Dave RamseyT

[Newby]

I pay cash for everything too. I just put it on a credit card that gives me cash back and pay it off the next month. Never carry a balance. Every few days I take my receipts and enter them in my Quicken program. I compare what I've spent to my monthly budget. If it's getting close, I stop spending. Frankly, I think carrying around so much cash isn't wise. What if it's stolen? What if you lose it? Not me. I'll stick with cc and debit cards.

Many people perceive Dave Ramsey as a financial adivisor (with no credentials I might add). I perceive him as a niche player. Tell people how to get out of debt and not go back in to debt and charge them for the advice. I gotta tell ya. It's elementary. I have never carried a balance on a credit card and lived within my means. Rarely have had a car note and if I do it's paid off very quickly (unless I can leverage). It doesn't take a rocket scientist to know that if I spend more than I bring in, I will go in to debt.

The house thing really annoys me too. I have a 5.25% house note. There's no way I'll be paying it off. It's cheap money. I can take the extra I would pay on it and put it in something else that pays at least that. BTW, I don't think I'm in debt if my net worth is positive. If I have the money sitting in the bank to pay off the house, then it's the same as if I paid it off. With one exception, I don't have to borrow it out if I need it.

Anyone that says to NEVER buy permanent life insurance is not only ill-informed, but giving out very bad advice. Every person's situation is different and he has people cancelling their permanent insurance and buying term. Whenever I listen to him I wind up laughing at his ill-conceived advice. Stick with the get out of debt advice and leave it at that Dave.

Couldn't have said it better myself. Except maybe the paying off the house thing. Just something I'm more comfortable with.

What you are saying about net worth being the only thing that matters is the key. It's not a matter of whether eveything IS paid off...what's important is that you have the funds there to pay it off IF you need to.

If people can't control their spending with credit cards, I think a better choice than cutting up their credit cards forever is to get help for their depression. I think most people with out of control spending are trying to fill a void in their personality and they need to address the real problem and become healthy. Not just put a crutch on a symptom.

 

[Crabcake Johnny]

Very true. Credit card companies act like the owner of an all you can eat buffet targeting fat people and telling them to come in and eat all they want and pay a year later.

Some laws need to be written regarding college kids. I've had three nieces graduate college so far and all of them commented on the insane level of credit card offers with unjustifiably high credit limits. I think credit card companies need to take some responsibility for giving a 22 year old a $5,000 credit limit at 24%. The buried in the fine print is when you miss a payment it's now 62% compounded hourly and $49 late fees.

 

[trvlnut]

As a society alot of people think of themselves as victims instead of taking personal responsibility. I think it's easy to blame cc companies. I don't subscribe to the idea that people can't control their spending. I think they choose not to. For those that choose not to control their spending, then using cash is about the only way I guess. Is it hard? Yes. I wish I could go out and buy all kinds of stuff, but I don't because eventually I'll have to fork out the money. BTW, I get the same high that those who spend $ freely when I spend. Hey, it's fun to buy new stuff.

I had a credit card since I was 17 or 18. I think only once did I not pay the balance off every month. I knew (as does everyone else) that I would eventually have to pay for what I put on the card. If I waited, I would pay more. Since I always like to get the most for my money, I never pay interest on my cc.

I agree that the home loan is a personal decision, but I still won't pay mine off unless I sell and move. This is a financial vs. an emotional choice. Paying off the home was very popular in the early 1900s because the bank could demand payment of the entire note. As a result, most people tried to pay off their notes quickly. Most notes weren't called until the depression when the banks were panicking. Obviously we don't have to worry about that now.

Newby-
To me if I have enough cash to pay off my home, then I am essentially debt free. If I pay off my mortgage with that money, then my opportunity lost is the difference between my mortgage rate and what I can get for the extra payments if I invested them in another vehicle.

 

[CHAS.R]

Newby-
To me if I have enough cash to pay off my home, then I am essentially debt free. If I pay off my mortgage with that money, then my opportunity lost is the difference between my mortgage rate and what I can get for the extra payments if I invested them in another vehicle.

Well Said.
It's the old "swimming pool" philosophy. Incoming vs outgoing...