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?
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!!
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.
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!
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. 😉
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!
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!
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!
I read We’re debt free board on Babycenter. All the people are very helpful and all follow Dave’s plan.
http://community.babycenter.com/groups/a48205/were_debt_free
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!”
@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!
@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.
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!!
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.
@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!
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!
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.
I am SO happy to see this post about Dave!
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.
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!!
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!
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!
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.
@Catherine R., Aboslutely, Catherine;)
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.
@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.
@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!
@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!
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.
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.
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.
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!
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.
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.
I LOVE DAVE! i checked out his book ‘Total Money Makeover” from the library about a month ago. My husband and I have been using his methods and have already paid off $1801 in debt. $1801 in a little over 3 weeks is beyond amazing to me! Dave rocks!
We are proof that Dave’s plan works. We are on what Dave calls Baby Step 7. We are completely debt free including a mortgage free home, an emergency fund, and are working toward a 7 figure retirement fund. While this is good, the best part is that it puts you in such a strong relationship with your husband/wife–you really are one and going in the same direction.
@Florence, AWESOME!! Can’t wait to be there! And absolutely builds a stronger bond with the whole family.
I have only read the book. It is a MUST!
DR is great. I read Financial Peace about 10 or 11 years ago, however, at the time I was a single mom just getting by and did not have any bandwidth to begin what he was proposing. I was eating out a lot with the kids, lunch too, financed cars, etc. Even though I worked for banks and I knew better. I knew the power of saving money, however, I just felt because I worked so hard taking care of my kids(without any help), I deserved these splurges. What I didn’t realize was how much I was hurting myself.
When I married my husband 2 years ago he had great income but his saving habits were not so good(no savings, etc.). At that time I became a stay at home and after having been a former career women I felt my new job was raising my beautiful children and saving us money. Well after 2 years I can say we have ZERO credit card debt and our total debt now is less than 1/3 of what is was. And that was done on 3/4 of the income we had when I was working. Oh and we have 4 months of cash reserves in the bank.
Any how, I have been totally energized by Crystal 100% down payment on her house and I am back on track searching for more ways to get our budget down, debt paid off, savings for house and to put us in a position to not only give more, but to free up my time so I can serve people like Jesus did.
Oh and one last thing, my absolute favorite thing that DR teaches is personal responsibility. This is one of the things I think is most important to teach my 4 children.
Marisa Stone O’Brien
It’s so funny to see this today because I just recommended Dave to yet another friend today. My hubby and I used to have over 100k in debt not counting our mortgage. With Dave and God’s help we have paid off over $87,000 so far. We aren’t finished yet, but I am so thankful for a black and white plan. So many advisers tell you to do this and that, but Dave lays it all out in his baby steps. We’re almost debt free! It’s hard work, but so worth it. I would encourage everyone reading this blog to use the money you save couponing to pay down your debt because that’s what we’ve done! YOU CAN DO IT!
@mommyluvs2save,
WOW!!!!
Today, we are living like no one else!!! We have been debt free (minus our mortgage) since January of this year. We began March 2009 with just a bit more than $30K in student loan and car debt. Foolishly, we always felt we were living within our means. My husband has the only full time income. I work PT, but after for the first time in our 11 years of marriage, we truly have more than we ever have.
Tonight, we have our first “emergency”, but guess what it wasn’t a financial emergency. The motor went out on our AC on a day when it is 101 outside plus humidity and we paid cash for the new motor and if we had needed to replace the entire untit, we would have the money for that too. But, God has blessed once again with only a minor repair needed.
I 100% recommend Dave Ramsey to anyone who is willing to be committed to his plan.
I highly recommend Dave Ramsey, too! The reason I found Money Saving Mom was because we had started Financial Peace, and I was researching ways to try and get our variable costs down.
I can’t stress how important the DVD ‘s in Financial Peace are if you have a husband that’s not on board, and is an visual/auditory learner and won’t read books! I had bought the Total Money Makeover book 2 years ago, but made no progress, because DH won’t read books. Finally, this past Christmas, we bought the at home course as a Christmas gift to our family. Life changing.
We’ve paid off all $17,000. in debt, and saved up a $10,000. emergency fund (so far) just since January this year. Yes, it involves major sacrifice………but the peace of mind is sooo worth it!! Our whole crisis was caused by my husband getting laid off last year, and we didn’t have an emergency fund. Never again! My husband has a good job again, and I’m saving as much as I can.
