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VAL0R · Mar 17, 2018

Consider that we have a limited number of years of labor we can give in order to accrue wealth for our lives, our retirement and our children's futures. Yet we often spend many of these years in financial frivolousness and are left with little to show for them. I was listening to famous debt-free apologist Dave Ramsey on the radio and he really made a strong case for striving with great effort to rid ourselves entirely of debt. He argues that once we are free of the chains of debt and endless payments to nowhere for "stuff we don't need to impress people we don't like," we can have true financial freedom. Freedom to assist our children in ways, perhaps, our parents could never assist us. Freedom to give more money to charity and community without hesitation and so on.

I started making debt free goals and plans:
- We refinanced our 30 year mortgage from a fixed 3.75% interest to a 15 year at 3.25%. This single move saves us more than $100,000+ in interest alone over the course of the loan's life!!!
- We paid off our 12 seater van (Catholics, lol) early and now have $440/month back in the till to use against other debt
- I hope to have the PMI removed from my mortgage within 5 months (by establishing a 80% debt to assessed value ratio). This puts another 75$/month in the till.
- I'm considering my options for attacking our combined ~$30,000 college debt (The biggest and last non-mortgage debt I have had for almost 20 yeeears. When this is paid I shall have a party with feasting and merriment.)

My (somewhat ambitious) extended goals:
- Become debt free of all non-mortgage debt sometime 2020-2021. (College loans gone would be another $200/month back in the till.)
- Become 100% DEBT FREE by 2030 (Mortgage gone would be a whopping $2,200/month back in the till!)

I don't want this thread to be just about Dave, but because I'm mentioning Dave, I'll give a link to his site and method here:
https://www.daveramsey.com/baby-steps/?snid=start.steps. And his YouTube channel here: https://www.youtube.com/user/DaveRamseyShow.

So GAF, is it time for you to cut up the nasty plastic cards, pay off debts and get in control of your financial life? Share you stories and successes here!

Hulk_Smash · Mar 17, 2018

Love Dave Ramsey. Just went through Financial Peace University and learned a lot. I know some don’t like his strong Christian emphasis but look past that if you must because he has some great words of wisdom.

As far as debt, been debt free for a while bit just got back into debt thanks to my wife going back to school. But that student loan is it. No other debt. The best thing about getting out of debt is the hope it brings. Hope that you can actually have a retirement and go on those trips you always wanted to take.

Corrik · Mar 17, 2018

Easier said than done. Basically the answer to not having debt is to have more money which you wouldn't have if you had more money.

Like, if I could pay my mortgage off in 10 years I would. But, I do not have the money to do so.

VAL0R · Mar 17, 2018

Hulk_Smash said:
Love Dave Ramsey. Just went through Financial Peace University and learned a lot. I know some don’t like his strong Christian emphasis but look past that if you must because he has some great words of wisdom.

As far as debt, been debt free for a while bit just got back into debt thanks to my wife going back to school. But that student loan is it. No other debt. The best thing about getting out of debt is the hope it brings. Hope that you can actually have a retirement and go on those trips you always wanted to take.

You got the mortgage paid off? Excellent!

As a serious Roman Catholic I like Dave's Christian ethic intermingled with his financial advice, but I could see how that could chafe zealous atheists. Dave's also pretty unapologetically politically conservative. Again, like myself, but he doesn't emphasize that too much.

VAL0R · Mar 17, 2018

Corrik said:
Easier said than done. Basically the answer to not having debt is to have more money which you wouldn't have if you had more money.

Like, if I could pay my mortgage off in 10 years I would. But, I do not have the money to do so.

Well, I think you are oversimplifying the big picture. A ton of personal debt, especially in wealthy nations like the US, is self inflicted. I work with a guy who just bought a $70,000 truck! He could have paid cash for a $5,000 used pickup instead. But he wanted the giant, awesome, manly, shiny, behemoth and he got it. That's 70k of debt he has to eat (plus interest!), that was a want and not a need. People buy unnecessary crap with credit cards all the time and bury themselves alive.

But even people with modest incomes can be debt free. Dave has seen thousands of success stories on this front. The average American income is what $40-50k annually? These homes can be debt free.

