I’m not totally sure about The Teacher, but I was first introduced to Dave Ramsey for the very first time about 7 years ago when we were visiting my in-laws in Mississippi. My father-in-law loves to talk finances and politics with me, so somehow through the course of our conversation, he told me about one of Dave Ramsey’s books titled, The Total Money Makeover*.
I spent the majority of that trip reading through the book and my father-in-law could tell I was so interested that he decided to bless me by giving me his copy. The Teacher read some of the book as well, but I also read him chapters aloud because I was so excited about what I was reading.
I’d come to find out that Dave Ramsey has tons of other books out and has his own radio show, but this was my first introduction to the book that changed my view on finances forever. Without re-reading the book right now for this post, here’s what this book did for us.
1. Inspired us to set up a budget, but STICK TO IT!
As long as I’ve been married, we’ve had some sort of budget. I’m a nerd like that and I have always enjoyed crunching numbers. But, there were times when Kev and I lacked the discipline to actually stick to it. We sometimes still struggle with this, but this book was the “kick in the pants” we needed to really try to work on this.
2. Encouraged us to build a significant emergency fund
I don’t remember exactly what our savings account looked like at the time we discovered Dave Ramsey, but it was certainly not something we focused on with the same intensity as we do now. We were still young and not making nearly what we thought we would after college graduation, so we were more focused on getting by rather than saving. Am I the only one who was completely shocked that I wasn’t making $50,000 right out of college? HA!
This book was a great encouragement in our beginning to put forth effort in planning ahead for emergencies. As Dave recommended, we started out with $1000 in a savings account and then moved towards saving for a fully-funded emergency fund {which Dave recommends be 3-6 months worth of living expenses}.
3. Challenged us to live debt-free {except for the mortgage}
This book discusses the importance of being debt-free when trying to build wealth over your lifetime. This really resonated with me at the time because I was starting to become really frustrated with making our car payment {which was small in the scheme of things} and student loan payments each month when our Toyota Corolla wasn’t so new to us anymore and The Teacher had graduated from college a few years prior!
Our debt was not nearly as high as some, so I won’t pretend that we were buried in it {and we owe a lot of that to our generous parents and The Teacher’s service in the military}, but it was still a frustration of mine at the time and I became more and more dissatisfied by having debt. I never have liked owing people money, but this book challenged me to believe it was possible to live debt-free forever and there were tons of personal stories to prove it.
4. Introduced us to the cash-only concept
This concept was a very new one to me at the time. While I never considered myself to be a big spender, I always used my check card. I figured that since it was coming out of my checking account, I could only do so much damage. I’ve learned that using cash has tons of benefits and I’m thankful for Dave’s advice in this area. It took us years to get there, but this book was the start of our changed thinking on the topic.
I also began thinking more about saving ahead for big purchases rather than charging them and paying them off at the end of the month {or getting ourselves into another monthly payment once we were debt-free}. Since we tended to pay off our credit cards each month, I wasn’t quite sure what the big deal was. We haven’t always done this perfectly, but this book was what jump started our change in mindset regarding saving ahead and then buying with cash.
5. Caused us to save more intentionally for our long-term future
The Teacher and I have always known we needed to save for our long-term future, but it always seemed like such a huge undertaking. We are not Finance or Business majors so it can be intimidating to think about retirement accounts and 401(k)s. The book gives some general recommendations on how much to be saving so that you won’t be scrambling by the time retirement rolls around. We are not satisfied with our retirement accounts {I don’t know many people who are}, but Dave Ramsey has caused us to diligently work on them so we will be as prepared as we can be. We’ll work on college funds at some point too. I have no tips on that one yet. 🙂
One of the things I love most about this book is that he breaks The Total Money Makeover* down into “The 7 Baby Steps.” Dave Ramsey has a ton of experience counseling families that are in horrible financial trouble after learning lots of lessons himself the hard way {if I’m remembering correctly, I believe he filed for bankruptcy when he was much younger}, he advises families to tackle 1 baby step at a time rather than trying to accomplish everything at once.
The concept is very powerful because you can focus on each step with intensity and then move ahead with confidence and empowerment once the previous step is complete. I’m more convinced than ever that half the battle is with your mind!
Important to Note:
One thing that I want to mention is that Dave Ramsey’s plan is not a linear plan to building wealth. It may seem that way at first, but if you have lived long enough, you know that life is not linear. You will encounter bumps or surprises along the way. Because of this, the path to building wealth will not be linear either. We have found that things come up and we have to go back and re-work on some of the earlier baby steps. I’ve had to remind myself that it’s okay if that happens. The important part is to keep working at it.
What’s the Point?
While Dave Ramsey has certainly encouraged us to change our thinking on building wealth, our motivation for getting our finances in order is not so that we can become rich. There is nothing wrong with building wealth, but it’s not what our main goal is in life. And though I don’t know Dave Ramsey personally, I believe he’d agree.
For us, the reason we try to be good stewards is so we can be great givers and bless others throughout our lifetime. I would love to be able to bless my children in the same way that our parents have blessed us. I would love to be able to bless others by donating money to some of the causes we believe in the most {we do some of this now through tithing and other charitable giving, but we would like to increase it}. If we remember this, then working towards your financial goals becomes so much more rewarding. It’s not just about the money, but about using it to bless others.
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I've never done a Dave Ramsey class, but my parents did, so I grew up with a lot of these concepts. We still do use Angel's credit card–but only when we could just as easily use cash. We use it when buying a computer or paying a tuition bill in order to rack up rewards points! But we make sure that we're only using it when we could just as easily go withdraw the cash from the bank and use that.
My father-in-law uses his credit card for everything and then just pays it all off at the end of the month for that very reason and we've been very blessed to be the recipients of numerous gift cards he's earned to restaurants! He's very disciplined about it. We don't follow Dave Ramsey to the "T", but have found his books to be very inspirational! 🙂
I recently discovered Dave Ramsey and have been doing his plan for about three months. So far so good! 🙂
That's great, Laura! I found that once we got going with it and saw progress, we were so encouraged to keep going. You can do it!! 🙂
We read Dave Ramsey's book awhile ago, and wish we had been stricter with ourselves to save for an emergency fund! It would have helped us out a lot later 🙂 Great points and thanks for sharing!
Even though I read his book a while ago, I find myself thumbing through it periodically to refresh my memory and re-inspire myself! It's been a great resource for us. 🙂
Funny but I think I blogged about Dave Ramsey maybe in 2007 or so? Although I couldn't always manage to follow them, I really liked his methods – seemed like they were simple to implement and practical.
2007 is probably about the time I read his book for the first time…it's funny how old some of his stuff is but yet it's still so applicable!!