Another plus; Dave has a great sense of humor, and is really entertaining on the DVD ‘s. We were so bummed out when we finished the last DVD!! LOL (We actually finished the whole course in a week, along with all required paperwork, because it was so much fun to do!)
My teenagers loved watching the videos, and commented that their friends need to see them. My girls learned so much from the video’s! Right after watching, one daughter was in line at the store, waiting to purchase a shirt with her own money that she just ” had to have” because it was so “Cute and on sale!” and was so convicted while waiting in line, that when her turn came, she walked away from the register saying “I have to put this back! I just can’t justify spending my money on this!!!” I was so proud of her that I had to resist the urge to just buy it for her myself LOL We walked out of the store together and I told her how proud I was of her, and that what she’d learned that day was priceless!
@Carol,
What is the name of at home course you bought? My husband as well is not a reader. Thanks!
@Anne, We bought the Financial Peace University Home Study Kit. You can check it out if you go to Dave Ramsey. com and click under the Online store. Right now it’s on sale for $199. (1/2 price) and qualifies for free shipping, so if you think it’s something you want, it’s a good time to get it.
Has all of the books and forms, plus CD’s and DVD’s …..fantastic! (I did want to point out that the CD’s and DVD’s aren’t additional material that’s not covered in the book; it’s just the same material in a different medium, so that any learning style can comprehend the material. As a home school family, with all of us having different learning styles, it was crucial to our success to have the different formats.) Hope that helps……good luck 🙂
One thing I learned working at start-up companies was often people forget to plan for success: what do we do when we reach a goal? So my question for all you who have been with the DR program is, what does he suggest for after you’ve established your emergency funds, paid down debt, bought your house for cash, funded the kids education, and so on?
Thanks,
WilliamB
He encourages people to “live and give like no one else” once you’re in a financial position to do so.
Basically, he encourages people to change the world by changing the lives of their children, changing the lives of people in their community and changing the lives of people around the world. Thanks to him — and the grace of God! — we have some very big financial goals for the future. And now that we’ve purchased our house with cash, those goals are becoming more and more a reality!
@Crystal, Neat phraseology. Does he help his customer determine how much is enough?
@WilliamB, After you have completed the baby steps, and then paid off your house, you are free to build your wealth faster and give like no one else. You would also be free to travel, or start a different job or move closer to family, whatever you were being limited from doing because of finances.
*This is just my opinion, but I would prefer if Dave did not use the language he does sometimes. I also think that the way he tells people to respond to debt collectors is sometimes ungodly. Phillipians 2:3-4 comes to mind and the verse about NO unwholesome speech. We started down the debt free path with the late Larry Burkett and I found him to be a lot more gentle in spirit and Christlike in his speech, but he was less of an entertainer and more of a teacher, if that makes sense. A little less name-calling and a little more “Loving your neighbor as yourself.”
Deb: I would agree with you that I’m not always a fan of Dave’s language on his radio show — he tends to be a little on the crass side sometimes. But I wholeheartedly endorse his overall message.
@Deb,
I don’t know larry burkett – is he good?
@Claire at Saving Money Plan, Yes, Larry Burkett was one of the first Christians to dedicate a whole ministry to financial principles. He is gone, but his legacy is http://www.crown.org. (Crown Financial ministries). Ron Blue is another one who wrote a lot of good stuff for Christians and how to handle money. I also like Randy Alcorn’s book, Money, Possessions and Eternity and John MacArthur’s Whose Money Is it Anyway? I do think that DR has a lot of good principles, but I cannot get past him taking the Lord’s name in vain and his speech, I just don’t believe that Christ would speak that way and he could certainly get his message across without using such language.
We love Dave! Went through FPU a few years ago, and it has made a great impact. Actually, it’s information that should be revisited over and over. I think I’ll go redo the budget and recommit!
To start:
1) Create a zero-based budget.
2) Look to see what can be cut from the budget to bring it beyond zero (to generate income to start saving).
3) Go to cash only envelope system.
4) Sell everything you can to generate income – use this to start $1000 emergency fund, and then start the debt snowball.
That’s where we are – smack dab in the middle of a giant debt snowball (thanks to rental properties). So, it’s slow going there, but worth it.
Laura
@Laura Aridgides,
what do you mean when you say zero balance budget and what is cash envelope system?
@melissa neier, A zero budget is where your income minus expenses comes to zero (not a negative number). I looked at our last three months of actual expenses to make our first budget, and it definitely was negative (more expenses than income) until I looked where I could cut back. It’s an eye-opening experience.
The cash envelope system is taking items from your budget and paying with cash only. So, at the beginning of the month, if you have allocated $400 for groceries, you will take $400 cash from the bank, put it in an envelope labeled “grocery” and then whenever you purchase groceries during the month, you take the money from that one envelope. When it is gone, you must get creative until the next month when the money is replenished. We have envelopes for grocery, misc, blow money (we can use this for whatever), medical, haircuts, and clothes. We would have a gas envelope but we have the Mobil speedpass so it’s linked to our account already (although I have been thinking of going cash here too, but with 2 small kids, it’s easier to pay at the pump than go in to pay cash).
Hope this helps!
Laura
@melissa neier, a zero balance budget is when what comes in and what goes out equals zero on paper, every penny is accounted for, on paper. You write down all of your income for the month, and all of your expenses for the month, and you should have zero at the end, because you put any extra towards the smallest debt or your emergency fund, whichever you are working on. The cash envelope system is how you keep your money for the month. Each category has a certain amount and it’s own envelope. For example: Groceries $300, Clothes $100, etc. You will make a budget for the month and an envelope for each category with that set amount in it for the month. That is all that you have to spend. Once it is gone, you have no more money to spend in that area. It keeps you on your budget, and sets limits. (Some people will borrow from another envelope, others just do without until the new month.) It is all explained in Dave’s book in detail. Hope this gives you an idea. BTW, we love Dave! We are on Baby Step 2 and looking forward to being Debt Free!
I was basically following Dave Ramsey’s before I even heard of it. I don’t completely agree with 100% of what he says in all cases, but if you do follow everything he says, you can’t go wrong. You’ll be much better off. I’ve read and listened to a lot of his stuff, and I would recommend the Total Money Makeover book to someone just starting out. The most important thing by far is to make a budget and at least track where your money is going. And I recently found an online system for budgeting at mvelopes.com which I love! It makes it very easy to give “every dollar a name” and know exactly what is going on with your money. It does cost some money. I think we pay about $6/month for it, but I found it to be worth it, and they do have a 2 week free trial.
LOVE Dave Ramsey. Because of the things we learned in his class, we are hoping to be 100% debt free (including paying off the house 20 years early) within the next couple of years.
My husband and I took a FPU course at our church. It is amazing the difference it has made in our lives. With goals and a plan we are seeing great things happen as far as paying down debt and saving. The greatest factor that we love about Dave’s plan is that the STRESS about money that we use to have is now GONE!
WAIT!!! Dave tends to sell all of his books around holidays for $10! 4th of July is just around the corner. That may be the best time to pick up the Total Money Makeover. I agree, when you don’t have a lot of money use the TMMO book.
Also listen to his show everyday. That is how I learn the most. I think at this point I could teach this stuff. If he isn’t on a station near you, you can listen to archives on his website.
If you have the opportunity, even if you don’t have a lot of money, definitely attend a LIVE event. For me the problem was getting my husband on board. I would talk about it all the time, but it just wasn’t sinking in. The LIVE event really helped connect the dots for him. It was really motivating!! And set us on the right path. The tickets aren’t that expensive and if you learn they are coming often they have really super reasonable presale prices.
My honey and I finished FPU a few weeks ago. We ordered the “at home” version from his website. Saturday nights were our designated FPU nights. In just 13 short weeks, we had our baby-step #1 done ($1000 emergency fund) and paid off almost $3,000 in debt on a VERY small income. Not only has FPU and Dave changed our financial lives and our childrens lives, but our relationship has also been healed. We used to have money fights all the time and now no longer argue about money because we both know exactly what we’re doing with our income.
An added bonus…my exhusband has seen the changes in my household and is now doing the “at home” version in his house! So cool. I love Dave!
One of the major reasons I read Money Saving Mom every day is because I get so excited seeing their personal progress and it’s so inspirational. Thank you Crystal. 🙂
If you want to take FPU you can also search “Financial Peace University DVD Dave Ramsey” on eBay and you might be able to pick up a cd set for fairly inexpensive or even the full set for about the same price as the class- but then you could sell it after you were done with it and get all or most of your investment back.
But I found that I was just as happy reading his books (that I borrowed from the library). I read his newer version and a 1990 version of Financial Peace- in that one I found the writing style a bit outdated, but the principles were the same.
