Total Money Makeover

[my3kids]

Yep, before long a private college education will be cheaper than filling up your car's tank!

 

[Nik's Mom]

C.Ann, in my area, you can sometimes get a new car for less than a 2 year old car. But it may not have the same features. For example, the new car might have cloth seats, entry level radio, etc and the 2 year old car might be high end model with leather seats and all bells and whistles. Just an example. I'm not a high end type of girl when it comes to cars.
And when we bought our new car, the insurance did go up, but not that much. But we both have the good driver discount, homeowners discount, etc. I'm sure the discounts made a difference in price.
I guess I won't agree with Dave Ramsey when it comes to college. I had to take out student loans to go to college, and I do not regret it for a second.

 

[Muushka]

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I don't think I've ever heard of anyone being able to purchase a brand new car for the same price as a two-year old car, but I'd love to hear about it if you would like to share.. Also, what is the difference in your insurance rates? With my own car purchases I have always noticed that the newer the car, the higher the rates.. Has that been the case for you?

My only reason for posting that information is so that people will evaluate each situation. I am not a fan of blanket statements. Like "Sams Club" has the cheapest of everything, when they do not.

This is the car we just bought.Mazda 3 We paid $16500 for it and it lists for $17615 with 23000 miles on it, apples to apples except 1 year older and the mileage.
I am sure this car could be talked down in price, but it would have to be a large chunk of change to make me buy a car 1 year older with 2 year's worth of miles on it.

My other car is now 3 years old and not good for comparison, but we paid $10,600 for a brand new Neon (not a fan of that car!) and it listed for about $14,000. Like I said, 18 months later the car was still worth more than the $10, 600 that we paid. And I don't know about your insurance company, but ours does not go down by much (maybe a few dollars) each year. And when we put the new Mazda on (worth $17,500) and took off the 1999 Intrepid, worth $5000, our insurance went up only $6.

So, in conclusion, I would stick to my original statement!

 

[RichNKatHolly]

I'm just curious as to how Dave Ramsey tells you HOW to pay cash for everything. Right now, DH works 1 full time job and a part time job. I work a few part time gigs. We have just about enough every month for rent, food, etc. Very rarely are their any savings (now, if DH would stop smoking I figure we would have an extra $200+ a month). We use our tax refunds for vacations and I had a little "found" money this year to pay for our next trip.

If you literally just make enough to get by, HOW can you pay cash for a house? Today's cost of living (especially where we are) makes it impossible in my opinion.

We did luck out and purchased a new car with cash 2 years ago. We purchased brand new because we need this car to last at least 15 years. I researched, found the best value/reliability rated car and purchased it. It is very nice to not have a car payment for the past few years! And our insurance went DOWN because when you have a loan you have to carry higher limits.

I may have to check this book out at the library.

 

[paladin]

With my own car purchases I have always noticed that the newer the car, the higher the rates.. Has that been the case for you?

Actually my insurance rates when down when we recently bought a new car - same company as our previous car, but a different model.

 

[C.Ann]

This is the car we just bought.Mazda 3 We paid $16500 for it and it lists for $17615 with 23000 miles on it, apples to apples except 1 year older and the mileage.
I am sure this car could be talked down in price, but it would have to be a large chunk of change to make me buy a car 1 year older with 2 year's worth of miles on it.

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"Lists" where? A savvy car shopper would not pay that much for a used car with 23,000 miles on it if they could purchase the brand new one for less, so ultimately the "used" car would still end up "having" to be sold for less than the "new" one.. (Not counting the old "There's a sucker born every minute" phrase.. LOL .. The problem would be hoping it was the "sucker" who read the used car ad.. )

 

[C.Ann]

Actually my insurance rates when down when we recently bought a new car - same company as our previous car, but a different model.

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I wonder if it depends on what state or county people reside in? I'm driving an older car now (than the one that was totaled in Feb.) and my car insurance dropped to a quarter of what it was..

 

[C.Ann]

I'm just curious as to how Dave Ramsey tells you HOW to pay cash for everything. Right now, DH works 1 full time job and a part time job. I work a few part time gigs. We have just about enough every month for rent, food, etc. Very rarely are their any savings (now, if DH would stop smoking I figure we would have an extra $200+ a month). We use our tax refunds for vacations and I had a little "found" money this year to pay for our next trip.

If you literally just make enough to get by, HOW can you pay cash for a house? Today's cost of living (especially where we are) makes it impossible in my opinion.

We did luck out and purchased a new car with cash 2 years ago. We purchased brand new because we need this car to last at least 15 years. I researched, found the best value/reliability rated car and purchased it. It is very nice to not have a car payment for the past few years! And our insurance went DOWN because when you have a loan you have to carry higher limits.

