Dave Ramsey, debt, credit cards, retirement, etc

[douglee25]

speaking of emergencies, our water heater gas valve went out last night. The heater is fairly old, so I'm just going to replace the whole thing, and since we have an emergency fund, it's no big deal, just gotta get one and get it hooked up.

Murphy's Law man!

Similar unplanned event happened to me last night.... main sewer line is plugged up between the front door and curb. I was doing laundry and when the washing machine did the pump cycle, I noticed the water was going down very slowly in the wash sink. I checked in the bathroom some 30 ft away and the tub had filled up with the laundry water. lol! I pulled the clean out plug which is in my garden by the front door and water poured out! That's how I figured the clog was between there and the curb. Now I had to leave town for work this morning, so I won't be able to fix it until I get home. BS.

Typical Murphy's Law for me.

Doug

 

[WFO Speedracer]

The problem I see here is that his approach is a cookie cutter remedy and everyones financial problems are vastly different,he would have a field day with my finances but I been able to make them work for me,thats all that matters in the long run.

 

[Big Kahuna]

Why not? There are people that save up and pay cash for houses every day.

Think outside the box.

Yeah, there are some, they make $300,000.00 a year and have no debt. The average American cannot do that. Did you save up and pay for your house outright??

 

[Moondance]

Yeah, there are some, they make $300,000.00 a year and have no debt. The average American cannot do that. Did you save up and pay for your house outright??

That is not necessarily true. I know of a couple of people who were able to save & pay cash for their houses. They are far from making $300k a year. They were just disciplined & knew what their goals were. And they still were able to enjoy life & hobbies while saving. And the houses they bought were very nice houses. So yes, the average American can do it.

 

[Matt_E]

Yeah, there are some, they make $300,000.00 a year and have no debt. The average American cannot do that. Did you save up and pay for your house outright??

It's a popular misconception that folks with high incomes have no debt.
People don't realize that spending habits are mostly independent from income.
Taking my own life as an example, it didn't matter whether I made 14k a year or 95k - I was always broke.

 

[tnj4life]

It's a popular misconception that folks with high incomes have no debt.
People don't realize that spending habits are mostly independent from income.
Taking my own life as an example, it didn't matter whether I made 14k a year or 95k - I was always broke.

Thats true. My dad for example makes well over 100k a year with his stone yard, but he doesnt have a penny of savings.

 

[SuperJETT]

Yeah, there are some, they make $300,000.00 a year and have no debt. The average American cannot do that. Did you save up and pay for your house outright??

If you believe that, then you need to look around.

Our house payment is $1000/month, and we paid off $30k of debt in 22.5 months. Consider this, if we had stayed in our old house with the $800/month payment, and saved at the same rate as we paid off debt plus that extra $200/month, that would be $1533/month to savings.

In just 6 years at 6% interest, we'd have over $100k, plus even more equity in our old house, etc.

Now, consider if we had rented for more like $700/month or whatever.

It's not that crazy to think about this.

Plus, my wife doesn't work, if she picked up a part time job to earn just $500/month or whatever, it's not inconceivable to save up $150k in 6 years and buy a house outright.

 

[tnj4life]

We went from $915 mortgage to $350 rent. The renthouse is a double wide trailer, but its nice for an older home. So building out of my pocket won't be an issue, just gotta have patience.

 

[Big Kahuna]

If you believe that, then you need to look around.

Our house payment is $1000/month, and we paid off $30k of debt in 22.5 months. Consider this, if we had stayed in our old house with the $800/month payment, and saved at the same rate as we paid off debt plus that extra $200/month, that would be $1533/month to savings.

In just 6 years at 6% interest, we'd have over $100k, plus even more equity in our old house, etc.

Now, consider if we had rented for more like $700/month or whatever.

It's not that crazy to think about this.

Plus, my wife doesn't work, if she picked up a part time job to earn just $500/month or whatever, it's not inconceivable to save up $150k in 6 years and buy a house outright.

I never said it was not possible. Just that for the average American it is not.

 

[Moondance]

Define average...average saver, average spender, average wage earner, etc. You can't say that is not possible for the average American because there are too many variables. You're lumping everyone into a category that may or may not fit.

 

[afcblink]

Most people don't get in debt trouble because of emergency home repairs that are truly, immediately necessary. It's whipping out the MasterCard at Best Buy for that new XBox 360, home theater system and plasma screen that screws most people.