Phoenix RISING · Mar 17, 2018

Sigh. There are many reasons that people take on debt. What one considers a want, is a need in other cases. For example, my wife does business with Fortune 500 companies. I can't have her rolling around in a 1999 Camry, so I bought a Genesis.

I like Ramsey's methodologies for getting out of debt, but I detest his "rationale" as to how people get into debt. Just like the symptom, the solution is also not one-size-fits-all.

Stuff like snowballing the credit card, percentages of income to savings, percentages of income to housing, cash in envelope system, are all good. But 90% of America need financing for a car, house, college.

My wife and I are currently living comfortably to the point where I don't have to even check the bank account when we slurge, and that's with 3 kids. However, I'm praying that a soft hint someone dropped to her during her business affairs, that she will be able to secure a job that will make the equivalent of our current combined incomes.

We have about 50k in college loan debt (mostly me because of grad school) and could have it paid off in a year versus 20+ or whatever plan I'm on.

synchronicity · Mar 17, 2018

It's funny. We're all (the absolute vast majority, 99%) enslaved by money, yet we all continue to seek it, as a necessity. If people really wanted to break free from their shackles and give a powerful middle finger to the man, they'd quit using money altogether.

How would that work? Beg, borrow, trade, steal (not that I endorse the practice). Sure society would collapse, but those who rule us would be rendered totally impotent in the chaos. (And then new corruption and enslavement could emerge.

)

Woffls · Mar 17, 2018

My credit card debt gets cleared every month and all I get from that is benefits. Only other debt is a student loan which... well I could pay most of it off now, but I would need to spend a fair few extra years saving to buy a property.

If I am to avoid debt entirely then I shouldn't buy a property anyway, but paying a third of my income for a bedroom for the next 20 years (until I inherit a property) is not my idea of freedom.

And using a debit card for payments is a high risk for the funds in that account. Credit cards will cover you for fraud etc.

cubicle47b · Mar 17, 2018

Is it time to cut up my credit cards? No, I get 1.5%-5% (Amazon) cash back with those cards and never have to go to the bank or an ATM or carry around cash. Time to pay off my car loans in advance? No, I have 0% interest on one and 1.9% interest on the other (my wife's car). Even if that money isn't going into a tax-advantaged account I'm still going to do much better if I invest it. Our house is where I'd start considering putting part of our monthly income. That's a long-term commitment that I don't want sitting around when I'm over 50 and at ~4% it's not the worst thing to throw money at. I like Dave Ramsey and think his advice is pretty good for a lot of people in the US. The idea of snowballing in particular. It's just not great advice if you're already responsible with money.

Living the Dream · Mar 17, 2018

Going cash only is literally stupid if you pay off your credit card every month. You can make money by having a credit card which cash cannot do.

Hulk_Smash · Mar 17, 2018

VAL0R said:
You got the mortgage paid off? Excellent!

As a serious Roman Catholic I like Dave's Christian ethic intermingled with his financial advice, but I could see how that could chafe zealous atheists. Dave's also pretty unapologetically politically conservative. Again, like myself, but he doesn't emphasize that too much.

Of course not! Lol. But that is not part of the debt free step. That comes later.

Hulk_Smash · Mar 17, 2018

Living the Dream said:
Going cash only is literally stupid if you pay off your credit card every month. You can make money by having a credit card which cash cannot do.

You don’t really understand Ramsey’s reasoning for saying to not pay on credit. If you have the discipline to pay off your credit card every month then great. Most people do not. The temptation to keep spending beyond your means is too strong in most situations.

Bluntman · Mar 17, 2018

I only have student loan but since last year the government chose to erase the interest on that completely.

So I'm fine. Now only if I could stop heavy drinking and smoking I could save up.

Porcile · Mar 18, 2018

I like being able to put away a bit of cash each month, even on my pretty low wage. If got a part time job to supplement my main teaching job, then it would be all profit. I still use my credit for most online payments, but I just pay it off each month, and nothing I buy is crazy expensive anyway. Usually the most expensive things are my plane trips back home each year.

It's Jeff · Mar 18, 2018

Hey OP, great job and excellent move on tackling debt! It's not easy and I like your extended goals!

Getting rid of my debt was a huge weight of my shoulders. You're going to love it. Keep it up!

