T Nation

Dave Ramsey


I read Total Money Makeover about a year ago and I'm all in. I will graduate soon with a substantial amount of debt that I'm pretty disgusted by. I know the guy has a lot of haters, but I can't see why.

Has anyone here paid off a monumental amount of debt in a short period of time? How did you do it? If anyone is carrying debt, can you justify why? What financial philosophy do you follow?


Having a large income probably helps. Do you have a large income with little to no expenses? Should be easy!


I actually mentioned him in that stock thread a week ago or so. I've read some of his stuff and listened to his CD series when I was in the car. A lot of it is pretty simple stuff so I don't get the hate either. I'm in a decent amount of debt due to poor money management and such although I actually don't spend very frivolously- most of my money goes to bills and reducing CC debt.

Currently my mindset has been to reduce unneccessary expenses so we downsized our rental home to somethign cheaper, we are cutting back on utilities and such, I am looking into a better phone option (cheaper), and selling my car to buy something to rid myself of a monthly car payment/reduce the amount. I still need to work on budgeting.

The biggest expense is child care aside from rent. I also opened up 2 CC at 0% APR to remove myself from my high interest card. That's helped in terms of getting my monthly required minimums down and so I choose to tackle the highest interest stuff first to knock out.


If you are looking to ko the debt quickly, you will have to act drastically - set aside the money to reduce the debt before you ever see it.
Eat at home/sack lunch, kill transportation expense, delay wants (vs needs) such as vacations, fancy clothes, toys.

Tithe and take to heart the saying "The borrower is slave to the lender."


This is what our plan is. I would like to be the first one in my class to pay my debt off. I was mostly wondering how other people handled situations similar to mine and roadblocks they ran into, whether expected or not. The budget is done so I know how much money I need to make to survive and pay off the debt in 10 years, but I'd like to have it gone by 3-6. I'll be opening my own Chiropractic practice soon so the future is in my hands I suppose.


It's a great, effective system. I used it and paid off about $27 in 18 months on a combined income of $60-70k in that period. I could have done it sooner if I did his whole "beans and rice" plan, but the 'Debt-Snowball' is a great concept. Sure, it doesn't make mathematical sense, but sticking to a plan and paying off debt is not about math, it's based on emotion and motivation. Just like a weight loss or muscle building plan.

Once you start knocking out those first few small accounts, it gets so much easier. Even if you are buried with $50k in debt.


Oh and yes, you have to give/tithe. It's not his plan if you don't.


I agree, it's pretty simple stuff and I like it. I never read Total Money Makeover but I listened to his show via his podcast for a while. It seemed pretty common sense and I got a better understanding of how different savings, small businesses, health and life insurances work. I kinda had to stop listening due to it becoming repetitive and me getting pissed off hearing sob stories of people with good incomes being overrun with stupid debt due to lack of control.

Having never had more than a low to medium-low income and never having been in debt, I can't help but imagine where I'd be if I'd had some of these people's incomes without their lack of control. I'll still pop in and listen to a show every few weeks or so.


I paid off $18k in 3 months. I was unemployed for 2 years and that is what we racked up in debt. We took the class and tithed. During the first 6 weeks I got an interview and then a job paying me $45k. We then paid everything off in 3 months buy living on beans and rice.

With that all being said his first 4 steps are great, but doing the last 2 steps are hard for me. I'm in real estate and getting 30 year fixed loans and leverage up to 75% LTV is manageable with the rental income coming in and I am getting positive cash flow.

I have a saying. Dave Ramsey is great at getting people from sub broke to broke and I respect him for that. Broke is having a net worth of zero. Sub Broke is having a negative net worth. To get incredibly wealthy takes some risk and to me that is manageable leverage and Dave frowns on all leverage. I frown on all consumer debt, but not leverage to buy income producing assets.


Well I'm a bit higher than 50k after Chiro school. We don't need to snowball because it's the only debt. That's an awesome amount of debt to get through in that time span. Stories like that are highly motivating. Several other students at school are taking on business loans after graduation, something I'm not interested in. Basically my sole focus for the next few years will be debt elimination and I don't understand why more don't have this mindset. I essentially get a 24k per year raise once I'm done paying Sallie Mae.


This seems to be where most people have beef with him. I think he is correct in saying your income is your best wealth builder. He did go bankrupt by leveraging real estate for his first business, so he has a good reason to be weary of risk. I suppose that's why it's called personal finance. You do with your money what you feel comfortable risking. I personally don't feel comfortable investing other people's money, but that's just me.


He did not use 30 year fixed loans. He used extremely short term loans 12-18 months with no guarantee of renewal. He needed his loans to renew and when the banks did not renew them they called the entire amount of money at once ($4 million if my memory serves me correctly). This is why he went bankrupt. He used extremely risky loans. There were a lot of different things that were going on in the early 1980's that killed a lot of real estate investors.

I agree with you that it is a personal choice how to do personal finance. I respect Dave Ramsey a lot and I thank him for helping me and my wife get out of debt.


When I left school after obtaining my degree, I lived at home for 2 years, did not spend any money on new clothes, kept my old bomb of a car and drove it until it broke down, and did not spend much money on alcohol etc. Only thing I spent money on was food. Managed to save up a massive amount for a deposit on my first home. Wasn't easy, but looking back at it all, Im glad I did it.



I will also never buy a new car again after listening to Dave. I will probably drive my 2006 Honda Accord, which is paid for, for another 10 years while putting the old $300 payment into my mutual fund.

And to all those married couples who never truly budgeted: you will be shocked and embarrassed on how much money you waste on food. Eating out, excess lunches etc.


Agreed. Leverage is just a tool in a toolbox. With interest rates as stupid low as they are right now, it could be a smart move (depending on a slew of variables) to leverage your money at very low interest rate and free up your capital for other investments that will yield more than the interest on the liability. It's just math. Hard lines in the sand such as "don't EVER finance ANYTHING" is great for people who don't have much money and have poor financial discipline, which seems to be Ramsey's target audience. Now keep in mind, I'm talking about vehicles, real property, business investments, capital improvements, etc... , not flat screens or jewelry. Carrying credit card debt is foolish. Not that keeping credit cards is bad, pay them off every month and get your airline miles all you want, but don't live beyond your means.


^^^ to piggyback on AC
No house payment here in almost 20 years and have paid cash last 3 homes.
Considering buying another house with credit since interest is so low, as another form of forced saving.

Disclaimer Do your OWN due diligence with your finances/market/overall numbers. This advice is geared at others reading thread, not OP.. He needs to get rid of non appreciating debt.


They would also have a happier healthier marriage. I wonder how many marriages could've been saved with a 2 hour monthly budgeting meeting between spouses.


I agree with this 100%. My wife and I still budget together.


I never read his book but have listened to him on the radio for years. I like him a lot and his way of sifting through his caller's situations is interesting. I've always done things along the lines that he preaches anyway. He has a good sense of humor too.


This is a constant source of friction with me and mine. We have entirely different philosophies on budgeting, numbers, and what they mean.

I think that these are all very concrete incontrovertible indicators of money in, money out, and money left over.

I still can't figure out what they hell she thinks they mean. It gets way too personal/emotional intangible- Then the defenses come up, the argument starts and any hope of useful and productive conversation is lost.

It usually ends with me scratching my head saying "WTF? They're just numbers!".