Summary Of Financial Peace Revisited

Dave Ramsey’s book, Financial Peace Revisited, gave plenty of insight into have to better stewardship over finances. There were several enlightening aspects of this book. The covers information on saving, creating a budget, tips on getting out of debt, financial investments, paying off a mortgage and giving to worthy causes. In this paper, each aspect listed above will be discussed.
Saving
The first step to improving an individual’s finances is to pay the minimum due every month on all debt until there is a savings of $1,000.00 readily available for the unexpected expenses of life. This money is only for emergency use. “If an individual’s income is very low $500.00 will do, however if the person’s income is over $70,000.00, then save $2,000.00 (Ramsey, 2003, p.273).” This emergency funds could be for emergency car repairs or emergency house repairs, for example. To raise this money one might want to sell of his things that he has not used in over a year or work a weekend job. It is also important to keep this money separate from income, therefore a separate account is a great idea.

The method Dave Ramsey suggests is the snowball method. In this method, the person begins to reduce debt by paying off the balances in ascending order. “List all debts but the house in order. The smallest balance should be your number one priority. Don't worry about interest rates unless two debts have similar payoffs. If that's the case, then list the higher interest rate debt first (Ramsey, 2003, p.90). ” After this step the only debt the person should have is their