Dave Ramsey

[RakuraiTenjin]

Who listens to Dave Ramsey? I've been following his financial system for a couple months now but still find it hard to avoid credit at times. Been pretty strict though lately. Paid off about $10,000 in debt that was quickly racked up (accumulated in about 3 years) and have about $6000 to go until completely debt free, besides my home's mortgage.

I'm trying to double my income right now and hopefully will be able to do so within the next couple months. If so I'll be able to make a double mortgage payment and HOPEFULLY pay off the house in less than 10 years, but I will probably not always allocate that money to a double payment. It's just too tempting lol!

http://www.daveramsey.com for those who have never heard of him before.

I notice a lot of people on creditboards.com hate on him, due to his advocating a complete lack of credit. I agree with him but can understand the want to maintain a high credit score to avoid paying deposits and such.

 

[Krynn72]

So you've come back from a long hiatus to be an adbot?

People who are afraid of credit are annoying. People who let themselves rack up 10 grand in credit card debt are just dumb.

I've had credit accounts for a couple years now. One is still at a 300 dollar limit, which I never hit because I pay most of it off every month, the other has $800 limit which I've barely gone over 50% of that at any point. I don't see why you wouldn't use credit if you just understood that it wasn't free money, just a convenience. Which is easier than understanding that 2+2=4 to be honest.

 

[RakuraiTenjin]

Oh whoa no no not all credit card debt. All debt, including credit card, loans, vehicle notes, etc etc. Probably should've clarified.

I'm alright with using the paid in full system monthly, but may as well not even use credit then. I'm just tired of usury in general and I'm leery of even mortgage debt. Not enough people can be responsible with it in today's world. For every one that's responsible, there's two that aren't. And that has consequences for everyone, just look at the mortgage crisis. We all see what government forcing lenders to loosen lending standards and requirements resulted in. I just feel less credit over all is a good thing.

Cash is king in my world nowadays.

 

[Raziaar]

Who are you, my uncle?

 

[KiplingsCat]

What is David Ramsay? What is credit?

 

[dfc05]

I've never had credit card/loan debt, but then I've never been in a situation where I needed to take out a loan, so I can't really judge.

One of my friends had to get loans to pay his own way through college, and now through med school, which is maybe 5 or 6 more years of loan debt? I feel pretty bad for him sometimes, like I don't even know how he manages to eat or pay rent. Just seems like a really crappy and unavoidable situation. I never understood why his parents didn't help pay for his college; I'm sure they could've.

[edit]On topic, no clue who this Dave Ramsey guy is, but if someone really has issues managing credit cards, then yeah they should just avoid using them altogether. It does make you a lot more conscious of what you're spending if you pay for things using cash or checks. Especially if you use online checks, where your balance is very obviously displayed in front of you.

 

[Escaep]

What is credit?

I think it's those things you get at arcades.

 

[KiplingsCat]

I think it's those things you get at arcades.

I'm not overly familiar with the chewing-gum-stained world of arcades either. From reading the thread, I gather it's money owed, right? I have it too then. I've never had any problems with taking out loans and owing money. It's just a fact of life, I guess.

 

[Stigmata]

Credit is basically imaginary money from the future.

 

[KiplingsCat]

Credit is basically imaginary money from the future.

That sounds AWESOME.

 

[Stigmata]

It's actually really terrible. Money is supposed to represent real value, and the future isn't real.

 

[Quixoticism]

I completely agree with you Stigmata. How you describe it is perfect too.

I like Dave Ramsey and what he's doing. Most people are stupid with their money because they aren't taught to be responsible with it. I know I wasn't, but I'm sure I got more teaching than lots of people. He teaches good money management and staying out of debt. I like freedom and debt is financial prison.

 

[RakuraiTenjin]

Credit is basically imaginary money from the future.

Haha, this forum needs a like button for posts. Good way to put it.

 

[dfc05]

OK you guys are getting a little extreme now.

(1) Figure out how much money you make a month (hopefully you know this)
(2) Subtract what your rent and utilities cost
(3) Don't spend more than that. If you have trouble keeping track of what you spent, check it online.
...
profit

It really doesn't take a genius.

 

[Quixoticism]

But that's assuming you're only planning for now and not thinking about what you want for your future. While it's unwise to take money from the future, it's stupid not to save money for it.

 

[dfc05]

But that's assuming you're only planning for now and not thinking about what you want for your future. While it's unwise to take money from the future, it's stupid not to save money for it.

That's very true. I'm just thinking of basic credit card debt. Ideally you would pay your bill and save!

 

[Stigmata]

I'm not saying credit is impossible to utilise. I'm saying its effects on society are toxic.

 

[Krynn72]

I'm not saying credit is impossible to utilise. I'm saying its effects on society are toxic.

Only because society doesn't know how to utilize it. Preaching the abandonment of credit is merely treating a symptom.

