on CNBC.  I occasionally listen to Dave Ramsey and I follow these blogs.

I remember him talking to several single moms, though they were usually divorced or widowed.  I know he's talked to several couples living together but not married, and people who already have kids looking to get married-sometimes a second time.  He always just gives the advice to not combine finances until legally wed to protect yourself.  Though I can usually feel his desire to skim over that fact and just get to the financial question, because he disproves of it.  But I haven't heard a same-sex couple conversation, you're right maybe those are screened out.  Or maybe that crowd self-selects itself out of the pool of people who would call in, based on Dave being a conservative southern evangelical Christian.

YTProphet

  • Stubble
  • **
  • Posts: 204
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #62 on: February 09, 2015, 08:16:34 AM »
DR is great for people who are clueless; while not optimal in many ways, it will get someone who is "deep in do-do" out.  I don't like the "Churchiness" of it.  I have never heard him speak to a partnered/married same sexed, unmarried, or unmarried single Mom (obviously, those calls are screened out...).  Suze Orman gives pretty optimal advise, but I don't always agree with her.  I follow some of each as well as MMM.  I don't agree with MMM's (lack of) emergency fund advise, especially in this abysmal job market.

I get inspired by all.  I watch Suze's free video clips on CNBC.  I occasionally listen to Dave Ramsey and I follow these blogs.

I listen to his podcast every day. Unwed single mothers call in all the time, as do other people who live lives that he may morally disagree with (gamblers, alcoholics, drug addicts, etc), but he's actually pretty non-judgmental. Frankly, the people on this board seem more judgmental of him than he is with his callers.

I will say that I've never heard someone in a same sex relationship call in, however that could be because (1) his show is mainly on conservative Christian radio stations or (2) that's not really a pertinent question to ask for most calls.

Mississippi Mudstache

  • Handlebar Stache
  • *****
  • Posts: 2161
  • Age: 35
  • Location: Danielsville, GA
    • A Riving Home - Ramblings of a Recusant Woodworker
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #63 on: February 09, 2015, 08:24:40 AM »
boring and simplistic.

Pretty much sums up Dave Ramsey for me. I read two of his books and listened to his show for a while when it was on the local station, but I disagreed with a lot of what he said  (NO CREDIT CARDS EVER!!! GROWTH MUTUAL FUNDS YIELD 12% SO DON'T WORRY ABOUT FEES!!! PAY OFF SMALL DEBTS FIRST REGARDLESS OF INTEREST RATE!!!). But I do know people that he helped, because quite frankly, they needed something that was simplistic or they would never have stuck with it. What I wanted was evidence-based, rational, and certifiably badass financial advice, which is why I ended up here.

Proud Foot

  • Handlebar Stache
  • *****
  • Posts: 1042
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #64 on: February 09, 2015, 11:24:42 AM »
I feel like he is very good for the beginner. He provides a plan for someone who does not have one and feels helpless. Good place to start to start controlling where your money is going and get your debt paid off. The biggest criticism of him that I have seen and do not agree with is that his snowball/debt payoff method is not optimal. While true, he acknowledges that the math works better paying off the high interest rates but my take is that he is more focused on the psychological boost that comes from paying off a debt. Plus if you truly follow the snowball method the order you pay your debts does not change your monthly cash flow. The first two baby steps are about as far as I agree with him.

jms493

  • Stubble
  • **
  • Posts: 118
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #65 on: February 09, 2015, 12:02:03 PM »
Dave Ramsey is not for the person reading investment/personal finance blogs and books in their free time.  It is most helpful for the person that has no idea what to do with their money.  Which sadly is MOST people.  If you have never had debt, lived on less than you make and invested the difference and then started listening to him you would be like 'Duh...everyone knows that'.

His show is not only financial advice...he is a very positive guy and give advice on being a good person overall.  I like that hs has no patience with people that complain.  Stop complaining and change you life!

I enjoy his show as it is just another resource for me to get information for free.  Ill decide what works for my family.

Neustache

  • Handlebar Stache
  • *****
  • Posts: 1189
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #66 on: February 09, 2015, 01:29:59 PM »
I followed it up 'til Baby Step 4 - that's where I stalled.

