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The Water Cooler
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How many of you are debt free? (Dave Ramsey stuff)
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<blockquote data-quote="cody6766" data-source="post: 2483515" data-attributes="member: 26511"><p>His model is really simple. It's not a scheme or anything that requires you to spend money on his products. His website outlines his plan and he goes over it pretty much every day on his radio show. He sells tools that you can use to follow his plan, but the plan is basically a set of common sense steps. He calls them babysteps. </p><p></p><p></p><p>Step 1 is to get yourself on a strict budget and put $1000 in the bank as a short term emergency fund</p><p>Step 2 is pay everything off, smallest debt to largest debt, other than the house. You live on your budget and throw as much as you can on the smallest debt while paying the min on each other debt. Once it's gone you roll that payment into the next...and so on. He has people work smallest to largest because he's noticed that it helps people feel better about their progress and stay more motivated through the plan. It's not a math thing, it's a behavior thing.</p><p>Step 3 is to pile up 3-6 months of expenses in savings as your full emergency fund.</p><p>Step 4 is to pay 15% into your retirement</p><p>Step 5 is to dump extra into your house to pay it down while saving for kids' college and the like. I forgot exactly how he lays the last few out, but it's close to that. </p><p></p><p>I'm working a loose version of his plan. Rather than getting super aggressive with the debt snowball, we're paying a lot extra and playing a little. We make enough that we decided we can afford a little play money as long as we're making strong progress on our debts. I owe on a truck and a student loan and my house. The first two should be gone in 2 years.</p><p></p><p>Give his radio show a listen and you'll see what he's all about. He is on AM 1520 from 1-4, weekdays.</p></blockquote><p></p>
[QUOTE="cody6766, post: 2483515, member: 26511"] His model is really simple. It's not a scheme or anything that requires you to spend money on his products. His website outlines his plan and he goes over it pretty much every day on his radio show. He sells tools that you can use to follow his plan, but the plan is basically a set of common sense steps. He calls them babysteps. Step 1 is to get yourself on a strict budget and put $1000 in the bank as a short term emergency fund Step 2 is pay everything off, smallest debt to largest debt, other than the house. You live on your budget and throw as much as you can on the smallest debt while paying the min on each other debt. Once it's gone you roll that payment into the next...and so on. He has people work smallest to largest because he's noticed that it helps people feel better about their progress and stay more motivated through the plan. It's not a math thing, it's a behavior thing. Step 3 is to pile up 3-6 months of expenses in savings as your full emergency fund. Step 4 is to pay 15% into your retirement Step 5 is to dump extra into your house to pay it down while saving for kids' college and the like. I forgot exactly how he lays the last few out, but it's close to that. I'm working a loose version of his plan. Rather than getting super aggressive with the debt snowball, we're paying a lot extra and playing a little. We make enough that we decided we can afford a little play money as long as we're making strong progress on our debts. I owe on a truck and a student loan and my house. The first two should be gone in 2 years. Give his radio show a listen and you'll see what he's all about. He is on AM 1520 from 1-4, weekdays. [/QUOTE]
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