Paying Down Debt

[CDRhom]

I don't think you are weird at all.

Psychologically I respond best to the Low Balance First payoff technique. Every time I'm tempted to back slide I remind myself that no savings account pays intrest at the rate my creditors charge.

 

[Unrepresented]

I've never held a credit card balance, I've always paid it off at the end of each month. I used this really simple strategy of not buying anything I couldn't afford. Strange, I know.

Credit cards are just a tool. If you use them wisely, they're great.

My situation was a combination of some spending that I probably could've avoided combined with a lot of stuff I needed in order to keep life sailing relatively smooth. You don't always need to fix your car, but you do need to get to work. And when your income levels are so close to your set monthly expenses, it's easy to have to rely on credit cards for any of the unexpected expenses. That's the story of my college years, at least.

 

[Unrepresented]

I don't think you are weird at all.

Psychologically I respond best to the Low Balance First payoff technique. Every time I'm tempted to back slide I remind myself that no savings account pays intrest at the rate my creditors charge.

Yeah, that's really it for me, especially since my credit card companies have raised my APR when the recent legislation involving reform passed, despite my perfect payment history and never overdrafting.

They're parasites who must be excised as soon as possible.

 

[fdeck]

http://en.wikipedia.org/wiki/Debt-snowball_method

Very interesting! I may give that a try.

It makes sense because the effective interest rate of a low balance loan is very high if there is a monthly service charge. If there were no service charges, it would make sense to pay off the higher interest loans first.

 

[DigMe]

The debt snowball is also a good thing on a psychological/motivational level because you're seeing things get paid off pretty quickly and then you see the other debts get paid off more and more quickly as your payment amounts grow greater for the next debt as you pay off the last one. Very satisfying feelings and helps you keep going and keep making the sacrifices.

bc

 

[anyonefortennis]

We went through Dave Ramsey's program a few years ago and used his debt payment method to pay off all of our debt. Now we don't use credit cards. Google "debt snowball" and you might find the method we used. Our friends did the same and paid off over $70,000 of debt in under 2 years.

bc

Glad it worked out for you but this guy really bothers me. Someone that sells t-shirts, a "Designer Coupon Companion", and something called "Financial Peace University" shouldn't be preaching about how to spend your money.

He may have some good ideas but most of it is common sense or something you should have learned in school.

If you need the help, talk to a local financial adviser. Some of them work at no cost to you (they make money if you open accounts and what not) or use the $100 from the Financial Peace University and take a personal finance at the local community college.

That's just my .02 but I'm sure glad if help you get out of some debt!

 

[anyonefortennis]

The debt snowball is also a good thing on a psychological/motivational level because you're seeing things get paid off pretty quickly and then you see the other debts get paid off more and more quickly as your payment amounts grow greater for the next debt as you pay off the last one. Very satisfying feelings and helps you keep going and keep making the sacrifices.

bc

I just find it funny how the humans work - I used my own home brewed snowball-like payoff and was the most successful method I used. It still is not the best method to use dollar for dollar but even if you know that in your head, just having one less bill on your budget is a great feeling.

 

[DigMe]

You don't sound glad. You sound very patronizing. I did take personal finance when I was in college and it was helpful but they do not teach many of the things that Ramsey does. Why would a guy who helps thousands of people get out of debt bother you? Because you disagree with his particular philosophy? Because he sells things? Get over it!

bc

 

[anyonefortennis]

You don't sound glad. You sound very patronizing. I did take personal finance when I was in college and it was helpful but they do not teach many of the things that Ramsey does. Why would a guy who helps thousands of people get out of debt bother you? Because you disagree with his particular philosophy? Because he sells things? Get over it!

bc

I have the same feelings towards Ramsey as you have towards me. If he really wanted to help people get out of debt, he wouldn't be charging $100 a year to post on his boards. I just don't think he has the right intentions. He even has link to the cash for gold sites on his own!

I worked for a company that processed payments for those "work for home" and "get rich fast" and seen what those things do to people. Maybe I'm wrong but I always looped in Ramsey in this same group.

Trust me, I'm glad and happy for ANYONE that managed to get out of debt regardless of the method or source of motivation to do so.

 

[ADbassman]

I have low limits for a reason. I don't trust myself.

 

[ModulusFan]

I have low limits for a reason. I don't trust myself.