I may have to check this book out at the library.

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See if you can get the book at the library and read it for yourself.. It's a little too lengthy to go into here.. What would it hurt?

Every hear the phrase "The proof is in the pudding"? It worked for my Dad, and it worked for us kids (with the exception of my 40-ish younger brother who thought he knew better and is in debt up to his eyeballs and will never see the light of day..)..

 

[mrsbornkuntry]

I read the book and it makes alot of sense to me. I always thought we were doing okay, we aren't in THAT much debt, but after I read the book I thought it would be nice not to have any debt at all so I wrote down all of it and WOW. It was so much more than I thought to see it all added up like that. I had tried reading Suze Orman's books in the past, but I get confused easily when I start reading about investing and hers seem to talk alot about that (well, I only read one and it did), but I understood TMM perfectly and I love the way he breaks everything down into steps and then explains the WHY of each step.

 

[TNKBELL]

I read the book and it makes alot of sense to me. I always thought we were doing okay, we aren't in THAT much debt, but after I read the book I thought it would be nice not to have any debt at all so I wrote down all of it and WOW. It was so much more than I thought to see it all added up like that. I had tried reading Suze Orman's books in the past, but I get confused easily when I start reading about investing and hers seem to talk alot about that (well, I only read one and it did), but I understood TMM perfectly and I love the way he breaks everything down into steps and then explains the WHY of each step.

I agree with you! I'm reading Suze Orman's book now and I think it has very good information, but I'm just not there yet, I found Dave's so much more simple and inspirational. I tell people about Dave and most people just don't want to change thier "lifestyle" and I admit I'm struggling with a little of that myself! Self control is so difficult for our generation....must have it now, no matter what!! I'm trying to change, it's sooo hard, I want my children to be better than I have been.I've got to lead by example!! So grateful for Dave!!

 

[peacefulgirl]

Like Dave says "I am wierd, I don't want to be Normal, because normal is BROKE!"

Anyone who knows me from my other post knows my financial mess. I can't say enough about what DR teaches. You may not agree 100%, but 99.9 you have to know he is on to something.

You guys should read "Financial Peace Revisted" from DR, TMMO is more about the plan, but FP is a good place to start, where he explain the life styles and mistakes most of us make.

DR's plan is not for the weak... he pushes for intense !!!

Go for it!!!!!!!!

 

[Muushka]

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"Lists" where? A savvy car shopper would not pay that much for a used car with 23,000 miles on it if they could purchase the brand new one for less, so ultimately the "used" car would still end up "having" to be sold for less than the "new" one.. (Not counting the old "There's a sucker born every minute" phrase.. LOL .. The problem would be hoping it was the "sucker" who read the used car ad.. )

C.Ann, we are just going to have to agree to disagree. LOL

 

[my3kids]

I'm just curious as to how Dave Ramsey tells you HOW to pay cash for everything.
If you literally just make enough to get by, HOW can you pay cash for a house?

Dave Ramsey actually says, usually, "debt free except for the house." After someone pays off everything else, including cars, then he helps them tackle the mortgage. When all the money that was going to consumer debt is being saved instead of going to the credit card or car loans, it can be put towards the mortgage and then it would paid off more quickly. In terms of mortgages, he advocates for 15 year fixed rate loans with the hope of a family paying it off sooner.

 

[my3kids]

In terms of cars, I bought a new one a few years ago....a popular model that was selling for list price or even more virtually everywhere. I did an internet query and set an email to dealers all over my region of the country. I got an offer for about $3K less than anywhere else. Although I did I have to make a weekend trip to get the thing, the savings were worth it. A year later I had a car I still could have sold for more than I paid for it new. Dave's blanket rules aren't always right, in my opinion. All circumstances are different. Kind of like my problem with him bashing private colleges......often they are more finance friendly than public universities.

 

[RichNKatHolly]

Dave Ramsey actually says, usually, "debt free except for the house." After someone pays off everything else, including cars, then he helps them tackle the mortgage. When all the money that was going to consumer debt is being saved instead of going to the credit card or car loans, it can be put towards the mortgage and then it would paid off more quickly. In terms of mortgages, he advocates for 15 year fixed rate loans with the hope of a family paying it off sooner.

Thanks! We don't have any debt (no credit cards or mortgage because we rent) but we are having trouble saving for a down payment on these ridiculous priced houses here and our work income does not seem to cover more than the basics. I guess we never should have gotten caught in the rental black hole, but what can you do.

I will check out the book tomorrow.

 

[RichNKatHolly]

I just ordered the book from Amazon. It had more great reviews there so I figure buying is better since it will be in my home anytime I need some encouragement.

