I know there are many on this board that are fiscally responsible people. Or at least there are many on this board that claim to be fiscally responsible people. Being that its an internet forum, we will never know for sure what the truth is. However, I would venture to say that based on the national averages, there are many here that are drowning in credit card debt. So to be forthright:
HELLO, MY NAME IS LOCKE, AND I AM A COMPLETE MORON.
Now everybody say “HELLO LOCKE”
Okay, now that that is out of the way…
Had a friend recommend this documentary and it was very enlightening. I would highly recommend everybody watch it, not just the other morons that are drowning like good ole Locke. I rented it on Itunes for $3. Well worth the price of admission.
MY NAME IS NOT LOCKE and I am only a sorta moron . . .
each and every year we do fall behind after the holidays and property taxes are paid - - and it takes a few months to catch up (like right now)
and we have on occasion made a major purchase (like a TV) and took advantage of the 1 year free financing. And each time we paid the balance in full before the interest came due - - but I have resolved to not do that again.
Finally, I second the documentary Maxed Out - - we just netflixed it. After watching this flick I realized how painless it is to autopay something like our DirectTV bill with a credit card - - cuz’ if I had to actually write a check out each month for $67 I would likely drop the service. BUT IT IS THE SAME $67 either way so we will drop the service as soon I get around to it ha ha ha - - which is why I am a sorta moron.
I have listened to him for awhile now. At first I thought he was a nut. Now I get it. Yesterday wifey and I signed up for one of his financial peace university 13 week classes. I already feel empowered and know this will change our lives. I know it will suck ass for awhile, but even knowing that, I feel less stress because I know I am finally going to do something to take control of this situation.
I was about to start a thread about him, but now figure if anybody is interested, they can just let this thread dovetail.
Dave Ramsey’s program works. We’re on baby step 4/5/6 (I think they go hand in hand).
I am getting laid off on 3/31 - and because I have 6 months in savings I feel ok. I may have a job by then, or not, but either way I know barring anything crazy happening my family will not be hungry or in foreclosure if I do not work for a few months.
I have listened to him for awhile now. At first I thought he was a nut. Now I get it. Yesterday wifey and I signed up for one of his financial peace university 13 week classes. I already feel empowered and know this will change our lives. I know it will suck ass for awhile, but even knowing that, I feel less stress because I know I am finally going to do something to take control of this situation.
I was about to start a thread about him, but now figure if anybody is interested, they can just let this thread dovetail.
That’s the same class my wife and I took a few years ago. I forget how much it cost us, but the course paid for itself after the first month because of some changes we made that we learned in the class.
Anybody who carries a balance on a regular credit card (ie. one with the normally high interest) is throwing money out the window. If you own a home and you are doing this, then it’s even more ridiculous since you could likely get a line of credit against your home for the cash flow problems you may run into through the year. Pay off that credit card and then cut it up if you can’t get disciplined enough to pay it off every month.
The best financial advice I ever got was from the book “The Wealthy Barber”. Still follow that plan today.
That’s just ridiculous. How would you stay at a hotel or rent a car without a credit card? Besides, I get goo-gads of airline miles with my credit card. Well worth it if you can pay it off each month.
My name is Steve, and I’m a recovered moron. Just before I graduated law school, I went on a “spending spree” with my credit cards, because, hey! I was starting a high paying job soon, and I needed/wanted some cool stuff as well as to do the whole “Europe for a month” bar trip thing. When I got back from my bar trip and saw the balances on my credit cards, I realized that I was a moron.
I canceled all but one card and negotiated a reduced interest rate. Paid off the balances and never looked back. I now have 2 cards, and balances are always paid off at the end of every billing cycle. Budgets and text message balance alerts significantly reduce the liklihood I’ll get the balance too high, and I think it’s been about 8-10 years since I’ve carried a balance. If I don’t KNOW have the money in my checking account, the purchase is not made.
The key as with just about everything in life is discipline. Some have it and can make credit cards work for them. Sounds like you are one of those people. Wish I had that ability but I have come to realize too late, that I don’t have it. Besides me, the overwhelming majority also don’t have it. If you watch max out, you will see that the credit card companies do their best to exploit that weakness.
