Debt paydown strategy?

[jag90]

I have read reviews of both books on Amazon and am still at a loss at to which I want to invest in. Anyone out there who has read both and can give some insight into both?

Mrs. jag90

 

[got2lovedisney]

There is some great info on this thread! I just wanted to add my $.02. I agree that for some it is easy to say "use the credit card and pay it off each month". It's not easy for me...twice I had an Amex...twice it came time to pay my Amex annual fee of $55 and twice I've cancelled my Amex Green Card. Twice I've made a big mistake. The interest I've accrued on my credit cards far outweigh the $55/year. I'm one of those type that NEED the regimented monthly pay-off of an Amex.

Recently I was lucky enough to get an offer for a Discover with 0% on balance transfers for life with no transfer fee so everything is now on that card. For purchases, I started using an AMEX BLUE I had with only a $500 limit. This way I HAVE to pay it immediately or I'll go over the limit. For gas I have another Discover with 5% cashback on gas purchases and I log on immediately and pay that.

It's not only a case of not spending but finding ways to make money. Some months back there was a promotion at E*trade so I opened up a checking account and I made $175 by completing direct deposit and online bill pay requirements. If a reputable bank wants to give me money...I'm there! Also, I put away stuff to sell on ebay. I haven't listed anything yet but I'm working on it. And I always keep my eyes open for free stuff/promotions. I recently got a $25 blockbuster card for (mis)using one of my credit cards so I'm saving that to give as a gift.

You just have the stay positive and realize...You CAN do it!!

 

[etwinchester]

I think we've all made the CC mistake at one time or another. I'm in the same boat and learning from past mistakes. I haven't used mine since the beginning of the year. Also, I'm starting to pay extra on the lowest one since I got a part-time job. That should be paid off in a few months and then I can tackle the next. Having one paid off awhile will give me some peice of mind.

A word to the wise about closing the accounts. Don't do it until their paid in full. I'm finding out the hard way. If their not FIXED rates, they can increase. I called to get a lower rate on my one card and they can't/won't do it since my account is closed. I now keep my other 2 open until they are paid off in full so I can dispute the rate at a later time if need be!!!

 

[ForTheLoveofDisney]

I agree that it's nice to get a great deal. But I think what Chefdeb was talking about was more along the lines of people using a sale price as a justification to purchase something they hadn't needed or wanted until they saw that it was on sale. You know, the people who see the Free Dining Package and have to book it even though they hadn't been planning on going on vacation until NEXT YEAR. Hey, if you were planning on going to WDW in Nov., then it makes a lot of sense to change your plans to Sept. or Oct. to save money. But if you don't have the money saved up and you just fall prey to the marketing, then that isn't very financially savvy.

After all, sales and coupons aren't intended for use by people who were going to purchase the product anyway.

Oh EthansMom, how I can relate. Recently, I went back to work at Bath and Body Works for a short time to help them with the Semi-Annual sale. What a mistake that was!! I found that being in the store for all of those hours led me right into the temptation of buying things that I didn't "really" need just because they were a great price. Don't get me wrong they were all "great deals" at 75% off but afterwards I wondered to myself would I have purchased this stuff if I had not been in there at all and the answer is no. We hardly go to the mall at all and I tend to stay out of B&BW because even though they have nice products they are over priced in my opinion.

Basically the purchases I made did not put us behind any but they certainly didn't put us ahead any either because just about all the money I made went back into the store.

Also, just want to add my $0.02 too. . . We love Dave Ramsey in this house! I'm looking at two of his books right now as I write this and I'm thinking I need to get back to reading them. It's easy to get off track but when I stick to the plan (Dave's plan that is) I get so much accomplished.

 

[geetey]

I have read reviews of both books on Amazon and am still at a loss at to which I want to invest in. Anyone out there who has read both and can give some insight into both?

Mrs. jag90

I can't recommend one over the other. Perhaps you could check the library and borrow them both?? We own Financial Peace and More Financial Peace and have given away quite a few copies of Financial Peace. Money Makeover is Dave's more current book. We didn't buy it because we have the other two. Still both are good reading.

Yeah, harleyquinn! I am glad to read that you are enjoying the book! Dave really cuts to the core of the matter, explains things so clearly and makes you know you can do it too!

This is a great thread!

 

[ForTheLoveofDisney]

I have read reviews of both books on Amazon and am still at a loss at to which I want to invest in. Anyone out there who has read both and can give some insight into both?

