Dave Ramsey, debt, credit cards, retirement, etc

[jetskiier]

Buying a boat on a 15 yr payment plan? That is one of the worst ideas I've heard in a while. What will the boat be worth in 5 yrs? What will you owe? Look at what you end up paying for the boat in the long run, easily double MSRP, I doubt the interest rate is that good.

I know its hard, but try and save up to pay cash for all toys.

 

[douglee25]

Buying a boat on a 15 yr payment plan? That is one of the worst ideas I've heard in a while. What will the boat be worth in 5 yrs? What will you owe? Look at what you end up paying for the boat in the long run, easily double MSRP, I doubt the interest rate is that good.

I know its hard, but try and save up to pay cash for all toys.

That's the lowest term the boat loan comes with. Boat loans are very different from car loans. This boat will be considered a 2nd home. Trust me, I will no way in hell be taking 15 years to pay off this boat. The interest rate is no more than a car rate. My FICO score is close to 800/850 so I've qualified for the best rate.

Doug

 

[Moondance]

Paid off the truck this month with Tax rebate. Last kid will be out of daycare in 2 months. Should free up around $1100 in liquid cash by the Summer. We will have almost all of our mid/high interest cards paid off in the next couple months. Leaves me with the ski 4500 @ 10%, CC 9K @ 3.9, wife's Momma mobile and the Casa. By the end of 2008 (if, I pray, nothing changes) I should just have her car and the house. No CC and no other loans. Of course gas and the horse we own will continue to eat some level of funds... that and the kids.

Sell the kids, you'll be out of debt quick! Shipping gets a little tricky, but it's doable.

Great job, just stick with your plan.

I'll take the middle one Tim. Shipping shouldn't be too much to TN. Heck, I'll just bring her back with me the next time I'm in TX.:wavey:

 

[Mile9c1]

As of 10:45am today I'M DEBT FREE!!!!!!! FREEDOM!!!!!!!!!!!! Dang I wish I could type in larger font.

 

[SuperJETT]

AWESOME!

As of 10:45am today I'M DEBT FREE!!!!!!! FREEDOM!!!!!!!!!!!! Dang I wish I could type in larger font.

 

[freestylegeek]

... I'M DEBT FREE!!!!!!! FREEDOM!!!!!!!!!!!!...

Way to go man!

You're a wierdo. :scared:

 

[vitaly]

As of 10:45am today I'M DEBT FREE!!!!!!! FREEDOM!!!!!!!!!!!! Dang I wish I could type in larger font.

Congrats Mike!


And keep lying to yourself... You still have to pay taxes, vehicle registrations, whatever else, AND the most important question: do you still have to work in order to survive and assure your family survival?

 

[SuperJETT]

Congrats Mike!


And keep lying to yourself... You still have to pay taxes, vehicle registrations, whatever else, AND the most important question: do you still have to work in order to survive and assure your family survival?

Didn't you admit that you don't even follow your own advice about opening a Subway, that you're an 'employee' too?

I'll say this, if we do head into a true recession with high inflation, being out of debt will be one key to 'getting by'.

 

[BruceSki]

Congrats Mike!


And keep lying to yourself... You still have to pay taxeseveryone has to pay taxes, vehicle registrations(live in the city and walk), whatever else, AND the most important question: do you still have to work in order to survive and assure your family survival? he didnt say he got rich quick

those are recurring bills everyone has to pay unless you are into fraud

of course you still have to work to support yourself and your family, its just that now you arent paying interest on the things you want/need so your money goes further than it used to.

 

[Mile9c1]

You still have to pay taxes, vehicle registrations, whatever else, AND the most important question: do you still have to work in order to survive and assure your family survival?

I live with my Parents... I could retire right now if I wanted to :beerchug: But I don't think Dave Ramsey would approve of my situation.

 

[Snackem]

Well Kara and I went to the first FPU class at our church last night.
Class #1
Super Saving
I was really surprised with the class. I have read two of Dave's three books and I listen to his radio show often but I was not disappointed in the class. There is still a lot of stuff that Dave goes into and it was very entertaining.

Hopefully the rest are as good as the first.

