Q&A Tuesday: How do you get started following the Dave Ramsey plan?

My husband and I want to sign up with Dave Ramsey. I was looking on his website and it is so overwhelming. I don’t even know where to begin. If we want help with budget and saving (which at this time we have a big ZERO!), should we do the Financial Peace University, or just financial coaching? What do you recommend? How do we get started? We don’t have a lot of money. -Kellie

As you well know, I’m a huge fan of Dave Ramsey (read more about how he changed our lives here). The Dave Ramsey website does have a lot of stuff to offer and if you’re a newbie, it can feel overwhelming!

Much of what Dave stresses is common-sense money advice which you probably already know. He just does a great job of packaging it and “selling” it so that the lightbulb goes off and you actually are motivated enough to follow it!

He outlines a seven-step plan for financial success which he calls The Seven Baby Steps. While you don’t need to follow them completely to see financial success, using them as a guideline or road map, can be extremely helpful — especially if you’re really struggling financially.

Since you don’t have a budget and you’re not saving money, I definitely think that you could find some great help and hope from the principles Dave Ramsey teaches. And also just lots of plain encouragement and inspiration. In fact, it just might turn your life — and your finances — completely around!

I’d personally recommend two things if you are strapped for cash:

1. Get a copy of The Total Money Makeover: A Proven Plan for Financial Fitness. This book will give you a step-by-step plan for getting out of debt, budgeting and saving money, no matter your income level. You can probably check out a copy from your local library or borrow one from a friend. If not, it’s worth every penny of the approximately $15 it costs to purchase.

Read the book, let it sink in and follow the steps outlined. Just getting on a zero-based budget will significantly improve your current financial situation. In fact, it will more than likely feel as if you got a good pay raise. You telling your money where to go instead of the other way around is a powerful thing!

2. Listen to The Dave Ramsey Show. If you don’t have a local station which carries his show, you can listen online or download the one-hour podcast. Listen while you’re driving, exercising, folding laundry or doing dishes. It’s free, it’s engaging and you’ll pick up all sorts of motivation to keep on, keepin’ on when you don’t feel like sticking with your financial plan or eating beans and rice yet again.

You can also watch Dave’s TV show for free on HULU. Again, you can turn it on and listen while you work on another project. So it’s not taking any extra time out of your day, but it’s giving you lots of financial advice, ideas and inspiration — which I’m guessing is something you could really use right now!

After reading Dave’s book, listening to his show for a few months and implementing the principles gleaned, your finances will invariably be in better shape. Then, you might consider going through Financial Peace University or attending a live event. Neither of these are necessities and there will be some overlap in the materials, but they can serve as excellent continued motivation.

However, none of Dave’s advice or ideas will work if you’re not committed to make them work. But if you’re willing to make sacrifices, be self-disciplined and stick it out for the long-haul, it will make a major difference in your financial situation.

Have you followed any of Dave Ramsey’s advice? How has it impacted you?

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Comments

  1. cnew says

    We came to Dave Ramsey at the lowest point in our financial lives and he changed everything. My hubby sold his truck that we could not afford. He had agreed to do anything but do that, until we took the Dave Ramsey class. 2 years later and we still fill out the same budget form every single month. Absolutly LOVE him and will not even hear about someone who doesn’t.

  2. says

    We also follow Dave Ramsey’s Total Money Makeover plan. We paid of $16k in debt in 11 months and are now completing our 3-6 months emergency fund. In addition to reading the Total Money Makeover book, watching Dave on Fox Business Network and listening to his radio program on-line, I’m also a member of a free on-line forum which promotes Dave Ramsey’s teachings. The forum is not affliated with Dave Ramsey or his company, but it is Christian based (all are welcome regardless of faith/beliefs) and the moderating team makes sure any advice that is given is in line with Dave’s babysteps. Not sure if it is okay to post the link but the forum is called Living Like No One Else.

