Comments on: Dave Ramsey Baby Steps Defined http://frugaldad.com/2008/05/29/the-dave-ramsey-baby-steps-everybodys-a-critic/ Promotional Codes, Coupons & Deals + Money Saving Insights Thu, 24 May 2012 01:21:20 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: trekker http://frugaldad.com/2008/05/29/the-dave-ramsey-baby-steps-everybodys-a-critic/#comment-87246 trekker Tue, 20 Mar 2012 11:42:51 +0000 http://frugaldad.com/2008/05/29/the-dave-ramsey-baby-steps-everybodys-a-critic/#comment-87246 Sorry Charles... I think a look in the mirror is in order. Using credit cards for "everything" although convenient is not really that "smart" financially speaking. What Dave preaches is to use cash as a tool for negotiating. True, it may be a little difficult at the local Walmart trying to buy the kids clothes and getting a discount waving cash but for other purchases, everything from TV's to shrubbery at the local nursery, cash is king. Why? Because credit card companies charge the vendors who accept them fees to process transactions and in turn, these costs are passed along to you - and me. So the "cash back" you receive using your cards ain't free... far from it. Sorry Charles… I think a look in the mirror is in order.

Using credit cards for “everything” although convenient is not really that “smart” financially speaking. What Dave preaches is to use cash as a tool for negotiating. True, it may be a little difficult at the local Walmart trying to buy the kids clothes and getting a discount waving cash but for other purchases, everything from TV’s to shrubbery at the local nursery, cash is king. Why? Because credit card companies charge the vendors who accept them fees to process transactions and in turn, these costs are passed along to you – and me.

So the “cash back” you receive using your cards ain’t free… far from it.

]]> By: Art http://frugaldad.com/2008/05/29/the-dave-ramsey-baby-steps-everybodys-a-critic/#comment-76539 Art Mon, 06 Feb 2012 15:21:13 +0000 http://frugaldad.com/2008/05/29/the-dave-ramsey-baby-steps-everybodys-a-critic/#comment-76539 Unfortunatly, most states use credit scores heavily for insurance rates. If a client comes in with proof that they are fiscally responsible as ramseyfan suggests there is nothing that the insurance brokers can do to adjust the rates for you. The rates are determined by actuaries and are unadjustable. There are many discounts available from safe driving to good student discounts, however, there is no way to manually override the credit score factor. Worse yet, if you do not have a credit score on file they lump you into a category based on your age - which is an average of sorts of people in your age group credit scores - as you can imagine that average is not going to be good. Personally, I very much dislike the way we use credit scores these days - and I only have one credit card that I own for the sole purpose of maintaining a decent score for better insurance rates as well as the ability to one day be able to get a favorable loan for a home purchase. Unfortunatly, most states use credit scores heavily for insurance rates. If a client comes in with proof that they are fiscally responsible as ramseyfan suggests there is nothing that the insurance brokers can do to adjust the rates for you. The rates are determined by actuaries and are unadjustable. There are many discounts available from safe driving to good student discounts, however, there is no way to manually override the credit score factor. Worse yet, if you do not have a credit score on file they lump you into a category based on your age – which is an average of sorts of people in your age group credit scores – as you can imagine that average is not going to be good.

Personally, I very much dislike the way we use credit scores these days – and I only have one credit card that I own for the sole purpose of maintaining a decent score for better insurance rates as well as the ability to one day be able to get a favorable loan for a home purchase.

]]> By: Melissa http://frugaldad.com/2008/05/29/the-dave-ramsey-baby-steps-everybodys-a-critic/#comment-70349 Melissa Sun, 08 Jan 2012 18:47:45 +0000 http://frugaldad.com/2008/05/29/the-dave-ramsey-baby-steps-everybodys-a-critic/#comment-70349 I really like what you wrote here! After listening to the audio of the book I wondered where Dave Ramsey found a mutual fund with a 12% return and a term life insurance policy that's only $7.00. Even though his numbers may be a little off he still has the right idea of "sacrifice" to live better. I really like what you wrote here! After listening to the audio of the book I wondered where Dave Ramsey found a mutual fund with a 12% return and a term life insurance policy that’s only $7.00. Even though his numbers may be a little off he still has the right idea of “sacrifice” to live better.

]]> By: David http://frugaldad.com/2008/05/29/the-dave-ramsey-baby-steps-everybodys-a-critic/#comment-69988 David Wed, 04 Jan 2012 21:28:55 +0000 http://frugaldad.com/2008/05/29/the-dave-ramsey-baby-steps-everybodys-a-critic/#comment-69988 Wow, I love your refined baby steps. You should repost this! I have been struggling with not putting anything in a 401(k) not even to the match. Today, I decided for the New Year to go the 3% since we match 100% to 3%. This really helped solidify my decision. Thanks! Wow, I love your refined baby steps. You should repost this! I have been struggling with not putting anything in a 401(k) not even to the match. Today, I decided for the New Year to go the 3% since we match 100% to 3%. This really helped solidify my decision. Thanks!

