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Content Provided by MyTotalMoneyMakeover.com

A bigger baby emergency fund

Sean presents a plan that might mean skipping a Baby Step. Does Dave agree with her special situation?
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Stupid Tax Stories

I Didn't Want to Damage My Credit

"To further complicate the problem, I continued to use the credit card for emergencies when I expected to have extra income to pay it off," Delvin said.
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Success Stories

Open-Heart Surgery and Still Got of Debt!

Getting out of debt "it has changed who we are as people, enriched our marriage, taught our children valuable life lessons," Peter and Ginger said.
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Myth: Debt is a tool and should be used to help create prosperity.
Truth: Debt is not a tool; it is a method to make banks wealthy, not you.

Debt is dumb. Most normal people are just plain broke because they are in debt up to their eyeballs with no hope of help. If you're in debt then you're a slave, in the sense that you do not have the freedom to use your money to help change your family tree. According to a recent USA Today article about debt, 78 percent of baby boomers have mortgage debt, 59 percent have credit card debt, 56 percent have car payments.

It takes a lot of will, discipline, courage and help to slay the debt monster. But it can be done. Imagine how much you could put toward retirement if you just didn't have a stinking car payment? This is how the wealthy build their wealth. Debt is really dumb. Welcome to the real world! Start your Total Money Makeover Now.

Get more information on debt.

Debt Help

Myth: I can get quick debt help over the phone or internet.
Truth: True debt help is not quick or easy, and it starts in the mirror with you.

Where do most people go for debt help? Most people try credit repair companies, debt consolidation, debt management companies or bankruptcy. These services almost never help solve the true problem - behavior.  Companies touting quick, pain-free fixes are really scams that cause more harm than good.

So, my Total Money Makeover begins with a challenge. The challenge is you. You are the problem with your money. The financial channel or some tape sets aren't your answer; you are. You are the king of your future, and Dave has a plan.

Get more information on debt help.

Debt Consolidation

Myth: Debt consolidation saves interest and you have one smaller payment.
Truth: Debt consolidation is nothing more than a "con" because you think you've done something about the debt problem.

Debt consolidation is dangerous because you treat only the symptom. The debt is still there, as are the habits that caused it. You just moved it! Our counselors will not recommend debt consolidation for a client.

The reason that we do not use debt consolidation to get out of debt is because it doesn't work. You end up paying about the same amount, which doesn't really help you pay your debts off faster.  Most people end up taking on more debt after consolidation and several end up in bankruptcy.

Get more information on debt consolidation.


Myth: I'll just file bankruptcy and start over; it seems so easy.
Truth: Bankruptcy is a gut-wrenching, life-changing event that causes lifelong damage.  Avoid bankruptcy if at all possible.

Bankruptcy is listed in the top five life-altering negative events that we can go through. Chapter 7 bankruptcy, which is total bankruptcy, stays on your credit report for 10 years. Chapter 13 bankruptcy, more like a payment plan, stays on your credit report for seven years.

Bankruptcy, however, is for life. Loan applications and many job applications ask if you have ever filed for bankruptcy.  Ever.  A common misconception is that you can use credit repair services to fix the damage from filing bankruptcy. If you lie to get a loan because your bankruptcy is very old, technically you have committed criminal fraud.

Find out how to avoid bankruptcy.

Debt Management

Myth: The debt management companies on TV, like Ameri Debt, will save me.
Truth: You may get out of debt but only with your credit trashed.

Debt management companies are springing up everywhere. These companies help "manage" your debt by taking one monthly payment from you and distributing the money among your creditors, with whom they've often worked out lower payments and lower interest, but at a price.

When you use one of these companies and then try to get a conventional, FHA or VA loan, you will be treated the same as if you had filed Chapter 13 bankruptcy. Mortgage underwriting guidelines for traditional mortgages will consider your credit trashed, so don't do it.  Get a Total Money Makeover instead.

Get more information on debt management.

Debt Reduction

Myth: I should pay off the debt with the highest interest rate first to get out of debt quickly.
Truth: You should pay off the smallest debt first to create the greatest momentum in your debt reduction.

