creditmess

A Book Everyone Absolutely Must Read!!! Like Now!!!

Recommended Posts

Ok, I know it was probably mentioned before but I will say it again.

Everyone should read Dave Ramsey's "The Total Money Makeover". Go to your book store and get a copy TOMORROW. It's absolute book that everyone who is in debt or maybe just need some kick in the a** needs to read. It is simply amazing. No bulls**t approach, very motivating and super easy to read. It's pretty much straight approach and common sense which abvioulsy, most of us lack or where lacking at some point since we post on this message boards (let's be honest :) ) We all have something in common here. We are either in big time dudu with money and debt, or we are starting to see the light but are still in trouble. Well, if you want to get out of this rat race, I would recommend reading Dave's book.

Some of you, if you read it, might be a little surprised at his way of thinking, but if you really deeply think about it, it makes sense.

It's no rocket science really...most of us know what we should do and not do if we have piles of credit card bills coming in. But yet, some of us fail to do the "right" things, knowing that what we do with our money sometimes is wrong. i.e. going shopping for clothes that we don't need when you have credit card payment coming up.

That is all. Just wanted to share it. I am reading it now and I can't put it down. I am not deep in debt, I have plently of money left over at the end of the month, I have a good job, pays good. Despite all this, I still manage not to save any money! Why is it? Well.. read the book....

That is all.. carry on..

:)

Share this post


Link to post
Share on other sites

Part of the problem is that people still abuse money and credit...

It is no different than crack or cocaine or alcohol or sex.

They have money, they spend it. They get a sub-prime application in the mail and they apply for it. They got a credit card and they max it out. They are already up to their ear lobes in debt and they still acquire more debt. They get a bill's consolidation loan but then max out everything again...

And I have been there and I am still trying to crawl out.

I would like to see a book that takes the approach of AA...

Like, I am [YOUR NAME] and I abuse money and credit...

Share this post


Link to post
Share on other sites

I like a lot of what Dave Ramsey has to say.

But there are a few things that I don't agree with. For instance, his total disregard of credit cards. Credit cards should be used responsibly and we all know that most of us haven't used them responsibly that's why we're here.

But I digress.

Used carefully, credit cards can help rebuild credit. Also we're in a 21st century world here. While there are many things that can be done with debit cards, such as booking hotels or rental cars, there are times that a credit card is the better bet.

Some companies hold twice the amount on the debit card in order to guarantee that they receive payment. That never happened when I used my credit card.

I don't want to nitpick Dave so I'll just leave it there.

Share this post


Link to post
Share on other sites

Wicked,

Why do you think that credit card is sometimes better than a debit card?

Dave's FICO score is 0. His thinking is, that FICO score only exists to let people get more loans and be in debt. It's funny when he makes fun of that FICO score. He is a millionaire, but yet, he could not get a loan because his FICO is 0. How dumb is that? Think about it

If you pay cash, you don't need FICO score. I tend to agree with this. Think about it...why pay with credit card? because you don't have money to buy certain thing? Well then, wait and save money to buy that certain thing instead of charging it. Even if you "pay it off in full at the end of the month" why not just wait until the end of the month and pay cash for it?

Doesn't that make sense?

He flat out hates credit cards. If someone follows his plan, they dont' need credit cards. For what? If the goal of the whole book is to get someone to pay for things cash, why need credit cards?

Share this post


Link to post
Share on other sites

From "The Total Money Makeover":

-------------------------------------------------------------------------

Yes, you will need to "build your credit" by borrowing and replaying debt in a timely fashion if you want to live a life of credit cards, student loans and car payments. Not me. The one questions we must answer is" How do I get a home mortgage?" Later, I will introduce you to the 100 perecent down plan, or if you must, how to settle for 15 year fixed rate mortgage. Byt if you want thet fifteen year fixed rate with a payment is no more than 25% of your take-home pay so I won't yell about it, don't you need credit? No.

You will need to find a mortgage company that does actual underwriting. That means they are professional enough to process the details of your life instead of using only Beacon score (lending for dummies). You can get a mortgage if you have lived right. Let me define "lived right".

You can qualify for a Conventional fifteen-year fixed rate loan if:

1. You have paid your landlord early or on time for two years

2. You have been in the same career field for two years.

3. You have a good down payment, which is more than "nothing down"

4. You have no other credit, good or bad

5. You are not trying to take too big a loan. A payment that totals 25 percent of take home is conservative and will help you qualify.

