My view on Dave Ramsey
If you did not hear of Dave Ramsey, you are losing a lot. Dave Ramsey is a Christian financial counselor or advisor. He has good ideas on money management. I agree with mostly everything with him, but have different point of view on some things. Read full article... For those, who does not know, Dave Ramsey teaches mostly about debt and how to win it. He teaches how to manage money in a funny and clearly to understand ways. He believes that to beat debt, you have to cut off your credit cards and not use them at all. He also says that you need to create an emergency fund, and when all debt is gone (except house mortgage) to invest in mutual funds.
I really like the way Dave think, but here is something I am not fully agreed with him. My credit score went down simply because I did not use my credit card for over 6 months. Because it went down, I could have an issue with getting a house mortgage. Another slight disagreement is investment in mutual funds. I personally invest at ETFs. Dave Ramsey said that ETFs are made for short term investment, but as far as I can see, ETFs can be used for long term investment better than short term as most ETFs are low risk funds.
So my opinion on credit cards. After all debt is paid, I would recommend to use a credit card (only one) and fill it up only to 15%-20%. Keep the money there for one billing period so that you don't get charged interest. Then pay it all in full. Now, most importantly, KEEP IN MIND. Do that ONLY when you plan to get a house mortgage. Other than that, you should not care about your credit score. I'd say start using your credit card about 12 months before getting a house mortgage, but right after you got your mortgage, STOP using credit card.
Speaking of Mutual Funds. Its not bad investment and a very low risk. The only problem I see there is there may be fines to withdraw money from mutual funds if you don't wait so many years. If you don't care about getting money earlier and just want to be rich by the time you retire, that sounds like a good plan. I personally prefer ETFs and here is why. I am investing money in ETFs on a monthly basis, putting in good amount of money. I personally not an expert with stocks etc, but sometimes I have a basic idea on where to put good amount of money. What I will do later on is sell portion of ETFs and put that money in a single stock (which would be low to medium risk) and then sell once price goes up. It can be risky, but I'll take that chance after doing some research.
Once again I personally agree with pretty much everything Dave Ramsey says and would highly recommend you to watch Financial Peace by Dave Ramsey and you'll find a good way to success in finances.
Financial Peace University