Dave Ramsey, debt, credit cards, retirement, etc

[Mile9c1]

So it makes more sense to pay off a 10k student loan @ 3.2% before a 20k cc debt @ 19.9%?

I can't recall many callers with lower student loans than credit card debt.

In this specific case, I don't know what Dave would say, but he always says it's okay move cc debt to a lower interest card. It probably wouldn't take much to find a lower interest card.

Many callers with that much cc debt are many months deliquent, and in these cases Dave urges them to negotiate for a lower payoff amount.

 

[Mile9c1]

P.S. I know a few people who have tried a "modified Dave Ramsey" plan, and they are still in debt. While those who followed the plan more closely (Me, Jett, Freestylegeek for examples) are now debt free.

 

[Matt_E]

I can't recall many callers with lower student loans than credit card debt.

In this specific case, I don't know what Dave would say, but he always says it's okay move cc debt to a lower interest card. It probably wouldn't take much to find a lower interest card.

Many callers with that much cc debt are many months deliquent, and in these cases Dave urges them to negotiate for a lower payoff amount.

Makes much sense, I just never heard the details before.
Thanks.

 

[Matt_E]

P.S. I know a few people who have tried a "modified Dave Ramsey" plan, and they are still in debt. While those who followed the plan more closely (Me, Jett, Freestylegeek for examples) are now debt free.

I believe it.
I think it has a lot to do with following rules within a tight structure. If you could do that in the first place, you wouldn't be in debt, right?
So if someone goes for a "modified" plan, it probably means they don't like some of the rules for one reason or other.
No structure, less rules -> failure.
I started getting my finances in order a few months back, and feel I am on the right track.
Sure is nice. No payments on anything, even bought my new van with cash.
I am still renting, but that's going to be that way for another year or two until I have 20% down saved.

 

[Snackem]

I believe it.
I think it has a lot to do with following rules within a tight structure. If you could do that in the first place, you wouldn't be in debt, right?
So if someone goes for a "modified" plan, it probably means they don't like some of the rules for one reason or other.
No structure, less rules -> failure.
I started getting my finances in order a few months back, and feel I am on the right track.
Sure is nice. No payments on anything, even bought my new van with cash.
I am still renting, but that's going to be that way for another year or two until I have 20% down saved.

Bingo. If you have the discipline to pay off debt purely in a mathematical way they you would not be in debt in the first place.

 

[SJ Thumpa]

It's really difficult to tell how old everyone is in these posts on this subject. I'd like to know what your fathers and grandfathers think of your opinions??. Remember the worlds forever evolving. Things change, not leastly your economy. Keep that in mind when making investment decisions.

I went through the 87 crash. I was fairly young and my advice to my father at the time fell on deaf ears. I personaly lost 30G but I said to my father: BUY BUY BUY!!! I'll go you halves, third's, quarter. The most expensive beachfront property halved in value. My opinion was that IT"S GOT TO COME BACK AGAIN. He never listened but to a lessor extent I followed my own opinion and came out reasonably.

However this 08 economy slump is somewahat different. We have emerging Worlds. Its not the same as 87. The emerging performing economies are hitting us at a drastic pace. Us over indulging = over borrowing = over risky lending (stupid by trying to be competitive) by the financial institutions has just been the start.

How are major banks going to keep their share price up now? The Western markets almost saturated!!! Collapses of the finacial institutions where they're bound to have lent some money must have some effect???

In a totally "safe" society the most conservative bank would have had their share price increased dramaticly because the competition has been diminished. Have any of your banks share price increased in that way?

Over here in NZ approximately 8-10 reasonably well known finance companies have collapsed. The start of a domino fall. It's got to hit the banks at some stage of the ladder.

Emerging Worlds (specifcly China and India)

How (in Hell) do you keep your standard of living up and attempt to compete with these country's economy's ???? without lowering it?
You can argue that it's cyclical however (in my opinion) free trade agreements with highly populated third world countries surely cannot be the answer.

If I'm right and thats what govenments are subscribing to, the inevitable is that the "western world" has got to adapt to a near third world "standard of living" whilst the cyclical change comes into effect.

I sincerely hope I'm wrong!

 

[Matt_E]

Yeehaw.....just sold my 97 Blazer about 20 minutes ago.

Another $2k for the emergency fund. :biggthumpup:

 

[SuperJETT]

We are $200 shy of our 3 months' worth after today, should finish it up by the end of the month easily, then on to college/retirement/slowly bump the EF up to 5-6 months'.

 

[SuperJETT]

Yeehaw.....just sold my 97 Blazer about 20 minutes ago.

Another $2k for the emergency fund. :biggthumpup:

Cool deal!

 

[Matt_E]

Debt free is the way to go!

 

[romack991]

P.S. I know a few people who have tried a "modified Dave Ramsey" plan, and they are still in debt. While those who followed the plan more closely (Me, Jett, Freestylegeek for examples) are now debt free.

I guess I sort of went with a modified plan and am still in debt but I still don't don't think I care. I have about 9K in a student loan but the rate is at 1% fixed. I know debt is still debt but thats lower than inflation and I can get higher interest from a bank. So I just leave it at the minimum payment and have it automatically taken out. Everything else is paid for (besides mortgage) and I wont be taking a loan for anything else. I guess the only downfall is if I'd lose my job and couldn't afford to pay it but I should have stuff I could unload to cover it. Think its that big of deal?

 

[Mile9c1]

My gf does the same thing, keeps a student loan because her bank pays higher interest. Also she likes having the cash available "if she needs it".

Here's how I see it... it's easier to spend money when one has 10 grand in the bank and a small student loan payment, versus no money in the bank and being debt free. So I'm skeptical that my gf is actually coming out ahead by not paying her student loan.

Also at this point, I'd be surprised if her bank were still paying more interest than her student loan rate.

 

[Matt_E]

My online savings account pays 3.6% right now.
Beats 1%, if that's what the student loan is sitting at. (is it?)
Oh, and better yet...money in the bank AND no payments. :biggthumpup:

 

[Mile9c1]

My online savings account pays 3.6% right now.
Beats 1%, if that's what the student loan is sitting at. (is it?)
Oh, and better yet...money in the bank AND no payments. :biggthumpup:

How about better yet... get debt free so you can start investing, and make 12% on that money instead of a crappy 3.6%!

 

[Matt_E]

No debt here.

The online savings account is my emergency cash.
It isn't investment money.

How have you got yours set up?

PS My 401(k) earns about that.

 

[Mile9c1]

I have all my cash in a bank... saving up to buy a house.

 

[onesojourner]

what kind of retirement investments do you guys have?

 

[Snackem]

We have a Roth IRA that we contribute to and Kara has a Thrift savings plan with a 5% match with her job. Right now however we are just putting into Kara's to get her match and the rest is just going into savings until I finish school.

 

[Matt_E]

I have all my cash in a bank... saving up to buy a house.

Same here. I doubt your bank is getting you 12%?

what kind of retirement investments do you guys have?

My 401(k) is through T-Rowe Price. I got my money in target retirement fund.

 

[freestylegeek]

We are $200 shy of our 3 months' worth after today, should finish it up by the end of the month easily, then on to college/retirement/slowly bump the EF up to 5-6 months'.

You guys are FLYING!!!!!!