...or financing a 12 grand watercraft at 16% APR.

 

[SuperJETT]

Most people don't get in debt trouble because of emergency home repairs that are truly, immediately necessary. It's whipping out the MasterCard at Best Buy for that new XBox 360, home theater system and plasma screen that screws most people.

...or financing a 12 grand watercraft at 16% APR.

Bingo.

People don't buy what they can afford or need, they buy what they want.

 

[WaveDemon]

Bingo.

People don't buy what they can afford or need, they buy what they want.

is that really the case? It's certainly not how I got here.

 

[Idok]

If that's how you want to spin it, then yes.

I always want to have cash reserves... period. If unexpected items pop up which warrant totally draining the cash reserves (ie big bucks - thousands, not hundreds), I will opt out and split the expense between cash/CC to save for the possibility of another unexpected expense that month. There is a threshold in my mind that I don't want to cross between liquid assets and unsecured debt. Again, I'm probably way more disciplined with CC debt than most. I can handle some debt and pay it off on a fixed schedule where others can not.

Doug

this is exactly my method as well.....NEver want to be cash poor, but at the same time I will never carry a balance on a credit card..


I made a concious effort to ONLY use my amex this past month on fuel (truck, ski and bike) and couldnt believe how much money I saved....I think am going to just stop carrying it period!

speaking of emergencies, our water heater gas valve went out last night. The heater is fairly old, so I'm just going to replace the whole thing, and since we have an emergency fund, it's no big deal, just gotta get one and get it hooked up.

lol...we had a garage sale about 1 month ago....Goal was to make enough to buy a new surround sound for the hosue...

We made 385 that day at the sale....went in, ate dinner..loaded the dishwater and "buzzzzzzzzzzzzzzzzzzzz"


so, instead of surround sound we got a new dishmcwasher :rant::beerchug::Banane09:

Thats true. My dad for example makes well over 100k a year with his stone yard, but he doesnt have a penny of savings.

thats not uncommon at all...

 

[tnj4life]

Man there are tons of ways to save$$$. Since we sold our house we started eating out alot at lunch then on weekends. We'll ive been taking my lunch to work and eating breakfast at home. We would spend $300 to $400 a month just on lunch eating out. Since ive been taking my lunch it costs me about $100 or less on sandwich stuff. And once the weekend comes im ready to pig out!

 

[SuperJETT]

I saw an episode of Big Spender on tv where a couple (with no kids) was spending $1800/month eating out, just insane!

 

[afcblink]

Eating out is not only a great way to break the bank, but your caloric, sodium and fat intake usually go through the roof, too.

 

[SuperJETT]

After about 5 hours of work, we have lukewarm water!!! It's heating up, we should be good to go in an hour or two.

~$640 total including tax, 50 gallon gas Whirlpool Energy Smart 12 year warranty, I like it. I wish it were a tankless, but I'm not sure that's feasible without a lot of work for the venting and the payback timeframe is pretty long.

 

[SXIPro]

After about 5 hours of work, we have lukewarm water!!! It's heating up, we should be good to go in an hour or two.

~$640 total including tax, 50 gallon gas Whirlpool Energy Smart 12 year warranty, I like it. I wish it were a tankless, but I'm not sure that's feasible without a lot of work for the venting and the payback timeframe is pretty long.

I'll be going tankless on my next one. I plan on staying in this house a while and between the energy savings and the water savings, it's the right choice for my situation. Especially since I have a tight tank septic system, so every drop of water saved from going down the drain is $$ saved as well.

12 year warranty on yours is awesome. Most of them top out at the 5 year mark.

 

[GDFL]

this is exactly my method as well.....NEver want to be cash poor, but at the same time I will never carry a balance on a credit card..


I made a concious effort to ONLY use my amex this past month on fuel (truck, ski and bike) and couldnt believe how much money I saved....I think am going to just stop carrying it period!



lol...we had a garage sale about 1 month ago....Goal was to make enough to buy a new surround sound for the hosue...

We made 385 that day at the sale....went in, ate dinner..loaded the dishwater and "buzzzzzzzzzzzzzzzzzzzz"


so, instead of surround sound we got a new dishmcwasher :rant::beerchug::Banane09:





thats not uncommon at all...

So is she hot? :chairshot: