Dave Ramsey, debt, credit cards, retirement, etc

[SuperJETT]

See below for the original post.


We started Dave Ramsey's Baby Steps on 12/15/2005 and paid off our last debt (other than the mortgage) on 10/30/2007. $30,000 in 22.5 months paid off!

The 'Baby Steps' from Dave Ramsey are:
(assuming you are current on your bills)

$1000 in a savings account as your Baby Emergency Fund
pay minimums on all bills except your smallest, attack the smallest with every dollar available, when it's paid off apply all that money on the next one and on and on, this is the Debt Snowball
fully fund your Emergency Fund with 3-6 months' expenses
put 15% of your gross income in retirement accounts, matching 401k first, then Roth IRA, then non-matching 401k
fund college funds if needed
pay off your mortgage early
grow, save, spend your money
If right now you'll 'live like noone else', later, you can LIVE LIKE NOONE ELSE!

Also, whether you do Dave's plan or not, do a written budget!


Original post:
The thread on pwctoday about this kinda died, so I figure I'll start one over here to see what you guys are thinking?

Who is doing ok on retirement? I have like 70K in retirement for us and just turned 36, so I think we're well on track. We should be debt-free except the mortgage in under 2 years, and the mortgage paid off in less than 10, when our oldest will be 14 years old. I'm liking this plan.

[Frosty]

Yeah, I remember this thread. Nice job on your plan.. sounds pretty good so far.

We were doing ok, but unfortunately used up a huge chunk of our retirement to pay for my daughters med school. Good news is we should be debt free by years end.

Just paid off about $10k in education expenses last week, and my truck will be completely paid off in March. We're sticking to our 2006 debt free plan. :Banane01: :Banane01: :Banane01:

Need to start maxing out our 401k deposits soon, get that baby back up where it should be.

[Matt_E]

I am working on paying off debts. :frown:
I got that job I wanted. It'll cost me a bit to move, unfortunately. Also, I will be upping my house payments. (Since I have to sell my current home and get a more expensive one)

[Whtbread]

I have a planner do most of my investing work. I have two rules that I try to keep in mind that have really helped me:
Have your money work for you rather then working to pay for money you borrow.
I also never buy anything I can't pay off that month.

[Mark44]

My mutual funds are kicking butt everything I have is paid for. 7 more years on mortgage then plan to retire at 50 I have 9 more years left. Just started a 509 account for my kids collage and purchase IRA every year for me. Life is good knock on wood.

Most important my children and myself are healthy
and........
Did I mention I just sent Magoo my cylinder………….

Mark44

[ketsair]

i'm 25, and total debt right now including my land is about $30,000, i have 80 acres though and am in the works of sectioning and selling off most of it, we will keep about 15 acres to build our new house behind my motocross track, i fugured out that if my land sells at botom $ we'll still have enough to be debt free and build most of our house:headbang:

[Whtbread]

I was watching the Barret-Jackson auto auction the other day and there seem to be a lot of people investing in cars as opposed to the stock market. Many of them are doing very well with it.

The owner of the attatched pics was going to be happy getting $400,000 for the bus. He ended up getting $4 million

[freestylegeek]

Wow, you guys are doing great!!

I'm hoping to be in Darin's position by his age, but I doubt it.
I'll be out of debt, and have good stuff going for kids college fund, but my retirement won't be ANYTHING close to what he has.

[waxhead]

i am debt free
i just dont have a house at the moment
Haha
i have spent to much time and money on jetskis

I will buy a house next year
but i have been saving a depositi for about 15years so its getting large

[beachjunkey]

I prefer to invest my money in Magoo's and Yamaha stock :nono:

[Matt_E]

Wow, you guys are doing great!!

I'm hoping to be in Darin's position by his age, but I doubt it.
I'll be out of debt, and have good stuff going for kids college fund, but my retirement won't be ANYTHING close to what he has.


Same here. 'Sup, "Almost-Like-Darin-But-Not-Quite-Bro"?

[michael950]

I bought Apple at $55

(whish I had done it last year when I thought about buying it - it was $35/share.)


Looking to attend FPU. Dave Ramsey Rocks!

[Mile9c1]

What's up with that bus???????

I was pretty lucky, I never had student loans so I've been debt free since I graduated from college about 3 years ago. I have a mortgage, but it's like an investment IMO.

I'm going to start doing the Roth IRA thing, it looks like a good deal because your gains are tax free. You can only invest $4,500 a year though (though this number may go up in the future).

I also do a 401K through work, they match part of what I put in, so it's free money.

[romack991]

i just got outta college so i'm just starting to plan all this stuff. have 12K in student loans but interest rate is fixed at 2%. I figure that is cheaper than inflation so i might as well just pay the minimum and pay all i can on my truck loan. truck should be payed off in a yr. hopefully by then i'll be ready to get a house. (i'd do it now, but just wanting to work at my job a bit more to make sure im still enjoying it.) no CC debt.

looking at my 401K, if i wouldnt get a raise, contribute the same ammount, and not including any interest, i'll have 63K by the time im Superjett's age.

[Snackem]

I realize that this is an old thread but I am a huge Dave Ramsey fan so I gotta post. 25 years old and married we have a mortgage now but other than that are debt free put 15% into retirement (plus a 3% match for my wife). in 2001 I had to drop out of college because I was over 40k in the hole with school, student loans and:headbang: credit cards :headbang: got everything paid offthis past fall and now I am going to start school this comming fall and we will be able to pay cash for it.

[SuperJETT]

Awesome, that's the way to go! freestylegeek and I are having an unofficial contest to see which family gets out of debt first. We started in about the same shape, both income and debt-wise and it's been a very interesting journey so far. I'm guessing we'll be out of debt except the mortgage late next year or early 2008. (However, the only debt we have left is our home equity (stupid, did a 80/10/10 loan) which I transferred to a fixed rate credit card until paid off at an interest rate lower than our mortage)

[D Slicker]

I have a 80k whole life policy that I am paying into. All my other money is going into 240 acres of land with 800+ residential units and 2 shoping centers that I am developing with my 2 partners. We have 100 units that will be selling in the next 3 months that will net enough to set me up for a while. Then we have 487 units that will be ready buy next summer. Buy the time it is all done I should be ok :woot:

[SuperJETT]

I have a 80k whole life policy that I am paying into.

Oh my....get some term life to get you through until you're self-insured, and cash that sucker out and invest it in something that actually makes money! ASAP!

I have 20 year term $500,000 insurance for $290/year. In 20 years, I will be self-insured and won't need insurance. That's a total of $5800 for $1/2 Million for 20 years, and my retirement money has earned 14.76% since transferring it to John Hancock a few years back. Whole life can't do either of those.

[Whtbread]

Oh my....get some term life to get you through until you're self-insured, and cash that suck out and invest it in something that actually makes money! ASAP!

I have 20 year term $500,000 insurance for $290/year. In 20 years, I will be self-insured and won't need insurance. That's a total of $5800 for $1/2 Million for 20 years, and my retirement money has earned 14.76% since transferring it to John Hancock a few years back. Whole life can't do either of those.

Thats a good idea. I have never looked into it.

[Snackem]

Term life is definately the way to go. Whole life is junk, you make more money in a plain savings account or even a CD most Whole/Cash Value Life policies don't even keep up with inflation.

It's a good feeling to be debt free. . .

[Waste Land]

Still living at home....trying to find a better job and get situated well before moving out. No sense in struggling for no reason.

I have 401k at work but it just doesnt work on my level. My checks arent big enough to even use it and they match it but its only every 10 years....which doesnt help me none.

[D Slicker]

Oh my....get some term life to get you through until you're self-insured, and cash that sucker out and invest it in something that actually makes money! ASAP!

I have 20 year term $500,000 insurance for $290/year. In 20 years, I will be self-insured and won't need insurance. That's a total of $5800 for $1/2 Million for 20 years, and my retirement money has earned 14.76% since transferring it to John Hancock a few years back. Whole life can't do either of those.


I have been looking into doing just that for the past month. I just have been so busy.

[freestylegeek]

Oh my....get some term life to get you through until you're self-insured, and cash that sucker out and invest it in something that actually makes money! ASAP!

Absolutly!!
My Dad set me up with a (tiny) whole life policy when I turned 21.
I think the benifit was $20k or something.
I cashed it out when I turned 28.
I paid in around $2200, and got about $1300.
Now we are paying $37/mo for $500K worth of term, and our policy is good for 30 years.

[Snackem]

Absolutly!!
Now we are paying $37/mo for $500K worth of term, and our policy is good for 30 years.

Exactly what we do. My wife and I are 25 and we have 500k of term insurance and it is locked in for 30 years. [insert edit]I will have enough SAVED by that time that I will no longer need a policy.

[romack991]

do term policies sky rocket or something when you get older? or do you just bank that you'll have enough money when when it ends that you dont need insurance.

i believe i have a life for like 50K, payments around 20 bucks a month. and then some 50K thing thru work.

[freestylegeek]

Exactly what we do. My wife and I are 25 and we have 500k of term insurance and it is locked in for 30 years. I figure that by the time the 30 years is up I will be self insured and no longer need a policy.

I'm not figuring, I'm saving! :biggrin:

[The Penguin]

Still living at home....trying to find a better job and get situated well before moving out. No sense in struggling for no reason.

I have 401k at work but it just doesnt work on my level. My checks arent big enough to even use it and they match it but its only every 10 years....which doesnt help me none.

at your age you should be be commended for even thinking about contributing to a retirement plan

:biggthumpup:

[Snackem]

I'm not figuring, I'm saving! :biggrin:

Sorry, it's fixed now. lol.

[yamaslut]

The thread on pwctoday about this kinda died, so I figure I'll start one over here to see what you guys are thinking?

Who is doing ok on retirement? I have like 70K in retirement for us and just turned 36, so I think we're well on track. We should be debt-free except the mortgage in under 2 years, and the mortgage paid off in less than 10, when our oldest will be 14 years old. I'm liking this plan.

I got nothing....

no retirement
no life insurance
no savings
nothing but the fear of living week to week.... and it's getting scarier every day....


I am gonna die of a staph infection while eating dog food in an alley......

[Snackem]

I got nothing....

no retirement
no life insurance
no savings
nothing but the fear of living week to week.... and it's getting scarier every day....


I am gonna die of a staph infection while eating dog food in an alley......

Check out this guy
http://www.daveramsey.com/
He'll get you on track

[PWW]

I listen to Dave at work all the time. Good stuff.

[Snackem]

I listen to Dave at work all the time. Good stuff.
I get him on my XM just after lunch. Rush is on before lunch (sorry Dave but I'm a ditto-head).

Teaching people to act their WAGE.
-- Dave Ramsey
&
Teaching people to live on less than they make, a concept congress can't grasp.
--Dave Ramsey

[yamahammer]

I got nothing....

no retirement
no life insurance
no savings
nothing but the fear of living week to week.... and it's getting scarier every day....


I am gonna die of a staph infection while eating dog food in an alley......

DITTO DAMMIT!!:banghead:

[TheSimpleManLance]

i remember this thread over on pwc today. i dont think to much has changed since then.

22 years old.

my debt is $5,000 in student loans.

i need to really start getting my stuff together (said this on pwctoday too)

im looking into opening a roth IRA through sharebuilder.com

https://www.sharebuilder.com/sharebuilder/Plan/article_LPRET001.aspx

but dont really know to much about them.

dont have a 401K through work so i need to find something else.

[yamaslut]

Check out this guy
http://www.daveramsey.com/
He'll get you on track


not to sound all doom and gloom, BUT
there is just no possible way for me to save money.
If I was to sit home everyday, not ride, not drink, not go out to eat (maybe once a month) maybe I could save a little, but life is too short to save up for something you don't even know if you will live to see... I had a 401k w/ about 12k (2000) and it was growing good bla bla bla... and was laid off twice from the same company... My line of work has seen a huge decrease in earning potential... I thought I could be making 60-70k by now, cause I was heading that direction in the early 2000's... Since then the earning potential has dropped for all computer related jobs... at least in this area... I make less than half of that now.... pretty pathetic that I was making 20k more a year 5 years ago... I see no jobs for what I do that pay over 15$ per hour... it use to be 20$ per hour minumum...
whatever... life aint fair, then ya die
:Banane01:


I have pretty much accepted that I'm not "that guy" who will ever have money.


ok..... back on topic :headbang:

[eschberg]

I know many people don't like reading, and I don't either.. but a friend suggested that I read "Rich Dad, Poor Dad" and i must say that is a truly inspirational book. If you read no other book, make it a point to read that one... it'll most likely change your mind on getting into investments (other than stock market, ira, cd's).