Mrs. jag90

I've read both and I love both. If I had to pick a favorite (I mean if someone were twisting my arm telling me I had to choose a favorite) I'd have to say The Total Money Makeover. But they are both fantastic books and an easy read which is a plus for me. Both books kept my attention and made me want to change my way of doing things.

Perhaps you could check the library and borrow them both??

I agree with geetey. Check at the library. That's how I first read Makeover and then someone gave me a copy so I do have it in my collection.

HTH!

 

[Barbmouse63]

Wow, everyone!! There is a lot of wonderful info on this thread. Thanks for the inspiration and motivation...keep it coming!! Let's encourage each other to become debt-free!! I am not a big shopper but I do fall into temptation sometimes just by being in a store. I really want to pay down our debt and you guys have some excellent advice and strategies!

There's a More Financial Peace book? I didn't know! I'll have to check that out!I have read FP and would highly recommend it!! In fact, I am rereading it!

I really want to do a Disney Cruise but need to take care of some debt before that is feasible. I am so thankful for the support I have found here!!

 

[luvthatdisney]

Hi guys,

This thread is great. I was wondering if any of you have followed Suze Orman's practices. I do have 1 of her books and she is really well spoken and easy to follow. However, I just cant find the will power to follow her completely. We do have alot of cc debt and would love to get out of it, but I am a shopaholic and it just kills me to see something at a great price and not buy it. Now I only buy stuff on sale - I guess in my mind that is how I get around the fact that I should not buy it at all. The clearance racks at Target are my worst enemy

I only work part-time and this is due to my DS and his teenage antics. He needs as much supervision as I can give him. I would prefer to not work at all, but I do have to work some just for us to pay our monthly bills. I am doing the snowball thing with our cc bills, but I do have to admit that I still frequently charge things if I dont have it in my checking account. I can seem to find will power to be on a diet (I have lost 46 lbs since Feb 2005) but the cc debt just hangs over me like a dark dark cloud.

 

[Golf4food]

Hi guys,

This thread is great. I was wondering if any of you have followed Suze Orman's practices. I do have 1 of her books and she is really well spoken and easy to follow. However, I just cant find the will power to follow her completely. We do have alot of cc debt and would love to get out of it, but I am a shopaholic and it just kills me to see something at a great price and not buy it. Now I only buy stuff on sale - I guess in my mind that is how I get around the fact that I should not buy it at all. The clearance racks at Target are my worst enemy

I have watched her PBS special and looked at her website. She is very similar to Dave Ramsey in theory, but she does seem to allow more freedom for spending on things you enjoy because she seems to follow the belief that if you aren't having ANY fun in life, what's the point?

I agree, so I waste money playing golf.

I'm also leasing a car, which is a big no-no to Ramsey and Orman, but I do plan to convert it to a purchase at the end of the lease - the old one died and we couldn't afford a purchase, but we can afford the lease. DW only works PT while still in college for one more year, so we aren't saving much, but we are working on paying off the one CC we have (through our local bank - all others have been paid off and closed) and then I need to tackle the $11,000 + I owe for my student loans... stupid private university education!

 

[melaniemiller2002]

A word to the wise about closing the accounts. Don't do it until their paid in full. I'm finding out the hard way. If their not FIXED rates, they can increase. I called to get a lower rate on my one card and they can't/won't do it since my account is closed. I now keep my other 2 open until they are paid off in full so I can dispute the rate at a later time if need be!!!

If you are concerned about your FICO score, do NOT close any of your accounts. This will lower your FICO score. I have taken quite a few personal finance classes after learning about money the hard way (bankruptcy quite a few years ago). I can now say that I'm pretty darn savvy when it comes to finances. 3 years ago, my FICO score was 496 (thanks to the bankruptcy). It's now around 720, which I'm pretty darn proud of. I've learned that by closing your accounts (if you owe ANY money at all on ANY CC), it will increase your debt to credit limit ratio, thereby lowering your FICO score. Keep those accounts open to lengthen your credit history as well...that's another thing that will lower your FICO score. My longest credit account is 16 years (I was given a credit card at 16 years of age) and that's actually helped my FICO score a lot.

Also, IF you do have a bankruptcy in your past, be aware that as soon as that bankruptcy "falls" off your credit (7 to 10 years after bankruptcy was finalized), your FICO score will go DOWN. This I did not know and I'm glad I learned it now. We were going to wait until my bankruptcy was off my credit before we purchased a house, hoping to get a better rate. The reason it goes down AFTER bankruptcy comes off? When you file bankrupcty, they compare your credit to all the other people who have filed bankruptcy. You are NOT compared to those with a "clean" bill of credit. You are only compared to those who have bankruptcy. So when it comes off your credit, you are now compared to those who don't have bankruptcy. More times than not, that lowers your FICO score.

