What does Dave Ramsey recommend?
Esteemed radio host and financial advisor Dave Ramsey is best known for three NY Times best sellers and his syndicated radio show, “Life and Money.” His approach to eliminating debt is opposite of conventional knowledge, which says “Pay off the highest interest rate credit card first.” Instead, Ramsey recommends what is called the “Debt Snowball” strategy. The idea is to pay off the smallest debt first to give you a sense of accomplishment and enthusiasm, in essence, getting that snowball of debt rolling. In his book, “Baby Steps,” Ramsey recommends a proven seven-step program. First, while paying the minimum monthly payments, he says you should start to accumulate an emergency cash fund of at least $1,000. Once this goal is met, you can take the next “baby step,” which is paying off all debt by using the “debt snowball” strategy, working your way to the largest debt eventually. The third step is to put three to six months of expenses into a savings account. Next, he says to invest 15%
