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 Ezzee
Joined: 7/26/2004
Msg: 1
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Living Without Debt/ Dave RamseyPage 1 of 2    (1, 2)
So I have been listening to the radio as I do on a fairly regular basis and I've become extremely interested in Dave Ramsey.

He talks about living debt free and living without using debt or credit cards or anything like that. He believes in paying off anything you want to buy with cash and living within your means. I think it makes perfect sense and I absolutely love the idea. He also has a program he calls Financial Peace University along with several other thoughts on how to do this.

I guess I have a couple of questions.

1.) Has anyone ever heard of this guy or gone through his programs? If so, I'd love to hear more about how they worked and what y'all thought about them.

2.) For those of you who have not heard of him, do you think it is possible to live debt and credit free? I mean, yeah, at some point, I think you might hve to have some debt for a house, even though Dave Ramsey doesn't advocate it, but I'm just curious if anyone has ever tried it or has attempted it.

Also, I'm going to try and live through many of his principles, especially the not using credit cards and living debt free as much as possible. We may have one just for emergency purposes, but other than that, nothing. Anybody have any suggestions on this?
 hooked_and_happy
Joined: 3/24/2008
Msg: 2
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Living Without Debt/ Dave Ramsey
Posted: 6/2/2008 7:38:02 PM

2.) For those of you who have not heard of him, do you think it is possible to live debt and credit free? I mean, yeah, at some point, I think you might hve to have some debt for a house, even though Dave Ramsey doesn't advocate it, but I'm just curious if anyone has ever tried it or has attempted it.

I'm not totally debt free. But it's certainly possible to do so. We have a mortgage and 2 car loans, but that's only because we don't have hundreds of thousands in cash to pay for a house and cars out right.. not many people do. But other than those bank loans, we ARE debt free. We each have a credit card (that have no balances owing) that we mostly use for emergencies, hotel reservations and internet shopping (things that require a credit card only)... and we always make sure the balance is payed off. Our credit cards have the lowest interest rate we could find and they also offer us other benefits (air miles and gas money).

Everything that my husband and I buy is "cash on the barrel" (paid in cash). A few months ago we bought ourselves a new TV. It cost $1200 and we saved up until we had the money to buy it. We could have taken the payments through the store, but after taxes and interest, it would end up costing us over $2000.. no thanks. We saved for 6 months, putting away money when we could and then bought it when we had the full amount.

I'll never understand the idea of buying everything on credit? Either your credit cards are almost at thier limits and it could take you 20 years to pay it off by paying the minimum payments, or you have 10 different payments to make a month on items you've bought through payments plans with the store you bought it from. First off, you never really own it if your constantly making payments on it, and by the time you finally own it, it's either broken or useless. IMO, if you can't afford it, then you shouldn't have it. It's called living beyond your means and we all do it.

Instead of making monthly payments on furniture and electronics and credit cards each month, we place the money we'd save into a savings account. That way if we really wanted something... like a vacation or a new dining set or something big for the kids, etc., we can buy it... out right.

I think you might hve to have some debt for a house, even though Dave Ramsey doesn't advocate it

I don't know this Ramsey, but how else does he think a middle-income family is to own a home? I'm able to save money... but I'd never own a home if it's going to take me 50 years to save up THAT kind of money. lol
 pazoozoo
Joined: 8/28/2006
Msg: 3
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Living Without Debt/ Dave Ramsey
Posted: 6/2/2008 7:44:50 PM
Hey ezzee. Yep, I went to some siminars he was conducting.

Here's the thing, while I thought some of his ideas were great (and still are) it just wasn't practical for me to follow his princples. I had a business to run, and a hefty line of credit at the bank was imperative.

With the way things are going, there is absolutely no way I would use big chunks of cash to pay for cars (even second hand ones), home repairs (home equity loans have great rates right now), or buy a home with cash (mortgage rates are terrific if you can get one, and it's good for a tax deduction).

IMO, if you have no reason to need to use credit, you shouldn't run a balance. Credit requires huge doses of self decipline. If you don't have it, then do as Dave suggests and operate on a cash basis only.