Neither do your creditors

 

[Indiana Mike]

Dave Ramsey is in business. Much like a doctor,dentist or therapist.They all are in the business of helping people in one way or another in exchange for money.
I recently listened to a report on NPR that studied the level of treatments doctors perform as related to population and number of like competing doctors in the same fields. The higher the population and like doctors resulted in a proportional increase in surgeries and treatment therapies. The lower the population and number of competing doctors resulted in a proportional decrease in surgeries and treatment therapies. That has nothing to do with Ramsey but it proves one point , to me anyway...

They are all in business to make coin.

 

[DigMe]

I have the same feelings towards Ramsey as you have towards me.

What are you talking about? I have no feelings towards you? Just because someone responds to a post you made on the internet doesn't mean they have any feeling one way or another about you as a person. I don't know you, I don't recall having any other interactions with you. I have no feelings about you.

If he really wanted to help people get out of debt, he wouldn't be charging $100 a year to post on his boards. I just don't think he has the right intentions.

How can you know his intentions? Just as you cannot know how I feel about you as a person since I haven't made any indication of such you cannot know that his intentions are not the right intentions. Why are you making these negative assumptions about people? The guy has some ideas and implementations that have helped tons of people. Should he spend his life giving them away for free? I would be willing to bet that most people who have actually implemented the ideas would have gladly paid more than they did for the program. In hindsight it's certainly worth more than $100.

He even has link to the cash for gold sites on his own!

I don't know anything about the particular website that he has linked but looking at the other websites that he has linked from his front page this is the only one of its kind. Part of his philosophy says if you're really that in debt...desperately in debt...then you do whatever it takes to pay it off and that might mean selling some of your stuff. This would be in-line with having a garage sale except you would probably get more from these people that you would at your garage sale. Then again, you'd probably get more from a local gold broker too.

I worked for a company that processed payments for those "work for home" and "get rich fast" and seen what those things do to people. Maybe I'm wrong but I always looped in Ramsey in this same group.

Yes, you are wrong. Ramsey is nothing of the kind. I've seen what Ramsey can do to people and it's amazing. He's the anti-scam. I don't see how you previously working for scam artists has anything to do with Dave Ramsey. It seems to me that you are not as familiar with his program as you think you are...that's the only assumption that I can make based on your comparing his program to a scam. The "get rich fast" people are taking money from folks with nothing in return except irresponsible financial ideas. Dave Ramsey is selling a product that is regularly helping thousands to get out of debt and live responsibly. Also, he regularly dispenses his ideas on the radio and podcasts for free so anyone who listens to his program could get a lot of the same concepts over time.

BTW, I don't follow EVERYTHING that Ramsey recommends in his program...especially some of the investment advice. That's the great thing about having a mind of my own...I'm free to pick and choose and cull ideas.

bc

 

[anyonefortennis]

What are you talking about? I have no feelings towards you? Just because someone responds to a post you made on the internet doesn't mean they have any feeling one way or another about you as a person. I don't know you, I don't recall having any other interactions with you. I have no feelings about you.



How can you know his intentions? Just as you cannot know how I feel about you as a person since I haven't made any indication of such you cannot know that his intentions are not the right intentions. Why are you making these negative assumptions about people? The guy has some ideas and implementations that have helped tons of people. Should he spend his life giving them away for free? I would be willing to bet that most people who have actually implemented the ideas would have gladly paid more than they did for the program. In hindsight it's certainly worth more than $100.



I don't know anything about the particular website that he has linked but looking at the other websites that he has linked from his front page this is the only one of its kind. Part of his philosophy says if you're really that in debt...desperately in debt...then you do whatever it takes to pay it off and that might mean selling some of your stuff. This would be in-line with having a garage sale except you would probably get more from these people that you would at your garage sale. Then again, you'd probably get more from a local gold broker too.





Yes, you are wrong. Ramsey is nothing of the kind. I've seen what Ramsey can do to people and it's amazing. He's the anti-scam. I don't see how you previously working for scam artists has anything to do with Dave Ramsey. It seems to me that you are not as familiar with his program as you think you are...that's the only assumption that I can make based on your comparing his program to a scam. The "get rich fast" people are taking money from folks with nothing in return except irresponsible financial ideas. Dave Ramsey is selling a product that is regularly helping thousands to get out of debt and live responsibly. Also, he regularly dispenses his ideas on the radio and podcasts for free so anyone who listens to his program could get a lot of the same concepts over time.