I was surprised at Dave's method of paying off CC debt. I have always followed the "pay accounts with higher interest first" method. But in the back of my mind, I always felt like paying the cards with less balance would give me a sense of relief. So I am now attacking what's left of our CC debt this way.

For our trip next April/May, it will cost us around $6000 for the total vacation to WDW. How will it be paid? Cash! The kids already know that Christmas this year will be VERY minimal, if any, from us. They have a LOT of extended family and we will be asking them to send either Disney Dollars or make a deposit into their "vacation fund". As a family, we will not be getting each other anything. This will help with the "mad money" part of the trip. I can't fathom putting our vacation on a CC. We have always paid for our vacations with cash....if we don't have enough saved up, the vacation gets downsized or postponed until the next year. Last year, we decided to go camping. Our total week long vacation, including boat rental, food, tent site, etc. was around $500. We had a GREAT time, relaxed, and enjoyed spending time as a family. Our trip to WDW next spring will be our "Big One" for the year and next summer, it will probably be camping again.

Such great advice and inspiring people on here. As a side note: I did not file bankruptcy due to credit card debt, etc. I had several medical emergencies during a time when I had no insurance. One of the hospitals I owed money to was not satisfied with my small monthly payment, turned me over to collections, who in turned went into my bank account and froze all my assets. I struggled with the decision for months before finally filing. It was a horrible time and I've learned to ALWAYS carry medical insurance, even if I can't afford much else. I had a father who filed bankruptcy due to $30,000 in CC debt and I can't any good in that. I lost respect for him when he did that. Especially since he was making a good living at the time.

Melanie

 

[harleyquinn]

As a librarian its my sworn duty to recommend that you check out our books My library has two copies of all of Dave's and Suze's books...And they are free to check out. I plan to buy one of Dave's, but only after I read it make sure it was worth it...

 

[Nik's Mom]

I'm glad I stumbled on to this thread. We really want to get rid of our debt! I am currently looking for part time work, and can hardly wait to put my plan into action! I just got an offer for 2.9% for the life of the balance on transfers. That beats the 7% that I had on my old card, so I think I'll transfer my balance to that lower interest card. Hey, every penny counts! After we get rid of cc and car loan, then I'll tackle our student loans, since the interest is a tax write off.

 

[disnutt]

I'm a big Dave Ramsey believer. Tomorrow morning I will be paying off my final student loan! We will have paid off just over $56,000 in 3 yrs. We sold everything including our house to get here. We closed on our house last Friday and I'll be using part of the proceeds to pay off the student loan. We'll be renting a 2 BR condo for about a year while we sock away savings for at least a 20% down payment for a simple home.

We've even had a few luxuries along the way like a paid for week long trip to Disney World earlier this month. We did that by doing away with the 'little luxuries' I used to think were necessary to the 'good life' like the aforementioned Bath and Body soaps, new clothes every season, and frequent dinners out. By not paying finance charges on credit cards each month we saved even more.

Dave Ramsey is the best!!

 

[jag90]

I can't recommend one over the other. Perhaps you could check the library and borrow them both?? We own Financial Peace and More Financial Peace and have given away quite a few copies of Financial Peace. Money Makeover is Dave's more current book. We didn't buy it because we have the other two. Still both are good reading.

Yeah, harleyquinn! I am glad to read that you are enjoying the book! Dave really cuts to the core of the matter, explains things so clearly and makes you know you can do it too!

This is a great thread!

Check them out at the library, you say? The thought never crossed my mind! I was prepared to spend the money to purchase one or both. Money I don't really have to spare, mind you! Yet another reason I need to find these books!

Guess the kids and I will be making a trip to the library tomorrow!

 

[skiingwife]

Jag90: I've read both books. 3 years ago, I read Financial Peace in about 2 days. I could not put it down. It was very motivating to us. We're not debt free except the house. Last year, I read TMM, and it was not as good to me as FP, however, I already knew what he was going to say. Like the other posters said, check out both from the library. His strategy really works. Dave's first step is $1000 in the bank. That will prevent you from charging up the credit cards again. Good luck to you. You'll be debt free before you know it. (Thanks to Dave, I'll be paying cash for our $6000 Disney trip.)

 

[aero99]

Interesting thread. Thanks for sharing

 

[arizonacolbys]

Thanks for all the inspiration on this thread! We are currently working on paying down our debt - we haven't used our CC's in about a year now (other than this past April when our chocolate lab had to have emergency intestinal surgery that cost us about $3,000 on a Saturday morning - he had to have an object removed that he ate & couldn't digest .) After that minor setback, we've been doing pretty well at paying down some CC's.

