As you may recall, my husband and I are taking Dave Ramsey's Financial Peace University classes with BIL/SIL.
First class was last Wednesday. DH went alone as I was out of town on a work trip and BIL/SIL were on vacation.
He said the others were nice, he thought Dave was funny, etc.
I finally sat down and watched the video session last night. I liked it more than I expected to. I appreciated that he acknowledged how low interest rates are right now, and that your savings account is not an investment. I like how he advocates investing and saving for retirement, but I STRONGLY DISAGREE with him that you should wait until all student loans, car loans, etc. are gone to start investing, saving, and giving.
His Steps Are:
1) $1,000 to start an Emergency Fund 2) Pay off all debt using the Debt Snowball 3) 3 to 6 months of expenses in savings 4) Invest 15% of household income into Roth IRAs and pre-tax retirement 5) College funding for children 6) Pay off home early 7) Build wealth and give!
I still think that his baby step of "pay off all debt except the mortgage" should be amended to "pay off all HIGH INTEREST debt except the mortgage". Our mortgage is a 15 year at 3.375% so we will probably skip that step entirely. I think he underestimates how much student loan debt a lot of professionals have these days. He is a huge preacher of compound interest and the time-value of money, which is why Step 2 seems out of place. I am fine with paying off all consumer debt, or all high-interest debt, or something like that, but to me it is downright silly to delay the other goals while attacking debt under 5%.
I know that we are not really his target audience, and I do think having a clear plan is a huge help for many people. I think this week the topic is relationships & money, which I find fascinating.