Credit Debt Cures

What do you think of Dave Ramsey??

I just started listening to Dave Ramsey the other day. Does he give good advice? I want everyones opinion.

Public Comments

1. beans and rice, beans and rice!! and get a pizza delivery job! but yeah, i really do like listening to him. he has great advice and has helped a lot of people get out of debt.
2. Just eat beans and rice and rice and beans and everything will be just fine. If you haven't heard him say that yet he will. Basically his advice in general is sound for people in debt. Val
3. Decent message, but his books could be condensed to a magazine article.
4. He's right about a lot of things. I do have a credit card or two and I use them wisely but stay out of debt at all cost I do agree. Debt free is stress free please take that advice.
5. Great advice for the common man or women. Stay out of debt. If you're in debt, get out of it. Save, save, save! I suggest you keep listening to him.
6. I'll give credit where it's due, and I do believe Dave Ramsey has helped a lot of people. However, I don't agree with his strategy for getting out of debts. As far as I know, he recommends clearing the smallest debt first, regardless of interest rate, so that you feel like you've achieved something. This is not the most efficient way of paying off debt. When clearing debt, you need to look at the interest rate. The higher the rate, the more interest you'll have to pay per dollar borrowed. So it makes sense to clear the highest rate debt first (while making the minimum repayments on the others, of course) because that debt is costing you the most money for every dollar you owe. If the rate is 18%, every dollar extra that you pay off it saves you 18 cents a year. Compare that to another debt at 5%, for which every dollar still outstanding is costing you 5 cents a year. Effectively, paying extra onto the debts earns you whatever the interest rate is, because that's money you don't have to find later. So if you pay an extra $100 a year on a debt at 18%, that's an extra $18 you didn't have to find in your budget. Same goes for the loan at 5%. So if you could choose between saving $18 a year or $5 a year, most people would naturally choose $18. Paying off the highest rate debt first, regardless of the amount, is the most efficient use of your money. If it's going to take you about 2 years to pay off two debts, you would have to fork out less if you made the highest rate debt the priority. So unless you like giving banks your money, pay the highest interest rate debt off first. As I said, Dave Ramsey says a lot of great things and he's helped a lot of people, but going for the 'quick fix', or clearing a small amount of debt so you feel good about yourself, while still having to fork out unnecessary amounts of money on interest you could have avoided doesn't make sense. It appeals to our desire to get a reward, but in this instance, the reward is only apparent. You would still actually be more in debt after 12 months than you would if you paid the highest interest rate debt off first. A much better strategy would be to work out, on a weekly or monthly basis, the ENTIRE amount of debt you're carrying. Total all the amounts outstanding into one total, and compare it to the previous total from the last month. This is a good way to see what progress you've made, and you can set goals, like to get under a certain amount by a certain date. And, you'll be using your money more efficiently, meaning you can spend more on what you want to spend on, rather than what you have to spend on. Best wishes
7. He is great! His advice is right on! As for paying off debt, he will agree the math for highest interest first vs lowest balance first will get you out of debt "faster" (only by about 2 months) but the psychological boast you get to keep going when you pay off debt fast (instant gratification) keeps you motivated to keep going and continue to get out of debt. After you are out of debt he continues with great, sound, common sense advice on saving, investing, etc. Keep listening, get on a budget and read his books.
8. My husband and I love Dave Ramsey. We read his book "The Total Money Makeover" last year, and still think it is the most life changing book we've ever read. It's common sense, but presented in a way, that makes it easily actionable. While it's true that paying the highest interest rate debt is correct mathematically, personal finance is more about behavior than math. If it were about math, we wouldn't be paying interest at all by paying cash. Doing the baby steps has worked wonders for us. We paid off about $25K in debt last year alone by getting on a budget, and following the steps. Keep listening, it will start to make sense!