It just wasn't extreme enough for me.  I mean, the whole point of the first three baby steps is to make rapid progress, which I loved.

So I quit, found MMM, and am working a much more aggressive plan now. 

He's also really materialistic - it's all about sacrificing now to get better/more expensive things later.  That's just not us.  We are frugal because we are content with what we currently have. 

asauer

  • Pencil Stache
  • ****
  • Posts: 590
  • Location: North Carolina
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #67 on: February 09, 2015, 01:35:43 PM »
We did- we're in pay of mortgage now (we have a LOW tolerance for risk).  We did start with more than the $1,000 baby emergency fund ($2,000) b/c I had a heart attack with the bank account that low.  We didn't have a ton of debt, it was mainly our behavior and habits that needed to get under control and the TMMO really worked.  Now we have our shit together and more confidence so we're moving on to the big leagues with MMM!

rmendpara

  • Pencil Stache
  • ****
  • Posts: 602
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #68 on: February 09, 2015, 02:39:15 PM »
I just finished reading Dave Ramsey's Total Money Makeover mostly out of an academic interest. He gets recommended as a starting point for lots of people so I wanted to find out what his advice was. He lists some "baby steps" to take to get your shit together.

1. Save $1000 for Ultra Emergencies
2. Start a Debt Snowball (pay down smallest debts first)
3. Save the rest of an Emergency Fund (3-6 months expenses)
4. Save 15% of expenses for Retirement
5. Save for Children's College
6. Pay off Mortgage
7. Build more wealth and give.

These are based off of removing psychological barriers to getting your shit together. I.e. if you kill a tiny loan (regardless of interest rate) you'll feel good and keep going with the steps.

I personally wouldn't follow the steps exactly how he recommends (debt should be paid off highest interest first!!!) but I'm curious if anyone on here has followed his advice or has a friend or family member actually working through these steps? How has it worked for you/them?

Does this plan really help keep people on the straight and narrow?

Others already mentioned some obvious shortcomings in his plan for people who are more advanced financially (payoff by interest rate, keeping low rate debts, investment allocation, etc).

Most people who call Dave are struggling to pay bills, stay out of credit card debt, find ways to deal with family and money, etc. The steps are designed for people without a sophisticated understanding of personal finance... which, unfortunately, is a lot of people.

I think most of his advice is solid for people who struggle to modify their behavior. Shredding credit cards, paying off all debt (even if it's low rate), save 15% retirement, save a little more for other stuff, etc, seems prudent for the average person.

None of that advice will get anyone to early retirement, which DOES take a more sophisticated approach to managing finances and investing, but that's not at all what he's trying to help people achieve. Many people would be happy to retire at 65 with some decent savings and a place to live.

I do wonder how well it works. His steps do seem very doable... even for someone deep in a hole.

jr1029

  • 5 O'Clock Shadow
  • *
  • Posts: 28
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #69 on: February 09, 2015, 05:57:44 PM »
I'm a gay liberal high-income Jew (so, not his typical target demographic) and paid off about $78k following his advice. And doing some hate-listening. ;) But past that, yeah, not so helpful. REALLY good to get me started though. 

Cheddar Stacker

  • Magnum Stache
  • ******
  • Posts: 3714
  • Age: 41
  • Location: USA
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #70 on: February 09, 2015, 08:00:53 PM »
I'm a gay liberal high-income Jew (so, not his typical target demographic) and paid off about $78k following his advice. And doing some hate-listening. ;) But past that, yeah, not so helpful. REALLY good to get me started though.

I hope that's how you introduce yourself all the time. Awesome!

Welcome to the MMM forums, a mostly welcoming place. Just watch out for punches about the facial area.

ninjaneer

  • 5 O'Clock Shadow
  • *
  • Posts: 30
  • Location: Central Texas
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #71 on: February 09, 2015, 09:18:46 PM »
DW and I got started getting our finances straight following Dave's advice in the TMMO.  After a little while I stumbled onto MMM and we've been slowing moving this way by limiting lifestyle inflation.  Dave really helped me recognize the emotional way we had been treating money, which was really surprising to me.

mrmoneycleanshaven

  • 5 O'Clock Shadow
  • *
  • Posts: 44
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #72 on: February 09, 2015, 10:14:58 PM »
I listen to him, but I can't believe he tells people to forgo a retirement plan match and instead pay off low interest debts like student loans, not to mention his distaste for credit cards. But you can't argue with the people he helped (although I do think those people were the ones who wanted to change and were just nudged along).

