Dave Ramsey

[IndyTom]

Yes, I am. I don't even have paid-off-each-month credit cards. We just use debit cards for everything.

The rewards cards can be a nice bonus if you are paying them off each month and don't have an annual fee (unless the fee gets you something of greater value, per your wants and/or needs). I've walked out of Cabela's with a lot of "free" (no cost to me, since I don't pay the card any fees or interest) stuff just for getting gas/groceries and a few auto-pay bills sent to it each month. It does require a modicum of discipline over your spending, so it isn't for everyone *coughmy_excough*

Though they are changing who runs the cards on the back end (Capital One), it has been nice because I generally choose to go pull cash from my bank and hand it over to them in the front of the store to pay my bill. Makes sure that it is clear that it is real money (and gives me a good reason to visit to see if anything interesting would be covered by my points) rather than just another electronic transfer of numbers. Obviously, this isn't as nice a benefit if you aren't close to a location (or a Bass Pro Shops).

 

[JettaKnight]

There used to be more security for using a CC over debit card in terms of fraud liability.

I'm not sure that's the case anymore.

 

[CampingJosh]

The rewards cards can be a nice bonus if you are paying them off each month and don't have an annual fee

My sister-in-law chases rewards points like a second job. It's the kind of second job where she makes less than minimum wage.

I'm just not compelled to chase them.

 

[FearAndLoathing]

I cant think of any organization that I would be willing to give 10% of my income too...Especially when I still have debts to pay.

 

[PistolBob]

When you find yourself in a hole, the best first thing to do is stop digging.

 

[BigBoxaJunk]

When you find yourself in a hole, the best first thing to do is stop digging.

Unless you're trying to find water.

 

[jkaetz]

There used to be more security for using a CC over debit card in terms of fraud liability.

I'm not sure that's the case anymore.

Liability, no, ease of dealing with issues, yes. Fraudulent charges on a debit card cost real money until the bank gives it back to you. Fraudulent charges on a credit card don't impact you directly. At worst with a credit card you could simply not pay the bill. Credit cards usually also offer things like warranty extensions, trip and travel protections, rental car insurance bonuses, and sometimes even price drop protections as well.

My sister-in-law chases rewards points like a second job. It's the kind of second job where she makes less than minimum wage.

I'm just not compelled to chase them.

There is no need to chase the rewards, plenty of cards give 1-2% on everything. Bonuses can be had from 2-10%. The Chase Bank Amazon card gives 3% for non prime members and 5% for prime members on all Amazon purchases. None of my rewards cards have an annual fee

 

[BehindBlueI's]

Different strokes for different folks. I'm an atheist, so naturally tithing seems like a massive waste of money.

Not "naturally". Athiests can and do donate to charities which is what tithing is supposed to be about. You don't have to be religious to help the less fortunate.

 

[BehindBlueI's]

Everyone believes their god is the correct one

Not everyone. There can be more than one right answer to many questions, just as many paths can lead to the top of the same mountain.

 

[JettaKnight]

There is no need to chase the rewards, plenty of cards give 1-2% on everything. Bonuses can be had from 2-10%. The Chase Bank Amazon card gives 3% for non prime members and 5% for prime members on all Amazon purchases. None of my rewards cards have an annual fee

THIS. I'm happy with just a meager cash reward.

I could get more with miles or discounts or ... but that's just another financial thing to monitor and optimize - i.e. work.

 

[IndyTom]

THIS. I'm happy with just a meager cash reward.

I could get more with miles or discounts or ... but that's just another financial thing to monitor and optimize - i.e. work.

Yeah, I don't have to track the flavor of the month/quarter or anything like that. Just use it the way I'd been using my debit card and hand over cash (could pay electronically, to be clear) monthly. I wait till I have forty or more bucks available in rewards and look for something fun (if not something I have actual need of) that I get for free.

 

[Hohn]

... but you've got to balance living now with your living later.

This is something that gives me pause about Dave's approach. In Dave's world, everybody gets to go on to living dreams and being debt free and life is wonderful.

But what if you are working so hard to get debt free that you are killing yourself? Are you willing to skip funerals and such to save money? To skimp on gifts to family that mean a lot to them? To cut off your charitable giving?

My best friend is a spendthrift-- substantial two-earner household income and a modest house. He wants a new gun or guitar or amp or anything-- he buys it. Why? Because it makes him happy. He lives for the moment. He does a lot of fun things.

I'm sort of the opposite. I have a decent income also for just being me. But after paying down the mortgage, medical expenses, charitable contributions (we are some of those crazy evangelicals that believe in substantial monthly donation), and all that stuff, there's very little left. I can't just spend a couple hundred dollars that's unplanned without a near budget crisis.

The irony is this: I'm pretty miserable. There is very little to anything fun I get to do, and it's a couple weekends a year a most in which I got said spendthrift's house to enjoy his toys.

Now my health is declining.

By the time I'm in Dave's promised land, I won't be able to do anything but watch my paid-for TV and wish I had actually DONE something with my life while I was still mobile. What good does it do you to FINALLY have the money to travel the world when you can't do it because your arthritic knees can't handle all the walking on that trip? You finally have the money to take the kids on a good vacation and make some memories, but the kids are grown now and it's too late.

So yeah, right now I guess you could say I'm "living like no one else." But what if later I never get to do the other "live like no one else?"

