Anyone here doing a modified Dave Ramsey program?

[daveymck]

I would say having your car damaged by a falling object counts as an emergency.

It gets fun once you have a paid off house and car, are paying towards retirement, and you have money left over. You decide what to do with that money. Have fun with it. Not sure what's so hard about the concept.

While I would agree that the catastrophic destruction of a vehicle would constitute an emergency, I haven't seen anything from Dave's books or heard anything from his show to indicate HE would. The example of the car doesn't matter, however it failed, it still failed.
Dave says that something you KNOW will happen doesn't constitute an emergency. No, you can't predict falling objects, but you can predict a beater car breaking down. That's my point. Dave doesn't say, in his baby steps, where you save for such purchases. And I haven't heard any examples on his show. But hey, I've only been listening steadily for a few months.

Perhaps a less catastrophic example would better illustrate my "difficulty with the concept." Same time frame, everything's paid off and you have your emergency fund and nothing else saved. Now, your car just dies, or something fails in it. Regardless of why, you need a replacement vehicle and have nothing saved up for that. Is this a big enough emergency?

Look, I like DR. I like the concept. I've followed it, albeit loosely, and it's helped my wife and me to get our financial act together. Like everybody here, I've taken what makes sense to me and applied it with vigor. The rest I have taken with salt. It's just that as I go through the planning and try to apply his model on a long term basis, I keep wondering when you can really have fun with your extra money.

Realistically, I do agree that in this hypothetical scenario, if a caller was on Dave's show and said, "Dave, I have successfully paid off all my debt. So we want to give a debt free scream- yaaay. But we need to replace our car and we have nothing but emergency savings. Should we take a loan or use our savings to pay for it?" Dave would say definitely use savings first before you take a loan.
But he wouldn't call it an emergency.
And he'd say you better budget for the next one (as if to say "Go, and sin no more...)

[Wino]

All DR recommends is that you put a name to every dollar. You want to go on vacation? Set up "Vacation fund" in the budget. You had an asteroid hit your car? Buy a beater with the emergency fund and set up a new item for "not a beater car." Even better, set up the fund first, and when the asteroid hits, go out and buy a new car for cash.

The point of the "leftover money" is that you can do anything you want with it. If you want to buy something new, you need a budget item for it. If you want an impulse-buy fund, then set it up as a budget item (blow money or fun money).

Also, the 15% and all of his other levels/numbers are just suggestions. Modify the plan to fit your needs, income, lifestyle, and desires.