Dave Ramsey, debt, credit cards, retirement, etc

[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

 

[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/threads/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.