-jen
I am so thankful to Dave Ramsey! We didn’t really have debt, never credit card, but we always played the catch up game. (Paying for something we bought last month.) I first heard Dave Ramsey’s name on this site (thank you Crystal) and went to his site. Simply follow the baby steps and use CASH! In the last three months we have had close to $2000 in home/car repairs. We paid it…in CASH!!!! The emergency fund is a financial must.
Kellie-I encourage you to read about those baby steps and find a budget that works for you. You won’t regret it!! 🙂
I totally agree about reading “The Total Money Makeover.” It will give you what you need to know to get MOTIVATED and get started – and motivation is the key! Once you start paying things down and start making changes, you get really motivated. The TOTAL Money Makeover has lots of personal examples of people who have gotten out of debt and changed how they spend. It shows you that you are NOT alone!!!
We…ha! I started by listening to a girl at work talk about going through FPU and reading through her FPU book. Then I got my hands on a TMMO book and started reading that, just after I had register for FPU classes of our own.
Once classes started it was a couple thing for us…not just me reading about it. The classes really helped us get into the same spot, on the same page (rather than me just telling him what I’d read and him nodding and saying, uh-huh uh-huh and doing it.
The FPU classes were a HUGE benefit for us. If you can swing the class fee, I’d highly recommend it. And the church that we went to for the class (not our home church but a local church) offered “scholarships” for those who needed help with the cost of the course. I don’t know how much help was offered but that might be something to look into.
And if you wonder at this statement of Crystal’s, “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!”…she is totally telling the truth. We make absolutely no more money that we used to (and maybe even less due to OT being cut) but have so much more money now.
GOOD LUCK! TMMO and FPU have totally changed our lives.
Love TMM! Its great and realistic…Gives you the tools you need to do what you really want to do! Do the budget and the debt snowball..we were working on debt for years but didn’t really start making progress until we went through TMM and started implementing the plan. We’ve paid off over $13,000 in less than two years on one tight income and having a baby at that time. You can do it!!!
I agree with your two getting started tips. That is all that I have done. I have never even gone to the website. We are about to finish up baby step #3 soon which I never thought was possible before listening to Dave’s common sense approach to living debt free.
I am a HUGE Dave Ramsey fan! The most helpful thing he suggests is the zero-balance budget. It’s so empowering to “tell your money where to go” rather than it telling you (in the form of a bank statement) after the fact. Although it’s often difficult to stick to the budget, it feels like the HUGEST raise when you start actually following it! Then, you can use the “extra” money to get out of debt–the other most practical suggestion Dave gives. My husband and I went to his live event, and it was encouraging, but if you have the book Crystal suggested, the live event is really just a big “in-person” repeat of all you’ve already read–especially if you also listen to the radio show. Spending the $15 to buy his book to get you started could be some of the best $15 you’ve ever spent!
We started following Dave Ramsey’s Baby Steps after my husband started listening to his radio show and bought Total Money Makeover about 4 years ago. We didn’t have lots of debt, but our savings account was not in good shape. Enter Dave Ramsey and then FPU and we almost have 6 months of expenses in a savings account. FPU is expensive, but it is worth the money.
The hardest step for me was going to all cash. I felt like it would be a pain to handle and I felt uncomfortable at the thought of carrying cash around. Then those Visa commercials came out where all things stop moving when someone hands over cash! I felt like that was me…every time I went to a register I just felt like I was the “bad person” in the commercial. 4 years later I’m still carrying my original envelopes and loving that I know how much money we’re spending and what we’re spending it on. Yes, I sometimes “borrow” from one envelope at the end of the month, but I’m using cash and saving more than I ever thought possible on our salary.
That first month with envelopes I had an emotional breakdown when the grocery envelope had no more money! There was still plenty of cash in other envelopes and we were only guessing at our budget, but I was just broken to pieces, crying on my bed and calling my husband! 🙂 We’ve made mistakes, but we’ve just kept going and so proud of ourselves for doing so.
@Leslie, Thank you so much for sharing that. I have had concerns about using cash too and it helps to know someone overcame that. =)
We love DR!!! We took the FPU class the beginning of 2009 when our daughter was 2 weeks old. By the end of last year we had paid off $18,900 in debt on a $37,ooo/yr. income. We are down to just our student loans and just paid cash for a newer car. I also quit my job last Aug. to stay at home with our daughter. It has changed our lives. We use the free online monthly budget from vertex42.com. They have tons of free debt reduction calculators and budget templates that have been a huge time saver for us.
Hang in there- it’s totally worth the hard work and sacrifice!!
