Thursday, August 09, 2007

Not Exactly Dave Ramsey

I've been pretty vocal about Dave Ramsey lately because his teachings have gotten me on the path to getting rid of my debt. But I need to be honest - I don't believe in everything he says so I better not tell you anymore that I'm following his plan. I am, in fact, following a zero-budgeting plan. To me, this means I try to determine where every dollar is going for the month and whatever is left over gets paid toward our debt -- which brings us back to zero at the end of each month.

So while I love Dave, here are some areas where we disagree:

1. Debt is always bad. From what I've heard, Dave is against debt unless it's for your home. However, many opportunities may require you to go into debt for the short term. For example, a now successful businessman said he never could have gotten where he is today if he hadn't gone into debt to start his business.

2. Only get a 15 year mortgage. In the real world, this would be excellent. However, when Pool Boy and I were starting out, there's no way we could have purchased our home on a 15 year mortgage. It just wasn't feasible for our income at the time. As our salaries increased, we were able to refinance to get it shortened and we now have about 11 years left (unless we get it paid off earlier!). Since we purchased our home when we did, we bought it at a ridiculously low price and now have quite a bit of equity in it.

3. Rice and beans, beans and rice. Dave said to do everything you can to get out of debt: no more entertainment, no more eating out, no more of this, no more of that, etc. While I strive to get out of debt soon, it's important that our family will still have a life and will still have fun. We will aim to cut back our expenses, but there will be no rice and beans here.

If you are into getting out of debt, here are a few blogs you might want to add to your Bloglines account (or whatever you use):