Neustache

  • Handlebar Stache
  • *****
  • Posts: 1189
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #73 on: February 10, 2015, 05:09:39 AM »
Oh yeah, we ignored the bit where he says to stop contributing at all into the 401K.  I mean, for high interest loans, sure, makes sense.  But for low interest loans?  No.   

I did need (back then) to hear 'no credit whatsoever' from him.  We credit churn now, which is fun for me, but I do not think putting things on credit makes us spend more, because we spend so little. 

jms493

  • Stubble
  • **
  • Posts: 118
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #74 on: February 10, 2015, 07:19:22 AM »
He does have a separate guy in there for Retirement...Chris Hogan.

ninjaneer

  • 5 O'Clock Shadow
  • *
  • Posts: 30
  • Location: Central Texas
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #75 on: February 10, 2015, 07:29:48 AM »
Dave's system is really tailored to those with a complete emotional attachment to their spending habits.  My favorite (paraphrased) quote of his is "if the problem was the math then none of you would be in this position in the first place".  His steps are definitely not the most efficient in terms of increasing your 'stache, but they help you break the bond of spending on the latest thing that passes your eye and they also get you into the habit of being mindful of what each of your green employees is really doing for you.  Creating a budget is "telling every dollar what it's job is that month".

That said, I've found that once the budget switch flipped, it really did become just about the math.  Using credit responsibly was easy once we had the blueprint of our month in front of us.  Choosing the 401k match over knocking out the student loan was an easier decision, because we knew our plan would work.  However, for those folks who aren't comfortable breaking out of Dave's system, he has at the very least made it so they will retire comfortably and can be responsible for themselves.  That's an awesome achievement considering where the average American is with their finances.

ioseftavi

  • Bristles
  • ***
  • Posts: 401
  • Location: NYC
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #76 on: February 10, 2015, 08:27:26 AM »
Not a fan of Dave Ramsey.  I put him in the same category as Robert Kiyosaki in that he "gets people thinking about money", which is a good thing, but the vast majority of advice he gives his readers/listeners is really far from optimal.  Some of it is downright harmful.

"Thinking about money" is a good thing!  But then his readers/listeners go way too far and venerate him as some kind of amazing life-changer, and Super Awesome Complete Financial Guru Who Should Not Be Questioned. 

These people give Dave Ramsey way too much credit, and themselves way too little.  Some of his "Financial Peace University" grads are convinced that the ONLY REASON they got out of debt was that they attended his (expensive, imperfect, kind-of-cultish) class, read his books, or listened to his radio show.  Newsflash:  *You* are the reason you are making progress, getting out of debt, or living below your means.  Dave Ramsey happened to be the guy you were reading who made something click for you, and you started getting serious and creating habits that were helpful. 

It's pretty easy to see how Ramsey gets more than his share of credit.  He helps people start their financial journey, and he has ENORMOUS reach (through his books, seminars, radio show, local providers).  So yes, if you're making any progress on your finances, while spending time and money on Dave Ramsey's program?  And he was the guy who got you started on this path?  Of course you associate any and all progress with his program(s).

Ramsey deserves some credit for making something "click" for you.  However, pretty much all he says beyond his basic advice of "Hey, you should spend less than you make and try not to have too much debt" is extremely poor advice.  It's geared towards extremely unsophisticated, undisciplined investors, who are riding on the "high" of starting their financial journey.

At the end of the day, if you are an investor beyond the "hair on fire and not even aware of it" stage of things, Dave Ramsey's advice doesn't offer you very much of substance.  His books are the "Dick and Jane" books of personal finance - geared towards beginners, but not exactly offering much of value to people past that stage. 

