Dave Ramsey has had it all with credit cards. He was in a huge amount of debt and was able to pay off all of his balances but he was in a worse situation than most. Now he is in debt again but with a different goal in mind. He wants to get you out of debt and give you the financial freedom that you deserve.
Dave’s main focus is on getting you to break out of the financial rut that so many of us fall into. He was in the same situation as you but decided that it wasn’t worth staying in this rut. So he took action and created a very successful plan to get you out of this. Dave’s main tip is to create a budget that you can live with. Also, he has created several helpful tips like the famous “10 Budget percentages”, “automatic spending”, and “Dave Ramsey auto underwriting”.
Dave’s first tip which should really jump out at you is to create a budget that you can stick to. The best way to do this is to simply take a look at your expenses each month and determine what you can afford. Then you want to find areas within that budget that you can trim or reduce. Dave’s 10-percent rule is great for getting this done because this means that you have to cut out 10% of your expenses in order to get out of debt.
The second step in Dave’s debt elimination process is to determine which debt is safe to eliminate. We all have unsecured credit card debt like most of us. There is also the issue of mortgage debt that we may not have even realized is owed. These are all areas where you may want to begin building wealth and eliminating debt with the help of a good Dave Ramsey plan. Just make sure that you stay on track and don’t let yourself get off track.
One of the last tips that he has is to purchase enough life insurance coverage so that you have some buffer to fall back on if things go south. Life insurance isn’t something that most people have enough of. It is usually thought of as a bad thing to buy and more of a financial burden to have. By creating a budget for yourself and taking out enough insurance you can be back on solid ground financially.
The final three tips that Ramsey gives us is to purchase term life insurance. This will give you time to replace any major financial losses that you may incur and help you build wealth. You can do this by using your savings, investment accounts, mutual funds, and CDs. The beauty here is that you are only paying premiums on term life insurance which is something that you can cancel if you need to.
The final one of Dave’s debt and financial tips involves the act of investing. In his book he states that you should start investing in things such as mutual funds, stocks, and bonds. Dave also says to avoid investing in the real estate market. He does not recommend the stock buying, but rather that you invest 15% of your income into an IRA. There are many tax advantages to this and it will allow you to build your nest egg for the future much easier.
If you follow the Dave Ramsey debt snowball method then you will be able to eliminate your debt without filing bankruptcy. This is because the debt snowball method will force you to prioritize each debt that you have and work to eliminate it from your life. So once you get rid of the largest debt you can then go after the next biggest one until you are down to the final one. This means you will have less debt and the ability to eliminate it much easier than what would happen with the traditional method.