Money Management

Is this program worth joining? 

Dave Ramsey is a popular financial guru. He has written several books on money management, offers a variety of budgeting and debt repayment plans, and has even created his own line of products and services. But should you use the financial products and services that Dave Ramsey recommends? Let’s take a look at what you need to know before making any decisions.

What does Ramsey recommend?

Dave Ramsey is well known for bestsellers such The Total Money Makeover and Financial Peace Revisited. In addition to his radio show and podcast, according to Ramsey, nearly 10 million people have taken his course, Financial Peace University. Like Mint and Rocket Money, Ramsey has a digital app called EveryDollar to help you budget and get spending insights.

Ramsey also offers curriculum for kids, businesses, schools, churches, and more. If you want more help with your finances, however, Ramsey offers a free service called “RamseyTrusted” to help you with Ramsey’s financial “Baby Steps.” He also recommends providers such as PODS Moving & Storage, Mama Bear Legal Forms, and other companies.

What is RamseyTrusted?

RamseyTrusted is an online platform that connects you with national and local providers for real estate, insurance, tax services, investing and retirement, and more. The service is free, and after you enter your information and location, you will receive a list of Ramsey’s endorsed local providers (ELPs) or RamseyTrusted pros in your area. Ramsey has certain guidelines for professionals to become part of Ramsey’s program and earn the Ramsey shield. Professionals must apply and, if they qualify, pay to be a part of the program.

The benefits of using RamseyTrusted

If you are a Dave Ramsey fan and believe in his “Baby Steps,” RamseyTrusted can be an incredibly useful tool for anyone looking to get their finances in order. It provides access to experienced financial advisors who can offer personalized advice on how best to manage your money and also endorse Ramsey’s financial philosophy.

Should you use RamseyTrusted?

Ramsey’s financial advice is unique in that he states people should not use credit cards at all and should avoid debt altogether. Some financial experts endorse responsible use of credit cards, as it can build your credit score, earn you cash back or points, and provide access to fraud protection. In addition, some experts believe that not all debt is bad. For example, the vast majority of home buyers don’t have the cash to pay for a house outright. If you can get a low mortgage rate, it may make sense to take advantage of it. If you are a firm believer in Ramsey’s financial philosophy, then getting an advisor in the RamseyTrusted program may make sense, though.

Do your research

Before you commit to using any of Dave Ramsey’s products or services, it’s important to understand exactly what you’re buying. This means reading all the fine print and taking some time to do research yourself. Meet with the different professionals he recommends and find one that best suits your needs. Don’t rely solely on Dave Ramsey’s advice when it comes to choosing a financial product or service.

Instead, do some independent research into the various options available so that you can make an informed decision about which one is right for you. Don’t be afraid to ask questions of professionals or seek out advice from friends and family members who have experience with investing or managing their finances. Doing this will help ensure that whatever product or service you choose matches up with your individual financial goals and needs.

Dave Ramsey has been helping people manage their finances since 1992, and his advice has helped millions of people get out of debt and improve their financial situation overall. However, before committing to any of his recommended products or services, it’s important to understand exactly what they entail and what your needs are.

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It’s a strategy that could make you very wealthy. 

When we think about the things we spend money on, we can generally break them down into two categories: needs and wants. Needs include things like our mortgage payments, cars, and food we put on the table. Wants encompass everything from streaming services to the various subscription boxes you might sign up for and forget to cancel.

It’s not really reasonable or realistic to limit yourself to only spending money on needs. After all, you have to enjoy life to make it worth living. And so you may decide to spend a portion of your income on things that bring you temporary joy.

But you may also want to keep spending of that nature to a minimum. In fact, if you were to take some of the money you’d normally spend on wants and invest it in a brokerage account instead, you may be shocked at how much wealth you have the potential to accumulate.

Investing can really pay off

In a recent tweet, investing guru Graham Stephan stated point blank: “In my view, you must absolutely spend on things and experiences that bring you joy. At the same time, you should be aware of its long-term impact.”

He then highlighted an example to show the difference between spending money on a product you might love versus investing in it. And his example was none other than Starbucks coffee — a popular treat that some of us might indulge in daily.

