Dave Ramsey and other financial experts

[Karceno888]

Carmella, wow, lots to think about; a few comments:

• Dave Ramsey (and others of his ilk):
  • They say, "Don't ever use a credit card, it can come back to hurt you."
  • To them I say, "Credit cards are a tool not unlike a chainsaw; used properly and they will enrich your life, used improperly and both can hurt you."
  • Does Dave Ramsey tell you not to use a chainsaw?
• As it seems you're figuring out, having a comfortable emergency fund can be MUCH more of a safety net than trying to snowball a pile of debt.
• Your plan to attempt to get your husband up to speed regarding your finances is good, but as you've suggested, it may not work; looping your daughter in is a great fallback.
• Late in life job changes:
  • In my late fifties I had a job (which I had thought was safe until I retired) "off-shored" to India, followed by a significant round of layoffs, including most folks my age; I was stunned to survive said layoffs and got assigned to a different project.
  • When I turned 60 my "new" project was also off-shored to India, only this time I wasn't given any real portfolio of work to do and figured it was only a matter of time before I got the axe.
  • It turns out I was correct, my boss, a person of color and one of the best managers I've ever worked for, was getting regularly dumped on and publicly criticized by his/her boss; the story eventually worked it's way through the corporate grapevine to my ears:
    • "You, because of your age, and your boss, because of, well, his/her race, were slated for being terminated; because of the potential race card your boss could play, they wanted to throw him/her a bone which he/she could use as a juicy resume item. The thing was, this bone was in a new field of expertise completely unknown in our company and it was assumed your boss, and you by extension, would fail, thus justifying your termination."
  • My boss voluntold me of my new assignment at the beginning of October 2107; initially I was relieved at having some assigned work, but that relief quickly dissolved into a bit of panic; the team the company had contracted with to teach me my new skill had no freakin' clue what they were doing; that much I knew, but I didn't know enough to explain why.
  • This new project came with a 10-week deliverable, which in and of itself should have been a clue I/we were being set up for failure.
  • When the project was rolled out, it was an absolute steaming pile of, well, poo. The outfit contracted to teach me my new skill left and I was on my own to try and fix a project which was incorrectly designed from the very beginning and had zero chance of success.
  • Three things happened at this point:
    • I realized I may never learn this skill A) because of the timing and B) because my older and less elastic brain just wasn't picking up concepts up at the same rate as it did 40 years before. I actually started considering an early retirement, something I could ill afford to do given I was right smack in the middle of my Chapter 13.
    • Out of the rubble of the consulting team (who had gone on to greener pastures) was a 23 year old kid in Bangalore India fresh out of college; he and I started comparing notes and working out a plan. The cool thing about working with this young man was he'd say things in such a way as to trigger a memory of some bit of trivia or know-how I'd literally forgotten in 1982 which suddenly became relevant. In the end he and I developed a new architecture which was positively groundbreaking and which I still rely on to this day.
    • My company started getting press about our project (even the crappy parts), both within our industry and in multi-industry journals; and this positive press changed the thinking of management; suddenly there was funding and management involvement.
  • In 2020 my former boss left the company for a much more challenging project and a pay bump of over 100%; as many of you may remember, I too changed jobs just a little over a year ago.
  • In the end, I'm glad I stuck with learning a skill entirely new from anything I'd ever done before; in the last four years my income has more than doubled and my job satisfaction has skyrocketed; I'm 65 now and am looking forward to working until I'm in the 72-73 range before I retire.

Man, I just read your story. I am in my late 40s and starting to really fret over retirement, because my options seem to be dwindling a bit with age. I just finished up my MBA from a Big Ten school, so the network is strong. I plan to use it for a long time. Also, I have a MS in teaching, and can pull that out at any time. However, I don't have a lot of cash, and that is troubling due to some health issues I have been dealing with.

To see you considering work after 70 is great. I think I am going to teach in my 60s and wrap up the corporate world stuff. Its just too much. A game for predators and naive young people.

Regardless, there is always something to be thankful for. I just want to retire with some comfort and your post gave me plenty of encouragement that life can get better as we age.

Thank you.

-Ceno

[Karceno888]

Hey there! I can totally relate to your situation. It's great to see that you're following Dave Ramsey's advice to get your finances in order. Setting up a budget and working towards paying off debt is definitely a good idea. It's important to prioritize and find a balance that works for you and your husband, especially since you're working on emergency funds and managing regular/irregular expenses. I also recently started listening to financial podcasts and found them useful for picking up tips. Speaking of which, I just heard about someone [moderator removed website link] which sounded intriguing. Anyway, keep working on that budget and remember to take things one step at a time. Good luck!