Dave Ramsey’s Total Money Makeover changed our lives. I’m not the typical poster child for Dave Ramsey. My husband and I had always lived within our means and didn’t have any debt except for our mortgage, but we didn’t have a financial plan either. We saved some, we spent some, we invested some – but it was hodge-podge at best.
For the first time in our lives, we feel TOTALLY in control of our money. It is so freeing to think that in five to seven years our house will be paid off and we can start making decisions on how we want to live our lives – instead of making decisions of how to live our lives so we can pay our bills.
The turning point for me was making a budget monthly. If we had dentist appointments or the car needed fixed, those expenses had to be accounted for. We would have to evaluate other line items and reduce or eliminate them. I won’t lie – it is hard some months. Who doesn’t want to go out to eat every week? But knowing that next month I will be able to eat out again and still have our long-term goals in tact more than makes up for it.
The first few months are the hardest – then it starts rolling and you can’t believe you ever managed money without using Dave’s principals.
My husband and I are working on it, and I’ve almost finished with TTMO the book. Reading it has given us momentum, and we’ve got a fire lit under us to get debt free and start saving. DO IT! I’d suggest getting the Total Money Makeover- this clearly lays out the steps, and addresses all those reasons we go into debt and stay there.
I’ve been hearing about Dave Ramsey for months now and decided today after reading this blog post to at least Google the baby steps. I realized that without knowing it and without having a budget on paper we already had completed baby steps 1-4 and I have been thinking about a 529 for children (if we have them). I am a recent college grad and my husband has a few years left of undergrad, and we have never had any debt. I have been feeling like we weren’t saving enough each month for purchasing a home in the future, and I realize now that even though we have completed many of the steps, we could save more if I got a budget on paper and we went to a cash only system.
i love Dave and listen to his show every day in the car or live streaming on the internet. Thanks for the Hulu tip I didn’t know I could watch too!
My best dave tip keep trying it takes a while to get the hang of it ( the budget thing) BUT YOU CAN DO IT!
And DO NOT worship at the car payment alter. I will never have a car payment again! We love owning our cars out right it’s wonderful!
What percentage of your income does Dave say to use for your mortgage? Also is there some type of calculator to figure it out?
@Anne, On Dave Ramsey’s website, it says this, “Save a down payment of at least 10% on a 15-year (or less) fixed-rate mortgage, and limit your monthly payment to 25% or less of your monthly take-home pay.” Here is the article it came from: http://www.daveramsey.com/article/the-truth-about-mortgages/lifeandmoney_realestate/
At the bottom, there is also a link to a mortgage calculator.
I actually started following Dave Ramsey soon after I started following Money Saving Mom, thanks to Crystal’s recommendation. It was good timing! We paid off my husband’s truck in February, and went to 1/2 salary in March. I bought “The Total Money Makeover” last week (for only $4.83 thanks to a Borders gift card), and am reading it now. I’m home with our daughter and pregnant with our second child, so I’m trying my best to make the most with what we have. We owe $43,000 in student loans, and $135,000 on a house (that we currently rent out) in our hometown across the country.
As Dave says, it appears that we always have more month left at the end of our money, but somehow God always provides and all of our needs are met. Despite that, we are plugging away at our debt snowball, and learning how to budget our small income, as well as looking for new sources of income. My husband’s been doing some refereeing and I’ve been doing some substitute teaching to make ends meet, and we’ve cut back on a lot of things. I’d like to sell my 9-year-old car (which doesn’t get used much), and we’ve been selling a lot of our excess stuff.
Anyhow, thanks for your thoughts! Money is on our minds a lot these days, but I do enjoy the discipline of learning how to manage it better. I agree, read Dave for inspiration, motivation, and solid methods. 🙂
DH started listening to Dave back in 1996 when he worked in the Nashville area frequently. We definitely followed some of the principles but were definitely not out of debt nor particularly hardcore about it.
Between Christmas (2004) and New Years Day (2005) we both read Total Money Makeover (checked out of the library). We already had baby step one down and the only consumer debt we had was the final payment on our truck so those happend in about 10 days. We spent a couple months beefing up the emergency fund and then then next two years working on the mortgage. This ended up being a very prudent move since DH was laid off from 12-2008 to 5-2010. I consider us very greatful to live through that experience with pretty limited anxiety and more money in the bank at the end of the period than the begining (DH received unemployment and I worked part-time so we were not without income that whole time).