If you can use credit judiciously, then it can be another tool for accumulating and keeping wealth. If you have any designs on owning your own business, you will need credit.

I do like the way he prioritizes the way we spend money. Pay for shelter, food, utilities, clothing, and transportation. Then comes secured loans, and waaayyy back comes the unsecured stuff such as credit cards.
 bearwoman1959
Joined: 8/25/2006
Msg: 4
Living Without Debt/ Dave Ramsey
Posted: 6/2/2008 7:45:00 PM
I shop at thrift stores and hit the clearance racks at regular stores, but you have to look in the back of the stores to find the good clearances, the 60% to 90% off stuff. Don't eat out as much, and the one credit card is a good idea, as cars do break down and kids get sick. We started a gift exchange at Xmas in my family so that we only have to buy for one person. Xmas shouldn't be all about the presents anyway. Basically, you have to stay away from malls and movie theatres and restaurants. It can get boring, but there are free things to do like picnics at the park or fishing with worms you dug up yourself. I've been poor for so long I wouldn't know what to do with alot of money. Guess that's a good thing.
 OpenWaterCaptn
Joined: 4/13/2008
Msg: 5
Living Without Debt/ Dave Ramsey
Posted: 6/2/2008 8:00:26 PM
i use my bank card for online orders its a visa and its 5 bucks extra a month, use a prepaid cell its 43 a month and always have left over time on it, got my 42" lcd at a pawn shop for 700 instead of 1800 at best buy (it was 4 months old and came with the reciept and bb still warranties it).....my friends actually think im broke all the time because i dont go to the bars and clubs or buy clothes all the time, my laptop ive had since 2002 but still works great.
 Cheezyone
Joined: 3/7/2007
Msg: 6
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Living Without Debt/ Dave Ramsey
Posted: 6/2/2008 8:29:04 PM
Yea, I've heard of him. I've listened to quite a few of his shows but have never gone through one of his programs. I do think that if more people actually listened to him and tried to implement some of his advice they would be alot better off.


For those of you who have not heard of him, do you think it is possible to live debt and credit free? I mean, yeah, at some point, I think you might hve to have some debt for a house, even though Dave Ramsey doesn't advocate it, but I'm just curious if anyone has ever tried it or has attempted it.


Is it possible? Yes. Have I attempted it? Yes

It was one of his shows that I was listening to about 4 years ago that made me realize that I needed to change the way I using my money. My only debt as of earlier this year is my house mortgage, my utility bills, insurance, and taxes.

I tried to be smart when I bought my house 8 years ago. I found one at far below market value (I found a guy who needed to get out because of a nasty divorce), got a really low fixed interest rate, and didn't over buy . My mortgage is about 1/3 of what a person would pay for a really small apartment around here. At this point I should have it paid off in another 6 years.

I have no credit card debt, I used to but I paid the last of it off this year. I have no vehicle loans. I did have 1 vehicle that I was making payments on but decided to sell it off at the beginning of this year and went out and bought another in cash. I just couldn't stomach making the payments anymore when I was so close to no debts.

I can tell you that it will liberate you in ways that you can only imagine! I can finally wake up in the morning and smile knowing that I don't owe a bunch of companies money. I know that no matter how bad things can get I could make the minimum payment on my house working at a fast food restaurant or pan handling, LOL.

The biggest suggestion is what I'm sure you already know... If you can't pay for it in cash, you can't afford it.

Just start knocking those credit cards and loans off one by one. Start off by paying off the smallest one first. Just so you can get the taste of freedom quicker when you throw it away. This will really make you start to rethink how you spend your money. Then start knocking them off one by one. You can pay the minimums on some while using the bulk of your money to knock one down faster. Then when that ones gone, do it to the next. Each time you knock one out you will have more money to knock the next one out.

