# No Debt (Ramsey) or Debt as a Tool



## Sapper PE LS (Sep 18, 2013)

I generally like Dave Ramsey's debt advice, ie no debt period, but at the same time, I think that there is a balance that can be healthy for intelligent, disciplined people who use debt as a tool while critically analyzing the risks and ensuring they pay it off every month (or in the case of a mortgage don't get in over their head).

I'd like to hear the thoughts of other engineers. What say ye, no debt ever, or manage your debt for leverage in a responsible way?


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## kevo_55 (Sep 18, 2013)

I prefer to use debt as a tool but my wife is a strong Ramsey supporter.

Unfortunately, we don't use debt as a tool in my house. My wife won that battle......


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## Ble_PE (Sep 18, 2013)

I completely agree with using debt as a tool, but you've got to be able to keep it under control. It's very easy to charge $100, but putting a $100 bill on the counter is much harder. You should also be smart with your two largest expenses as well (house and car). We bought a new car last year and I got a 0.9% interest rate on it for 5 years. I'd be crazy not to take that because it's basically a free loan (note that there were no incentives available for not taking the low interest rate). Also, we recently refinanced to a 20 year mortgage and will save ourselves over $80000 in interest over the life of the loan.



kevo_55 said:


> Unfortunately, we don't use debt as a tool in my house. My wife won that battle......


You really didn't have to tell us that, us husbands already knew that answer...


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## Krakosky (Sep 18, 2013)

Having no debt is really appealing to me but not feasible for me right now. I'm working to pay things off to the point where I feel comfortable with the amount of debt I have but realize it'll probably never be zero. I was lucky enough to pay my car loan off a few years early and haven't had a car payment since 09. My car is running great, but want to be prepared when the time to replace it arrives.


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## snickerd3 (Sep 18, 2013)

mr snick came from a family that followed the no debt method, but they never spent $ anyways as they always think they need the money for the future. My parents have lived in the same house since I was about a yr old and they still have a mortgage because they had to borrow against it to pay for major repairs on the house and some credit card debt and they live for today,

We are a combination. Loans are tools that if managed correctly can allow you to enjoy today and think about tomorrow. THe only reason we use credit cards is to get the cash back, the bill is paid off in full each month. THe method has worked for us since we are debt free as of earlier this year.


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## Flyer_PE (Sep 18, 2013)

I generally agree with Dave Ramsey's approach with the only exceptions being the mortgage and the occasional car loan. Credit cards get paid off every month.

Just financed a new truck at 1.6% through the credit union and managed to get all of the end-of-model-year rebates that go away if you go for the manufacturer 0% financing. The interest gives me at least a small incentive to pay the thing off early.


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## engineergurl (Sep 18, 2013)

I say, managed debt to a point...

for instance- I took out loans for college, I pay said student loans, I wait until they are paid off before I invest anymore money in my education (I can't justify shelling out $2000 for school in cash when I owe someone $2000 for classes I took before....)

we qualified for a VA mortgage but forced ourselves to save up what other people our age should have been required to put down as a down payment on a house before we used our VA loan (our first home we didn't use it) 5 years later, that account as accrued interest, has acted like a buffer when we had issues with the mortgage company, and when and if we find a better deal on a loan, we can use it to cover any costs associated with refinancing

Debt is okay if it's education, a home mortgage or a car payment.

Of course, we have credit card debt aka. bad debt because sometimes life forces you to make decisions that sometimes you would rather not choose the way you have to, but since it is manageable and our assets are greater than the debt, it doesn't make me panic.


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## csb (Sep 18, 2013)

Debt as a tool- we're paying off the mortgage and the car loans. Well, my husbands has a truck loan. My car was a 0% 60 month loan that I took my sweet time paying off, because it was Ford's money and paying it off early didn't get me anything. I instead paid of student loans.

I will admit that we have a second mortgage because we bought in 2004 during the height of housing madness and we had nothing to put down. We've been double paying that down and just got the notice last week that the second mortgage closes off next year (meaning we've been in the house for ten years) and we'll enter repayment. I didn't even realize that it was an interest only payment...we've always been paying towards the principle. I imagine those notices are nasty wake up calls for some people, because it essentially doubles the payment. I don't think we ever paid it at interest only. In fact, we're overpaying what they'll require of us in repayment.


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## mudpuppy (Sep 18, 2013)

No one method is right for everyone. If what you're doing isn't working then it's time to find something that does. For me, I'm quite disciplined about saving and I don't like being in debt. But sometimes debt is the best way to go--for instance, I had a car loan at 0% for six years. I kept wanting to pay it off early but that would have cost me money in the long run. Same thing on the house, I owe $25k at 5% but since I'm only 4 years from paying it off I'm only paying about $100/mo in interest. I'd like to get rid of the mortgage, but I also need to save more cash for down payment on my next house so I think it's better to keep the debt.

I've even used credit card debt in the past when it made sense--a special 4% offer, I used to pay for roofing my house. It made more sense than saving up the money over the winter and hoping I didn't develop any major leaks.


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## Ship Wreck PE (Sep 18, 2013)

I think Dave is pretty good at what he does, but having a car loan and a house mortgage is pretty much a way of life if you were not born privileged. Doesn't Dave also think a married couple should keep all of their money together??


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## DVINNY (Sep 18, 2013)

Everyone's situation is different.

It really depends on where you are in life, and calculated risks too.

Example:

A young mid-20's married couple is buying a 200K home, both are professionals and its reasonable to assume will have income growth over the next 10 years, I can see them borrowing 30%+ of their income on a mortgage. Knowing their incomes SHOULD grow &amp; make that ratio more comfortable in years to come.

