I sure as heck am not rich but , I have no debt whatsoever.
Everything I own is paid for.
I do have a credit card , but I pay it off every month.
Now when you add up all the insurance , taxes , utility bills and all the other expenses that creep up , I still feel like I am in debt.

 

I sure as heck am not rich but , I have no debt whatsoever.
Everything I own is paid for.
I do have a credit card , but I pay it off every month.
Now when you add up all the insurance , taxes , utility bills and all the other expenses that creep up , I still feel like I am in debt.

Right! Why add debt to the misery? If your totally debt free and don't borrow money do you even need a credit score?

 

There are enormous advantages to going into retirement debt free. We retirees are on fixed incomes, but inflation continues. Rent, taxes, food, insurance will continue to go increase with no regard for our fixed incomes.

Yes, life can be done without credit cards. Debt is not an ally, but an enemy. We all like to buy stuff on sale when we can, but financing on credit cards makes the true cost the asking price plus 24%.

Cutting up ones credit cards is a step toward changing the mindset of a debt mentality. And it's been shown that folks spend 25% more when buying with the card rather than opening their wallet for cash.

Dave's plan allows for taking out a mortgage for a home. At 15 years, fixed rate, monthly payments no more than 25% of your take home.

Think about it...

How would you like to have an extra $1200 every month?

That's the price of two car payments at $500 each and a $200 card payment.

And once the mortgage is paid off, that becomes another $1500/ month available to you, instead of the bank.


There's nothing magic about this plan. Essentially it's telling folks to spend less money than they earn. But it provides a way for people to think about their money, and gives them hope and a straightforward way to change their spending habits so that they can prosper, rather than merely to scrape by. It's the attitude and behavior that needs to change.

Give it a try. If you discover that you don't like the feeling of not any owing money to anyone, you can always take out another mortgage. Getting into debt is easy.


If you're interested, Ramsey's books are on sale this July 4th weekend.

 

There are enormous advantages to going into retirement debt free. We retirees are on fixed incomes, but inflation continues. Rent, taxes, food, insurance will continue to go increase with no regard for our fixed incomes.

Yes, life can be done without credit cards. Debt is not an ally, but an enemy. We all like to buy stuff on sale when we can, but financing on credit cards makes the true cost the asking price plus 24%.

Cutting up ones credit cards is a step toward changing the mindset of a debt mentality. And it's been shown that folks spend 25% more when buying with the card rather than opening their wallet for cash.

Dave's plan allows for taking out a mortgage for a home. At 15 years, fixed rate, monthly payments no more than 25% of your take home.

Think about it...

How would you like to have an extra $1200 every month?

That's the price of two car payments at $500 each and a $200 card payment.

And once the mortgage is paid off, that becomes another $1500/ month available to you, instead of the bank.


There's nothing magic about this plan. Essentially it's telling folks to spend less money than they earn. But it provides a way for people to think about their money, and gives them hope and a straightforward way to change their spending habits so that they can prosper, rather than merely to scrape by. It's the attitude and behavior that needs to change.

Give it a try. If you discover that you don't like the feeling of not any owing money to anyone, you can always take out another mortgage. Getting into debt is easy.


If you're interested, Ramsey's books are on sale this July 4th weekend.

Wow! That was awesome! Would it be safe to assume you're doing "better than you deserve"?

 

Never had credit card debt - I paid off everything, including our home, back in '88. Won't buy anything on credit ever. Early on, we doubled our house payments as most of the money on a 30 year mortgage goes to interest - not a good deal. Then we bought the house next to us - that was when I was still a cop. Rented the house out for a bit less than the payments - still a good investment. Starting my own business was a real drain on the bank account, but after a few years it was our best investment ever.

 

Your more like Dave Ramsey than Dave Ramsey! Lol Great Job!

 

Ramsey doesn't like old people asking how to get out of debt.
He thinks you should have done something earlier and will hang up on you.
I am not a big fan of his , but have listened to his show , and heard him do this a few times.

 

It's sad how our society is a big lie when it comes to money. Many of us don't realize we're caught in a debt trap until there's no time left to get out of it. I guess its hard to tell someone they have terminal money cancer.