[Mile9c1]

i believe i have a life for like 50K, payments around 20 bucks a month. and then some 50K thing thru work.


Why the heck are you paying for life insurance??

[SuperJETT]

Why the heck are you paying for life insurance??

Because he needs 8-10 times his yearly salary?

[romack991]

Why the heck are you paying for life insurance??

:dunno:

[SuperJETT]

Nick, go out on your own then. If you do what I think you do, you could do stuff from across the country all from your house, and ride when you want.

not to sound all doom and gloom, BUT
there is just no possible way for me to save money.
If I was to sit home everyday, not ride, not drink, not go out to eat (maybe once a month) maybe I could save a little, but life is too short to save up for something you don't even know if you will live to see... I had a 401k w/ about 12k (2000) and it was growing good bla bla bla... and was laid off twice from the same company... My line of work has seen a huge decrease in earning potential... I thought I could be making 60-70k by now, cause I was heading that direction in the early 2000's... Since then the earning potential has dropped for all computer related jobs... at least in this area... I make less than half of that now.... pretty pathetic that I was making 20k more a year 5 years ago... I see no jobs for what I do that pay over 15$ per hour... it use to be 20$ per hour minumum...
whatever... life aint fair, then ya die
:Banane01:


I have pretty much accepted that I'm not "that guy" who will ever have money.


ok..... back on topic :headbang:

[Mile9c1]

Because he needs 8-10 times his yearly salary?

Last I knew he was single w/o kids, so he doesn't need it (especially with that free 50k policy from work).

[Snackem]

Last I knew he was single w/o kids, so he doesn't need it (especially with that free 50k policy from work).

I wouldstill want enough life insurance to cover any outstanding debts and hey if you buy it when you are younger and healthy it's really cheap and you can lock in great rates then.

[Mile9c1]

I wouldstill want enough life insurance to cover any outstanding debts.


Why? When you die your debts are forgiven (unless you have money in your estate to pay them off).

[Snackem]

Why? When you die your debts are forgiven (unless you have money in your estate to pay them off).

I say that if I borrow the money then I should pay it back. When you die your debts are not forgiven, they are written off. It is just a personal preference thing. I want to honor all my debts.

[Mile9c1]

I say that if I borrow the money then I should pay it back. When you die your debts are not forgiven, they are written off. It is just a personal preference thing. I want to honor all my debts.

It wouldn't be you paying off your debts, it'd be the insurance company paying off your debts. So you'd be taking from one company and giving to another... I don't really see that has honorable, but either way, I doubt Romack has more than 50K in debt so his work sponsored insurance would cover his debts for him :biggthumpup:

[yamaslut]

Nick, go out on your own then. If you do what I think you do, you could do stuff from across the country all from your house, and ride when you want.

I really want to start a small buisness... I just want it to be simple though... I have been kicking around ideas, but nothing has stuck yet...

[Gainera2582]

Since I got a credit card, I make sure to pay it on time regardless of the amount. However, sometimes I have gone over what I wanted to spend, but I cut back on things I do not need to spend my money on(bs items, including the sj).

Stock market, roth ira, and money market are the things i utilize for my personal savings and retirement.

The best thing you can honestly do is budget yourself. Stick to it firmly. Sure, you have to live life to the fullest, but you have to live tomorrow and not just for the moment!!!!!

[ski4]

not to sound all doom and gloom, BUT
there is just no possible way for me to save money.
If I was to sit home everyday, not ride, not drink, not go out to eat (maybe once a month) maybe I could save a little, but life is too short to save up for something you don't even know if you will live to see... I had a 401k w/ about 12k (2000) and it was growing good bla bla bla... and was laid off twice from the same company... My line of work has seen a huge decrease in earning potential... I thought I could be making 60-70k by now, cause I was heading that direction in the early 2000's... Since then the earning potential has dropped for all computer related jobs... at least in this area... I make less than half of that now.... pretty pathetic that I was making 20k more a year 5 years ago... I see no jobs for what I do that pay over 15$ per hour... it use to be 20$ per hour minumum...
whatever... life aint fair, then ya die
:Banane01:


I have pretty much accepted that I'm not "that guy" who will ever have money.


ok..... back on topic :headbang:

i know the feeling, same feeling here, the facts are not allthe same for me but week to week and being in debt are something that seems to follow me to the point where that is my life. however in a few yrs student loans will be gone and car payment too. maybe then i will be able to make soem headway????????who knows:dunno:

[ski4]

I know many people don't like reading, and I don't either.. but a friend suggested that I read "Rich Dad, Poor Dad" and i must say that is a truly inspirational book. If you read no other book, make it a point to read that one... it'll most likely change your mind on getting into investments (other than stock market, ira, cd's). i did read that book and it really is good. still to invest i need free cash to do it and first i need to uncover from some debts then follow his advice. very good book though

[djkorn1]

Was doing great... was debt free except for student loans...Then I got laid off (cost me a fortune):dunno:, car died (bought a used Honda) and built a jet ski... damn that adds up quick.

I figure it will take me 2 years just to get back to where I was. It would help if I would stop blowing up motors.

[jetskiier]

Does anyone own a rental house? I don't own a house, and don't plan on buying one in the near future (rent/hydro is less than 15% of net income), maybe 5-7 years.
I am thinking about buying a student rental near the university I went to. I have been doing some reading/research and it seems like a good time (school is investing $250 million in sporting complex, as well as some major reconstruction), even though the interest rates are rising, and housing prices will likely fall in the (near?) future. I know there are some maintenance issues/headaches, and I live 2hrs away, but nothings easy right? Typical prices range from $250-350k, with incomes of anywhere from $2000-$3500/month. Just wondering if anyone owns a student rental or has any ideas good or bad.

[norcal ex]

arnt interest rates falling?

[SuperJETT]

Dave Ramsey talks about that quite often, he used to own some, and says it's a bad idea. Lots of repair issues due to students (more so than regular renters), high turnover, etc etc plus being 2 hours away is a bad idea too. You want to be close so you can keep an eye on it.

[jetskiier]

SuperJETT - There is a high turnover, but there is no problem finding tennants, I had a hard time finding a house when I was going to school, and in my last year, we had over 20 people looking at our house. As far as the maintenance issues go, I know there will be some, but there would be a damage deposit required, and the student housing standards are not as high as the rest of the rental market. I would start a limited company (I know there is a cost there), and have the company buy the house. I would be happy if I could make 1k/year take home from the house, but the real savings would come from the company, I could write off my personal vehicle and fuel, as well as some personal expenditures.

Norcal ex - Around here (Ontario, Canada), the interest rates have been rising steadily. I think its the same down there, I heard the FED has raised their lending rate for the last meetings?

[thrllskr]

Heard Dave Ramsey on XM last night for the first time. Pretty interesting.

My condo is located right on a ski mountain about 1hr from New York City. I plan to live there for about 3 years than rent it out, either as vacation or long-term leases (prefer the latter). Once I pay off some debts, I should be able to buy another place in the area and hold onto that still. But its not in a college town so I don't have to worry about issues with the college kids. But I would still be selective (even though you legally can't) about who I would rent it to. The owners I bought it from rented it out and it was a dump when I bought it. Renters just don't give a damn.

[Mile9c1]

But I would still be selective (even though you legally can't) about who I would rent it to.


You can be selective, you just can't discriminate because of race or ethnicity. Actually it would be very dumb to not be selective.

Dave would say no way in hell, unless you were paying cash for it. I think living 2 hours away is a bad idea. Been there... doing that now... not fun.

[32vickie]

Lets see. Just under 100K in 401k/ IRA, saving with company contribution 18% of my pay in the 401K my account. Wife has 45K and is putting in 3.5% in 403b, she also has a pension. 11 years left on the mortgage. This would give me two years to put away more money for the kids college. Son will start college two years after the house is paid off. Three vehicles last one paying off the loan 23 payment left. Should have no vehicle payment for at least two years. But I should have more life insurance for the short term, just don’t know what to get. Still paying off student loans 10 payments left.

[SuperJETT]

Sounds like you're trying to do everything at once. I bet if you knocked your 401k down to the minimum to get your match, you could knock out the student loan in 2 months and the car in less than a year, then bump it back up and really hammer stuff out.


Lets see. Just under 100K in 401k/ IRA, saving with company contribution 18% of my pay in the 401K my account. Wife has 45K and is putting in 3.5% in 403b, she also has a pension. 11 years left on the mortgage. This would give me two years to put away more money for the kids college. Son will start college two years after the house is paid off. Three vehicles last one paying off the loan 23 payment left. Should have no vehicle payment for at least two years. But I should have more life insurance for the short term, just don’t know what to get. Still paying off student loans 10 payments left.

[Snackem]

Just got Dave's book in the mail. The Total Money Makeover. I got it during the huge labor day sale $10 bought 2 copies one for us and one for a friend. I agree with SuperJETT focus on one thing at a time and throw all your muscle at it and you'll be amazed what you can do. The power of focus is incredible and once you get the ball rolling it's like a "debt snowball" it just keeps picking up steam. . .

[freestylegeek]

...I agree with SuperJETT focus on one thing at a time and throw all your muscle at it and you'll be amazed what you can do. The power of focus is incredible and once you get the ball rolling it's like a "debt snowball" it just keeps picking up steam. . .

Not to mention the power of tiny little victories.
There is something really inspiring about accomplishing each one of the baby steps.
Also, it's very helpful if you can find a friend who's doing the same thing.

SuperJETT and I started getting out of debt about the same time, and being able to discuss certain situations together has been great!

[32vickie]

401K, company gives me 4% automatically and then they match 1 for every 2 up to another 4% so I have to put in 8% to get to the full company match. Before they changed the plan I started out putting in 6% and raised it 1% each year till I hit 10% so I was comfortable with the 10% before they started the company match. Before they had profited sharing that went into a taxed deferred account and a pension which is now frozen. So I could reduce my contribution by 2% while still maximizing the company match and use that money to reduce the school/Truck debt. Problem is I can see the wife using the extra money for other things and it not going where it should and I would rather have it locked away tax deferred. If we can just get rid of the truck payment we would be in better shape. Children in day care for the summer, before school program now for my son and daycare for Kelly cost more than expected.

[SuperJETT]

using the extra money for other things and it not going where it should

Budget, budget, budget. You do a budget for the month, you tell the money where it's going instead of just letting it go wherever.

If you were a department manager in a company, you would do a budget for your department or you'd get fired. If you ran a small business, you'd do a budget or go out of business. Your family is a small business, so you need a budget!

Once we started doing our budget, it was surprising that we were able to pay all the bills, feed the family, pay off debt, and actually had money to put toward things that are important like car repairs, home improvements, gymnastics lessons for the kids, etc.

[jetskiier]

SuperJETT - Does Dave Ramsey give any reson why he thinks rentals are bad (or is it just student rentals?). The way I had planned on doing it is to start the company and save most (all?) of the excess money generated into a company account, and use it for any repairs/upgrades that need to be done. After the mortgage is up (25yrs) I would have a 'free' house (hopefully keeping up with maintenance on the house will keep it in decent shape), that I would either sell or keep as a rental. I am 24 now, with no debt, but not much as far as savings (most of my extra money goes towards the toys at the moment) but I do have a retirement plan started.

[SuperJETT]

SuperJETT - Does Dave Ramsey give any reson why he thinks rentals are bad (or is it just student rentals?). The way I had planned on doing it is to start the company and save most (all?) of the excess money generated into a company account, and use it for any repairs/upgrades that need to be done. After the mortgage is up (25yrs) I would have a 'free' house (hopefully keeping up with maintenance on the house will keep it in decent shape), that I would either sell or keep as a rental. I am 24 now, with no debt, but not much as far as savings (most of my extra money goes towards the toys at the moment) but I do have a retirement plan started.

I don't know his exact thoughts on it, but I know he doesn't like student rentals because of the damage that is done and he doesn't like long distance landlording either, he'd rather be able to drive by the place fairly often just to keep an eye on things.

[jetskiier]

I'm not disagreeing, but the landlord I had when I was in school lived about 3 hours away, and only came back a couple weekends in March/April to show houses and sign leases for the coming year. He did have a handyman in town that took care of all the emergency maintenance (our furnace stopped working in February, and there was a guy there that night with some electric heaters). I still have a lot of research to do, but I'm not going to rule it out because Dave Ramsey says so, I would like to supplement my income, and I live in a small town with very little rental demand. At least near the University I don't have to worry about filling the house.

