Scary, but we are excited.

We owe:
Car1 = 12,000 @ 6%
Car2 = 9,000 @ 6%
CreditCards = 15,000 @ 18%
FurnitureStore = 4,000 @ 0%
____________________________

We are about to spend almost all our savings and tax refund to:
Pay off Car2, and 4000 of credit cards.

I am about to move the rest of the credit cards to a 0% card (1year).
Next we plan on paying 4k a month on car1, then CC at 0%, then FurnitureStore.

THEN we will be debt free !!!!!!!!!!!!!!!!!!!!!!!! --- minus our home.


We plan on doing this all by october 2008, wish us luck



$1,000 to start an Emergency Fund
Pay off all debt using the Debt Snowball
3 to 6 months of expenses in savings
Invest 15% of household income into Roth IRAs and pre-tax retirement
College funding for children
Pay off home early
Build wealth and give!
Invest in mutual funds and real estate


Edited by admin to remove link.

why would you want to pay more interest than you have too? if you follow nutbar ramsey you will pay a zero % loan before an 18% loan

have you considered adjusting your W4 so that you don't have a large tax refund and thereby have the money thorugh out the year to paydown debt?

though the poster is not advising anyone else to follow DR's advice, I must note that DR's philosophy doesnt not agree with much of the CBs philosophy.... and in that light, I remind everyone of the following

please stop and think about this...do you really think paying off a zero percent loan is better than paying of something at 18%? This is exactly why DR's one-size fits all B.S. snowball is expensive.

It sounds like you are getting 13K in a refund (tax refunds are a terrible idea IMHO but that is a different topic).

You are so so so much better off paying 13K on the 18% debt. 18% is extremly high interest.

When does the 0% reset and to what? I know that some furniture stores charge you interest from date of purchase at some ungodly rate if you don't pay off before the due date. In that case, paying off the 0% loan may not be as stupid as it sounds.

I didn't say it was stupid I said it was more expensive.

Do you think paying a 6% auto loan before 18% credit card debt is smart?

Sorry - my post probably was not clear enough..

We owe:
Car1 = 12,000 @ 6% ----> Second balance to pay off.
Car2 = 9,000 @ 6% ----> First balance to pay off - This Month.
CreditCards = 15,000 @ 18% ------> Paying off 4k of this now, moving 11k to a 0% CC (ends april 09).
FurnitureStore = 4,000 @ 0% ------> Fourth and last to pay off as it is 0% for term of balance.


I would also like to ensure everyone knows I would'nt have been approved for the 0.0% 15,000 BOA Visa I am moving my last debts to if it were not for CB.

Also, I did fix my tax info - was working 2 jobs when I set it up years ago and forgot to ever change it:)


I also need to add that we havent read any of Daves books, his show simply got us excited about the idea of being debt free.

Hope that clears things up..

that would all make too much sense.

Not a Dave Ramsey fan.. sorry. There is not a lot of rhyme or reason to some of his tactics.

I DO wish you luck, moneymonkey. While no one here buys DR's "all debt is evil" philosophy, getting rid of high-interest debt that keeps you awake at night, and not owing more than your cars are worth, are good moves.

I agree with earlier posts that if your tax refund is that high, you're essentially loaning money to the government at zero% and paying 18% interest on some of your debts- not a good trade-off! Take a look at your withholdings and change them so you take home more money every month and get less of a refund next year. You'll be out of debt faster.

If you want to do things the Dave Ramsey way, break the $15K in CC's into individual credit cards and knock them off one at a time smallest balance to largest. Even if you have one CC at a high rate I'd pay that before getting aggressive on the car loans.

I'd take a careful look at the 0% furniture financing. Many times they will 'backcharge" all the interest accrued if the balance is not paid 100% in FULL at the end of the promotional period.

The 0% CC transfer MIGHT work if you don't get ratejacked, it's a very common practice with credit cards.

"Invest 15% of household income into Roth IRAs and pre-tax retirement"


Ramsey works for a certain sect of people but many here weight the money side more then the emotional.

If I stopped at only 15% investment rate I would be working until I was 4237452361456.
I prefer my 40% rate. I also think the saving for kids college should be much lower on your "list."



saladdin

saladdin, is your house paid for?

Dont care how or whose method you use to pay done your debts... just Get 'er Done!

I agree with this idea.
There is no harm in getting back a little of a refund if you are truly worried about having to pay (and thus having to come up with the money)
but if you are getting back 4 figures, there is something wrong. You are better off with that money on your paycheck or in your 401k, or a Roth IRA (or something) but not a free loan to the government.

