Dave Ramsey

[terry f]

    Anyone listen to, or follow Dave Ramsey? I'm sure alot of members here lived that lifestyle before there was a Dave Ramsey. I know if you heard one show, you heard them all, but I still enjpy listening to him.

[Kansas]

On the rare times I listen to him, I think he gives excellent personal advice. For business, and especially sawmills, it won't work. Might be a goal to work toward to, but you take opportunities when you can. Including borrowing money to achieve something.

[terry f]

    I agree Kansas, I can't jump completly on board, but I could have used a little more of it the last 30 years.

[Cedarman]

There is a huge difference from borrowing for personal items that do not make you money by owning them and capital items that can make you money by using them.  Borrowing money for a sawmill may let you make money by using it thus paying it off and making money to buy personal items.
I think Dave is talking about personal spending and saving.
If I had not borrowed lots of money, I would not have created the net worth that I have now.

[DouginUtah]

Dave Ramsey and I have one major disagreement, and there may be some on here who don't agree with me, but a person absolutely needs a credit card. I have had occasions in my life where I would have been in dire straits without one.

Like having my truck stolen on Saturday when visiting Disneyland. Try to fly or rent a car without one!

I have been inclined to email Dave and ask how he flies without having a credit card.  :D

[Kansas]

When you have a capital intensive business like a sawmill, you have plans, backup plans, backup plans to the backup plans. Few of us cutting hardwoods have the luxury of having just in time inventory. When you have logs for inventory for your just in time customers, regular customers, you get logs when you can get them, enough to get you through the rainy times or other times. I realize rainy times isn't exactly a problem these days. At least around here. Plus if your dealing with big companies, and running a bunch of receivables, it can be a mess.

Still kicking around the notion to putting this all out there in a seperate thread. Just haven't quite talked myself into it yet.

[Cedarman]

For many in the sawmill business, "Just in Time" means getting a deposit to the bank before the check you wrote gets there.

[pigman]

I agree with Dough on credit cards. I use mine on a regular basis, but I never have paid any interest. I trust myself and treat the card as cash and never carry a balance. I do agree with Ramsey on most issues.

[Cedarman]

Paying with a card costs the merchant several % in extra costs which they pass along to you the customer.  Some will take a few % off if you pay cash.
I agree with the need for a credit card that you pay off each month.  When purchasing parts over the phone that you need next day may  be impossible without a card.

[easymoney]

yes a credit card is a necessity for some folks especially ordering things by phone or the internet. since i am retired and no longer in business a debit card works for me. but a credit card would be handy in case of an emergency if i did not have enough money in the bank. i listen to dave also and he has a lot of good advice if we would do as he says. one thing i agree with him on is his advice about buying a new car. he says do not buy new unless you have plenty of money in the bank and can afford it..   

[Roxie]

I think Dave's principals are sound for personal or business purposes.  If an individual or business is always working to pay your debt, it's hard to fathom that you can get out of debt, and become your own bank.  You don't need a line of credit, or a credit card when you have sufficient savings to finance yourself. 

As for travel, my debit card can be used just like a credit card, and I've purchased plane tickets, hotel rooms, and rental cars with the debit card.  If you've followed Dave's advice, and you get in a tight spot, you should have the savings to switch over to cash for emergency expenditures. 

Dave's is a total package philosophy, and if all the components are followed, the results are amazing. 

I was living the Ramsey way long before I ever heard of him, but I bought his books for both my sons and that was one of the best investments that I made for my boys.  I could have told them and shown them till the cows came home, but Dave Ramsey makes the information fun and really drives the point home.  As in all things, they'd rather take their advice from someone besides Mom, and therein lies Dave's greatest strength.  His "work and save for what you want" advice is spot on. 

[Don_Papenburg]

Just to reafirm what Roxie said Dave belives in debit cards not credit cards.  If you pay with a debit card that is almost like cash .   However in my buisness I only use cash or check. I can only accept cash (preferd) or check for payments of goods and or services.

[Dodgy Loner]

Debit cards are less secure than credit cards for online transactions. I also get 1% back on everything I put on my credit cards, which my wife and I use for hotels when we travel. There is no cost associated with using a credit card if you pay it off every month, which we do. So I definitely disagree with Dave Ramsey about credit cards. His advice to avoid them is probably good for people who lack self-control.

[Roxie]

How is a debit card online purchase less secure than a credit card? 

As for self control, nothing shows better self control than not spending money until you've saved sufficient to cover your purchases. 

[pigman]

On a debit card if a mistake is made by the seller, you have to try to get your money back. With a card card if a false charge is made I can refuse to pay the credit card company.

[Roxie]

The law on purchases may vary by state, but I have exactly the same rights with my debit card as a credit card on erroneous charges. 