A couple retiring next year, buying a 200k home at 35%+ of their income, maybe NOT such a good idea, if their income will be fixed for the future and not have any room for growth. This is setting them up at a higher percentage for failure (in my opinion) than the younger couple.

I know there are a thousand variables in people's situations, but making SMART calculated risks are key, IMO. Not just going on wishful thinking.

I am grateful to be a good position now, but I remember my early 20's, I bought my first house at 23 years old, without 20% down, used a second mortgage on that portion, had to put a washer/dryer on a credit card, etc. etc.

I was one of those walking the tight rope for a few years, but I had that potential for income growth and rolled the dice. Things turned out in my favor (I'd like to think not by accident, but by hard work and sacrifice). Eveyone has to walk their own walk, but if I would have fell flat, I wouldn't have been looking for a BAILOUT. I can guarantee you that. I would lick my wounds and learn from it.


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## Master slacker (Sep 18, 2013)

I don't believe that any debt is good debt. If you owe someone money, that's less you have. We have debt, lots of debt, and look to pay off my chunk of student loans next year when I cash out a lot of stock. With that extra money, we'll be putting aside some in 529 plans and the rest into extra mortgage principal. My goal is to have the house paid for before I turn 40. May not happen, but that's my goal.


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## Sapper PE LS (Sep 18, 2013)

Yeah I'm basically in the debt as a tool to use sparingly camp. I have some but not much credit card debt and will have that paid off soon.

I don't like unsecured debt at all. But I'm okay with car loans, student loans, and mortgage. I'd rather not have a car payment, but that is something I can live with as long as it isn't astronomical, like the payment I had in the worst financial decision I ever made, glad I got out of that one.

Student loans to me are almost required for most people. I simply would not have my income without them. So the return on investment is pretty high. I will be paying them for quite a while still, but for me it was worth it.

The way I see it, credit card debt is the bad stuff and I avoid that at all costs.


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## roadwreck (Sep 18, 2013)

spsukenyon said:


> I think Dave is pretty good at what he does, but having a *car loan* and a house mortgage is pretty much a way of life if you were not born privileged.


I totally disagree with the car loan portion of your statement. Cars can be cheap, if you are willing to buy something that isn't new or flashy.

Dave Ramsey doesn't say you can't have a home loan either, he just advises that it be a smaller portion of your income that what most people would elect. He also advises people to get a 15 year home loan.

I don't prescribe to Dave Ramsey's methods myself. I never felt I needed to. To me his advice is good for people who have difficulty managing their finances and take on more debt than they can handle. To me his plan is to get out of overwhelming debt once you are there and to keep you from going back to that place once you finally dig yourself out. I've never been in that place. I've lived within my means and thus I've never needed to abide by Dave's principles. I still don't carry much debt. I have a mortgage, but no other debt. I use credit cards, just because I find them more convenient than cash, but pay them off every month. I know Dave says that you spend differently when it's cash vs. credit cards, and that's probably true, but I feel like I do a pretty good job of managing my spending. I've read Dave's books and listened to his radio show partially because I find it entertaining and partially because I thought it could be a good tool for some family members that don't do a good job of managing debt. I figured I should know what Dave was all about before recommending his program to them.

For myself, I prescribe to Clark Howard's teachings more than Dave Ramsey's.


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## Dexman PE PMP (Sep 18, 2013)

Too many things for me to write now, I will have to revisit this later...


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## knight1fox3 (Sep 18, 2013)

Flyer_PE said:


> I generally agree with Dave Ramsey's approach with the only exceptions being the mortgage and the occasional car loan. Credit cards get paid off every month.


+10. About the same. We followed DR's philosophy pretty well. When we got out of school and got jobs, most of our friends were buying cars and houses while LadyFox and I continued to rent and stretched out the life of our used cars. And most of our revenue went towards both our student loans. We only used debit cards, no credit cards. For approx. 3 months or so we were debt free but then decided we wanted to finally purchase a home. But once the student loans were paid off, we saved as a much as we could for a down payment on a house. We also decided to get something we'd be in for quite awhile instead of a starter home like a few of our friends did. We were able to put 10% down on the house and secure a rate of 5.05%. We also took advantage of the $8000 first-time home-buyer tax credit which was nice. We recently re-financed to 3.6% since we were only 2 years into our 30-yr. We plan to have the mortgage paid off in half that time. We also save for our vehicles and don't buy new. Our only payment is the mortgage each month.

We both do have credit cards now but use them primarily while traveling for work. Then get the expense check and pay off the balance each month. I also use mine to finance computer builds and repairs for my side business. Again once I get paid for the work, the balance is paid off each month.



roadwreck said:


> spsukenyon said:
> 
> 
> > I think Dave is pretty good at what he does, but having a *car loan* and a house mortgage is pretty much a way of life if you were not born privileged.
> ...


lusone:


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## Exception Collection (Sep 21, 2013)

Cheap, extremely temporary debt is fine as well. Take CareCredit or 0% financing offers; they are horrendous if you can't pay them off in 6 months, but on the flip side if you have the money to pay them off sooner, you can save a bit of money in the meantime. Right now I have almost $5k in 0% offers - dental, appliances, furniture, veterinary. I have the money to pay it off in full in two months, but why bother when I can pay it off over 5 months and get .5-3% interest (gain, not paid out) on the money?


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## Capt Worley PE (Sep 23, 2013)

roadwreck said:


> spsukenyon said:
> 
> 
> > I think Dave is pretty good at what he does, but having a *car loan* and a house mortgage is pretty much a way of life if you were not born privileged.
> ...




