She's not a fan of Dave and the debt snowball

re: She's not a fan of Dave and the debt snowball

Jeff — Tue, 07 Apr 2009 20:28:32 GMT

We have a government that believes that direct government spending is more beneficial than letting individuals decide how to spend their extra money because they foolishly save it or pay off debts.

Do all analysis you want. In the end its What Works that matters, and Ramsey has a long long track record with the average Joe that few can match.

If you can convince someone with discipline to follow the more 'efficient' approach and they stick with it, fine. On the other hand, if they fail where they might have succeded on Ramsey's, you have done them no favors.

re: She's not a fan of Dave and the debt snowball

James — Wed, 18 Feb 2009 21:13:25 GMT

After having a lengthy discussion with a friend I became intrigued with this topic and whether or not Ramsey's plan is a good one. My wife and I have a lot of debt, as some very unfortunate circumstances have come our way. The most serious of these was the need to have the foundation of our home repaired. These issues were not prevalent when we bought the home, but we had to borrow a significant (tens of thousands) to resolve the issues before our home literally collapsed on itself. It was around this time we also found out about our first child.

Looking at Dave's plan, for some, may make a lot of sense. For me, I don't see it because of our debts, a few are zero percent interest debts to medical practitioners (our child was born premature and even though we have insurance, the bills were significant.) As it turns out, 2 of these are the lowest balances. Why would I focus on paying off debt that costs me nothing in interest first, when credit cards (between 5 and 10% between the 3) are there. Though I experiment with different methods of handling monthly expenses, we focus on the credit cards. No, we don't have the "victories" of paying off small debts sooner, but I see the impact of watching the amount of interest paid each month going down. Psychologically, Ramsey's plan doesn't make much sense to me, but for others I do think it's fine.

re: She's not a fan of Dave and the debt snowball

Joseph — Wed, 11 Feb 2009 21:48:07 GMT

Ramsey and Ormon are financial entertainers, not financial experts. Their advice is generic. Worse, they give advice beyond their level of competence. For example, when Dave rails against whole life insurance, referring to it as junk, he is being completely irresponsible. He is essentially advising EVERYONE to own only 20-year term insurance, and if you die after that it won't matter because of all the wealth you've acquired in those 20 years, it will be OK to die uninsured. What utter nonsense. Millions of widows will come to grief if they allow their husbands to get away with that level of foolishness.

re: She's not a fan of Dave and the debt snowball

Mark — Wed, 11 Feb 2009 19:42:03 GMT

Suze's not really one to throw snowballs at glass houses... She ought to practice what she preaches. She is probably one of the most simplistic people out there pretending to be a 'financial advisor' She loves the stock market - for her callers, not for herself... Her first big selling book was about the psychology of getting into debt and why it happens, and now that Ramsey uses psychology as a way of helping people get out of debt - that's no good! She's a hypocrite as well as naive...

Suze Orman Claims White Collar Workers are in 'Bread Lines' - That's right Bread Lines... and she wasn't being figurative - she was talking literally...

re: She's not a fan of Dave and the debt snowball

JoJo — Tue, 10 Feb 2009 23:21:04 GMT

His debt snowball may not make sense to you on paper but it works. Thanks to his blunt and easy to follow advice, my husband and I went from living barely over paycheck to paycheck, to paying off all debt besides our mortgage in less than 2 years. He does more than talk about credit cards; he changes the way you think when you walk into a store. He addresses how people are so concerned with what others think of your handbag or your car, when in reality those judging you are buried in bills.

