Dave Who?

This past weekend, my husband and I drove to Charleston, SC to see the Total Money Makeover Live Event with Dave Ramsey.  Who is Dave Ramsey?  Are you kidding me?  You don’t know?  I’m just kidding.  I had no clue who he was until a year ago when my Dad gave me his book.  I hate to read (I get distracted easily), so I bought the book on CD and started listening to it in the car.  I liked what Dave had to say, but put it on the back burner.  I then read another blog who mentioned Dave, so it sparked the interest again, so I checked out Dave’s website and found his radio show and now listen to that daily.

Listening to his radio program has gotten me really excited about what he has to teach about finances.  I found that he was speaking in Charleston, SC and my husband and I have wanted to go there since we moved to NC almost 8 years ago, so it was perfect!  We saw him this past weekend and loved the conference.  Dave is so funny and makes money interesting.  We learned so much about how to save and to get out of debt fast, by really making the effort to do so.  Our current debt is one car ( which will be paid off this year) and our house, which most people have.  We want to try to pay that off early (instead of just making the normal payments for 30 years). :)  We’d love to have no debt and then really be able to save, save, save for the future.

Dave also teaches about not having a car payment.  I always thought that was normal (to have a car payment).  Dave talks about buying a “beater” car that’s reliable.  Pay $2,000 to $5,000 (in cash) for it, run it to the ground and do the same thing until you have all your debts paid off.  This leaves for no car payments ever, which means you’re not paying interest on a car loan either.  Then, when you’re debt-free, you can buy the car you want (still buying with cash, of course).  It’s an interesting principle and not everyone is going to want to catch on.

I find it all fascinating and would love to move forward with Dave’s plan.  It makes sense to us.  For instance, our other car has been paid off for over 9 years.  It could die any day now (it’s so old).  We had already been planning to buy a new Honda Accord or Civic when it dies.  My only rule is that we don’t have two car payments at once (which we wouldn’t since the other car is almost paid off as well).  Now, after hearing Dave, I think we’d go for a used Honda (up to $5,000) and pay cash for it so we have zero car payments (that would be a first for us).  We could then take that car payment and put it into a mutual fund and let it grow.  Watch this video.  It makes sense to me. :)  Ok, I could ramble on and on about Dave forever, but don’t want to bore you, especially if this stuff doesn’t excite you, but real quick, here are his “baby steps” that he teaches in his Total Money Makeover book (a quick overview):

1. $1,000 to start an “Emergency Fund”
2. Pay off all debt using the “Debt Snowball”
3. 3-6 months of expenses in savings
4. Invest 15% of household income into Roth IRA’s and pre-tax retirement
5. College Funding
6. Pay off home early
7. Build Wealth and Give!

If you have any questions about the “baby steps”, please just ask.  I’m happy to fill in the details for you.