Someone attempted to charge an online purchases on my debit card once, and a call to the bank, and then a call to the vendor (which the bank provided), and it was corrected immediately. 

[DouginUtah]

I was unaware that debit cards were okay in Dave's world. (I have never used a debit card.)

Speaking of credit cards, it is a good idea to let the card issuer know when you are traveling. I had mine canceled while buying gas in Canada. What a hassle.

[terry f]

    Easymoney, I agree about buying a new car being a wealth killer, and I've been guilty of that more than most. I have no problem makeing a 400 dollar payment, but to save up 25 thousand and lay it down on a car is something I couldn't do (lack of self control). I know its the same money, but its a different mind set, and something that needs to start early, like Roxie and her boys.

[metalspinner]

Dave is a local hero around here.  He grew up and went to high school right in my little town.

The hardest part of Dave's program is the full buy-in of everything he teaches and learning to make and stick to a budget. 

We added up all of our debt payments each month and pretended for just a minute that we didn't have them. We could be rich! We were working for the banks not us!

[DanG]

I enjoy listening to Dave Ramsey and his principles are sound, however I find his advice to individuals a bit unrealistic at times.  I guess it comes from being a multi-millionaire for too long, but he seems out of touch with the issues most people face today.  It is pretty easy to sit up there and say "sell the car" or "get a second job", when you don't have to worry about finding a buyer or the job.

[Kansas]

While I have a tremendous amount of respect for Dave, here is a good business example. We used to run old skid steers. Farmer sat me down and made me see the light. Skidsteers are such an intregal part of our business. They get started and shut off more times than  you can count every day. He made me understand that its the per hour cost, not the cost of the machine. We switched to new New Hollands. We run around 4.50 to 5 dollars an hour for actual costs for depreciation on the machine. And usually turn them in with bald tires. You just can't beat that. We kept one for a little too long, and had to replace the battery and starter this last week. That is 360 bucks total. About the cost that we have the monthly payment for either one down to. This fall, one or both will be traded. Just about the time they are paid off. I consider them to basically be leased machines, even if we technically own them. In Dave's system that could not happen. Every situation is unique. Not having down time, time spent working on something, not having to buy parts, has value as well.

[Shotgun]

I agree about buying a new car being a wealth killer, and I've been guilty of that more than most. I have no problem makeing a 400 dollar payment, but to save up 25 thousand and lay it down on a car is something I couldn't do (lack of self control). I know its the same money, but its a different mind set, and something that needs to start early, like Roxie and her boys.

But it's not the same money.  It's costing you much, much more.  If it's okay with you, it's okay with me though.

[Patty]

I think Dave Ramsey fills a very important role for many folks.  So many do not learn about finances and budgets from school or from their parents, and this is a void that he fills. Do I live my life by his rules? No not completely, but I do pay cash for most things that cannot be deducted for tax purposes, such as my groceries, clothes etc.

I have found that a "business credit card or debit card" is very convenient for all tax deductible items, as it keeps a record of all my purchases for the tax attorney. I could probably save receipts and throw them into a shoebox to be sorted at tax time, but I value my time too much for that.

Starting a new business venture almost always requires a line of credit or a start up loan to get going. These can be very important tools, and if used wisely & paid off or paid down as quickly as possible, can payoff big time in future business.

Ramsey is for the folks that are in over their head via credit cards, car loans, upside down mortgages, etc. He gives good advice for those who will follow it and become financially disciplined.

It all comes down to common sense and spending less than you earn.....it is that simple.  ;)

[Dodgy Loner]

How is a debit card online purchase less secure than a credit card? 

As for self control, nothing shows better self control than not spending money until you've saved sufficient to cover your purchases.

On a debit card if a mistake is made by the seller, you have to try to get your money back. With a card card if a false charge is made I can refuse to pay the credit card company.

Pigman is correct about the difference between a debit card and a credit card. Also, consider what would happen if someone made an unauthorized purchase on your debit card and as a result, you unknowingly racked up hundreds of dollars of overdraft fees from your bank. This happened to my sister when she was in college. She got back the ~$500 that was improperly withdrawn from her account, but the bank left her liable for every penny that they charged her for overdrafts - almost $200. That can't happen with a credit card.

Your statement about self-control makes it sound as though you believe that people who use credit cards are spending money they don't have. Not true. Every dollar that goes on our cards is matched by a dollar in the bank. We pay off the cards (my wife and I each have one so we can track our purchases separately) in full at the beginning of every month, thus we never pay interest, and we get 1% back. That's free money. Credit cards are not for everybody. But they work for us, and I wouldn't be without them.

[Norm]

As a merchant that takes credit cards I beg to differ on that free money. The price for a product sold has that figured in whether you use a cc or not.