Another thing is be very careful about those credit counseling services. The ones that say they can lower you credit card bills, etc. Those will trash your credit almost as much as bankruptcy will. That is, if you care about such things. Because in reality, if you live without any debt you have no real use for credit ratings anyway.
 Bona x
Joined: 6/11/2007
Msg: 7
Living Without Debt/ Dave Ramsey
Posted: 6/2/2008 10:00:54 PM
I never heard of this guy.
I don't owe a dime to anyone.Have found credit cards to be a convenience in some situations,pay off the bills as they come in.
I live fairly conservatively, don't want for much, save for what I want and don't over extend myself financially.

seaspot has it together!
 AwP
Joined: 12/31/2006
Msg: 8
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Living Without Debt/ Dave Ramsey
Posted: 6/3/2008 5:25:46 AM
Living debt free is good, but I don't agree with his method. I think it's good to put things on a CC when you have enough cash to pay for it. Pay your CC off completely every month, and you'll still be debt free but you'll be building your credit rating and have something to fall back on in case of an unforseen emergency.
 jonibgood
Joined: 5/9/2008
Msg: 9
Living Without Debt/ Dave Ramsey
Posted: 6/3/2008 11:04:42 AM
I worked in the credit industy pretty much my whole life and the one thing I learned: don't use credit!

I know, I know - nobody pays cash for a house. But, if that's your only outstanding debt you're in good shape. In all my life, starting at 18 or so, I've made a total of about 15 monthly car payments. I have a friend who thinks a car payment is a way of life - can't STAND not to have one!

I've tried to raise my kids to understand that they need to have a good credit rating (for buying that future house ) but to only buy something when they have the cash to pay for it, i.e., delayed gratification!
 Cheezyone
Joined: 3/7/2007
Msg: 10
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Living Without Debt/ Dave Ramsey
Posted: 6/3/2008 9:53:20 PM

I think it's good to put things on a CC when you have enough cash to pay for it. Pay your CC off completely every month, and you'll still be debt free but you'll be building your credit rating and have something to fall back on in case of an unforseen emergency.


You don't have to charge anything and pay it off to have a CC for an unforseen emergency. Trust me the CC companies will let you keep it with no balance for "an emergency". But, if you didn't play the game, and you have no debt, why would you even need a CC for a unforseen emergency? At that point you should already have enough in savings to cover said emergency.

By the way, paying your CC off every month in full won't get you great credit.

F* those credit pushers! Stop playing their game. Take your financial life back.
 42 4 U
Joined: 2/18/2008
Msg: 11
Living Without Debt/ Dave Ramsey
Posted: 6/4/2008 12:04:26 AM
Its definitely possible,I've never been in debt or used credit cards.If I can't pay for it,I don't buy it until I can.Credit cards are the biggest scam going,after taxes and insurance.Any thing that doesn't produce or create something,is dead weight.The biggest problem with living debt free is having to do without until you can afford something.But in the long run,you'll be glad you did because that debt will kill you.No matter how many hours you work,or how good a wage you earn,the interest payments to service you're loans will eat up any gains you make.
Another big issue is tax planning.A lot of things bought on credit are tax deductible while paying cash is not.I'm not an expert,so if anyone has any good suggestions on this,feel free to share.
 Calray
Joined: 12/25/2006
Msg: 12
Living Without Debt/ Dave Ramsey
Posted: 6/4/2008 12:25:13 AM
I listen to Dave Ramsey every day. He's well known in Christian circles and has kind of taken over for the late Larry Burkett as the top dog of Christian financial counselors. Though I would disagree with him on several points. Credit cards are not evil. My pastor of thirty years charged absolutely everything on his Discover card. He paid it off every month and Discover would send him a check every year for between 300 and 5oo dollars just for using their card.(My best friend does the same with his Visa). The same pastor gave me the advice "never borrow money unless you intend to make money." So the general rule is this: consumer debt and car loans are bad. Student loans are acceptable. Business loans are ok if they're backed by security. Mortgages that provide an inexpensive monthly payment AND a tax break are good. Second motgages to pay for that vacation or some other creature comfort, or even improvements to the house that increase monthly payments are bad.
 Calray
Joined: 12/25/2006
Msg: 13
Living Without Debt/ Dave Ramsey
Posted: 6/4/2008 12:37:59 AM

Trust me the CC companies will let you keep it with no balance for "an emergency


Actually they may not. It's happened more than once where someone tried to use their card and they find that it's been cancelled for inactivity.


But, if you didn't play the game, and you have no debt, why would you even need a CC for a unforseen emergency?


