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Old 09-02-2010, 12:51 PM   #121
bettymae1121
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Originally Posted by sameyeyam View Post
Not sure if I can think of a challenge worse then cancer. I guess maybe death? But that's what I have life insurance for.

I do see your point. However, I guess maybe I prefer to stay on the safe side. Too many things can go wrong with investments and then if something happens, there goes your money and you're stuck with a car payment. These days it's hard to find any low to moderate risk investments that have a decent payback. The stock market is back down again, bonds & treasury notes don't pay much. Probably the best investment a person could make would be picking up cheap foreclosed real estate, but even then it could take 5-7 years to see it go up, and that's after you've paid property taxes, hoa fees, etc. By far the best investment I think a person can make is to save up and pay cash and have zero risk.

I know that catastrophic "sharp end of the stick" things happen. But I believe with planning ahead you can definitely lessen the impact. If you prepare for emergencies, then amazingly enough when the do happen, they aren't emergencies anymore.
Please don't get me wrong, I'm not making light of your illness or any other challenge your family has faced. And I absolutely agree that being prepared like you were made a huge, huge difference for you. Had these things happend to someone in debt and with no savings, the outcome would have likely been bankruptcy.

What I'm trying to say is that sometimes disasters that strike can be so huge that they overwhelm any preperations we make. We can do our best but sometimes you just can't overcome what life throws at us. Case in point, a lot of people that lost homes in Katrina. People that had huricane riders and flood insurance thought all their bases were covered. But the homeowners insurance said the house was a loss due to flood damage and wouldn't pay, and the flood insurance said it was wind damage and wouldn't pay, so the homeowner is stuck with a mortgage on a house that is unlivable. Who foresees insurance companies weasling out of their payments? Sure those people sued, but lawsuits take years, if not decades, and what do you do in the meantime? They did everything right (had the right insurance), and still lost it all, and no one can prepare for that kind of financial loss, unless they were independently wealthy to begin with.

As bad as things get, there can always be something even worse lurking around the corner, and no one can possibly prepare for it all. It does come down to luck sometimes. That doesn't mean we shouldn't prepare for life's curve balls, but it's just not possible to cover all possiblities.
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Old 09-02-2010, 01:02 PM   #122
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In response to OP- airfair, tickets, dining plan, room are all paid in full before we leave. We bring cash and use our debit card for spending money, tips, parking at airport ect. Once trip is over we owe nothing and begin to save for next trip. That is how we define afford it.
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Old 09-02-2010, 03:42 PM   #123
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The problem with the budget board is you don't get the broad range of answers here for a question like yours. People here are very focused on the "never any debt" angle. The average American just doesn't live like this...most people use credit at least some of the time.

For us, we make make sure we have substantial retirement savings, college savings, an emergency fund of about 8 months. We drive our cars 10 years or more. Our current cars have 14 and 15 years on them; we are just in the process of buying a newer car to replace one of them.

But we don't dip into savings to pay cash for cars, for example. We get good financing and simple interest loans. Our last car loan was at 2.9 percent. Yes, it's costing us a bit in interest, but we got a great deal on the car, and we'd rather have the liquid cash on hand.

We did pay cash for our boats. And today, we pay cash for most of our trips, using frequent flier miles and credit card rewards for our airplane tickets and free baggage.

But if we had a great opportunity, but didn't have the cash saved up -- we'd use credit for the trip. We believe in living life now. You don't really know if you have tomorrow.

I did rack up some debt a few years ago with very frequent trips to see my dying father. There was no putting off those trips -- it was now or never. It took awhile to pay them off, but I wouldn't change a thing.

To me, moderation is the key...and you don't find a lot of moderation on the budget board.
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Old 09-02-2010, 06:45 PM   #124
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Originally Posted by jodifla View Post
The problem with the budget board is you don't get the broad range of answers here for a question like yours. People here are very focused on the "never any debt" angle. The average American just doesn't live like this...most people use credit at least some of the time.

For us, we make make sure we have substantial retirement savings, college savings, an emergency fund of about 8 months. We drive our cars 10 years or more. Our current cars have 14 and 15 years on them; we are just in the process of buying a newer car to replace one of them.

But we don't dip into savings to pay cash for cars, for example. We get good financing and simple interest loans. Our last car loan was at 2.9 percent. Yes, it's costing us a bit in interest, but we got a great deal on the car, and we'd rather have the liquid cash on hand.

