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Old 01-02-2020, 11:13 AM   #21  
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Originally Posted by SonicFlyer View Post
Ehhhh debt on things that depreciate is never a good thing. I understand sometimes it is necessary but should be avoided if possible.

Very good point, but you forget to factor in risk. If for whatever reason you go bankrupt, in many states they can't take your primary residence. Having a house that is paid off increases your financial security.
Guess we were typing at same time, good points.
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Old 01-02-2020, 11:19 AM   #22  
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Ehhhh debt on things that depreciate is never a good thing. I understand sometimes it is necessary but should be avoided if possible.

Very good point, but you forget to factor in risk. If for whatever reason you go bankrupt, in many states they can't take your primary residence. Having a house that is paid off increases your financial security.
It's irrelevant whether you use cash or debt to fund the purchase.

What matters is how much of either you use. Paying in full for a $50k car is way worse than $5k, as the $50k car will cost you more in one year in depreciation what the $5k cost you total, and the little amount of interest you'd pay pales in comparison.

Plus, at the rates/interest you pay for car loans these days, you'd would've made 10x that had you had it invested in one year alone.
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Old 01-02-2020, 01:23 PM   #23  
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Letís say the 6 months of Emergency money is in a low yield money market account. Could it be acceptable to invest a percentage of this money in mutual funds? IE 10-25%?
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Old 01-02-2020, 01:38 PM   #24  
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Letís say the 6 months of Emergency money is in a low yield money market account. Could it be acceptable to invest a percentage of this money in mutual funds? IE 10-25%?
Not per Dave. This money is essentially insurance. Itís not there to make money.
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Old 01-02-2020, 02:43 PM   #25  
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We paid cash for our cars.
My wife drives a $2500 car that had 109k on it when we bought it and I drive her old beater with 225k as all I need is a roof over my head around town anyway. I do the brakes myself and $19.98 Walmart oil changes as you canít do it yourself for that kind of money.
Something that DR does is change your way of thinking and how you spend.
Couldnít tell you how many times Iíve now passed a Starbucks and go...nah...not going to spend $6 on a coffee.
Tonight I bought a 12- pack for $11.99 on sale instead of the $14.99 next to it.
Still drink beer itís just a $3 difference.
All this nickel and dime-ing adds up at the end of the month.
Bought ammo at 30% off at a store going out of business.
Bought a metal toolbox at a thriftstore for $8 instead of $18 at Harbor Freight or $27 somewhere else.
Had seafood stew for dinner with....shark...at $5.59/lb
Last but not least, spousal unit approved a new gun purchase from money I saved from my Per Diem allowance. There...company pays for my new gun.
Ramsey approves.
The ďemergency fundĒ is exactly what it says it is. House on fire, water heater exploded, car wrecked, family members terminally ill, or both of us furloughed or laid off as we both work in aviation.
Because of the volatility of our industry weíve decided to go for 50% of our yearly income in a savings account instead of the 3-6 months of ďexpensesĒ.
Weíre also doing the steps slightly out of order as weíve already started paying off extra on our house.
Next pay raise in March ( add year seniority) Iím going to 10% on 401k.
It works for us and thatís really all that matters.

Last edited by TiredSoul; 01-02-2020 at 03:01 PM.
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Old 05-05-2020, 08:11 AM   #26  
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Im very grateful that I am living the Dave Ramsey principles these days (covid-19). While my pilot brothers and sisters worry about money, I know that I have enough in my emergency fund to stay afloat for six months.

i have no debt except the mortgage and that is a real blessing right now!!

Please give his program a look. He is offering financial peace university online for FREE right now. You can get all the content for two weeks. Plenty of time to complete the course.

https://www.daveramsey.com/
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Old 05-05-2020, 09:33 AM   #27  
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His cash envelope budgeting method is also extremely effective. And just a friendly airline pilot reminder that a divorce will crush most money saving plans, good luck fellas.


Sent from my iPad using Tapatalk
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Old 05-14-2020, 11:21 PM   #28  
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I use his plan to get out of debt, build the 6 months of EF and 15% into my 401k along with our kids 529, and a 15 year mortgage. The issues I have is his plan is not a 1 size fits all approach. A couple years ago I purchase a new car that I intended to pay cash. The dealer offered 7K off MSRP if I finance with the manufacturer. I did that and paid it off once I got the first statement. Dave would not approve of it, and if I followed his plan, I would have to pay cash even if it cost more. I also use a Cash back credit card, that I get $1,500 a year in cash back and never paid any interest. We also track our spending every day and do a budget. I guess you can say we are Dave-ish.
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Old 05-15-2020, 08:51 AM   #29  
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I use his plan to get out of debt, build the 6 months of EF and 15% into my 401k along with our kids 529, and a 15 year mortgage. The issues I have is his plan is not a 1 size fits all approach. A couple years ago I purchase a new car that I intended to pay cash. The dealer offered 7K off MSRP if I finance with the manufacturer. I did that and paid it off once I got the first statement.
Dave would agree, you essentially paid cash.
Itís the spirit of the law not the letter of the law.
You achieved the same thing.
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Old 05-15-2020, 08:13 PM   #30  
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I watch some of Dave's videos and occasionally the live show. Some good advice. I bought a new car last summer, got a good discount on the 2019 closeout's. After agreeing on the drive away price the salesman handed the wife and I a financing application. I pulled out the checkbook and said we didn't need to finance. Should have seen the look on his face, then he had to make a quick trip to see the sales manager. I got the feeling had they known we were paying cash we wouldn't have gotten as good a price.

I also use a rewards credit card, it pays 2% to be used on travel related expenses. Put everything on it and pay it in full each month. Between that and my hotel points I have left over from NetJets we almost never pay for a hotel room.
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