Used American sedans are a bargain. Check out prices on 2012 Impalas. You can get a loaded out LTZ for under 15K, and its got all the bells and whistles, plus 300hp (as well as, a trivia fact, a suspension system that was completely reworked by GM Performance because of the high percentage they expected to go to police fleets)

Of course, not everyone has gotten to the 'cars are tools to go from a to b' place yet.


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## engineergurl (Sep 23, 2013)

Capt Worley PE said:


> roadwreck said:
> 
> 
> > spsukenyon said:
> ...






But most car loans now days come with so many incentives... I'm not going to pay mine off early, it's not gaining interest, and the payment isn't that much... granted though, I paid for half my car in cash and bought it in a situation where I had just totaled my truck earlier that day, or I probably would have been able to get the value I financed from the trade in... so had I not crashed into the ditch, I wouldn't have the car loan... but I also wouldn't have bought that car... my case in point earlier... sometimes we end up with debt because life throws you curve balls... divorce, car accidents, medical bills... etc etc.


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## Capt Worley PE (Sep 23, 2013)

engineergurl said:


> Capt Worley PE said:
> 
> 
> > roadwreck said:
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Which is better from the standpoint of money paid? Paying $15K cash for a two year old Impala, or paying $30K for a new one at 0% interest?


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## Master slacker (Sep 23, 2013)

Capt Worley PE said:


> roadwreck said:
> 
> 
> > spsukenyon said:
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I came to that realization when I discovered I had no money...


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## snickerd3 (Sep 23, 2013)

For me the brand new car is the hands down winner. It guarantees me the previous owner didn't smoke in it, wear cologne/perfume I'm allergic to, have animals in the car, etc... I will also know how the car was treated sicne I would be the first owner.


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## snickerd3 (Sep 23, 2013)

I did the used vehicle route for my first car out of school...it was a chevy blazer with all the bells and whistles but I was at the repair shop often with it.


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## envirotex (Sep 23, 2013)

from k1f3--"We both do have credit cards now but use them primarily while traveling for work. Then get the expense check and pay off the balance each month. I also use mine to finance computer builds and repairs for my side business. Again once I get paid for the work, the balance is paid off each month."

I don't even use a credit card for work expenses...If it's gong to be more than $1000, then I generally pay in advance and get reimbursed in advance, or get an advance. I don't really like the idea my employer using my cash or my credit...


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## engineergurl (Sep 23, 2013)

Capt Worley PE said:


> Which is better from the standpoint of money paid? Paying $15K cash for a two year old Impala, or paying $30K for a new one at 0% interest?




Considering, the only new car I've ever technically had in my possession was purchased and waiting in the driveway when I got home from work one day, and I have just now started driving it nearly 4 years later, you are preaching to the choir... I would have loved to have gotten a brand new jeep, but my 2002 grand Cherokee was a quarter of the price, and had met my current needs so that's what I got.


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## mudpuppy (Sep 23, 2013)

envirotex said:


> from k1f3--"We both do have credit cards now but use them primarily while traveling for work. Then get the expense check and pay off the balance each month. I also use mine to finance computer builds and repairs for my side business. Again once I get paid for the work, the balance is paid off each month."
> 
> I don't even use a credit card for work expenses...If it's gong to be more than $1000, then I generally pay in advance and get reimbursed in advance, or get an advance. I don't really like the idea my employer using my cash or my credit...




I love to charge travel for work--gimme those airline miles! Yeah!


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## csb (Sep 23, 2013)

^ yep! Our work is really good (please don't let me jinx this) about getting us paid right away. That means I build up travel points and cash back.

We also have a work issued card that I rarely use. If the bill will be really big then I use it, like for my two weeks of hotel room in Chicago. That's a lot of money hanging out there if work decides to have a hiccup in the reimbursement process.


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## Capt Worley PE (Sep 23, 2013)

engineergurl said:


> Capt Worley PE said:
> 
> 
> > Which is better from the standpoint of money paid? Paying $15K cash for a two year old Impala, or paying $30K for a new one at 0% interest?
> ...




I bought two vehicles new, one in 1989, the other in 1998. After the one in 1998, I decided I'd go used because I just honestly can't see paying more than 15K for a car. The fact is, I haven't paid more than 10K for one since then, although I suspect the next one (hopefully at least five years or so down the road--I have an 07 with 65K on it) will probably be pushing the 15K mark because of inflation (and tha fact that I wouldn't buy anything pre-2012 because that's when they started mandating stability control).


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## engineergurl (Sep 23, 2013)

we are actually in a debate right now. Right now, we have two car payments, but both will be paid off shortly. We were looking at the 2013 models and considering getting what we call our 'lifetime' truck... it's a big step towards the retirement we want and it fits in with our plan.


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## knight1fox3 (Sep 23, 2013)

snickerd3 said:


> For me the brand new car is the hands down winner. It guarantees me the previous owner didn't smoke in it, wear cologne/perfume I'm allergic to, have animals in the car, etc... I will also know how the car was treated sicne I would be the first owner.


I don't have allergies so I can't really relate. But I just can't justify the amount of depreciation when driving a brand new car off the lot. That will never be a deal IMO.



envirotex said:


> from k1f3--"We both do have credit cards now but use them primarily while traveling for work. Then get the expense check and pay off the balance each month. I also use mine to finance computer builds and repairs for my side business. Again once I get paid for the work, the balance is paid off each month."
> 
> I don't even use a credit card for work expenses...If it's gong to be more than $1000, then I generally pay in advance and get reimbursed in advance, or get an advance. I don't really like the idea my employer using my cash or my credit...


