Some ?'s about Dave Ramsey's plan...

**FrugalMamaof2** · 07-03-2011, 10:26 AM

What are some differences between Dave and Suze Orman? I remember listening to him on the radio a while back while I was on a long drive and appreciated a lot of the things he has to say and his enthusiasm, then Laura Ingram came on after him and I realized I had the radio on a Fox station. Not to cause any rifts or debates but, that is something that has kind of blocked me from taking on his advice or reading his books. I know it is not very open minded of me but I believe that core beliefs have a lot to do with where someone is coming from in the advice they give, and my values and beliefs do not jive with 99.9% of the people employed by Fox news.

Just trying to be open and honest with my apprehensions.

Thanks!

**ladykemma2** · 07-03-2011, 10:35 AM

suze orman wants to to protect your credit rating by having and using a credit card responsibly. she wants you to have 8 months to a year of an emergency fund. she stresses living BELOW your means.

i don't "connect" with suze because she is, like, PhD level and i feel like I am in middle school as regards to finances. she appeals to 6-digit wage earners, not lower middle class like me.

dave ramsey wants to you cut up the credit card, have a baby emergency fund of 1000, zero based budget, pay them all off one at a time, smallest to largest, 3-6 month emergency fund, then more steps after that. dave says FICO score doesn't matter.

i disagree with dave in that the FICO score DOES matter. employer and insurance company check mine every month.

the dave ramsey program made me mildly nuts and after two years i backed off. step 3-7 were making me nuts. i wasn't feeling any financial peace, in fact i felt frantic and, shamed, and not measuring up. for me, his advice after step 2 didnt work.

i am doing the LDS style of money management now, and i feel peace, calm, and abundance. that's another thread.

i still listen to his show every day.

skip the fox news, he's better on the radio. http://www.daveramsey.com/radio/?#listenlive-tab listen here. great for cleaning the house!

**khaski** · 07-03-2011, 11:04 AM

I am a fan of BOTH and disagree with the statement above
'i don't "connect" with suze because she is, like, PhD level and i feel like I am in middle school as regards to finances. she appeals to 6-digit wage earners, not lower middle class like me.'

Suze makes more sense on- get rid of the debt with highest interest rate first, not the lowest amount. Have 8 months EF- the 3-6 Dave eventually recommends when you get far enough in his program doesn't seem enough back up to me, in this day and age of high long term unemployment rates. I agree with poster above FICO score DOES matter, for jobs, insurance rates, future loan rates (we plan to move and purchase a different house in 5-7 years, you can bet our scores wil affect what kind of rate we get, so thanks but no thanks, not cutting up our one credit card- but not using more than a few times a year to keep it 'open').

Dave has a LOT of good points and ideas that are very helpful....if you read my recent post, he has motivated us to ditch $23k+ consumer/business debt in a year, we only now owe $3500 and a mortgage. I find him to be very motivational even if I don't agree with every point he believes in. Some purists will tell you if you don't follow his advice to a 't' you're not 'really' following him....we modified his plan to fit our financial comfort levels. For instance, we have continued to put away a little bit for our retirement regularly and even a smidge for the kids for college, which is a no-no to Dave while snowballing on step 2. Still giving him the credit for our success, even if he says there is no 'modified' plan.

I do agree Dave is more 'common man' than Suze is sometimes, but she also does a great job explaining some types of financial investments/vehicles I did not understand before listening to her.....and I don't think it's just 6 figures+ who need to know why bond funds or variable life insurance policies are unwise moves to make.

We watch Suze for the general financial education, we read/listen to Dave for general day to day financial ideas. You don't have to do all or nothing of either- walk away with, and use, whatever makes sense to you. They are both 'financial experts', but at the end of the day, you have to do what meets your goals in your life. No shame in picking and choosing from both!

**ladykemma2** · 07-03-2011, 11:11 AM

yeah, take what you like and leave the rest.

mary hunt is very strong on sinking funds.

**Hannahski** · 07-03-2011, 11:43 AM

I understand how "Frugal Mama" feels about the political tones of Fox, but I do enjoy Dave Ramsey and Financial Peace. A Lot of what he says about postponing "toys" until you can pay with cash makes so much sense to me. It took a lot of time before my dh came around to frugality. Time and TWO campers... sigh. However, I've begun to save so much more since begining his cash plan. I shop mostly at Aldi's now because they don't do credit -- cash, food stamps, debit cards and my grocery bill is about 200.00 lower each month. I really haven't read or watched enough Suze Orman to comment. Hannah

**l8eebugg** · 07-03-2011, 12:45 PM

I agree take the advice that works for you and leave the rest. No advice fits every person and their situation.

**OOwl** · 07-03-2011, 01:35 PM

I listen to BOTH Dave and Suze and have gleaned a lot from both of them. I followed Dave's plan to debt freedom, but like Lady Kemma, I've become mired in everything after step 3. After two years of "living like no one else," I find myself in the year of worse than that, trying to build up that fully funded EF, almost frantic like LK described. I like Suze's advice but I am sometimes baffled about the "How Am I Doin'" segment of her show. Seems like she doesn't really take someone's chosen (inexpensive, simple, in my case) lifestyle into consideration. I've seen her give "F" grades to someone with over $500,000 in retirement funds. That seems rather "alarmist" to me. I could live quite comfortably on that with my SSI and pension since everything is paid off. So, I keep listening to BOTH, thinking I must of missed something in the lessons and hoping to learn more about financial issues.

