What Dave Ramsey Teaches
Dave says, “look, we need a budget”. I agree with Dave 100%, we need a budget. I personally use a program called Mint.com, but there are numerous free ways to help setup and track your budget. No matter what you use, Dave says a budget is required.
2. No Credit Cards
For people who need help with financial discipline, no credit cards is a good idea. But I also have seen people who use credit in various beneficial ways, Nerdwallet has done alot of the homework if you’re looking for more info.
3. Be Frugal
Dave says to live a frugal life. “If you will live like no one else, later you can live like no one else.” In the chant often heard from Dave Ramsey, he is saying be frugal now like no other so later you can live wealthy like most do not. I don’t think there is anything wrong with living frugally, just don’t over do it. We just need to spend less than we bring home. It just makes common sense.
4. Save Money
Dave says we got to put a lot of money back and I agree with him. We need to have some cash for an emergency fund. Keep this in mind, cash is going to devalue every year because of inflation. This can be counteracted with the rise of savings account interest rates with many between 1.5-1.9%!
5. Invest in Mutual Funds
Dave encourages people to invest in mutual funds. I heard the other day on a radio show that a good mutual fund can earn twelve percent. I’m not sure many investment advisors would agree with that percent. What I do know is if you buy a good growth mutual fund and leave it alone, you’re going to be a lot better off than putting your hopes in cash.
6. No Debt
Dave hates debt. Here I disagree with him. Debt can cause people lots of pain. It causes people to lay awake at night. But debt is not necessarily a bad thing if you how to use it to your advantage.
7. Buy a House
Dave says the American Dream is a smart plan… go out with a little bit of money down and buy home. But he also says pay the house off asap, and prefers to pay all in cash if possible.