[thrllskr]

I'm not disagreeing, but the landlord I had when I was in school lived about 3 hours away, and only came back a couple weekends in March/April to show houses and sign leases for the coming year. He did have a handyman in town that took care of all the emergency maintenance (our furnace stopped working in February, and there was a guy there that night with some electric heaters). I still have a lot of research to do, but I'm not going to rule it out because Dave Ramsey says so, I would like to supplement my income, and I live in a small town with very little rental demand. At least near the University I don't have to worry about filling the house.

If you really insist on doing this, I would take a larger than normal security deposit, since 90% of the time its coming from the parents anyway, I am sure it shouldn't that big of an issue. Would be great to get the parents to sign the lease, but you'd risk turning the students away because of that.

Wouldn't you rather put the money into a house for yourself? Or buy a fixer-upper and spend some time with it and sell it. That would make you more over a few years than a rental property would. And then you could watch a property get nicer rather than be destroyed by college kids.

[SeaLion]

What does Ramsey say on 2nd homes/vacation property. I bought a house in AZ by the Colorado River as our get away weekend place. It has appreciated 150% in the past 2 years I have owned it. I think this is the only debt I have if your primary residence doesn't count. I paid cash for my 03 Ranger and my wife's 04 Expedition. Bought both used btw. Always pay cash for the skis, quads and trailers. I have a credit card but it gets paid off in full every month. I am self employed so I wish I had matching retirement contributions but I don't. I max an IRA for my wife and myself every year though. I have a good sized savings accumulated and some stocks but nothing major as far as stock investment goes. I am 36 with a wife and 3 kids. I am almost debt free but due to the 2nd home I guess I am not technically there yet. Although if I sell it, it would be a big gainer.

[Snackem]

What does Ramsey say on 2nd homes/vacation property. . . .

If you are going by just what Dave says he would tell you to sell the house. Put the cash that you get from it either into a savings/money market account or into good mutual funds depending on how long you plan on leaving it there. It would go into Mutual funds if it would be a "long term" *(five years or more) or into savings if it were a "short term" (less than five years). Then he would say to start saving your mortgage payment and more and wait until you have the money saved up to pay cash for a nice vacation home. He LOVES real estate:headbang: but HATES debt more:bad3:

[Mile9c1]

Dave's thing is to never borrow money, because it's dumb to go into debt.

He doesn't count primary residences as debt. But he only likes 15 year mortgages max, where at least 20% is put down and the payments are less than 25% of your take home pay.

Jetskiier, borrowing a quarter million dollars for a 25 year loan on a house for students to party in... Dave would have a heart attack if you asked him what he would do if he were you :cool2: Before you jump into anything, take a hard look at all the numbers. It might make sense, I have no idea what your situation is, but don't forget you have to pay property taxes (I'm guessing they'd be around $5-6 grand a year), you can't take a tax deduction on the interest if it's not your primary residence, and you have to pay income taxes on any profit you do make each year. Just some things to consider.

I'm not sure why a 24 year old would want the headache... start saving your extra money in good mutual funds or buy a house for yourself to live in if you don't already have one. Much much less risk and less stress IMO.

[SeaLion]

If you are going by just what Dave says he would tell you to sell the house. Put the cash that you get from it either into a savings/money market account or into good mutual funds depending on how long you plan on leaving it there. It would go into Mutual funds if it would be a "long term" *(five years or more) or into savings if it were a "short term" (less than five years). Then he would say to start saving your mortgage payment and more and wait until you have the money saved up to pay cash for a nice vacation home. He LOVES real estate:headbang: but HATES debt more:bad3:

Well then maybe I got lucky because if I don't know where I could have made 150% in mutual funds. I know it could tank and go back to what I bought it for (highly unlikely). It will also be paid off in a couple of years. It gets used often and all my toys are stored there. It saves me time and money not having to trailer back and forth. Most people have a car payment higher than what my mortgage is on it. It could also be rented for double the mortgage cost (positive cash flow) if I chose to and still have all that appreciation equity. It was a legal steal on the deal I got on it. The right circumstances all fell into place on it. I'm sure there are some guidelines and every situation is unique. You can't just put a blanket over it all. The general principles of Ramsey are pretty sound but I'm sure there are some exceptions. Yeah if I had 2 car payments, 3 credit cards maxed out etc. I don't think it would have been a good idea (not knowing that the market will boom so much).

All I know is I am glad I made the decision to buy it. One of the best deals I have made yet. My primary residence was not too shabby of a deal either. That one has appreciated 80% and should be paid off in 8 years. I bought it 3 years ago.

[Snackem]

Well then maybe I got lucky because if I don't know where I could have made 150% in mutual funds. I know it could tank and go back to what I bought it for (highly unlikely). It will also be paid off in a couple of years. It gets used often and all my toys are stored there. It saves me time and money not having to trailer back and forth. Most people have a car payment higher than what my mortgage is on it. It could also be rented for double the mortgage cost (positive cash flow) if I chose to and still have all that appreciation equity. It was a legal steal on the deal I got on it. The right circumstances all fell into place on it. I'm sure there are some guidelines and every situation is unique. You can't just put a blanket over it all. The general principles of Ramsey are pretty sound but I'm sure there are some exceptions. Yeah if I had 2 car payments, 3 credit cards maxed out etc. I don't think it would have been a good idea (not knowing that the market will boom so much).

All I know is I am glad I made the decision to buy it. One of the best deals I have made yet. My primary residence was not too shabby of a deal either. That one has appreciated 80% and should be paid off in 8 years. I bought it 3 years ago.

Yeah that was a GREAT investment. I'm not saying that think that what you did was wrong. I was just answering your question about what Dave would say. I'm an avid listner of his and I am reading his book so I think that I have a sound grasp on his principals.

[Mile9c1]

I got my Total Money Makeover book today :arms:

[32vickie]

How do you like the book. Had a long talk with the wife tonight and we are putting all of our debt in line and taking out the little ones 1 at a time. I will see how that works. hope the talk help us out and we will see in one or two months how things are going. Now how do i set up a pop up reminder on this site to revisite the thread. :question:

[Snackem]

How do you like the book. . . . . Now how do i set up a pop up reminder on this site to revisite the thread. :question:

I love the book so far. Can't wait to finish it so I can give it to some friends.
You can subscribe to the thread or just "bump" it. Good luck to you and God Bless.

[Mile9c1]

How do you like the book.

I don't know, I haven't opened it yet. I've never really had any debt... so I don't know how it'll help me now, but I want to avoid making mistakes in the future.

[jetskiier]

Dave's thing is to never borrow money, because it's dumb to go into debt.

He doesn't count primary residences as debt. But he only likes 15 year mortgages max, where at least 20% is put down and the payments are less than 25% of your take home pay.

Jetskiier, borrowing a quarter million dollars for a 25 year loan on a house for students to party in... Dave would have a heart attack if you asked him what he would do if he were you :cool2: Before you jump into anything, take a hard look at all the numbers. It might make sense, I have no idea what your situation is, but don't forget you have to pay property taxes (I'm guessing they'd be around $5-6 grand a year), you can't take a tax deduction on the interest if it's not your primary residence, and you have to pay income taxes on any profit you do make each year. Just some things to consider.

I'm not sure why a 24 year old would want the headache... start saving your extra money in good mutual funds or buy a house for yourself to live in if you don't already have one. Much much less risk and less stress IMO.


Maybe I'm wrong, I know its going into debt by buying a rental house, but it wouldn't cost me any of my income (if all goes as planned), the rental income would more than cover the mortgage and taxes. I wouldn't pay income tax on the income, because it would stay in the company, with me making very little (probably 0 in the beginning, but more after 10-15 years). I could write off the depreciation of the house if I had to, but that would come back to bite me in 25 years when I sold the house, as I would have to pay tax on the difference of the depreciated value and whatever I sold it for.
I don't buy a house for myself mainly because I dont have to, I'm living with a friend and the rent is less than the interest I would be paying on a mortgage, plus the mortgage would be coming out of my pocket, unlike the rental house. I know there will be some problems, nothing is ever easy or everyone would be doing it (there are a lot of people that own rentals in the area).
I am not completely sold on the idea, thats why I asked for opinions, but it does seem like a good idea to me. At the moment I'm reading "How to invest in real estate for dummies" its a pretty good book, I've read a couple more and like I said before I have some decisions to make and more learning to do.
I knew a guy that had a 6 bedroom rental house, which was mortgaged, and it paid for its own mortgage, the mortgage on his house (small house in the country), and his boat payment. I'm not saying thats what I'm trying to do, I would invest the money back in the house, but I do think there is money to be made. The average rental rate is around $400/room, plus utilities.

[thrllskr]

Went to B&N at lunch and bought the book. Rainy weekend ahead of me (atleast tomorrow), figure I'll dig into it. I was laughing to myself though - since I bought my condo, I already started on a strict budget, only use debit card now, cut coupons for groceries, etc and its working well. Then here I am buying a $20 book - my budget doesn't allow for anymore frivilous (sp?) purchases but I figured this is an exception!

[PancakePete]

I am reading threw this thread and feel like a complete Moron ! I have followed the love of skiing this year so much.. I have nothing left. No savings, nothing in checking and living week to week, barely getting by.. I think I went a little crazy this year.. Well travel and whatnot.. I am 34k in the hole... maxed Home Equity and just put my house up for sale last night... I am moving out... and taking the equity in my condo to get a house and pay off everything... I hope I can do a couple rides next year... But the sport has gotten me really broke.... I have made some Irriplaceable Friends, and had a blast... But the headache I have now.. is not worth all of it... I am on the path of fixing... and I will probly ride Jersey rager and thats it, way until next season.... It is, what it is ! :dunno:

[SuperJETT]

I am reading threw this thread and feel like a complete Moron ! I have followed the love of skiing this year so much.. I have nothing left. No savings, nothing in checking and living week to week, barely getting by.. I think I went a little crazy this year.. Well travel and whatnot.. I am 34k in the hole... maxed Home Equity and just put my house up for sale last night... I am moving out... and taking the equity in my condo to get a house and pay off everything... I hope I can do a couple rides next year... But the sport has gotten me really broke.... I have made some Irriplaceable Friends, and had a blast... But the headache I have now.. is not worth all of it... I am on the path of fixing... and I will probly ride Jersey rager and thats it, way until next season.... It is, what it is ! :dunno:

That was me a few years ago, trips, trips, trips, all on credit cards.

The good news is it's completely fixable!

[PancakePete]

That was me a few years ago, trips, trips, trips, all on credit cards.

The good news is it's completely fixable!

Thanks Darin... I dont want Kelly to ever suffer...

Just like Nascency's "Addiction". Man.. Its true !

[Mile9c1]

I wouldn't pay income tax on the income, because it would stay in the company,

LOL, then don't forget the company would have to pay income taxes. There's no way of hiding from taxes! :banghead:

If the renters would foot the whole bill (mortgage payment, taxes, insurance, etc.) it would be tempting.

[32vickie]

Hope everything goes well, pancakePete it looks like you have a plan. Beth and i are working out a plan tonight and i think i will also get the book. $11.99 on ebay plus shipping. could be the best money spent lately. Beth is taking me away for my B-day, don't know where we are going, needed to get a passport for Kelly so it is out of the country. The bill is on her credit card and she has bags of clothing for the trip. I think i need to start the snowball rolling.

Doug

[thrllskr]

I wish I debt free, but I am several years from that. I picked up Ramsey's book in hopes of shortening that goal. I have a lot of debt (6 years of college and 4 years of spending dollars and making dimes) but I have flawless credit and now own my residence. What I have finally taught myself though, is that income, debt, interest rates etc. aren't the problem - it was me. I've put myself on a very strict budget and even stayed home in august when all my friends went to Vegas. I think that was the turning point. I am now very motivated to stay on budget and rid myself of debt. I just hope his book will give me more insights.

The way I look at is this - I have a roof over my head that I own, I pay all my bills, I have food in the cabinets, great job, etc. I am better off than 80% of the people in the world. Sad, but true.

[SeaLion]

Yes you are doing better than most.