]]> By: Spendwise Mom http://frugaldad.com/2008/05/29/the-dave-ramsey-baby-steps-everybodys-a-critic/#comment-68439 Spendwise Mom Thu, 22 Dec 2011 04:04:33 +0000 http://frugaldad.com/2008/05/29/the-dave-ramsey-baby-steps-everybodys-a-critic/#comment-68439 I'm a little behind in reading Dave Ramsey, but it is nice to know that there's someone else out there that had to tweak the steps a little to fit their situation! I linked to this post in my review of the TMMO. I’m a little behind in reading Dave Ramsey, but it is nice to know that there’s someone else out there that had to tweak the steps a little to fit their situation! I linked to this post in my review of the TMMO.

]]> By: Charles http://frugaldad.com/2008/05/29/the-dave-ramsey-baby-steps-everybodys-a-critic/#comment-67311 Charles Thu, 15 Dec 2011 17:47:03 +0000 http://frugaldad.com/2008/05/29/the-dave-ramsey-baby-steps-everybodys-a-critic/#comment-67311 Personally, I think Ramsey is a total idiot and there are many sites that cite a long list of examples of that. Learn some simple discipline and use credit cards for everything! We do. We put our groceries, household expenses, travel, and even recurring bills like the telephone and internet all on credit cards. If you pay them off every month you pay no interest, so there is no cost. And, if you are smart you can save quite a bit of money. We receive checks from Chase and Citibank on a regular basis. Our rewards cards always give us 1% back, which is usually about $20 for free every month. But, two of our cards have rotating categories such as groceries or gas that pay 5% rewards. And, we get free rental car insurance when we travel, liability limits in the case of theft, and other perks that you don't get with debit cards. Now, I know some will say: but, credit cards got us into this mess and I don't want to risk charging on them again. If that's the case, you probably don't have the discipline for the Ramsey-style crash diet approach to personal finance, either. I just get so tired of people saying the first thing you should do is cut up your credit cards. The first thing to do is make a plan and maximize your end everywhere you can. That should include credit cards and the discipline that goes with them. Also, create a budget that results in positive cash flow, makes sound progress or a reasonable period of time, but leaves you with a life. The Ramsey/Orman/etc approach will just burn you out and you'll binge. Personally, I think Ramsey is a total idiot and there are many sites that cite a long list of examples of that. Learn some simple discipline and use credit cards for everything! We do. We put our groceries, household expenses, travel, and even recurring bills like the telephone and internet all on credit cards. If you pay them off every month you pay no interest, so there is no cost. And, if you are smart you can save quite a bit of money. We receive checks from Chase and Citibank on a regular basis. Our rewards cards always give us 1% back, which is usually about $20 for free every month. But, two of our cards have rotating categories such as groceries or gas that pay 5% rewards. And, we get free rental car insurance when we travel, liability limits in the case of theft, and other perks that you don’t get with debit cards.

Now, I know some will say: but, credit cards got us into this mess and I don’t want to risk charging on them again. If that’s the case, you probably don’t have the discipline for the Ramsey-style crash diet approach to personal finance, either.

I just get so tired of people saying the first thing you should do is cut up your credit cards. The first thing to do is make a plan and maximize your end everywhere you can. That should include credit cards and the discipline that goes with them. Also, create a budget that results in positive cash flow, makes sound progress or a reasonable period of time, but leaves you with a life. The Ramsey/Orman/etc approach will just burn you out and you’ll binge.

]]> By: Dave Ramsey’s 7 Baby Steps: Step 2 – Pay Off All Debt Using The Debt Snowball http://frugaldad.com/2008/05/29/the-dave-ramsey-baby-steps-everybodys-a-critic/#comment-41622 Dave Ramsey’s 7 Baby Steps: Step 2 – Pay Off All Debt Using The Debt Snowball Tue, 25 May 2010 14:22:57 +0000 http://frugaldad.com/2008/05/29/the-dave-ramsey-baby-steps-everybodys-a-critic/#comment-41622 [...] that you’ve got your $1000 emergency fund saved,  it’s time to get intense about paying off all your debt.  Dave Ramsey likes to call this getting “gazelle intense”, in reference to the bursts [...] [...] that you’ve got your $1000 emergency fund saved,  it’s time to get intense about paying off all your debt.  Dave Ramsey likes to call this getting “gazelle intense”, in reference to the bursts [...]

