A Redditor shared on the social media platform earlier this year how he got out of heavy debt and financial troubles by following the advice of American personal finance author and radio host Dave Ramsey.
In 2013, the poster had $23,000 in credit card debt and owed $123,000 on his mortgage. He was making about $60,000 annually from his small business, but could not "put my hands on $200 cash." Today, he's debt-free with around $80,000 in cash, and both his house and car are paid off.
"We can close our business today and not have to work another day in our lives," the Redditor, 50, said. "I may have missed out on some nice beach days at a condo somewhere for a few years, but it’s nice to know that if I wanted to go to Bermuda tomorrow, I can put it on my debit card and not worry about it."
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‘Snowball' Method to Pay Off Debt
The Redditor said he used Ramsey's well-known "snowball" method, a debt-reduction strategy that focuses on paying off the smallest debts first. He focused on living below means and did not follow any "get rich quick" scheme or invest in bitcoin.
"We didn’t take vacations, and invested literally every penny. Every day that I’d have cash left over, it was invested, not blown," he added. "Turned off cable and internet at home, at times would use a space heater so we didn’t have to pay to heat the whole house, and dumped our two cars that still had a huge balance on them."
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The Redditor said he paid off his mortgage "way too early" by Ramsey's standards, but owning his home was a top priority because of the uncertainty in his business. About four years ago, he renovated his house for $37,000, paid in cash. He also paid in full for two used cars.
The Redditor advised fellow investors to take "baby steps" and live below their means, using the extra money to invest. He thinks Ramsey's advice is mostly aimed at those who live paycheck to paycheck and have limited financial knowledge.
"I see a lot of people that say his advice is ridiculous, but it worked for us," he added.
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