I guess that works. Do you have a corporate card? How do you pay for hotels and car rental? You can't charge those in advance especially if you have to unexpectedly stay longer and pay for that when you leave. And same goes for meals, you can't "pre-pay" those either. Airline tickets were always paid for on the corporate account. But now working for a 20 or so person consulting firm, there are no corporate accounts or cards. If you're traveling, you're paying out of pocket and will be reimbursed once you submit the report. That's why I use credit because the money isn't being taken directly from my bank account. That certainly would not fly with me.



csb said:


> ^ yep! Our work is really good (please don't let me jinx this) about getting us paid right away. That means I build up travel points and cash back.
> 
> We also have a work issued card that I rarely use. If the bill will be really big then I use it, like for my two weeks of hotel room in Chicago. That's a lot of money hanging out there if work decides to have a hiccup in the reimbursement process.


+1


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## snickerd3 (Sep 23, 2013)

knight1fox3 said:


> snickerd3 said:
> 
> 
> > For me the brand new car is the hands down winner. It guarantees me the previous owner didn't smoke in it, wear cologne/perfume I'm allergic to, have animals in the car, etc... I will also know how the car was treated sicne I would be the first owner.
> ...


I'll just be one of those people that makes the opportunity for those of you to have used cars to choose from. ;-)


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## Flyer_PE (Sep 23, 2013)

If I traded cars more often, I would definitely go the used vehicle route. Picking up a new one gets me pretty much exactly the options/color I want and I tend to run them for well over 10 years. It would be a very different story if I were changing vehicles every 3 to 5 years.


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## Sapper PE LS (Sep 23, 2013)

I look at it like this, if I were buying a car for an investment, absolutely I would not buy it new. But I'm not buying it as an investment, I'm buying it for transportation, knowing that it will depreciate in value and it will wear out in time. When I look at a new vehicle with like 30 miles on it and the cost is let's say $20k, but then you can get the year end close out model and knock off $1k, probably get some other discounts knocking off another $500 or more, and then trade in value of my current car, bringing the price down to hopefully somewhere in the $10k - $15k range, then you get financing at 0%, plus warranties and free oil changes for x number of years, it really doesn't make sense to go find that $16k two year old car with no rebates / discounts, and financing at 6% or higher. Even if you are paying cash, the amount the dealer charges for a certified pre-owned vehicle is not really that much less than the price of the car new after incentives, so to me it makes no sense not to buy new. With a new car, you pretty much know what you are getting and that it most likely will still be running in 10 years.


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## Flyer_PE (Sep 23, 2013)

^That pretty much describes where I landed with my new truck. Once the end-of-model-year incentives were factored in, the differential in price between new and used is pretty small.


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## Capt Worley PE (Sep 23, 2013)

^^Ford is really upping the ante on rebates because the 2015 F-150 is changed significantly, making heavy use of Al in place of steel.


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## Ship Wreck PE (Sep 23, 2013)

Flyer_PE said:


> ^That pretty much describes where I landed with my new truck. Once the end-of-model-year incentives were factored in, the differential in price between new and used is pretty small.


That's what I am saying In with the old truck, and out with the new truck.. Less $200.00 a month payment


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## Flyer_PE (Sep 23, 2013)

Capt Worley PE said:


> ^^Ford is really upping the ante on rebates because the 2015 F-150 is changed significantly, making heavy use of Al in place of steel.




I have a buddy that works at Ford. He told me I'd be happier with the 2013-14 truck. He's a little taller than I am but he's been in the 2015 truck and felt like the character "Bones" from the movie Gator.


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## Capt Worley PE (Sep 23, 2013)

Flyer_PE said:


> Capt Worley PE said:
> 
> 
> > ^^Ford is really upping the ante on rebates because the 2015 F-150 is changed significantly, making heavy use of Al in place of steel.
> ...




Why do they call you Bones?


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## Master slacker (Sep 23, 2013)

Sapper said:


> I look at it like this, if I were buying a car for an investment, absolutely I would not buy it new. But I'm not buying it as an investment, I'm buying it for transportation, knowing that it will depreciate in value and it will wear out in time. When I look at a new vehicle with like 30 miles on it and the cost is let's say $20k, but then *you can get the year end close out model and knock off $1k*, probably get some *other discounts knocking off another $500 or more*, and then *trade in value of my current car, bringing the price down to hopefully somewhere in the $10k - $15k range*, then you get *financing at 0%, plus warranties and free oil changes for x number of years*, it really doesn't make sense to go find that $16k two year old car with no rebates / discounts, and financing at 6% or higher. Even if you are paying cash, the amount the dealer charges for a certified pre-owned vehicle is not really that much less than the price of the car new after incentives, so to me it makes no sense not to buy new. With a new car, you pretty much know what you are getting and that it most likely will still be running in 10 years.




I drive cars into the grave and then some. Our youngest car is 12 years old. The oldest is 22 years old. I HIGHLY doubt the trade-in value of any of our cars would knock $4000 - $9000. 0% financing from the dealer has caveats associated with them in that there fine print. Usually warranties are extended to used cars - losing 2 years / 18,964 miles off the warranty won't phase me. And oil changes? Nobody puts generic oil-from-the-black-drum into any of our cars.

2014 Kia Sorento LX - $26,550 at 0.89%

2012 Kia Sorento LX - $18,691 at 1.39% with 22k miles

Both using USAA car service tool. For our position, the $8k savings is a much better choice.


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## Dexman PE PMP (Sep 23, 2013)

^^^ That's a full $125/month difference on a 60 month purchase.

And then there are guys like me who put several thousand dollars into aftermarket upgrades to cars that already don't need them...


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## Master slacker (Sep 23, 2013)

3 year loan. But if you're a true balla' like me, you'll pay that sh*t off early.