Honestly, we were always pretty frugal and debt averse but we learned the most from the budgeting portions and using cash and working even better on the communicating as a couple about money.
I was up to my eyeballs in debt, but had managed with a lot of help to get out of it. A couple of weeks after being debt free, I heard Dave on the radio for the first time on a debt-free scream call. He motivated me to get an emergency fund. I scrapped for six months, but I did it. Shortly afterward (with no warning), I learned I got an inheritance. The death had been recent, so I got a different car (the one I had was dying a slow death and had just rolled 170K), added to IRA and some giving, then put the rest in the bank for several months. At the end of that time, I decided I could afford real estate after all (post-housing crash) and I bought a condo with cash and furnished it. If I hadn’t listened to Dave and gotten the emergency fund, I likely would have squandered the inheritance. I figured that I could have paid the debt if it had not been paid off, but I wouldn’t have my own place now.
We have been on the Dave Ramsey plan since Sept. 2008. We have paid off almost $20,000 in debt. I think you should just start with the book and the show. My husband and I went to see him live and it really got us fired up. I also think that budgeting is one of the most if not the most important thing to do.
It will change your life if you follow the Baby Steps. It’s not easy, but it is worth it.
We did his FPU course. We didn’t have enough money to pay for the course but some kind stranger online offered to pay for it. (I had posted a question on a forum I use to frequent asking if it was worth the money to pay for the class when we had debt and weren’t making much money. Someone read it and said he thought it was so worth it he wanted to pay for us to do it – and sent the money to the church that was hosting it. SO AMAZING!)
Anyways, we did the course about 4 years ago and it was the greatest thing to get my husband and I on the same page and using the same terms for finances.
We are now debt free -apart from a mortgage that will be paid off in 10 yrs- and have enough savings for my husband to take 6 months off work and pursue his own business ventures without us going in to debt for it.
Dave’s advice is common sense and more people need to register it!
I have read TMMO and taken FPU and am currently working on Baby Step #3. I have no personal consumer debt, am building a 6 month emergency fund and have a put together a 5 year plan to financially position myself for future goals. If you follow his steps (which are really just common sense), it DOES work!
I am a HUGE Dave Ramsey fan! It’s good old fashioned common sense that most of the world really doesn’t want to hear (and I didn’t want to hear some of it back before I started his plan either!!). And he sure does give people a kick in the backside, but only for the purpose of setting them on the right path 🙂 He has lots of resources, and Crystal is right, start with the book, read about the babysteps, and watch the show. That will give you a great idea of the plan if you can’t afford Financial Peace U. Best of luck!
I love it. We did FPU through our church. The first 3 steps **must** be done in order to really succeed. I was able to learn quiet a bit from him when it comes time for mortgages, retirement…..etc. He has a wealth of knowledge in savings and how to get your money to work for you; not you to work for it. I did a lot with the discussions and coaching lessons after the classes each week.
There are many templates on his site once you pay for the courses on how to work your off pay schedules together to pay off the bills. You know the amount you get a month, and you know the out for the month. You time it so your bills get paid on the day they need to get paid. Budget yourself some fun money. Its not going to be perfect the first few times you do it, and you HAVE to have teamwork. But it works itself out. DR is harsh to the “stupid, uneducated people” who dont understand why their budget dosen’t work when they make 600 a month and have a 550 a month car payment.
Spend the money to learn, the investment for the 90 days of learning is worth it many times over. But you have to follow it 110%.
If you can take FPU, then do it! It changed our lives!! There are worksheets online to help you figure out a budget, I still fill this out every month!! (I don’t know if you have to take the class to access these or not). We were over 20 K in credit card debt, just bought a house, had our first child & expecting our 2nd (they are only 13.5 months apart); it only took us 21 months to pay off our credit card debt & pay off two cars. During this time we also added our third child. We now have four children, one car payment & a house payment. When I became a stay-at-home mom, we did not notice the loss of my part-time paycheck because we were able to budget! We are now working on paying off the car & starting our 6 month savings!!
We started Financial Peace University less than a month ago (my husband and I got really interested after I read Crystal’s series on saving 100% down for a home) and it has been great for us! We finished Baby Step 1 a couple of days ago and are working on our debt snowball. Dave’s plan has a lot of information that we already knew but we are finally motivated enough to do what we need to do to get out of debt and stay of debt. Learning how to implement a zero-based budget has been extremely helpful for us. We look forward to the day we can call Dave’s show and scream “We’re debt free!”