BTW, I don't follow EVERYTHING that Ramsey recommends in his program...especially some of the investment advice. That's the great thing about having a mind of my own...I'm free to pick and choose and cull ideas.

bc

The feeling that I pointed out is when you call me patronizing. I think Ramsey is somewhat condescending as well.

The cash for gold is not the best alternative (plenty of complaints about them if you search), like you said a local gold broker is the way to go. So why doesn't he recommend that? Because the cash4gold people pay him to put an ad on his site. That's one of the things that make me say that he doesn't have people's best interest in mind.

The consensus that financial experts have of Ramsey is that he has good advice in debt and payoff from a physiological POV but is not 100% accurate in the investments and financial side of things.

He is very good at motivating people to get stuff paid off. Like you said, his method worked for you and I did something very similar to the snow ball after the more financially logical methods failed for me.

Much like you said, you take what you want out of it, but if you are paying someone for financial advice, they should at least be accurate.

Not trying to start an argument with you or anything. Maybe I should just listed to a few of the things he has to say to make a better opinion of him, but there are some things like the cash for gold links that are red flags in my book. I may just upgrade him from "get rich quick" to "Dr Phil" status

 

[HailCorduroy]

I'm in Nashville where Dave Ramsey got started. I used to listen to his show on 99.7 years before he was syndicated. I don't think he's a scam artist, but he has changed some of his business practices. He has always charged for his Financial Peace University meetings, but back in the day, he was the one teaching it. He had his book that he sold and that was about it. I knew a guy that worked for him and he was a great employer. He treated his employees very well. I believe he really cares about helping people get out of debt. I haven't really listened to him in years because he started to preach the religious angle a little too much for my taste.

Now it seems like he is selling a lot more "stuff", but I guess you have to keep expanding your product line in that business. You either continuously expand your audience or sell more stuff to existing customers. When I have heard him recently, he still has the same phrases and process as he did years ago. None of that has changed.

I used to crack up at the people that would call him. Some guy would call and say, "My wife and I have a $300,000 mortgage, 2 car payments, $50,000 in credit card debt. We are thinking of buying a boat. Should we get a regular loan or put it on a credit card?" Uh, have you ever actually listened to the show?

 

[Absentia]

About to add another 115k on top of my 97k in student loans!!!!
Sure it's for a house but my student loans were a bad investment I don't like seeing the balance go down because it reminds me of what I shouldn't have done in the first place.
oh well live and learn it's only money.

Planning to have the house paid in ten, no other debt thank god.

 

[Quadruple Jay]

You should take a look at a mortgage amortization table sometime if you really want to get sick. I'd planned on trying to pay off my home in the first 4-5 years, but decided going sprint car racing was a better idea. Meh....

Heh tell me about it. I'm an accounting major and I have to see those tables so often. It's amazing how quickly future values balloon up. Makes me glad I'm not in the housing market yet.

 

[Eric Perry]

Man, I am crazy in debt. Over $60k on school loans, $8k left on my car, and about $12k on credit cards (high balance mainly because of of school: tuition, books, fees, etc).

I'm okay with the fact that my school loans will never (ever) be paid off. I plan on going back for my doctorate in the future, which certainly won't be cheap. I mainly just want my credit card debt gone. I haven't charged anything in years, and cannot wait until that balance is gone, never to return again!!!

 

[DigMe]

Anyonefortennis,

just to be clear, the link on Ramsey's page is not to cash4gold. I have also seen the reports on that company and how they underpay. His link is for a differet gold-buyer company. I know nothing about that company but maybe they pay better. Either way that would be an issue where I would say shop your gold around if you want to sell it. I would bet that Ramsey would agree with that if someone called and asked him directly on his show

HailCorduroy, who posted before you, seems to have some first and second hand experience that somewhat contradicts your image of Ramsey as well.

BTW, all that stuff that Ramsey sells on his website can only be purchased if you have the money because he doesn't accept credit cards! Peace.

bc

 

[anyonefortennis]

BTW, all that stuff that Ramsey sells on his website can only be purchased if you have the money because he doesn't accept credit cards! Peace.

bc

That is pretty cool.