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## engineergurl (Sep 23, 2013)

Was thinking about snicks comment. When I got the jeep home I found a pack of wraps under the front seat. Puts a whole new meaning to car dealer. (That was a bad joke but true story)

Snick turns into snack on my autocorrect... lol


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## Flyer_PE (Sep 23, 2013)

Dexman PE said:


> ^^^ That's a full $125/month difference on a 60 month purchase.
> 
> And then there are guys like me who put several thousand dollars into aftermarket upgrades to cars that already don't need them...


I just had a spray-in bed liner applied to my new truck today. Next up is a retractable tonneau cover and a set of splash guards. I think that should be just about it until the tires are shot. Managed a cheap upgrade to newer model take-offs on the last one. I thought my old GMC looked pretty good sportin' Denali wheels.


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## Capt Worley PE (Sep 24, 2013)

Dexman PE said:


> And then there are guys like me who put several thousand dollars into aftermarket upgrades to cars that already don't need them...




Spoiler alert: That'll lose its appeal one day. I know you don't beleive me, because I wouldn't have believed anyone who told me that when I was your age.


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## Master slacker (Sep 24, 2013)

HP never loses appeal. However, when trying to recoup the money spent on said HP when selling, the appeal of that cost to the buyer is lost.


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## roadwreck (Sep 24, 2013)

Master slacker said:


> HP never loses appeal.




Harry Potter? I never found him terribly appealing to begin with. :huh:


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## ventilator (Sep 24, 2013)

The only debt we carry is home loan and one car loan. Usually I don't like having a car loan but needed a new car for the family and after looking around were able to get a 2012 model that was still new but had a tone of dealer incentives at what I think was a 1.9% rate. After our trade and everything even if we take the full 6 years to pay off the loan it comes out to something like 1500 so its not worth it to me to deplete savings so much to pay it off when compared to the small amount of interest over a 5 year period.

Like some others have said, if you can manage your money on your own and don't have spending problems you can use debt as a tool, but I do know some people who absolutely can't be trusted with a credit card or loans because they just spend away.


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## csb (Sep 24, 2013)

ventilator said:


> The only debt we carry is home loan and one car loan. Usually I don't like having a car loan but needed a new car for the family and after looking around were able to get a 2012 model that was still new but had a tone of dealer incentives at what I think was a 1.9% rate. After our trade and everything even if we take the full 6 years to pay off the loan it comes out to something like 1500 so its not worth it to me to deplete savings so much to pay it off when compared to the small amount of interest over a 5 year period.
> 
> Like some others have said, if you can manage your money on your own and don't have spending problems you can use debt as a tool, but I do know some people who absolutely can't be trusted with a credit card or loans because they just spend away.




You know my husband?!


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## Capt Worley PE (Sep 24, 2013)

Master slacker said:


> HP never loses appeal.




I have to admit there's a certain perverse pleasure in driving a slow car quickly. You can wail on it like you stole it and not stand out in traffic.


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## Exception Collection (Sep 24, 2013)

I went the used car route for my first three cars - in 2000, 2002, and 2003. When I bought my 4th car in Dec 2003, we decided to buy new. Still driving it, and only rarely do I have issues (most of those due to mechanic screwups - one fried the computer with a firmware upgrade, one failed to do an alignment I paid for after installing new shocks, one installed an incompatible aftermarket part). I think it's been unusable for all of 2 weeks over the past decade.


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## envirotex (Sep 24, 2013)

Capt Worley PE said:


> Master slacker said:
> 
> 
> > HP never loses appeal.
> ...




A 1972 MGB, for example...top speed, 130 kph, downhill, with a tailwind. Cop would never believe the car could go that fast...


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## csb (Sep 24, 2013)

envirotex just went Canadian on us...130 kph indeed.

Driving less aggressively saves gas...and makes people angrier. I have all the makings of a road rage inducing hypermiler.


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## Dexman PE PMP (Sep 24, 2013)

There's always one in the left lane...


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## EM_PS (Sep 24, 2013)

usually a friggin' Prius... &lt;_&lt;


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## Capt Worley PE (Sep 25, 2013)

I actually like the 3rd gen Prius. I wonder what the fourth gen will look like.


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## Capt Worley PE (Sep 25, 2013)

envirotex said:


> Capt Worley PE said:
> 
> 
> > Master slacker said:
> ...




Most entertaining vehicle I ever had was my 89 Civic Si. 108hp and double wishbones all the way around. And, you could haul amazing amounts of stuff in it.

And, most importantly, it was black, and blended right in with traffic.


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## Master slacker (Sep 25, 2013)

I was holding the pole position at a stop light two days ago when a newer Kia Optima pulled alongside me. As the two lanes merged to one (his lane ending) up ahead, he was steadily creeping up to that white line hoping to hit the green and get a head start to go around my little red putt putt car. He crept so long that his back tires were on the white line before he stopped (it was a long red light). I, on the other hand, took the approach of watching the right turn arrow of the crossing traffic go from green to yellow. At yellow I let off the brake and crept up. When our light turned green, I used that initial momentum and propelled my car forward, undoubtedly shocking the number two car. He ended up merging behind the lowly red sports car, bathing in shame. Another fight won for the underpowered, A-to-B turd mobiles.


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## Flyer_PE (Sep 25, 2013)

I had a Camaro in college and my roommate had a VW Rabbit. We would sometimes drag race them between stop lights on the way to class. It always amused us that his little 4cyl would kick the muscle car's ass for the first 50 feet. We would wind up about even when it came time to slow down for the next light.


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## Exception Collection (Sep 25, 2013)

Master slacker said:


> I was holding the pole position at a stop light two days ago when a newer Kia Optima pulled alongside me. As the two lanes merged to one (his lane ending) up ahead, he was steadily creeping up to that white line hoping to hit the green and get a head start to go around my little red putt putt car. He crept so long that his back tires were on the white line before he stopped (it was a long red light). I, on the other hand, took the approach of watching the right turn arrow of the crossing traffic go from green to yellow. At yellow I let off the brake and crept up. When our light turned green, I used that initial momentum and propelled my car forward, undoubtedly shocking the number two car. He ended up merging behind the lowly red sports car, bathing in shame. Another fight won for the underpowered, A-to-B turd mobiles.