We did pay cash for our boats. And today, we pay cash for most of our trips, using frequent flier miles and credit card rewards for our airplane tickets and free baggage.

But if we had a great opportunity, but didn't have the cash saved up -- we'd use credit for the trip. We believe in living life now. You don't really know if you have tomorrow.

I did rack up some debt a few years ago with very frequent trips to see my dying father. There was no putting off those trips -- it was now or never. It took awhile to pay them off, but I wouldn't change a thing.

To me, moderation is the key...and you don't find a lot of moderation on the budget board.


Wow. Great post! I admire what you've accomplished & appreciate the balance as well!
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Old 09-02-2010, 06:46 PM   #125
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Dave doesn't give a lot of investment advice, other then to tell people to diversify and put money in mutual funds rather than having stock in one or just a handful of companies. I totally agree with you, I wouldn't want him to give me investment advice either. He even tells people on his show to speak to investment professionals and that he doesn't give investment advice. The closest he comes to investment advice is telling widows to not make any financial decisions for 6 months to 1 year, to just park their money in the bank until they have had a chance to grieve and think clearly. To me that just makes common sense.

I'm a bit curious about why you would think paying a low interest rate would be the same as cash? Let's say you can get a car loan at 5% on a $20,000 new vehicle. You would pay about $800 - $1,000 interest the first year. All of the sudden the $20,000 car becomes a $21,000 car. Even if you could earn 2% in a savings acccount on your $20,000, that would only offset about $400 of the interest. So you are still paying $400-$600 to the bank that first year. That $400-$600 just went into my children's college account, instead of to the bank's bottom line. Even those cars that are 0% interest carry a price, ever try to negotiate a deal on a 0% interest car? Trust me cash gets the better deal every time.

Life has thrown me lots of unexpected curve balls. My husband has had several periods of unemployment as he works in manufacturing. Four years ago I went thru breast cancer (mastectomy, chemo, radiation & reconstruction). I was able to handle those unexpected curves because I didn't have consumer debt and had money in savings. My favorite saying "the only thing in life that is certain is that life is uncertain". I plan for the uncertainty and pray that it never happens. I've tried to build up a wall of curve ball repellent, because I know they will always be thrown at me!

I still do not think I am fortunate. The definition of fortunate is very closely tied to luck. I believe that luck had nothing to do with my financial situation. I believe that hard work, staying out of debt, delaying purchases and putting money into savings got me where I am today. My DH & I both started out making minimum wage and put ourselves thru community college. I ate so many PB&J sandwiches & Top Ramen while watching our friends go out for dinner at fancy restaurants. Some of those friends lost their jobs in this recession, along with their homes and fancy cars. I feel sad for them and I thank God for giving me the brains & wisdom to choose a different path. Even though there were plenty of times I felt like hopping off that path.

I do agree that it is not easy for some people. Heck, I will even say it's not easy for almost all people, myself included. But I do think that making smart decisions with your personal finances can make it much easier in the long run.

When my kids were younger, we just couldn't afford a Disney vacation. The closest they got to Disney were the videos! Finally when they were 12 and 6 we could afford a WDW vacation. It was hard not to take them earlier, but we just could not afford it as we were trying to save money for our necessities and build up a good emergency fund. I listened to my DH for many years ask how all of our friends had so much more then us. Come to find out, as we surmised, they financed most of their toys. Now their toys are getting repo'd and ours belonged to us from day 1.

I still truly believe that I can't "Afford It" if I have consumer debt, have large house payments, don't have college & retirement funds, don't have an large emergency fund, etc. I don't say that my way is right or wrong for everybody else. But I am 100% certain that what DH & I are doing is right for our family and has put us on a good path for the future.
I agree with everything you've done. You will get no arguments from me. You asked why I would pay the interest on a car. Its because my return on my investments is way more than than the 3% intersest I pay on my car. I don't put my money in a low interest savings account. I'm diversified in stocks, metals, 401k etc. My $300 car payment is hardly missed each month but I would definetly miss having the opportunity to use that 20,000 to trade stocks and make more money. Debt is not the devil as long as you keep it in moderation and use it wisely. Everything I buy including food I put on my credit cards and pay them off each month. I like the rewards. I am a really frugal person I rarely buy anything I don't need except trips to WDW which I have a special savings account for. I too feel I am doing what is right for our family and the future whether the economy gets better(doubtful) or continues to crumble. We just have different approaches.
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Old 09-02-2010, 07:36 PM   #126
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Originally Posted by jodifla View Post
The problem with the budget board is you don't get the broad range of answers here for a question like yours. People here are very focused on the "never any debt" angle. The average American just doesn't live like this...most people use credit at least some of the time.