I sell cable for a living, and if you chose not to play their game and don't have a payment history on some kind of debt, it's likely I'll be charging you an extra 50 dollars just to turn your cable on as opposed to the guy who makes a credit card payment of 60 dollars every month.


By the way, paying your CC off every month in full won't get you great credit.


Actually it will. those actions alone raised my fico by 100 points in one year. Another 100 and I can buy a house at prime rate.
 nipoleon
Joined: 12/27/2005
Msg: 14
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Living Without Debt/ Dave Ramsey
Posted: 6/4/2008 2:39:06 AM
It's a great idea in theory.
Unfortunately sooner or later, some sort of big expense is going to come up and you'll have to use credit in some form.
Who has several thousand dollars saved up for an emergency medical bill ?
How long can you go without your car while you save up the cash to get it fixed ?
 galonthemt
Joined: 10/31/2007
Msg: 15
Living Without Debt/ Dave Ramsey
Posted: 6/4/2008 6:39:40 AM
I am totally debt free.........No mortage....no car payments......no credit card debt.......The only debt I ever had was a mortgage. I never had a car payment.

I must admit since I am on my own I do pay everything by credit card....its just easier than carrying cash......but the bill is usually paid on line before the statement is even sent out. I have NEVER paid a penny interest on a credit card.

I have no ideas who Dave Ramsey is.....this happens to be how I was raised. If you cant afford it you dont need it. Save till you can.......................

I was always taught to have 6 months of your normal monthly expenses aside for emergencies and I have always done that. When savings went over that amount it was invested.

When I got married we had a plan............that plan did include going out twice a month.....even if it was just for dinner and a movie. I never felt deprived and now I am living with no financial worries..........................


My daughter however lives much different..........sometimes I wonder who raised her lol

PEACE
 luv to laugh
Joined: 7/12/2006
Msg: 16
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Living Without Debt/ Dave Ramsey
Posted: 6/4/2008 4:38:52 PM
I've never heard of Dave Ramsey, but I agree with living debt free for the most part. Depending on your circumstances, living debt free isn't always practical. Unless your rich and have lots of cash, you cannot buy a house or car without getting into debt.

Another good speaker to listen to about fincances and getting out of debt is Suze Orman, I've borrowed her C.D's from the library and have learned alot.

Most Entrepreneurs who start businesses are not rich and have to use "OPM" (Other Peoples Money) which is loans from banks or private investors to get their business started.
I have listened to C.D's from successful entrepreneurs such as David Kiosakis "Rich Dad, Poor Dad" series and other successful people such as Donald Trump who had to take loans out to create their businesses.

Listening to these C.D.'s, I have learned their is a difference between good debt and bad debt.
Good debt is when you use debt to buy investment properties or a business and you can write off business deductions and eventually make a profit. Bad debt is using credit to buy consumer items such as T.V.s, stereo systems or other things you want but really don't need.

I would really like a nice big 52" LCD flat screen T.V. but I am making due with my 27 " regular T.V. as I am concentrating on saving money and putting some extra payments on my mortgage. I also have a 10 year old car that still drives well and will drive it until it dies or costs me too much to fix, and then I will buy a new car if I'm offered 0% financing or buy another used car. Mine was 3 years old when I bought it and it only had 41,000 km on it.

I use credit cards to obtain air miles, but then pay it off in full from my savings. I also take the occasional vacation as I like to travel. I used to pay travel by credit when I didn't have the money to pay in full, but now I'm saving the money and will also use the air miles I'm accumulating. I'm not going anywhere fancy this year. When I win the lottery that will be a different story.

Good topic.
 The_garbageguy
Joined: 12/21/2007
Msg: 17
Living Without Debt/ Dave Ramsey
Posted: 6/4/2008 4:53:26 PM
No. NO. Must have stuff. MUST MUST MUST. If you don't have the money you borow. Borrow beg steal!! Get stuff! Get MORE stuff!! GET GET GET!!!!!
 actualizing
Joined: 5/2/2008
Msg: 18
Living Without Debt/ Dave Ramsey
Posted: 6/4/2008 5:19:26 PM
Yes I have heard of Dave Ramsey...listened to him on the radio. He is wonderfully inspirational and I have since cut one of my two credit cards up after paying it down. I only have one for emergency. I am trying now to take another one of his baby steps. He is great and yes, it is really the ONLY way to live. You can google him to connect up with him some more and follow his steps and such.
 Calray
Joined: 12/25/2006
Msg: 19
Living Without Debt/ Dave Ramsey
Posted: 6/4/2008 5:40:07 PM
It's a great idea in theory.
Unfortunately sooner or later, some sort of big expense is going to come up and you'll have to use credit in some form.