[Snackem]

Hey Pancakepete a couple of years ago I was about 40k in the hole. Between Student loans, book and other loans from my college, local charge accounts and credit cards. It was so bad that I had to drop out of school or rather they would not let me register. I had a $150 car with duct tape holding the passenger side doors shut. It was no fun digging out of that hole. Then to add insult to injury just after I quit school to find a job two jetliners hit the world trade center towers in NYC. The economy tanked and there were no jobs in my neck of the woods. I finally found the first job that I could find pumping gas for $5.75/hr. It got so bad that for a while I was sleeping in my car and only eating a couple days a week. Eventually I was able to move up to a much better job and start to pay on that debt. It took me until Jan. '05 to get the last one paid off but I had a pretty "small shovel" to dig with. Now I can not describe how god it feels to be debt free (except for the house 85k on a 15 year fixed). All I gotta say is keep at it and you'll be amazed what a little bit of focused intensity can do. Good luck

[romack991]

bringing this back from the dead. i have a Fidelity 410K through work. Looking to start a roth ira. is it wise to use the same company or a different company?

also i have a truck loan, would it be smarter for me to delay starting the roth a yr until that is paid off or should i start the roth now?

[SuperJETT]

also i have a truck loan, would it be smarter for me to delay starting the roth a yr until that is paid off or should i start the roth now?


Yes, get out of debt first. Knock it out quick, then go for it because your risk will be way way lower.

[Mile9c1]

is it wise to use the same company or a different company?

also i have a truck loan, would it be smarter for me to delay starting the roth a yr until that is paid off or should i start the roth now?


I would look for a different company. I used Vanguard when I rolled over my 401K from the company I left earlier this year. They have among the lowest expenses.

If you don't have much debt, you might as well start the Roth now. You can only contribute $4,000 a year. Just go for it. I keep putting it off with excuses and now I still don't have one (I'll start it next month, sure).

[PAIR-A-DICE]

I keep putting it off with excuses and now I still don't have one (I'll start it next month, sure).

Waterdawg purchases, perhaps?!? :biggrin:

Sure you will...:haha:

[Mile9c1]

WD has nothing to do with it, the company I work for just filed for bankruptcy today, so I'm thinking I should keep a little larger emergency fund :banghead: Although I think my job is very safe.

I'm already maxing out my 401K so I figure I'm not doing too bad. I have till April next year to fund this year's Roth contribution.

[PAIR-A-DICE]

WD has nothing to do with it, the company I work for just filed for bankruptcy today, so I'm thinking I should keep a little larger emergency fund :banghead: Although I think my job is very safe.

I'm already maxing out my 401K so I figure I'm not doing too bad. I have till April next year to fund this year's Roth contribution.

Wow! Sorry for the bad luck on your company's bankruptcy---why is your job safe? Are you the accountant?!? :biggrin:

I was just kidding you as I am sure you know...:cool2:

I cashed in my 401K to assist in starting my business---my wife and I have been investing in real estate in lieu of IRA's and such, lately. We have a plan to start investing in a retirement fund in case the real estate doesn't pan out as we hope.

[Mile9c1]

why is your job safe?

Because my boss just quit and so did another engineer and so I got most of their crap to work on, plus I still have all the crap I usually work on :smile:

I know you were just kidding :biggthumpup:

This thread reminds me I need to finish the Total Money Makeover. I only got half way through it.

[romack991]

This thread reminds me I need to finish the Total Money Makeover. I only got half way through it.

is it worth buying?

[Snackem]

is it worth buying?

Yes. I my wife and I liked it so much that we bought three copies. One to hang onto (donate to the church library) and two to give to friends.

[Mile9c1]

It's only $10 new. Or less, if you watch Ebay.

[32vickie]

Yes get the book it will help you look at your dept differently. I read the book when we were in Scotland and my wife is on the second chapter. We are both trying to help her brother to get out of a bad money situation and the book helped us set up a spread sheet for him. Plus we have our own dept snowball rolling now. I just need her to finish the book. It was only $13 on line and I think it was well worth the money.

[FL-cracker]

I am 13k in the hole on my 05 frontier. 21yrs old and do Precision Machining/daimond turning for a living...cutting infared/night-vision lenses for all sorts of Gov. vehicles/guns/rifles exc....I will also be starting work part time with Trinity Composites! My dream is to make that full time and travel all over the World doing what I love......Its just hard to give up what I already have with DRS....I am too young to be making all these decisions.....time will tell.

Went through about 20k racing mini moto "pitbikes" for two years, and now about 8k deep into this X-h2o disease.

[SuperJETT]

This time last year, our total debt (minus house) was $30,757

We're currently at $12,621

We've knocked out $18,000 in a year!

[SuperJETT]

This time last year, our total debt (minus house) was $30,757

We're currently at $12,621

We've knocked out $18,000 in a year!

$18,000, at 6% interest, that's $1080 saved per year.

[Snackem]

This time last year, our total debt (minus house) was $30,757

We're currently at $12,621

We've knocked out $18,000 in a year!

NICE!!! :arms: :arms: You guys are on fire!!!:cheer: :cheer: You'll be debt free in 6 months or less!!!!:woot: :woot:

[SuperJETT]

NICE!!! :arms: :arms: You guys are on fire!!!:cheer: :cheer: You'll be debt free in 6 months or less!!!!:woot: :woot:

Well, not really, I'd love to but we had some 'help' at first, in the form of downgrading my car ($2400 off the top), my mother-in-law was living with us and paying rent for the first 4 months, and bonuses.

Our realistic goal is to be debt-free in 2007. That is completely doable, it's just which month do we do it.

[Snackem]

You wait and see once you get on a roll 'something' will come along that you did not expect, a raise, or some other sort of increased income an you'll be out of debt before you know it.

[onesojourner]

right now I have 5-6k for retirement and I was debt free (other than my house) until the leg thing and thats about 26k. I am 23 right now.

[FL-cracker]

Sucks about your leg man.

[Snackem]

That's pretty good for your age. Most people our age are not even thinking about retirement or debt. What happened to you leg man? I must have missed that. Keep up the good work though and you'll be back on top of things in no time. Just remember to make your money work for you and not the other way around.

[jetskiier]

Does anyone know some good websites to read about all this? I've read the 'Rich Dad Poor Dad', and am reading on real estate investing, but if there was a website similar to this thread that would be great. I like to see everyones opinion, and its very easy to read.

[Snackem]

Go to www.daveramsey.com or www.crown.org
Both are Very Good.

[romack991]

Just an FYI, Im halfway through the book now and it has some very good basic concepts. It isn't complicated formulas, just basic spending habits that would seem common sense but aren't in most people's mind. So far I'd definitely recommend it.

Oh and you dont have to buy the book, I just went and got a library card and checked it out.

[SuperJETT]

Just an FYI, Im halfway through the book now and it has some very good basic concepts. It isn't complicated formulas, just basic spending habits that would seem common sense but aren't in most people's mind. So far I'd definitely recommend it.

Oh and you dont have to buy the book, I just went and got a library card and checked it out.

Bingo, it's basic concepts, but most people don't have the discipline to do it. Dave lets people see the other end so you get motivated to do it.

Our first big things were paying off the cars, next will be the home equity line next year, then fully funding the emergency fund, then settling in to funding retirement, college funds, and killing the mortgage.

[Snackem]

Just an FYI, Im halfway through the book now and it has some very good basic concepts. It isn't complicated formulas, just basic spending habits that would seem common sense but aren't in most people's mind. So far I'd definitely recommend it.

Oh and you dont have to buy the book, I just went and got a library card and checked it out.

Yeah the principals are suprisingly simple. But it's amazing how many people just don't get it or have never thought of it.

[freestylegeek]

Yeah the principals are suprisingly simple. But it's amazing how many people just don't get it or have never thought of it.

Actually, it's not amazing.
The credit companies dump soooo much money into brainwashing that most peope are no longer capable of thinking of a different way. You're viewed as 'wierd' if you don't "follow the crowd".

I love the way it feels when you go into a store with C-A-S-H, and get exactly what you want for what you wanted to spend.

[Snackem]

Actually, it's not amazing.
The credit companies dump soooo much money into brainwashing that most peope are no longer capable of thinking of a different way. You're viewed as 'wierd' if you don't "follow the crowd".

I love the way it feels when you go into a store with C-A-S-H, and get exactly what you want for what you wanted to spend.


Yeah that's true I know that in my speech class I gave a "Speech To Convience" about getting and staying out of debt. My prof. ridiculed me for the notion. How will you build credit without getting some debt? I guess that she did not hear the two minute section in my speech about how you don't need credit. All the students just looked at me and said "What about student loans and emergencies?" It was like I was spewing a vile hateful speech. They did not even imagine that you could live without debt.

[32vickie]

I like romack991 idea the best "Oh and you dont have to buy the book, I just went and got a library card and checked it out." wow i could have saved $16. But then again my wife would not be able to read it. she is still on chapter 2 for three weeks.

[romack991]

even though i pay off my credit card every month, its now out of my wallet. you do spend more when you just swipe a card instead of handing out cash. i guess i'll trade the spending rewards for less money spent.

[onesojourner]

That's pretty good for your age. Most people our age are not even thinking about retirement or debt. What happened to you leg man? I must have missed that. Keep up the good work though and you'll be back on top of things in no time. Just remember to make your money work for you and not the other way around.

I shattered my femure when I was on vacation with my lady last april. insurance is refusing to pay for the plane ride home.

here is the original post
http://x-h2o.com/showthread.php?t=2824&highlight=there+goes+my+summer

[michael950]

I bought Apple at $49.78

(whish I had done it last year when I thought about buying it - it was $35/share.)


Looking to attend FPU. Dave Ramsey Rocks!


Update. Sold at $81.92. Wish I had invested a lot more than what I had to net more cash. $32/share is not bad.

Now about that debt.

[michael950]

I skimmed 30% and read 70% of this thread, but heard no mention of FPU.

Has anyone attended or purchased the kit?

[SuperJETT]

Maybe I should rename this thread FPU on the X.

We've thought about attending one, but we already have the determination/motivation and freestylegeek and his wife are kind of our accountability partners. We're actually racing to see who gets out of debt first. I think it will be them, but we're trying.

[michael950]

Maybe I should rename this thread FPU on the X.

We've thought about attending one, but we already have the determination/motivation and freestylegeek and his wife are kind of our accountability partners. We're actually racing to see who gets out of debt first. I think it will be them, but we're trying.

My #1 priority after I graduate will be to take control of the finances and get us out of debt. My wife is the accountant, but I have more of the finance perspective (investments and such).

I would like to know if the FPU is better to do in a class or self paced DVD package (not draw it out in what 14 weeks).

[kingnothing3]

K Well im 21, until I was 18 I always spent less than what I had. When I was 18 I bought a house and 7 acres. ( should say that I work ALOT 50-80 hours a week depending on time of year.) I rented the house and front garage out to a family to help with the payments. I still live at home. Right now its my only debt. But my parents just gave me 2 months to move out(2months ends nov. 30th.) So I am now planning on moving into the house, paying full payment, paying for food, insurance, taxes, and all living exspenses. Its going to suck.
Also need to buy a new truck very soon.
No 401k through work or anything going toward retirement. maybe its because im young but I agree with Nick. Live for today. Noone knows if they are ever going to make it to retirement so why worry about it now? All you really need is good health insurance and a little extra money saved up.(should take my own advise but im spending my saved money on a new ski:banghead: )

[michael950]

... maybe its because im young but I agree with Nick. Live for today. Noone knows if they are ever going to make it to retirement so why worry about it now? ...


Family, death is a bitch to deal with and a mortgage payment w/o some backup is going to be tough with the income reduced in half.

[romack991]

He hit the nail on the head. Do you really want to be in debt and then have have something bad happen and leave your loved ones with the burden?

Also do you really want to work the rest of your life instead of being a little more responsible when your young and living comfortably at 60. A small savings isnt going to last if you live till your 80.

Also, everyone please do what you can to have insurance. You never need it till you really need it. My parents were doing great, on track for a good retirement until they got diagnosed with cancer with no health insurance. That can wipe you out and any insurance after that is outragiously expensive. The payments suck but its a lot better than the consequences of not having it.

[SuperJETT]

My #1 priority after I graduate will be to take control of the finances and get us out of debt. My wife is the accountant, but I have more of the finance perspective (investments and such).

I would like to know if the FPU is better to do in a class or self paced DVD package (not draw it out in what 14 weeks).

The big benefit from FPU is you can see other's experiences and have people that will help hold you accountable, plus give other ideas on how to budget, etc.

[kingnothing3]

I would NEVER go without insurance. had my own vehicle insurance since I was 16, health Ins. since I was 17 and I cover everything else myself as well. My parents only helped me out finacialy when they were obligated too. as soon as I was old enough they dropped me off everything. Thought about life ins. and all that but to tell you the truth im not that conserned about leaving my parents with my debt. They dont want me to get life ins. and we just dont get along very well. They have more than enough to make my payments without any troubles.

