Get Out of Debt: Clark Howard vs Dave Ramsey
Two of the most spectacular personal finance gurus are from the south and remain there today. Dave Ramsey is from Tennessee and Clark Howard from Georgia.
Both are predominately on syndicated radio shows directed at consumers to live free debt free. They have similar, but not identical approaches. You can see them on YouTube, TV, radio and in bookstores.
Clark Howard has a five-step approach to get out of debt:
- Make a conscious decision to stop borrowing money
- Establish a start emergency fund of say $1,000
- Create a realistic budget and keep to it
- Organize your debts – he uses a “debt avalanche”
- Throw any excess cash at debt
Dave Ramsey has 7 Baby Steps to get out of debt:
- Start a $1,000 emergency fund
- Pay off your debt using a “snowball” approach
- Now build a 3-6-month emergency fund
- Save 15 percent of your income
- Save for college
- Pay off the mortgage
- Build wealth and give
Snowball means you pay off the smallest debt first while making minimum payments on the other debt and get a success quicker. You go after the next smallest debt second and so on. Avalanche means you pay off the highest interest rate debt first, followed by the second highest interest rate. You pay less interest in the long run with Avalanche, but you can get more motivated sooner with Snowball. Clark is the Avalanche advocate and Dave likes Snowball. You get to make your choice after understanding why they like that particular approach.
Dave has an evangelical Christian background that surfaces in his writings and pronouncements but don’t let that be a turn off. Take the best of his ideas and it will serve you well. You can put up with the preaching to obtain your debt free goal.
Clark seems to be more flexible in his approach and is not so dogmatic in getting rid of a mortgage. Nevertheless, I feel Dave had created more successful get out of debtors, but not sure if anyone can keep that kind of score since it involves self-reporting.
Are you a reader? Clark Howard’s “Living Large for the Long Haul” is my favorite. For Dave Ramsey, I like “Total Money Makeover”, his classic book.
Good luck. Either method and guru will get you there.