Actually it's a great idea in practice. The idea is if you apply his principles, then when that big expense occurs, the money would be there. [


Who has several thousand dollars saved up for an emergency medical bill ?


I live comfortably knowing that this year if I were suddenly struck sick 100percent of my medical bills would be paid. However I do have health insurance, and all I have to do is make sure I have my deductible liquid. But this is the amazing part. I live confident that if I exhausted all 3000 of my deductible this year, on Jan 1 it will be replaced by another 3000. I do that by budgeting 10 percent of my gross into a medical savings account.


How long can you go without your car while you save up the cash to get it fixed ?


I recently made the decision to sell my truck and live without. I have a transportation budget of roughly 300/month. 200 got me an all you can ride bus pass for a year, and I budget 75 per month to rent a car when I need it. My plan is such that in two years, I'll have roughly 10,000 to buy a good used car and will be able to make car payments to myself and pay cash every 5 years after that for a new one.

Gallonthemt, you may have never heard of Dave Ramsey, but you hit what he teaches on the nose

Luv to Laugh, b e careful. You keep reading Kiyosaki, and Trump, and they may transform your life. Shameless plug: Read "Why we want you to be Rich" by Kiyosaki and Trump.
 Cheezyone
Joined: 3/7/2007
Msg: 20
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Living Without Debt/ Dave Ramsey
Posted: 6/5/2008 7:52:56 PM

I sell cable for a living, and if you chose not to play their game and don't have a payment history on some kind of debt, it's likely I'll be charging you an extra 50 dollars just to turn your cable on as opposed to the guy who makes a credit card payment of 60 dollars every month.


Thats odd. My girlfriends son who is 22 years old, has zero credit, never had or has a credit card, and has never even had a drivers license, rented a place a couple months ago and the only utility he needed to make a deposit on was the electricity. He didn't need a home phone sense he has a cell phone (prepaid). He got a dish system with all the "stuff" (multiple rooms, dvr, etc.) and he got the new customer deal and doesn't pay anything extra.



It's a great idea in theory.
Unfortunately sooner or later, some sort of big expense is going to come up and you'll have to use credit in some form.


It would have to be one huge expense. As long as you make yourself an emergency fund you shouldn't have to use credit.


Who has several thousand dollars saved up for an emergency medical bill ?


Um...Me.


How long can you go without your car while you save up the cash to get it fixed ?


How long can I go without a car? Well actually a pretty long time since all 4 of them would have to break down before I didn't have one to drive and then I'd use my girlfriends car.

It's called back-ups! 2 of them were purchased with loans and paid off 4 1/2 years ago, the other one is a 4X4 that was bought in cash a couple years ago and is a toy, but legal. And the last was one I bought in cash this year after selling my Nissan Titan because I hated the payment. That Titan was the hardest choice though. I had already paid on it for a couple years and it still looked cherry. But I had to make the choice of paying on it a couple more years or sell it and make a little bit (really, a little tiny bit), and walk away without any car payments. I sold it and walked. I am so much happier now that I don't send them any more payments. Yea I admit it, I like vehicles.

Almost everyone could afford a back-up vehicle. There's all kinds of used cars and trucks out there to be had at decent prices for a decent ride. If you have a person you really trust, and I mean really trust, you can even go halfsies. My bro and I bought a truck a while back (we've since sold it) together just to have access to a truck and for another back-up vehicle and that worked out great. We spent very little money on it, did some maintenance and when it was getting ready to pop, we sold it for parts.
 some woman
Joined: 5/16/2007
Msg: 21
Living Without Debt/ Dave Ramsey
Posted: 6/5/2008 8:20:08 PM
I've never heard of Dave Ramsey, but I live debt free even on a very small fixed income. I don't own a home or a car, but I don't feel either of those are necessities for me personally. I used to have a mortgage, car payments, credit cards, student loans and consumer loans, but no more and never again. I had much more financial trouble when I was able to work and make way more money than I have now. It took self-discipline and a few lifestyle adjustments, but it really wasn't too difficult after just a short time.