[michael950]

I would NEVER go without insurance. had my own vehicle insurance since I was 16, health Ins. since I was 17 and I cover everything else myself as well. My parents only helped me out finacialy when they were obligated too. as soon as I was old enough they dropped me off everything. Thought about life ins. and all that but to tell you the truth im not that conserned about leaving my parents with my debt. They dont want me to get life ins. and we just dont get along very well. They have more than enough to make my payments without any troubles.

You asked so I answered, yes it is a case-by-case decision but for a majority of the population that is the reason why people carrt life insurance.

[Mile9c1]

We're actually racing to see who gets out of debt first. I think it will be them, but we're trying.

Are you just trying or are you gazellle intense?!? :smile:

I haven't finised the Makeover book yet, but I would recommend it to everyone. It explains all the steps and gives some good stories to really kick you in the pants. If it doesn't motivate you... what will FPU do? Only thing I can think of is it might help get the wife on board if she doesn't want to read the book.

I still use my credit card as much as possible (on the things I need). I actually think I spend more when I have cash, and don't tell me it's not painful when I get a big bill every month!

I'm still having a hard time paying extra on my mortgage, I'm saving more by keeping the money in a simple savings account so I don't see the point (as long as I save it and don't spend it of course).

[32vickie]

Mile9C1 as long as you are paying of the card every month you are doing good. Some people need to just use cash and that works for them and others as yourself are disciplined enough to use the card. I hate using the card lately since we went away for vacation and now I am paying them down so if I don’t have the cash we don’t buy it.
I think I will get a copy of the book for my brother in law for Christmas, he is in debt up to his eyeballs and thinks nothing about it. :banghead:

[onesojourner]

have you guys seen that commercial with that semi nerdy looking family guy showing off his house and country club and all that crap and he says something along the lines of and how do I do it? I;m in dept up to my eye balls. I love that commercial. it pretty much sums up our culture... it cracks me up everytime I see it.

[freestylegeek]

Maybe I should rename this thread FPU on the X.

We've thought about attending one, but we already have the determination/motivation and freestylegeek and his wife are kind of our accountability partners. We're actually racing to see who gets out of debt first. I think it will be them, but we're trying.


Not after this month...:rolleyes:

I've got to admit, that acountability is extremely helpful!

[Snackem]

Are you just trying or are you gazellle intense?!? :smile:

I haven't finised the Makeover book yet, but I would recommend it to everyone. It explains all the steps and gives some good stories to really kick you in the pants. If it doesn't motivate you... what will FPU do? Only thing I can think of is it might help get the wife on board if she doesn't want to read the book.

I still use my credit card as much as possible (on the things I need). I actually think I spend more when I have cash, and don't tell me it's not painful when I get a big bill every month!

I'm still having a hard time paying extra on my mortgage, I'm saving more by keeping the money in a simple savings account so I don't see the point (as long as I save it and don't spend it of course).

The big advantage of FPU is that it lets you see how others are doing. that way when you get into a rut you can look across the room and see how well someone else is doing and use that as motivation. In turn someone can see your progress and be motivated. It's kinda like going to weight watchers meetings. If you show up with a new car/snickers bar there is someone there to slap you upside the head and keep you on the right path. Kara and I have not taken FPU but we plan on taking it eventually. Something else really neat about FPU is that when you pay to go through it you can attend it for life, and so can your spouse.

[Mile9c1]

I know two people who have done FPU and not long after they were back to old habits. They never even got debt free and both of these couples I am thinking of financed a camper and a car (after FPU). So that's why I think either it's your personality or it's not.

One couple says they are doing the "modified Dave plan" and the other says "hey, the bank says we are doing way better than most people our age". Hello :banghead:

[Snackem]

I know two people who have done FPU and not long after they were back to old habits. They never even got debt free and both of these couples I am thinking of financed a camper and a car (after FPU). So that's why I think either it's your personality or it's not.

One couple says they are doing the "modified Dave plan" and the other says "hey, the bank says we are doing way better than most people our age". Hello :banghead:

Oh I agree entirely. Following Dave's plan is kinda like trying to lose weight. It does not matter what weight loss plan you try to follow if you decide that you like burgers, fries and shakes more than being skinny then you'll never lose weight.

[MASTER Brian]

All I can say to this thread is WOW!!!

....that and a lot of you, including some who think you know what you are doing, need to find a GOOD Independent Wealth Advisor to speak with. I say independent because, they shouldn't try to push a product, just because someone in a home office says they should. A lot of people probably think it costs a lot to do so, but it doesn't.

I wish I could chime in more, but I can't.

[Mile9c1]

Dave Ramsey is free to listen to :biggthumpup:

[MADMAT]

I listened to Dave for a long time. He just confirmed everything that I had already learned the hard way in life.

Every time I see this thread I cringe. And now for some reason it is making me think of that stinking citi card commercial:


Rewarding. Very very very rewarding.

[Fathom]

I read through the last post from October and November this morning and it confirmed what I knew all along in regards to my own personal finances. I lived debt free with the exception of my primary residence and a $491 truck payment.
I have a maxed IRA contribution, and a company matched 401k at 6%. I bank my monthly VA disability each month and my military retirement pension.
For the most part, I felt really comfortable with my finances but hated the truck payment, although it was at a fixed 5% APR.
As of a few minutes ago, I am now debt free. I paid off my truck and set up a recurring transfer from my checking to savings in the amount just over what the monthly payment was. Instead of paying $46 in interest, I will earn interest with each monthly transfer.:arms:

[michael950]

I read through the last post from October and November this morning and it confirmed what I knew all along in regards to my own personal finances. I lived debt free with the exception of my primary residence and a $491 truck payment.
I have a maxed IRA contribution, and a company matched 401k at 6%. I bank my monthly VA disability each month and my military retirement pension.
For the most part, I felt really comfortable with my finances but hated the truck payment, although it was at a fixed 5% APR.
As of a few minutes ago, I am now debt free. I paid off my truck and set up a recurring transfer from my checking to savings in the amount just over what the monthly payment was. Instead of paying $46 in interest, I will earn interest with each monthly transfer.:arms:

Would love to be in that position.If your savings is not earning any more than 3.5% interest, and you have more than your "3-6 mos expenses" in your savings accout, you will not keep up with inflation (~3%).

[Fathom]

. . . If your savings is not earning any more than 3.5% interest, and you have more than your "3-6 mos expenses" in your savings accout, you will not keep up with inflation (~3%).
This is true but with the 5% offset of interest paid, I'm still doing better than keeping the money in savings.
MMF and brokerage accounts keep up with the cost of living increases.:biggthumpup:

[Snackem]

I read through the last post from October and November this morning and it confirmed what I knew all along in regards to my own personal finances. I lived debt free with the exception of my primary residence and a $491 truck payment.
I have a maxed IRA contribution, and a company matched 401k at 6%. I bank my monthly VA disability each month and my military retirement pension.
For the most part, I felt really comfortable with my finances but hated the truck payment, although it was at a fixed 5% APR.
As of a few minutes ago, I am now debt free. I paid off my truck and set up a recurring transfer from my checking to savings in the amount just over what the monthly payment was. Instead of paying $46 in interest, I will earn interest with each monthly transfer.:arms:

Wow that's awesome!!!! I would however start eventually sticking some of that excess into a good mutual fund. You will earn a lot more money off of inerest and have a ton of money in a couple of years.:arms: :arms:

[Fathom]

Absolutely! I have an existing Money Market Fund based on Mutual Funds that I've had for years. It is tied to my brokerage account. Whenever I buy, the fund is my cash account. When I sell, the funds automatically transfer. You're right though. I would be better suited to transfer those same funds directly into the MMF in lieu of savings. Thanks for the insight!:biggthumpup:

[32vickie]

So how is everyone doing? Still working on reducing debt and trying to get wife on board. Brother in law now that is another story he will probably file for bankruptcy before the end of the year and is costing him his marriage.
Thinking about halting my contribution to my 401K ($420) and taking that extra money and paying off some small credit card stuff. What do you think. Working out the payments tonight and I will see how many months it will take.
Also rebuilding the emergency fund due to needing new tires on the car for inspection and new oxygen sensor on the truck.
Doug

[SuperJETT]

We're still plugging away, though it's slowed down due to some medical bills and car repairs.

BUT, and a big but, we haven't had to charge anything, and only one of those had to come out of the baby emergency fund, the rest was cash-flowed by reducing our debt payment so our total debt was still decreasing while paying for those things. That's a big deal to us.

Our Christmas shopping is almost done and we still have a little $$ in that account, so that's good too.

[32vickie]

Glad things are going well for you. Getting ready to start christmas shopping this weekend, so we will see how it goes.

Doug

[Snackem]

So how is everyone doing? Still working on reducing debt and trying to get wife on board. Brother in law now that is another story he will probably file for bankruptcy before the end of the year and is costing him his marriage.
Thinking about halting my contribution to my 401K ($420) and taking that extra money and paying off some small credit card stuff. What do you think. Working out the payments tonight and I will see how many months it will take.
Also rebuilding the emergency fund due to needing new tires on the car for inspection and new oxygen sensor on the truck.
Doug


Since you asked what I think and I'm never shy to give my opinion. . . I'd stop the 401 K for a short time while you pay down the debts. Then I'd start with the 401K again only I'd put a lot more in there (like the $420 you're doing now along with whatever yoiu a paying towards your credit cards). I don't know your card balance but I'm guessing that with the extra $420 you'll pay them off pretty quick and then you can really sock some money away for retirement, or a 'new' ski. :firedevil:

[romack991]

So how is everyone doing?

You just had to ask that today when I went and spent all my extra cash (not emergancy fund) on a engine. :banghead:

[32vickie]

Just think if you used that extra money to reduce debt you could have purchased a 760 with cash later. :arms:
Maybe i should take my own advice. By By 401K for a couple of months.
Hello to paying off the CC faster and paying cash for a square or early round nose.:cheer:

[SuperJETT]

I dropped my 401k down to 1% (plus 1% match) temporarily to help pay debt. Ramsey recommends it, as long as it's not for more than 18-24 months I believe.

[jetskiier]

I've been listening to the Dave Ramsey show online as often as I get the chance, but he gives some advice that I don't necessarily agree with;

One caller was in school and had around 15-20k in student debt at 0% for the next couple years (the interest didn't start until after graduation), he inherited enough to pay off the loans and was asking if he should pay them off now or wait until just before the interest starts on the student loans. Dave told him to take the money out of the money market and pay off the student loan. Why does this make more sense than collecting ~5% interest for 2 years? He asked would you take a student loan to invest in the money market, and the answer was no, but this was already done, I would personally collect the interest.

Another caller spent his 'emergency fund' on his sisters roof and the blew the motor in his car, and only had $800, and wondered if he should take out a 2-3k loan to buy a car, Dave told him to buy and $800 car, save up then buy a $1500 car, save some more until he can afford a $2500 car, but it and save until he can buy a $5000 car... I understand how this works on paper, but does he not understand the taxes, title, safety... fees everytime you buy a car. To me it makes more sense to borrow $2k and pay it back as fast as possible rather than flipping cars every month or two.

His answers are usually pretty predictible, and his theory is pretty simple but it seems to work for lots of people, these are just two cases I have heard in the 3-4 shows I have listened to that I don't agree with. I think he is trying to over simplify things, or do you guys agree with him?

[32vickie]

I agree with you and I would keep the money in the bank until the student loans kick in. He could be thinking that the debt would be paid off before you could find something to buy with the money. Me personally I would get a 12 month CD and when it matures get another and then pay off the loan. But most people are not like that. The money burns a hole in their pocket. As for the car he probably thinks a person will hold on to the car until the 800 dollar car dies and by then they will have plenty of money to buy a better car. We have three vehicles two are paid for and the third has 20 months left. I use the older car to go to work and keep my truck for the weekends and towing the toys. Could I sell one and get out of dept faster. Yes but we would then have to give up on doing things with the family that we call love.

Doug

[Mile9c1]

Dave has strong principles. Debt is debt, no matter what the interest rate. Sure the student loans are free till graduation, but will the inheritance still be there?? Good chance something will come up and the money will be gone. Most people don't have good money discipline, which is why they have debt in the first place.

Dave didn't say that called NEEDED a nicer car every time he had the chance. You don't need to buy a nicer one if you don't want to, but if you have cash for one and it's something you want, then it's okay to buy the car. I've been driving a $600 car for the last 7 months, and I drive 100 miles every day. It's got 200,000 miles on it. I don't plan to upgrade till it dies.