Don't let anyone tell you to go into debt to make way for a mortgage;thats a lie. A quality mortgage professional can get you into a home if he or she knows how to do underwriting. As for buolding credit for the other stuff, leave that to the losers. With your Total Money Makeover, you won't be taking on that kind of debt anyway.

--------------------------------------------------------------------------

Share this post


Link to post
Share on other sites

My parents never had credit cards -- paid cash for everything.

I just wanted to point out that in the credit vs. debit debate, you have much more protection with a credit card than a debit card should it get stolen or you get ripped off. There are no chargebacks on a debit card.

I agree with some of what Dave says, but I like Suze, better. For some, a clearcut A, B,C method of getting out of debt works....for others it's undertanding what your motivation is for getting in and staying in debt.

It's all about lifestyle choices.

People first, then money, then things.

Share this post


Link to post
Share on other sites

I've been using Mary Hunt's books. You have to overlook the religious aspects of her books if it's not for you -personally it's not my thing, but her methods make so much sense to me. I recommend her book, "Debt Proof Living" (debtproofliving.com). David Ramsey is a little too extreme for me, for lack of a better word.

While I agree the credit system doesn't make much sense as far as the way it works, credit cards do offer more protection. We just have to stop thinking of them as "extra money". I'm a "pay-it-in-full-every-month" kind of gal.

Share this post


Link to post
Share on other sites

To make money you have to have money. Sure his system would work if you had not one single debt, a good job, and live with your parents. Then you can save, invest, and as long as you have the will power to stay the course, it could be done.

But currently, we our a society that needs everything that comes out on the market, so we can keep up with the jones's.

Share this post


Link to post
Share on other sites
While there are many things that can be done with debit cards, such as booking hotels or rental cars, there are times that a credit card is the better bet.
The biggest advantage to a credit card over a debit card, as mentioned by a poster above, is the protection it offers should you purchase a damaged item or have your card stolen. I pay my credit cards off in full each month, but have 'rewards' cards that give me something in return for using them. I realize that many don't pay their balances off in full and so the rewards are more than offset by the monthly interest. I also don't like to use debit cards for hotel or rental car reservations because of the fact that they hold more than the actual amount of the reservation. The majority of hotels and rental car companies discourage customers from using debit cards. All that being said, though, I think if we are disciplined we can live without credit cards, but I still want a few in my wallet.;)

Share this post


Link to post
Share on other sites

That is only part of the problem, and a part that you can overcome yourself- simply refuse to play.

The flaw there is the system itself-

25% of your income. The median income in my area is about $40,000 for an entire family. That means two incomes. The median for single income? $30,000.

$40K= $3,300 per month = $833 payment at 25%= $85,000 home loan at 7.5%.

$30K= $2,500 per month = $625 payment at 25%= $54,000

The average home price here is $214,000. Even the homes in the BAD, BAD neighborhoods are over $140,000. That means a down payment of $55,000 for a bad neighborhood, and a down payment of up to $160,000 for an average home.

Share this post


Link to post
Share on other sites
The biggest advantage to a credit card over a debit card, as mentioned by a poster above, is the protection it offers should you purchase a damaged item or have your card stolen. I pay my credit cards off in full each month, but have 'rewards' cards that give me something in return for using them. I realize that many don't pay their balances off in full and so the rewards are more than offset by the monthly interest. I also don't like to use debit cards for hotel or rental car reservations because of the fact that they hold more than the actual amount of the reservation. The majority of hotels and rental car companies discourage customers from using debit cards. All that being said, though, I think if we are disciplined we can live without credit cards, but I still want a few in my wallet.;)

Nope.. Dave explains about this in his book. You have a same protection. At least if you have Visa debit card. Not sure about MasterCard. He has a Visa policy copied in his book bascially saying debt or credit card, doesn't matter, you still have same protection. He actually talks about the way people think that they have better protection with credit card over debit which is wrong. Check out his book.

Share this post


Link to post
Share on other sites
To make money you have to have money. Sure his system would work if you had not one single debt, a good job, and live with your parents. Then you can save, invest, and as long as you have the will power to stay the course, it could be done.

But currently, we our a society that needs everything that comes out on the market, so we can keep up with the jones's.

And that is exactly what he is talking about. Why trying to keep up. Jones' are BROKE!!! Why keep up with them?