Just knowing all my bills are paid, I have everything I need, some things I want and money left over at the end of the month makes me feel pretty good. I live within my means and don't buy anything if I can't pay cash for it. I might not be doing things according to any book or expert advice, but I must be doing something right. My way works for me.
 Vancer
Joined: 10/29/2006
Msg: 22
Living Without Debt/ Dave Ramsey
Posted: 6/5/2008 9:10:03 PM
I live debt free, and I rarely use my credit card, and when I do it's because I had too. I also pay it off at the end of the month.
I don't enjoy worrying about money...ever.
As a result I tend to foot the bill, without even flinching, only because it's easier and I can afford to.
I'm not rich by any means. Just haven't gotten into any bad spending habits that'll upset my financial security.
I started out living in some crap holes though before securing myself.
 July Morning
Joined: 5/21/2008
Msg: 23
Living Without Debt/ Dave Ramsey
Posted: 6/5/2008 9:11:08 PM
Kid, I've never lived with a debt. I don't know how people can do it. I grew up in a communist country where nobody had credit or money or aspirations or hope.

I had good times and bad times since coming to Canada. I have always lived within my income, not just within my means. I don't own property, but by my cars with cash. I have several credit cards, and have a line which surpasses my total worth several times over, but I pay them off at the end of the month religiously. Needless to say, I use a fraction of my line to buy things every month, and it's usually because that's the only instrument of negotiation they accept in some shops.

Most Europeans from the mediaeval times hate the North American governments for running up debts so much that financing it alone takes 50-80 percent of the tax revenue per annum. This is crazy. This is a disgrace. This is a shame, a level of stupidity that can be expressed only with astronomical distances. This is a disaster of biblical proportions.

Right now we're all smiling and looking pretty, but if inflation drives the bank interest rates up even as much as a percentage point, never mind the 20% interest rates of the seventies, then even a one-point raise will totally wipe out the North American economies. It will wipe Canada out with its humongous government debt, which it marrily finances now, but it wouldn't be able to sustain after a one-point rise; and the US, with its own version of reliance on incredibly bad financing policies.

If inflation alone won't drive the rates up, then the money will deterioriate. The US has been in just such a situation for about a year now, and had been way overdue for that. So the Fed did not put up the interest rates, in order to save the established industries (which is government fraud and legal battles, and a bit of wheet farming, ever since the manufacturing for internal and external markets has been moved very cleverly into the hands of the workers party of the People's Republic of China) which resulted in the US dollar losing exactly one third of its value against other currencies. Which means that one dollar is worth 66 cents. Which means that maybe the cars made in America are still about the same price, but you pay 15 bucks for a piece of rock (crack) that you used to be able to buy for $10. Which means the crack people have to commit 50% more crime to support their habit. Mabbe that's good for the economy. I dunno. Nobody knows, actually. We are skilled at observing the economy and taking its vital signs (indicators), but once something goes wrong with it, nobody, not all the king's horses or all the king's men, will be able to make it healthy again. It may get healthy on its own, though. That's been the historical pattern.

And the population falls in line, everyone buys with credit. I don't know who it is that owns anything. I studied accounting and economics, even if on a very basic level. The rich are not rich; they own stock. Which is not the same as money. The poor, the rich, the governments, the churches and the congressmen, whole goddamned celestial lot of fools are up to their eyebrows in debt. Who supplies the money for the debt? I wonder. Somehow common sense would make you believe that for each dollar somebody owes, there is a dollar that somebody has in their "receivables". In other words, you can only borrow a buck if there is someone else who has one and who can lend you it. But it seems that's not the case at all. It seems there is only "owings" and no "receivables" in the New World. Making debt without making money first is the miracle of the American know-how.
 Ideoform
Joined: 9/23/2007
Msg: 24
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Living Without Debt/ Dave Ramsey
Posted: 6/5/2008 10:03:57 PM
I live pretty much debt-free. Yeah me!

