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Old 12-05-2016, 07:23 PM   #1
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Debt free planning

My wife have always been good at spending money and suck at saving.

I've hit a point in my life that I'm thinking of sweet sweet retirement OR at least cutting back so we can live off of less and so that I can work less.

Anyway- I've read of Dave Ramsey and some Rich Dad, Poor Dad reference.

Does anyone have reading suggestions/recommendations?

(Yes, I know the obvious is to spend less than I make.)
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Old 12-05-2016, 07:52 PM   #2
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Pay cash....have a friend that is still working, but he went to SS office to see what his payout would be.....then he decided to try an experiment and see if, without using his paycheck, if he could live his lifestyle on SS.....before anything like retirement came along.....think he was thinking about early out..
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Old 12-05-2016, 08:29 PM   #3
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I have been terrible with money my whole life. I did own some very nice vehicles and boats when I younger... Luckily I married a woman who is just the opposite, she has put us in a very good place, no early retirement for me but that is only because we want to pay for our kid's college. My youngest will hopefully graduate about the time I am 67. She always used to watch Suzy Orman when she had her weekly show on TV and really used a lot of her principles and has done well for us. Might be worth it to check out some of her stuff. She is no longer on CNBC but she is on PBS quite often and I am sure you can find her books and CD's.
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Old 12-06-2016, 07:07 AM   #4
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Debt free is impossible. When I started my business I paid off everything house cars cards O debt. Later in life I paid cash for my new house and all the toys I buy camper, boats, etc. However I finance my 3 autos as they loose value. Pay for majority of things with cash.

I have excellent credit with a debt to income ratio that's excellent..

I am early 60's and started thinking of retirement. I am finding that my life insurance will double at 65, my health insurance increased 61% this year, auto insurance upped 31% We just keep piling up medical-hospital bills prescription cost..

My expenses per month are near what I paid when I had debt. It may not be debt but it is the cost of living , today.
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Old 12-06-2016, 07:39 AM   #5
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Dave Ramsey has some good books out there, to help you get started in changing the way you do your money. It's more common sense stuff that many people don't think about.

I have read several of his and was doing fairly well utilizing his suggestions, until life took one of those unexpected turns.

Dave has a good radio show too, that I think you can listen to on his website. He just happens to air on a local station where I live at the same time I am usually driving home, and I like to listen to him and the people who call in.

Like I stated, Dave shows you a lifestyle/mindset change to getting out of debt, and a lot of his advice is motivational in nature, for you to make a goal and work towards it. I know several of my couple friends, who followed his advice and it kinda became a competition between them on who could cut back and save more....which is a good thing.... as you and your wife both need to be together in this.

I would get Dave's beginning book and peruse it. I will tell you upfront, Dave is adamant against borrowing money to go to college.
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Old 12-06-2016, 10:40 AM   #6
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Debt is not bad. Credit (and debt) is a financial tool, and a very useful one at that. Yes, I could have saved for 10-15 years and bought my camper for cash. But why bother? I have my camper now, and it costs me just a measly 2.75% for the convenience. Hell, I can leave my cash where it is and earn more than the APR of the loan.

Now what is bad is "Debt without a plan". Like any tools, credit can be abused. I always say "never buy anything on credit that will be gone before the first payment is due". The unplanned, spontaneous purchases on credit is where people get in trouble. Walking through the store, see a stereo you like and think "I have room on my card"... THAT will get you in over your head in a hurry.

The guys that say "I never use credit, I buy everything with cash or I don't buy it" to me is the same as the guy who says "I built this house without air tools. Either I beat the nail in by hand, or I don't build it". I'm not impressed either way, because they are taking pride in going out of their way to ignore a valuable tool.

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Old 12-06-2016, 10:45 AM   #7
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Debt is not bad. Credit (and debt) is a financial tool, and a very useful one at that. Yes, I could have saved for 10-15 years and bought my camper for cash. But why bother? I have my camper now, and it costs me just a measly 2.75% for the convenience. Hell, I can leave my cash where it is and earn more than the APR of the loan.

Now what is bad is "Debt without a plan". Like any tools, credit can be abused. I always say "never buy anything on credit that will be gone before the first payment is due". The unplanned, spontaneous purchases on credit is where people get in trouble. Walking through the store, see a stereo you like and think "I have room on my card"... THAT will get you in over your head in a hurry.