  3. Laurie says

    I would HIGHLY recommend Financial Peace University. (even if you don’t have debt issues) My husband & I just completed the course. We didn’t really have any debt to worry about but the information on how to build wealth & prepare for retirement was soooo helpful. We have changed the way we look at preparing for the future & moved some money to be more beneficial to us. Dave Ramsey is amazing! I would listen to every word he says & then do it!

  4. H.olly says

    I am wondering why it costs so much to do the Dave Ramsey FPU? In our area it is about $200 to do the class with the materials. It really saddens me the amount of money that they make off of people in some desperate situations. I do understand the investment part in order to be invested in it, but $200 is a ton in my opinion.

    • says

      It’s actually only around $90 usually — and you get a LOT of material for that price, in my opinion. Many churches also offer scholarships.

  5. Angie says

    Our church in southcentral PA is soon starting up the Financial Peace University. My husband and I are really looking forward to going through the class. We budget and manage our money well (in my opinion), but there’s always room for improvement. Can’t wait to see his ideas.

  6. Heather says

    I wanted to add that the program is offered for free to military families through the Adopt-A-Base program that Dave offers – my husband and I are preparing to go through FPU when he returns from deployment and I’m SO excited!

    However, I have a question I hope someone can answer: my husband and I are fairly young with no kids. We want to travel before we have kids which would mean paying off debts and then traveling. That obviously means not following the Baby Steps to the letter since we’d be living like no one else before fully funding a retirement etc… are we going against some cosmic Dave Ramsey rule?

    I’ve been trying to get my husband to do this forever and he’s finally excited, but he keeps saying that this guy is going to tell us that we can’t travel until we’re 60 and have a full retirement – I’m afraid he has a point.

    • says

      @Heather,
      To me you can still start saving for retirement, 15%, on a military salary AND still travel. If you have no debt and do not go overboard with monthly expenses, you should be able to travel reasonably now.
      I don’t think he wants us to hoard all of our money until we retire, I just wouldn’t travel until 15% of my salary were going into the bank every month, so that when I do retire I do not regret going on a cruise.
      My husband and I are planning on going on a cruise as soon as we through baby step #4 and save for just a few months.

    • Jaime says

      @Heather, As long as you can make it through the first three steps (baby emergency fund, debt snowball, and 3-6 months of expenses emergency fund) there is no reason that you can’t do baby step 4 (15% of your income in retirement accounts) while saving for your traveling. Once you get into the program and get “gazelle intense,” it is amazing how quickly you can start moving through the steps! Before you know it, you will be debt free, have an emergency fund in the bank, have your retirement accounts started and be traveling all at the same time!

    • says

      @Heather, Heather – you’ll be fine just as long as you get 3-6 months of expenses in savings, all your debts paid off, and 15% a year in retirement. Since you have no kids you don’t have to start with a college fund – and if you don’t have a mortgage just don’t bother with that until you come back from travelling!

  7. says

    I think Dave’s systems are solid tactics that are not easy necessarily, but simple and effective. My husband and I have been stuck trying to maintain baby step 1 since we got married 3 years ago for various reasons. We are just now hoping to get back on track and get serious about doing some of the things he suggests.

    One thing I do want to say is that Dave Ramsey’s system is not a magic wand or something that if you don’t do, it’s just because you’re lazy and foolish. For example, some people are just in a different place in life than others. Some people have problems that are actually more serious than money, even though they have money problems too. But I think Dave knows this. Other than that, when and if the time is right and the health and well-being of your marriage/ family is sufficient, I really believe it works if you take it seriously.

  8. Lisa says

    My husband and I did the Financial Peace class through our church and finished the classes in early April. To date we have paid off one car and the second will be paid off by the end of summer. We will be totally debt free except for the mortgage by the end of 2010. The classes were just the motivation we needed!

  9. gina says

    I just finished Total Money Makeover last night! It has been truly life changing. My husband and I have mapped out our steps to be debt free and while it seems a little daunting right now I have hope we will get to the finish line. I do recommend this book!