 

[Stigmata]

Of course. The sickness is greed. Credit's just a widespread, culturally-mandated (at this point in society) manipulation of that.

 

[RakuraiTenjin]

OK you guys are getting a little extreme now.

(1) Figure out how much money you make a month (hopefully you know this)
(2) Subtract what your rent and utilities cost
(3) Don't spend more than that. If you have trouble keeping track of what you spent, check it online.
...
profit

It really doesn't take a genius.

If only Congress could do this!


But I think the problem most people run into is they don't have an emergency fund set up, and when that car repair or other large figure bill comes around they borrow to cover it. Then pay back at a minimum rate. This inevitably happens again, and they borrow more. Etc. This isn't so much to people that are running a budget deficit (which means a bankruptcy is soon coming) but rather those that are tired of being slaved into debt paymentsm, even if those debt payments are still within their monthly income allowance.

 

[Eejit]

I'm not saying credit is impossible to utilise. I'm saying its effects on society are toxic.

Well, mostly. It's still usually essential for property and often car purchases. Mortgages in particular are pretty healthy, they stop everyone being buttraped by landlords while trying to save up for a house their entire life.

 

[RakuraiTenjin]

It really only takes about 5-10 years to save up for a house cashmoney if you really go hard. *Says the man with an underwater mortgage*

 

[Sulkdodds]

I am interested in the term 'underwater mortgage' but I fear it does not actually mean you live under the sea.

Anyway, I'm very excited about dealing with debt and suchlike, as this year, I will have plenty. Teach me to do a postgraduate course. The idea of minutely budgeting my next year and providing myself with decent margins for different purposes etc etc etc is somehow intensely alluring.

 

[RakuraiTenjin]

I am interested in the term 'underwater mortgage' but I fear it does not actually mean you live under the sea.

Anyway, I'm very excited about dealing with debt and suchlike, as this year, I will have plenty. Teach me to do a postgraduate course. The idea of minutely budgeting my next year and providing myself with decent margins for different purposes etc etc etc is somehow intensely alluring.

It means you owe more on your mortgage note than the land/house collateral is actually worth. So selling the property in order to pay off the remainder of the loan is not an option. Only three options in that case: foreclosure, short sale, or continuing throwing money at it.

In my case my mortgage was underwater almost immediately after buying. I got in at $135,000 and now the property is worth around $95,000

I'm continuing to throw money at it because it's not TOO DEEP underwater. I can expect the value to rise back to positive again in the next 10 years or so before I'm done with it. Time/Patience + Money = Profit

 

[Eejit]

It really only takes about 5-10 years to save up for a house cashmoney if you really go hard. *Says the man with an underwater mortgage*

Oh hey that's a worthwhile statement, it's not like wages and property values vary hugely.

 

[RakuraiTenjin]

Oh hey that's a worthwhile statement, it's not like wages and property values vary hugely.

Going hard means getting a quality wage, too.

But yes you're right about house values. I live in Arizona where you can get a nearly 3000 square foot house for about $150,000-$175,000 nowadays. A more modest house size like 1200 square foot goes for $50,000-$70,000.

 

[CptStern]

hahah you couldnt buy a garage for $150k in toronto. average price is $450K and that gives you a shitty house in a not so good neighbourhood

It really only takes about 5-10 years to save up for a house cashmoney

in backwoods arizona. when you're paying $1200/month for rent, saving for a downpayment can be next to impossible. on a $400K house that's 20K for a first time buyer

 

[RakuraiTenjin]

hahah you couldnt buy a garage for $150k in toronto. average price is $450K and that gives you a shitty house in a not so good neighbourhood



in backwoods arizona. when you're paying $1200/month for rent, saving for a downpayment can be next to impossible. on a $400K house that's 20K for a first time buyer

No, these are prices in Phoenix, AZ (4.2 million people in the metro area.) 5th largest city in the USA.

And that's insane. Why would you want to live somewhere so expensive? It's up to them if they want to continue living there. If the cost of living in Arizona skyrocketed that high I would move. 450k here gets you essentially a modest mansion.

 

[Krynn72]

No, these are prices in Phoenix, AZ (4.2 million people in the metro area.) 5th largest city in the USA.

And that's insane. Why would you want to live somewhere so expensive?

Because Vancouver is like a quadrillion times better place to live than anywhere in shitty Arizona. Anywhere I've lived that had such low housing prices has always been shitty places. And I don't mean the structures but the area. I was renting a nice two bedroom duplex for $450/mo. in Louisiana and northern Louisiana is easily the most boring, terrible location I've ever lived. You don't pay for the structure, you pay for the location.

 

[CptStern]

No, these are prices in Phoenix, AZ (4.2 million people in the metro area.) 5th largest city in the USA.