The guys that say "I never use credit, I buy everything with cash or I don't buy it" to me is the same as the guy who says "I built this house without air tools. Either I beat the nail in by hand, or I don't build it". I'm not impressed either way, because they are taking pride in going out of their way to ignore a valuable tool.

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Old 12-06-2016, 11:21 AM   #8
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Subscribed. Not only do I suck at money management I'm currently recovering from one of life's little curve balls. At 44 and retirement (hopefully) in sight I need to make that final push towards debt free.
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Old 12-06-2016, 11:29 AM   #9
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Debt free is impossible. When I started my business I paid off everything house cars cards O debt. Later in life I paid cash for my new house and all the toys I buy camper, boats, etc. However I finance my 3 autos as they loose value. Pay for majority of things with cash.

I have excellent credit with a debt to income ratio that's excellent..

I am early 60's and started thinking of retirement. I am finding that my life insurance will double at 65, my health insurance increased 61% this year, auto insurance upped 31% We just keep piling up medical-hospital bills prescription cost..

My expenses per month are near what I paid when I had debt. It may not be debt but it is the cost of living , today.
I have no debt.
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Old 12-06-2016, 11:55 AM   #10
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My expenses per month are near what I paid when I had debt. It may not be debt but it is the cost of living , today.
So true! I have been keeping a monthly household expenditure journal for the last 6 years. Recently, I was looking back through them and comparing the "then vs. now" cost increases.
Amazing how cost of monthly living has gradually exploded. It may not be "monthly contract debt", but every bit of "equal to". Realistically, noone is ever debt-free!
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Old 12-06-2016, 12:32 PM   #11
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I got to retire at 58. I didn't want to work anymore. 40 years in the same trade. I worked in air conditioning since I was 18. I was a self employed HVAC contractor since age of 26. What I did was to start putting money in an IRA in my late 20's. Started a 401k at my shop. The smart people put in as much money as they could afford. The dumb ones didn't and still worked paycheck to paycheck. I now have enough money in my personal bank account (already taxed) to last a couple of years without anything else, a payment check coming in every month from the sale of my company and commercial property, money from a healthy account of tax deferred money I can start using in February if I want, SS in 3-5 years, my wife's retirement 401K and also her tax deferred savings. She retires in May just after turning 58.

This was all planned. I was 20 when I married her and she was 18. She went to college to become a nurse after kids were in full time school. I went to tech school for 6 month's right out of high school. You don't need to be smart. I think you just need to come from a family who's parents made you stand up on your own 2 feet.

Paying cash is not always an option. In Arizona there is no prepayment penalty. We always made double or triple payments. If you do that to your house payment you will be amazed on how fast it gets paid off. Get acquainted to your amortization table. My second house is in Mexico. I borrowed money from my paid off Phx house to buy it and paid it off in 8 years 15 years ago. My 3rd house was up north in the mountains. I sold it after 5 years and was able to pay cash from the profit for my new MH

I never gave my boys any money. I made them earn it. They are both in the same business I was and are way ahead of me at the same age.
You can have new cars and boats, but always look at the amount of interest money you are wasting. Better planning pays off in the long run...

JMHO & YMMV
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Old 12-06-2016, 01:12 PM   #12
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My wife and I are trying to become debt free and currently only owe on a house. With that being said I know that in the future my kids will be going to college and we would like to be able to help with that. I would love to stay debt free because I feel we are able to do much more without the debt but I know things happen and can put you in positions you didn't think you would be in.
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Old 12-06-2016, 01:25 PM   #13
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I got to retire at 58. I didn't want to work anymore. 40 years in the same trade. I worked in air conditioning since I was 18. I was a self employed HVAC contractor since age of 26. What I did was to start putting money in an IRA in my late 20's. Started a 401k at my shop. The smart people put in as much money as they could afford. The dumb ones didn't and still worked paycheck to paycheck. I now have enough money in my personal bank account (already taxed) to last a couple of years without anything else, a payment check coming in every month from the sale of my company and commercial property, money from a healthy account of tax deferred money I can start using in February if I want, SS in 3-5 years, my wife's retirement 401K and also her tax deferred savings. She retires in May just after turning 58.

This was all planned. I was 20 when I married her and she was 18. She went to college to become a nurse after kids were in full time school. I went to tech school for 6 month's right out of high school. You don't need to be smart. I think you just need to come from a family who's parents made you stand up on your own 2 feet.

