I Didn’t Need Dave Ramsey To Get Out Of Debt

by golbguru on February 22, 2007

fight against debtDon’t get misled by the title, I am not trying to demean Dave Ramsey or his ideas in any way with this post (perhaps, there will be a different post for that :)). The humble objective is to put forth some features of my debt reduction story and hope that someone in debt might stumble on this, pick up the beneficial parts, and be inspired to think out of the box with regards to his/her debt management approach.

I have mentioned earlier about my three year fight against debt. It was a rather short account of a span of three years and after that post, I never talked about it again. Now, after quite some time, I have decided to spill some more beans about it.

By the way, I didn’t even know who Dave Ramsey was when I went on my own debt reduction program. In fact, I was totally unaware of any of the financial gurus that you generally see floating around many personal finance blogs. Heck, I wasn’t even fully conversant with the concept of “blogging” at the time. So these things, that I am going to list down in the following, are from the point of view of a person (me) who was absolutely oblivious of all the fancy debt reduction ideas.

In this post, I will list some of the features of my debt reduction efforts. I am not claiming that all features were absolutely beneficial towards my efforts. However, I will still list them here because it’s some combination of these features that got me out of debt.

Also, to put things into perspective, without disclosing the real numbers, let me mention that I was facing a 5 figure debt of the order of my annual graduate student stipend.

So, here are some features that I could pin down after some retrospection:

  • Comparison lead to realization: Debt in itself was not enough to convince me the seriousness of my situation. What really woke me up was some casual talk with a few fellow students about the balances they carry on their credit cards. Some of them were earning as much as me but had zero balances on their cards. Once, I knew that, it was like “what the heck! how come I have a 5 figure balance while some of them have none?”. I probably realized, that at this rate, I might just become the poorest graduate student on my campus, in spite of a healthy stipend and that didn’t make me feel good. The will to reduce the debt came almost naturally from then on.
  • Simple tools for a simple fight: At the time, I wasn’t aware of portals like Yodlee, or softwares like Quicken or Money. Initially, I started putting some numbers together using just a piece of paper and a pencil. When the papers started disappearing on me, I turned to Excel sheets and started recording my statement balances and payments each month. Things were kept really simple.
  • No micromanagement: Most personal finance bloggers won’t like this (even I don’t like it much when I think about it now), but that’s how I was doing it. I didn’t keep track of every expense that I was making. I did budget my monthly expenses, but I didn’t keep an account of where every penny was going. Perhaps, it saved me a lot of unnecessary stress. My only goal was to put an arbitrary large amount towards debt every month and make the balances lower than those in the previous month. Period.
  • Didn’t stop using credit cards: Yeah, I said it! It’s just that, I was not using the ones with balances on them. I used the ones that had zero balances and paid them off every month. Logic was simple; once I have budgeted my monthly expenses, it didn’t matter whether I paid cash or used credit cards. Cards were convenient and I was using them for the convenience. Another thing is that my debt was not because I was spending with credit cards…my debt was because I was spending like a fool.
  • Took time-outs to think about debt: Often I would sit in front of my Excel sheet and work out different payments plans and put my progress into perspective. Sometimes, the resources were there, but I was too tied up (or stressed out) to think about them. A word of caution here: thinking too much about debt might be detrimental instead of being more beneficial; you have to remember there is life beyond debt.
  • Sharing helped (I mean thoughts…not debt): This was sort of unexpected. Debt reduction was rapid after I got married. I guess it helps to have someone else’s perspective on your problem once in a while. Gives rise to fresh ideas and renews courage. I guess that’s why it helps reading other people’s blogs and discussing things with them.
  • Being consistent: I don’t remember doing anything out of the ordinary in my fight against debt. I didn’t starve myself to save pennies…I was just being sensible in my spending and consistent in my payments. By consistency, I don’t mean being “rigid”..sometimes, you have bend your spending rules (for the benefit of the universe) and you got to do it when you got to do it (in my opinion).

That’s all that comes to my mind right now. All in all, I had a fairly stress free journey to being debt free with the way I did things. :)
Hopefully, the point is clear by now. You don’t need to prescribe to a third person’s plan for your debt reduction…give it a shot and you may be able to do it effectively under your own terms. It’s really not as complicated as some people make it out to be.

Also, please understand that this is just a suggestion (and not universally applicable); everybody’s debt is different, and depending on the situation, professional advice may sometimes be a better choice.

