Another Dave Ramsey Thread | TigerDroppings.com

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HoLeInOnEr05
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Another Dave Ramsey Thread


So i bout his book Total Money Makeover. I was just wondering if any of you have actually tried his concepts, and if so, how aggressive did you attack the goals? So far, I have read through the first two steps. I like what I have read, and everything makes sense, but it would take a huge overhaul of our personal finances, and lives to start doing this.






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wegotdatwood
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Member since Aug 2009
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re: Another Dave Ramsey Thread


What's your situation?


I think Will Cover has.






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jso0003
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re: Another Dave Ramsey Thread


Huge overhaul in what way?

If you have credit card debt, then yes attack it in the way he suggests.

If you have a 30 yr mortgage at 3%, then no don't liquidate all investments to pay extra on it.






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Double Oh
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re: Another Dave Ramsey Thread


List your debts and I mean every debt you have and then we will tell you what you need to do.




"Rice and beans and beans and rice"






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matthew25
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Member since Jun 2012
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re: Another Dave Ramsey Thread


I'm about the same age as Dave, and have been doing what he says even before he wrote the book. But I didn't have to endure bankruptcy.

I do have a mortgage, 30 years at 2.7%. No other debt. I pay cash for cars on ebay and get 8 years out of them. Don't see any reason to cash in my mutual funds to pay off mortgage.






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HoLeInOnEr05
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re: Another Dave Ramsey Thread


Wife and I are going to sit down tomorrow and arrange our debt from least to greatest. The only large debts we have besides mortgage are her student loans 21k, and my tahoe, about 16k left. The rest are just small crap, except for some land we own, which owe about 7k. Other than those three things, everything else is less than a grand each, but there might be a lot, as we are trying to work on my credit (I was a dumbass between the ages of 18-24.) I am currently back in school, and don't have a full time job. I umpire high school baseball and travel ball, and also work for my father-in-law. Our bring home pay is about 4500 a month. Our monthly expenses run about 1200 a month, including a baby sitter. We are staying in her grandparents old house, so we don't have a monthly payment.





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Double Oh
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re: Another Dave Ramsey Thread


quote:

Wife and I are going to sit down tomorrow and arrange our debt from least to greatest. The only large debts we have besides mortgage are her student loans 21k, and my tahoe, about 16k left. The rest are just small crap, except for some land we own, which owe about 7k. Other than those three things, everything else is less than a grand each, but there might be a lot, as we are trying to work on my credit (I was a dumbass between the ages of 18-24.) I am currently back in school, and don't have a full time job. I umpire high school baseball and travel ball, and also work for my father-in-law. Our bring home pay is about 4500 a month. Our monthly expenses run about 1200 a month, including a baby sitter. We are staying in her grandparents old house, so we don't have a monthly payment.







Im confused. You say you have a mortgage but live in grandparents old house with no monthly payment. Is the mortgage on the land you owe 7K on?


1-Sell the car and buy a 3K car with cash. Im assuming your car note is around $500 a month so that will free up an extra $500 to put towards debt.

2-You have an extra 3300 a month to put towards debt which is good. Pay the smallest one off and work your way up.

3- Can you pick up a job waiting tables at night? That's good money with the tips.






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Double Oh
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re: Another Dave Ramsey Thread


When I read the book all I we had left was her car payment and mortgage. Paid the car off early then we attacked the mortgage. We didn't have any other debt beside those 2. We sold our house and moved into another house and paid cash for it $160K. We used a lot of our savings to buy the house but we have replinshed the savings since then. And that's with 2 kids in private school. And we just bought kid a used car and paid cash for it.



You got a nice income and can do this easily. Just have to cut your lifestyle and get rid of that 16K car. You can pay that student loan off in 6 months if you get intense.



This post was edited on 8/14 at 12:37 am


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NC_Tigah
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re: Another Dave Ramsey Thread


quote:

If you have credit card debt, then yes attack it in the way he suggests.

If you have a 30 yr mortgage at 3%, then no don't liquidate all investments to pay extra on it.

+1






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trident
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re: Another Dave Ramsey Thread


we followed Dave to the tee and got out of 35K student loan debt and about 5k credit card debt in 18 months. It is a lot of hard work and dedication but it has paid off. We decided to get rid of our debt before we had a kid and we were successful

the debt snowball works really good. Stay focused






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HoLeInOnEr05
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re: Another Dave Ramsey Thread


And I forgot to mention that our mortgage is for a house in North Carolina that we couldn't sell. We are renting it now for the full mortgage payment. As far as credit card debt goes, we have $356 worth. That's it! I will try to post an itemized breakdown tonight.