 

[Matt_E]

I got 18% of my gross check going straight to 401k and emergency fund now.
Feels great.

 

[Freestylin-FX1]

As of 10:45am today I'M DEBT FREE!!!!!!! FREEDOM!!!!!!!!!!!! Dang I wish I could type in larger font.

:cool2: Interesting as Im still in debt the exact amount of $$$ I sent to you?? :hitwithrock: LOL

 

[douglee25]

I'm curious if anyone has cut their 401k contribution back because of the economy right now? I looked at what I'm making through 401k and I almost would be better off keeping it and using it towards something else.

Doug

 

[AtomicPunk]

not if you have everything else "in line". with the market down, now is the time you want to be funding long term investments.

 

[SuperJETT]

I'm curious if anyone has cut their 401k contribution back because of the economy right now? I looked at what I'm making through 401k and I almost would be better off keeping it and using it towards something else.

Doug

not if you have everything else "in line". with the market down, now is the time you want to be funding long term investments.

Bingo, stocks are cheaper now, so you want to buy more if possible.

 

[freestylegeek]

Well Kara and I went to the first FPU class at our church last night.
Class #1
Super Saving
I was really surprised with the class. I have read two of Dave's three books and I listen to his radio show often but I was not disappointed in the class. There is still a lot of stuff that Dave goes into and it was very entertaining.

Hopefully the rest are as good as the first.

That's great!
You won't be disapointed in the rest of the classes. They are very informative.

I'm looking forward to teaching it again this fall. Hopefully I don't forget anything over the summer...

 

[AtomicPunk]

SuperJETT,
What does DR say about financing capital improvements to your home? I have upgraded everything myself in my house (all paid for) but have yet to remodel our kitchen. It is WAY overdue and I don't have the cash to fund most of it. I have a ton of equity in my house (even with the downturn). We are at point that we are either going to sell the house in a year to 18 months or stay until the kids are out of high school (14-15 years.)
I really don't think our house will sell with the kitchen as-is. Especially with the rest of the house being already remodeled. I have the time and other resources to try and get this remodeled cheap this summer.

So I am thinking about a equity line to get this done and then aggressively pay it down over then next 1-2 years.

 

[CuzzinOlaf]

The Baby Steps from Dave Ramsey:
pre-1. get current on all bills (you already are)
1. $1000 in a baby emergency fund (savings account, it's not an investment)
2. pay off all debts except mortgage from smallest to largest, minimums on all but the smallest and attack that small one, then attack the next, the next, etc.
3. fully fund your emergency fund with 3-6 months' expenses
4. contribute 15% of your gross into retirement funds, matching 401k first, then Roth IRA, then non-matching 401k
5. college funds if needed
6. pay off mortgage early
7. grow, give, spend money

1./3. - So, what you're saying is to keep just $1k as a baby emergency fund? Once your debt is paid off then build the emergency fund to cover 3-6 months of expenses? I have a hard time without having $5k min, but more like $10k as liquid cash. I have about $10k liquid cash sitting in the bank now. Soon to be $7k when I buy my pontoon boat (found a steal I can't pass up and always wanted one).

2. What if your smallest debt is 0% for the lifetime of the balance, assuming you don't default, AND, that you charge a minimum of two things on the card per month? I have two small bills that are always the same for each month on this card. THEN, what if you have two other debts, one credit card and one term loan. Both interests rates AND total amounts are the same. I assume you'd pay off the credit card since it isn't a "term" loan.

4. I am putting 7% into my 401k, my company matches 3.5% and I get a free 3% deposit once a year. What is the max contribution allowed to a 401k per year? I am above the AGI for a Roth IRA so that isn't an option.

5. No kids, no wife, so no college fund till then. Right?

6./7. - Baby Steps LOL

 

[Matt_E]

The 1k emergency found DR speaks of is just for starters. The target audience likely has no savings at all.
I believe he does advocate 6-12 months expenses as emergency fund.

Debt snowballing....yes, the logic behind his debt snowballing falls apart a little bit once you look at different types of debt (i.e. low interest student loans, different interest rate CCs, etc)...but again, keep in mind that he's wanting to make it simple and not confuse people.

Do you really not know what your 401(K) contribution limit is?