HTH does one get a $14000 refund? The most DH and I ever got was maybe $3000. My SIL and BIL say they are going to get a $12000 to $15000 refund and I just don't see how that is possible?!?

I got 10k one year mainly because of rental expenses and tuitions and I was married claiming 9

That's what I don't get about BIL & SIL. I think SIL said he claims 1 maybe 2 they have four kids but he can only claim three as the other is hers with her ex, they own their home, it just is mind boggling to me to see a refund that large. I guess I could only wish as I will always have to pay.

My refund is about 9k, *Mostly because I worked 2 jobs when I setup my W4 a few years ago so I took out extra taxes to cover the 2nd 1099 job.

But I also have a rental property that runs at a loss and just had a kiddo !!!

I have since fixed my w4's and hope to pay/come out even next year rather than get a refund.

I'm hoping that between the fact that we bought a house late last year (duplex we live in one side) and my DH's business lost money again that we won't owe as much as last year.

Congratulations!!!
My wife and I have been following Ramsey's plan for three years now and let me tell you it works great! We don't even own a credit card; much less have any consume debt any more. Our house will be paid in full in 20 months!!! Woo Hoo! We have been tithing regularly to our church and helping people financially in our community. Ramsey is right, when you start doing smart things with money God send more your way. God says to himself, there's a smart one that manages his money well; let me send more his way so he'll continue to help others.

I hope you enjoy paying more for insurance. I hope you never have to travel by plane or use a hotel.

Ramsey's advice is very expensive to follow.

God does not care about your credit or finances.

ETA: since you are new to CB (welcome by the way) you may want to read this post:

http://creditboards.com/forums/index.php?showtopic=243891

The discount for good FICO can be 40% or more.

some people will never learn lol

Ramsey. I wonder how much he earns directing people with no FICO score to his ELP "partners".
Wouldn't it make more sense to maintain a decent FICO (even if you never, ever go into debt) so you can do the choosing?
For giggles, ask your auto insurer what rate tier people with no FICO are put in. It's not the best.
But heck, you can always go on his radio show and yell "I'm Discount Free!"

I don't want to get anyone into another Ramsey rant but I came across this post recently about an ELP. This is just one instance so take it for what it is worth.

Radi,
Delete this if I am breaking CB rules.

saladdin


http://www.getrichslowly.org/forum/viewtopic.php?t=1242

DR is a twit. i dont pay FULL price for ANYTHING including his drivel

Dave Ramsey is a brilliant marketer. No more and no less.

He is not a guru. He is not watching out for your best interests.

However, if his methods work for you, then by all means go for it.

You have to find something that works for you. Just don't be fooled into thinking that you're getting something more than you are.

OP, great job. Do what it takes to get yourself out of debt. If Ramsey works for you, good for you.

I personally follow some of his advice. Some of it I don't follow. Like, I will never be "credit" free. But I do want to eventually become debt free. So most of his beliefs about credit cards, I don't necessarily agree with it, but I do understand why he says it. MOST of the people who listen to him have F'ed up big time in the past, doing dumb things with credit. So I guess he is trying to steer them away from using credit. Sure, it can be costly in the future. But I have met some people who are using his methods and have paid off tens of thousands of dollars. They have cut up their credit cards and everything. I asked, "What about car rentals and hotels." They say, "Use your debt card. Sure, you will have a hold on it, but it's worth it. If you don't have the money in your account for a hold, well, you are in trouble anyway." They seemed to be doing fine using his plan. They weren't complaining about things people here say will happen to you if you use DR's strategies.

Either way, I love having good credit. I disagree strongly when DR says not to worry about credit period. I think that, even if you plan on paying cash for everything, you should focus on getting good credit, just in case. We haven't used a credit card in over 2 months. However, we have BTed to 0% for 1 year and 4.99% for life cards. These saved us about $350 a month total in interest. So we are using credit to get us out of the mess we caused using credit in the 1st place. But if it was up to Ramsey, you shouldn't obtain new debt to pay off old debt. So obviously, he is foolish right here.

Basically, I use DR for money management and Credit Boards for credit advice. I use the snowball, but I don't do it his way. I prefer to pay off the high interest cards first. I have 2 accounts of about $6,000 each at 0% for 30 more months. I also have a car loan at 2.9% for 4 more years. Why the L would I pay those off before my $5,000 balance with a 17.99% rate? It makes absolutely no sense.

Ramsey fan or not, I now OWN one of our cars.

Also paid off:

Amex, Walmart, and some others.