He's good at getting people to "think about money", so I hope he continues to help people do that.  However, I sincerely hope that people use him to start their journey, and then stop listening to him and move on to better sources.
« Last Edit: February 10, 2015, 08:29:34 AM by ioseftavi »

Neustache

  • Handlebar Stache
  • *****
  • Posts: 1189
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #77 on: February 10, 2015, 09:24:36 AM »
Oh yes, very cult-y.  There was a site not run by Ramsey but based on him, and you could NOT say anything that deviated from the baby steps.  That's why I push back pretty hard here when people start to say that others are doing it wrong.  It's way more fun to have diversity on this forum rather than pat answers that anyone can regurgitate.  For me.  Others may disagree and dig the cult vibe more. 

Jersey

  • 5 O'Clock Shadow
  • *
  • Posts: 10
  • Age: 31
  • Location: Nashville, TN
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #78 on: February 10, 2015, 09:46:04 AM »
DR was my intro to personal finance. I was doing a lot of driving and started listening to the radio program. After you listen to a few, you know exactly what he is going to say to everyone and you feel invested in the process. That being said, we did not follow the program verbatim. We borrowed the CDs from a coworker and listened to them. This let us start researching things on our own and creating our own path. I felt like MMM and other bloggers were more relate-able especially as the evangelical aspects start to wear thin on you. I would recommend the program for people in a tight community like that to have the support system, but you should research why you are making the changes on your own as well. DR is out to make money. I live below the mountain where his house is. It is gigantic and he must have some impressive views of the area.

hodedofome

  • Handlebar Stache
  • *****
  • Posts: 1211
  • Age: 39
  • Location: Texas
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #79 on: February 10, 2015, 08:54:52 PM »
Dave knows a lot about getting out of debt and he knows about real estate. He doesn't really know much about investing. That being said, if someone followed his principles they'll be ok.

FarmerPete

  • Bristles
  • ***
  • Posts: 346
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #80 on: February 12, 2015, 11:14:19 AM »
I like to compare DR and MMM to weight loss/fitness programs.  Can you lose weight without signing up for Weight Watchers, Jenny Craig, Atkins, SlimFast, Nutrisystem, etc?  Hells yes.  Eat less and exercise more.  Those five words are the only weight loss coaching that people should "need" to lose weight.  Yet why are there so many fat people in the world?*  Is it because people are dumb?  Do they have a math problem?  (Calories in vs Calories burned).  DR/MMM like Weight Watchers/Paleo are not for everyone.  Different people will gravitate to what makes sense to them.  For me, the secret to losing weight was to just eat less.  Using Atkins sounded good, as you can eat as much steak as you want, but I can't possibly believe in any diet that doesn't take calories into consideration.  Just like DR might have some good advice, but you think that not prioritizing high interest debt is moronic.


---------------------
*In the last two years, I've lost over 100lbs, so I know quite a bit about being "fat" and losing weight.

OSUBearCub

  • Bristles
  • ***
  • Posts: 397
  • Age: 39
  • Location: Orlando, Florida
  • Tackling student loan debt/not saving dryer lint.
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #81 on: February 17, 2015, 12:10:22 PM »
Thanks to a very generous benefactor (Cheddar Stacker) I'm now the proud owner of three Dave Ramsey titles: Total Money Makeover, More Than Enough, and The Money Answer Book.  The Financial Peace class doesn't start until March 4th, so I've challenged myself to read these books in the next two weeks to determine if the class is still relevant/necessary for my special brand of lazy. (Ha ha.)

I'll report back with oldey-timey book reports for the benefit of the topic. 


Kaikou

  • Pencil Stache
  • ****
  • Posts: 503
  • Location: United States
  • Kermit is like a box of chocolates
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #82 on: August 21, 2015, 03:49:45 PM »
Thanks to a very generous benefactor (Cheddar Stacker) I'm now the proud owner of three Dave Ramsey titles: Total Money Makeover, More Than Enough, and The Money Answer Book.  The Financial Peace class doesn't start until March 4th, so I've challenged myself to read these books in the next two weeks to determine if the class is still relevant/necessary for my special brand of lazy. (Ha ha.)

I'll report back with oldey-timey book reports for the benefit of the topic.

