Dave Ramsey

#51
#51
BearCat204 said:
Wanted to bump this thread to announce that as of yesterday afternoon, we are debt free with exception to our mortgage which will be paid off in less than 5 years. We have been following Dave's plan and started our "baby steps" February of this year. It has taken some sacrifices, but necessary ones. It has really been like going on a diet that turns into a lifestyle change. I would say that the biggest hurdle was getting my wife onboard, but once that happened, we were able to make it happen. My target date of retirement was age 66, but unless the worst "murphy" happens, I will be able to retire at the age of 60 :)
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Did you go William Wallace on it?
 
#52
#52
GAVol said:
That's one of the areas where Dave Ramsey flies off the tracks a little for my tastes. Sure, I'd like to have a paid off house, but I just don't feel very compelled to dump cash into my home when I have a 4.5% mortgage. Consumer debt truly sucks, but cheap money is cheap money.
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I forgot about this comment, but I am in agreement with you here.

That said, I know I'm not in our "final" house and that eventually we'll be in a bigger one. My mortgage is 3.875 and I'd much rather be paying down more on this at lower rates than spending/investing it elsewhere and having a lower mortgage at higher rates down the road. And I know that I could invest that and probably make more to put down, but that just goes beyond the risk I'm willing to personally take. If we were in our long-term house though, I'd be much more in agreement with you.
 
#53
#53
tigervol9802 said:
Congrats my man. :loco:
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Thanks, it's a great feeling. We don't even have credit cards anymore because we don't need them. A year ago I would have thought that would have been crazy not to have a cc, but looking at how much that unnecessary credit was costing us was eye-opening.
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#55
#55
BearCat204 said:
Thanks, it's a great feeling. We don't even have credit cards anymore because we don't need them. A year ago I would have thought that would have been crazy not to have a cc, but looking at how much that unnecessary credit was costing us was eye-opening.
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I've not used a credit card in nearly 6 years now and have no need to. I think it's as crazy to have one as people who make every purchase on them think I am.
 
#56
#56
tigervol9802 said:
I've not used a credit card in nearly 6 years now and have no need to. I think it's as crazy to have one as people who make every purchase on them think I am.
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Credit Cards are easy to use and abuse. Then hard to get out from under.
 
#58
#58
the biggest thing that's helped me is paying my bills online. I don't have to worry about any checks floating out there. I can pay my bills and put money in savings all in one swoop.
 
#59
#59
The thing that Dave says about investing vs. paying off your mortgage makes a whole lot of sense to me. If you pay off everything and then start investing you are on a much better footing IMO. If you stay in mortgage debt and invest for 5 years instead of paying off your mortgage, what happens if you get injured to the point you can't work and can't sell your house? You cash out your money at your current tax rate plus 10% penalty. You are giving away about half your money. Then maybe the spouse can pay for every day living expenses. If you spend 5 years paying off the mortgage then get hurt, maybe the spouse can pay for every day living expenses. The difference is that the 40%-50% loss for taxes may leave you short of paying off the mortgage. Now your spouse has to pay for living expenses plus the mortgage.

Another thing to think about is that Dave recommends starting your investing at 15% when you get your emergency fund fully funded. 15% in good mutual funds will make a nice nest egg plus you are aggressively paying the mortgage at that point.
 
#61
#61
Way oversimplified . . . but it's hard to argue with the sentiment.
 
#63
#63
I like Dave Ramsey. I've never followed his radio show devoutly or read his books but I've lived my life according to the simple principles he teaches. But that's what my parents taught me. Not Dave.

Until our elected officials have the balls to take on military spending/social security/medicare we're just farting in the wind.
 
#65
#65
oklavol said:
Does it involve the govt eating rice and beans and beans and rice?
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Yes . . . followed by selling a boat, moving out of a trailer and working nights at UPS.

Ramsey's advice is often sound, but it blows my mind how he fills 3 hours a day with variations of the same phone call over and over again.
 