[SuperJETT]

Dave's take on cars.

http://www.daveramsey.com/etc/lms/drive_free/player.cfm

[Mile9c1]

Hey that's not Dave :rippedhand:

I respect Dave and all, but does anyone have mutual funds that actually average 12% every year? I am invested in about 10 different funds and they are not even close.

[michael950]

Then you need to dump those funds and invest in something else.

I did a project for finance to find 3 different MFs that returned no less than 15% over the last 10 years and 4 stocks with 5-yr projected growth of no less than 15%.

There is other information to watch for, but if you are not earinging more than 8%, they are not working for you.


[Investment in anything all depends on your objectives, the prof wanted 15% b/c we are young and can invest in the more aggressive stocks/MFs. But for someone who is about to retire, you want that money to be safe so you invest in less risky investments]

[michael950]

http://www.morningstar.com > Funds Tab at the top > Morningstar Tools (left of ad on right) > Mutual Fund Screener

There are some predefined screens by pressing the light green "Moningstar Scrrens" button.

Watch those Returns, screen for more than 15% over 10 years (or exceed the S&P/market)

[Mile9c1]

All my mutual funds are in retirement accounts, I can't change to whatever I want.

I don't have any mutual funds for my savings... in fact Dave Ramsey says never put money into mutual funds unless you're going to keep it there for more than 5 years. I knew it wasn't Dave in that presentation :Banane01:

[michael950]

Some retirement accounts do allow you to choose into which MFs your money goes, some have a list of selected MFs and some give free rein on your selections.

Also, with IRAs you get to choose where your money goes.

The Auto segment recommended investing your car payment into a MF savings account for the long term.

[SuperJETT]

Just made a $2300 payment on our debt today, we should be under $10,000 next statement!

[Mile9c1]

Some retirement accounts do allow you to choose into which MFs your money goes, some have a list of selected MFs and some give free rein on your selections.

I have free rein, but only of a few selections. My last company was the same way, but I think those funds were even worse. Oh well.


Nice work SuperJETT! :arms:

[Starvin48]

If you don't have at least six months your salary in cash or cash equivalent, you shouldn't have a retirement account.

[Mile9c1]

Do jetskis count? I keep a 6 month cash emergency fund, and after I pay the bills I max out my 401K, and then pay off debt. I haven't started a Roth IRA yet, but I plan to. I don't want to end up 60 years old and broke.

[SuperJETT]

ive been meaning to look into this dave ramsey thing. i've been pattern trading in the market for a little while now. i ran my numbers last week and i'm at 26% ROI for 2006.

man, i really need to be a little more disciplined about my money!

First 2 quarters and 4th quarter were good this year so I can see that totally.

I would check my 401k return for this year to date, but We're sorry. We cannot process your request at this time. Requests can be processed Monday to Friday 7:00 a.m. to 3:00 a.m., and Saturday 9:00 a.m. to 9:00 p.m. ET. [1002]

What's up with that, it's not like an accountant is sitting there with an abacus.

[romack991]

I'm looking at my 401K and this is what its showing me
Company Match Fund : YTD Return 31.16%
Fidelity Freedom 2040 Fund : YTD Return 13.16%

I've been working about a yr and a half now. I have 9K in retirement already, pretty good. But I still have a college student loan and a truck loan.

Truck loan should be done by middle of next year and then it'll probably take another yr for the student loan. I wish I wouldnt have went out and bought an expensive truck when i first got out of college i really do enjoy it so just working hard now to get it paid off getting on track.

[SuperJETT]

Alright, year to date 14.6%, last 12 months 13.8%, not bad for what I've got my $$$ in.

For the entire time I've been with John Hancock, 16.8%

[SuperJETT]

In case anyone cares, I'm 80% Aggressive, 20% Growth

[romack991]

Is this too conserative? I'm 23 so I have a ways till retirement.

[32vickie]

I would say you are to conservative. You have no small cap, you don't need bonds at 23 and i would increase the foreign to 20%

Doug

[douglee25]

I would say you are to conservative. You have no small cap, you don't need bonds at 23 and i would increase the foreign to 20%

Doug

I would agree as well. A good investment election is having some small cap, large cap, international or foreign funds, some bonds, and retirement funds.

I have about 33% into large cap, 17% into retirement, 17% into international, 17% small cap, and 15% into stable value or bond funds.


If you're into IRA's, look into the Roth IRA which is probably your best option because of tax deferred growth. In that case, have an investment election which contains a main retirement fund (if you don't want to invest in individual funds and rather have someone manage it for you), international funds, and real estate funds (Dodge and Cox or Fidelity Real Estate seem to be doing well).

I take no responsibility for my statements. Just my personal opinion/thoughts:biggthumpup:

Doug

[chart102]

i be broke. but i have a roth IRA that i deposit in regularly.

[Mile9c1]

Here's my 401K funds YTD return as of 9-10-06 (best I can do off the plan's website):

7.76% Balanced Fund
2.06% Fidelity Magellan Fund (what a turd!)
1.22% Franklin Small-mid cap growth (piece of crap!)
7.37% International Stocks
10.48% Mid cap value fund
25.38% Real estate fund
11.04% value fund

I don't have much money into these as I just became eligible to contribute in October or this year. What should I do? Dump the turds? I don't like to trade for what's hot at the moment, I like to buy something and stick with it (long term). I'm not a stock watcher.

[Mile9c1]

Just checked my rollover IRA with Vanguard and the YTD looks pretty good IMO as of 11-30:

14.43% Asset allocation fund
14.33% Extended Market Index
21.17 Global equity index

[michael950]

If they are not working for you, i.e. required yields, and you can dump them and move into something more aggressive, given that is your strategy, then dump them. Remember, you want this money to grow as much as possible as quickly as possible. The older you get the less risk you want to bear, which in turn means less growth.

So ask yourself, how much can I risk and what do I want my money to do for me?

[Mile9c1]

If they are not working for you, i.e. required yields, and you can dump them and move into something more aggressive, given that is your strategy, then dump them. Remember, you want this money to grow as much as possible as quickly as possible. The older you get the less risk you want to bear, which in turn means less growth.

So ask yourself, how much can I risk and what do I want my money to do for me?


The thing is I thought I had looked at the 1/5/10 year history before I decided to opt for those funds. So what if they are 2% this year, but 30% next year? Why sell when they are down if they have a history of being up? I have all stock funds so I don't mind some down time if there is bigger up time. Similarly, why buy a hot stock when it's hot? Will it keep it up? Or is it about to slow down??

[michael950]

The thing is I thought I had looked at the 1/5/10 year history before I decided to opt for those funds. So what if they are 2% this year, but 30% next year? Why sell when they are down if they have a history of being up? I have all stock funds so I don't mind some down time if there is bigger up time. Similarly, why buy a hot stock when it's hot? Will it keep it up? Or is it about to slow down??

Yeah, I went on the info you provided (turd, etc.). So if the historical data (more than 5 years) was good then definitely stick with them.

As far as the hot stock. I bought a hot stock and it did me well. I bought apple at 44 (was eyeing it at 30-ish). It maxed at 93 quite recently. 1y Target Est: 95.14.

I lucked out.


Oh, sold it at 82. :banghead:

[djkorn1]

I finally got my Credit Card debt all on 0% cards. (Everything was screwed up from being laid off for a year) I am going to kill the small ones first. Two are gone... three to go. Killed $6000. I have about $8000 to go. My car has 2 1/2 years left on it. (about 9 grand). I will drive that Honda hopefully for the next 8 years.

In a year the CC debt should be gone and then I can kill the car quick.

[yz250fpilot]

My 401K has done fairly well over the past few years.... but I find it easier to make faster cash in this arena

http://photo.ringo.com/175/175298821O669107202.jpg

http://photo.ringo.com/175/175298856O420214038.jpg

http://photo.ringo.com/175/175298910O778084778.jpg

[djkorn1]

Nice place. I like the extra garage for Jetskis.

:cheer:


I have a 403B Tax Sheltered Investment and my STRS (State Teachers Retirement System) It is all automatically deducted from my paycheck. The 403B is through ING. I don't know much about it.

[yz250fpilot]

No...there's 3 vehicles in the garage. The skis and other stuff are in the workshop/storage area in the basement under the house. :smile:

[douglee25]

No...there's 3 vehicles in the garage. The skis and other stuff are in the workshop/storage area in the basement under the house. :smile:

That's one sick house my friend. I hope one day I could own something like that. :biggrin:

Doug

[SuperJETT]

I have a 403B Tax Sheltered Investment and my STRS (State Teachers Retirement System) It is all automatically deducted from my paycheck. The 403B is through ING. I don't know much about it.


It's ***your*** money, you need to know all about it.

[yz250fpilot]

That's one sick house my friend. I hope one day I could own something like that. :biggrin:

Doug

Thank you sir.

[Snackem]

Just made a $2300 payment on our debt today, we should be under $10,000 next statement!


It's amazing how fast you seem to pick up steam once you get the number down to a managable ammount. Keep up the good work.

[SuperJETT]

It's amazing how fast you seem to pick up steam once you get the number down to a managable ammount. Keep up the good work.

We're $18k down from last year at this point, so by this time next year we'll be done for sure, at least we better be based on our plan!

[Snackem]

Freedom is just around the corner. Right now I'm back in school so we are trying to cash flow that, it's put a crimp on our lifestyle for sure but in another 18-24 months I'll be done. Good luck with the debt snowball, just think next Christmas will be a whole lot different. . .

[32vickie]

Looks like September of 2007 for us. just need to keep on track for a few more days and the hard part will be over. We have a Christmas account set up for next year with automatic dep.
Now i need to get one of them for my super jet fund.
Doug

[SuperJETT]

Actually, next Christmas will be the same, we have a savings account with per check deposits, and probably won't change the amount at all.

Once this last debt is gone (which was actually 10% down on our house), we still have to build the full emergency fund and get kicking on college funds.

[32vickie]

we are working on our emergency fund haven't finished funding it yet. having direct deposit works great when there is more than 4 Friday's in a calender month, it helps out the Emergency fund and puts us a week ahead on collect the money for the bills. i have a spread sheet at work that helps me keep focused.

[romack991]

Do you guys keep actual tabs on your budget? I can sit down and make one out. Follow it pretty closely, but I never have been able to keep track of every dollar. I don't save receipts, ect. And using cash now, its next to impossible to be able to track everything. I basically use the budget as a guideline but not a set in stone practice. Just wondering what others do.

[SuperJETT]

Our budget works pretty easily and is very close to the dollar, but not exact.

Money goes into envelopes for clothing, car, etc, we transfer money to our personal accounts for our 'allowances' and the car fund (repairs, etc), money is transferred into our bill payment account to cover all the regular bills, the only thing left in the regular checking account is the budgeted money for groceries and gas and we enter those expenses in our spreadsheet. It works well.

Do you guys keep actual tabs on your budget? I can sit down and make one out. Follow it pretty closely, but I never have been able to keep track of every dollar. I don't save receipts, ect. And using cash now, its next to impossible to be able to track everything. I basically use the budget as a guideline but not a set in stone practice. Just wondering what others do.

[PAIR-A-DICE]

Our budget works pretty easily and is very close to the dollar, but not exact.

Money goes into envelopes for clothing, car, etc, we transfer money to our personal accounts for our 'allowances' and the car fund (repairs, etc), money is transferred into our bill payment account to cover all the regular bills, the only thing left in the regular checking account is the budgeted money for groceries and gas and we enter those expenses in our spreadsheet. It works well.

You would make a good businessman. The toughest thing I had to learn about running a business was to come up with a realistic budget as to how much "things" cost me each year. I have been working pretty hard on next year's budget numbers and have actually been seriously considering downsizing slightly because of inefficiencies that have come up with having the number of employees that I have.

[yz250fpilot]

I don't budget.

[shawn_NJ]

^&@@#%* credit cards! Dont use them, they kill me yearly.

[jetboy1004]

Our budget works pretty easily and is very close to the dollar, but not exact.

Money goes into envelopes for clothing, car, etc, we transfer money to our personal accounts for our 'allowances' and the car fund (repairs, etc), money is transferred into our bill payment account to cover all the regular bills, the only thing left in the regular checking account is the budgeted money for groceries and gas and we enter those expenses in our spreadsheet. It works well.

:bigeyes: :bigeyes: :bigeyes: Holy Crap Batman!! Now that dicipline....I have guidline budget...But it always gets blown.. because I can't keep a budget I've decieded to pay myself first and live on whats left. I get paid weekly, so, I use www.paytrust.com and, they cut a check, every week, from my checking account to my brokerage account.