In Stephan’s example, someone buying coffee daily might spend $4 each time, which could amount to $19,200 over a 20-year period. On the other hand, someone who invests $4 a day in Starbucks stock over 20 years might come away with $161,396, and earn $229 a month in dividend payments.

Now, Stephan assumes a 19% average rate of return, which is unrealistic over the long term. The point, however, is that if you cut back on a few expenses and invest that cash, you could end up with a heaping pile of money after many years. And that could spell the difference between meeting major life goals, like being able to retire comfortably, or falling short.

It’s all about compromise

If your Starbucks coffee is something you very much look forward to, then you don’t necessarily have to stop buying it and invest your $4 every day instead. But it does pay to do an audit of your personal spending and identify expenses in the wants category you may be willing to give up. If you then take that money and invest it, you may be surprised — in a good way — at how much wealth you’re able to accumulate in your lifetime.

Remember, too, that companies like Starbucks that pay dividends give you two opportunities to make money. First, you can eventually sell your shares at a higher price than what you paid for them and walk away with the profit. Secondly, you can collect dividend income that you either cash out or reinvest.

If you do decide to give up your daily coffee, you could compromise by putting that cash into shares of Starbucks and holding them for years, but cashing out your dividends along the way and using that money to fund your caffeine habit. That certainly wouldn’t be an unreasonable route to take.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Starbucks. The Motley Fool recommends the following options: short April 2023 $100 calls on Starbucks. The Motley Fool has a disclosure policy.

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Even with a rocky economy, travelers are still cautiously optimistic. 

A potential recession was a hot topic in 2022, and by the end of the year, the majority of Americans were expecting one. Nearly 60% of Americans believed the United States would enter a recession in the next six months, according to a December 2022 survey by Destination Analysts.

During times of economic uncertainty, people often cut discretionary spending. Leisure travel certainly fits into that category, but does that mean you should hold off on booking a trip for the time being? Not everyone’s taking that approach, and depending on your financial situation, you might not need to, either.

How a possible recession is affecting Americans’ travel plans

People are still planning and booking travel, despite the economy. They are, however, being cautious about how much they spend. In Destination Analysts’ survey, 64.7% of all travelers said that they were being more careful with their money.

To stretch their travel dollars further, nearly three-quarters (74.4%) of Americans said that travel deals and discounts were more important to them than they were six months prior. And that’s not the only way people are saving on travel. Nearly 31% of Americans said they had used credit card points for travel-related purchases in the previous 12 months. Most who used points from their credit cards redeemed them for airfare and hotel stays.

Should you wait to travel due to recession fears?

When there’s so much talk of a recession, you may feel nervous about the idea of spending money on travel. If you’re in a stable financial situation, there’s no need to put your travel plans on hold.

No one knows for sure if a recession will happen, and there have been some positive economic indicators lately. The U.S. economy grew 2.9% in the fourth quarter of 2022. There were also 517,000 jobs added in January, and unemployment hit a 54-year low. On the other hand, inflation numbers were higher than expected in January. The reality is that it’s impossible to say whether we’ll have a recession or not.

What’s important is that you’re in a good place financially before you travel. Here’s what that means:

You can pay for your travel without going into debt. It’s hardly ever a good idea to take on debt to pay for a trip. Consider setting up a savings account specifically for travel expenses to use as your travel fund.You have sufficient emergency savings. Financial experts generally recommend having an emergency fund with at least three to six months of living expenses.

It also never hurts to look for ways to save on travel. Shop around for deals and discounts, like most Americans are doing. Keep in mind that you can also sign up for deal alerts with airlines, hotels, and online travel agencies. If you haven’t already, look into travel credit cards as well. With one of these, you could potentially travel for free with credit card points.

Travel shouldn’t be a financial strain, which is why it’s best to build a travel fund and an emergency fund first. If you have those in place, then you don’t need to wait around to go on a trip just because of recession fears.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Who doesn’t enjoy listening to other people talk about finances? 

