Dave Ramsey clip that seems like the typical American story right now

[TANSTAAFL]

Actually turning out to be a fairly awesome string. Well worth the read. Average auto payment has climbed, also average auto loan is now 125% loan to value. Mortgage market is pretty fracked too, sad that only about 1% of Americans can afford to buy their first home. Home values are being propped up as well, a seller will pay money to the buyer in the form of a Rate Buydown in several markets, meaning the sale price does not reflect what the seller is actually pocketing. Anyone buying silver? Still think it is a pretty good idea, but with a worsening economy many do not want to buy even at spot price. Inflation is still the biggest killer of your finances, and potentially it will get worse.

Back to cars and car loans, my wife wanted a Bronco (not the poser version on an escape frame), however lack of supply has led to more expensive prices, I have no desire to be ripped off by a dealership. I will wait, her vehicle is low mileage and gets good gas mileage. Could I trade in my car and buy the Bronco? Yes, but I really like my car in spite of it being a 2019. Then there is the loan, got 0% on mine, and worth more than I paid, so mine is much cheaper than the newer version with less power and no rebates, and no 0%.

Ramsey does have some great advice, he also has some very stupid advice. The Ramsey school of thought would be if you have the cash, pay cash, even if you can get 0%. If you have discipline always get financing that is at or below inflation, and keep the money in your pocket, as well as negotiate a good deal and keep your car till the wheels fall off. As for homes you never truly own it, you will lose a home faster by not paying property taxes than not paying a mortgage, or could lose it to emanant domain, so why put all of your money into it and pay it off faster? I do see the argument if one is at 8% to pay it off faster, but Trump made his real estate $ on leverage, and so have others.

 

[Bravo1413]

I went that way several years ago. Then I went in to borrow some money to buy something and was told I did not have any credit rating. Sense then I have kept credit cards and some loans, but keep them paid up. If i find something I want to buy I can call the bank and tell them what it is and if it is a good deal they tell me to go ahead , then come in and sign the papers. Now I am at the point where I am turning more to our kids and starting to travel more. Everyone needs to find their own way and make it work.

Yes, I purchase most items on c.c. (Don’t have or need a debit card) But pay off cards every month. Keeps my credit rating over 800, but due to the way I have controlled my finances in my life, I don’t need a bank loan if I want to purchase something. It’s not easy, with the temptations of get what you want “Now“ just sign here mentality. You have been programmed, and the banks love you paying the interest, until everything goes south and people quit paying. Then the government steps in and bails out the banks with your tax dollars, and you are still paying with higher taxes. And around we go.

 

[JD8]

Ramsey does have some great advice, he also has some very stupid advice. The Ramsey school of thought would be if you have the cash, pay cash, even if you can get 0%. If you have discipline always get financing that is at or below inflation, and keep the money in your pocket, as well as negotiate a good deal and keep your car till the wheels fall off. As for homes you never truly own it, you will lose a home faster by not paying property taxes than not paying a mortgage, or could lose it to emanant domain, so why put all of your money into it and pay it off faster? I do see the argument if one is at 8% to pay it off faster, but Trump made his real estate $ on leverage, and so have others.

 

[Bravo1413]

Actually turning out to be a fairly awesome string. Well worth the read. Average auto payment has climbed, also average auto loan is now 125% loan to value. Mortgage market is pretty fracked too, sad that only about 1% of Americans can afford to buy their first home. Home values are being propped up as well, a seller will pay money to the buyer in the form of a Rate Buydown in several markets, meaning the sale price does not reflect what the seller is actually pocketing. Anyone buying silver? Still think it is a pretty good idea, but with a worsening economy many do not want to buy even at spot price. Inflation is still the biggest killer of your finances, and potentially it will get worse.

Back to cars and car loans, my wife wanted a Bronco (not the poser version on an escape frame), however lack of supply has led to more expensive prices, I have no desire to be ripped off by a dealership. I will wait, her vehicle is low mileage and gets good gas mileage. Could I trade in my car and buy the Bronco? Yes, but I really like my car in spite of it being a 2019. Then there is the loan, got 0% on mine, and worth more than I paid, so mine is much cheaper than the newer version with less power and no rebates, and no 0%.