As long as the savings checks don't bounce, I figure I'm ok. It's great, I never have to think about saving, It just gets done, and I'm forced to live on what's left over. Plus i make concious decisions to keep my expenses low. Like driving arround in a paid off 98 saturn, so I can put what I would've paid in car payments, into savings.

I'm probably one of the very few people in america that lives on less than they make, so that maybe...someday, I'll be financally independant.

I'm a sucker when it comes to toys though. RV, Quads, Skiis, Truck, Camera stuff.....Gotta have my toys. Why else in the world would you work???

[32vickie]

That is good Jetboy1004, if you are living on less than you bring in, still saving you can have all the toys you want if you pay with cash. Most people get what they want by putting it on a credit card and paying for it over and over again. The biggest / hardest part is the first few months and the first Christmas or holiday. If you can pay cash for everything you buy and have a plan to pay off the debt and you can make it through the first few months you should be in good shape. Locally we have a few banks that are promoting on the radio to take out a home equity loan to pay for your Christmas gifts. :banghead:
Keep up the good work Jetboy1004
:Banane01:

[SuperJETT]

I agree.

You either charge things to get them right now and pay a lot more for them in the end, or you just suck it up ONCE, save the money, and buy it a little later. In the long run you can buy MORE stuff because you aren't paying interest on things.

[douglee25]

Very true. I would agree with this unless companies offer you credit cards with zero percent interest for a year. In that case, 'buy now, pay later' may be an option for some.

Doug

[romack991]

Very true. I would agree with this unless companies offer you credit cards with zero percent interest for a year. In that case, 'buy now, pay later' may be an option for some.

Doug


Thats a big marketing gimick for the masses. Tyically if a person doesn't have the cash now, then they arent going to have it the next year. Also by then they will be wanting something else so that will go on the next card. Also most people will spend more when using credit because its very easy to get carried away.

I never carried a balance on my card when I used it. I paid it off every month. I was fat, dumb, and happy. Since getting into this thread, I really haven't changed any of my living habits, except for not using a credit card, and i already save a couple hundred bucks a month. You are a lot wiser on how you spend your money when its limited to the cash in your wallet. Now that saved money goes towards my truck, and it should hopefully be paid off by mid summer. Whereas before, I thought I couldn't make more than the automatic payment.

[douglee25]

I suppose for the masses you have many valid points. I guess ultimately it comes down to the individual and how religious they are about their payments. If they can swing it and be smart about it, buying on zero percent has some advantages like building credit.

One thing many people aren't aware of is that building your credit (for home, car, etc purchases/loan) requires one to carry a balance and make payments on that balance vs. just paying the balance off every month.

Doug

[SuperJETT]

Something else I've found is it's very hard for some people to accept the fact that a used car can be reliable. Buy a new car, BAM, instant depreciation, you just lost money and you'll be back at the dealer within a year getting any kinks worked out anyway.

[goXtreme]

I just read this whole thread from start to finish, after I was done reading, I called the wife and talked to her about the debt that we are in, I was all prepared to tell her that we need to get this book and go for it, but then she said that we are doing very well with our debt, so rather than argue with her I told her that we can do it her way for a year, and if it dont seem to be getting lower then we can try the Superjett approach.

As of now, including EVERYTHING, we are about $150K (conservative), but she is making bigger payments on everything and the balance is going down, slow, but it is going down.

Is all I can say is I am damned glad to have her, I am HORIBBLE at saving money and paying bills, she has always been good with money and that helps, and when she says we are doing alright, I have no choice but to believe her.

[douglee25]

I just read this whole thread from start to finish, after I was done reading, I called the wife and talked to her about the debt that we are in, I was all prepared to tell her that we need to get this book and go for it, but then she said that we are doing very well with our debt, so rather than argue with her I told her that we can do it her way for a year, and if it dont seem to be getting lower then we can try the Superjett approach.

As of now, including EVERYTHING, we are about $150K (conservative), but she is making bigger payments on everything and the balance is going down, slow, but it is going down.

Is all I can say is I am damned glad to have her, I am HORIBBLE at saving money and paying bills, she has always been good with money and that helps, and when she says we are doing alright, I have no choice but to believe her.

If the 150k includes your mortgage, that doesn't factor into your 'bad debt' so to speak.

Doug

[douglee25]

Something else I've found is it's very hard for some people to accept the fact that a used car can be reliable. Buy a new car, BAM, instant depreciation, you just lost money and you'll be back at the dealer within a year getting any kinks worked out anyway.

Agree totally. I'm an avid used car purchaser. I will avoid new cars for that very reason. Used cars offer much more value to me when I purchase.

Doug

[goXtreme]

If the 150k includes your mortgage, that doesn't factor into your 'bad debt' so to speak.

Doug

Yes, that includes mortgage, pickup, 4-wheeler, camper, credit cards, furniture, and doctor bills.
Like I said, that was a conservative estimate, I do not know exactly how bad it is, but I am pretty sure my wife does.

[Idok]

Agree totally. I'm an avid used car purchaser. I will avoid new cars for that very reason. Used cars offer much more value to me when I purchase.

Doug


my last 2 vehcles Ive purchased new....but I dont think Ill do it again

[SuperJETT]

Yes, that includes mortgage, pickup, 4-wheeler, camper, credit cards, furniture, and doctor bills.
Like I said, that was a conservative estimate, I do not know exactly how bad it is, but I am pretty sure my wife does.

I'm going to be as sincere as possible.

YOU NEED TO KNOW.

"she said that we are doing very well with our debt" to her, that could mean you're making the payments, not paying it down aggressively. She could very well be stressed to death about the payments/balances because she's the only one taking care of it. If you ask and want to see/help, she may be very relieved.

You should sit down together, look at the balances, what you're paying on each, and when they will be paid off. If you're just going through the motions making the payments every month, that's not much progress and a lot of money is going into thin air in the form of interest.

You are a perfect person to call Dave Ramsey on the air and get his opinion. He'll walk you through what you could do and where it could put you and when and you might be surprised how easy it is to understand.

It's not rocket science, just simple math really.

pm me if you want some detailed info...

[goXtreme]

Darin, if she tells me that she is making bigger payments than are required, I believe her.
I am not arguing the fact that Dave Ramseys way is better because I am sure it is, I am just saying that we are going to do it her way for one year and take a look at it again.
I did tell her to concentrate on one bill and get it paid off, then take that money and put it to another bill, and she said she would, again, I believe her, as of now I have no reason what-so-ever not to trust her.
Who knows, maybe in 6 months if it dont look like we are getting anywhere, I will promise you now that I will get more information about Ramsey.

[Mile9c1]

It's not that you don't trust her, it's that you two should decide together as a couple whatever you do.

Dave doesn't count mortgages as debt.

[goXtreme]

I see what you are saying, and that is the plan for when ever I get home, we are going to sit down and basically inform me of what is going on with the money.

[madoyster]

I was doing great, then I was introduced to standup freestyle ski's. I am poor now, but happy as can be.

[PAIR-A-DICE]

I'm going to be as sincere as possible.

YOU NEED TO KNOW.


I agree 100%

It's not that you don't trust her, it's that you two should decide together as a couple whatever you do.


Again, I agree 100%

[michael950]

I just bought the financial peace university kit. Anyway here is the Christmas promotion for a free 30 day trial of MyTotalMoneyMakeover.

Go to http://www.mytotalmoneymakeover.com/gift
Enter code 30DGIFT
Offer for new members only
Ends Jan 15, 2007

Try it out, should be a no lose situation.

[SuperJETT]

I just bought the financial peace university kit. Anyway here is the Christmas promotion for a free 30 day trial of MyTotalMoneyMakeover.

Go to http://www.mytotalmoneymakeover.com/gift
Enter code 30DGIFT
Offer for new members only
Ends Jan 15, 2007

Try it out, should be a no lose situation.

Thanks! I'll be in!

[SuperJETT]

http://www.youtube.com/watch?v=9Z1qix6W8Gs

[goXtreme]

That is one hell of a blender, I went to the website and watched all the others too.

[michael950]

:haha:

Here is one f'ing expensive broken iPod:
Will it Blend iPod (http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=300061186098)


Video (http://www.willitblend.com/videos.aspx?type=unsafe&video=ipod)

[romack991]

I just bought the financial peace university kit. Anyway here is the Christmas promotion for a free 30 day trial of MyTotalMoneyMakeover.

Go to http://www.mytotalmoneymakeover.com/gift
Enter code 30DGIFT
Offer for new members only
Ends Jan 15, 2007

Try it out, should be a no lose situation.

Just a note, remember you have to cancel it atleast 2 days before it ends or it automatically renews.

I signed up, after reading the book, i don't think this offers much more, but good for people still not understanding it or need help setting things up.

[SuperJETT]

Just a note, remember you have to cancel it atleast 2 days before it ends or it automatically renews.

I signed up, after reading the book, i don't think this offers much more, but good for people still not understanding it or need help setting things up.

Agreed. I just like getting all 3 hours of the show via podcast as our radio station has it from 12-3pm and it's bad AM reception. This way I can listen to it in just over 2 hours and it's clearer.

[32vickie]

goXtreme, my wife had a plan to get rid of the credit card debt and we thought we were doing good. When i did ask about a bill i would hear, well you never do the bill and you have no clue what it going on. So we both started to do the bill together. Her plan had us getting out of debt in three years without any real emergency money. Our new plan has us getting out of debt except for her vehicle payment (less than 1 year) in nine months, a few thousand dollars in emergency money and a fully funded holiday account for next year. What was the change, we both worked together and when we go to buy something we us the debit card. Christmas was tough this year paying for everything in cash but I can say it will never be that way again. It will be nice to pay for a new superjet in cash in two years. :arms:
:Banane01:

Doug

[SuperJETT]

Got tickets to Dave on Feb 1 here in Louisville!!!

[SuperJETT]

We see Dave live next Thursday, woohoo!

We're pretty well on the way to being done by the end of the year, maybe by October/November actually, so I think the live event will just push us even more.

The coolest thing about doing the right things now, is when something comes up, we have money to take care of it right away.

Case in point: last week, the battery died in our van. We had $70 in our car repair fund (budget $120/month), and Napa had their Legend battery on sale, for $70 after tax. Got it that afternoon, never even had to think about where the money was going to come from or if we could afford, it the money was there! I know that's a minor thing, but it just makes stuff like that a minor annoyance.

Same thing with tires for the van last fall, we had the money to get them, so we got them, good ones too.

We could be more aggressive, but would have to cut back on stuff like gymnastics for the girls, printing photos every month, etc. I think we've got a good balance right now and when we are out of debt, probably won't make many changes to the budget and just divert the debt $$$ to the full emergency fund, retirement, college funds.

[Snackem]

We see Dave live next Thursday, woohoo!

We're pretty well on the way to being done by the end of the year, maybe by October/November actually, so I think the live event will just push us even more.

The coolest thing about doing the right things now, is when something comes up, we have money to take care of it right away.

Case in point: last week, the battery died in our van. We had $70 in our car repair fund (budget $120/month), and Napa had their Legend battery on sale, for $70 after tax. Got it that afternoon, never even had to think about where the money was going to come from or if we could afford, it the money was there! I know that's a minor thing, but it just makes stuff like that a minor annoyance.

Same thing with tires for the van last fall, we had the money to get them, so we got them, good ones too.

We could be more aggressive, but would have to cut back on stuff like gymnastics for the girls, printing photos every month, etc. I think we've got a good balance right now and when we are out of debt, probably won't make many changes to the budget and just divert the debt $$$ to the full emergency fund, retirement, college funds.


Glad to hear the good news Jett. I'd love to go to a live event but Dave never makes it to the PNW. It is kinda a nice feeling the first time that something "comes up" and you don't have to stress over what card to put it on or where to get the money from. For me it was the overflow tank for my radiator that cracked and needed replaced, I started to worry about it since it cost like $85 and then I realized that "Hey I've got $150 in my Car Repair fund so problem solved.

Let me know how Dave's live event turns out.

[SeaLion]

I have 2 vehicles that I bought used and paid cash for (03 Ranger and 04 Expedition), so no car payments. I pay my single credit card off every month so no balance on that. I max an IRA for my wife and I every year. I have quite a bit saved up. All the skis were bought cash. I pay $1000 extra every month on my primary residence mortgage and another $1000 extra on my 2nd home's mortgage. My question is would it be better to pay $2000 extra on my primary residence and nothing extra on my 2nd home or vice versa or leave it as is paying $1000 extra for each one?