Sounds more like a win for those that pay attention to intersection light patterns and small measuring tape vendors.


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## mudpuppy (Sep 26, 2013)

This article about Ramsey was published in this month's Money magazine. I think anyone following Ramsey's advice should read it:

http://money.cnn.com/2013/10/01/pf/dave-ramsey.moneymag/

Honestly, I knew very little about Ramsey before reading it. From what I'd heard of him it sounded like he had some decent advice. And I still agree that his advice on saving and getting out of debt sounds good. But it also sounds like he is an egotistical ass who is mainly interested in his brand and making money for himself, like many big-name radio personalities. Which is fine as long as you take what they have to say with a little skepticism.

The fact that he recommends buying front-end loaded funds just pisses me off, because these types of funds line the pockets of shady financial advisers, and at the same time it is so easy to invest in no-load funds yourself. They take advantage of Ma and Pa Main Street by taking 5% of every dollar invested for themselves, leaving a hole that's hard to make up. If Ramsey is really that good at talking to the average Joe about money, then he needs to go the next step and educate people not just about being responsible in saving, but also in investing. Really, if you're going to bring religion and morals into the picture (which I personally don't feel belong here, but whatever), isn't this the moral, responsible thing to do? Oh but wait, that wouldn't benefit the pocketbooks of his cronies (e.g. the Dave Ramsey  approved financial advisers).

In the end, I pretty much agree with what the article concludes--follow his advice on saving and getting out of debt, but forget his advice on investing.


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## Sapper PE LS (Sep 26, 2013)

Mudpuppy, I saw an article similar to that one, actually I think it was a blog recap of your article there. I've always kind of disagreed with Ramsey's investing advice but only because it goes against what I've always heard from the really wealthy investors who say to diversify and take on varying percentages of risk based on your age, etc., but like you said, and the article said, and pretty much everybody who blogs about this stuff says, he's great at helping you get out of debt. And I'm with you on the religion thing, I think it should be left out of his financial advise.


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## knight1fox3 (Sep 27, 2013)

mudpuppy said:


> This article about Ramsey was published in this month's Money magazine. I think anyone following Ramsey's advice should read it:
> 
> http://money.cnn.com/2013/10/01/pf/dave-ramsey.moneymag/
> 
> ...


I have read this before and to be honest, when he first wrote his book, he was a small fish in a large pond. The book was a good read and gave excellent advice on how to eliminate debt. Since going mainstream with his syndicates, pod-casts, etc, like all things that go mainstream, the money eventually trumped the quality of advice/services being offered. Which probably also gave way to the "untouchable" egotistical attitude (unfortunately).

As for investment options with front-end loaded funds, I disagree that this is solely to line the pockets of shady advisers. It depends on the options that accompany the funds and how aggressive they are in the market. Some front-end loaded funds are much better than other back-end loaded funds. I had to really dig into this to see how the math and the benefits worked out. And I say this because LadyFox and I just recently consolidated 401k funds from our previous employers into a very aggressive mutual fund. Which will yield much more return than what was to be had in the 401k fund. And those funds will be instantly available when we hit retirement. No messing around with accountants and putting in requests to withdraw a 401k. Additionally, the financial adviser we chose is getting a percentage yes. But you know what? My time is worth quite a bit at the moment (life, small business, grad school, work), and I simply do not have time to pick and choose which investments are the most optimal. That is now his concern and I will gladly give him his percentage (albeit small) to look at the corresponding information for me and make the best decisions. That's not to say I won't be monitoring the decisions he makes. But I have no problem letting him do the research for me and making informed decisions with my approval.


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## knight1fox3 (Sep 27, 2013)

mudpuppy said:


> This article about Ramsey was published in this month's Money magazine. I think anyone following Ramsey's advice should read it:
> 
> http://money.cnn.com/2013/10/01/pf/dave-ramsey.moneymag/
> 
> ...


I have read this before and to be honest, when he first wrote his book, he was a small fish in a large pond. The book was a good read and gave excellent advice on how to eliminate debt. Since going mainstream with his syndicates, pod-casts, etc, like all things that go mainstream, the money eventually trumped the quality of advice/services being offered. Which probably also gave way to the "untouchable" egotistical attitude (unfortunately).

As for investment options with front-end loaded funds, I disagree that this is solely to line the pockets of shady advisers. It depends on the options that accompany the funds and how aggressive they are in the market. Some front-end loaded funds are much better than other back-end loaded funds. I had to really dig into this to see how the math and the benefits worked out. And I say this because LadyFox and I just recently consolidated 401k funds from our previous employers into a very aggressive mutual fund. Which will yield much more return than what was to be had in the 401k fund. And those funds will be instantly available when we hit retirement. No messing around with accountants and putting in requests to withdraw a 401k. Additionally, the financial adviser we chose is getting a percentage yes. But you know what? My time is worth quite a bit at the moment (life, small business, grad school, work), and I simply do not have time to pick and choose which investments are the most optimal. That is now his concern and I will gladly give him his percentage (albeit small) to look at the corresponding information for me and make the best decisions. That's not to say I won't be monitoring the decisions he makes. But I have no problem letting him do the research for me and making informed decisions with my approval.


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## mudpuppy (Sep 27, 2013)

A lot of front end loaded funds charge 5%, which is huge when you're talking an average market return of 8% or so over time. I personally have a hard time paying someone to do something I can do myself, though if the payback is small I'll do it, for instance pay someone to work on my car.