  10. says

    So my husband and I started Dave Ramsey’s plan February 1st. At the age of 23 (me) and 26 (husband) we were drowning in over $50,000 in debt and we KNEW we needed to change something in our lives to give ourselves and our daughter the best life possible. And so we read The Total Money Makeover and signed up for FPU. And let me tell you. Since February 1, thanks to bonuses and refund checks, we have paid off over $7,000 in debt, been on a 2 debt-free vacation, taken an emergency trip to Florida to include a plane ticket, bought almost all the clothes our daughter could need for a year, and still have over $1000 in the bank for savings. We have not used a credit card since February 1st. We have not added to our debt since February 1st. We have realized that we must sacrifice to get debt free and once we are the stress of being in debt will melt away and we will be free to do with our money as we want. And because of this, my husband is going to re-enlist in the military. With the bonus he will receive and our estimated tax refund next year, we will be debt free and have our 3 to 6 months expenses by the end of 2011. 18 months to freedom!!

  11. says

    I just finished reading The Total Money Makeover. I checked it out from our library. Even if your library doesn’t have a copy, check to see if the library could get a copy through inter-library loan. Or check a used bookstore if you want to own a copy for yourself.

  12. Abbygail says

    I heard about this whole living debt free thing through a couple of blogs I frequent for saving money on groceries and freebies (thanks Crystal and Cheri). I didn’t really give it a second thought until my hubby brought up the idea of paying off a personal loan of about $3000 with our tax check this year and a little of our savings. This saved us $185 a month! At this point I was hearing more about Dave and the Baby Steps so I wrote it all out and discovered that we had over $85,000 in cc, student loans, and car payments!! My hubby about fell on the floor! My parents were very thrifty (5 kids!) but never talked much about why they were or why it was best to save up so I just thought it was “normal” to get loans for car, school, that big screen. By getting on a budget, my hubby working a TON of overtime (better than a second job!), selling some things on craigslist and a garage sale we have already paid off $17,000 in just 5 months- and we made less than $60,000 last year. As Crystal said,, budgeting and cutting out unnecessary items (do you really need to go to McD’s today or get that new CD?) has been the BEST thing we have done financially. If you read the book, (my hubby thinks he can be a little extreme sometimes, but in order to get debt free I think you NEED to get extreme) listen to the show, and “like” his facebook page you will find so much knowledge and encouragement! We can’t wait to be “weird” and live like no one else!! 18 months is our goal for consumer debt and after the other baby steps our house within 7 years.

  13. Julie says

    While engaged, my then-fiance burned Dave Ramsey’s FPU as MP3s for me. After listening to it, it has changed my life and how I view/spend money! It’s tips, advice, and strategies I wish that I had been exposed to before leaving for college! I thought everybody had to go into debt at some time; I had no idea that you could really not live paycheck to paycheck no matter what your salary is! I entered our marriage having the only debt – approximately $15,000 left for my car and another $15,000 left on school loans. We are now going to pay off my car by this fall, pay off my school loans by next summer, and start saving towards our 20% down payment that we will make on a house which we plan on buying when we can afford it. Dave Ramsey is direct, but he is biblically-based, and really knows what he’s talking about! I think FPU is worth every penny!

  14. Michele says

    Just curious–Have you worked through FPU book and workbook? Or attended the class? Would you suggest buying those as well? We can’t really afford to do the class right now, but could likely swing the book/workbook.

    • says

      @Michele, I don’t know how much the books are but the classes at our church were only $99 and included the book, workbook and the CDs (audio of the DVDs shown in class). Going through the book and the workbook together were extrememly helpful for us.

      I don’t know what anyone else would suggest but I think if you’re going to do it on your own (versus taking the FPU class) that reading Total Money Makover might be the better road. I think it reads better than the FPU book does…

      Good luck!

  15. Jen says

    We love DR too! It has enabled me to be able to stay home with my 16 month old without stressing about money as we have no debt & an emergency fund. Your blog post just got posted on DR’s website!!

