The Dave Ramsey Allocated Spending Plan, My 2 Cents On The Awesome Dave Ramsey Model Of Finance
The Dave Ramsey Allocated spending plan really puts together a lot of information that all leads to one way of structuring your finances so that you are debt free, so that you have an emergency fund, so that you have a paid for house, and so that you have a fully funded retirement, with other naked investment accounts, and a fully funded 529 plan for the kid’s education. In terms of the overall financial model, step by step, it is the best one that I have ever seen, and basically involves never using a credit card or taking out a loan or a car lease, or anything of that nature. And so, in this blog post, I will tell you how I am going to be following the Dave Ramsey model to a tee moving forward, and of how I will most likely never deviate in the slightest moving forward, it is most definitely the pathway to wealth and can make most of these people that call in MILLIONAIRES if it were to be followed to a tee!
Among some of the highlights of The Dave Ramsey Allocated Spending Plan include the below:
NEVER use a credit card
Never take out a car loan or any debt
The only exception to the no debt rule is to take out a 15 year fixed mortgage and pay it off within 10.2 years, the time the average millionaire does.
Never use a car lease, line of credit, or anything like that
Get a 6-12 month Emergency Fund put away (more here is fine, if an 18 month or so cushion helps you sleep at night)
Pay physical cash for everything in order to cut costs and spend less money
Budget for every single dollar in your Financial Plan
Once you are debt free and have a pile of cash for emergencies, Put 15% in the 401K
Then focus on homeownership (personally, I think you can skip this step and go to investing which may be smarter depending), whether getting your house or condo paid off
Then fund your 529 plan accounts if you have children
From here, MAX OUT your retirement accounts and every single dollar of savings, since you now have 0 house payment, as every single other dollar now goes into investments.
The Dave Ramsey Allocated Spending Plan, Why It Works For Getting Rich
It works for getting rich because it fortifies your finances. Keeps you from bankruptcy, keeps you from paying interest to the big banks, keeps you from spending more than you need, and puts you on a path towards becoming an investor rather than a spender and one who lives off of debt. It also will change your mindset and behavior if you watch Dave’s philosophies and really understand what he is telling you, you are on the path way to getting rich over time. There are a few reasons why this works:
Fortifies you against debt interest and payments
Allows you an emergency fund to have wiggle room
Stops you from overspending and rewards points chasing with credit cards
Fortifies you against risk and bankruptcy, and if your smart, it should give you peace of mind knowing that you have both increasing wealth and a cushion
Encourages you to have a strong financial structuring, being 0 debt (eliminating the diseases of the body), an emergency fund so you never have to touch your investments, and finally, a LOT of investments and retirement accounts so that you can keep building and growing your wealth over time.
Why Dave Leaves Out One Thing For Getting Rich – Sustaining Your Income Over Time
With all this, yes, Dave is correct in the best way to get you rich. This is pretty much the absolute best way for you to become wealthy as an overall strategy, but it does leave one part of your financial situation in the dark, and that is HOW to make the kind of income you need to actually get rich. It is extremely difficult to get to an income of like $200,000 or $250,000 per year, and is even HARDER to sustain that type of wealth. Heck, even keeping down a $50,000 to $60,000 per year job is absolutely brutal regarding what it takes, and Dave only goes into primarily staying out of debt, versus getting your income up. He leaves that one to you.
Final Thoughts On The Dave Ramsey Allocated Spending Plan, Dave Wants You to Be Rich And Safe
Regarding the Dave Ramsey allocated spending plan, I absolutely love the business model and the way that he advises people to structure their finances. Even among financial advisors at work I find myself seeing things like people leasing cars, using credit cards, having credit cards with $550 per year fees on them, and having personal loans for like hundreds of thousands of dollars, and this is among multi millionaire financial advisors that I can’t figure out for the life of me why they have debt just sitting there. I feel that I understand how to structure personal finances better than, seriously, 99.9% of people, due to me watching Dave Ramsey. Hope you enjoyed the post, subscribe for more info!
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