PF Blogs Burning the Type About Dave Ramsey

This past week several pf blogs have taken up the subject of Dave Ramsey and his "The Total Money Makeover: A Proven Plan for Financial Fitness." Most of you, if you have read my blog much know that I follow Dave Ramsey's teaching along with John Cummuta's, "Transforming debt into Wealth." Supposidly John Cummuta was around before Dave Ramsey and both of their teachings are very simaler.

Young and Broke wrote (I added the link to the article she quoted),

I read a really great article in last Sunday's Chicago Tribune (May 28, 2006) that focused on Dave Ramsey, author of "The Total Money Makeover: A Proven Plan for Financial Fitness", who's expertise is getting people out of debt (the big, bad kind). One of the things that Dave abhors, it seems, is borrowing money in the case of an emergency. He believes that money - lots of money - can be found fast without taking out loans.

Here are his suggestions, and my thoughts:

She then discussed each of these Dave Ramsey points (my comments on each of these, instead of hers, are below):
- "Live on 'Beans and Rice'" - Have been basicly doing this for many years, even before hearing of Dave Ramsey.
- "Sell Your Car" - I have written another article earlier tonight (and an email to Dave Ramsey) regarding my transforming thoughts on this from an earlier post. In tonights article I ask Dave and you my readers for thoughts about putting this into action.
- "Sell Your Stuff" - All my stuff is second hand particle board specials. None of my furniture is made of real wood, and thus has no real value.
- "Stop Your (retirement) Saving" - Although Ramsey admits many people feel this is counterintuitive (and I am one of them), it's not. The interest you're paying on your debt is likely much higher than the return your getting on your savings.
- "Work Extra" - Get a side job. I have considered this, but at this point I have not done so.

On May 30th, Free Money Finance weighs in and says,

I recommend paying off the debt first because: 1. it's costing you money (a lot) that's digging you deeper into debt and 2. if you pay it off, it's not like that money's gone. You can charge again if you HAVE to (if you get into trouble financially) This has the same effect as saving money for future expenses. However, if you save first, you're paying interest on the debt the entire time you're saving. Doesn't seem like a smart move to me.

To add a few more specifics to this, here's what I'd recommend as the order:

1. Pay off high-interest, credit card debt.

2. Establish an emergency fund.

3. Pay off other debt.

In adition he adds a few more tips,

The rest of the article hems and haws and really doesn't make a complete recommendation, so I'll make one:

1. Spend less than you earn. This alone is THE key to getting rich. Said another way, save a portion of all you make.

To spend less than you earn, you may need to earn more or spend less.

2. Contribute to your 401k to get the full employer match.

3. Pay off your credit card debt.

4. Establish an emergency fund.

5. Pay off all other debt.

6. Invest your savings regularly in good, solid investments. I like index funds.

7. Do this for a long time, letting the power of time and compounding work for you.

Other articles, were both supportive and disparaging torwards the financial guru.