Does Dave Ramsey's book work for poor people?

[boysrus]

We do have debt, but it seems different from the debt talked about in the book:
$14,000 in student loan debt, but we have it deferred because we can't afford to pay it.
$1.000 in credit card debt.
$2000 in debt to our old landlord due to damage (paid on monthly, will be paid off in '08 unless we speed up payments)
We own two cash cars and we rent, so no mortgage.
We have no savings

It seems like his method is get out of debt, stay out of debt, but it also seems to be dealing with people who are making decent incomes.
Is this true? I have just started the book and I am trying to decide if I should pursue it

[sweetfeet]

We're lower income and using it with success. I was amazed at how quickly we came up with the $1k emergency fund. It's all to budgetting every penny and frugality though. I think it's totally doable no matter the income. I think debt is usually in relation to income, for example I don't make enough to have a $30k car or $400k house, but someone with a higher income does. However on my income my $14k car is proportionate to their $30k car on their income.

[Eman'smom]

I think like with everything take what you like and leave the rest.

There are certain parts of his book/ideas that I loved, and other parts that I hated or were unrealistic for us.

I'm sure there are some ideas that can work for you and others that won't.

Looking at what you've posted I acutally think you could do pretty well with it, you really don't have that much debt.

[root*children]

We are living below poverty level (according to gov. standards), and found his books quite helpful. Financial Peace is the book I find most helpful. I think it doesn't matter your income... he plainly lies out steps (that's what I like about his method), that help you get where you need to go. Like, you need an emergency fund, right? And that's 3-6 mos. of income. So, if you're not making very much to begin with, you don't have to save as much as someone who brings home more money

The only problem I can't figure out (and maybe someone here can help??), is that he's always talking about getting your house paid off. But I don't see any step in there of where the money is supposed to come from to save for a house (first house) at all. I need one of the "baby steps" to be for renters to save a downpayment!

[Tradd]

Originally Posted by root*children

The only problem I can't figure out (and maybe someone here can help??), is that he's always talking about getting your house paid off. But I don't see any step in there of where the money is supposed to come from to save for a house (first house) at all. I need one of the "baby steps" to be for renters to save a downpayment!

In The Total Money Makeover, I think saving for a house is about step 3B

Step 1 - save up a $1K baby emergency fund

Step 2 - snowball debt and get all non-mortgage debt paid off

Step 3 - 3-6 months expenses in an emergency fund

Step 3B - save up a substantial house downpayment

[cappuccinosmom]

It's supposed to. That's the whole point.

We are pretty near the poverty level, and have stayed *out* of debt using his principals. I really think the "snowball" thing is the key to getting out of debt, gradually building up more and more of your income to apply to your debts, until they're gone.

OTOH, if you literally have no income to work with, he would say you have an income problem, and need to work on that side of the problem. But even delivering pizzas or running errands for people can be enough to start the snowball if you've got your basic needs covered. (We did that for a while too).

[Belleweather]

We're low-income right now, but we've used it successfully to pay off small things like late bills, medical payments, stuff like that. I like his advice about posting totals on the fridge and letting yourself get mad about them. We're planning on turning the snow-ball method full force on our mountian student debt as soon as we graduate (May, IhopeIhopeIhope so we'll see how that works.

[Shirelle]

When we started out DRs plan, we were bringing home about $1800/month for a family of four. We're renters. We have $80K in debt, mostly student loans, and it was climbing. That was six months ago. Through his plan, we just finished up saving up our $1,000 Baby-Emergency Fund, paid off $1600 in debt, we've paid for one semester of dh's school in cash, $1200 dental work in cash, and we're close to having saved up another semesters worth of school. We start BS2 in January, and will start swinging $500 payments to our creditors.

The cool thing about his plan is that you HAVE to be on top of your money. Once we had a clue where our money was going, we realized that the problem was lack of income....so we've done everything we can to get our income up. I got a pt-job where I take my kids with me, dh took a coaching position at work, I just did my first speaking engagement and got paid $50, market research surveys, etc, etc. We were actually making more money than we realized to begin with. Now, a typical month is about $3100. It was almost like the money we needed just found us, instead of us finding it. You can't fix your money problems unless you know what the problem is. If you have debt, it's either because you spend too much or make too little. It's very simple, really. And your choice is that you can cut back or make more. It's common sense--whatever your income is, you have to spend LESS than that on expenses, or you will be borrowing money.

It works for anyone, because anyone can make a budget, and choose to live on less than they make, whether they make $1800 or $5000 a month. You just have to live within YOUR means.

[snuggly mama]

I found the book to be very helpful as well, even though we have issues that he never deals with in the book. The bulk of our cc debt is directly related to dd's medical issues. While we have never gone without health insurance, insurance doesn't pay for things like 3 times a week trips across the state to see the dr., childcare for the other kids during said trips, and loss of income. But, we really do want to pay down this debt and move towards a healthier financial future. I don't see us paying off our house or saving $20K in the bank anytime soon, but we can still use the method he outlines to handle our debt in the way that works best for our family.