The wonderful thing about the internet is that we have all kinds of information directly at our fingertips, and this includes advice for money management and personal finance. Video content is particularly popular, and many people turn to FinTok (TikTok’s personal finance advice videos) for advice about investing, saving, and beyond. But I’m an old millennial and can sometimes be set in my ways. Since I already have a YouTube Premium membership, I’m always on the lookout for ad-free financial content over there.

Just like with TikTok, however, it’s important to take all money advice being offered on YouTube with a grain of salt, and beware of seemingly effortless or suspiciously lucrative opportunities being peddled. Thankfully, there are many solid, reputable channels that offer useful and applicable advice for anyone looking to pay off debt, learn to invest, or even improve their career standing.

And what’s really nice about these YouTube channels is the fact that they don’t lean in on shaming viewers for making mistakes with money and daring to spend some of it in the pursuit of happiness. Here are a few of the best I’ve found.

1. The Financial Diet

I’m definitely a fan of Chelsea Fagan and her YouTube channel, The Financial Diet. Fagan is very relatable, and openly discusses her past mistakes with her finances and acknowledges the ways our economy is often stacked against the average American. At The Financial Diet, you’ll find a wide variety of videos and even some podcast content with big-name guests about money in popular culture, career advice, and learning how to prioritize your spending. There’s something for everyone.

2. Your Rich BFF

Vivian Tu is a former Wall Street trader who’s worked for big names like JP Morgan and Buzzfeed. Your Rich BFF offers shorter videos on topics like mortgage loan types, credit cards, and careers, with many of them clocking in under 10 minutes. This is especially nice if you want to learn but don’t have the time (or patience) to glean advice from longer content. Tu also has many YouTube shorts with even smaller chunks of useful information.

3. A Life After Layoff

For a change of pace, you can find excellent career, resume, and interviewing advice if you check out A Life After Layoff. Bryan Creely is a former corporate recruiter who started his channel after being laid off in 2020, like so many Americans were. While you won’t find advice about how to save or invest on this channel, you’ll find tons of information about how to apply and interview for jobs effectively, as well as career advice (including discussions about employer benefits). And since most of us can’t fund our checking accounts without having a job, this is a valuable channel indeed.

4. Debt Free Millennials

Justine Nelson offers thoughtful, realistic, and practical money tips and analysis on her YouTube channel, Debt Free Millennials. As the name of the channel indicates, Nelson focuses on getting (and staying) out of debt, but she also offers videos about budgeting, paying for childcare costs, and learning to spend intentionally.

Plus, the channel has some monthly budget breakdown videos hosted by Nelson and her husband, where they have a beer and talk about how much they spent by reviewing spreadsheet entries. These are especially relatable, as I know I’ve had moments where I looked at my bank statement and said, “I spent HOW MUCH at the grocery store last month?”

There are many resources for money advice on the internet, and YouTube is a great place to find both short- and long-form content on a variety of topics that relate to your finances. In between catching up on news clips and late night comedy shows, take some time to check out these useful channels.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Cutting it too close could keep you from getting your card’s sign-up bonus. 

A sign-up bonus is one of the best reasons to get a new credit card. This type of offer is an incentive for new cardholders to apply, and you can earn a big chunk of cash back, points, or miles this way. Bonuses of $200 or more are common, and the top credit card sign-up bonuses can be worth $500 or more.

Most of these bonuses have a spending requirement. For example, spend $3,000 in the first three months, or $10,000 in the first six months. In return, you might earn $300 in cash rewards or 50,000 points, to give a few examples.

If you can complete the bonus requirements, this is a smart way to maximize your credit card rewards. However, there’s one huge mistake that sometimes costs people these bonus opportunities.

Not leaving yourself a margin of error

Before you apply for a rewards credit card, you should review the terms of its sign-up bonus and confirm you can complete them. In particular, make sure you’ll be able to reach the spending requirement, within the time limit, based on your normal spending habits.

As you work toward the sign-up bonus, the key is to leave yourself a margin of error. Some people cut it way too close here. If you need to spend $3,000 in the first 90 days, you don’t want to reach day 89 with another $200 to go.