Just wondering if anyone has his book about teaching kids about money? I may look in the library for that one. DS thinks it grows on trees.

 

[robsmom]

I have not read this book (yet) but in general i do agree that Dave Ramsey gives good common sense financial advice. The main point that i can not agree with Dave on is his college stance on no private college. I think we need to think of our personal finances as a business. We are trying each year to have the best net profit (income - expenses) that we can and put it into retained earnings (savings). Dave is very focused on lowering expenses but doesn't spend as much time working on how people can increase their income. let's face it delivering pizza isn't a 6 figure job. If you look at major companies and high paying firms (law firms, medicine, accounting firms, consulting, fortune 100), most of them have recruiting lists of colleges they work with. Private colleges are usually at the top of those lists. Depending on what your child wants to do, Private education can pay for itself ten fold even with student loans. it is not the answer for everyone but for some kids it is.

 

[jay-nee]

I have been reading many money management books (Start Late, Finish Rich, Money Lessons for a Lifetime, Rich Dad, Poor Dad, etc). I have not read DR yet, but will do so based upon the recommendations here.

It sounds like his information is a very common sense approach and that makes sense.

Several years ago, I cut my hours in half (to 20 hrs per week) and we did not see any major differences overall. But, I did make some "unnoticable" changes. Like: decreasing our cable TV to basic-plus, paid off braces for the kids early, consolidated and paid off credit card debt, started making coffee at home, shopped at Wal-Mart for most of our groceries, shopped at BJ's for paper goods, bring my breakfast and lunch to work each day, made a 5 week menu plan (and grocery list to match), stopped going to the movies and rented DVDs instead, etc. It's worked very well.

I wish I had these books then, though, 3 years and we could have been so much further along right now. But, better to start somewhere than no where. I see folks at work buying coffee and breakfast and lunch and complain about having no money and I want to say...people look where you're money is going! That is probably $10+ a day! $70 a week! Yikes...

Plus, we always do our errands on the way to some place, very few special trips anywhere. It helps to keep a list of what you need to see, stop for, do, etc. We keep our list by the phone and just jot down things as we think of them. That way, when we head somewhere, we can just add in those stops too. It helps on gas alot!

This information has been interesting to read through. It's obvious that folks have differing opinions about how to handle money matters, but that's ok. As long as the end result is the same - successful money management for that family. Each tip may not work for each family, but the discussions will hopefully help alot of families. I wish more folks would talk about money and how they manage it, I think we would all learn more.

OP - thanks for starting this thread! I appreciate the sharing of information, it looks like alot of us do. I can't wait to get the book (through the library, of course!).

Happy Sunday!

 

[C.Ann]

Thanks! We don't have any debt (no credit cards or mortgage because we rent) but we are having trouble saving for a down payment on these ridiculous priced houses here and our work income does not seem to cover more than the basics. I guess we never should have gotten caught in the rental black hole, but what can you do.

I will check out the book tomorrow.

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I just noticed where you live (under yur user name) and yes, I imagne the housing costs are VERY high there.. There's a couple next-door right now who are visiting from Long Island and last night at the campfire we were talking about the cost of homes.. I nearly fainted when her DH was telling me the "average" cost of a home on LI..

I think this book might help you though - especially if you have no current debt.. Won't be easy, by any means - but I'll bet you can get that house that you want eventually if you're willing to follow the plan..

Best of luck!

 

[C.Ann]

I have not read this book (yet) but in general i do agree that Dave Ramsey gives good common sense financial advice. The main point that i can not agree with Dave on is his college stance on no private college. I think we need to think of our personal finances as a business. We are trying each year to have the best net profit (income - expenses) that we can and put it into retained earnings (savings). Dave is very focused on lowering expenses but doesn't spend as much time working on how people can increase their income. let's face it delivering pizza isn't a 6 figure job. If you look at major companies and high paying firms (law firms, medicine, accounting firms, consulting, fortune 100), most of them have recruiting lists of colleges they work with. Private colleges are usually at the top of those lists. Depending on what your child wants to do, Private education can pay for itself ten fold even with student loans. it is not the answer for everyone but for some kids it is.

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Obviously I can't speak for Dave, but I would think that if you are totally debt free when the time comes to send your child to college he wouldn't have any problems with you sending that child to a private college.. That's kind of the whole point of the plan - to reach a point in life where you can do whatever you'd like with your money.. However, if you're buried in debt and struggling to make ends meet - no emergency savings - no retirement - then those issues have to be addressed first..

I also think he doesn't talk much about increasing your income because there are so many areas where the money you're already bringing in is being wasted or mismanaged and if you change those areas an increase isn't needed.. I don't think he's "against" it - he's just able to see through the fog and point out that much of what you need is already there..