Ramsey does have some great advice, he also has some very stupid advice. The Ramsey school of thought would be if you have the cash, pay cash, even if you can get 0%. If you have discipline always get financing that is at or below inflation, and keep the money in your pocket, as well as negotiate a good deal and keep your car till the wheels fall off. As for homes you never truly own it, you will lose a home faster by not paying property taxes than not paying a mortgage, or could lose it to emanant domain, so why put all of your money into it and pay it off faster? I do see the argument if one is at 8% to pay it off faster, but Trump made his real estate $ on leverage, and so have others.

I agree with the zero percent interest borrowing . if you have the cash you can make money on a CD and pay back zero interest. As for owning a house, you have to pay rent somewhere, so if you don’t own, you rent. At least if you own the money is going into equity instead of someone else’s pocket. Equity is an asset, rent is a liability.

 

[Pstmstr]

Actually turning out to be a fairly awesome string. Well worth the read. Average auto payment has climbed, also average auto loan is now 125% loan to value. Mortgage market is pretty fracked too, sad that only about 1% of Americans can afford to buy their first home. Home values are being propped up as well, a seller will pay money to the buyer in the form of a Rate Buydown in several markets, meaning the sale price does not reflect what the seller is actually pocketing. Anyone buying silver? Still think it is a pretty good idea, but with a worsening economy many do not want to buy even at spot price. Inflation is still the biggest killer of your finances, and potentially it will get worse.

Back to cars and car loans, my wife wanted a Bronco (not the poser version on an escape frame), however lack of supply has led to more expensive prices, I have no desire to be ripped off by a dealership. I will wait, her vehicle is low mileage and gets good gas mileage. Could I trade in my car and buy the Bronco? Yes, but I really like my car in spite of it being a 2019. Then there is the loan, got 0% on mine, and worth more than I paid, so mine is much cheaper than the newer version with less power and no rebates, and no 0%.

Ramsey does have some great advice, he also has some very stupid advice. The Ramsey school of thought would be if you have the cash, pay cash, even if you can get 0%. If you have discipline always get financing that is at or below inflation, and keep the money in your pocket, as well as negotiate a good deal and keep your car till the wheels fall off. As for homes you never truly own it, you will lose a home faster by not paying property taxes than not paying a mortgage, or could lose it to emanant domain, so why put all of your money into it and pay it off faster? I do see the argument if one is at 8% to pay it off faster, but Trump made his real estate $ on leverage, and so have others.

Ramsey explains many times the “math nerd” logic on having debt at low interest versus no debt. Some prefer to have debt and accept the risk associated with it. For some it’s a very low risk and they manage it well. Others not so much. Some actually invest the money at higher percentages than the debt they keep. Some just make excuses for keeping debt. The good news is it’s an individual choice.

 

[aarondhgraham]

Way back in the late 90's,,,
I became "suddenly single" and on my own.

My ex never met a credit plan she didn't like,,,
When we divorced, with mortgage, auto payment, and credit card,,,
We (read she, not me) had amassed well over 80,000 dollars in revolving debt.

Fortunately for me she did accept responsibility for the debt,,,
So I got out of the divorce smelling like a rose,,,
A paid for vehicle, $2000 cash, and no debt.

I moved back to Oklahoma and started living a real life again,,,
But believe me, I had learned my lesson about credit.
Credit can be insidiously evil.

At the age of 47 I decided that working a "job",,,
Wasn't going to get me anywhere at all.

I was in that semi-comfortable,,,
Three paychecks from being homeless.

I decided to bite the bullet and go back to college,,,
Student loans were the only recourse for me.

I was fortunate throughout the pursuit of my BS and MS degrees,,,
I had good student worker/graduate assistant jobs,,,
Also some tuition waivers from my college.

But what I did that was really important,,,
Was to stabilize my finances/spending.

I didn't live in a nice apartment,,,
I lived in a one-room efficiency apartment,,,
It was rough but it was also the cheapest place in town.

