Comments on: Dave Ramsey’s Baby Steps

By: Jessica

Jessica — Tue, 24 Feb 2009 17:43:09 +0000

Dave’s plan focuses on the behavior. Because he did the mathematical way and he did the savings and retirements and had over 4 million to his name by 26 years old. The only thing was that he kept spending and then he lost it all. He had a budget based solely on math and the “old” way of budgetting. The reitrements can be lost due to a struggling economy and savings can be spent in no time. You have to change the way you look at money and the way you approach your spending or else like Dave and many other millionaires, you can loose it all. Using Daves plan has already been proven to work because it requires discipline which is what other sources are forgetting to include. His methods aren’t that different, but his approach is.

By: DEBTective

DEBTective — Tue, 19 Sep 2006 16:07:33 +0000

You hit the nail on the head, jack. Dave Ramsey’s plan makes a lot of sense; thanks for spreading the word about deep-sixing the debt and connecting with the cash. Doing that helps tons of joes and jills everyday. Go get ‘em, bub!

By: Emma

Emma — Thu, 23 Feb 2006 15:19:40 +0000

Tom, that makes sense mathematically. Like I said before, Dave Ramsey focuses on the behavior aspect. If you can’t make that mental change, numbers won’t help. Also, without that emergency fund in place, people will have that tendency to fall back on those credit cards.

The debt snowball is all about small victories. You can’t beat the war on debt without winning the battles. The enemy is not interest, it’s debt. If you don’t build that momentum, you’ll lose steam.

And, Dave doesn’t claim that his material is new. He is completely upfront about that. Being repackaged advice, doesn’t reduce its’ potentiality.

By: Tom

Tom — Thu, 23 Feb 2006 03:29:53 +0000

I think that some of what Dave Ramsey says is good, but much of what he says is just repackaged advice. I think that once one begins to do the research into why they go into debt, and how they can get out of debt, one can (and will want to) do without the hype that Dave gives to saving money and getting out of debt. The problem I see with putting extra payments toward debt on hold, while reloading the emergency fund, is this. If there is too much time in between the last extra payment toward debt, and the moment the emergency fund is complete, the interest lost from those extra payments and the exponential risk of having an expensive emergency, can put a person further behind.

By: Emma

Emma — Tue, 21 Feb 2006 22:04:49 +0000

Hey, thanks for sharing that! I saw that clip at church during a service about finances. What’s crazy is that people actually act that way when you tell them they should live within their means. What an idea?

By: Guest

Guest — Tue, 21 Feb 2006 20:54:13 +0000

I saw this on TV a couple of weekends ago and it beats ANY system for getting out of debt. I’ll even go so far as to state that it is probably 100% effective. Check out the short clip!

http://www.youtube.com/watch?v=H-GsjW28izo

By: ncnblog

ncnblog — Tue, 21 Feb 2006 17:59:26 +0000

I used Dave’s plan, and it worked for me. I found myself in 3 different situations where I had to use my 1000 dollar emergency fund. I was glad to have it. The pain is, building the emergency fund BACK up after you have used it, and putting your extra debt payments on “pause” for a while.

As for wiggle room, I think that there are circumstances where 500 dollars for an emergency fund is enough, and some where 2000 dollars is NOT enough. (If you are single, with no children, 500 might be enough. If you are married, with a child on the way, 2000 might not be enough.) 1000 was always a “goal” for me, and I managed to stay somewhere around that amount, give or take a bit, the whole way through.
ncnblog.com

By: Emma

Emma — Tue, 21 Feb 2006 16:31:49 +0000

I’m curious now, what do you mean by wiggle room and giving larger gains? See, there is no wiggle room through the first three baby steps, after that, there’s all sorts of wiggle room so I’m not sure what you’re getting at.

By: Caitlin

Caitlin — Tue, 21 Feb 2006 16:28:15 +0000

I have friends who are using Ramsey’s baby steps and I think it’s incredibly useful to them. I just wish Ramsey would have allowed for a higher priority to matched retirement savings over particularly low cost loans. I understand he is trying to keep it simple, and I believe this is what helps a lot of people…having simple rules to follow, but without a little bit of wiggle room folks are potentially giving up larger gains because they fear deviating from his plan.

By: Emma

Emma — Tue, 21 Feb 2006 15:21:40 +0000

The first baby step is often the most neglected in people’s ‘plans’ to get out of debt. I’m not sure they’re actually plans, but maybe hopes. But having that starter emergency fund really helps you lean on the ‘emergency’ credit card less, which is what got most of us into debt in the first place.

For us, I know that these baby steps have produced phenomenal results. Above all of these steps though is what Dave calls the ‘dreaded’ budget. It’s important to give your money a place to go before you even get it. By doing that, you can squeeze every penny for what it’s worth and really do some damage on baby step 2 (debt snowball).

I get so irritated when mathgeeks try and tear apart what Dave teaches. They do so based on one thing, math. And personal finance has little to do with math and more to do with behavior. Dave helps people fix their behavior so then thay can focus on the math later.

By: Tim Freund

Tim Freund — Tue, 21 Feb 2006 14:06:47 +0000

I think it’s great that his first step is to build up a $1000 emergency fund. I started my debt elimination kick shortly after purchasing a house, and my budget was tight because I wanted my debts gone as soon as possible. As any home owner knows, sometimes life happens regardless of our best laid plans and budgets. Furnace repair comes to mind in my case. That was a fun month.