Autumn Wind · Mar 18, 2018

Ditto for Dave Ramsey here also. I started listening to him first on WABC back in 2006. I then was listening to him recently on WOR until I realized that SiriusXM Triumph has his live feed.

highrider · Mar 18, 2018

Corrik said:
Easier said than done. Basically the answer to not having debt is to have more money which you wouldn't have if you had more money.

Like, if I could pay my mortgage off in 10 years I would. But, I do not have the money to do so.

And that’s really the bottleneck that makes these financial pep talks kind of like, nobody is paying shit out here. Not to rain on any parade, I genuinely want to see people be successful doing this.

jadedm17 · Mar 18, 2018

Cards offer amazing incentives if you're smart : Discover gave my near $300 cash.

Time is money as well : I bought a motorcycle on a zero interest card and got to ride months before I could have saved up cash.

It's important to know the benefits and the downfalls. Personally I haven't set foot in a casino in 12 years and don't keep junk food in the house so I understand if you don't have the will power and are better offer without debt. Personally I've found it to work great for me.

It's Jeff · Mar 18, 2018

highrider said:
And that’s really the bottleneck that makes these financial pep talks kind of like, nobody is paying shit out here. Not to rain on any parade, I genuinely want to see people be successful doing this.

That's true to a point. I mean, some of the guys I work with are pulling down $1200.00 a day, but they have debt and I don't. Making more money really is the way out but I can't stress enough to NEVER forget what it was like being hungry. Just remember looking at two overdue bills and having to pick one to pay or reaching out to your family with your hat in hand and hoping they can keep you afloat for just one more month.

lachesis · Mar 18, 2018

I would love to be debt free myself. I do try my best not getting into debt - chose not to get a student loan but go to a small local university for my education which gave me full scholarship... and I do not buying anything that I can't pay off in 1 month. Of course in exception of... car and mortgage. I have about 20k left on car, but it's at least 0% interest... but mortgage is another beast though. In my area, my smallish 3bd house is around 600k - at property tax being 10-12k. I have 400k to pay off the house... so as much as I'd love to pay off, its just long long way to go, and honestly I don't think I will be able to entirely pay off till retirement.

I am at this place for my child's education (great public school) - once my child is off to college, I will either rent it out or sell it and get am smallest and cheapest possible house so that I can really save...

Vicetrailia · Mar 18, 2018

highrider said:
And that’s really the bottleneck that makes these financial pep talks kind of like, nobody is paying shit out here. Not to rain on any parade, I genuinely want to see people be successful doing this.

That's why we must take advantage of the age we're in. I sell yoga pants online advertising only on Facebook. I'm finishing college in May and I've been going to a lot of interviews. Needless to say, negotiations included, I'm an engineering major and while companies are stingy, I'm looking at the money I make like...that's it? I gotta pay back my loans, buy a house...man. I guess I'll sacrifice having kids.

bitbydeath · Mar 18, 2018

I did once with a mobile plan but found it to be a waste of money, my only debt is a mortgage now. If I want a new car, TV or whatever I’ll just save and use cash.

Credit cards can be good though, I’ve made 2,500 cash and other things like movies tickets and a mobile for my wife through points.

MultiCore · Mar 18, 2018

I'm only in debt on my mortgage, and 2 relatively new cars, one of which is a 12-passenger Nissan. Funny.

I'll get them paid off soon. I have cash, but since the interest rate on the car is .9 percent, it's better to have the money in the market in my opinion.

VAL0R · Mar 18, 2018

Phoenix RISING said:
But 90% of America need financing for a car.

This may be true for a new car. But buying a new car makes very little financial sense, imo, when you consider how much value the vehicle loses immediately when you drive it off the lot, etc.

MultiCore said:
I'm only in debt on my mortgage, and 2 relatively new cars, one of which is a 12-passenger Nissan. Funny.

I'll get them paid off soon. I have cash, but since the interest rate on the car is .9 percent, it's better to have the money in the market in my opinion.

My 12 seater is a Nissan (NV) too.

michaelius · Mar 18, 2018

Can you give me a link to those 12 seaters ? I assumed everything above 7 seats is made for commercial transport as mini buses.