But in this case we're talking about tens of thousands of dollars when compounded over time.

If I did want to pay someone to manage my money, there are plenty of advisers who charge by the hour. Commissions on front end loaded funds are a conflict of interest that even the most honest adviser would be tempted by... All they have to do is steer you toward the funds that give them the biggest kickback.


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## knight1fox3 (Sep 27, 2013)

^ understandable. If I had time to do it myself, I surely would. So this particular instance is circumstantial. Both LadyFox and I did our own individual research and arrived at nearly the same conclusion. The forecasted returns look to be pretty substantial. So for now, this looks to be a move in a better (not necessarily the right one) direction for our investments.


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## Master slacker (Sep 27, 2013)

Tl;dr sex


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## Road Guy (Nov 6, 2013)

So does Dave recommend not even having a mortgage payment?

We dont have any debt,zero right now because we are renters  no credit cards, no car payments...

But that won't last long... We make a good salary but it seems we don't put away as much as we should every month (aside from what goes into 401k and work retirements)

We do tend to put most everything on the credit card throughout the month and then pay it off every month, which is sometimes painful.

Does he suggest using all cash, or is he the one that says put Monopoly money in your wallet in case you have to use your credit card?

I kind of have an issue buying a book from someone who gets rich of my buying a book telling me how to save money...

I am probably only in this position because my wife is cheap as hell and doesn't spend like typical women do. To her shopping is hell...

But before we had kids we used to always have a decent savings and $10 grand in checking of something close by and it seems these days the only real savings we have are our retirement accounts...

I would love to get back to those days...


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## Capt Worley PE (Nov 6, 2013)

Road Guy said:


> I kind of have an issue buying a book from someone who gets rich of my buying a book telling me how to save money...


Make Abbie Hoffman proud and steal it.


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## roadwreck (Nov 6, 2013)

Road Guy said:


> So does Dave recommend not even having a mortgage payment?


Sort of. But he realizes that most people couldn't buy a house outright, so he proposes you buy a home with a 15 year mortgage where the payment is no more than 25% of your take home pay.





Road Guy said:


> Does he suggest using all cash, or is he the one that says put Monopoly money in your wallet in case you have to use your credit card?


He does suggest using all cash. He contends that it "hurts more" to spend cash than to use a credit card (which doesn't feel as much like real money). So if you are spending cash you are likely to spend less than you would even if you were to use credit cards and pay them off. I completely believe this is true, but I love the convenience of credit cards, and really don't like dealing in cash. I'm such a tight wad anyway that I would probably be totally intolerable if I were to operate in a cash only mode. 




Road Guy said:


> I kind of have an issue buying a book from someone who gets rich of my buying a book telling me how to save money...


I agree. I have bought one of his books before, but with the intention of giving it to some family members that are just awful with money. You really don't need to buy his book, I think you can get 99% of what he says in his books just by listening to his radio show, which you can listen to free on his website.

http://www.daveramsey.com/show/radio/

With all that said, I don't know that much of what Dave Ramsey teaches is applicable to your situation. His plan tends to focus on getting people out of debt and really isn't aimed at people who are already there but just want to do better. Sure you could apply some of what he preaches, but none of it will be new information for you.


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## Flyer_PE (Nov 6, 2013)

Road Guy said:


> I kind of have an issue buying a book from someone who gets rich of my buying a book telling me how to save money...


We borrowed one from the library.


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## mevans154 (Nov 6, 2013)

I just paid off my mortgage last week! My wife and I had our house built in 2002 and I "aggressively" paid extra on the mortgage each month. It took a little over 11 years but I am now mortgage free at 45 years old!!

I refinanced my mortgage 3 times over the 11 years and in the end had a 2.24% loan. I know I could have made more money investing it, but there is just something about being debt-free that has always been of goal of mine.

What is the concensus out there...Should I have kept my mortgage longer and invested the extra payments or pay down my mortgage aggressively as I did?


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## Ship Wreck PE (Nov 6, 2013)

I felt the same way years ago before the housing crash. I put every extra penny trying to pay down the mortgage. But now I pay the payment and any extra money I put in savings or invest elsewhere.

Houses in our area just don't sell very quickly and I have seen quite a few people that really needed to get the cash out of their house and they could not.


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## mevans154 (Nov 6, 2013)

Ship Wreck said:


> I felt the same way years ago before the housing crash. I put every extra penny trying to pay down the mortgage. But now I pay the payment and any extra money I put in savings or invest elsewhere.
> 
> Houses in our area just don't sell very quickly and I have seen quite a few people that really needed to get the cash out of their house and they could not.



I have a $150,000 HELOC so if I ever needed cash it would just be a mouse click away. Also, I don't plan on moving for at least the next 20-25 years, so the housing market can do whatever it wants for a while before I have to worry...


