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Dave Ramsey's 7 Baby Steps

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donhughesmusic

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I was curious what everyone's thoughts were on this. I am currently working towards getting out of debt (hopefully in a year that will be done) and wondered if anyone else has done this method.
 
donhughesmusic said:
I was curious what everyone's thoughts were on this. I am currently working towards getting out of debt (hopefully in a year that will be done) and wondered if anyone else has done this method.
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Good on you! You are going to feel a lot better once you pay off that last debt, and realize all of a sudden everything is yours to do with as you please :)


I have led several adult FPU classes and Foundations in Finance classes for high school students.

I have some differences with him on specifics (I use CAGR, for example, to project long-term results, and think that it's fine to count company matches to get to your 15%-into-retirement-savings), and haven't followed his program to a T (I have a 30 year mortgage, which I now regret).

However, in terms of a basic set of principles that gets you out of debt and builds you towards a secure financial future, it's the best thing I've run across to date. I've given variations of the class to hundreds of people at this point (mostly informally).
 
Ramsey generally has good advice. I don't necessarily agree with everything he suggests but, on the whole, it's a good plan.

Being debt free is a HUGE morale booster. Staying debt free is a huge commitment. Once you get the job done don't screw it up!!!
 
A very important first step is to get out of debt. You are clearly heading in the right direction.
 
donhughesmusic said:
I was curious what everyone's thoughts were on this. I am currently working towards getting out of debt (hopefully in a year that will be done) and wondered if anyone else has done this method.
Click to expand...
I commend You for taking control over your debt. Ramsey's plan works for some people and by all means as long as you're committed to it I think you'll have success.

I wish you luck becoming debt free it's a struggle butt it's definitely worth it.

Coming out of it I realize how frugal I had become I refer to myself as a cheapskate.
 
I definitely think (based on my own research) that at least the first 4 baby steps are very good. I don't have any kids (and at this point I am not sure that will ever happen), and am waiting to buy a house until the debt is gone. My main two concerns (if you want to call them that) is how to treat what I save once I am out of debt. I have no clue when it comes to investing, and I also don't want to feel bad if I do decide to treat myself once in a while with a bigger purchase or vacation (of course not taking a loan out to do that).
 
donhughesmusic said:
I definitely think (based on my own research) that at least the first 4 baby steps are very good. I don't have any kids (and at this point I am not sure that will ever happen), and am waiting to buy a house until the debt is gone. My main two concerns (if you want to call them that) is how to treat what I save once I am out of debt. I have no clue when it comes to investing, and I also don't want to feel bad if I do decide to treat myself once in a while with a bigger purchase or vacation (of course not taking a loan out to do that).
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Investing is IMO the easiest part of the whole picture. If you're reasonably young, you'll literally beat 90% or more of the pros out there with a broad based index fund, SP500, SP100, 'total market' index, etc. The Vanguard SP500 index is the biggest, but any no commission version from a discount broker is fine. There are ETF's (look that up if you want) that are similar. They all perform about the same. Warren Buffett pretty famously bet the SP500 against ANY 'hedge' fund and almost no one would take the bet, and the one that did got beat.

Put money away every month, don't try to time the markets, and forget about it. There's a value to 'diversification' when you get a larger portfolio, but those starting out just need to buy an index fund. The end.

As to bigger purchases or vacations, recreation, new golf clubs, boat, etc. those can and should be part of your budget.
 
donhughesmusic said:
I definitely think (based on my own research) that at least the first 4 baby steps are very good. I don't have any kids (and at this point I am not sure that will ever happen), and am waiting to buy a house until the debt is gone. My main two concerns (if you want to call them that) is how to treat what I save once I am out of debt. I have no clue when it comes to investing, and I also don't want to feel bad if I do decide to treat myself once in a while with a bigger purchase or vacation (of course not taking a loan out to do that).
Click to expand...
You have made the decision which is a big part of the battle. Maybe find a financial planner that can help you if Ramsey's method does not work for you.

Good luck!!
 
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