Well, the guy above you said following Dave Ramsey is BAD.

I agree with him.

Ramsey is just trying to make his money off of other people's problems.

[chargers777]

Ramsey is a gatekeeper for the banks, the rich, whatever you want to call them, that shame you into not filing BK.

So, don't listen to him or others that discourage filing for BK.

BK is a wise guy move and we should help others and encourage BK for others that need it.

[Carmella]

shipo I may have a lead on a career change which is pretty exciting. It's a process and will take time to get apply get hired. I found a course on the subject and it's clear it takes time and multiple applications or places that take a few months to even respond to your resume, but I have time. I do have the skills it's a matter of learning a little more taking some classes/certifications that in the end might cost around $1,000 total which is really nothing in terms of education. My job is draining, but it's a reliable job and secure as it can be, nothing is 100% secure. I can focus on my escape LOL!

on the Ramsey front, I have been listening to podcasts in the car. And while I do not go for most of the advice I think it would be awesome to have enough of an emergency savings that you do not have to worry "what if?" and to have the house paid off is great especially as retirement nears. As for cars if we have car payments and no other debt is that really a problem? It's nice just to have the pay the utilities, internet, cellphone, etc and not worry about miscellaneous debt. I am all for keeping consumer debt at bay as much as possible and years ago we did. But we did get caught in a similar spiral to what Ramsey warns of that we had payments and all was fine until we lost some of our income. Now I will say my husband and I didn't get together and say we have to stop and try to keep debt from growing, etc stuff happens. That is probably our biggest mistake that when things went sour we didn't attack it, but it slowly brewed or got better for a while then got worse again and eventually so out of control BK13.

[Carmella]

shipo That’s a wonderful explanation and great story of your success!

[shipo]

Carmella, wow, lots to think about; a few comments:

• Dave Ramsey (and others of his ilk):
  • They say, "Don't ever use a credit card, it can come back to hurt you."
  • To them I say, "Credit cards are a tool not unlike a chainsaw; used properly and they will enrich your life, used improperly and both can hurt you."
  • Does Dave Ramsey tell you not to use a chainsaw?
• As it seems you're figuring out, having a comfortable emergency fund can be MUCH more of a safety net than trying to snowball a pile of debt.
• Your plan to attempt to get your husband up to speed regarding your finances is good, but as you've suggested, it may not work; looping your daughter in is a great fallback.
• Late in life job changes:
  • In my late fifties I had a job (which I had thought was safe until I retired) "off-shored" to India, followed by a significant round of layoffs, including most folks my age; I was stunned to survive said layoffs and got assigned to a different project.
  • When I turned 60 my "new" project was also off-shored to India, only this time I wasn't given any real portfolio of work to do and figured it was only a matter of time before I got the axe.
  • It turns out I was correct, my boss, a person of color and one of the best managers I've ever worked for, was getting regularly dumped on and publicly criticized by his/her boss; the story eventually worked it's way through the corporate grapevine to my ears:
    • "You, because of your age, and your boss, because of, well, his/her race, were slated for being terminated; because of the potential race card your boss could play, they wanted to throw him/her a bone which he/she could use as a juicy resume item. The thing was, this bone was in a new field of expertise completely unknown in our company and it was assumed your boss, and you by extension, would fail, thus justifying your termination."
  • My boss voluntold me of my new assignment at the beginning of October 2017; initially I was relieved at having some assigned work, but that relief quickly dissolved into a bit of panic; the team the company had contracted with to teach me my new skill had no freakin' clue what they were doing; that much I knew, but I didn't know enough to explain why.
  • This new project came with a 10-week deliverable, which in and of itself should have been a clue I/we were being set up for failure.
  • When the project was rolled out, it was an absolute steaming pile of, well, poo. The outfit contracted to teach me my new skill left and I was on my own to try and fix a project which was incorrectly designed from the very beginning and had zero chance of success.
  • Three things happened at this point:
    • I realized I may never learn this skill A) because of the timing and B) because my older and less elastic brain just wasn't picking up concepts up at the same rate as it did 40 years before. I actually started considering an early retirement, something I could ill afford to do given I was right smack in the middle of my Chapter 13.
    • Out of the rubble of the consulting team (who had gone on to greener pastures) was a 23 year old kid in Bangalore India fresh out of college; he and I started comparing notes and working out a plan. The cool thing about working with this young man was he'd say things in such a way as to trigger a memory of some bit of trivia or know-how I'd literally forgotten in 1982 which suddenly became relevant. In the end he and I developed a new architecture which was positively groundbreaking and which I still rely on to this day.
    • My company started getting press about our project (even the crappy parts), both within our industry and in multi-industry journals; and this positive press changed the thinking of management; suddenly there was funding and management involvement.
  • In 2020 my former boss left the company for a much more challenging project and a pay bump of over 100%; as many of you may remember, I too changed jobs just a little over a year ago.
  • In the end, I'm glad I stuck with learning a skill entirely new from anything I'd ever done before; in the last four years my income has more than doubled and my job satisfaction has skyrocketed; I'm 65 now and am looking forward to working until I'm in the 72-73 range before I retire.

