Dave Ramsey


Dave Says - April 21, 2014

I noticed that your Baby Steps list puts saving for retirement before ...

The Dave Ramsey Book from Grandma...ugh.

Hey Dave,

Despite working two jobs all summer to help pay my way through college, I managed to escape with just about 30k in student loan debt. I had a graduation party to celebrate, and as I was going through the cards of congratulations, I noticed that my grandma did not give me a card with $20 like the others...instead I ended up with a book by you. What a lousy gift I thought - I finally break free from school and assigned reading, and there I found myself with your face sitting on my nightstand night after night. My parents were also following your guidance and forced us to listen to your talk radio show for multiple years (which went under-appreciated for a long time, as I preferred the local country station myself), but I wasn't really sure what the point of it all was. I read the book from my grandma anyway, and I'll tell you, it was the best thing I could have done for myself.

I was fortunate to have secured a great job out of college, starting just a few short months after graduation. We got a great signing bonus too, which was really exciting after having been absolutely broke and in school for quite a few years. Some of my coworkers bought new furniture for their swanky Chicago apartments, while others bought new cars. Prior to reading your book, a brand new car was the first thing on my list...but now knowing better, I "suffered" through not buying a new car and continued to drive around in the same car I got on my 16th birthday. I took my entire signing bonus and made the first of what would become many student loan payments. It stung a bit at first, but after coming to the realization that I have lived college-poor for the past 5 years, another year or two wouldn't hurt me. The stinging loan payments were rough at first, but the thought of the amount of interest I was paying daily to have that borrowed money sickened me. Soon it turned into a game for me...and didn't sting anymore. I made a budget and stuck to it, and shockingly, it worked. My friends and coworkers, some also in debt, some not, took great vacations while I forced myself to live vicariously through their tweets and facebook posts, all from the less-than-swanky basement apartment that I was living in, thanks to a great find on Craigslist.

It wasn't easy, but grandma kept asking me if I had taken any of the baby steps every time I chatted with her. I told her I didn't need the $1,000 emergency fund, but reluctantly opened a savings account and started to stock it anyway. 2 weeks after finishing funding that $1,000, my car transmission went out and I had to wipe out the entire fund, plus some. Per usual, grandma was right, I was broke, and found myself starting over on step 1, but this time I knew I could do it.

2.5 years later, too many months of living in less than ideal city apartments, and one too many packets of ramen for dinner later, I AM DEBT FREE.

I don't feel like I missed out on much; quite the opposite actually. I feel like I conquered something. FINALLY, I was able to take that great backpacking trip overseas that I was dying to do(which I had saved cash for of course), and now I have checked off that fully stocked emergency fund and my 15% investments. I'm not married and I don't have any kids, so before I think about starting step 5, I'm in the process of saving up to finally buying that new car I want, and of course, LIVING LIKE NO ONE ELSE!

To all of the other recent grads swimming in student loan debt - if I can do it, you can do it! Create a budget, stick to it, and reap the benefits for the hard work. Don't forget to reward yourself!

Thanks again for the advice in the book from grandma (and sorry for judging it as a lousy graduation gift, I really did think she was losing it for a while there).

coffee diet

My Keurig machine died this week. We are in stages of paying down debt- mostly 6 figure student loan debt. I want to be financial secure by time kids go to college that they are not in same situation as I was. And my husband says you use that coffee machine a lot (I work out of my home) so just go buy a new one. I couldn't do it. I have an old fashion old coffee pot and took it out. I can't justify $100-$200. Paying cash has been biggest advantage of following Dave's advice. I looked in my envelope and knew that my money is better spent for now.
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