For us, we make make sure we have substantial retirement savings, college savings, an emergency fund of about 8 months. We drive our cars 10 years or more. Our current cars have 14 and 15 years on them; we are just in the process of buying a newer car to replace one of them.

But we don't dip into savings to pay cash for cars, for example. We get good financing and simple interest loans. Our last car loan was at 2.9 percent. Yes, it's costing us a bit in interest, but we got a great deal on the car, and we'd rather have the liquid cash on hand.

We did pay cash for our boats. And today, we pay cash for most of our trips, using frequent flier miles and credit card rewards for our airplane tickets and free baggage.

But if we had a great opportunity, but didn't have the cash saved up -- we'd use credit for the trip. We believe in living life now. You don't really know if you have tomorrow.

I did rack up some debt a few years ago with very frequent trips to see my dying father. There was no putting off those trips -- it was now or never. It took awhile to pay them off, but I wouldn't change a thing.

To me, moderation is the key...and you don't find a lot of moderation on the budget board.
I agree with your post 100%. It does amaze me how many disers are completely debt free or pay every rotating debt off in full each month. Especially in this economy where so many have been hit with job losses and houses that are completely underwater in value. There are a whole lot of hurting families out there right now but we tend to only hear from those who have all their finances perfectly worked out. Which is never really perfect, if you think about it, depending on what happens in life.

One could have three years of expenses set aside in an emergency fund but the reality is that if that person ends up out of work for four years then you could still say they were not prepared. And that could happen to anyone. Even those with no debt and an emergency fund. If you lose your source of income, go through your entire savings, then still have no income coming in once your savings are exhausted you are going to be in the same situation as someone else who happened to go through their savings faster than you did.

On the other hand, those who have no debt and ample savings are going to be "richer" with the money they have not spent on interest payments. They are probably a lot less stressed than those who worry about debt in their life.

The best you can do is be as prepared as you can possibly be for your own family. And realize that there will always be judgments made about what you decide. No matter what you do someone will agree with you and someone will condem you. Such is human nature. What one may think is affordable in a good economy may not be the same thing if the economy stinks. If the OP had asked this same question several years ago there would probably be completely different answers than what we are posting today.
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Old 09-02-2010, 08:25 PM   #127
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affording it

everyone has their own definition of what they can afford, and pay their bills according to their own systems.
good luck to all
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Old 09-02-2010, 08:37 PM   #128
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I pay my vacations like I pay my bills. If its 1,000 for a trip I want to take. I budget it into my "bills". I am a college kid that doesnt have alot of money, but I'm also going to "treat" myself with the extra money that I've earned through out the year.
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Old 09-02-2010, 08:46 PM   #129
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Originally Posted by jodifla View Post
The problem with the budget board is you don't get the broad range of answers here for a question like yours. People here are very focused on the "never any debt" angle. The average American just doesn't live like this...most people use credit at least some of the time.

For us, we make make sure we have substantial retirement savings, college savings, an emergency fund of about 8 months. We drive our cars 10 years or more. Our current cars have 14 and 15 years on them; we are just in the process of buying a newer car to replace one of them.

But we don't dip into savings to pay cash for cars, for example. We get good financing and simple interest loans. Our last car loan was at 2.9 percent. Yes, it's costing us a bit in interest, but we got a great deal on the car, and we'd rather have the liquid cash on hand.

We did pay cash for our boats. And today, we pay cash for most of our trips, using frequent flier miles and credit card rewards for our airplane tickets and free baggage.

But if we had a great opportunity, but didn't have the cash saved up -- we'd use credit for the trip. We believe in living life now. You don't really know if you have tomorrow.

I did rack up some debt a few years ago with very frequent trips to see my dying father. There was no putting off those trips -- it was now or never. It took awhile to pay them off, but I wouldn't change a thing.

To me, moderation is the key...and you don't find a lot of moderation on the budget board.
I couldn't agree with you more. Moderation is the key to everything in life.

Last edited by padawans; 09-02-2010 at 08:47 PM. Reason: typo
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Old 09-02-2010, 11:02 PM   #130
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Didn't you know here at the Dis, EVERYONE pays their cc off monthly. NOONE carries a balance, lol.



