At the end of my rope

[g2outdoors]

I believe that's DR in a nut shell. Be sure all your money has a place before you get it, or else it goes some where it shouldn't have.


DR has just opened up my eyes to keeping a tab on where your money is going. It is shocking to see where ever nickel and dime goes some time.

I seemed to remember DR being much more concerned with cutting things out. I'm less concerned with cutting things out. I pay all the important things first with automatic xfers, then I can do whatever I want with the rest. But if that's what he preaches as well, then yes I agree with DR

 

[DanielB89]

I seemed to remember DR being much more concerned with cutting things out. I'm less concerned with cutting things out. I pay all the important things first with automatic xfers, then I can do whatever I want with the rest. But if that's what he preaches as well, then yes I agree with DR

It depends on where you're at in life. His biggest thing is getting out of debt and everything is budgeted. It seems like you're budgeting everything out.

When you make 2000 a month and 1500 of it is gone before you get it, by decreasing your monthly debt you're essentially giving yourself a raise!

I am always looking into ways to increase my income, so if you've got some to help out a teacher, please let me know. haha.

 

[bluetoofew]

Isn't Dave really debt averse?

I am in the camp that debt is a tool and leveraging assets to accumulate additional assets and increase cash flows sooner than later can be a big plus.

 

[bluetoofew]

This is the flow chart to which I subscribe.

 

[Swampfox]

We went through Dave Ramsey's Financial Peace University when we were newly married and in our early 20s. It's been more than 10 years now and I don't regret choosing against strictly abiding by his principles. He has a lot of solid advice, but most DR people I know really turn into bean counters. There's nothing wrong with that if it suits your personality and your lifestyle. It didn't suit ours. I'd rather find creative ways to make new money and increase my pay rather than constantly focus on pinching pennies. Let me be clear, if DR works for you...great. I know it's worked for a bunch of people and it has improved their lives. It didn't really work for us because it was too stressful to constantly focus on it.

Here's the thing that worked for me better than anything in the world.

I automatically separate my money every single time I get paid. I spent a lot of time going through our finances and determining how much we needed to set aside for different things. Then I created a crap load of checking and savings accounts and titled them all for their explicit purpose. Then I built a whole bunch of automatic monthly transactions that work without me having to make a decision.

We have different checking and savings accounts for Emergency, Christmas, Birthdays, Auto Repairs, Vacation, Big Vacation, IRA, Mortgage, Utilities, Rental Property, Kid's College, etc.

Every 1st and 15th my paycheck gets split into all these various accounts. I built up padding over time in every account as well. So we have 3 months of mortgage payments in the "Mortgage" account. We have 6 months of payments in the "Rental Property account". I've built enough in the "Utilities" account for almost 3 months standard bills. At Christmas time, we have enough set aside to buy what we want.

Finally, we only keep 1 debit card available to us. That's our basic checking account. Everything in there is available to use and when it's gone, it's gone until the next paycheck. All of our living expenses are covered with other funds. All of my bills including cell phone, water, electric, Netflix, mortgage, etc. are setup on AutoPay from their respective accounts. That way I never miss a payment. This takes a lot of planning and dedication at the beginning. However, once you get it dialed in, the stress of bills and monthly payments goes away. PLUS you don't have a choice about saving for the future. It's done automatically.

This is precisely what DR preaches, “Tell your money where to go instead of wondering where it went”.

 

[DanielB89]

Isn't Dave really debt averse?

I am in the camp that debt is a tool and leveraging assets to accumulate additional assets and increase cash flows sooner than later can be a big plus.

I can't say I agree with all of DR's strategies. But, he is a millionaire and i'm far from that. hah. I know that his way has been proved 1000's of times. I hope it works one more with us!

 

[Swampfox]

Isn't Dave really debt averse?

I am in the camp that debt is a tool and leveraging assets to accumulate additional assets and increase cash flows sooner than later can be a big plus.

Yes, his whole foundation is becoming debt free.

It seems you may have more of a Robert Kiyosaki mindset. “Rich dad, poor dad”

 

[Nutterbuster]

A lot of DR stuff is pretty basic, Personal Finance 101. It's also targeted to people who don't manage their money. Baby steps for the financially ignorant, so to speak.

He is very debt adverse. People who do not understand debt (and boy, ain't there a pile of 'em) are well-advised to avoid it like the plague. He also advocates living below your means, which is somethong most people who turn to his books have not been doing. Hence the "cuts" he preaches.

If you are financially literate and not already in a hole, a lot of his stuff is overkill/oversimplified. He says as much himself.

We have debt. Most of it is "good debt" owed on investments that can reasonably be expected to produce returns greater than the interest paid (home, education). Some of it is "bad debt," incurred by depreciating expenses that we wanted/needed "right now" (credit cards, personal loans).

DR says to build an emergency savings, pay off debt, then save. He actually advocates ceasing 401k and other retirement contributions until you are debt free.

Not a chance.

My debt is manageable (going down every month, and a fair IR thanks to a healthy credit score) and my employer matched contributions are quite nice. And every dollar I squirrel away in my ruddy youth has many years to gather interest. Net win to keep that money going in the 401k.

Money management is exactly like weight loss. You can dress it up however you want it, but at the end of the day it's calories in vs calories out, and money in vs money out. The math is easy, the discipline doesn't come naturally to a lot of people.

 

[bowhuntr09]

I firmly believe in YouNeedaBudget.com Its a great tool for tracking your money and expenses and "giving every dollar a job". I used Quicken for years, but that merely tracks whats happened. With YNAB, I can plan what happens. It's very similar to @g2outdoors methodology without the need for all the different accounts.

 

[bluetoofew]

I firmly believe in YouNeedaBudget.com Its a great tool for tracking your money and expenses and "giving every dollar a job". I used Quicken for years, but that merely tracks whats happened. With YNAB, I can plan what happens. It's very similar to @g2outdoors methodology without the need for all the different accounts.

YNAB has everything you need to be successful!

 

[bluetoofew]

Money management is exactly like weight loss. You can dress it up however you want it, but at the end of the day it's calories in vs calories out, and money in vs money out. The math is easy, the discipline doesn't come naturally to a lot of people.

Well said as usual!

 

[ImThere]

We are set up a lot like G2. We follow a lot of what Dave says and have for many years. But when we need and sometimes want something we go get it. And a lot of that is we live well below our means so we may get snowed under on something we want but I make enough money to cover it quickly until paid off.
We have everything we need but not all we want. Lol



Sent from my iPhone using Tapatalk

 

[dalton916]

It all depends on how you see your money as being well spent. If you're one who wants to "live my best life now because " you can't take it with you". What about the loved ones you leave behind? They'll need it. One thing I don't want to leave my kids is my debt. I like Dave's slogan, "right now you live like no one else, so that later you can live and give like no one else.".

Essentially I started it for mine and my families future. Were headed towards retirement that'll be infinitely better than my time while working. It's an exciting thought.

Should I die before that time comes, I don't think i'll be in heaven wishing I had spent more money on possessions..
YMMV

That’s what life insurance is for. My kid already knows he ain’t getting rich when I die, but his stockpile of guns, boats and various other things will grow mightily.