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Ace Midnight
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re: Another Dave Ramsey Thread


All of the principles are sound, especially for people who are prone to get into trouble with budgeting and borrowing.

Even if you do not buy into his "12%" mutual fund return assumption (because I don't), everthing else is sound. There are people who will come in and say, "Why pay off the house or car when the money is essentially free?" And those people are right - for people who do not have trouble with money in the first place and don't need the debt snowball/no more debt method. But for many people, if you stumbled across TMM or FPU, your life will be improved by following it as closely and as aggressively as you can.

Watch his "drive free, retire rich" video for an example of how powerful it can be to have your money work for you, and pay for something before you buy it, rather than the other way around.



This post was edited on 8/14 at 8:36 am


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Ace Midnight
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re: Another Dave Ramsey Thread


quote:

If you have a 30 yr mortgage at 3%, then no don't liquidate all investments to pay extra on it.


That's not a fair characterization of what his method proposes. You're talking about Step 6. He does not advocate selling things to pay off the mortgage - he encourages refinancing into a 15 year, and only after your emergency and rainy day funds are full, 15% going to retirement, all other debt retired, etc., that you pay EXTRA on the 15-year mortgage.

Please familiarize yourself with what you're shooting at before you demonstrate what you don't know.

The Seven Baby Steps






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Ric Flair
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re: Another Dave Ramsey Thread


quote:

as credit card debt goes, we have $356 worth


you can't write a check for this and be done with it? or is this just your monthly balance?

Whatever interest rate is higher b/w student loan/land/tahoe, throw an extra grand a month toward it. If they're about the same, start with the land to get that paid off due to the positive psychological/motivational effects.






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XanderCrews
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re: Another Dave Ramsey Thread


Ace Midnight

Im not flaming this is a serious question.
I have friends that follow DR to a tee and we argue about paying of the mortgage. Why would you not just put the money in savings acct that you would be paying into the house. In my eyes you are tying that cash up into a mortgage when your not real sure you can get it back out.

And if you really want to do it maybe pay every year? I understand you cost yourself interest, throughout the year.

Caveat: Stay in theis house forever vs Not sure.






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Ace Midnight
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re: Another Dave Ramsey Thread


quote:

Why would you not just put the money in savings acct that you would be paying into the house.


I could see the logic of this, IF the savings account paid a higher rate than you're paying on the mortgage. However, something is going to come up to pull on that money. Again, if you are the kind of person that doesn't need the debt snowball, you probably don't need Step 6, either. What Step 6 does is reduce the total amount of interest you pay on the mortgage - if you can do it another way, do it another way.

The point is - some people have a $1500, $2000, $2500 mortgage - imagine what you could do with that money - every month - if you didn't have that mortgage payment?




This post was edited on 8/14 at 8:30 am


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XanderCrews
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re: Another Dave Ramsey Thread


quote:

Again, if you are the kind of person that doesn't need the debt snowball, you probably don't need Step 6,


agreed






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NC_Tigah
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re: Another Dave Ramsey Thread


quote:

"Why pay off the house or car when the money is essentially free?" And those people are right -
No they aren't. House and car are separate debt issues. Unless the car is funded through a HELOC, lumping them together as similar makes no sense.
quote:

Please familiarize yourself with what you're shooting at before you demonstrate what you don't know.
quote:

Pay off your house early Now it’s time to begin chunking all of your extra money toward the mortgage. You are getting closer to realizing the dream of a life with no house payments. As you attack this last debt, you will gain momentum much like you did back in the second step of the debt snowball. Remember, having absolutely no payments is totally within your reach!
In a low-rate environment, with inflation on the horizon and given any degree of investment savvy, paying off a tax-deductible low-rate mortgage is not good strategy. That is what was correctly pointed out earlier.






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Ace Midnight
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re: Another Dave Ramsey Thread


quote:

That is what was correctly pointed out earlier.


No - the guy suggested that Dave says to liquidate things to pay of the mortgage early. That was a mischaracterization.

Again - if you don't need the debt snowball, you don't need Step 6. If you got into trouble with money (many of us have), then paying off the mortgage a year or two (or three) is going to help much worse than it will hurt.

Step 7 is "Build wealth and give" - skip the give part if it doesn't suit you, but clearly he intends that mortgage payment to go into savings and investment. Yeah - that's just "crazy" talk...






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HoLeInOnEr05
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re: Another Dave Ramsey Thread


quote:

Whatever interest rate is higher b/w student loan/land/tahoe, throw an extra grand a month toward it. If they're about the same, start with the land to get that paid off due to the positive psychological/motivational effects.


Ramsey says to start with the smallest debt, and work your way up. I assure you, none of the above mentioned is our smallest debt.



This post was edited on 8/14 at 8:56 am


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