So how did the class go for you?

catmustache

  • Stubble
  • **
  • Posts: 139
  • I jumped out of a plane once. So there's that.
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #83 on: August 21, 2015, 04:03:23 PM »
I think it's a fairly good intro to money management, but like some people have said, it's all pretty basic. I started following the program right after discovering MMM, so I'm not sure which one motivated me to stop spending more.

That said, I read the books from the library and wouldn't drop the money to attend one of his classes or buy the program. It's a good starting point for people who don't have a ton of money and struggling. I think MMM is more targeted to middle class readers, though, while DR's starting steps will work for anyone.

Kaikou

  • Pencil Stache
  • ****
  • Posts: 503
  • Location: United States
  • Kermit is like a box of chocolates
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #84 on: August 21, 2015, 05:39:16 PM »
I think it's a fairly good intro to money management, but like some people have said, it's all pretty basic. I started following the program right after discovering MMM, so I'm not sure which one motivated me to stop spending more.

That said, I read the books from the library and wouldn't drop the money to attend one of his classes or buy the program. It's a good starting point for people who don't have a ton of money and struggling. I think MMM is more targeted to middle class readers, though, while DR's starting steps will work for anyone.

One of Dave's sayings is to be "outrageously generous" and I would say he is true to his word.

He gives out books and classes daily on his show to call in listeners. He gives away money. Right now there is a giveaway for $5000 cash on his website celebrating 5 million copies sold of the TMMO book. You can volunteer at his events (which I have) and got the same opportunity as the attendees for free stuff. I am attending a class for free and got all the materials free too. I did buy my own copy of the book because I couldn't wait on having my own copy or waitlist from the library. Like someone said upthread it's a community, that you can engage in.

BrickByBrick

  • Stubble
  • **
  • Posts: 120
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #85 on: August 22, 2015, 02:22:05 PM »
I too started with the Dave Ramsey material.  It turned out to be a great intro to personal finance that eventually led me to MMM/Bogleheads and others.  I personally never struggled with having much debt, but I paid off what little I had at that time (didn't have a house at that point).  I'm a Christian, so perhaps I'm biased but I don't think his religious overtones should bother most secular people.  With the exception of the closing message on his radio show, most shows tend to go by with barely a scripture verse (I'm a regular listener).  That's not to say he doesn't give bible-influenced advice on callers personal matters sometimes (unmarried couples living together for example), which can and likely is considered preachy/judgemental by many.  His books do contain ref. to bible verses, but not in an overbearing way.  He recently released a new book called the Legacy Journey that is far more overtly Christian than any of his others (it is intended to be a Christian book).

As I moved on to other personal finance sources (like MMM) I began moving away from parts of his plan, but overall I still feel his material is a great intro, especially for people who don't have a clue to begin with.  I've bought many copies of TTMM (usually from goodwills) and handed them out to people in my social circles who ask me finance questions (I'm the local 'personal finance' enthusiast).  Since I no longer follow his plan explicitly, I occasionally feel a little disingenuous promoting his material, but I've come to the conclusion that his material is the safest I can give to people who otherwise no nothing about finances.  If they hypothetically followed DR's steps their entire lives, and never learned anything more sophisticated, they'd most likely be ok (but not FIRE'd for sure).

I had an interesting opportunity recently when a majority of members (who are in their early to mid-20s) of my bible study group wanted to learn about money/finances "but with more nuts and bolts."  The DR material immediately became the topic of discussion, and short story short, they asked me to teach the group about finances (just for clarification I'm not in the finance field or anything, just a self-described enthusiast).  I ended up presenting them a significantly modified DR baby steps program over a 4 week period using a mixture of DR class videos and William Bernstein's "If You Can":

1.  Save a $1000 emergency fund (Great advice, as far as I'm concerned)

2.  Pay off all debts - I presented both the Snowball and Avalanche method (fairly objectively I hope) and discussed generalized pros and cons of both (emotion vs math).  I made sure to state that unless your facing destitution, contribute enough to your work's retirement plan to get the match regardless of your debt (if your not making much headway, it's obvious your not doing your part to cut expenses - can't blame the match).