#66
#66
GAVol said:
Yes . . . followed by selling a boat, moving out of a trailer and working nights at UPS.

Ramsey's advice is often sound, but it blows my mind how he fills 3 hours a day with variations of the same phone call over and over again.
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It's amazing how many "smart and normal" people are broke.
 
#67
#67
GAVol said:
Yes . . . followed by selling a boat, moving out of a trailer and working nights at UPS.

Ramsey's advice is often sound, but it blows my mind how he fills 3 hours a day with variations of the same phone call over and over again.
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Agreed. I listen about an hour twice a week. It's about all I can stand.
 
#68
#68
How does the gov'ment do it? It is pretty simple....it is other people's money. They complicate the tax system and use withholdings to lull people to sleep.
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#69
#69
Lexvol said:
How does the gov'ment do it? It is pretty simple....it is other people's money. They complicate the tax system and use withholdings to lull people to sleep.
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Exactly . . . And then people get excited when they get a tax refund as if the tooth fairy came to visit.
 
#70
#70
GAVol said:
That's one of the areas where Dave Ramsey flies off the tracks a little for my tastes. Sure, I'd like to have a paid off house, but I just don't feel very compelled to dump cash into my home when I have a 4.5% mortgage. Consumer debt truly sucks, but cheap money is cheap money.
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It should be noted that paying off the house is step # 6 of 7, after paying off all other debt, fully funding your emergency fund, investing/saving 15% for retirement and funding college for your children.

Oh, and :bump3:
 
#71
#71
tigervol9802 said:
I forgot about this comment, but I am in agreement with you here.

That said, I know I'm not in our "final" house and that eventually we'll be in a bigger one. My mortgage is 3.875 and I'd much rather be paying down more on this at lower rates than spending/investing it elsewhere and having a lower mortgage at higher rates down the road. And I know that I could invest that and probably make more to put down, but that just goes beyond the risk I'm willing to personally take. If we were in our long-term house though, I'd be much more in agreement with you.
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I just cannot motivate myself to try to put money into paying off the house early.

Plus, the wife is taking about kiddo #2, which means We're going to have to start funding our HSA a lot more again.
 
#72
#72
we paid off just a small heloc and are now saving to do improvements instead of paying off the mortgage. Figure we'll get a good return on that anyway and have a pretty good interest rate on our loan now.

and with a kid on the way we may need the extra cash laying around
 
#73
#73
utvolpj said:
we paid off just a small heloc and are now saving to do improvements instead of paying off the mortgage. Figure we'll get a good return on that anyway and have a pretty good interest rate on our loan now.

and with a kid on the way we may need the extra cash laying around
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Always have extra cash with a kiddo coming. I would even advise to keep it around for a year just to be safe if possible. You never know when the doctor is going to tell you the kid needs his head cut open.
 
#74
#74
if you add $100/month to the minimum payment on your highest interest rate debt, pay the minimum on the rest until that particular debt is paid. then take what you were paying on the now gone debt, add that to the next debt in line and continue that trend you should be debt free pretty quickly. assuming you don't take on new debt. you are out an extra $100/month total and after a little while you won't miss it. it works.

debt 1 minimum $80. pay $180
debt 2 minimum 65
debt 3 minimum $125
debt 4 $350
debt 5 $850

after debt 1 is paid off
debt2 $245
debt 3 minimum $125
debt 4 $350
debt 5 $850

after debt 2
debt 3 $370
debt 4 $350
debt 5 $850

after debt 3
debt 4 $720
debt 5 $850

after debt4
debt 5 $1570
 
#75
#75
tigervol9802 said:
I just cannot motivate myself to try to put money into paying off the house early.

Plus, the wife is taking about kiddo #2, which means We're going to have to start funding our HSA a lot more again.
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if you are borrowing at 4.5% (hell lower than 4% if you consider the taxes), i see no reason to pay back the house. you'd do a lot better investing the difference.
 
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