  16. Amy says

    We moved to KC 7 yrs ago so my husband could go to seminary. After a couple of years we came across Dave Ramsey, and it radically changed our lives. We realized that the debt we incurred would keep us from being able to travel and minister to people. We started on Dave’s plan immediately and now 5 years later are debt free, except for our house. It changed our lives so completely that my husband felt the need to help others in this area and started a financial ministry. He leads FPU at our church and is a DR certified counsellor. Our neighbors know if something comes in the door, it was paid with cash. Our most recent purchase is a new RV coming in a couple days from the factory. All I can say is it is so worth the innitial sacrifice. “Live like no one else, so later you can live like no one else!”

    • Mandy says

      @Amy,
      How does the DR certified counselor work? I’ve seen it online, but I’m not sure if it would be a good investment for us.
      Thanks!

      • Amy says

        @Mandy,
        He was trained by Dave and his staff to become one of his financial counsellors. His name is on Daves website when people want to look for a counsellor in their area. It is a lot of time and work to coach each person so I don’t know if it would be worth it for your family or not. He constantly gets emails from people and has hired an assistant who was also a trained counsellor to help him because the need is great in our area.

  17. AndiBeth says

    We started reading Total Money Makeover and found a local Dave Ramsey coach.
    So worth the money to have our own personal coach help us for 6 months. We now have an actual working budget, are getting out of debt, and seeing our future in a positive way.

    It’s hard work, but so worth it. And talking about money isn’t a horrible, dreaded, depressing issue anymore. Our money works for our family, not the other way around. :)

    Our personal coach has really helped with answering our individual needs and accountability. He has helped us define our goals and look to the future (life insurance, care for our special needs child, etc.)

    Dave Ramsey is the best!

  18. Melody says

    My family is going through Dave’s Financial Peace University right now. One of the things I am looking forward to is the fact that even when we finish the class, we are lifetime members, and can retake the class at any time, with no additional cost. We will have that support any time we need it!

  19. Kristie says

    My Husband and I took FPU, even though his parents taught him to save mine did not. It taught me a lot about money and making it work for me. My Husband now teaches the class throught our Church and I have sat through the class 3 times. Take the class it is worth it!

  20. says

    It is also worth taking a look at library sales (friends of the library bookstores) and thriftstores for a copy. I happened to find one at a thrift store for $2! I was so excited because I already paid full price for the workbook that you can get with it, so I got both books for 17 and am currently reading them. I like to write in the workbook so I thought it was worth purchasing.

    also, the radio show now airs in my area! I was so excited to hear it one morning, but I agree with the first comment, if you don’t understand where he’s coming from (and have never really done finances this way) he can sound harsh, and even “shocking” to someone whose never dreamed of paying for a car in cash or saving for emergencies. ;)

  21. Sarah says

    We just got done taking FPU and we learned so much. My husband has been listening to Dave for a long time and I thought I knew a lot about him but I was wrong-I learned so much. My husband was just recently laid off and it does stress us out but we have our emergency fund and are doing fine thanks to Dave Ramsey!

  22. Sheila says

    My husband and I took the FPU class a couple of years ago. We than taught a class. Dave Ramsey and FPU changed our lives. We paid off all of our debt, have more money in an emergency fund than we’ve ever had in all of our married lives and we finally can live like no one else. The baby steps are easy to follow and using cash really made a difference in our spending.

  23. says

    I had never heard of Dave before until reading your blog. I was reluctant to fork over the money for yet another book to tell me stuff I already knew, but I was sick and tired of living paycheck to paycheck and making no progress on debt reduction. And I had begun to notice certain patterns about our finances that were exactly that: patterns.(And you are such a sensible and wise young woman, I thought I should look into it!) So I reserved the book from the library, but because I was unable to go get it, my husband picked it up for me. He read the whole book that night, and was so on board with everything that it was almost as if it was his idea! I even thought he was mocking me because he kept saying things like, “Okay honey, we’re gonna be gazelle-intense!” We’re still a couple of years from being debt-free, but we have changed our patterns, our mindset, and our way of communicating with one another about money! So I first thank God for what He’s done, and a BIG thank you goes to you, Crystal, for your fabulous blog and your life example. THANK YOU!!