]]> By: Do Not Follow the Government’s Lead By Bailing Out Others | Frugal Dad http://frugaldad.com/2008/05/29/the-dave-ramsey-baby-steps-everybodys-a-critic/#comment-32225 Do Not Follow the Government’s Lead By Bailing Out Others | Frugal Dad Wed, 30 Sep 2009 01:29:23 +0000 http://frugaldad.com/2008/05/29/the-dave-ramsey-baby-steps-everybodys-a-critic/#comment-32225 [...] and the borrower–not a good relationship to have with a family member or friend.  Like Dave Ramsey says, “Thanksgiving dinner just doesn’t taste the [...] [...] and the borrower–not a good relationship to have with a family member or friend.  Like Dave Ramsey says, “Thanksgiving dinner just doesn’t taste the [...]

]]> By: Steve http://frugaldad.com/2008/05/29/the-dave-ramsey-baby-steps-everybodys-a-critic/#comment-29831 Steve Wed, 12 Aug 2009 03:03:49 +0000 http://frugaldad.com/2008/05/29/the-dave-ramsey-baby-steps-everybodys-a-critic/#comment-29831 I have to disagree with these steps. It seems to me that if you are having to keep using ALL of your emergency fund and dip into credit cards, then you have the worst luck in the world, or as Dave says, you really dont have emergencies, you just use it as an excuse to spend. I mean really, how many times have you had an emergency that cost you over a $1,000 and then another RIGHT after that before you could build back up your fund? The 2nd step that is REALLY out of order is the debt snowball. The reason Dave says to do this number 2 to save you ALOT of money on intrest. The sooner you do this, the less you pay off. I know I would rather pay less than more. To sum this all up, I guess if you feel the plan works well for you, then go for it. "different strokes, for different folks." However, although I agree with this author regarding being careful taking advice from certain sources, Dave said it right when he said, "Dont take advice from broke people! Now I am not saying this author is broke, but I would rather take advice from a proven millionaire and financial genious, then somebody that has a little extra time to post this.... I have to disagree with these steps. It seems to me that if you are having to keep using ALL of your emergency fund and dip into credit cards, then you have the worst luck in the world, or as Dave says, you really dont have emergencies, you just use it as an excuse to spend. I mean really, how many times have you had an emergency that cost you over a $1,000 and then another RIGHT after that before you could build back up your fund?
The 2nd step that is REALLY out of order is the debt snowball. The reason Dave says to do this number 2 to save you ALOT of money on intrest. The sooner you do this, the less you pay off. I know I would rather pay less than more.

To sum this all up, I guess if you feel the plan works well for you, then go for it. “different strokes, for different folks.” However, although I agree with this author regarding being careful taking advice from certain sources, Dave said it right when he said, “Dont take advice from broke people! Now I am not saying this author is broke, but I would rather take advice from a proven millionaire and financial genious, then somebody that has a little extra time to post this….

]]> By: IndianaTeacher http://frugaldad.com/2008/05/29/the-dave-ramsey-baby-steps-everybodys-a-critic/#comment-29678 IndianaTeacher Sat, 08 Aug 2009 22:27:06 +0000 http://frugaldad.com/2008/05/29/the-dave-ramsey-baby-steps-everybodys-a-critic/#comment-29678 You write, "For us to save a year's expenses would take us a 3 years! I’m not going to wait that long to get out of debt." No, I wouldn't either until the debt was gone, and I didn't until my house was paid off. (Luckily, I never had too much debt to begin with. My parents paid for most of my education, and in Grad. school I worked as a Graduate Teaching Fellow and was able to get my Masters without debt as well.) I was just saying that I don't feel comfortable with less in savings, not that everyone should set that much money aside. I'm sure the fact that I'm a single parent (widowed) and the major source of income also means that I need to have more savings than a two-income family. It seems you have done really well paying off debt, and I'm sure you will reach your goals. You seem pretty savvy when it comes to money, and you set goals - which means you're half-way there. Well, it's always nice to meet the real people behind those user names. You have a great blog here. I'll visit from time to time, and perhaps we'll talk on twitter. (I follow your messages there.) You write, “For us to save a year’s expenses would take us a 3 years! I’m not going to wait that long to get out of debt.” No, I wouldn’t either until the debt was gone, and I didn’t until my house was paid off. (Luckily, I never had too much debt to begin with. My parents paid for most of my education, and in Grad. school I worked as a Graduate Teaching Fellow and was able to get my Masters without debt as well.) I was just saying that I don’t feel comfortable with less in savings, not that everyone should set that much money aside. I’m sure the fact that I’m a single parent (widowed) and the major source of income also means that I need to have more savings than a two-income family. It seems you have done really well paying off debt, and I’m sure you will reach your goals. You seem pretty savvy when it comes to money, and you set goals – which means you’re half-way there. Well, it’s always nice to meet the real people behind those user names. You have a great blog here. I’ll visit from time to time, and perhaps we’ll talk on twitter. (I follow your messages there.)

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