[Carmella]

I will probably look more into credit as time goes on. I have a lot on my plate at the moment juggling the cost of the garage roof and the property taxes as well as trying to establish a solid budget which will include the emergency fund and savings.

Right now I have the Ollo card which is sky high interest and I will use it and pay it off just to start rebuilding.

I am listening to Ramsey's podcast and his people more and it is interesting, but I cannot go along with some of the scenarios and don't relate to many of them. I noticed most are married couples with very good incomes or the ability to pick up extra work that pays very well. I guess whatever works for you, but I couldn't work 7 days a week 8-12 hours a day for a few years even when I was younger it just wouldn't be feasible, but it could work for some who don't have kids and has a very supportive spouse who is working as well and taking care of the homestead.

I heard a podcast with a lady who wanted to get a credit card due to traveling which was work related. She was unable to rent a car with the debit card. Getting a credit card to use only sparingly was a huge NO! Luckily this lady was able to get work credit card and they were fine with that type of credit card. Maybe the attitude is that it can lead to mis-use and I know he talks about the Bible and how debt is only seen in a negative light in the Scripture even though it doesn't say "thou shall not obtain debt." I find it kind of ironic as well he says that even if you use a credit card to get rewards/use responsible you are adding to the problem of people who get the card for the rewards and then don't use it responsibly. I thought it's ironic since Ramsey is into all this not just for the good of mankind, but to make money and sounds like he's a multi millionaire. Which is fine, but I am sure there's people who bought into his plan and haven't succeeded as well--just the some with credit cards get trapped!

Oh well, really whatever works and keeps one out of debt is fine. I probably won't listen to the podcasts much longer some is helpful some is very annoying!

If someone is old and has 5 million, why can't they help a responsible adult child without strings attached? Why should they make the adult child promise to NEVER take on any type of debt. Not having a car loan might not be feasible in the course of one's life. And really if the person with 5 million passes away and leaves that money to the kids what then? or maybe it will be a will with stipulations. This just seems wrong to me. I totally get not giving a lot of money, etc to an adult child who is irresponsible, but if they are responsible and you want to share with them and you still have more than enough for yourself why not do it without strings attached.

My father-in-law was comfortable, but not rich and we never asked him to help us with anything because we knew he would hang it over our heads with all kinds of strings attached. My dad on the other hand who didn't have much would help us with anything and if he helped with a home repair and bought parts or even picked up something like light bulbs. I mentioned once I needed light bulbs the next day he was there with light bulbs. He always gave me the receipts and I always paid him back. If it was a larger expense paid back over a short time period, but there were never strings attached. We were responsible. Later we got into financial trouble, and I still don't feel it was irresponsible, since we never splurged. But we had charged home repairs and then lost income, etc and could never get out from under it even though we came close a few times.

I guess my scenario supports the debt theory that we had charged home repairs that we could have paid off over time IF our income was not cut by 25%. But then again with the online group/advice I followed part was Ramsey inspired and I did great with snowballing and a small emergency fund, but it wasn't enough. It definitely would have been better in my case to have a LARGER emergency fund and make minimum payments or slightly over minimum while making sure I had enough cash in reserves when Murphy struck so we wouldn't have to take on more debt and get back in the vicious cycle.

I was not in a great mental state with loosing income, both pay and loss of hours and uncertainty with layoffs in my field and few to no jobs, my father passing away and dealing with the debt we took on assuming my income would stay as it had been for at least 5 yrs! My mother already was gone and I am an only child. My husband's family was never supportive emotionally or any other way. If I had squirreled more savings away instead of putting more money into snowballing and pushing debt reduction, I think it would have been better in the long run. We really had no safety net.