re: She's not a fan of Dave and the debt snowball

Scott The Truth — Tue, 10 Feb 2009 21:53:02 GMT

You not only get the psychological effect but also get the "snowball effect" of paying of your lowest bill first because then you take that money and then apply it to your next lowest dollar amount bill. When you do this you start making progress and you don't feel discouraged. That is why Dave's system works! So you can say that it is foolish to pay off a lower interest rate first, but most people who try to pay off the highest interest rate first get so down about not doing it that they end up paying nothing off and try to file bankruptcy.we have paid off over 22K so far and we are down to one credit card and two consumer loans. I can tell you it is definitely a boost when payday comes and you don't have to send out so many bills. My wife and I are constantly asking, "Aren't we fogetting to pay something?". You also have to remember some of Dave's other talking points. One being "Act your wage!" He tells people that if they do not change their habits they will not succeed. By getting close to instant gratification you start to change your habits. He also talks about that you have to "Get serious", I think he says acting like a Gazelle, if you want to get out of debt. Suze talks about increasing your FICO score which means you have to get debt. Dave talks about not being in debt. So I would say that Suze's advice is worse.

re: She's not a fan of Dave and the debt snowball

STLMO — Sat, 31 Jan 2009 15:08:53 GMT

Dave DOES provide advice to keep people going and overcome their discouragement. It's called: start by paying the smaller debts first and get some QUICK WINS. Getting to ZERO is much more motivating for me than anyone's lecture on how much you're saving on interest rates by paying the highest balance first.

>Sit down and compare both methods and see

>how much money you're wasting by doing it

>Dave's way, she says.

Before I started the snowball I did do the math, and the snowball method both took less time and cost less in interest.

re: She's not a fan of Dave and the debt snowball

jhm — Mon, 26 Jan 2009 18:00:04 GMT

Just get out of debt and quit trying to over analyse common sense!!!!!!!!!!!!!!!!

re: She's not a fan of Dave and the debt snowball

Eric — Wed, 10 Dec 2008 16:35:57 GMT

I am a Dave Ramsey fan, but I would ask you, run the numbers by Dave's method (smallest balance) and your method (largest int rate)

Here is a hypothetical scenario if you could run the process for us.

Total family debts

120000 30year home mortgage at 6.8%

8000 car loan at 9%

credit card 1, 5000 at 14.99%int

credit card 2, 1800 at 9.99%int

These numbers are totally made up and may or may not represent most if any people.

I would just like to see a chronological layout of the process and the total interest paid and the total time to pay all of the debts off.

Thanks for your indulgence

Eric

re: She's not a fan of Dave and the debt snowball

STLMO — Thu, 23 Oct 2008 10:09:05 GMT

I don't think Dave Ramsey is the best investment advisor out there, but for getting out of lots of debt quickly, there's no one better IMO. I've done the debt snowball, and it works. You see quick wins, you quickly free up tons of money to pay off your big debts, you knock off your big debts very fast because you're making bigger and bigger payments, and before you know it, you're debt free. Yes, there's a psychological side to it - because Dave is trying not just to get you out of debt but to CHANGE YOUR BEHAVIOR. When you see results you're more likely to stick to the plan. The longer you stick to it, the more likely that it will become habit. And while you're working through the debt snowball you're learning how to live on a budget, stay within your means, and pay cash for everything. Sounds like pretty good ideas to me.

Dave isn't exploiting people any more than Orman, Bach, or any of the other financial "gurus" out there. You think the others are doing what they do as a charitable act? Uh, no, they're out to sell their stuff and make money, just like Dave is, and they're marketing themselves just as much as Dave does. You think it's an accident that Suze Orman worships at the Altar of the Almighty FICO score? It's not - she has a business relationship with Fair Isaac Corporation, the creator of the FICO score. If that's not exploiting people I don't know what is. David Bach's plan comes down to one idea, which is: automate your savings and invetments. You can read the Automatic Millionaire and get all of Bach's ideas, so why has he written five other books that pretty much say the same thing? Cha-ching, that's why. You don't have to go to a live seminar or Financial Peace University to get Dave's information, nor do you have to buy his books, nor do you have to even go to the library. The principles are all out there for free on his website, and you're free to just skip the rest of it if you don't want it. Dave's marketing isn't any worse than anyone else's.