 

[chezuki]

This is something that gives me pause about Dave's approach. In Dave's world, everybody gets to go on to living dreams and being debt free and life is wonderful.

But what if you are working so hard to get debt free that you are killing yourself? Are you willing to skip funerals and such to save money? To skimp on gifts to family that mean a lot to them? To cut off your charitable giving?

My best friend is a spendthrift-- substantial two-earner household income and a modest house. He wants a new gun or guitar or amp or anything-- he buys it. Why? Because it makes him happy. He lives for the moment. He does a lot of fun things.

I'm sort of the opposite. I have a decent income also for just being me. But after paying down the mortgage, medical expenses, charitable contributions (we are some of those crazy evangelicals that believe in substantial monthly donation), and all that stuff, there's very little left. I can't just spend a couple hundred dollars that's unplanned without a near budget crisis.

The irony is this: I'm pretty miserable. There is very little to anything fun I get to do, and it's a couple weekends a year a most in which I got said spendthrift's house to enjoy his toys.

Now my health is declining.

By the time I'm in Dave's promised land, I won't be able to do anything but watch my paid-for TV and wish I had actually DONE something with my life while I was still mobile. What good does it do you to FINALLY have the money to travel the world when you can't do it because your arthritic knees can't handle all the walking on that trip? You finally have the money to take the kids on a good vacation and make some memories, but the kids are grown now and it's too late.

So yeah, right now I guess you could say I'm "living like no one else." But what if later I never get to do the other "live like no one else?"

I bet you’re fun at parties.

 

[dung]

The other part to balance is actually living to retirement. My dad died at 63, his dad passed relatively young as well. My mom's side has some great genetics with Grandpa making it almost to 99 and healthy the whole time. I am socking away as much as I can and would love to do more. However, if I don't get to use it I won't be thrilled....at least my wife and kids should be covered by that time.

We have no urge to pay of the house or stay out of debt. My rates are low enough that financing isn't robbing us blind.

 

[JettaKnight]

So, yeah Hohn may be a downer with his post, but he does present the paradox of saving for grand retirement of fun and luxury... in the twilight of your life. (assuming you make it there)

Especially when it comes to travel. Travel and other such experiences can create strong ties in a marriage, and if you're not able to do that because you're trying to save to get to $5M for retirement...

Penny wise, pound foolish.

 

[eldirector]

Not directed at Hohn, but reminded me of some other conversations with friends and family.

A) Live within your means. If you can't pay cash, you really can't afford it. Yeah, things like mortgages and car payments may be "exceptions", but only if your other ducks are in a row.
B) If you can't afford the lifestyle you want, either change your expectations, or change your income.
C) We are the product of our choices. If you don't like where you are TODAY, it is because you made a choice YESTERDAY.
D) That said, you don't have to STAY where you are. Start making better choices, and TOMORROW will be a better day.
E) Life is all about priorities. Be very intentional about setting yours. Don't let them just happen.

All stuff I've (slowly) learned over the years, from folks that tend to be successful in their own right. Applies to money, and about anything else.

Item "E" above comes up in my life a lot. I often want "stuff", but remind myself to prioritize. Is this "thing" the best use for my $$$ or time? It usually isn't.

 

[Hohn]

I bet you’re fun at parties.

What about that post suggests I go to parties? HAHA!

I'm excluding the whiny self pity party I indulged.


The point I was trying to make and failing is that living *only* for a future that might never come is foolish. Like BBI said, there's balance involved.

And balance lately is something I'm struggling with.

 

[BehindBlueI's]

So, yeah Hohn may be a downer with his post, but he does present the paradox of saving for grand retirement of fun and luxury... in the twilight of your life. (assuming you make it there)

Especially when it comes to travel. Travel and other such experiences can create strong ties in a marriage, and if you're not able to do that because you're trying to save to get to $5M for retirement...

Penny wise, pound foolish.

Travel is the last "luxury" I'd give up.

Under-buying on our house vs what "they" say you can afford on a given salary has been a great play for us.

 

[Trigger Time]

Not directed at Hohn, but reminded me of some other conversations with friends and family.

A) Live within your means. If you can't pay cash, you really can't afford it. Yeah, things like mortgages and car payments may be "exceptions", but only if your other ducks are in a row.
B) If you can't afford the lifestyle you want, either change your expectations, or change your income.
C) We are the product of our choices. If you don't like where you are TODAY, it is because you made a choice YESTERDAY.
D) That said, you don't have to STAY where you are. Start making better choices, and TOMORROW will be a better day.
E) Life is all about priorities. Be very intentional about setting yours. Don't let them just happen.

All stuff I've (slowly) learned over the years, from folks that tend to be successful in their own right. Applies to money, and about anything else.

Item "E" above comes up in my life a lot. I often want "stuff", but remind myself to prioritize. Is this "thing" the best use for my $$$ or time? It usually isn't.

Excellent points

 

[Trigger Time]

What about that post suggests I go to parties? HAHA!

I'm excluding the whiny self pity party I indulged.


The point I was trying to make and failing is that living *only* for a future that might never come is foolish. Like BBI said, there's balance involved.

And balance lately is something I'm struggling with.

Maybe try your "spendthrift" buddy's way for a bit and see if it works for you? You can always go back to the way it was before.