 

I've listened to Dave Ramsey's radio program for 15 years. I believe in what he teaches but differ a little. I do have one credit card that I use for everything and I pay it off every month. I have been debt free for over a decade. I don't plan on borrowing money ever again.

It seems that a person who is debt free and has saved money for things tend to spend less than a person who purchase items with credit. It's more difficult psychologically to spend $30K of saved money on a vehicle than it is to sign some loan papers for $30K. Also, a big purchase item means more to a person that has no debt attached.

I was horribly irresponsible with money in my 20' s and early 30's. I give credit to Dave Ramsey for my drastic turn around to becoming financially responsible. There is no way I could have retired without following his rules.

True wealth is built over time, and doesn't come overnight. Putting $50 a week into a matching 401k will turn into $400K after 25 years. Investing at an early age along with saving money instead of borrowing money can make anyone starting out today a millionaire by retirement age. However, despite there being more opportunity than ever to make and save money, I just don't see it with this latest generation in the workforce.

 

It looks like you did things right! Unfortunately, many or most don't. A little OT:

One good way to get ahead is to go into business. (Keep in mind that most companies fail during the first few years. The easier a business is to get into, the more likely it is to fail. Others will see your success and copy to compete with you if there are few or no barriers to entry.)

Back when my alarm company was fully on its feet and growing, I quit the police department to devote full time to the company. I learned early on that retaining good, well-trained employees was much less expensive than training new ones. Reducing turnover was important, so treating current employees well was the smart thing to do. To that end:

I limited my own pay to 10 times that of my lowest paid employee.
I instituted a 401K plan for employees, where I would put 1-1/2 times their contribution. Due to tax savings, their dollar would only cost them 70 cents to contribute and they's end up with $2.50 in their 401K with no taxes on that money. (I finally had to end the program when only 5 of our 25 employees (at the time) were participating. I had company meetings to explain all that, but to no avail - they would not look forward to their financial future, it was all about now. The fixed costs for Fidelity to run the program only made sense if we had better participation, so it was cancelled.

It was a lot of work growing the company. But it was a great way to attain some level of wealth. There were sadnessed too, I hated to see a good employees leave. That was expected and okay when they left for the right reasons, which often it was - but still as sadness.

After some 47 years in business, I sold the company last year (that was a sadness too, but the current generation wasn't interested - - kinda like what happened with Marlin, but on a much smaller scale!

 

Makes a lot of sense

 

I went to the Ramsey Solutions website. There is an investment calculator I may monkey around with a little. Would that be a good tool for building wealth? It seems like building a credit score only leads to more debt.

 

You have to go into debt in order to get a credit score.

 

NerdWallet has some good investment calculators. Calculator Soup is another site that has an easy to use compound interest calculator. Play around for a few hours and you will see the money interest can make. You can also see how much money can be thrown away with interest when borrowing.

 

OK Thanks

 

In America you can achieve financial freedom, even if knocked down repeatedly. As a unwise younger person got into debt, lost a job and bankrupted. Lesson learned, got wiped out in the housing crisis. Third time was a charm, rebuilt, retired ample pension, SS, and investments. Ramsey's guidance is spot on. Time from my last wipe out until retired in financial security with home and cars payed off, 0 debt, 14 years. Not hardly any money spent on anything but this goal, it is a mine set. Now retired with a good income, I'm loath to spend it, old habits die hard.

 

don’t bet more than you can afford to lose.

It’s not easy running a small business debit free but I try. When I bought a truck a year or so ago, they ran my credit score, it was as high as they ever saw.

Even if we can buy it outright we, it is never good to use up all of our cash reserves. What we do for the mortgage or car loans is pay 30-60% in cash or trade-in. Then our first payment is 10-15% of the loan. Then we always pay 10-100% more than the scheduled payment. We bought a home 3 years ago. We mortgaged just under half the value. Even though we could’ve use the money for a down payment, we paid 20% of the loan on our first payment. All of that money went towards principle, the same thing as a down payment. We pay $100-$300 extra on each month’s payment. In 3 years the 20 year mortgage is now down to 11 years, counting compounding interest.