I especially like the mention here of making an additional on-line payment the night before payday - I just did that this week & it worked great! We are both currently leasing our vehicles, but may look into purchasing next year when they are up. At the time, the lease payment was all we could afford. We are also hoping to put our house up for sale within the year & need to get some debt paid down in hopes of being approved for a bigger house (& bigger payment .) I actually just took some financial/credit books out of our local library - I'll have to look for Suze or Dave's books when I return the ones I have.

Keep the great advice coming!

 

[Chicago526]

Thanks for all the inspiration on this thread! We are currently working on paying down our debt - we haven't used our CC's in about a year now (other than this past April when our chocolate lab had to have emergency intestinal surgery that cost us about $3,000 on a Saturday morning - he had to have an object removed that he ate & couldn't digest .) After that minor setback, we've been doing pretty well at paying down some CC's.

I especially like the mention here of making an additional on-line payment the night before payday - I just did that this week & it worked great! We are both currently leasing our vehicles, but may look into purchasing next year when they are up. At the time, the lease payment was all we could afford. We are also hoping to put our house up for sale within the year & need to get some debt paid down in hopes of being approved for a bigger house (& bigger payment .) I actually just took some financial/credit books out of our local library - I'll have to look for Suze or Dave's books when I return the ones I have.

Keep the great advice coming!

The first thing Dave's book will tell you is to get out of the leases ASAP and not buy the bigger house at all. While I love his books, sometimes life demands that you put your debt pay off on hold while you get other areas of your life straigtened out. We're looking to get a bigger home too. His book says you should live cheaply and save, save, save to buy a house with cash (no loan), but we are 29 and 33, if we wait to buy a home, that means we have to wait to have kids and we just don't have that kind of time. Our new house payment will be at the 25% of our take home pay that he recomends and we'll have plenty of money to pay down our other debts in no time flat, so I'm ignoring him on paying cash for the house.

My point is, that while these books have great ideas on how to get your finances under control, you don't have to follow them word for word. True, following them to the letter will result in a family getting in a much better position faster, but sometimes you need to look at the bigger picture.

Good luck!

 

[ForTheLoveofDisney]

oops, double post.

 

[ForTheLoveofDisney]

I'm a big Dave Ramsey believer. Tomorrow morning I will be paying off my final student loan! We will have paid off just over $56,000 in 3 yrs. We sold everything including our house to get here. We closed on our house last Friday and I'll be using part of the proceeds to pay off the student loan. We'll be renting a 2 BR condo for about a year while we sock away savings for at least a 20% down payment for a simple home.

We've even had a few luxuries along the way like a paid for week long trip to Disney World earlier this month. We did that by doing away with the 'little luxuries' I used to think were necessary to the 'good life' like the aforementioned Bath and Body soaps, new clothes every season, and frequent dinners out. By not paying finance charges on credit cards each month we saved even more.

Dave Ramsey is the best!!

CONGRATULATIONS!

On being debt free!! Wow, you really were Gazelle Intense!!

DH and I had thought about selling our house too. We purchased our house for around $80,000. The previous owners put alot of money in paving the (long) driveway, putting in a pool and in the landscaping and then they lost the house. It was a foreclosure in a very nice neighborhood. Now, we could sell our house for about $200,000! Talk about a profit. But, now we're very close to being debt free and we figure, if we get gazelle intense on the house we should be without a mortgage in about 5 years and then if/when we sell the profit will truly be ours.

Sometimes it's hard following the plan. I've had a love/hate relationship with Dave throughout this journey. Sometimes you do feel like you're somehow "missing out" at times but the truth is, it is only temporary it's not for the rest of your life, and in the long run the payoff at the end will be great. I mean, think about it for a minute. How much money do you really need to make, how hard do you have to kill yourself when you have No Credit Card payments, No Student Loan payments, No Car Payments, No Mortgage payment? It's thoughts like these that keep me going and we're almost there!
We started out with $26,000 in Credit Card debt and Car loans! We are now down to about $10,000. It will have taken us two years when we're finally debt free but it will be a marvelous feeling! We've had some setbacks in that we couldn't always be gazelle intense in our paying down the debt but we did not resort to using the CC's again and that helped tremendously because at least we weren't taking 2 steps back, we were just maintaining.

Again, way to go disnutt!! I'll be listening for your yell, "I'm DEBT FREE!!" on Dave.