That wasn't always the case. We used to have at least 4 credit cards, almost maxed, student loans, a car loan and lots of bills. And I made this shocking discovery that it is very expensive to owe money! And the worst part is, just owing the money--there is nothing to show for it except ulcers and worry lines on my face. I hated the times when I would overdraw about $2. and 3 other checks would bounce! Ouch!

Owing people gives you less freedom. It feels like strings tying you to various businesses who take your precious time and money as you pay the bills each week.

Every bill signifies that someone trusted you enough to temporarily loan you some money. So thank them for that privilege, but then don't make them wait too long for it back. (Thank God we don't have debtor's prisons anymore!)

Getting debt-free required a commitment, and not going to malls as much. I watch less commercial TV. Commercials are insidious ways to make you feel unhappy about not being in them (Oh, I seem so unhappy now that I've seen how happy the actors all look. Of course, they are happy about their paychecks, not necessarily the pizza they are pretending to eat.)

I own my van outright. Car loans are expensive and a bad "investment" if you can avoid it. I have no mortgage, but I still think home-ownership is a good investment if you shop around for the best mortgage, and put as much down on it as you can, no less than 10%, and keep the property maintained. Home ownership is still one of the few ways to generate wealth for the average person. Don't get a mortgage based on faulty information you give your lender. Don't buy with a balloon payment due. Don't get an ARM.

Credit cards are still a necessity if you travel and want/need to rent a car, and are very helpful in getting airline and hotel reservations. It also helps to use to pay bills online. Carrying a balance is not good, but a small balance once in a while is OK. Just not more than two months. This is just to maintain good credit. Good credit means that if you ever do need a loan, you can get a better interest rate and terms.

I would stick with no more than two cards. Don't cut any extras up or cancel the card (unless there is a yearly fee.) Pay it off, freeze it in a block of ice in the freezer or some other way of making sure you don't rush to use it on impulse. Canceling cards also does affect your rating.

I live on cash. It is great. You always know how much you have, and when it’s gone, it’s gone. I give myself 3 payments of cash each week, Monday, Wednesday and Friday. I don't use the ATM. I put some of it in envelopes with specific uses written on them, like "GAS." The amounts I carry are small enough that I actually would loose less if my purse were stolen than if I carried a checkbook and credit cards. I pretty much use it the same day anyway, as I grocery shop or run errands on those days also.

I have as priorities: Pay the rent/mortgage first. Then pay for transportation (gas, bus tickets,) food, insurance, clothing, and some recreation. Anything needed to generate income is a high priority, in other words, anything required for work, such as tools of my trade, and work-related clothing, training, trade magazines, etc.

Children's needs are a high priority. They get the best quality food we can afford, average clothing compared to others in their group (but not too "trendy.") Expenses related to their health and education are a high priority, but they don't have to have the best to be the best. But this does not include many things that are luxuries that children often think are necessities (except they do get some great stuff from Grandma.) We buy videogames used. We get movies at the library or share with friends. However, I don't keep their standard of living significantly lower than mine (or higher, for that matter.)

I love the feeling of living within my means. It is an honest way to live, and I think, less stressful, than living a lifestyle that is not sustainable. I don't expect the "future me" to support the younger, more immature me. I don't think I will appreciate that down the road. I think that the people that might judge me for my clothes or shoes being a little out of style might also be people that would hate to find out that the person they are dating is loaded with debt and about to go bankrupt.

However, I don't agree with the people who are saving so much for a "rainy day" that they don't live for today much. If you save as much for your retirement as some investors suggest, you might never live well enough to see that era of your life come to pass. I have decided that I won't live an unhealthy lifestyle (unsafe neighborhood, cheap junky food, no recreation or time off, never taking a sick day even when sick, etc.) to save for a day that may never come.

Things cost money to own, did you know that? The more you have the more you have to take care of. Fancy clothes often require dry-cleaning. Nice cars have higher insurance, more expensive repairs, and need a garage and an alarm system. McMansions have huge heating/cooling bills. Collections require storage and insurance.