Well at the moment my plan is to get a realistic budget for our life needs and emergency/savings. Any repairs are going to be thought out and saved to pay in cash because I think that is manageable and also keeping in mind that by the time I retire I do want to not have any car payments, etc.

I also want to plan better for my husband who has never been involved in the finances. We would discuss things, but he would have the deer in the headlights look. If something happens to me he has no experience running a budget. I want to work the budget over the next few years that it will work on our limited retirement income especially when one of us passes away and the other is left. I want to make sure we can afford what we have or make plans otherwise if we need to downsize or rent a senior apartment or even a less expensive condo. I also am planning to change bank accounts once he retires and when I get closer to retirement. It would be nice to have the money in one place and have automatic payments especially since my husband isn't great with the computer. I want to have a system set up so in the worst case scenario my daughter could oversee the expenses easily and keep tabs on everything virtually. I have a friend my age who does this for her father. She set all his expenses up online and she manages it with automatic payments for the most part.

Lots to think about and to plan. I don't really see myself retiring at full retirement age at best I see semi-retirement.

I have also been thinking of career change, but it might be too late in the game for me. If I get training in a new line of work I would be entering a whole new field at age 60. I have had a good career for the most part, but there's no advancement. You hit the top, you get pay cuts and the market varies on job availability from feast to famine, experience is not rewarded and the employers rather have a less experienced/new college graduate who they can pay less than they pay you. I may look into doing Medical Reviews since there is opportunity with my credentials to do that, even some work at home possibilities. The jobs seem few, but I need to time to prepare and probably take a few software/computer classes. Or who knows once I am 65 if the market still allows I will have Medicare for insurance and maybe I can work more of the "as needed" jobs that pay better. If that is a viable option in the future who knows, but I could make more money with less responsibilities or I could work less and make a similar income.

[shipo]

I am not ready for credit to earn rewards.

The good news is some secured cards offer rewards as well; it pays to shop around.

[Carmella]

I agree on the emergency account we really need that and I am starting that this week. My second full paycheck I might open the credit union account and use that as the emergency account. I can direct deposit into it.

My husband's car won't have a high enough down payment unfortunately since we had to get the roof on the garage earlier than planned.

I am not ready for credit to earn rewards. Verizon is sending me lots of advertisements on their rewards card. I feel like I need to get the budget set and work on the car/taxes before I can deal with the credit card!

I never thought we would be dealing with this so soon! Glad the BK payments ended early!

[shipo]

My approach is somewhat different; as a general rule, 2022 not withstanding, conservative investments (mutual funds and such) will return superior returns compared to secured loans like homes and cars. With the above proviso in mind, I practice (or will practice) the following:

• An emergency fund is paramount; I did this before anything else.
• Put down enough on our next home to secure a good interest rate (probably for a 15-year mortgage) and not pay PMI
• Put down enough on our next car(s) to secure a good interest rate for a 36-48 month term
• Where credit cards are accepted, I always pay with a "Rewards" credit card knowing I will pay it off before it is due.
  • Note: I got my first "Rewards" credit card two years ago this week and to date, I have earned over $1,500 in cash rewards and have paid $0.00 in interest.

Long story short, advocates of "Pay cash for everything except a house" (even if they CAN afford to), are literally throwing away investment money AND rewards money.

[Carmella]

shipo I get what you’re saying. Many of the podcasts are people with higher incomes than my husband and I have and the debt is paying the home and cars off. It makes me think well they have enough money to up their payments without much hardship or pick up a part time job and put it into extra payments.

I don’t think most people can pay cash for a car or put 50% down on a house.

Prior to our debt we had a fairly good budget system except no real emergency account and that’s how the debt started.

the other questionable thing with Ramsey if I remember right is to pay off debt (maybe all debt except the house) before saving up the 3-6 months of living expenses. To me it sounds good to work on the living expenses incase something goes wrong.

I don’t plan on buying any expert’s plan at the least I would buy a book.

They all have similar problems plans in the end. We had a local lady on local radio who was popular in our area. She had similar advice.

I will go with a little this or that and I want to avoid credit card debt and pay as much in cash as I can.

I would prefer only one car payment, life happened and I had to get the one I have….instead of having it paid off early next year.

For now a decent budget with some savings and a plan to knock out the Taxes, Roof and Car down payment are the most important.