3.  Save a 3 - 6 month emergency fund (Again, great advice in my opinion)

4.  Invest 15% of your gross income - This is where I diverged heavily, and used very little DR material here (other than the 15% number), and basically proceeded to teach as clearly as I possibly could (but unfortunately quickly due to time constraints) the entire "If You Can" pamphlet to people who largely didn't even know the basics.  I really do mean the entire pamphlet...everything in there is just great in my opinion.  I also warned them away from broker's unless they really feel like they can't do it on their own.  It's kind of hard to imagine, but there are people out there who really can't handle it (the same type that will never be FI).

5.  Save for kid's college - vast majority in this group don't have kids yet, so I briefly ran through ESAs, 529s, etc.   

6.  Pay down the mortgage - tried to objectively explain the pros and cons of shorter vs longer mortgage terms, and the pros and cons of paying down the mortgage early, especially in regards to interest rates.

7.  Increase Investments/Give - basically let DR finish that one out, and included material from the Legacy Journey (this was still a 'bible study' after all).

At the end I gave everyone a copy of the "If You Can" pamphlet and encouraged them to read it multiple times.

Kaikou

  • Pencil Stache
  • ****
  • Posts: 503
  • Location: United States
  • Kermit is like a box of chocolates
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #86 on: August 22, 2015, 04:24:39 PM »
I too started with the Dave Ramsey material.  It turned out to be a great intro to personal finance that eventually led me to MMM/Bogleheads and others.  I personally never struggled with having much debt, but I paid off what little I had at that time (didn't have a house at that point).  I'm a Christian, so perhaps I'm biased but I don't think his religious overtones should bother most secular people.  With the exception of the closing message on his radio show, most shows tend to go by with barely a scripture verse (I'm a regular listener).  That's not to say he doesn't give bible-influenced advice on callers personal matters sometimes (unmarried couples living together for example), which can and likely is considered preachy/judgemental by many.  His books do contain ref. to bible verses, but not in an overbearing way.  He recently released a new book called the Legacy Journey that is far more overtly Christian than any of his others (it is intended to be a Christian book).

As I moved on to other personal finance sources (like MMM) I began moving away from parts of his plan, but overall I still feel his material is a great intro, especially for people who don't have a clue to begin with.  I've bought many copies of TTMM (usually from goodwills) and handed them out to people in my social circles who ask me finance questions (I'm the local 'personal finance' enthusiast).  Since I no longer follow his plan explicitly, I occasionally feel a little disingenuous promoting his material, but I've come to the conclusion that his material is the safest I can give to people who otherwise no nothing about finances.  If they hypothetically followed DR's steps their entire lives, and never learned anything more sophisticated, they'd most likely be ok (but not FIRE'd for sure).

I had an interesting opportunity recently when a majority of members (who are in their early to mid-20s) of my bible study group wanted to learn about money/finances "but with more nuts and bolts."  The DR material immediately became the topic of discussion, and short story short, they asked me to teach the group about finances (just for clarification I'm not in the finance field or anything, just a self-described enthusiast).  I ended up presenting them a significantly modified DR baby steps program over a 4 week period using a mixture of DR class videos and William Bernstein's "If You Can":

1.  Save a $1000 emergency fund (Great advice, as far as I'm concerned)

2.  Pay off all debts - I presented both the Snowball and Avalanche method (fairly objectively I hope) and discussed generalized pros and cons of both (emotion vs math).  I made sure to state that unless your facing destitution, contribute enough to your work's retirement plan to get the match regardless of your debt (if your not making much headway, it's obvious your not doing your part to cut expenses - can't blame the match).

3.  Save a 3 - 6 month emergency fund (Again, great advice in my opinion)

4.  Invest 15% of your gross income - This is where I diverged heavily, and used very little DR material here (other than the 15% number), and basically proceeded to teach as clearly as I possibly could (but unfortunately quickly due to time constraints) the entire "If You Can" pamphlet to people who largely didn't even know the basics.  I really do mean the entire pamphlet...everything in there is just great in my opinion.  I also warned them away from broker's unless they really feel like they can't do it on their own.  It's kind of hard to imagine, but there are people out there who really can't handle it (the same type that will never be FI).

5.  Save for kid's college - vast majority in this group don't have kids yet, so I briefly ran through ESAs, 529s, etc.   

6.  Pay down the mortgage - tried to objectively explain the pros and cons of shorter vs longer mortgage terms, and the pros and cons of paying down the mortgage early, especially in regards to interest rates.

