How to Pay Off Debt Quickly with Dave Ramsey

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When we finally got to the point that we were ready to create a budget and pay off our debt, one of our first Google searches was:  How to pay off debt fast!  The results disappointed us a bit because a majority of the articles were about Dave Ramsey’s budget plan.

Article after article referred to this money guru that I had heard on the radio for years.  For me, buying into the Dave Ramsey plan was not the easiest thing.

It wasn’t until after I read his book that I finally got it!

The Dave Ramsey budget is successful at helping people pay off their debt fast because it goes beyond the dollar signs.  It helps you to take responsibility for your decisions with money and start living your life!

To help you navigate through the Dave Ramsey budget plan, we will cover some of the most frequently asked questions.  If we missed one, please include it in the comment section below so that we can add it!

  • What is the Dave Ramsey budget plan?
  • What is the importance of paying off debt fast?
  • How does Dave’s plan help people pay off debt?
  • Why do you want to pay off your debt?
  • How does Dave Ramsey’s budget plan help you to pay off debt fast?
  • What is the Debt Snowball?
  • Can I use my credit card to pay off my debt faster?

Learn More About Dave Ramsey: The Dave Ramsey Plan That Will Make You Want To Live Debt-Free

Frequently Asked Questions about Dave Ramsey’s Budget Plan

With so much hype out there I am sure that you have a ton of questions on how the Dave Ramsey budget plan works and how it changes lives.

For us, the difference was that it dealt with the root of our problem.:  We sucked with money!  With the “I want it now” mentality approving our decisions, we were outta control.  We were living the paycheck to paycheck lifestyle because we did not know how to control ourselves.

I came to realize that my money problems, worries, and shortages largely began and ended with the person in my mirror. I realized also that if I could learn to manage the character I shaved with every morning, I could win at money. – The Total Money Makeover

Q: What is the Dave Ramsey budget plan?

A:  The first thing that you must realize is that the Dave Ramsey budget plan is about you!  It is about retraining you and the way that you view money.

When we think about a budget, the initial response is to see a bunch of dollar signs generally.  After all, a personal budget is all about money and money is all math.  It is a bunch of accounting mumbo jumbo that freaks us all out a bit.

Wikipedia’s definition of a personal budget captures this craziness we all think of when it comes to budgeting:  allocates future…blah, blah, blah.  You can almost say it loses your interest at allocates.

A personal budget or home budget is a finance plan that allocates future personal income towards expenses, savings and debt repayment. Past spending and personal debt are considered when creating a personal budget. There are several methods and tools available for creating, using and adjusting a personal budget. For example, jobs are an income source, while bills and rent payments are expenses.

The crazy thing that we learned from Dave Ramsey is that Personal finance is 80% behavior. It’s only 20% head knowledge.”

It is from embracing this way of thinking that Rob and I were able to see that our financial success does not hinge on us making more money.  It depends on us staying engaged with our money.

Q:  What is the importance of paying off debt fast?

A:  In a review of the FDIC data, MagnifyMoney found that in 2018 Americans paid $104 billion in interest and fees to their credit card companies, which is up 11% from the prior year, and up 35% over the last five years.  The amount of money wasted is mind-boggling.

With debt and fees on the rise, it is easy to see why Americans are trying to right their ship and pay off their debt.  With over 25 years of experience of guiding people out of debt, it is no wonder people look to Dave Ramsey for advice on how to pay off debt fast.

When our boy moved out, the feelings of our newly empty nest consumed us.  Our home was quiet, and our bank accounts were empty.  We worked to pay bills; we worked to pay for our past.

If you are anything like us, the time had come to take charge, create a budget and start planning for our future.  The problem was, we were unsure of how to start.

Then we read the book by Dave Ramsey:  The Total Money Makeover.  It was through rethinking how we viewed our money that we were able to pay off our debt fast and start saving for our future.

Q: How does Dave’s plan help people pay off debt?

A:  The act of taking responsibility for our actions is a freeing experience.  It is the tipping point that we become empowered and start taking charge of our own life.  It is that moment that we take charge of our own life. We can truly experience happiness.

The Dave Ramsey budget taps into that philosophy and helps you focus on the important things in life.  The things that make you happy by adding value to your life.

This one may surprise you, but debt generally does not bring happiness.

This budgeting plan is a no-nonsense plan that requires you to take full accountability of your actions as you learn new, healthy ways to manage your money.  It is Dave’s common sense, down to earth delivery of advice that inspires countless Americans to take control of their finances, get out of debt, and change their future.

Tell your money what to do instead of wondering where it went. People know what they need to do with their money, but they just don’t do it. Be proactive with your money – do a budget, get rid of debt and save. The Total Money Makeover

Q: Why do you want to pay off your debt?

A:  The success of Dave Ramsey’s budget plan hinges on the reason that you want to get out of debt.  It is your reason, your “why,” that will give you the courage you must have to focus on paying off your debt and changing your behavior with money.