Down to 1 car loan, and 1 credit card at 0%.

I agree with you,

I will never be "Credit Free" due to the easy of use of + the investing I want to do.

My plan is to have only:

1. CC - paid in full on most months.
2. Mortgages (Ours, and rentals)

Ramsey is a idiot and a hypocrite to boot. Most of his advice is hogwash, mathematically laughable and meant for simplistic lemmings who are incapable of sophisticated thought.

Why hold back? Tell us what you really think!

over under 5

Sure maybe but he still inspires many "lemmings" to be smarter with their funds.

and for that "pleasure" they get to pay more for car insurance that my 18 year old son with 2 tickets for excessive speed

If they are debt free and HAPPY, then who cares how much they pay for car insurance or how much you think DR's an idiot?

You are right, we dont care. As long as the insurance companies make their moolah gouge Ramseyites, they will continue to give CBer's the best rates possible.

Yup. I pay less for 2 cars now than I did for one car 2 years ago.

Yeah. Thank God I have cheap car insurance.

If they are happy and on financially sound ground, I have nothing to say of importance other than to cheer them on! They've accomplished their goals- which is the real priority.

FWIW, the problem I have with Ramsey is that he chops off and sometimes demonizes certain avenues that could help certain people reach their goals sooner. FICO isn't going away no matter how much he pretends it is unimportant. It's only going to become more pervasive as time passes. (now we have medical scoring? ! )
One-size-fits-all strategies never really do. One person may get a huge boost from Ramsey's psychology of small, rapid wins- others may get a big boost from squeezing every penny of value out of their payments.
With DR you only get the first choice, leaving the latter group unmotivated.
I agree that DR's advice has dug a lot of folk out of debt. What it has NOT done is prepare them fully for what awaits in the FICO-driven society we are forced to live in.

[/quote]
Congratulations!!!
My wife and I have been following Ramsey's plan for three years now and let me tell you it works great! We don't even own a credit card; much less have any consume debt any more. Our house will be paid in full in 20 months!!! Woo Hoo! We have been tithing regularly to our church and helping people financially in our community. Ramsey is right, when you start doing smart things with money God send more your way. God says to himself, there's a smart one that manages his money well; let me send more his way so he'll continue to help others.
[/quote]

You know, I thought I heard God mention you! Good job!
Are those "What Would Ramsey Do" bracelets in yet?

and still broke because their dollar doesnt go near as far as it should. sounds like a pretty crappy trade off to me

??????

Hey guys, new here. I've been lurking for a while and decided to register after reading this thread.

I actually purchased The Total Money Makeover Audiobook a few months ago off ITunes w/my credit card. LOL

I found Dave to be very motivating and I do think that his intentions are good. However, he comes across like an ex-smoker or recovering alcoholic who admirably has defeated his own demons but scowls at anyone who has a cigarette in their mouth or a cold beer in their hand.

I like his recommendation to start an emergency fund before getting going on repaying debt. And saving for retirement earlier rather than later is always smart, although most people with common sense know this.

Cash is good. And paying off debt to free up your income is good as well.

Here's what I disagree with him on.

First of all, I'm Canadian, as of right now we cannot order online or rent automobiles with a debit card because our debit cards aren't linked to visa. I prefer using my debit card for everyday purchases because it allows me to better track my spending. Here in Vancouver, Debit card scams are running RAMPANT. Dave is right, in that if one's account is breached, the bank is responsible for re-embursing stolen funds. HOWEVER, this can take a couple of weeks in which you'll be out of pocket. So in that case, a credit card is ideal, visa will reconcile and while they do that, your money is still in your account. Again, most of you here have already stated that.

Dave's 100% down payment plan isn't that feasible here in Vancouver as most "low-mid priced" homes run around 450-500K.

Anyways. I think it all comes down to discipline. Credit isn't bad, as long as you are disciplined with it and don't 'spend' beyond your means.

LOL, reading this post makes me look like Captain Obvious.
His examples of people paying of 100K mortgages made me chuckle.

there are many more examples of where dave is on crack..

Agreed, but after doing a thorough search there are a bunch of threads that have gone down that road already. I was just trying to show some tact and not come off like a troll.

Welcome to the board Mike. I agreed with just about everything you said in your first post! Great job.

Thanks.

Again, I'm Canadian, so a lot of the lingo here is new to me. Like 401K's/Roth IRA appear to = RRSP's here in Canada.

Prices in Canada are going to come back to earth just like they are now in the coastal areas of the US. Average home prices that are more than 3X the median annual income are simply not sustainable long term.