All he says is: Work as hard as you can to pay off your debts if you have them. If you have mortgage, dont' worry about it from the start but revolving debt should be paid off asap. Then you move on to your car payment if you have one, then a house. I skipped steps like 1000 emergency fund and things like that. It's funny how I listen to his show and there are these people calling:" HI Dave, I make 40k a year, we have 35k in cc debt, 700/monht Tahoe payment and we just bought a house for 300k... but we can't make ends meet, what do we do?" and he would flat out say:" Sell the car, buy a used 4k dollars car, sell the house and move into cheaper apartment and pay off your debts." It's funny and sad to hear people's reactions like:" But Daaaveee.. we loooveee this houuseeee waahh waaahh waaaahh". Yeah, but YOU CAN'T AFFORD IT!!!!!

Share this post


Link to post
Share on other sites
That is only part of the problem, and a part that you can overcome yourself- simply refuse to play.

The flaw there is the system itself-

25% of your income. The median income in my area is about $40,000 for an entire family. That means two incomes. The median for single income? $30,000.

$40K= $3,300 per month = $833 payment at 25%= $85,000 home loan at 7.5%.

$30K= $2,500 per month = $625 payment at 25%= $54,000

The average home price here is $214,000. Even the homes in the BAD, BAD neighborhoods are over $140,000. That means a down payment of $55,000 for a bad neighborhood, and a down payment of up to $160,000 for an average home.

Then you keep saving and live on rice and beans until you can afford 15 year mortage loan.

Share this post


Link to post
Share on other sites
And that is exactly what he is talking about. Why trying to keep up. Jones' are BROKE!!! Why keep up with them?

All he says is: Work as hard as you can to pay off your debts if you have them. If you have mortgage, dont' worry about it from the start but revolving debt should be paid off asap. Then you move on to your car payment if you have one, then a house. I skipped steps like 1000 emergency fund and things like that. It's funny how I listen to his show and there are these people calling:" HI Dave, I make 40k a year, we have 35k in cc debt, 700/monht Tahoe payment and we just bought a house for 300k... but we can't make ends meet, what do we do?" and he would flat out say:" Sell the car, buy a used 4k dollars car, sell the house and move into cheaper apartment and pay off your debts." It's funny and sad to hear people's reactions like:" But Daaaveee.. we loooveee this houuseeee waahh waaahh waaaahh". Yeah, but YOU CAN'T AFFORD IT!!!!!

This is the area that I think Suze Orman has a better strategy. "WHY do you have to keep up with the Jones?" What are things really worth to you?

My fiance buys all his clothes at Good Wiil and even brags about it. "Look I got this great shirt for $3!" His attitude is why pay $40 for something when you can get it for $3?

All of the debt wizards address discipline.

I have a close friend (millionaire next door type). If they budget $100 on groceries and spend $30 going out to eat, they only spend $70 on groceries and maintain what they budgeted to savings.

When they paid their car off, they put the amount of their car payment in savings every month, and bought a new car in cash in 3 years. I have another friend who refuses to buy name brand ANYTHING when grocery shopping and will only buy what's on sale.

I have used the snowballing method to pay off debt. But you have to have clear goals of what you want when it's paid off. Do you want to invest? Save for your children's college? Retirement? A house? Have you annual salary in savings? (What freedom THAT is)?

There are many resources on the net for how you can find extra money in your budget...whether it giving up the $4 latte, a night out with friends, using change you save throughout the year, or moving into cheaper housing.

Initially, it was very difficult for me to learn to be frugal (sometimes it still is)...but when it came down to harrassment from creditors vs making different spending choices... it was much easier.

When I was 20's and had just graduated from college, a family member told me,"If you don't learn to manage your money at $20,000/ year, you won't be able to manage it at $100,000/ year." I wish I had paid more attention then.

Share this post


Link to post
Share on other sites
Then you keep saving and live on rice and beans until you can afford 15 year mortage loan.

OK, then. Let us know how you do!!

Share this post


Link to post
Share on other sites
Then you keep saving and live on rice and beans until you can afford 15 year mortage loan.
I had to smile at that because Dave Ramsey says that at least five times during each radio show. I wonder if he has stock in the makers of Bean-O? ;)

I know for a fact that my MasterCard debit card that I have through my credit union does not provide the same protection as my credit cards. So I don't agree with Dave on that one.