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## mevans154 (Nov 6, 2013)

:2cents:


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## Road Guy (Nov 6, 2013)

[SIZE=medium]I was 9 years away from having my old house paid off![/SIZE]

[SIZE=medium]At least I took some money with me after paying those dirty scum sucking realtors…[/SIZE]

[SIZE=medium]I would place importance on paying off the house over investing. We did a refinance to a 15 year and I am glad we did as it helped us walk away with some money for our next house..[/SIZE]

[SIZE=medium]Our next house here in Colorado though is unfortunately probably going to be 100,000 more than the house we just sold, next year if we stay and buy here, I plan to do a 30 year mortgage and do whatever creative methods I can to avoid PMI, but my plan is just to “chill” for a few years and make sure were staying here and then just pay more on the mortgage and not pay for the refinance to a 15 year. And by Chill I mean just pay the basic payment….[/SIZE]

[SIZE=medium]We don’t like having debt, last month we bought a used car for me and we were going to finance some of it and when we got our coupon book in the mail we just mailed in a check for the full amount.. Too annoying![/SIZE]

[SIZE=medium]I need to learn to be more of a tight wad I reckon, my wife is way off the spectrum tight wad (like she makes Clark Howard look like he spends too much money) so if were both like that then life is just no fun..[/SIZE]

[SIZE=medium]Are mortgages these days in the post meltdown world back to requiring 20% down payment or does it depend on what your credit rating is?[/SIZE]


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## snickerd3 (Nov 6, 2013)

^ I can relate with your wife I'm a super frugal person too, but that allows me to splurge on occassion. Other than coats and shoes I don't buy clothes if they aren't on supergood clearance. Minisnicks clothes are all $2 or less each, brand new from places like old navy, target, kohls. I know this method wont work when he is older and growing unpredictablely, but it saves a shit load of money now.


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## wilheldp_PE (Nov 6, 2013)

roadwreck said:


> With all that said, I don't know that much of what Dave Ramsey teaches is applicable to your situation. His plan tends to focus on getting people out of debt and really isn't aimed at people who are already there but just want to do better. Sure you could apply some of what he preaches, but none of it will be new information for you.




http://www.mrmoneymustache.com/

That's a website that essentially teaches you how to be a tightwad. I know some people who have implemented a lot of his ideas.


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## roadwreck (Nov 6, 2013)

I bought a new house 3 months ago. We put 20% down so I don't know what the stipulations are these days for folks that don't have the down payment to put down.

We did a 30 yr mortgage this time around. The place I just sold was on a 15 year, but if I had it all to do again I probably would have done a 30 year on that instead. Had it been on a 30 year I probably wouldn't have sold it (which i did at a considerable loss). On a 30 year I probably would have held onto it for a year or two as a rental to see if prices would recover at all but on the 15 year loan the rental income would be considerably less that the mortgage payments and I didn't want that hanging over my head.


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## Road Guy (Nov 6, 2013)

wilheldp_PE said:


> roadwreck said:
> 
> 
> > With all that said, I don't know that much of what Dave Ramsey teaches is applicable to your situation. His plan tends to focus on getting people out of debt and really isn't aimed at people who are already there but just want to do better. Sure you could apply some of what he preaches, but none of it will be new information for you.
> ...


LOL, I have to laugh, that guy is in Boulder, there are not that many other cities in the US you can bike everywhere..


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## wilheldp_PE (Nov 6, 2013)

Knowing some of the crap he does, he probably researched which cities were most bike friendly and moved there specifically because he could bike everywhere. Some of his advice isn't the most practical, but if you need to save money, he has some good ideas.


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## goodal (Nov 7, 2013)

We bought last year and got 3.25% for a 30 yr. The 20% down was not necessary, but we jumped through some hoops and got there. I think it is a great idea to get out from under the mortgage asap, but you don't need to stop investing for 10 yrs to do it. My wife is an avid couponer and consignment shop connoisseur. The only time the kids get new clothes is when grandma buys them some at Christmas. I'm a Dave fan, but I have not been able to abide by too many of his baby steps. We have a credit card, but don't use it much. I do use credit when it makes sense. We have started using the envelope system and really like it. It gives you a lot of tiny savings accounts and when the life insurance bill comes due, you don't have to dip into the checking account. Just go empty the envelope.


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## Road Guy (Nov 7, 2013)

That's good to know, I can comfortably put down 10-15%, but i would like to keep some cushion cause I am in a place with no networking contacts and if something bad happened with a job and I had to go looking for a few months I wouldn't want to dip into my 401k.


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## goodal (Nov 7, 2013)

I had to do that very thing a couple months ago when the paychecks stopped flowing for a little while. It sucked.


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## knight1fox3 (Nov 7, 2013)

roadwreck said:


> I agree. I have bought one of his books before, but with the intention of giving it to some family members that are just awful with money. You really don't need to buy his book, I think you can get 99% of what he says in his books just by listening to his radio show, which you can listen to free on his website.
> 
> http://www.daveramsey.com/show/radio/
> 
> With all that said, I don't know that much of what Dave Ramsey teaches is applicable to your situation. His plan tends to focus on getting people out of debt and really isn't aimed at people who are already there but just want to do better. Sure you could apply some of what he preaches, but none of it will be new information for you.


+1

Our mortgage is also the only debt we have right now. We pay cash (including cars) for everything else. I only have/use a credit card for my side PC business and for work travel expenses. Balance gets paid off each month when I invoice customers. LadyFox has a CC too but only uses it for business travel as well. Otherwise it's all cash and/or debit cards.


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## Road Guy (Nov 7, 2013)

Wil- he does have some good ideas though, I just had to laugh at the old sel your car and move to boulder routine(I hear it from the peeps I work with everyday). I guess if my family of 5 could live in a duplex we could swing it!


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## MetsFan (Nov 7, 2013)

The only debt we have right now is the car we purchased in 2011. The interest rate on it is 1.7% so we didn't feel the need to pay it off. We use credit cards for everything to get the rewards and pay them off at the end of each month. I'm slowly starting to learn about investments since we haven't done anything besides setting aside 5% for our 401k.

It almost sounds like hiring an adviser would be the best bet.


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## knight1fox3 (Nov 7, 2013)

MetsFan said:


> We use credit cards for everything to get the rewards and pay them off at the end of each month.
> 
> It almost sounds like hiring an adviser would be the best bet.


+1. And we also just went the financial adviser route because we both had 401k plans just sitting there from previous employers. They are now sitting in high yield mutual fund accounts.


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