And that's insane. Why would you want to live somewhere so expensive? It's up to them if they want to continue living there. If the cost of living in Arizona skyrocketed that high I would move. 450k here gets you essentially a modest mansion.

why would anyone want to live n manhattan or paris or london etc? toronto is a world class city and the cultural centre of canada. why would anyone want to live anywhere else? and our wages are higher on average than americans. also we never had a real estate crash in fact prices went up not down. my house is worth almost $200K more than it was 4 years ago

Krynn: average houses in vancouver are around $800K however the outskirts are much more reasonable. it also has one of the best standards of living in the world so people are willing to live with the high price of housing

 

[RakuraiTenjin]

Because Vancouver is like a quadrillion times better place to live than anywhere in shitty Arizona. Anywhere I've lived that had such low housing prices has always been shitty places. And I don't mean the structures but the area. I was renting a nice two bedroom duplex for $450/mo. in Louisiana and northern Louisiana is easily the most boring, terrible location I've ever lived. You don't pay for the structure, you pay for the location.

Arizona is great, you're ridiculous in comparing Louisiana (deep south) to Arizona which is a Western state. The Western states have a great quality of life and are considered great places to live.

The only thing to complain about in Phoenix is the decimated construction industry and the heat. If, like me, you're fine with and accustomed to temperatures like today's (110F which is 43.33C) then it's wonderful.

 

[Raziaar]

You think 110 is great? You're inhuman.

 

[RakuraiTenjin]

110 is hot but it's easy to deal with. The tradeoff is the rest of the year is absolutely beautiful. I can actually enjoy all of spring, fall, and winter with perfect temps for outdoor activities. No giant winter coats here, no snow, no frozen pipes. I dont even know how to drive on ice or snow nor did I even ever learn what snow chains for tires were till very recently on a trip to northern Nevada.

 

[Krynn72]

Winter is awesome, so I consider that a negative. But I was more referring to the population and density of people. People are what make life interesting, and Arizona, with an average of like 55 people per square mile, sounds ****ing boring as ****. Maybe there's a few decent places to live, but as a state on the whole there's hardly anybody around. Compare that with where I live, in Connecticut, where there's an average 737 people in the same area. There's naturally going to be more interesting stuff going on due to the massive variety of people and interests covering every part of the state. Even Louisiana has more people per area (almost double), and it sucked how there was nothing to ****ing do, no places of interest anywhere except in New Orleans.

 

[RakuraiTenjin]

Winter is awesome, so I consider that a negative. But I was more referring to the population and density of people. People are what make life interesting, and Arizona, with an average of like 55 people per square mile, sounds ****ing boring as ****. Maybe there's a few decent places to live, but as a state on the whole there's hardly anybody around. Compare that with where I live, in Connecticut, where there's an average 737 people in the same area. There's naturally going to be more interesting stuff going on due to the massive variety of people and interests covering every part of the state. Even Louisiana has more people per area (almost double), and it sucked how there was nothing to ****ing do, no places of interest anywhere except in New Orleans.

You gotta consider the actual size of our state and what metro area you're in. Yeah, if you live in say "Nothing, Arizona" (An actual town) then you're gonna be miserable. If you live in the metro areas of Phoenix, Tucson, or Yuma you're in massive cities that are known around the globe and you'll never be bored.

Look at it this way: the ENTIRE state of Connecticut only covers 5,543 sq mi. The METRO AREA of Phoenix covers 16,573 sq. mi. with 252.9 people per sq. mi. The city of Phoenix proper (within city limits of PHX only) has 3,071.8 people per square mile!

 

[Krynn72]

You gotta consider the actual size of our state and what metro area you're in. Yeah, if you live in say "Nothing, Arizona" (An actual town) then you're gonna be miserable. If you live in the metro areas of Phoenix, Tucson, or Yuma you're in massive cities that are known around the globe and you'll never be bored.

Look at it this way: the ENTIRE state of Connecticut only covers 5,543 sq mi. The METRO AREA of Phoenix covers 16,573 sq. mi. with 252.9 people per sq. mi. The city of Phoenix proper (within city limits of PHX only) has 3,071.8 people per square mile!

So the state of Connecticut, being ~800 sq miles smaller than Phoenix's Metro Area, still has more than double the population? And the city of Hartford proper (within city limits) has more than double the population of Phoenix proper? Well, thanks for proving my point!

 

[RakuraiTenjin]

So the state of Connecticut, being ~800 sq miles smaller than Phoenix's Metro Area, still has more than double the population? And the city of Hartford proper (within city limits) has more than double the population of Phoenix proper? Well, thanks for proving my point!

My point was that there's still awesome lifestyles to be had here. You were factoring in hundreds of miles of empty desert with 0 population into your numbers about Arizona. When you just take in the metro areas where people actually live and is considered "Arizona" (living wise) then you see its not a boring emptynessas you implied.