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Dave Ramsey Is Right: Get Out of Debt, Now
Dave Ramsey
Dave Ramsey, a syndicated financial columnist and radio host, espouses a plan to get out of debt and accumulate wealth that he calls “The Seven Baby Steps.” They include paying off all of your debt using the “debt snowball,” starting by paying off your smallest line of credit and working your way up to pay off larger and larger debts. Ramsey says, “You need some quick wins in order to stay pumped up about getting out of debt! Paying off debt is not always about math. It’s about motivation. When you start knocking off the easier debts, you will see results and you will stay motivated to dump your debt.”
I can’t tell you how true that is. If I’ve accomplished one thing since getting divorced, it’s getting my money straight. I’ve spent the last two years paying off my debt little by little and now I’m virtually debt-free.
I still have student loan debt and a car payment, plus one credit card that I’m paying off on a very low-interest payment plan that I arranged with the company. Other than that, I’ve paid off all my retail cards and paid my mother back the money I borrowed from her after my divorce (something Sasha Miller of Daily Worth described as single-mom start-up debt). It feels GREAT. And because I’ve been budgeting for two years to pay off my debt, I now feel like I know how to budget for future spending to avoid winding up back in debt, something I plan to avoid.
My parents never taught me much about money. My Dad always spent money freely, and was never shy about showing his family a good time. We splurged on simple pleasures like dinners and trips to the mall; we only really went on one family vacation, but we didn’t need to go to Florida since we had a pool in our backyard. My Dad built that pool and the home my mother still lives in with his bare hands. What he didn’t build was a financial legacy for my mother to be able to take care of that home now that he’s gone. Now that I’m a single mother, my financial health is of great concern to me, and I look forward to building a sound financial future, one that teaches my daughter how important it is for her to take her own economic power seriously. One of the reasons my ex-husband was able to embezzle funds without me knowing is because I wasn’t invested enough in our economic life. I looked to him as the older, wiser partner and figured he’d make sure everything would work out. I’m an artist – until now, I never really took money seriously. Getting divorced and having to finally be completely responsible for myself – and someone else – has taught me to respect the power of wealth, and driven me to want to earn it.
Source: DaveRamsey.com
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4 Comments
Lee commented on Mar 21 11 at 6:15 pmI very rarely agree with you but on this point I want to give you a high-five. I particularly appreciate your emphasis on not only getting OUT of debt but STAYING OUT of debt. To paraphrase a popular slogan for dieters, no expense will be as enjoyed as financial security will feel.
Kikiriki commented on Mar 22 11 at 11:42 amYes! Both women and men need to take an active role in the family finances – understanding where the money goes, what the family needs/doesn’t need, and putting enough aside for the future. My mom is in the same position as yours, Carolyn, because she barely worked during their marriage and had no interest in learning about finance or retirement. My father’s benefits are barely enough for her to live on. It’s a lesson I took to heart; I know where our money is and where it is going, and I am learning about investing as well so I can have a say in where we put our money. Another smart idea – once you have paid off your debt, don’t go back to spending! Most of what you did without while you were paying off your debt, you can still do without! Act like you’re still paying off the debt, only now, put that money in your bank account/investments/IRA/etc.
carolyncastiglia commented on Mar 22 11 at 11:46 amYou’re totally right, Kiki – that’s the hard part, but worth doing! I definitely have financial discipline in my heart now, and another little person to inspire me, so savings should be right around the corner…… fingers crossed (and out of the wallet!)
Linda, the original one commented on Mar 22 11 at 1:07 pmYou forgot about the part where you moved back in with your mother in order to do this. Would it have been possible had you been renting your own apartment, paying all your own utilities, etc…? Seriously, it’s great that you’ve been able to pay off so much debt. We’d be free and clear in a couple of months too if not for that pesky mortgage, electric bill, garbage bill, and sewer bill. I totally agree with you about the importance of paying off/staying out of debt, but I’m puzzled why you don’t mention the huge luxury you’ve been afforded. Surely you know that most adults parents of minor children don’t have this particular housing option.
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