The official Dave Ramsey thread

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Brian in Mesa

Brian in Mesa

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I still don't see the need for an "emergency fund" why can't you just have a low interest credit card set aside for emergencies and use the money you would have set aside to pay off debt instead of having it sitting and waiting for a bill that may never come?

1. It teaches you to save money. Proves to yourself that you're capable of being responsible with money and budgeting.

2. You're trying to break your dependence on debt so a credit card is out of the question if you're following the plan.
 

thirty-two

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1. It teaches you to save money. Proves to yourself that you're capable of being responsible with money and budgeting.

2. You're trying to break your dependence on debt so a credit card is out of the question if you're following the plan.

Exactly. If I were to use the 1k in my emergency fund on my loans, and let's say the next day my car breaks down, the only option I will have is to use my credit card to cover it.

I have enough credit card debt, and the point is to not gain any MORE debt. I need to learn to save money for a rainy day, not take the easy way out by charging it.

Plus having 1k saved, it's a great motivator (for me at least) and it's comforting knowing that I don't HAVE to use my credit cards anymore.
 

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I not necessarily an advocate of this book/thread/system or whatever, but I will be following A LOT of the practices here.

I am about 30k in debt between student loans, small credit cards, car payment, etc.

My goal is to be debt free by my 30th birthday. August 10th of next year.

I don't know if I can do it, but I sure as hell am going to try.

Good luck dreamcast, kick some ass!
 

Mike Olbinski

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I still don't see the need for an "emergency fund" why can't you just have a low interest credit card set aside for emergencies and use the money you would have set aside to pay off debt insted of having it sitting and waiting for a bill that may never come?


Besides what BIM said, you have $1000 sitting in a savings account making interest, or maybe a money market making more interest.

Do you not see that if you had to use a credit card for an emergency with an interest rate is a lot worse than taking $1000 of your own money and using that?

What if you can't pay it back for awhile?
 

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Paying yourself FIRST will never go out of style!!

That said, there are plenty of ocassions when using debt is a smart thing. Lots of variables, but if you can use that debt to fuel your future financial growth - go for it!!!
 

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If you are going to have a savings account, you might as well have it in an ING direct savings account. Highest interest rates I've seen... 4.1%, no fee's, no minimum...
 

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If you are going to have a savings account, you might as well have it in an ING direct savings account. Highest interest rates I've seen... 4.1%, no fee's, no minimum...

I have all my money invested in Sharebuilder, which is now owned by Ing. I have several stocks and a money market. The money market, as you said, is over 4% whereas a savings account is much, much lower.
 

thirty-two

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Holy crap. I just paid off my first debt. With a little help from a large mileage check, I was able to pay it off with this paycheck. I am absolutely floored at how quick I was able to do this.

Sorry, I'm just incredibly happy right now. One down, 6 more to go.
 

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Holy crap. I just paid off my first debt. With a little help from a large mileage check, I was able to pay it off with this paycheck. I am absolutely floored at how quick I was able to do this.

Sorry, I'm just incredibly happy right now. One down, 6 more to go.
Way to go, Kate! I'm very happy for you!!
 
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Brian in Mesa

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What does Dave Ramsey say about debt accumulated through higher education? Just curious.

What does he say in general or what does he say about paying it off? :shrug:

Here's what he says about paying it off - treat it like any debt. Write a budget, go through the baby steps...etc.

Dave Says - September 10, 2007

Graduate wonders what to pay off first

Dear Dave,
I’ll be graduating college in December with a degree in elementary education, and I have a job waiting for me. It will be the first time in my life I’ve made more than minimum wage, and it will bring our household income up to about $75,000. I’ve got $15,000 in student loan debt, $6,000 to pay off from a repossession a while back and $3,000 in credit card debt. How should I handle this salary increase?
Mickey

Dear Mickey,
Congratulations on your degree and the decision to get serious with a plan for your money! And here’s some more good news for you. If you guys keep living the way you have been and put the rest toward debt, you can have it knocked out in about a year.

But just because you’re making some money doesn’t mean you should double your entertainment budget or pick up a car payment. Sit down together and work out a written monthly budget. Give every dollar a name before you spend it, and don’t forget to work the debt snowball, too. List your debts from smallest to largest, pay minimum payments on the two largest and then attack that credit card debt with a vengeance! Chances are you can get these taken care of in a month or two. Once you’ve paid that off, roll the money from that payment over and apply it plus any other cash you can scrape up toward the car repo. If that debt has any age on it you can probably work a deal for fifty cents on the dollar and get out paying just half.

Once you done this you’ll have a bunch of cash to throw at those students loans and get the debt off your back once and for all. Good luck, Mickey!
- Dave
 

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I think the question is more like, what does he say about incurring debt to go to school? Does he say don't incur debt under ANY circumstances (outside of a mortgage, I would guess; maybe a car, too?) or does he accept that incurring debt to improve your ability to have a greater income is good?
 
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Brian in Mesa

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I think the question is more like, what does he say about incurring debt to go to school? Does he say don't incur debt under ANY circumstances (outside of a mortgage, I would guess; maybe a car, too?) or does he accept that incurring debt to improve your ability to have a greater income is good?

Here's what he says about college/student loans:

http://www.daveramsey.com/etc/cms/go_to_college_5788.htmlc

http://www.daveramsey.com/etc/cms/index.cfm?intContentID=91#1

Regarding debt:

Mortgage is about it as long as it doesn't cost more than 25% of your take home pay each month. No going into debt for a car - nothing drops in value like a car.
 

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I think the question is more like, what does he say about incurring debt to go to school? Does he say don't incur debt under ANY circumstances (outside of a mortgage, I would guess; maybe a car, too?) or does he accept that incurring debt to improve your ability to have a greater income is good?

:yeahthat:
 

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dreamcastrocks

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Using my huge tax return, I have completely paid of 2 credit cards ($3000), paid down on another, and made 3 car payments.

I don't feel so bad buying DVDs from Kate anymore. :)
 

thirty-two

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Using my huge tax return, I have completely paid of 2 credit cards ($3000), paid down on another, and made 3 car payments.

I don't feel so bad buying DVDs from Kate anymore. :)

Hahah!

AWESOME job!!!

I plan on using my tax return + other money to pay off another debt plus some of another one.

Also, the dvd/video game money is helping tremendously!!!
 
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thirty-two

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Today I paid off my 2nd debt (credit card)! Unbelievable. 2 down... 5 to go...

Budgeting is still tough, but I love paying in cash/debit and I no longer carry my credit cards (too much temptation).
 

thirty-two

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Fox Business has a Dave Ramsey marathon on right now :thumbup:
 

thirty-two

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I should have my 3rd debt paid off by the end of September, if not sooner. It would have been paid off by this time if I hadn't lent some money to a relative (never again!). I've paid over 11k in debt so far, just gotta keep truckin'.

I'm still working my second job, but once I pay off this next debt, I will quit that job to give myself a break for a bit. With the extra money I was making, it was bringing me closer to bumping up to the next tax bracket. So, if I quit in September, I should be fine. I will probably pick up the same 2nd job once the new year starts. I want this debt GONE.
 

thirty-two

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I should have my 3rd debt paid off by the end of September, if not sooner.

Debt #3 officially paid off TODAY!!

Still going strong with my second job... will try to push through the end of the year.

3 down, 4 to go!
 
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