Financial type information does not come easy for me. Thankfully our bank, Helpful Bank, makes paying our bills pretty easy by giving us online bill pay and they do all the work with an automatic debit and credit feature that adds and subtracts numbers for me. When I had to balance my own check book I was constantly screwing it up. Helpful Bank even helps us save by automatically taking money from checking and putting it in our interest gaining savings account every two weeks. I really like Helpful Bank, but I needed some direction.
I read online that Dave Ramsey was the financial guru with simple plans. I love plans, so I added his station to my favorites and I started to listen every single day. Dave has an easy manner and enjoys most of his callers. He has a lot of devout callers who telephone him to do the debt free scream. Most of these devotees are Christian, married couples, who have paid off $20,000 or more in debt in about 12 months. The amount of debt that has been cleared using Mr. Ramsey’s system is really staggering.
Dave’s financial advice is called the debt snowball and Dave believes that paying off debts from smallest to largest regardless of their interest rate is a wise decision. Dave is also a firm believer of a $1,000 emergency fund in the bank. Now, I am not a financial person. I have never studied money markets or stocks and I could not tell you the difference between the gold and silver markets. What I do know is that life can get expensive. We are homeowners, car owners and I am a full time neurological patient and our world costs money.
Before all of the Dave supporters get riled up, I don’t hate Dave, I just don’t really like him (sorry Dave). To start with, the idea of a $1,000 emergency fund is so unbelievably ludicrous it is almost laughable. One of the very first emergencies we had as homeowners was when our 60 year old boiler quit working in September and the cost with a home warranty was over $1,500. Three months ago Mr. MVP hit a pothole on the way home from work and did $750 in damage to the car, but we had to replace all of the tires to make the care drivable again. The total cost of the emergency was $1,300. Our monthly bill for medications after insurance is $200 and with co-pays for visits to doctors our medical budget hits $400 quickly. We have an emergency fund, but we laugh in the face of $1,000.
One gigantic issue that is never discussed on Dave’s show is the extras. Dave likes to coach people to buy cheap cars and take out 15 year mortgages, but he never, ever talks about the impact. An inexpensive car is fantastic IF it never needs repairs, new tires, new brakes, an oil change, transmission work, or any of the other millions of things that could go wrong with a clunker car. On top of that you still need to pay for insurance and fuel. Dave never talks about fuel efficient cars and the possibility of paying a little extra for a car that goes a little further per gallon of gas. Mr. Ramsey actually gave a caller the advice that if he could afford to keep both his cars it was a solid decision to do so. Dave also doesn’t talk about the bonuses that come along with buying a home. Home ownership is really freaking expensive. If Dave is encouraging a 15 year mortgage he should also be promoting a house emergency fund of $3,000 for when the roof starts leaking from an ice damn in the middle of the winter.
How does someone get out of debt without stuffing all their money in Dave Ramsey envelopes or believing that God is in charge of all their money? Well, I do believe there isn’t any secret bigger than figuring out exactly what you owe, figuring out what you make, finding extra money everywhere, paying off debt anyplace you can, never stop saving, and of course starting right now. Remember, I’m not a financial wizard and this is not financial rocket science. Dave will tell you to pay off debts in order, but really Dave also says that the only way to financial peace is through the Prince of Peace, Christ Jesus. Actually Dave, the only way to financial peace is to pay off all of your debts. If God was making all of us financially stable I do believe the churches of the world would be a whole lot richer.
Helpful Bank assists us in paying our bills, saving money, and understand how we could allocate more or less towards different areas of spending. With technology and applications I’m willing to bet that your bank has an app too. We use our debit card because it’s easy and fast. Some banks have budgeting plans worked right in to their software. Budget Simple is a free budget planning program that will help if your bank doesn’t have plans available. Money doesn’t have to be scary or complicated, but it does have to be maintained. If you give your money direction you will reap the rewards.