@Erin, LOL! Crystal’s 100% down for a home series is what got me interested too! After reading the first couple installments, I found out that an old elementary school friend had just paid off her house using DR’s plan. Hubby and I did exactly what Crystal just suggested. I bought The Total Money Makeover book and started listening to the radio show online. In April, there was an offer where you could attend the first FPU class for free so we went to that to see what we thought of it. We loved it and went ahead and spent the money for it. It has been worth it! I’ve been unemployed this whole time but by following his plan, we have $1000 in the bank for our baby emergency fund and have paid off over $1200 in credit cards and student loans. We’re planning to pay off another $1350 within the next month! It is amazing how much more peaceful your life can be when you aren’t worried anymore!
@Jaime,
Jaime – how much does FPU cost, by the way? I listen to him every day but dont live near a class and have always wondered~!
@Claire at Saving Money Plan, When I signed up, it was $93. That got me the 13 week class, Financial Peace Revisited book, workbook, access to the Member Resource Center website including online budgeting forms that you can use, CDs so that you can listen to the class over and over again (we do this in the car for motivation!), an envelope budgeting system, and a lifetime membership so you can retake the class as many times as you want! The home study system is usually around $200 if you can’t find a class close to you. I know it can feel like a lot but I have more than made up the cost simply by changing my spending/budgeting (nonexistent before) habits. If you ever get the chance to take it or can convince a church near you to host it, the class is well worth the money! 🙂
Oh my goodness…. my hubby and I loooove DR!! I would definitely recommend starting with the Total Money Makeover book – we got out of debt while hubby went back to school and we lived off of my teacher’s salary our first year of marriage. Then, we went through Financial Peace University, and remained debt-free even through 4 months of hubby’s unemployment earlier this year. Without having gone through Dave’s information first, we would have had tremendouc credit card bills at the end of the unemployment string. Thank goodness we didn’t! 🙂 Good luck, and stay strong!!
We took FPU and it literally changed our financial lives. We knew we were suppose to spend less than we made but we couldn’t figure out how–I know it sounds simple. However, budgeting wasn’t something we knew how to do. I tried it my way and it didn’t work. My husband tried it his way and it didn’t work. The main problem was that we expected to have a perfect budget the first month. Dave taught us that it was a learning process and that there were going to be unexpected expenses and that we needed to plan on blowing some money. We didn’t know what we really could “afford”. Since we have stuck to 33% of TAKE HOME PAY for housing and utilities we have been much more comfortable. His class taught us to communicate and taught us that it was normal to have a huge fight and then that would pass and we could make our budget work. We love Dave and I honestly don’t know how we would be surviving without his advice. I find it funny that to some of our neighbors and friends it is foreign to simply go without–we don’t go out to eat and we don’t go on vacations. We find ways to relax at home. And that is what we have decided is important. Other’s may decide that going on vacations is more important to them, which is fine too.
@Kassi,
I am familiar with Dave Ramsey but don’t know much about his % guidelines. I am curious, is the 33% his recommendation or something that you set for yourselves? I am off to figure out if we are below that or not! =)
@Emily,
Emily, he sometimes says no more than 25% of your take home pay should go towards your mortgage. So, with utilities this would be about 33%.
Make sure that you’re counting take-home and not gross!
@Claire at Saving Money Plan, Thank you so much! Fortunately we are below the 25% and the 33% of take home. Whew! =)
We followed Dave’s plan before we knew it was “Dave’s” plan and just paid off our consumer debt in February. While we didn’t follow the steps Dave outlined exactly, we did follow most of them and that is a huge reason we had the success we did. We will now be following his steps as we get the savings fully funded, pay off our mortgage and consider investments.
Oh, and the determination too – you have to want it!! That is something you won’t learn in a book – it’s within you!
@Andrea @ MommySnacks.net,
Congrats on killing the consumer debt!
If you are in a good bible believing church with a library you might be able to borrow a copy there otherwise if your library does not have i they can borrow it thru inter library loan or you an make a suggestion to purchase it.
My husband and I have become big Dave Ramsey fans. One thing we started doing after reading all the information he has to offer is to set up a realistic monthly budget and tell our money where to go each month. This has really helped us to stay on track each month. Also, we use his cash envelope system for our variable expenses (ie: groceries, gas, baby care expenses, etc…). This has helped us so much to stay within our means and not overspend each month. We also set up an emergency fund which I think is so valuable in order to try and stay out of debt(especially if you are a one income family).