My advice: watch out for all those monthly service - they are only 5 or 10$ but they add up quickly and once you do a math you get into few hundreds of dollars.

Also credit card need to be used smartly - use it to get bonuses and free credit but make you you always pay it before your interest free period. If you can't pay it you are spending above your means.

After I made some stupid debts when I was younger I got to reaching same conclusions as author in OP post on my own

entremet · Mar 18, 2018

I'm Dave Ramsey disciple, but I do use CC's for bills to get points. Points are way too nice. But I don't carry a balance. It's paid off in full each month.

Phoenix RISING · Mar 18, 2018

VAL0R said:
This may be true for a new car. But buying a new car makes very little financial sense, imo, when you consider how much value the vehicle loses immediately when you drive it off the lot, etc.

My 12 seater is a Nissan (NV) too.

Yes, agreed. Buying a new car is one of the worst investments you can possibly make. I don't think I'll ever buy new gain.

VAL0R · Mar 19, 2018

michaelius said:
Can you give me a link to those 12 seaters ? I assumed everything above 7 seats is made for commercial transport as mini buses.

https://www.nissancommercialvehicles.com/nv-passenger?tool=global.nvpass.link

MY 12-seater is cool enough for superheroes. The cargo version made an appearance in Captain America: Civil War when Ant Man and crew met up with Captain America.

Vicetrailia · Mar 19, 2018

The good thing about new cars is that you only have to worry about tires, taxes and oil changes for the next 5 years. The bad thing is that they're bad investments, or if you have a high interests rate you're throwing lots of money away.

Car loans are basically useless for building credit.

RiccochetJ · Mar 19, 2018

VAL0R said:
This may be true for a new car. But buying a new car makes very little financial sense, imo, when you consider how much value the vehicle loses immediately when you drive it off the lot, etc.

Buying a new car makes perfect sense if you plan on putting 150k miles on it. If you're someone that needs a new ride every 3 years, then sure, go used.

MultiCore · Mar 19, 2018

michaelius said:
Can you give me a link to those 12 seaters ? I assumed everything above 7 seats is made for commercial transport as mini buses.

VAL0R said:
https://www.nissancommercialvehicles.com/nv-passenger?tool=global.nvpass.link

MY 12-seater is cool enough for superheroes. The cargo version made an appearance in Captain America: Civil War when Ant Man and crew met up with Captain America.

Yep, have an NV 3500 SV.

I looked at everything else on the market. The Ford 12 pax is just too small, and I didn't need the 15 passenger version. The Sprinter costs more. The NV hits all the right notes, at the right price. Mine will tow 9500lbs. Only downside is there's not much room for anything else, like luggage, with all the seats installed.

VAL0R · Jul 14, 2018

From my OP: "- I hope to have the PMI removed from my mortgage within 5 months (by establishing a 80% debt to assessed value ratio). This puts another 75$/month in the till."

I just gave my bank a mortgage principal only payment of $1,300 and accomplished this goal one month early. Goodbye PMI! And another $76.41/month goes in the coffee can! Now to really get serious about those student loans. I'm looking for an evening job where 100% of my money goes toward conquering that ~30k debt. We really need the ~$200/month breathing room, especially now that we've decided to send four of our kids to Catholic school.

I love paying off debt. It's so liberating.

Straight Edge · Jul 14, 2018

I paid cash for my house and cars. I use my credit card to pay daily purchases and then pay it off completely each month.

VAL0R · Jul 14, 2018

Straight Edge said:
I paid cash for my house and cars. I use my credit card to pay daily purchases and then pay it off completely each month.

Wow, that's great.

Edit: Why use the credit card at all? Rewards or points or whatever? I steer clear because I know myself and that I'd forget to pay on time and accrue interest or be tempted to spend too much in the first place with money I don't have.

Straight Edge · Jul 14, 2018

VAL0R said:
Wow, that's great.

Edit: Why use the credit card at all? Rewards or points or whatever? I steer clear because I know myself and that I'd forget to pay on time and accrue interest or be tempted to spend too much in the first place with money I don't have.

I accrue cash back, it's not much but it's free money. My current goal is to put 20% of my pretax pay into my 401K. I'm at 16% now and tweaking things to raise it by next year.

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