The risk of not having a margin of error is that if anything goes wrong, you’ll miss out on your card’s sign-up bonus. Here are a few ways this could happen:

You need to return a purchase for a refund.An order you made gets canceled.A merchant charges you when it ships an order, instead of when you place the order as you expected.You realize at the last minute that you won’t be able to spend enough.

Let’s say you spend $3,000 in the first 90 days to earn a credit card sign-up bonus. But you’re not satisfied with one of those purchases, so you return it. The refund pushes you below the spending requirement for the sign-up bonus.

If it’s already past the 90-day time limit, then you can’t complete the bonus terms. You spent less than $3,000 in the first 90 days, so you won’t get the bonus. If you already received the bonus, the card issuer will claw it back (deduct it from your rewards balance).

Credit card companies are usually strict about sign-up bonuses. If you don’t complete the terms, you don’t get the bonus. You’re probably not going to have any luck calling and asking for more time.

Play it safe with sign-up bonuses

When you open a credit card, you have one shot to earn the sign-up bonus. Always do the math on how much you’re going to spend to see if it’s enough to meet the bonus requirement.

The simplest method is to add up your monthly credit card spending. Use that number to see if you can realistically spend enough. If you spend $1,500 on your credit cards per month, then a bonus that requires $3,000 or $4,000 in purchases within three months is doable. One that requires $5,000 or more would be out of reach.

Another option is to wait until you have some big expenses to pay. For example, if you’re going to be putting new tires on your car next month or buying a new bed, that could help you earn a sign-up bonus. Just apply for the credit card you want first, so you have it before you need to make the purchase.

Most importantly, spend more than you need with time to spare. I like to spend a few hundred dollars more than what’s required and have it done with at least a week or two to go. It’s best to play it safe to ensure you earn that sign-up bonus.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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The numbers may be a bit skewed. 

If you take a look at today’s unemployment numbers, it would appear as though the U.S. economy is in an utterly fantastic place. In fact, one reason some financial experts have started to scale back their recession warnings is that the national jobless rate is so low, and the labor market is so solid and loaded with job openings.

But while there’s no arguing today’s unemployment levels, it may be worth digging into that data a little deeper. The jobless rate alone may not exactly tell the whole story of what the labor market and economy truly look like.

One trend we may be forgetting

In January, the national unemployment rate dropped to 3.4%. That’s the lowest reading on record in 54 years. But is the economy really in such a strong place?

Let’s think about what the unemployment rate measures. Remember, it accounts for the number of people who want to work but can’t find work. That’s reasonable enough, right? But one thing today’s seemingly low jobless rate doesn’t account for is the number of people who were pushed out of the workforce due to the pandemic, or in the wake of it.

When the COVID-19 crisis struck in early 2020, a lot of older workers had to leave their jobs behind due to health-related concerns — especially those whose work couldn’t be performed remotely. And even once vaccines became widely available, a lot of older people with non-remote jobs were scared to put themselves in a position where they might get sick.

In fact, a Bloomberg report published in late 2021 found that over 3 million people retired early due to the pandemic. And that’s something to take into context when discussing today’s unemployment numbers.

It’s true that the jobless rate is really low. But part of the reason for that may be due to the fact that the population of available workers shrunk in short order on the heels of a major crisis.

Or, to put it another way, let’s say the 3 million workers who retired early due to the pandemic hadn’t left the workforce. Would today’s jobless rate be higher? Quite possibly.

Let’s not get lulled into a false sense of security

Unemployment may not be a problem in the U.S. right now. But we shouldn’t let our guard down with regard to the economy. Things still have the potential to take a turn for the worse, so everyone should be doing their part to shore up their finances.

Most importantly, every member of the workforce, regardless of age, should aim to have enough money in a savings account to cover a minimum of three months’ worth of essential expenses. Consumers should also do their best to shed high-interest debt, like that of the credit card variety. Having fewer outstanding obligations could make it easier to ride out a recession should a downturn hit.

All told, recession fears may be waning, at least for now. But today’s unemployment rate is somewhat misleading. And it’s important to recognize that in the context of the greater economic picture.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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