My hubby and I started following Dave Ramsey’s principles about 6 years ago. During that time, we paid off a vehicle payment and our entire mortgage! We are now debt free, which has enabled me to be a stay-at-home mom!
I just recently read Total Money Makeover and am in the process of trying to start using a budget. The part that I am having difficulty is how to actually implement using the budget. I get paid weekly & my husband gets paid bi-weekly. I guess I’m lost on how to divide up our checks….if that makes any sense.
@Shawn M., I had this same problem (hubby is paid weekly; I’m paid once a month). If you get the chance to go through FPU, Dave spends a whole lesson on this exact topic, and he helps you understand how to spread out paying your bills among your paychecks. If you can’t attend all of the 13-week FPU course, you can attend one session for free at a church that is holding the classes… find out what lesson they’re on and stop in for the budget lesson!
@Shawn M., we’re in the same boat (except I’m paid every other and he’s paid weekly). I just looked at what was due when and then put it on the calendar a week or two before it was due…making sure that the Fridays we are both paid that a we pay more bills than the “off” Friday when only he is paid.
I made a super easy excel spreadsheet that I use for my monthly budgeting – I’d be glad to email it to you if you’re interested.
@Casie,
Casie, that would be great! My email address is shawn1davis@yahoo.com. Thanks for all the suggestions.
@Casie,
Could you PLEASE email the spreadsheet to me? I am a teacher and even though we do our best to save for the summer months, it gets so tough.
maggeo05@hotmail.com
(It is the numbers 0 and 5)
Thank you,
Maggie
@Maggie,
Casie – I would LOOOOOVE to see your spreadsheet! I’ve done my first month’s budget, but am starting to work on July’s, and I’m not too excited about it. Maybe your spreadsheet will make it easier for me. Thanks so much! My e-mail is alexa.tutor@yahoo.com
@Casie can you email me the spreadsheet amandafrum@yahoo.com
@Shawn M., I use a big calendar to show income and expenses and to keep track of everything that’s due and when. Using Dave’s baby steps and going through FPU my husband and I paid off over $13,750 during the 13 week course.
@Kassie,
Amazing!!
@Shawn M., I use post its for each payday. We sit down and write out everything that we need to pay for next month. I get paid twice a month and my hubby gets paid every week. I put a post it on every pay day and fill in the bills according to how much the payday is/when they are due. My hubby’s varies due to overtime so I base it on just 40 hrs and EVERYTHING above that and all of the extra money each payday is put towards our debt snowball. This really works for me as I just look at the calendar and know which bills need to be paid each week.
@Abbygail, sometimes it is just $8 or $25 each week extra, but I schedule a cc payment to make sure it goes to something and doesn’t just get blown.
@Shawn M., I had the same initial confusion as you did until I realized that the “Allocation Spending Plan” aka “Sheet 7” was nothing more than a pay-period breakout of my monthly budget. You can find this form in the back of your Total Money Makeover book or there are many resources online to download it for free. It has gotten to the point in our household that we simply complete the Allocation Spending Plan at the beginning of every month before the month begins instead of the “monthly budget” it works the same way, has the same categories.
p.s., I think you should definitely start with your budget – if you get used to knowing where every dollar is going and using cash for everything, it makes a big difference!
Kellie – Totally agree with Crystal on this if you’re strapped for cash. If however you can afford to take Financial Peace University, it’s sooooo worth it! My husband and I met there – it really got us on the same page and heading in a good direction.
Warning: Dave Ramsey is VERY DIRECT, so if you start listening to the radio program before learning his principles from the book you may find him harsh. Personally – I think it’s just tough love that most of us need when we’re not being wise with our money. We’re huge fans and love Dave Ramsey. I just wanted to give you the heads up, so you don’t get turned off by the radio show before really learning the system. Once you learn what he’s teaching through FPU or his books then what he says on his radio show makes a lot of sense. Just don’t close your ears too soon if he says something that seems harsh.
Dave’s plan and his principles work! We were a little of $50 k in debt and became debt free after 14 months of really following his plan. Three years later, we are still debt free (except for our house which we bought last year putting over 20% down and only taking a 15 yr mortgage) and live each month within our means. Dave’s plan & God’s help have put us on a path that has us “living like nobody else so that we can one day LIVE like nobody else”! : )
@Michelle,
Way to go Michelle!!!
I’m doing the financial peace class through my job, and so far my fiancé and I really like it. It’s a very interesting class :).