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Would Dave approve???

January 6th, 2010 at 06:51 pm

Yes, I mean Dave Ramsey. If you're reading blogs about debt I'm going to assume you may have already heard of him. But for those who have not, Dave Ramsey is a financial author, tv host (his show is on Fox Business News channel) and motivational speaker of sorts.

Ok before you judge me too much, it's not a cult or some fad. I get it, he's an entertaining TV personality. However, as I've mentionned before, I have spent months researching debt reduction strategies, I've read every blog, watched every personal finance show on TV. What I like about him is that he went through financial ruin and came out alive. He knows what he speaks!

Dave's approach is mostly common sense, with some direction and strategy put to it. He doesn't believe in credit cards AT ALL and he gives a good, do-able approach to getting rid of the debt.

So hubby & I are taking his approach in our journey. Before getting our emergency savings started, or saving for a home, or retirement, we are getting rid of the debt first. It's not wrong to do all the above at once, but I agree with Dave in that if you try to spread your efforts around, the results maybe be weaker. When I look at the interest rate I'm paying for these dang credit cards...I don't want to spend a minute longer than I have to paying for them! What's the point of saving for retirement (at say, an estimated annual 8% stock market return), when I'm paying minimum payments on credit cards with a 22.99% interest rate? I'm still losing money.

Check out the "Credit Card Interest Calculator" at www.consumercredit.com. All you need is the basic info from your credit card statement (balance, APR, minimum payment amount). Plug in and voila! It gives you the staggering news of how long you will be paying that credit card and how much in interest you will pay. It's a sobering exercise.

4 Responses to “Would Dave approve???”

  1. creditcardfree Says:

    Welcome to SA! Dave says you need that baby emergency fund of $1000 first...before you tackle the debt. If you don't alreay have it, I highly recommend it from personal experience.

  2. Ima saver Says:

    Welcome, glad you have joined us!!

  3. littlemama Says:

    I like dave too. His strategy worked for us. We have been debt free except for mortgage (which we make extra principle payments on) for over a year now.

  4. frugalgal Says:

    Yeah, I know I started a little out of order and I should have done baby step 1. But I got so excited about paying down the darn debt!! I'm thinking of using a potential tax return for that...we shall see what Uncle Sam leaves me with.

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