re: How many of you follow Dave Ramsey's advice for everything?

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So paying off the smallest to largest balance (instead of focusing on interest rates) gives them a sense of progress or accomplishment.

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Obviously that is a big part of it - stack up little wins to equal a big win. The other part, though, is reducing complexity. You guys that min/max everything are already into complexity. Most people aren't. If I have 100 tasks for the week to do in no particular order, but they range from 2 minute tasks to 1 hour, most folks (I know I do) try to run through as many of the smaller ones as possible so the focus can be on the smaller number of bigger, more complicated tasks.

The debt snowball is just that - a system to reduce complexity. The smallest balance goes away quickly. The next smallest debt is on deck. Rinse, repeat. Even a Marine can follow that plan.

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If he's borrowing 18k on a used truck at 6.84 the interest will be less than $2k over 3 years or around $55/month. Doubt that's gonna kill him.

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Compounding works both ways, though. If you dismiss ~7% interest as "not going to kill me", pretty soon, you're paying a 7% tax, compounded on everything you buy and get nothing in return.

Imagine instead of paying 7% on that balance that you were making 3%?

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His philosophy is that his debit card works just like your credit card.

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Well except it doesn’t.

Again it’s a discipline thing which is why he’s preaching debit card. He knows it’s not the same thing and understands the differences.

Credit card is a vastly superior option if you do it correctly but a lot of people can’t.

I follow some of it. Have credit card that pay off monthly, don’t pay off mortgage since 1.99% interest rate which he wouldn’t agree with but debt free in every capacity.

He preaches debt free lifestyle. Being debt free has more value to some than others. His advice is more valuable to certain people.

If it helps people don’t sh*t on it.

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IF the stock is part of your long-term retirement or other plan, by all means do not touch it.

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it's not. i've been treating it as a savings account. if it was a normal savings account, it wouldn't nearly be this "big".

if i want something that's expensive, i would ask myself, "do i really want to cash this out, wait 4-5 days before i finally get it, and then pay capital gains on it (if there is any)?"

i'm lazy so if i say "not worth the time" then i don't buy that thing.

if it was a normal savings account where i could access easily by simply going to the bank the same day, i wouldn't have nearly enough to buy the truck outright.

I do think credit cards lead to people spending more money (even if you pay it off each month).

I DO NOT think debit cards offer all of the same conveniences as credit cards. Rental cars are a big one (I realize dollar is one of his sponsors that says you can do their rentals with debit).

Exactly. DR is for the high school educated crowd for the most part. He would be out if a job if we taught basic finance in school

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Did he actually do it by following his own advice?

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I'm not too well versed in his ideas, but I remember back when the PPPs were flowing like wine, his advice was to not apply for it because there was a chance it would not be forgiven. Ramsey himself took a gamble on his new development outside of Nashville by applying for a tax credit dependent on hitting employment numbers over a time period.

A key differences is one is a credit over time and one is a one-time potentially forgiven loan (which almost all were). They are similar in that they rely on things outside of your control. So, yeah, Ramsey somewhat went against his own advice, but, eh. I think Ramsey's total credit is something in the neighborhood of $4-5 million over a long time period, and his empire is worth about $200 million, so whatever.

Ramsey simplifies things for people who want it simple. He's not a dumb guy, and he has smart people working for him, so I'd imagine he's going to take risks that he himself would advise against to others.

Do I follow any of his advice? No, but my risk threshold and financial literacy is higher than his average listener.

My early days when I knew nothing about handling money, DR was a great way to start off. I do not follow all of his advice and do believe that there are some subtle things that could be changed/updated. However, I believe being debt free, living on less than you make, consistent investing over a long time, avoiding “get rich quick”, are all philosophies that most Americans would benefit from following as best as possible.

To all the detractors, Dave Ramsey has helped more people in regards to money management than everyone in this thread combined. I respect him for that.