The math seems to lean more toward paying the highest interest debts first, but what I have learned is that personal finance is 20 percent head knowledge and 80 percent behavior. You need some quick wins in order to stay pumped enough to get out of debt completely. When you start knocking off the easier debts, you will start to see results and you will start to win in debt reduction.

We've developed a little process called the "Baby Steps" to do one thing at a time and keep the debt reduction process simple. The Baby Steps are the foundation for your Total Money Makeover.

Get more information on debt reduction.


Myth: I don't have time to work on a budget.
Truth: You don't have time not to.

The dreaded "B" word. Budget. The only other word that starts with "B" that might generate a worse reaction in most people is the word bankruptcy. Unfortunately, the word budget has gotten a bum rap. It is basically just a plan. When you budget, you're spending on paper, on purpose, before the month begins. But many people view a budget as a straight jacket that keeps them constrained. Freedom and budget just don't seem to go together.

However, when you see that a budget is just spending your money with intention, you'll actually experience more freedom than before. Many people say they found even more money when they created a realistic budget and stuck with it.

Get more information on budgeting.

Life Insurance

Myth: Cash value life insurance, like whole life, will help me retire wealthy.
Truth: Cash value life insurance is one of the worst financial products available.

Sadly, over 70 percent of the life insurance policies sold today are cash value policies. A cash value policy is an insurance product that packages insurance and savings together. Do not invest money in life insurance; the returns are horrible. Your insurance person will show you wonderful projections, but none of these policies perform as projected.

Get more information on life insurance.


I'm tired of hearing all the gloom and doom coming from the media about the economy and unemployment - I bet you are, too! Let's take a minute to look at the true reality of the situation and what we can do about it.

Yes, many people have lost their jobs and houses. You may be one of them. But guess what? People have lost their jobs and houses even in a bull market. Over 90% of people are still employed. That is pretty good! I was alive in the 1970s when unemployment hit double digits, and we're nowhere near that right now! I'm not making light of the fact that some people are struggling; I'm just putting the situation in the proper perspective.

Get more information on unemployment.


Myth: I'll get a 30-year mortgage, but I'll pay it like a 15-year mortgage, so if something goes wrong I'll still have wiggle room.

Truth: Something will go wrong. Avoid 30-year mortgages.

If you say, "Cross my fingers and hope to die, I promise, promise, promise I will pay extra on my mortgage because I am the one human on the planet who has that kind of discipline," you are kidding yourself.

Sick children, bad transmissions, prom dresses, high heat bills and pet vaccinations come up, and you won't make the extra payments. The FDIC says that 97.3% of people don't systematically pay extra on their mortgages.

Get more information on mortgages.

Debt Snowball

Myth: I should pay off the debt with the highest interest rate first to get out of debt quickly.

Truth: You should pay off the smallest debt first to create the greatest momentum in your debt snowball.

The math seems to lean more toward paying the highest interest debts first, but what I have learned is that personal finance is 20% head knowledge and 80% behavior. You need some quick wins in order to stay pumped enough to get out of debt completely. When you start knocking off the easier debts, you will start to see results and you will start to win in debt reduction.

Debt Snowball Plan The principle is to stop everything except minimum payments and focus on one thing at a time. Otherwise, nothing gets accomplished because all your effort is diluted.

Get more information on how to get out of debt.


Myth: I can get a great deal on a timeshare and go for vacation every year! Plus, I can always sell it if I get tired of it.

Truth: Timeshares are one of the biggest scams on the market today. Once you are stuck in one, you are stuck in a black hole.

The first word that should come to your head when you hear the word timeshare should be RUN! Run far, far away! If you run fast enough, you can eventually escape that annoying, high-pressure salesperson!

Think about this for a minute. Why in the world would you pay thousands and thousands of your hard-earned dollars for a place with minimal square-footage that you might get the chance to visit for one week each year? Add to that the fact that you have absolutely no equity in the place. And you have to pay extra ongoing "maintenance fees." And selling it is near impossible. And it's basically just an expensive, ongoing headache. And, and, and!

Get more information on timeshares.

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