[shipo]

I'm one of those with an exceedingly low opinion of Dave Ramsey; my personal take on him is he spreads three kinds of information and gets rich off poor people:

1. Obvious common sense logic which is more or less in the public domain (thinking budgeting here; budgets pre-dated Ramsey by centuries, millennia even)
2. Distortions of truth (thinking "all debt is bad" kind of stuff)
3. Outright lies (thinking "never finance a depreciating asset" like a car)

[Carmella]

* my husband is still working overtime so we will use that extra $$ to our advantage to get thru the 6 points I listed above. I also have my second job, but I am not going to push it more than I already have, but that extra income definitely will help us.

It would be great to be "debt" free by the time hubby retires, but I don't think it's realistic, but maybe within a year or so after we can be down to one car payment ??

My goal will be as LITTLE debt as possible. But by the time I retire I hope we are totally debt free and just have our living expenses/property taxes to deal with!

[Carmella]

Someone I know mentioned to me ,they don't know about the BK, but know I paid off a lot debt, following Dave Ramsey's advice. I was happy that I only have a small HELOC and a car payment. We also owe the IRS but I did not offer that info to the conversation. Anyway I am so happy we got through BK and paid off 100% with almost half of my take home pay going to the trustee, plus we still had to pay the Mortgage, HELOC and two car payments during that time period. Really it might been my WHOLE paycheck going to the debt!

Ok got off on a tangent.

I remember someone in this forum commenting at some point they didn't care for Dave Ramsey.

I started to listen to his podcast and then downloaded one of his books (free) from the library.

I do not feel husband and I would fit into his plan, but I think there's helpful hints.

I have been trying to get a budget together after going on a meager spending spree after getting a whole payment for the first time in about 40 months. We bought a modest gas grill and a few other items.

Back before my debt got out of control I belonged to an online group we used different techniques some sound like Ramsey then there were a few other financial/get out of debt type people.

Right now it sounds like a good idea:

• MONTHLY budget
• REGULAR IRREGULAR budget: the taxes that happen once a year or the property taxes twice a year or the dog food on autoship every 9 weeks or eye glasses we buy once a year, husband has special prescriptions so even with insurance it's twice the cost of mine, etc and set up a FREEDOM account which is a checking account you put money in each month so you can pay these expenses when they are due.
• EMERGENCY account: Ramsey says $1,000 to start. I would feel better with a little more than $1,000.
• 3-6 MONTHS of LIVING EXPENSES
• SPENDING MONEY: set an amount for hubby and myself and take cash for the week. I would still use a debit card and track it. Husband always has preferred cash for the week to buy food/snacks or a 6 pack

Ramsey has me thinking about debt and like most people I feel like we won't be totally debt free due to car payments plus our age. I am 58 and hubby will be 65 later this year.

But now I have thought ok, what's the priority.

1. New garage roof must be paid off by the end of July--that's almost $4,000.
2. IRS payment plan ? needs to get set up, do we hustle and pay it off early, I say YES if possible.
3. Husband's car, that will be new debt.
4. Emergency account/Living Expenses account
5. Dryer: I am frickin tired of washing small loads and hanging clothes to dry and if I buy a dryer I will also buy a washer
6. Retirement: I need to get moving on the 401K for myself

I feel like it's realistic to get a meager emergency fund and set up the budgets so we and more easily/readily pay the taxes of all types. Maybe we can do $1,000 emergency and then $2-3,000 in the Regular/Irregular expenses to front load it and then start adding a set monthly amount. If it's front loaded it can be a back up for the emergency account. I had an account like this in the past, but it was always getting depleted as soon as it was funded. I guess it could also be part of the living expenses savings if it's front loaded.

I do not want to charge anything except the monthly cable I will most likely put on a credit card just to help build credit.

If I can get the 6 points above in action then I can think about getting rid of "all debt." The HELOC is just over $7,000 I could add a little extra there and then when that is paid off "SNOWBALL" some of that money into the car payment. I was really hoping to have only ONE car payment when hubby retires from his full time job and he plans to retire whether we can afford it or not, but he will work part time. He has a decent pension so our income will still be higher than what we lived on during the BK years assuming my income stays the same.

My immediate goal is to figure out a budget monthly vs irregular/regular expenses. And to stop the spending spree since we do have to pay for the garage roof ASAP. We already have $2,000 towards it, but he didn't want any downpayment and just said pay within 30 days. As for our situation with the city. The yard is almost totally cleaned up a neighbor is going to take the wood for fires and I am going to ask for an extension for painting the garage to get it sided, need to get a quote on that. I am going to try to get it extended thru next spring, If they really want it painted hubby and I will do a half a$$ed job, nice neighbor offered to help 'slap some paint on'