What this also does is, build your credit score, but keeps you out of crushing debt. All loans are paid off early and the interest paid is significantly less. Nothing we have leveraged is upside down. In a worst-case scenario we could sell the car, truck or home and have enough money left over to buy another car or home, with cash.

We also do similar to Bassetman with credit cards. If my business has slow cash flow for a month or two, and can’t pay off the card, triple their minimum payment seems easy. We never finance toys. Boats, campers, motorcycles, guns, etc are all paid for with cash or we simply don’t get them. when times get tough financially, those are the first things to be sold. Except maybe the guns.

 

I bought a Freightliner FLD on credit in 2005. I also had a house payment and 2 car payments. I was doing some mechanical repairs one day and fell. Shattered my pelvis and split my hip socked in half. Now I couldn't work anymore and had all of that debt. I hope you have better luck young man.

 

I've been living very well at less than 1% debt/ratio to income and my investments. We aim to make it 0% soon, might say just unplug from the modern world. I've never understood how people justify their heavy debt ratio, which amounts to a ball and chain. Not for me.

Jack

 

Credit cards are OK if paid off every month and some offer some savings. Buy stuff from Amazon and Menards and their cards offer discounts. Again they need to be paid off. Credit card interest is usury. Loan shark level.
Toys are people's big downfall. My boat may be a little extreme but I bought it for 1800 dollars used. In its day it was a great boat. Guys using big boats that reqire larger trucks or other vehicles to pull them. Then there is the operation costs and maintenance. Living in lake country I see a lot of status level money pits. OTVs that cost as much as cars. Now fish house trailers that are around 20,000.
When I worked I hng drive and drove a Ford Focus. Most had 4 wheel drive trucks. See a lot of people driving flashy 4WD that have no need for one. Especially city dwellers.
There are a lot of oversized houses built now. Mostly as status symbols. My daughters have one. My son in Florida also has one but they can afford it.
I soldoff the 100 acres and am retired comfortably in a smaller house in the country. Pull the 1800 dollar boat with a AWD truck bought new, but the Truck is 3 years old now with 18000 miles on it. Did not take out a loan for it.

DEP


.

 

We pay the card off in full every time it comes. The one thing I like about the card is the cash back when you use it we save it to put toward a future bill . I do feel that the card companies should give us some more cash back dollars for paying on time and stying with them. Finally some of us are smart enough to use the system to our advntage

 

To suggest a different way of thinking about this subject...

Difficult problems often have difficult and challenging solutions.

Many folks do not have adequate money handling skills. They were never taught how to handle money by their parents, or their schools. Currently about 46% of card holders do not pay off their credit cards each month, but instead carry a balance.

Have you looked at the minimum payment amounts on credit cards? It runs about 1-2% of the amount owed plus the interest on the balance. The average credit card interest rate (over many different cards) was 21.9% in Feb 25. Interest rates can run between 18 and 33%, according to the specific card, and the card holder's credit risk.

Calculate Credit Card Minimum Payment

But as an example from this site

According to the minimum payment schedule, it will take 26 years and 6 months to retire the debt and more than double the cost of the debt in interest alone.

The average credit card interest rate is 27.89%, according to Forbes Advisor’s Credit Card Rate Report as of mid-March 2024. Forbes Credit Card Rate Report

An argument can be made for using a card and paying it off every month. But for those who do not, the average credit card balance being carried is $6501.00. upgradedpoints.com May 2025

The average credit card interest rate is 27.89%, according to Forbes Advisor’s credit card rate report as of mid-March 2024. That's way more than any cash back or airline miles benefits. 28% interest to me vs 2 to 5% benefits paid out? I'll take that all day long, if I'm a card issuing bank.

It has been shown in many studies that people will spend more money when using credit cards than when paying with cash. This site says up to 100% more-- Why We Spend More Using Credit Cards. And I just saw a Capital One Shopping site, that is pitched to retailers, that says people spend 4X more in their stores when using credit cards.

Credit cards and digital payment make it very, very quick and easy to spend money. And for people with credit card debt, who do not or cannot pay off their cards every month, it's a huge temptation to continue spending more than they should.

