re: Rains it pours. Ramsey debt snowball and a dead air conditioner. Updated page 3

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We bought a shitty truck last. I hate the thing but the wife loves it. I honestly think we'd be upside down on that bastard.

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Sorry if I came across as an arse, but it pisses me off. I say this as well meaning as possible:

If you don't straighten up and get your shite together, you are going to be a burden for your children.

One of those vehicles needs to be for sale by the end of the day. That will knock out your emergency fund. At that point, you need to go through your garage and clear out stuff that you don't need like Yeti coolers, sports equipment, expensive hobby shite, etc. You can probably pay for the AC repair by selling crap you don't need.

After you do that, you need to do whatever it takes to get rid of all of the consumer debt as soon as possible. I don't agree with all of Dave Ramsey's teachings, but he is right on credit card debt. It is a deadly killer. Beg, borrow and do whatever it takes to get rid of it. Your kid might not be able to play travel baseball this summer, or you might not be able to take the beach vacation. I promise you, you will look back on those sacrifices and be thankful.

I have counseled people with $75k incomes with $60k in vehicle debt that take extravagant vacations and put their kids in everything available. Then they freak out over a $1200 auto repair bill. That's not how life is supposed to be. Not saying those unexpected expenses shouldn't suck, but they shouldn't be a burden.

The advice that you can get on this particular board is honestly as good as anywhere. Look at the retirement account return board. Sure some people could lie, but if they were going to lie, they'd probably be saying north of 20% rather than the solid 9-12% that most people are getting. People here know their shite.

Get in your garage and start selling stuff you don't need. You'll be surprised - most people have $1000 or more in crap they don't use at all just taking up space.

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Going after next bill constantly. On top of the snowball payment. Make frequent payments toward it. For example, every meal we eat at home and not out (IMO our worst offense) kick $20 to the card we are going after. If not we will waste the money.

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Personally, I would go after the higher interest first. However, some people do much better at staying motivated and focused if they attack the smaller total first and snowball upon it because they get the feeling they're making progress.

In order, here is how I would do it:

1. Make a monthly budget. Go into detail on how much "blow" money (if any) you want you and your wife to have and how much you want/need to spend on entertainment and clothing. Then I'd do a grocery fund and set aside how much (if any) you're willing to spend on eating out each month.
2. The FIRST thing you should do as soon as you get paid is put the amount you plan to save in a different account so you won't touch it. This will build up quicker than you realize and help you be able to cover emergencies like the one in the OP.
3. Line your debts in ascending order. Go after the smallest one. When you pay it off, then snowball it.

it takes discipline, but I find for people who have difficulty being disciplined in savings, it's much easier to save by paying yourself first to a different account. Just treat it like a bill. If you take the attitude of "oh, I will do that later this month and move it over to savings" it will NEVER happen.

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Except the higher interest that is all Ramsey? Right?

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Ramsey is about "small victories." If you need that motivation, there is nothing wrong with it. However, going after the higher interest at first is mathematically the best option.

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Ramsey is about "small victories." If you need that motivation, there is nothing wrong with it. However, going after the higher interest at first is mathematically the best option.

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This. Like I said, personally I'd rather go after the higher interest first.

But people sometimes need those small victories to feel like they're making a dent or else they'd give up.

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A home-owner should always have at least 6 months of mortgage payments in reserves in addition to 2-3 grand in the bank.

I believe mortgage companies should make it a requirement to pay at least 10% down, show proof of 6x the mortgage payments in savings, and a obviously good credit.

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This is just stupid. Owing a home if the same size compared to renting is far more beneficial and most people can afford it. So you dont have 6 months in savings, who gives a shite. You lose a job you'd be on the street anyway if you were renting.

My wife and I got a home with next to nothing in our account. Cheaper than rent and a bigger place. Now we have tons of equity, are HAPPIER, and have money saved.

To think of throwing away years of rent. LOL

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y wife and I got a home with next to nothing in our account. Cheaper than rent and a bigger place. Now we have tons of equity, are HAPPIER, and have money saved.

To think of throwing away years of rent. LOL

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So you were 1 missed paycheck away from missing your mortgage payment? Who picks up the tab when you miss? Do you think money just appears out of thin air?

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Pretty much his target market. Rather than doing a decent job preaching to everyone he does a great job preaching to half the country. Dude has a system that works and he's running it all the way to the bank. The open/shut stances are just a way of clamping down on the people he's targeting.

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Agreed. For at least half (I'd say closer to 80% IMO) Ramsey's advice would be the best thing they could do with money. Most people aren't investing/trading wizzes or people who will start a business. The only reasonable personal debt (not a business) for the average Joe is to have is a home loan. Credit card debt, small loans, car loans, etc are the bane of most Americans. All they are doing is kicking the can down the road as far as payments go.

The biggest thing I hate about auto loans is the second a person drives the car off the lot, it loses 20 to 30% of its value. Now a consumer has a loan that costs more than the auto is worth, and the total loan principle will likely be more than the auto is worth for the life of the loan.

Also, don't get me started on the 7 year loans I'm starting to see pop up for cars.

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It would be just as irresponsible of a purchase with cash.

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From the standpoint of not having to worry about a car note if a cash crunch/emergency occurs I don't agree.

From it being a poor investment I do agree. Unless a person drives a car for at least 7 years (preferably closer to 10 years) buying new is a waste of money.