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Old 09-03-2010, 08:26 AM   #131
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I agree with your post 100%. It does amaze me how many disers are completely debt free or pay every rotating debt off in full each month. Especially in this economy where so many have been hit with job losses and houses that are completely underwater in value. There are a whole lot of hurting families out there right now but we tend to only hear from those who have all their finances perfectly worked out. Which is never really perfect, if you think about it, depending on what happens in life.
Well, I think that these kinds of threads bring out those of us who are debt-free and follow that type of lifestyle.

But I will say that in the past two years we have had tons of threads where people are reaching out for help because they are struggling. In the years before the crisis, there were hardly ever any threads about people struggling.
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Old 09-03-2010, 08:55 AM   #132
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Originally Posted by jodifla View Post
The problem with the budget board is you don't get the broad range of answers here for a question like yours. People here are very focused on the "never any debt" angle. The average American just doesn't live like this...most people use credit at least some of the time.

For us, we make make sure we have substantial retirement savings, college savings, an emergency fund of about 8 months. We drive our cars 10 years or more. Our current cars have 14 and 15 years on them; we are just in the process of buying a newer car to replace one of them.

But we don't dip into savings to pay cash for cars, for example. We get good financing and simple interest loans. Our last car loan was at 2.9 percent. Yes, it's costing us a bit in interest, but we got a great deal on the car, and we'd rather have the liquid cash on hand.

We did pay cash for our boats. And today, we pay cash for most of our trips, using frequent flier miles and credit card rewards for our airplane tickets and free baggage.

But if we had a great opportunity, but didn't have the cash saved up -- we'd use credit for the trip. We believe in living life now. You don't really know if you have tomorrow.

I did rack up some debt a few years ago with very frequent trips to see my dying father. There was no putting off those trips -- it was now or never. It took awhile to pay them off, but I wouldn't change a thing.

To me, moderation is the key...and you don't find a lot of moderation on the budget board.
Agree with this 100%. Our regular budget is VERY tight right now, but we are still planning a trip to WDW for next year. We chose for my partner to be a SAHM, even though we knew money would be tight on just my income, because we feel it's what's best for our family. We're paying for WDW with "found" money - money earned from doing focus groups, rewards sites, selling on eBay, bottle returns, our change jar, & Disney Visa Rewards. Could that money be put towards something else? Sure it could. But we're able to pay our bills on time every month, we have about 6 months of expenses in savings, I contribute to my 401k, we have no debt except my student loan (we rent so no mortgage & we don't own a car) - and we want to go to Disney, so we're working extra to earn the money to do it.

I respect those who have chosen not to take any vacations or buy any extras until they reach certain savings goals, or who spent their young adulthood eating ramen in order to save their meager income for a rainy day, but that's just not the way we choose to do things. We're frugal & careful about what we do spend our money on, but we wouldn't be happy spending years never going anywhere or surviving on mac & cheese just to save for the "what ifs" of life. I'd rather have the experience & memories of taking my toddler to WDW than have an extra $2000 in the bank.
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Old 09-03-2010, 08:01 PM   #133
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Well, I think that these kinds of threads bring out those of us who are debt-free and follow that type of lifestyle.

But I will say that in the past two years we have had tons of threads where people are reaching out for help because they are struggling. In the years before the crisis, there were hardly ever any threads about people struggling.
Trust me when I say I am very envious of those who are debt free. And we are trying to follow their example and get there ourselves. Maybe not completely debt free as we will probably always have a car loan or credit card.....something to keep the credit score alive.

We were one of those who reached out to the Disers over a year ago and got wonderful advice and support.

I do admire those who were debt free even before the economy went south, such as yourself dvcgirl. And we should admire those who have had the guts to come here and ask for advice and been honest about their situations. Whether they were foolish, overly confident or whatever in their financial situation some of the nasty comments made have probably kept others from posting about their own situations.

My previous post just mirrors what many others have been thinking from time to time. All of a sudden everyone seems to have no debt and pay off their cards in full each month. disney4us2002's post said it well and with humor and jodifla hit on it too.

I still get some of my best ideas from this board and the people who share their thoughts and advice. That is when I can find some time away from work and the family.
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Old 09-04-2010, 12:35 AM   #134
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My idea of "affording it" means I have the money available to cover the cost....and I want to spend it
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Old 09-04-2010, 05:54 AM   #135
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My idea of "affording it" means I have the money available to cover the cost....and I want to spend it
You said it very short and sweet but, if I may, I'd like to add something.

"My idea of "affording it" means I have the money available before I buy it to cover the cost... and I want to spend it"

Thank you.
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