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{ 23 comments… read them below or add one }

1 Jessie 02.22.07 at 4:27 pm

Great post. I couldn’t agree more about thinking too much about debt. Not so long ago, I got myself so wrapped up in the what ifs of paying back my debt that I really started to become stressed. The key is always balance. Hopefully this time time next year I will be posting something similiar :-). And I do agree, you have to create a system that works for you. No debt “guru” can really know what is best for you.

2 jpostal 02.22.07 at 9:36 pm

Bravo…excellent post. I do not think cutting up credit cards, eating cup-o-noodles 3 times a day, and living with 8 other guys in a one bedroom apartment in necessarily the best way to go about eliminating debt (although it may be the only option for some people). In my opinion (and as you wrote) the key to getting out of debt is consistency and balance. I find that it also helps to have a measurable goal, and to share the goal with other people who will encourage you to reach your it. Anybody that has read my blog knows that I have a goal to pay down all of my debt by my second wedding anniversary. Having this goal posted on my blog keeps me focused on the it.

Again, excellent post. Often times the most simple approach is also the most effective.


3 tiredofbeingbroke 02.23.07 at 6:28 am

This post is so timely. I noticed that I started obsessing a bit about the amount of debt that I have. Then it occured to me that I am paying way more than the minimum, I have a small e-fund and I am consistent. I will just have to let time take its course.

4 Ambellamy 02.23.07 at 7:07 am


Thanks! Sometimes we all need reminders that there is a life… and dwelling on debt is not a good thing when you begin to loose sleep over it!

5 Tyler 02.23.07 at 8:46 am

This is basically what I am doing to pay off my debt. I don’t have a budget, or know exactly what I spend each month. When I graduated last year I had $5000 in student loans and about $3000 in credit card debt. My plan is to but $1000 to the student loan and $600 to the credit card every month. I can live ok on what is left of my pay check each month.

I’ve found what I can live on and the rest goes to debt, and it should be paid off in a few more months.

I just noticed your advertising payday loans a the bottom of a personal finance blog.?

6 golbguru 02.23.07 at 9:02 am

Thanks for the comments guys. Hope that encourages each of you to find your own suitable way of tackling your debt.

Tyler: That sounds about the same as I did to my debt. Good luck on the debt reduction. About the ad…it’s just an ad not an endorsement, and I don’t like it much either (read this & this ) and that’s why it’s right at the bottom. :) Please email me if you have a concern about that. I will appreciate it.

7 Moneymonk 02.23.07 at 9:44 am

“once I have budgeted my monthly expenses, it didn’t matter whether I paid cash or used credit cards.”

I agree. The main thing is you know how much you must spend daily or weekly. Stick to it.

I just want to say congrats on your success.

Dave Ramsey is ok, but everyone have a different approach about getting out of debt. It’s whatever best works for you.

8 Tyler 02.23.07 at 9:47 am

I figured as much about the ads.
No concerns, I just found it funny.

9 Msminiducky 02.23.07 at 10:09 am

“Another thing is that my debt was not because I was spending with credit cards…my debt was because I was spending like a fool.”

Hee. You know, this is the point that most people fail to grasp. That, and you have to personally want to be out of debt, and be willing to do something about your habits instead of just willing the debt to go away.

10 mbhunter 03.06.07 at 11:35 pm

Great post.

Michael Mihalik (of Debt is Slavery fame) recommends starting out with the same low-tech approach you implemented — paper and pencil!

11 Leo 05.17.07 at 5:33 pm

Great post, Golb Guru! I’m also trying to pay off all my debt. We have very different approaches (I think credit cards are evil, for example), but everyone should find the method that works for you. Very inspiring post!

12 Mike 03.14.08 at 6:08 pm

I enjoyed this post. Taking time outs to think about debt is a great idea. How many of our problems could be solved if we just took the time to think about them? All of the financial advice in the world isn’t going to help if you’re not open to different points of view. Taking time to think allows these ideas to enter your mind. Whether the ideas come from Dave Ramsey or out of your own mind, if they can improve your finances, they are worth considering.

13 Kristen 05.27.08 at 6:01 am

I think each person has to find their own way to get rid of debt. To me it will be totally worth it to so aggressively attack our debt that we have to eat ramen and sit around the house all day bored. And I also think credit cards are evil.

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