It helps a lot not to have any real addictions. Addictions are by definition, expensive. I don't smoke, drink only occasionally a glass of wine, do drugs, gamble or have any kind of shopping or food addiction. Addictions are "happiness" on the payment plan--with a very high interest rate!

It helps not to feel the need to "collect" a lot of things. I collect quotes, photos, memories and hugs. I guess if you want to collect something, make it something free or small. I like to collect seashells, stones and such from going on walks. They end up in my garden, as reminders of a lovely time. I collect cuttings sometimes from friend's gardens and houseplants.

It helps to know that people who live frugally are helping the environment, by not burdening the earth with more consumerism than is necessary for a quality life. For instance, I buy locally grown produce from our farmer's market weekly, and try to buy things that are in season. This requires less energy for storage and transportation of food, plus it saves money. I plan my driving to combine trips to stores/errands close together to save gas, with the bonus that it is less polluting. I have a little garden that grows some food. No transportation costs there.

Reward yourself as your debt goes down with something you really like, such as a hot bubble bath, or your favorite home-cooked meal. Don't be shy about patting yourself on the back. Take time to appreciate yourself for following through on a commitment you have made to yourself.

Own what truly gives you joy and what you will use on a regular basis. The rest will just weigh you down. Do what you are passionate about, and if that makes you wealthy, accept it as appreciation for a job well done. But don't use credit and debt to strangle you as you look handsome singing on the deck of the Titanic. (As you recall, the handsomest guy was NOT wearing the fanciest clothes in that movie.)
 Americanrover
Joined: 10/25/2007
Msg: 25
Living Without Debt/ Dave Ramsey
Posted: 6/6/2008 12:47:32 AM
Wow what a great thread.
Another money guru is Clark Howard (clarkhoward.com). I've been listening to him on various AM talk radio stations (not NPR) for years. He's great. And ditto re: Suzy Orman. She says it plain as can be, and takes no prisoners. While her PBS special right now is about women and finance, the advice is great for all of us. I've also heard about Crown Ministries, another Christian financial program. I don't use it, but I know people who do.
I do use credit cards almost exclusively. But I am highly disciplined and I make money back on them. I have a great one with no annual fee and between 1 and 7% cash back depending on what kind of partnering agreement they have with particular merchants (I have never purchased ANYTHING that would get me 7% back!! LOL). I pay bills with it, do all shopping with it etc. Most of my groceries are bought in a cash only store, but if I am in one of the other stores for a good sale, I'll put groceries on it even. All meals out are on it including any fast food meals. It's hard to lie to yourself about where the money goes when the statement shows it so clearly. About 6 weeks ago I called them to have my earnings sent to me in the form of a substantial check that was deposited in the bank. So used properly, a credit card is a good financial tool. If I had to give the card back tomorrow, I'd be fine financially, because I never put anything on it that isn't already budgeted for.
I have a credit score of 815, have waaaayyy too much available credit for most folks, am buying a home that is a stretch for me, but is paying off for me even with all the hype about home prices. Although I don't have as much equity in it as I did a year ago, it's still excellent. Life is my kind of good but I don't live like Hollywood.
And the shocker of all shockers is that because of a bad illness, from which I will never fully recover, I can no longer work. I now live on 40% of what I made before getting ill. At one point in the early days of being ill, I was what I call elegantly homeless. I owned (and owed on) 2 homes, but couldn't afford to live in either. I had an old motorhome that I lived in in parking lots and on streets. What a frightening time. But I came through it very, very strong and with a real testimony of what I can do when I put my mind to it.
The common thread running through all of this is that we live within our means, using whatever tools we need to use in order to discipline ourselves.
To me this is the most important aspect of any potential long-term relationship. The idea of being with someone who isn't financially disciplined is foreign. He can be someone who takes huge business and investment risks as long as the basics are covered. He wouldn't have to live poor, although it's been my experience that some of the richest people I know live quite frugally and simply. And they are so much happier than people who have to constantly fret about money, keeping up with the Jones' and trying to do everything for show, for the image, the Hollywood life.

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