…that I agree with Dave Ramsey’s plan for financial improvement/independence.
Well, let’s be clear about that: I agree with the broad strokes of Dave Ramsey’s plan for financial improvement/independence. I agree with aiming for a debt-free life. I agree with taking a “gazelle intense” approach to changing your financial life (although I realize it’s not for everyone). But most of all, on a purely intellectual level, I agree with following the seven baby steps.
To me, it just makes sense to focus all your intensity on paying off your debts before approaching other financial goals, like building an emergency fund or saving for retirement. I’m not into the “split the difference” approach to attaining financial goals – while a lot of people might like to throw some of their excess funds at debt, some at retirement, and some at the emergency fund, that’s not how I feel most productive. I like tackle a challenge, cross it off of my financial to-do list, then move on to the next one. That’s just my personality, which is why the seven baby steps speak to me.
I don’t agree with every nuance of what Dave Ramsey espouses, like not using credit cards or avoiding student loans at all costs (among many, many other nuances). I firmly believe that credit cards can be used responsibly and that student loans are sometimes necessary. I’m also not a religious person, so the Christian bent of Dave Ramsey’s approach isn’t appealing to me, nor is his abrasive, self-involved personality.
And I think that’s why I’ve avoided going all “Ramsey gung-ho” up until now. I don’t want to be one of those PF-ers who follow him so blindly that they can’t think for themselves, I don’t want other people to think that just because I agree with the baby steps I agree with everything about him. You know what, though? There are a lot of people who have good ideas who I wouldn’t necessarily want to befriend – Rachel Ray, Anna Wintour, and Barney Frank, for example. But being unlikeable doesn’t equate to being un-followable, at least not to me.
So what does this mean for my financial plans? It means that my next priority needs to be building my emergency fund to six months of expenses, or $10,000. I know, I know, I still have over $10,000 in student loans to pay off. But I’m eligible for $5,000 in student loan forgiveness at the end of next school year. If I make regular payments up to that point, the $5,000 will clear the remaining balance. If I paid them off on my own, that would be a waste of $5,000 (see, I’m still thinking for myself!) so in the meantime I’m skipping over to building my emergency fund. Getting $10,000 in the bank will be financial priority #1 for 2013, so stay tuned for how I’m going to make it happen.
I know almost all PF bloggers ask this from time-to-time, but what are your thoughts on Dave Ramsey? Love him? Hate him? A little of both? I have to know, so share!