In the Ramsey plan, he calls it getting sick and tired of being sick and tired.

It is that moment when you know that you must act if you ever want a better life, a better future — the deciding point that you must get to find your focus by identifying your reason why.

Dig deep and know the reason you crave change.  Without this, there is no way that you will be successful with this plan or any other plan.

I was sick and tired of being sick and tired. I was tired of sitting down to “do the bills” and having a heaviness come over me. The hopelessness was overwhelming. I felt like a gerbil in a wheel – run, run, run, no traction, no ground covered; maybe life was just a financial illusion. All the money came in, all the money went out, and only the names were changed to protect the innocent. I owe, I owe, so off to work I go. You know the drill and all the clichés that go with the drill. – The Total Money Makeover

Q:  How does Dave Ramsey’s budget plan help you to pay off debt fast?

A:  In the Dave Ramsey budget plan, paying off your debt fast is the key to success.  Dave refers to this speed as “Gazelle Intense.”

When you are gazelle intense, you maximize that first burst of energy, that excitement from the moment that you know it is possible to change your life and live debt-free.  It is in that initial ah-ha moment that you decide to make a change in your life, you identify your enemy, the debt, and you run!

It is the small successes that come to you immediately when you work with gazelle intensity that you find the momentum to tackle the next obstacle that is preventing you from financial freedom.

Get gazelle-intense and sell so much stuff that the kids are afraid they are next. Sell things that make your broke friends question your sanity. If your budget is stopped-up and your Debt Snowball won’t roll on its own, you are going to have to get radical. – The Total Money Makeover

Dave Ramsey's Debt Payoff Baby Steps

Q:  What is the Debt Snowball?

A:  Dave’s plan is broken down into seven baby steps.  The first step is to make sure that you have $1,000 stashed away for emergencies.

The design of the debt snowball system is to help you to stay motivated while you are tackling your debt.   As previously mentioned in this article, this plan is all about getting you to behave with money rather than focus on math.

With the debt snowball, you list all of your debts, smallest to largest and start paying them off as soon as you possibly can.  Apply the gazelle intensity!

How the debt snowball works:

  • Stop borrowing!
  • Disregard your interest rates and list your debts from the smallest to largest remaining balance.
  • Make minimum payments on all debts except the smallest.
  • Focus all of your energy (money) on the smallest debt!
  • Once you have paid off the smallest debt, take that payment and any “extra” money and apply it to the new smallest debt.
  • Repeat this process until all your consumer debt is paid off.

The Debt Snowball is designed the way it is because we are more concerned with modifying behavior than correct mathematics. Being a certified nerd, I always used to start with making the math work. I have learned that math does need to work, but sometimes motivation is more important than math. This is one of those times. – Total Money Makeover

Q:  Can I use my credit card to pay off my debt faster?

A:  Rob and I receive credit card balance transfer offers nearly every day.  Blank checks in the mail that offer 0% interest are so enticing.  The thing is, using a credit card is not paying off your debt, it is merely moving your debt.

Dave Ramsey adamantly opposes debt consolidation as his goal is that those that follow his budgeting plan learn how to live within their means.

With this plan, paying off debt as fast as you can is the goal! When you are 100% dedicated to working the program, your primary focus will be finding money to pay off the debt by cutting costs and possibly earning more through a side hustle.

Debt CONsolidation—it’s nothing more than a con because you think you’ve done something about the debt problem. The debt is still there, as are the habits that caused it; you just moved it! You can’t borrow your way out of debt. – Total Money Makeover

Looking for ideas on how to earn more?  Maybe this article will help you see all of the possibilities out there:  Hustle! Legitimate Ways You Can Make Extra Money From Home

Q:  How do I set up a Dave Ramsey budget plan?

A:  With the Dave Ramsey budget plan, you work to account for all of your money.  You become totally engaged and work a zero-based budget.

A zero-based budget is where your income, less your expenses is zero dollars.

Income:     (+) $,3000
Expense:    (-) $3,000
Leftover:               $0

Now, this does not mean that you drain your bank account.  This just means that you know where your money is going.

What do you do to make sure that you do not have any money “Leftover”?

  1. Emergency Fund:  If you do not have a minimum of $1,000 in savings, take the “leftover” money to your emergency fund
  2. Pay off Debt:  If you have $1,000 in your emergency fund and you are paying off your debt, the “leftover” money is applied to your debt
  3. 3-6 Month Emergency Fund:  If you do not have debt, and your emergency fund does not equal 3-6 months of living expenses, deposit your “leftover” money to your emergency fund
  4. Invest:  If you have 3-6 months of expenses saved in your emergency fund, invest!

Set up your zero-based budget today with our free printable budget sheets:

Enjoy the journey!

If you are contemplating debt pay off and building a nice nest egg, we highly recommend checking out the Dave Ramsey budget in more detail!  To help you start that journey, here are a few more reads that are sure to help you with your debt-free journey:

How To Pay Off Debt Fast - Dave Ramsey

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