One of the New York Times best selling authors, Dave Ramsey is a financial guru. He has written several books, including the highly successful Financial Peace. His most popular book, Baby Steps to Financial Freedom, teaches the 7-step plan for financial freedom. Dave Ramsey is no New Kids on the Block, but his personal experiences with debt have made him an inspiration for many people. He once declared bankruptcy and started his own business from a card table in his living room.
Some people have criticized Ramsey for his polarizing ways. His advice on the use of credit cards is particularly controversial. He urges consumers to avoid using credit cards for any purpose other than emergencies. This advice is widely followed by many financial experts, but it is not universally adopted. Moreover, the polarizing nature of Dave Ramsey’s advice has caused him to acquire a cult-like following. But what makes his advice so successful?
First of all, save a minimum of $1,000 in an emergency fund. Then, pay off all your debts, including non-mortgage debt. Using the snowball method, Ramsey recommends tackling each debt one by one, starting with the smallest and gradually working your way up to the largest. A $1,000 emergency fund is sufficient to cover most financial emergencies, but you should have three to six months of expenses in case of an emergency.