Getting out of debt - best financial advice/plan?

[deleted]

I recommend two blogs:

 

Get Rich Slowly

 

The Simple Dollar

 

Best part about it? They are FREE! Put them into your Google Reader and get 3-6 posts per day on personal finance. Eventually, it just seeps in!

[JessicaM]

Quote:

Originally Posted by Janet I recommend two blogs: Get Rich Slowly The Simple Dollar Best part about it? They are FREE! Put them into your Google Reader and get 3-6 posts per day on personal finance. Eventually, it just seeps in!

I try to keep up on the first blog, its pretty good! This is one of my new years resolutions as well....great thread!!

[rodent]

Quote:

Originally Posted by TAHOEJENI Morgan - can you explain a little bit more about what it is that you don't like about Dave Ramsey? My FI and I are Dave Ramsey junkies. There's a marker board on our fridge. In big black letters it states a few of his most said sayings Live like no one else now, so you can live like no one else later An emergency fund turns a crisis into an inconvenience Debt is dumb, cash is king. The paid off home mortgage has taken the place of the BMW as the status symbol of America. I'm 33 and contemplated bankruptcy about 5 years ago. I didn't and decided to get serious about debt. I moved into a less expensive studio apartment for two years and paid off debts. I wish I had found Dave back then as I would be debt free now. As is, 2009 I will pay the last $8000 off that lingers over my head and kick Sallie Mae out of the house 11 years early on a 15 year loan! I don't mean to drag my soapbox out (especially on a wedding forum) but getting out of debt is definitely a lifestyle change as is losing weight. Dave will tell you to SELL THE CAR right off the bat. How many people out there are making less than $30,000 and are driving $20.000 cars. Car debt alone eats up a bunch of your money. My FI and I bought a house this past April and we did a 15 year mortgage just like Dave recommends. I drive a 13 year old car with over 200,000 miles on it and it looks like crap but guess what, it's paid for! Dave suggests picking up a second job to help pay off debt. I didn't want to be locked into certain hours so I became a mystery shopper instead. I pick my schedule and it's the only time we go out to eat. This week we've got a Texas Roadhouse and Applebees scheduled. lol We religiously stick to a written budget. After it gets a little warmer, I plan to park the car and start riding my bike to work more consistently (20 mile round trip) and no, there's no bike trails here in Cincinnati. It's all roads. Whew - got a little long. My advice - get a gameplan and stick to it. Doesn't matter if it's Dave's, Suze's, or your own! Congrats on facing your debt.

I'm really happy you found success with his program. I know a lot of people have & I do see how it can work. I started listening to his podcast last year to have advice for friends who wanted to know how to get out of debt. I had to stop listening because he bothered me so much. I don't like the way he talks down to callers & I disagree with many of his methods.

I don't agree with his debt snowball of paying off the smallest bills first. I also don't agree with canceling all credit cards & not caring about having a non-existant fico score. even if I don't think the fico score is the best way to rank someone's ability to pay back credit, I think most people need to maintain a good fico anyway.

I understand what he means about getting out of debt being like losing weight. But, I personally would not want a gimic like the debt snowball. It would take less money to pay off higher interest cards first not lower balances. To me this is like a diet having a quick 5 pound weight loss at the start to motivate someone.

I agree with his overall goal. Mostly it's the debt snowball that I dislike. I don't think I'd have such an issue with him if he wasn't so insistant on that one method if anyone ever questions it. There are better methods to add in the psychological boost of the debt snowball without wasting money.

I like his advice of selling the car & getting a beater. I'm not saying his plan will not work for someone. I really hope my post wasn't discouraging. I didn't think about someone who like's his plan reading it. If you follow the plan, you will get out of debt so it's not a bad plan.

[rodent]

JEAN CHATZKY.COM

 

I like her too

[cdc0427]

Quote:

Originally Posted by Morgan I do not like dave ramsey. i disagree with so much of his advice & do not like his personality. I agree with his statement that getting out of debt is like losing weight, but I think his approach is a fad diet. suze orman can be a little annoying, but she gives very sound advice. she has a book called something like "young fabulous & broke" that is about getting out of debt.

Morgan, I'm sorry but I'm not sure if I agree with you. I used to listen to Dave Ramsey all the time and although I don't follow him 100%, I think he gives great advice. What don't you like about some advice?

[cdc0427]

Sorry, didn't read the entire thread, just jumped the gun and posted my question to you when I read your first comment Morgan.

 

Morgan, have you actually sat down and did the numbers to see which method would cost you more money in the long run?

[rodent]

Quote:

Originally Posted by cdc0427 Morgan, I'm sorry but I'm not sure if I agree with you. I used to listen to Dave Ramsey all the time and although I don't follow him 100%, I think he gives great advice. What don't you like about some advice?

i posted it two posts above this one.

if you don't follow him 100% its probably great. I just wish he wasn't so insistant that everything he says is right.