Paying cash is not always an option. In Arizona there is no prepayment penalty. We always made double or triple payments. If you do that to your house payment you will be amazed on how fast it gets paid off. Get acquainted to your amortization table. My second house is in Mexico. I borrowed money from my paid off Phx house to buy it and paid it off in 8 years 15 years ago. My 3rd house was up north in the mountains. I sold it after 5 years and was able to pay cash from the profit for my new MH

I never gave my boys any money. I made them earn it. They are both in the same business I was and are way ahead of me at the same age.
You can have new cars and boats, but always look at the amount of interest money you are wasting. Better planning pays off in the long run...

JMHO & YMMV
Of all the replies to the OP, yours wins in my book. The funny thing is that most think they owe their kids this and that, they are dead wrong. I have met lots of people (parents) and have made it a point to always tell them you're doing a good job, but sadly it's not that often.We unfortunately live in a time of excess, as demonstrated by how indebted some of us have gotten. To those who think it's not their fault, that is the first thing you need to face, then the rest is much easier to focus on.

You did it right. Remember this; you can't fake your kids. The rest is just small stuff.
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Old 12-06-2016, 06:42 PM   #14
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Debt free is not impossible. I'm close to it. I have 1/2 debt on the camper. Less than 1/2 debt on a new motorcycle and truck. Paid off a reasonable home improvement project. I don't like alot of payments so I pay cash for part of the things I buy. But. Here's the big but. Every single one of those are at very low interest rates.

Assuming you have debt, pay minimal payment on all. Rank them by interest rate, minimum balance and value ratio. Then pay off the one with the lowest numerical ratio. Then apply that payment along with the minimal payment on the next one in line and literally you can even pay off a mortgage in like 10 years. In the event of a life curve, suspend it for a bit, keep paying the minimums until you get back to stability. See the snowballing effect, summarized on back to black. Just google it. It really works. But I also recommend paying yourself 10% if you can first, then apply the repay schedule.
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Old 12-06-2016, 07:09 PM   #15
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My wife and I are trying to become debt free and currently only owe on a house. With that being said I know that in the future my kids will be going to college and we would like to be able to help with that. I would love to stay debt free because I feel we are able to do much more without the debt but I know things happen and can put you in positions you didn't think you would be in.
Just interjecting from my perspective. Worse thing you can do to yourself, and your kids is to help them through college. Unless of course you have a contract that they'll take care of you in times of need. Read the above. His kids had to work for it. College in itself is not the answer or a guarantee of success. Hell. I'm successful but if I'd been smarter 40 years ago I'd have become a plumber or an electrician as my family was. But at that time college was the dream. Like the flight attendants always say. Make sure you have your oxygen mask on before you help others. Otherwise you're dead and unable to help them either. My parents never let me starve in school. But they paid nothing. I did it and learned quickly to make good choices. I have a buddy that gets his ego stroked by paying his daughters college. Fact is he's not got a pot to do it in, and when she's out, he'll be 52 and have no means to make up his retirement. Hope she buys a huge house for them all to live in.
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Old 12-06-2016, 09:22 PM   #16
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College costs are astronomical now compared to 40 years ago.


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Old 12-06-2016, 09:40 PM   #17
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College is cheap if you go to a state school and commute. Whats really is financial suicide is letting your child pick a school that will cost 120K (4 years) at the ripe old age of 17. Then they major in liberal arts. Now that is the "other" definition of insanity.
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Old 12-06-2016, 10:01 PM   #18
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College costs are astronomical now compared to 40 years ago.


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And your point is what? . Evaluate the gain vs the cost. If you think it much better AND then feel it worthwhile to assist your kids then by all means do so. Ain't nobody taking away your right of evaluation.
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Old 12-06-2016, 10:01 PM   #19
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Just interjecting from my perspective. Worse thing you can do to yourself, and your kids is to help them through college.
I guess we will have to agree to disagree. My parents helped me with college, they didn't pay for all of it but they made it so I only had a $9k college loan when I graduated. When you look at the astronomical costs of college, it is very unlikely a non-scholarship student will get out of college without over a $100k student loan debt. I have heard of people with close to $200k in student loans. That's assuming they are going to a four year college and not a Junior college, (which is still pretty expensive). Of course we wouldn't do it if it were to cost us our retirement but as long as I am healthy and still like my work, I figure why not help pay for it?
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Old 12-06-2016, 10:03 PM   #20
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And you're assuming it's a college education will be the key to their access. Personally I disagree. But it's your kids. Just don't ask me to subsidize it. Your decision. Your payment.
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