Share this post


Link to post
Share on other sites

Rental car places in my area will NOT take debit cards (even if they have the Visa or Mastercard logo) for rentals. It HAS to be a credit card. I even went to rent bikes and put it on my debit card, but they refused. Had to use a regular credit card.

As far as getting credit back on debit cards - it can be done. My debit card number was used by someone on-line to rack up thousands of dollars. I noticed it because I regularly check my account on line - a few times a week - and noticed these crazy charges on it. Of course it put my checking account into overdraft (and I got charged $30 each charge) and I had a mess for about a week or two. BUT, I went down to my bank and had to fill out a paper on each and every charge that was not mine and it got credited back in a few days. The bank also credited back my overdraft charges.

Share this post


Link to post
Share on other sites
As far as getting credit back on debit cards - it can be done. My debit card number was used by someone on-line to rack up thousands of dollars. I noticed it because I regularly check my account on line - a few times a week - and noticed these crazy charges on it. Of course it put my checking account into overdraft (and I got charged $30 each charge) and I had a mess for about a week or two. BUT, I went down to my bank and had to fill out a paper on each and every charge that was not mine and it got credited back in a few days. The bank also credited back my overdraft charges.
My MC debit card through my credit union also provides some protection for unauthorized charges; however, it doesn't provide the dispute process for damaged goods that my credit cards do.

Share this post


Link to post
Share on other sites
I had to smile at that because Dave Ramsey says that at least five times during each radio show. I wonder if he has stock in the makers of Bean-O? ;)

I know for a fact that my MasterCard debit card that I have through my credit union does not provide the same protection as my credit cards. So I don't agree with Dave on that one.

Actually, I had that for lunch today hehehehe

As for your MC debit card, yes, that might be the fact. Dave did not mention MC debit card, only VISA debit card. Visa debit card provides the same protection as credit card.

Share this post


Link to post
Share on other sites

This is my opinion.

If I ever learn the secret to becoming a millionaire, I will become one and keep the secret. Sorry. If, in fact, the secret is to write a book and sell it to become a millionaire, then everyone will know. Typically these books are fairy tales. They are based on a lifestyle few of us can relate to. I always get a kick out of people saying that they are so broke they had to get in to their savings to pay a bill. HA !! What savings? My savings account has about $50.00 in it. Living from paycheck to paycheck will never allow you to do any of the get rich programs we all hear about. I'm still trying to figure out how to buy a house with no money and place one tiny ad in 45 newspapers and sell it for 3 times what I paid just because I put a coat of paint on it. I may by this book, but there goes my savings account :) :)

Share this post


Link to post
Share on other sites
This is my opinion.

If I ever learn the secret to becoming a millionaire, I will become one and keep the secret. Sorry. If, in fact, the secret is to write a book and sell it to become a millionaire, then everyone will know. Typically these books are fairy tales. They are based on a lifestyle few of us can relate to. I always get a kick out of people saying that they are so broke they had to get in to their savings to pay a bill. HA !! What savings? My savings account has about $50.00 in it. Living from paycheck to paycheck will never allow you to do any of the get rich programs we all hear about. I'm still trying to figure out how to buy a house with no money and place one tiny ad in 45 newspapers and sell it for 3 times what I paid just because I put a coat of paint on it. I may by this book, but there goes my savings account :) :)

What secret? There is no secret in the book. It's all straight forward stuff. It's motivating. Buy the book. It's only 10 bucks on www.daveramsey.com

It's straight forward stuff. Do whatever it takes to pay off your bills and dont' spend money you don't have. That's it. Work 2 jobs, sell stuff around the house, get 3-4 jobs....sell your car, buy a clunker for 500 bucks.. whatever it takes to pay all of that off. Sounds like a plan to me!

Share this post


Link to post
Share on other sites

Aerovette: Dave Ramsey's stuff is not "Get Rich Quick" stuff. I know, there is a lot of that out there these days, but Ramsey is the complete opposite. I have not read "Total Money Makeover" yet, but have read "Financial Peace" and "More Than Enough" from Dave Ramsey. Both are excellent, and the new one probably is as well.

Creditmess: I drove an $1800 clunker until we had enough to buy a 2004 PT Cruiser, cash!! :D Ramsey's ideas work.

Greg

Share this post


Link to post
Share on other sites
Guest
This topic is now closed to further replies.