I made a budget listing my total monthly income,,,
And compared it to my total expenses.

Except for the usual tuition/fees every semester,,,
I did not touch my student loan money,,,
I kept it in the savings account.

I had to live cheap for sure,,,
But I had the high-speed internet for school work,,,
And a Netflix account for all of my entertainment needs.

In short I made a budget spreadsheet,,,
And stuck to it religiously.

I walked to campus instead of driving,,,
I made sandwiches instead of eating at the student union,,,
And in general resisted the urge to "buy happiness" as a recreational thing.

When I graduated with my MS degree,,,
I still had about 85% of my student loan money in the bank.

My strategy was to accept that I would be paying those loans forever,,,
I took the longest loan payback offered at the time.

I know this is against most financial advice,,,
But even though it was "encumbered money",,,
I had some peace of mind knowing I had an emergency cushion.

When the Fairy Godmother Department helped me get a great job,,,
I still didn't go crazy with a luxury apt or a new car,,,
I remained frugal and amassed more savings.

I still use that spreadsheet that I made back in 1998,,,
Of course it's been modified many times since,,,
As my situation changed and evolved.

I wasn't miserly with my expenses,,,
I just never bought anything at all on credit,,,
Due to my initial frugality I always had cash for a new TV.

I'm extremely proud that I haven't paid a penny of credit card interest,,,
Since I got my Cabela's card 23-24 years ago.

But here's the gist of this long saga,,,
I was showing one of the young students in my college,,,
Exactly how to calculate a budget and set up a spreadsheet to manage it.

One of my co-workers was watching and said to me,,,
Oh, you use the Dave Ramsey Budget Method.

"Dave who?" I replied.

So I Googled him and read some of his basic advice,,,
It seems that what I called my common sense approach to budgeting,,,
Was something that he had gotten very wealthy promoting to the needy masses.

But that's all it was really,,,
Common Sense.

Calculate your total income,,,
Then calculate your total expenses,,,
Then compare the two against the other.

If you make more then you spend great,,,
You are having a good start.

If you spend more than you make,,,
You are in need of some life adjustments.

My Pop always said,,,
If you can't meet your monthly expenses,,,
There is really only two things you can do to remedy that.

Spend less or make more.

I ( like countless people before me),,,
Had invented the Dave Ramsey method on my own.

But again it was only practicing common sense.

I'm retired now living off of a pension from OSU,,,
And my Social Security Income check.

I still use the same budgeting method as I did before,,,
My total income is less than 3,000 per month,,,
But by budgeting carefully it's enough.

In 17 years of work after college,,,
I own my own home (hovel),,,
With money in the bank.

It's not difficult and it's not complicated,,,
Just figure out what your means are and live within them.

If that's not enough to satisfy your desires,,,
Do something else to create more income for yourself.

'Nuff said?

Aarond

.

 

[Pstmstr]

Way back in the late 90's,,,
I became "suddenly single" and on my own.

My ex never met a credit plan she didn't like,,,
When we divorced, with mortgage, auto payment, and credit card,,,
We (read she, not me) had amassed well over 80,000 dollars in revolving debt.

Fortunately for me she did accept responsibility for the debt,,,
So I got out of the divorce smelling like a rose,,,
A paid for vehicle, $2000 cash, and no debt.

I moved back to Oklahoma and started living a real life again,,,
But believe me, I had learned my lesson about credit.
Credit can be insidiously evil.

At the age of 47 I decided that working a "job",,,
Wasn't going to get me anywhere at all.

I was in that semi-comfortable,,,
Three paychecks from being homeless.

I decided to bite the bullet and go back to college,,,
Student loans were the only recourse for me.

I was fortunate throughout the pursuit of my BS and MS degrees,,,
I had good student worker/graduate assistant jobs,,,
Also some tuition waivers from my college.

But what I did that was really important,,,
Was to stabilize my finances/spending.

I didn't live in a nice apartment,,,
I lived in a one-room efficiency apartment,,,
It was rough but it was also the cheapest place in town.

I made a budget listing my total monthly income,,,
And compared it to my total expenses.