**ladykemma2** · 07-03-2011, 06:10 PM

Originally Posted by OOwl

I listen to BOTH Dave and Suze and have gleaned a lot from both of them. I followed Dave's plan to debt freedom, but like Lady Kemma, I've become mired in everything after step 3. After two years of "living like no one else," I find myself in the year of worse than that, trying to build up that fully funded EF, almost frantic like LK described. I like Suze's advice but I am sometimes baffled about the "How Am I Doin'" segment of her show. Seems like she doesn't really take someone's chosen (inexpensive, simple, in my case) lifestyle into consideration. I've seen her give "F" grades to someone with over $500,000 in retirement funds. That seems rather "alarmist" to me. I could live quite comfortably on that with my SSI and pension since everything is paid off. So, I keep listening to BOTH, thinking I must of missed something in the lessons and hoping to learn more about financial issues.

interesting that both of us are pension people. and step 4 is where i quit. according to the DR purists, i should be funding 15 on top of my pension. well, that would be about 30 % of my income. not if i want to eat.

texas teachers?

**OOwl** · 07-03-2011, 07:52 PM

Actually, not retirement or penison yet (mid 40s) but already thinking that direction.

I am rather bogged down at step three at the moment. I find myself hoping to hear more about those steps from the DR show, but many of the people discussing those later steps are millionaires, and it's more of a "money game" with them than true security. I'm more of a realist. I just want enough money to handle the IFs that come up and not be a burden to my children. Right now, it's just about building up the FFEF. After that, I may seek the advice of a financial planner, even though I feel kinda silly not really having THAT much to warrant it.

**Telephus44** · 07-03-2011, 10:00 PM

Funny, the people I listen to most for financial advice ARE millionaires. I'm hoping to be one myself someday.

**Frugal Sooner** · 07-03-2011, 11:35 PM

As a Christian, I appreciate the fact that D.R. brings a spiritual side to his financial advice. Many advisors might tell you if you're trying to get out of debt you should take your tithe and put it on your debt. We believe the Lord has blessed us everything we have, and we honor Him with 10% of that back to further the work of the church (of which our family has benefited from greatly).

We've tried it both ways; and unexplainably, we are able to do more with 90% and God's way than 100% and our way. Since we became debt free, we're able to give more than ever. That's where the real fun is!! I think D.R. understands this, and his advice reflects it.

And while I don't agree with S.O.'s lifestyle choice, I do feel she knows a lot about money management and communicates it well. From a strictly business standpoint, her advice makes sense. If that is all a person feels they need, she does a great job and has helped a lot of people!

And I understand if Fox News doesn't lean the same way you do. The good news is all the other stations lean the opposite way. So there's something for everyone! I personally don't see D.R.'s message of self-reliance, self-discipline and spirituality fitting very well with other networks; but that just my opinion.

Have a Happy 4th! May God Bless America & America Bless God!
Peace

**gmarie** · 07-05-2011, 03:51 PM

Suze annoys me. Dave doesn't. In fact, I think I love him. I want to name my first child after him. Or maybe a puppy. ;-)

Suze's mentality is part of the reason I am in the mess I am in. As far as I remember (and I haven't listened to her in a long, long time - see first sentence.), she doesn't have a big issue with low interest student loans, and I really wish I hadn't listened when others told me student loan debt was the best kind of debt have. It is not!! No debt (except maybe a mortgage!) is worth having!

**frugalfriend** · 07-05-2011, 05:45 PM

Originally Posted by gmarie

Suze annoys me. Dave doesn't. In fact, I think I love him. I want to name my first child after him. Or maybe a puppy. ;-)

LOL!!! I think I have finally met my match!

**a.nonymous** · 07-06-2011, 04:31 AM

Originally Posted by Frugal Sooner

As a Christian, I appreciate the fact that D.R. brings a spiritual side to his financial advice. Many advisors might tell you if you're trying to get out of debt you should take your tithe and put it on your debt. We believe the Lord has blessed us everything we have, and we honor Him with 10% of that back to further the work of the church (of which our family has benefited from greatly).

I'm an agnostic, and even I appreciate that angle over all, even though, I hope understandably, he sometimes pushes the Christian aspect too hard for my taste. Having said that, it's his show, his faith, and how he presents it is obviously none of my business.

We haven't come in contact with Suze's version, so I cannot compare.

On the other hand, Dave's logic behind the steps just instantly made sense to me. My wife had hinted at us getting out of debt for a while but I did not find it urgent. I thought it was A-OK to have a credit line as an emergency buffer.
It took about 10-15 minutes of listening to Dave to get the basic logic behind his reasoning, and another few days of letting it sink in and getting me on board.

The beloved FICO score discussion is a faux one and many people do not (want to) realize it. There are few exceptions where you do need a solid FICO score to get a job in your line of profession. I get that and do not disagree. (Just for reference, I was working in a non-advisory role at an investment bank for the past 7 months with no credit score at all - just to put that into perspective).

For all other matters, though, there are options out there for which you will not need a FICO score at all to do the very same thing (think credit unions, manual underwriters of mortgages, etc).
It's a matter of how much effort you are willing to put into finding them.
The only remaining exception being if you want to take out yet more debt which is pretty much the opposite of Dave's plan.

The bottom line is: If you're not willing to put in the effort to find people who put in more effort to evaluate your situation than simply pulling your FICO score, do not claim you absolutely need a FICO score.

**amos311** · 07-07-2011, 09:22 AM

Originally Posted by ladykemma2

interesting that both of us are pension people. and step 4 is where i quit. according to the DR purists, i should be funding 15 on top of my pension. well, that would be about 30 % of my income. not if i want to eat.

texas teachers?

Not a teacher, but I work for the state and get TRS. It was my understanding after reading Dave that the 6.5% we contribute off the top goes to the 15% we are supposed to put away (according to step 4) so we 'only' have to come up with the additional 8.5% to put into IRAs or what ever you choose. We don't count the matching funds from the state towards that 15%, however.

But I could be completely wrong!