7.  Increase Investments/Give - basically let DR finish that one out, and included material from the Legacy Journey (this was still a 'bible study' after all).

At the end I gave everyone a copy of the "If You Can" pamphlet and encouraged them to read it multiple times.


http://www.etf.com/docs/IfYouCan.pdf

jengod

  • Handlebar Stache
  • *****
  • Posts: 1220
  • Location: Near LAX

Kaikou

  • Pencil Stache
  • ****
  • Posts: 503
  • Location: United States
  • Kermit is like a box of chocolates

fb132

  • Guest
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #89 on: August 23, 2015, 06:20:14 AM »
For getting out debt, DR's baby steps do help....but beyond that I prefer to listen to MMM's advice which is to save more than 50% of my income and invest every leftover money + having no EF.

eyePod

  • Pencil Stache
  • ****
  • Posts: 966
    • Flipping A Dollar
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #90 on: August 23, 2015, 07:39:40 AM »
I also don't see much point in detailed budgeting. I track with Mint, and use that and the "just don't buy things" system to keep everything in check. That keeps my spending lower and savings higher than any budget-following person I've ever met.

Are you single? Budgetting makes a big difference when you share finances as it keeps everyone on the same page. Kind of forces the issue in a good way.

fb132

  • Guest
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #91 on: August 23, 2015, 07:50:53 AM »
Aren't you worried that some day mint might get hacked? That's why I chose YNAB over mint.

Kaikou

  • Pencil Stache
  • ****
  • Posts: 503
  • Location: United States
  • Kermit is like a box of chocolates
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #92 on: August 23, 2015, 08:41:42 AM »
Aren't you worried that some day mint might get hacked? That's why I chose YNAB over mint.

Hacking is just a reality now a days. It's actually something that Dave mentions "identity thief protection". He says that it is in preventable, but promotes a company to clean up the mess.

So I'm not really worried about it, to be honest. But I also don't care about my credit score.

Rosy

  • Handlebar Stache
  • *****
  • Posts: 2129
  • Location: Florida
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #93 on: August 23, 2015, 10:27:28 AM »
[quoteTo ensure that I stay on track with my very frugal grocery budget, I buy a gift card to my grocery store (so I still get the points on my credit card) in the amount that I've allotted for the month. Kind of like an envelope, but with the bonus of earning my CC points.][/quote]

Now that's a really clever idea:)

DR is a great starting point. Some people will never grow beyond that and that's OK, because the program as such works.
As far as the snowball method, DR repeatedly states in his broadcasts to evaluate whether you need the motivational impact of paying off a smaller loan first to see progress - because he also advocates to pay off the highest interest first for mathematical reasons.

You take away what works for you and move on to new concepts and ideas you find in other finance books, programs and all around the web.

The things from his program that never worked for me were:
the envelope system - I'm not that financially illiterate nor totally without self control - I can work with the numbers in my budget,
cutting up all your cards (why, when I can earn points and bonuses to add to my income?) - it is like cutting off your nose to spite your face,
the zero budget where every dollar has a name did not work for me either - the rolling budget makes a lot more sense to me,
and I wavered back and forth between paying off the highest interest or the smallest debt first.

What I enjoyed for a while were his radio broadcasts, but before long those got on my nerves.

One can't really compare it with MMM since it is geared toward a higher than average income, even including those from a privileged background, young adult population, save the planet group and I bet higher than average intellect as well. The end goal is different altogether.

The best part of MMM is this awesome, interactive forum:)

frugaliknowit

  • Handlebar Stache
  • *****
  • Posts: 1671
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #94 on: August 23, 2015, 01:34:49 PM »
As someone else said, DR's plan is WAY better than no plan at all.  However, it is sub-optimal in several areas.  The reason is, he has to create it for the masses.  Within the masses, there are people who cannot and should not be touching credit cards, for example. 