Except for the usual tuition/fees every semester,,,
I did not touch my student loan money,,,
I kept it in the savings account.

I had to live cheap for sure,,,
But I had the high-speed internet for school work,,,
And a Netflix account for all of my entertainment needs.

In short I made a budget spreadsheet,,,
And stuck to it religiously.

I walked to campus instead of driving,,,
I made sandwiches instead of eating at the student union,,,
And in general resisted the urge to "buy happiness" as a recreational thing.

When I graduated with my MS degree,,,
I still had about 85% of my student loan money in the bank.

My strategy was to accept that I would be paying those loans forever,,,
I took the longest loan payback offered at the time.

I know this is against most financial advice,,,
But even though it was "encumbered money",,,
I had some peace of mind knowing I had an emergency cushion.

When the Fairy Godmother Department helped me get a great job,,,
I still didn't go crazy with a luxury apt or a new car,,,
I remained frugal and amassed more savings.

I still use that spreadsheet that I made back in 1998,,,
Of course it's been modified many times since,,,
As my situation changed and evolved.

I wasn't miserly with my expenses,,,
I just never bought anything at all on credit,,,
Due to my initial frugality I always had cash for a new TV.

I'm extremely proud that I haven't paid a penny of credit card interest,,,
Since I got my Cabela's card 23-24 years ago.

But here's the gist of this long saga,,,
I was showing one of the young students in my college,,,
Exactly how to calculate a budget and set up a spreadsheet to manage it.

One of my co-workers was watching and said to me,,,
Oh, you use the Dave Ramsey Budget Method.

"Dave who?" I replied.

So I Googled him and read some of his basic advice,,,
It seems that what I called my common sense approach to budgeting,,,
Was something that he had gotten very wealthy promoting to the needy masses.

But that's all it was really,,,
Common Sense.

Calculate your total income,,,
Then calculate your total expenses,,,
Then compare the two against the other.

If you make more then you spend great,,,
You are having a good start.

If you spend more than you make,,,
You are in need of some life adjustments.

My Pop always said,,,
If you can't meet your monthly expenses,,,
There is really only two things you can do to remedy that.

Spend less or make more.

I ( like countless people before me),,,
Had invented the Dave Ramsey method on my own.

But again it was only practicing common sense.

I'm retired now living off of a pension from OSU,,,
And my Social Security Income check.

I still use the same budgeting method as I did before,,,
My total income is less than 3,000 per month,,,
But by budgeting carefully it's enough.

In 17 years of work after college,,,
I own my own home (hovel),,,
With money in the bank.

It's not difficult and it's not complicated,,,
Just figure out what your means are and live within them.

If that's not enough to satisfy your desires,,,
Do something else to create more income for yourself.

'Nuff said?

Aarond

.

Great advice and examples. Ramsey is quick to say his advice is what God and grandma would tell you to do. Most people don’t budget and have no idea what they spend their money on or how much they spend. Good intentions with a credit card have led many into large debt at very high percentage rates. Some people can manage it, use the points, and pay their balances monthly. A lot more people say they do that than actually do.

 

[TANSTAAFL]

Way back in the late 90's,,,
I became "suddenly single" and on my own.

My ex never met a credit plan she didn't like,,,
When we divorced, with mortgage, auto payment, and credit card,,,
We (read she, not me) had amassed well over 80,000 dollars in revolving debt.

Fortunately for me she did accept responsibility for the debt,,,
So I got out of the divorce smelling like a rose,,,
A paid for vehicle, $2000 cash, and no debt.

I moved back to Oklahoma and started living a real life again,,,
But believe me, I had learned my lesson about credit.
Credit can be insidiously evil.

At the age of 47 I decided that working a "job",,,
Wasn't going to get me anywhere at all.

I was in that semi-comfortable,,,
Three paychecks from being homeless.

I decided to bite the bullet and go back to college,,,
Student loans were the only recourse for me.

I was fortunate throughout the pursuit of my BS and MS degrees,,,
I had good student worker/graduate assistant jobs,,,
Also some tuition waivers from my college.

But what I did that was really important,,,
Was to stabilize my finances/spending.

