Posted on 03/06/2013 7:02:25 AM PST by Kaslin
Dear Dave,
My wife and I make $140,000 a year, and we’re working on our debt snowball. We’re almost out of debt, but we still have two small car payments and some credit card debt. She wants to get rid of the credit card debt but doesn’t mind us having car payments. Can you help me understand this?
Kelly
Dear Kelly,
I’m not sure I understand her thinking either. The car payments and the credit card debt are the same thing. They’re both debt payments, and you’re being charged interest on both of them. The only difference is that one is attached to a car and one’s not. It makes about as much sense as saying you like Visa better than MasterCard.
Even if she has some strange hang-up about car depreciation, that argument doesn’t hold water either. Cars go down in value whether you borrowed money to buy them or not. A $20,000 vehicle will be worth $10,000 in just a few years no matter what you do. A car payment won’t keep it from depreciating or slow the rate of depreciation.
Sometimes people get burned out or tired of paying the price to become debt-free. It can happen when you’ve been working on something for a while, and it seems like you’re never going to get there. Sit down and have a gentle, loving talk with your wife. Find out why she feels that way about the car payments and where the root of the problem really lies.
She may just need some support and encouragement from the man in her life. Remind her how far you’ve come together on this journey, how close you are to winning, and how much you love her. You’re too close to making your financial dreams come true to stop now!
—Dave
Dear Dave,
I’m 23 years old, and I was in the military for five years. While serving I received what is now $2,700 in Series EE bonds. Should I keep them?
Tammy
Dear Tammy,
If it were me, I’d cash them in and do my own investing with the money. Series EE bonds have a very low rate of return. They don’t pay much, and they’re not good long-term investments. They’re almost like keeping your money in a certificate of deposit over the long haul.
Investing is never a bad idea, and I know that may seem like a lot of money to you at the moment. But my advice is to cash out the bonds, find a financial advisor with the heart of a teacher, and invest the money in growth stock mutual funds with a good five- to 10-year track record. After that, get set up for auto-draft on your checking account and put at least $50 a month into your new mutual fund. That’s a much better plan!
—Dave
The figures I've heard bandied about in A.A. is that 10% of drinkers buy 90% of alcohol sold.
(32 years-O.D.A.T.)
I wish I could take credit for it.
I followed a dream. Not something I came up with while day dreaming. A dream I had while asleep. Basically it was about a field I use to work in and a place to get the work in the field.
When I woke up, before I forgot, I went to the web site I saw in my dream.
The site exists.
I am a contractor in the tech industry. I did this work 15-20 years ago so I was a bit rusty but I still had my needed state license to do low voltage electric work.
So, I jumped back in using a job board where companies publish requests for work that needs to be done.
Call it what you will. I call it an answer to a prayer.
Dave Ramsey ping
If you buy a new car from the dealership, you are getting it hard. If you don’t believe me, wait a year and sell it. There is nothing wrong with buying a car from the dealership if you have piles of money lying around.
But if you buy a new Honda Odyssey on a 6 year note because you need a dependable car to haul around the kids you are pretending are your’s, you’re foolish. If you own it a year and some drunk Mexican slams into it hard enough to total it, you will have to pay even more to get a new Honda minivan.
You've wandered far from the point. Credit Card interest is usually higher than a car loan. It has nothing to do with buying a new car versus buying a used one and if you think it does, you may be the "foolish one".
Remember too who it was that started hurling the gratuitous insults
You are kinda sensitive. Is there something you’d like to share with us?
You don’t NEED an assault rifle just like you don’t NEED a new car. These are things you want.
Oh yes they do get lost. It happens all the time. You may use autodraft but that doesn’t keep you from overdrafting. I’m sure your friend is incredibly adept with money but he still couldn’t afford the car he bought. That’s why he had to use the bank’s money.
A payment is called a liability for a reason. There is always risk involved.
When you’re working with addicts the solution is never.
The figures I’ve heard bandied about in A.A. is that 10% of drinkers buy 90% of alcohol sold.
And they are probably right. I’ve got friends that buy a bottle and it takes them YEARS to get through it. Fifty of them go through the same amount as a guy that has a drink a night. Maybe a hundred.
No offense but this is a forum, not a college class. We base our opinions on the data that is given, not the data that isn’t given.
Living like no one else ping!
If you would like to be added to the “Dave Ramsey Ping list” then FReepmail me.
You obviously have no idea about the system that Dave teaches. If you live a lifestyle according to the 7 baby steps, then there is no need for future loans and no concern about the FICO score. Your comments are more aligned with Suze Orman....
Not that your approach to your own life is bad, but it is just not aligned with Dave’s approach.
You obviously have no idea about the system that Dave teaches.
After reading the full thread, I am glad that I didn’t attack you with both barrells blazing! I see that you did back off of Dave a bit and took into consideration his audience.
Kudos FRiend.
Yeah, context is everything. ;-)
Thank God for your opportunity!
They call it gap insurance. It’a normally less than 1000 bucks for the life of the loan. Someone totals your van and the pay out is not enough gap will cover it. It cover the “gap” between actual cash value (what you get paid by the other parties insurance) and what you owe on the note.
Everything looses it’s value over the course of it’s life. Even your home if it’s in the wrong area or poorly maintained.
My house doubled in value so that’s a bad example. My 2003 Cavalier has kept its value over the last year. I can sell it for what I paid for it.
That is because as long as your 10 year old car still runs/drives it really has no more value to give up. is it worth more than it cost new? Of course not.
I did qualify the house statement.
Gap insurance is not for a 10 year old car. it’s for a new car with a note. If you have a loan out on a 10 year old cavalier... well.. I have a 2000 model year one I can sell ya.
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