I don't agree with suze ormon all the time either, but I really like how she tells people that they are their own best personal advisor. I would rather he advise more instead of instruct as if his advice is always right.

maybe i have too much animosity for dave ramsey.

[rodent]

Quote:

Originally Posted by cdc0427 Sorry, didn't read the entire thread, just jumped the gun and posted my question to you when I read your first comment Morgan. Morgan, have you actually sat down and did the numbers to see which method would cost you more money in the long run?

yes, the debt snowball always cost more money. he even says that. the idea is that you get rewards along the way for paying the smallest bills first. but, there are other ways to set up rewards for paying off certain amounts of debt, yet still do it in a way that saves the most money.

[cdc0427]

Quote:

Originally Posted by TAHOEJENI Morgan - can you explain a little bit more about what it is that you don't like about Dave Ramsey? My FI and I are Dave Ramsey junkies. There's a marker board on our fridge. In big black letters it states a few of his most said sayings Live like no one else now, so you can live like no one else later An emergency fund turns a crisis into an inconvenience Debt is dumb, cash is king. The paid off home mortgage has taken the place of the BMW as the status symbol of America. I'm 33 and contemplated bankruptcy about 5 years ago. I didn't and decided to get serious about debt. I moved into a less expensive studio apartment for two years and paid off debts. I wish I had found Dave back then as I would be debt free now. As is, 2009 I will pay the last $8000 off that lingers over my head and kick Sallie Mae out of the house 11 years early on a 15 year loan! I don't mean to drag my soapbox out (especially on a wedding forum) but getting out of debt is definitely a lifestyle change as is losing weight. Dave will tell you to SELL THE CAR right off the bat. How many people out there are making less than $30,000 and are driving $20.000 cars. Car debt alone eats up a bunch of your money. My FI and I bought a house this past April and we did a 15 year mortgage just like Dave recommends. I drive a 13 year old car with over 200,000 miles on it and it looks like crap but guess what, it's paid for! Dave suggests picking up a second job to help pay off debt. I didn't want to be locked into certain hours so I became a mystery shopper instead. I pick my schedule and it's the only time we go out to eat. This week we've got a Texas Roadhouse and Applebees scheduled. lol We religiously stick to a written budget. After it gets a little warmer, I plan to park the car and start riding my bike to work more consistently (20 mile round trip) and no, there's no bike trails here in Cincinnati. It's all roads. Whew - got a little long. My advice - get a gameplan and stick to it. Doesn't matter if it's Dave's, Suze's, or your own! Congrats on facing your debt.

Tahoe, have you been through Financial Peace University? Do you follow all of Dave Ramseys methods? How do you do your monthly budget? You can PM or email me if that is getting too personal.

[JUSTUSTWO]

I'm watching the rebroadcast of Oprah now. Suze Orman is on & for the next week she is offering her new book SUZE ORMAN'S 2009 ACTION PLAN, KEEPING YOUR MONEY SAFE & SOUND, online for FREE.

 

Here's the link:

Suze Orman's Free Book Download

 

She is also having a free webinar next week, January 15th & you have to sign up on Oprah's website.

 

She basically said that everyone's goal for 2009 should be to get rid of credit card debt. There were 225 people in the audience at the show today & in total, they had $2 million dollars in credit card debt.

 

She went thru her credit card payment plan which is:

1) line up all of your credit cards & pay off the high interest cards first

2) at the same time, maintain your minimum payments on all of the other cards but if you can, try to pay more than the minimum payment

3) you should try to pay all of your cards on time & never go over your credit limit because that's when your interest rate goes up

 

These 3 things also help you improve your fico score.

 

Something that was also interesting is that she said you should get out of credit card debt before you have a savings account. You shouldn't be trying to save when you have cc debt. You should get rid of the debt first & then save.

 

HERE'S HER SPENDING ACTION PLAN:

http://www.oprah.com/article/money/p...ws_suzesteps/4

1) sit down with your expenses & separate "WANTS" and "NEEDS"

2) circle all expenses that are "WANTS"

3) If you have debt or no savings, eliminate "WANTS"

 

HER SAVINGS ACTION PLAN:

http://www.oprah.com/article/money/p...ws_suzesteps/5

1) save enough to cover 8 months of expenses...you have to get there somehow

2) decide how much you can save each month & add 20%

3) search around for a savings accnt with higher interest rate

 

RETIREMENT ACTION PLAN:

http://www.oprah.com/article/money/p...ws_suzesteps/6

1) don't panic when the market goes down

2) keep investing monthly in your 401k or ira

3) if you need money within 5 years take it out of the stock market

 

This is the entire 5 step plan:

http://www.oprah.com/article/money/p...ws_suzesteps/1

 

2009 ACTION PLEDGE:

1) Don't spend any money for one day

2) Don't use any credit cards for one week

3) Don't go out to eat at any restaurants for one month

 

Sorry for my thoughts being all over the place but it was just a really good show! Even though these are things that I've heard her say before, I guess its time to just buckle down & get this done sooner rather than later, especially considering how the economy is.