I didn't live in a nice apartment,,,
I lived in a one-room efficiency apartment,,,
It was rough but it was also the cheapest place in town.

I made a budget listing my total monthly income,,,
And compared it to my total expenses.

Except for the usual tuition/fees every semester,,,
I did not touch my student loan money,,,
I kept it in the savings account.

I had to live cheap for sure,,,
But I had the high-speed internet for school work,,,
And a Netflix account for all of my entertainment needs.

In short I made a budget spreadsheet,,,
And stuck to it religiously.

I walked to campus instead of driving,,,
I made sandwiches instead of eating at the student union,,,
And in general resisted the urge to "buy happiness" as a recreational thing.

When I graduated with my MS degree,,,
I still had about 85% of my student loan money in the bank.

My strategy was to accept that I would be paying those loans forever,,,
I took the longest loan payback offered at the time.

I know this is against most financial advice,,,
But even though it was "encumbered money",,,
I had some peace of mind knowing I had an emergency cushion.

When the Fairy Godmother Department helped me get a great job,,,
I still didn't go crazy with a luxury apt or a new car,,,
I remained frugal and amassed more savings.

I still use that spreadsheet that I made back in 1998,,,
Of course it's been modified many times since,,,
As my situation changed and evolved.

I wasn't miserly with my expenses,,,
I just never bought anything at all on credit,,,
Due to my initial frugality I always had cash for a new TV.

I'm extremely proud that I haven't paid a penny of credit card interest,,,
Since I got my Cabela's card 23-24 years ago.

But here's the gist of this long saga,,,
I was showing one of the young students in my college,,,
Exactly how to calculate a budget and set up a spreadsheet to manage it.

One of my co-workers was watching and said to me,,,
Oh, you use the Dave Ramsey Budget Method.

"Dave who?" I replied.

So I Googled him and read some of his basic advice,,,
It seems that what I called my common sense approach to budgeting,,,
Was something that he had gotten very wealthy promoting to the needy masses.

But that's all it was really,,,
Common Sense.

Calculate your total income,,,
Then calculate your total expenses,,,
Then compare the two against the other.

If you make more then you spend great,,,
You are having a good start.

If you spend more than you make,,,
You are in need of some life adjustments.

My Pop always said,,,
If you can't meet your monthly expenses,,,
There is really only two things you can do to remedy that.

Spend less or make more.

I ( like countless people before me),,,
Had invented the Dave Ramsey method on my own.

But again it was only practicing common sense.

I'm retired now living off of a pension from OSU,,,
And my Social Security Income check.

I still use the same budgeting method as I did before,,,
My total income is less than 3,000 per month,,,
But by budgeting carefully it's enough.

In 17 years of work after college,,,
I own my own home (hovel),,,
With money in the bank.

It's not difficult and it's not complicated,,,
Just figure out what your means are and live within them.

If that's not enough to satisfy your desires,,,
Do something else to create more income for yourself.

'Nuff said?

Aarond

.

And the motivational speaking award goes to @aarondhgraham ! Excellent post.

 

[GC7]

I always got the impression that Ramsey does not recommend playing around with interest rate leveraging because it's just easier to preach the simpler model that says cash only and live like a peasant.

He's probably right too. A lot of people with bad money management skills might lose track of their interest earnings/expenses and end up back in debt.

 

[TANSTAAFL]

I always got the impression that Ramsey does not recommend playing around with interest rate leveraging because it's just easier to preach the simpler model that says cash only and live like a peasant.

He's probably right too. A lot of people with bad money management skills might lose track of their interest earnings/expenses and end up back in debt.

If you have the discipline to pay cash for everything, you have discipline for a mortgage building equity. Save than spend. a mortgage (assuming standard rates and not adjustable) does give one the ability to avoid rent increases. Yes, there is the possibility of a water heater dying, or unplanned expenses or necessary upgrades or increased property taxes, but it saves more money and aggravation than worrying that your landlord will not do necessary repairs. Mortgages are a good forced long term savings plan.

Perhaps I have a misunderstanding of dave ramsey, all I have heard about him is all debt is bad.