I never followed anyone's financial advice or read any books. I just came into all of this on my own and it seems like the same train of thought that this Dave Ramsey guy has. Since the primary residence doesn't count towards debt the only technical debt I have is my 2nd home, but it has more than doubled in value since I bought it 2 1/2 years ago so I am ok with that. What would Ramsey say about the accelerated mortgage payments in my situation?

EDIT: If it helps or matters, my primary residence balance is $140,000 and is worth $525,000? My 2nd home's balance is $34,000 and is worth $165,000 .

[Mile9c1]

Dave would tell you to sell that 2nd house and pay off the first :biggthumpup:

I'd like to go to the live event he is having in Grand Rapids, but the cheap seats are like $30 :rolleyes:

[SuperJETT]

Dave would tell you to sell that 2nd house and pay off the first :biggthumpup:

Yep, he would say get rid of the second to pay off the first.

However....you are the exception, your plan is working for you, you're disciplined, so keep going is what I say.

I would pay the extra on the second house since it's so close to being paid off, get rid of that payment then attack your primary.

[SeaLion]

That's not what I wanted to hear, lol. I love my river pad and it has treated me well. I got a great deal on it. The timing was good. It would cost me about the same in storage fees to keep all my toys as the mortgage is on it. I have 5 skis, 6 atvs and 3 trailers. I can't fit all of that at my primary residence. Just think of the gas I save not having to trailer/tow 240 miles each way. We just get in the car and go and everything is there ready to enjoy :)

[SeaLion]

D, I am very disciplined so I will not go into "debt". I have enough savings to pay off the 2nd home and still have a good cushion. My concern is that one lawsuit and my paid off home is someone elses. I am self employed and a lawsuit can occur any time. I have all kinds of insurance but still all it takes is one bs case and you can get wiped out.

[romack991]

I'd just put the 2g extra on the second house. Not including what you pay in morgage, that would be paid off in a year and a half, so I assume with your regular morgage payments, it would be paid off in a year. Then you would have that 2g + current morgage payment to put towards your primary morgage.

[freestylegeek]

Well, we just paid off our Home Equity Loan yesterday, and all we have left is my school loan. It looks like we should be debt free but the house at the end of this year. So far we've paid off about $16,500 in 11 months. I really don't even feel like we are 'bustin' it the way we should. Heck, I took a trip to Daytona, am building an 8mm Lamey stroker, and my wife even bought a few nice things. I hardly feel like we're sacrificing, just more like we are telling our money what to do.

[SuperJETT]

Well, we just paid off our Home Equity Loan yesterday, and all we have left is my school loan. It looks like we should be debt free but the house at the end of this year. So far we've paid off about $16,500 in 11 months. I really don't even feel like we are 'bustin' it the way we should. Heck, I took a trip to Daytona, am building an 8mm Lamey stroker, and my wife even bought a few nice things. I hardly feel like we're sacrificing, just more like we are telling our money what to do.

Let's ask your wife how she feels....lol

Just so everyone knows, there is a little friendly competition between our two families to see who gets out of debt first. Right now it's very tight and anyone's game.

[jetskiier]

There is a good forum on MSN Money that is similar to this thread if anyone else is interested in reading up on this stuff.

[onesojourner]

I just finished the book any one want to talk me out of my new superjet? I have $2,500 on the wifes car $26,000 in medical debt and I owe $50,000 on my house. Planning on starting this as soon as the SJ is safe in the garage.

[SuperJETT]

lol, that's a hard one. I borrowed $4000 to buy my SJ back in 2000, probably wouldn't do it again.

Oh, we did go see Dave live last week, awesome 'show'. For someone like me that's drinking the Kool-Aid and listen to the show just about every day, it was just extra motivation. I think my wife got some out of it since she doesn't get to listen very often, and I know there are a ton of people that could benefit hugely from the live event.

[onesojourner]

I have cash for the superjet, its just that cash isn't going to pay off any debt. Oh well I am doing it. then I will get out of debt.

[vitaly]

My take on this topic:
http://www.x-h2o.com/showthread.php?t=13074

[kingnothing3]

hey darin, how did you figure out your budget, ive tried to sit down and get one worked out, but it just seems like there are to many variables.

[SuperJETT]

hey darin, how did you figure out your budget, ive tried to sit down and get one worked out, but it just seems like there are to many variables.

Here's our budget with most of the numbers changed (higher in most of them)

http://spreadsheets.google.com/pub?key=pyt4kjgXGn6hUxPrcp7ELRA

I get paid twice a month, on the 15th and last day of the month. When I get paid, I transfer 50% of our total monthly bills (mortgage, utilities, etc) into our bill payment account. That way, when a bill comes in, as soon as I open it I schedule the payment online and it's paid the next day. No questions asked, the bills are just always paid because there is always the correct amount of money in there to cover them.

$25/check goes into our Christmas savings account, so we can buy Christmas gifts whenever we need to basically.

$60/check goes into the car repair account for tires, oil, brakes, etc.

$40/check goes into both my personal and my wife's personal checking account for blow money.

Whatever needs to comes out in cash for the envelopes, clothing (me, her, kids), gifts, Church, dining out, etc.

Whatever is leftover stays in our joint checking account for gas and groceries and some miscellaneous stuff, but we know how much that leftover is and we can't just blow it on a TV or something because it's spoken for.

At the end of the month, if there is anything left in joint checking, and there normally is, I transfer it to our bills account so we start out the month at ZERO and the extra can go to debt.

Check the spreadsheet up there, it works for us. It's a live spreadsheet so you can see what is linked to what.

[Snackem]

I've got a pretty cool bill payer excel program that I can email to you if you want to take a look at it. It's a simple fill in the blanks process. I know that when my wife and I first started doing this we couldn't believe how much money we just blew. We also had a heck of a time getting our budget to work out for us. We had to change it a couple of times a month for the first 3-5 months. Now we are getting much better at it and don't have to adjust very often. PM me your email address and I'll email the program to you along with the instructions that we got with it.

[thrllskr]

hey darin, how did you figure out your budget, ive tried to sit down and get one worked out, but it just seems like there are to many variables.

That's the exact reason you need a budget. Tell your money where it is going to go, rather than looking back at the end of each month and trying to figure out where your money is going.

It takes about 3 months until you get it close to being right. So start out with a list of your expenses and adjust it each month. The idea is to have every dollar spent on paper before the month starts.

Here are the categories in my budget:

Income
Paychecks:
Expense Checks:

Bills
Mortgage/Taxes:
Maintenance Fee:
Car Insurance:
Gasoline:
Phone:
Cable/Internet:
Electricity:
Gas Heat:
Water:
YMCA:
XM:
Groceries:
Hair Cut:
Miscellaneous/Leisure:
Blockbuster Online:

Debt
Chase:
Car Payment:
Student Loan:

Savings
ING Savings:
Affinity Savings:

[SuperJETT]

For everyone that thinks 'budget' means 'no spending', take a look at our categories. Dance classes, XM radio, blow money, YMCA, etc. You just put your priorities in first.

Our budget was actually pretty close the first month, and it was amazing how it felt like we had **more** money to spend on stuff.

[Snackem]

For everyone that thinks 'budget' means 'no spending', take a look at our categories. Dance classes, XM radio, blow money, YMCA, etc. You just put your priorities in first.

Our budget was actually pretty close the first month, and it was amazing how it felt like we had **more** money to spend on stuff.

Wow I'm impressed. We were WAY off on a couple of categories and it took a couple of months to iron them out. Of course we had just moved to a new area and gotten married so our lives were a lot different but that's still impressive that you didn't have to have a lot of "emergency budget meetings".

We also budgeted a couple of categories for fun stuff like Cable, XM, Fishing, Jet Skiing, and then we each also have "Blow" money every month. I know that we were making a very nice income when we first got married but we didn't budget, once we started budgeting our income didn't go up but it felt like we had a lot more money.

[kingnothing3]

Thanks everyone, maybe this will help me get my $ staitened out. Ive never had trouble paying my bills but I end up spending more than I should on things like wetsuits, tools, fun electonics, ect. and then skimping on important stuff like my grocerys.

darin, Im impressed with how you have your layout! I would like to do something like this but dont have excel. is there someplace I could download it? I dont really want to spend the money to buy it.

how much EXTRA pricipal do you guys add onto your mortgage payments? I realize it differes depending on how much extra you have for the month, just wondered what the average was if any.

[SuperJETT]

Thanks everyone, maybe this will help me get my $ staitened out. Ive never had trouble paying my bills but I end up spending more than I should on things like wetsuits, tools, fun electonics, ect. and then skimping on important stuff like my grocerys.

darin, Im impressed with how you have your layout! I would like to do something like this but dont have excel. is there someplace I could download it? I dont really want to spend the money to buy it.

how much EXTRA pricipal do you guys add onto your mortgage payments? I realize it differes depending on how much extra you have for the month, just wondered what the average was if any.

Use Open Office instead, the best free office suite there is, or sign up for Gmail and use the spreadsheet function in there.
www.openoffice.org (http://www.openoffice.org)

On the extra for your mortage, it depends on where you are with the rest of the stuff, emergency fund, retirement, etc.

As early as you're starting, you could be very wealthy by the time you're 40 if you get serious.

[kingnothing3]

As early as you're starting, you could be very wealthy by the time you're 40 if you get serious.


Thats the plan:biggrin: just want to point myself in the right direction.

thanks again darin, downloading openoffice now.
Jamie

[romack991]

i've had a budget made up and from what my spending report shows from my debit card, it is pretty close to what i plan. but i think this month i'm going to start using the evelope method to really monitor and limit my spending. Currently I run over somewhere but usually under somewhere else, but i am finding that it isnt always the case and im not paying down my premium on my truck loan as much as i want to. Hopefully I'll be able to enforce my budget better. i'm growing tired of renting and would like to have my truck paid off so i can start saving for a down payment on a house.

[Snackem]

The wife and I did the envelope system for a couple of months but have not done it lately. I'd really like to get back to that. I know that we fudge in some areas and if we had envelopes we would be forced to stick to our guns a little more.

[kingnothing3]

I think the envelope thing is a little to enforcing for me. I like to have freedom with my money but I want to be able to monitor where its going.

[thrllskr]

I think the envelope thing is a little to enforcing for me. I like to have freedom with my money but I want to be able to monitor where its going.

I do my budget in Excel and have a budget and actual column. Each time I spend money, I update the actual column for that budget line. For example, I already spent $118 of my alloted $180 for groceries. So it will be raman noodles for the rest of the month :haha:

[kingnothing3]

180 for groceries seems low. I set one up alot like snackems based on the last two months. ill keep with it, should help alot.

[douglee25]

I usually set up my expenses based on known expenses first. These typically are mortgage, car loan, electric, gas (natural gas), water, school loan, cell, internet, cable, sewer, car insurance, 401k, etc. I get a total from that, and then I add in varied expenses like food, gasoline, entertainment, and credit cards.

As a side note.... as of this month, I am credit card debt free!!!! I paid off over $10k this past year since Feb. 2006. I put a good balance on my card after I bought my house to do home repairs right away to make it liveable. Wahoo!!! :smile:

Back on topic, I then take my monthly income and subtract out the known expenses. This bottom line I spread out to the varying expenses. I usually budget $100 a weekend for entertainment/food/blow money and $50/week for food (when I'm in the office that is). If I'm traveling for work (as I have been a lot lately), work picks up the tab for everything. I for one know I could save some by cutitng down my $100/weekend line item.

This usually has worked well for me. I haven't saved a ton over the years per say in a savings account, but my 401k has been well on it's way, that's for sure. It's the first few years of getting established that are very hard (at least for me anyway). I figure once the car is paid off (1 year to go!), I will have a good portion to start saving away.

Doug

[thrllskr]

180 for groceries seems low. I set one up alot like snackems based on the last two months. ill keep with it, should help alot.

It's usually around there. I only buy things when they are on sale (except for milk pretty much). I usually buy store brand except for things like cereal and I try to only buy stuff like that when its on sale AND I have a coupon. It's amazing how much money you can save when you shop smart. :arms:

Plus, being single and only have to feed myself helps. :woot:

[Snackem]

The envelope system really isn't that restrictive. If you budget the items right then it's no more restrictive than keeping the money in your account. However what it does make you do is stick to you budget because you can see if you have any money left over in that category or not. If you don't have any money left in your "blow" envelope then you don't "blow" any more money. If you run out of money in the food envelope then you eat beans, rice, and ramen for the rest of the month.

Basically the Envelope system makes you stick to your budget.