The things that aggravate me about him and his show:

1.  He preaches  something like "...you need a fund for aggressive growth, growth, growth and income, international...."   Stupid.  How about Vanguard Total Market plus Vanguard International?
2.  He says forgo the 401K match when you've got debt.  I could see if you were "buried" in debt, but otherwise I think the match is too good to pass up.
3.  He sneaks in (right winged) political comments implying the middle class is not suffering. 
4.  I read in his "Entreleadership" book that he fires anyone who has an affair (because they cannot be trusted).  I am not sure if he means has an affair with someone at Dave Ramsey or even if they do outside.  I believe we are all human and imperfect and what does that have to do with my job?
5.  Insists debit cards are "as safe" as credit cards.  I have my doubts.
6.  Never seen or heard a reference to a same sex couple on any of his podcasts.  Sorry, I find it hard to believe that no gay folk ever call in.  Rarely hear from a never married single mom ("sinner" being screened out?).
7.  He reccomends Credit monitoring (through one of his sponsors).

MBot

  • Pencil Stache
  • ****
  • Posts: 509
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #95 on: August 23, 2015, 01:55:47 PM »

Disclaimer: I have taught his Financial peace class and really like the core message, but I feel the people on this forum are the 1% of the population that don't need his principles because they are willing to go farther than DR suggests for the general public.

+1

This. If anyone from the stories on the "Overheard" threads started DR material, it would b Amazon leaps and bounds forward.  MMM is a very small subset of already responsible folks for the most part.

The biggest change he promotes is focus and intensity and dropping stupid consumption. That's what most people need to hear.

Jags4186

  • Pencil Stache
  • ****
  • Posts: 596
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #96 on: August 23, 2015, 02:00:49 PM »
Steps 1-3 awesome.  Steps 4-7 need work.

If you have the discipline to go thru steps 1-3 you have the wherewithal to be a little more advanced in 4-7.

Kaikou

  • Pencil Stache
  • ****
  • Posts: 503
  • Location: United States
  • Kermit is like a box of chocolates
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #97 on: August 23, 2015, 02:49:23 PM »
As someone else said, DR's plan is WAY better than no plan at all.  However, it is sub-optimal in several areas.  The reason is, he has to create it for the masses.  Within the masses, there are people who cannot and should not be touching credit cards, for example. 

The things that aggravate me about him and his show:

1.  He preaches  something like "...you need a fund for aggressive growth, growth, growth and income, international...."   Stupid.  How about Vanguard Total Market plus Vanguard International?
2.  He says forgo the 401K match when you've got debt.  I could see if you were "buried" in debt, but otherwise I think the match is too good to pass up.
3.  He sneaks in (right winged) political comments implying the middle class is not suffering. 
4.  I read in his "Entreleadership" book that he fires anyone who has an affair (because they cannot be trusted).  I am not sure if he means has an affair with someone at Dave Ramsey or even if they do outside.  I believe we are all human and imperfect and what does that have to do with my job?
5.  Insists debit cards are "as safe" as credit cards.  I have my doubts.
6.  Never seen or heard a reference to a same sex couple on any of his podcasts.  Sorry, I find it hard to believe that no gay folk ever call in.  Rarely hear from a never married single mom ("sinner" being screened out?).
7.  He reccomends Credit monitoring (through one of his sponsors).

I have heard single mom on his show. People lie to get on the show and make themselves feel better.

I have not heard a gay caller, but I'm not sure how that would be relevant.

If Ramsey believes gay is a sin, that's his right. I honestly never have heard him mention gays outright, but neither has he mentioned other minority classes.


Kaikou

  • Pencil Stache
  • ****
  • Posts: 503
  • Location: United States
  • Kermit is like a box of chocolates
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #98 on: August 23, 2015, 02:53:46 PM »
Steps 1-3 awesome.  Steps 4-7 need work.

If you have the discipline to go thru steps 1-3 you have the wherewithal to be a little more advanced in 4-7.

He has been using other figures in his compound to develop those areas: his daughter, Rachel for legacy and children, Chris Hogan for Retirement, and Chris Brown for stewardship or giving.

I'll be honest, all of them are not up to par to Ramsey. They offer little to nothing or repeat his well known jargon. Pointless.

BrickByBrick

  • Stubble
  • **
  • Posts: 120
Re: Has anyone followed Dave Ramsey's Money Makeover?
« Reply #99 on: August 23, 2015, 04:56:34 PM »