It's not easy to pay off one's bills, and debts. It's difficult. It needs determination, effort, and a change in mindset to make it happen. But one of the ways to get there for those with multiple large credit card balances is to stop using them. That's the gist of the argument--to stop getting deeper into debt with the credit card companies.

Life is full of temptations---over eating, gambling, drugs, sex, spending, etc.... Just because I'm not tempted by some of those doesn't mean that no one else is. Most of us may not be carrying balances, but a lot of us are. And it's crushing them.

It's way easy to get a card. I get multiple card offers every week. Probably most of you do too. It's tempting and it's easy. But it's no way to get ahead financially. We need to be telling that to our young people, our sons and daughters. And teaching them what to do instead.

Even it the balance is paid off every month, it's still true that people using credit cards spend considerably more than people who just use cash.

And people who use debit cards spend less with them, than those who use credit cards instead.

 

Credit is a tool, much like a gun. It can be used well or it can be used poorly. Have none now, but if I hadn’t borrowed in the past I’d have never gotten my business up and running. I was earning a 40% return in the business and paying 15% for the debt, it was stressful but it worked.

Folks use credit to satisfy their wants, or even their needs, but IMHO it should only be used for investment or dire emergency.

I do have a handful of credit cards, they are paid in full each month.

 

45 years of using credit card and only 1 time had to make part payment to next month (40 years ago).
No car payment for 30 years
No mortgage payment 20years
All thanks to the good Lord and having a good wife he blessed me with.
Use it up
Wear it out
Learn to make due and do without.

 

My first wife would run up our credit card until we reached our limit. I could never get out from under the debt because she'd keep spending for stupid stuff. It ultimately ended the marriage. I was able to get out from under the debt and start over, and was careful about living within my means. But I still had one card that I used occasionally and always carried a small balance. Never gave it much thought.

Then I met my second wife. She showed me how much interest was attached to that balance month after month. She'd point out that something that I bought on sale with the card wasn't really on sale because I didn't pay it off completely and there was interest on it with the monthly payment. She also showed me how much we could save in interest by paying down our mortgage sooner. I haven't carried a balance on a credit card since. We paid off our mortgage early and became debt free many years ago. It's amazing how far the money goes when you manage it properly. We've been married 25 years now and life is grand.

 

I’ve always been responsible with money thanks to my Dad and Grandfather who were downright cheap.
I haven’t had any debt in years. One way that I differ from Dave, I’m not going to drive a junker and the trouble it brings. I buy new cars, pay cash and keep them 10 years.
Dave is always throwing out these amazing depreciation numbers on cars such as 25% as soon as you drive it off the lot. That’s not true anymore. Check the price of used cars.
I also put everything on a credit card and pay it off every month. I’ve saved around $20,000 on new cars using credit card points and currently have another $7,000 saved up.
You just have to be disciplined with credit card use.
And the key to being comfortable when you are old is to start saving & investing when you are young.

 

I’ve always been responsible with money thanks to my Dad and Grandfather who were downright cheap.
I haven’t had any debt in years. One way that I differ from Dave, I’m not going to drive a junker and the trouble it brings. I buy new cars, pay cash and keep them 10 years.
Dave is always throwing out these amazing depreciation numbers on cars such as 25% as soon as you drive it off the lot. That’s not true anymore. Check the price of used cars.
I also put everything on a credit card and pay it off every month. I’ve saved around $20,000 on new cars using credit card points and currently have another $7,000 saved up.
You just have to be disciplined with credit card use.
And the key to being comfortable when you are old is to start saving & investing when you are young.

. amen

 

Sometimes a little debt is OK, if your investments are averaging 5% and you can get an auto loan for 3%, maybe that's OK. Cost-Benefit for everything(almost!) We finally BOUGHT THE FARM but there are still taxes, utilities, food, fuel. We do have credit cards and use them. They can be very convenient for many purchases, but you must never allow them to accrue interest, paying them off EVERY month. In empty parts of the country, there are gas pumps that only take credit cards, no attendant after 8PM. I believe having some cash on hand is also comforting, how much? that a personal thing, kind of like that pocket knife and pistol you carry. Freedom from debt kind of comes with age, better jobs, maturity and wisdom. Education and family experiences can be important in developing these traits. Willingness to work is also very important.