In the end I do feel that the credit card companies are scumbags lower than porn makers. But do I blame them for my current situation. Nope, I got into this all by myself. I will work my way out by myself too.
Add me to the list of credit card abusers. My husband started his own business in 2001 and didn’t have an income for 3 years, then had a job that barely covered mortgage and a few utilities. I now have to put some serious work into reducing that debt. I’m done paying off my highest interest one and that is now stashed in a drawer for emergencies only. Next one is done within 2 months, if I can get a darn job, the third will likely take 6 - 7 months. I’ve made some changes to my monthly expenses and moved those savings over to paying the card but now that I’m unemployed it will be tough to be as aggressive as I usually am in shunting money over there. Next is to pay off the car, then the motorcycle. By the time we get to that the balance will likely be low enough we can likely just pay off the loan all at once. He uses that for commuting and we save a lot of money on gas. That all can be done in 24 months at the most. So, it will take 2.5 to 3 years but all we will left with is the mortgage for debt. That is my big goal. No more buying new cars on credit, no more charging to the cc unless there is an extreme emergency, but when I got to REI I will use that card because of the dividends then pay it off at the end of the month, and continue to reduce my monthly output. I’m doing some heavy analysis of my spending patterns and they are awful so there is a lot of room for improvement. For example, I spend a ridiculous amount on groceries for 2 people. We don’t eat out much so that isn’t a problem. I’m now only buying grocery splurges if they are on sale, bying brands that are on sale instead of our usual ones and am saving an average of 20% on my grocery bill by using my QFC discount card. Right now I’ve got about 4 months of basic living expenses covered and hopefully I’ll have a job sooner than that!
I thank myself on a regular basis for being very smart when buying my house and not taking all the money they wanted to give us. Mortgage is covered by unemployment benefits and most people can’t say that. I also took a longer loan out on the car than I wanted to just to be sure we kept the monthly payments affordable. I now pay extra every month towards it and that comes out to two extra payments a year. Amazing how quickly that reduces the outstanding balance!
So, sometimes I’ve been smart but the ccs have been the biggest trouble. It is easy to put the electric bill on it when you don’t have the money to pay it. Add on the occasional mortgage payment and plain irresponsibility and it racks up fast. The early 2000s weren’t good to us. Lesson learned.
EDIT TO ADD: I also pulled myself off all the mailing lists for stores that I used to get so there is no temptation. Surprising how much money that saves!
I think part of his justification about no CCs is that CC companies will screw you any time they can. Accidently misplace your payment etc. First chance they get they will try to screw you. That is his problem. Play with fire you’ll get burned type of thing.
There is nothing you can do with a CC that you can’t do with Debit.
And Cash talks (and hurts to spend). People spend more money on plastic than they do with cash.
When I was 18 (almost 30 years ago) my father told me told me that the only acceptable time to borrow money was for a house. With the exception of a business loan for expansion I have followed that advice. He paid for undergrad, I paid for 6 yrs of grad school with no loans. Never carried a balance on a card and never borrowed for a car. Means waiting for stuff sometimes but that’s the way it goes.
But I can certainly understand the attraction of credit, especially when you have to say no to your kid or your wife.
“In the end I do feel that the credit card companies are scumbags lower than porn makers” … Hey, what’s the matter with Porn?? JOKE
Thanks for starting this post, it’s very timely. I was debating on whether to pay off a somewhat small CC balance, or keep building my safety fund, due to the present economy…Well, I made up my mind and just withdrew some $$ from my ING account to clear off all deft save my mortgage. Thanks.
On a sadder note, my spouse is an abuser. She makes decent coin as an ER Nurse, but each month it was like I was pulling teeth to get any help with the household expenses…THEN, one day we sat and went over her expenses versus income. I almost left that night due to the 5 CCs she had and the balances! Well, given the problem solver nature of me we opened a joint account finally and I control it. Took out a low interest personal loan to pay off the CCs and cut them all up. She’s paying the loan. I didn’t want to be mean, but I had to draw a line in the sand as I have my daughter from a previous marriage to think of. I don’t want to be financially ruined, and made that pretty clear, you can read between the lines. I like my high credit score.
JOKE