Friday, August 3, 2012

Why I love Dave Ramsey

I am a self-proclaimed Dave Ramsey nut.  Some of you may know this from the post I wrote last year which touched on the subject, and some of you may know it because you know me, and I talk about it a lot.  Some think that Dave and I are completely off of our rockers in terms of our finances, and some think we are too concerned with money, so I wanted to write about my reasons for loving Dave Ramsey, and his babystep plan.

1) Dave Ramsey saved my marriage.  
I tell this to a lot of people but I can't say for sure that my marriage would have crumbled without finding and reading Dave Ramsey's Total Money Makeover.  I can say though that now we have one less thing to argue about, which is a blessing (because as I am sure most married couples know, there are lots of other things to argue about, and any one that can be crossed off the list is a blessing!).  This isn't to say we never argue about money, but the frequency that it happens has gone down dramatically.

2) I can sleep at night.
While I was in University, I used to lay awake at night, thinking about how I didn't know how I would pay my credit card bill.  Limited income, and seemingly unlimited bills can do that to you.  I can honestly say that since paying off our debt, there have been many nights I haven't gotten a good sleep, but none of them have been because I was worried about if we would have the money to pay tomorrow for our yesterday.

3) I am not counting my change to try to make rent.
At the end of every day, Dave and I take all of our change and split it into two jars - pennies, nickels, dimes, and quarters go in our change jar; and loonies and toonies go in our savings jar.  Our savings jar isn't to be touched, and once we get enough loonies or toonies to roll, we roll it, exchange it for cash,  and put it in our savings acccount at the bank.  But the change jar can be used for a coffee here, or muffin there, or something small we may want or need.  The change jar doesn't frequently get used though, because it is too hard to rummage through it to find the change you need.  So, once that jar gets full, I take it and roll it all, and take that cash and put that in our savings account too.

A couple of weeks ago, the change jar was full, and so I went through this process, which had reminded me of the time about two years ago (a month or two after our wedding) that we couldn't make rent.  At that time, I had jars and jars of change (mostly pennies), that I had been saving for years (I had started saving my change in high school).  I wasn't wise enough to have an emergency fund, so these jars were my storehouse (that I had planned on keeping forever).  We had to dump all of those jars out, roll all of the change, just so we could pay rent that month.

I am so glad that now I can count my change to pad our savings, instead of counting my pennies and praying there is enough so that I can keep a roof over my head.

4) When a rainy day comes, we will be ready.

We have a well-funded emergency fund.  Although I am a constant worrier, and still concern myself with tomorrow (Matthew 6:34, Amy!), I am less worried as I know we have a good padding between us and any financial mishaps.

5) Dave Ramsey's steps are simple and easy to follow.

I am not saying that the process will be simple or easy to follow through on.  I cannot tell you how much I am dying to go on a vacation to New Hampshire, and saving the money for our trip is probably going to take forever, and I don't think I will be able to go until I am 75 years old, and I would rather use the money we have in the bank right now to go.  But I can't, because it is not wise, and we have more important savings goals to be focusing on now.

Dave Ramsey's Baby Steps though, are simple and easy to follow.  And for those of us who like being able to follow steps, the plan is marvelous.
  1. Have 1000$ in the bank as an emergency fund.
  2. Pay off all debt, starting with the smallest, and working through to the largest.
  3. Build an emergency fund of 3-6 months worth of expenses.
  4. Put 15% of your income towards retirement.
  5. Save for your children's education.
  6. Pay off the house.
  7. Build wealth and give.
6) Dave Ramsey's plan has an emphasis on giving.

Dave and I are able to give now more generously and with a more willing heart than we have ever been able to give before.

7) Financial stewardship is Biblically mandated.

There are a lot of things in the Bible that we Christians don't like to talk about, and we especially don't like to hold ourselves to the biblical standard in these things.  My top three on this list are Money, Sex, and Gluttony.  I am going to avoid those last two for now, and just give a little biblical background on Money (which, by the way, is mentioned in the Bible over 800 times)*.
God believes building up storehouses is wise.  The famous story of Joseph is a great indication of this - God enabled Egypt to have food to last through a drought by saving up while times were good.  Proverbs 21:20 is also a great example of building up storehouses.

The Bible discourages debt. Proverbs 22:7

The Bible encourages saving. Proverbs 13:22, Luke 14.28, and Proverbs 31:16

Jesus, in Luke 16:11, even says "And if you are untrustworthy about worldly wealth, who will trust you with the true riches of heaven?".

Now, don't get me wrong - I also know that Jesus says "you cannot serve both God and money"(Matthew 6:24), but I do not believe that serving God means spending all my money, but that saving, budgeting, and giving are all wise choices that God looks favourably upon.  However, if he calls me to leave everything behind and follow him, I need to be ready (Luke 18:18-30).

So yes, we might be crazy, but I would rather be crazy than normal in this case.  And I know Dave Ramsey's plan may not be for everyone, but it worked phenomenally for Dave and I, and I encourage anyone with any concerns about money to pick up his book, The Total Money Makeover, attend a Financial Peace University class, or at least visit his website.  When we first had the opportunity to take a FPU class, we didn't, because we didn't think we had $100 to spend on it, but had we taken the plunge and spent the money on it then, I am sure we would have more money in the bank now.

"The poor are always ruled over by the rich, so don't borrow and put yourself under their power"
-Proverbs 22:7 MSG
Join me next week when I update you on how we are doing following the baby steps, and how I have amended our budgeting and jar system over the past year!

*Statistic found here.