 

It can be done. For years now my wife and I have only had mortgage debt. We do have two kids about a decade away from their college years… 🤞😬

 

My ex was a bookkeeper so I trusted her. My big mistake. I may never get a head but am just now breaking even. I'm 74 and if I die owing nothing I'll consider that good enough.

 

My wife and I took the Ramsey class several years ago. It was interesting and is valuable information to have and use. In saying that I did disagree with some of his philosophies. For example, we were about to retire and had a rental property that had a mortgage on it and we also had a mortgage on our home. According to Ramsey, we needed to sell the rental property to no longer have that debt. I understand his philosophy but that rental property was clearing $200 over the monthly payment. Also at the time the housing market was not in our favor. Now we did sell the property eight years later. Because of the market change and the monthly rental dollars we brought in we doubled our money. To me, that was a better financial decisio. As for our home having a mortgage. Our interest rate was just under 3% and at the time we were making three times that percentage on our investments. So taking the money out of the investments to pay off the mortgage made no sense at all. Now to be fair, our investments have not always made that amount of a return. However it has always been higher then the mortgage interest rate.

All I’m trying to say here is this. Ramsey’s philosophy is a good one. However not everyone’s financial situation will fit into his process. So instead of following it exactly as taught. Which by the way that’s how it was taught to us. Think it through and make the changes that benefit you financially. I guess a better way of saying this is to use common sense when going through this process.

 

I also disagree with Ramsey's view about never buying a new vehicle. I buy new with cash, drive them until they die, and buy new again with cash. Dave is strictly looking at a vehicle purchase with investment numbers, and I have never considered a vehicle an investment. I also don't have a problem with a low interest mortgage when getting a much higher interest return on investments.

Some people can do the balancing act with new cars every two years along with expensive toys and the latest $1500 cell phone all on credit with monthly payments and still retire. That lifestyle never worked for me because it didn't leave anything left over for unexpected hardships.

I appreciate the posts from people here sharing their personal experiences with handling debt. I really admire Darkcloud's passion for not wanting to use credit when operating a business. That would be very difficult to do when buying equipment and materials along with interrupted cash flow from clients not paying on time. It's been my experience that the bigger the customer the longer it takes to get paid.

I also admire the people who started out from the beginning to be debt free. I had to learn the hard way a few times. It took a drastic lifestyle change and a totally different mind set to become financially responsible. It just comes down to being passionate about eliminating debt and building wealth which includes some sacrifices.

 

Don't really consider us debt free, but close. Paid cash for the house when we moved. There are payments on the wife's car and my truck, but the interest paid is less than liquid cash is making in a high yield account. Vacations go on a card and depending on how much, is paid off in two or three payments. Wife had to use a credit card the other day for a purchase as the bank said if it wasn't used within two months it would be canceled. We live off of our retirement checks and social security. Won't pull from Thrift Savings until we hit mandatory age for it. Nothing wrong with using credit wisely. Never know when you may need it

 

bumper,

I see exactly where you are coming from. It's sad that more of your employees didn't see the lucrative and generous benefit you offered with the 401k. I didn't see the 401k benefits either when I was dumb and young. Since I've matured, I see it as a gold mine! Unfortunately, none of this was taught in school and I doubt it is taught today.

 

bumper,

I see exactly where you are coming from. It's sad that more of your employees didn't see the lucrative and generous benefit you offered with the 401k. I didn't see the 401k benefits either when I was dumb and young. Since I've matured, I see it as a gold mine! Unfortunately, none of this was taught in school and I doubt it is taught today.

True that. They really do need to teach money management and such in school. I didn't graduate HS as I left home at 16 and joined the Navy at 18 (as soon as I was able to make out a declaration of intent to become a US citizen). So, much of my education was the school of hard knocks, yeah, I've been called hardheaded. Very grateful the Navy saw some potential and sent me to Electronic Tech School for a year. After the Nam tours I finished up teaching at Crypto Repair School, Mare Island, CA (loved it!).