Dave Ramsey – Jan 25

The Total Money Makeover

I’m really behind on putting up these posts, so I’m just going to do a brief overview of what we’ve read the last couple of weeks.  Basically, debt is dumb.  ALL DEBT, ALL THE TIME!  Having a mortgage is pretty much the only debt Ramsey ever says is good.  He points out how much income you can free up by not having monthly debt payments, and how much less you would need to live from. 

Chapter Four has been about the “Secrets of the Rich”.  One of the myths was about gold and how people invest in gold because of a fear of the economy collapsing.  I know that we have considered doing this, but Ramsey says that over the last 50 years gold has increased in value by 4.4 percent and that you can earn higher interest in a good mutual fund.  I do not know if that is true now because of the recession or depression or whatever this turns out to be, however one needs to think in long-term. 

Ramsey also discusses groups that say you can work a few hours a week and get rich quickly.  Yep, been there done that.  There isn’t an easy program to make millions.  He says that if you want to have money, you will have to work for it.  It will be hard!  It will not happen overnight! 

Another myth was about life insurance.  Ramsey talked about the difference between term life and whole life.  He says that buying whole life insurance is a horrible investment.  An example was shown of a man who bought a whole life policy of $125,000 for $100 a month.  This same man could have bought a term life policy of the same amount for $7 a month.  Ramsey says that you can invest your money a lot better than with a whole life policy, which we are supposed to get to investments by the end of the book.

Some of the other myths were about the lotto, buying mobile homes, and prepaying funeral or kids’ college expenses.  All are bad ideas according to Ramsey.  He said that the lotto preys off the poor.  Mobile homes lose value at an astonishing rate.  And prepaying for anything puts money in someone elses pocket that you should have working for you.

I think that pretty much gets us caught up besides the More Than Enough book, but we haven’t read as much of that one lately.  There is an amazing amount of information in these books.  I can’t wait until we get to the part where we learn what we should be doing.  We also went over our budget recently and when I thought that cutting up our credit cards was drastic, well I haven’t seen anything yet .  It’s about to get crazy here.  Stay tuned for our crazy, extreme total money makeover.

He did it!

He did it!  Rod did it!  He cut up ALL of our credit cards!  Today is his late day at work.  This morning we read the Bible and then he read us the Dave Ramsey books.  Afterwards, I was cleaning up the breakfast dishes and I looked over at Rod.  He was standing over the trashcan cutting up his credit cards.  I was in shock and the kids were cheering.  There was a dramatic pause as he cut up his beloved Best Buy card.  I then went and got my cards out of the fire safe and he proceeded to cut those up as well.  I felt physically ill during this process as this has been our back-up.  I knew that if an emergency came up we could put it back on the cards, or if there was a great deal that we didn’t have the cash for now, we could put it on the cards.  The children cheered the whole time.  One thing is for certain, I’m really motivated to get our emergency fund in place now.  Another thing too, this is radically changing our lives!

Dave Ramsey – Jan 12

The Total Money Makeover

We’re still working through the debt myths.  We skipped a few, because they were about co-signing, leasing cars and such.  The one we got the most out of was about car payments.  Ramsey states that having a car payment is “one of the dumbest things people do to destroy their chances of building wealth”.  He says that the average car payment is $464 over sixty-four months.  Then he explains that most people will get a new car as soon as their earlier car is paid for and continue this process for their entire life.  Ramsey wrote that if you were to invest that car payment in an average mutual fund from the age of 25 until 65 that you would have $5,458,854.45!  Yes, that was over FIVE MILLION DOLLARS!!!  Live like no one else, so that later you CAN live like no one else!

The other myth that was informative to us was about getting a credit card to build your credit.  Ramsey thinks that the only debt you will ever need is a mortgage and he says that you can get a loan for a house if you have lived right.  If you have paid your landlord on time, had a job in the same career for two years, have a good down payment, and your payment will not total more than 25% of your take home pay then you will be able to finance a house.

I wish we had read these books when we were first starting out.  I am so thankful that my children will have this knowledge and will be able to make decisions based on what is right, not what everyone else does.  I am also thankful that we are still fairly young and can change our patterns.

More Than Enough

We skipped a bit of this chapter as well since Ramsey was talking about single moms and blended families.  The part we did read was about marketing.  He discussed how the desire for “stuff” has ruined relationships.  He showed how we spend so much time watching TV, playing video games, or whatever instead of helping our family, church members or neighbors.  I know we’ve said we don’t have time for being with people at times, but we do have time for these time wasters.  Now, we are so lonely and desperate for company that is not the case.  I hope we will always keep people a priority and reject the trappings of this world.

Dave Ramsey – Day Four

The Total Money Makeover

We’re still on chapter three and only made it through one more myth.  This myth was about loaning or borrowing money from friends and family.  Ramsey quoted the scripture verse Proverbs 22:27, which says that the borrower is servant to the lender.  Money can ruin relationships.  In our younger years we borrowed money from a family member and it truly did strain our relationship.  Now, our answer is “No, we would not like to borrow money” and also, “No, you may not borrow money”.    We do not wish to be a servant any longer, and do not want to be the master over anyone.

Dave Ramsey – Day Three

The Total Money Makeover

Chapter three is covering myths regarding debt.  We only made it through the first myth which is that debt can and should work for you, that it is a tool to prosperity.  I know that we have bought into this debt myth because we have student loans and also half of our debt is a large business loan.  Debt is detrimental to a family.  It places a huge burden on us and we are not free to pursue our dreams and God’s leading.  Allie said that it is like Christian’s burden that he carried in the  Pilgrim’s Progress.

We have a prayer need that we would like help with.  A few weeks ago we noticed footprints in the snow in our backyard.  Someone had walked along the back of our house by our windows.  We put window alarms on and hoped it was just some kids.  On Thursday, I went out to shovel the snow and someone had walked up to our garage and must have looked in the windows that are in the roll up door.  We are now very concerned and the kids are frightened.  Rod has put a motion detector outside and it went off twice last night, thanks to a couple of cats.  We are losing sleep over this and I do not want us to live in fear.  We also need to keep our family safe.  Please pray for safety and peace for us.  We would also love to hear any suggestions.  Thanks.

Dave Ramsey – Day Two

The Total Money Makeover

The second chapter was about denial.  He gave the example of a person who is overweight, about how they stand in front of the mirror and suck in their gut and don’t think they are that out of shape.  I know personally, I have not realized how overweight I am until I saw a picture of myself.  It is the same with our financial shape.  This morning I added up all of our debt and all I can say is OUCH!  This will not be an easy process.

More Than Enough

We only read half of the second chapter last night (it’s a long one).  The part we read was about integrity.  We need to be honest about everything and stick to our word.  Ramsey said that it is stealing to not have integrity in your job.  He was also beginning to discuss relationships and making time for others.  He quoted Gary Smalley in saying that love is spelled T-I-M-E.  Ramsey believes that there is no such thing as “quality” time and that if we truly love someone then there needs to be “quantity” time.

Dave Ramsey – Day One

Last night, we started reading our Dave Ramsey books.  Here are the lessons:

The Total Money Makeover

It’s all our own fault.  We can’t blame anyone or anything else for our financial shape.  We are the ones who made the decisions.  But, we can change it!  Ramsey’s motto is:  IF YOU WILL LIKE NO ONE ELSE, LATER YOU CAN LIVE LIKE NO ONE ELSE.  What changes will we make?  Hm, we’ll see…

More Than Enough

The first chapter was just about the need to change.  Ramsey explains that change is hard and only happens when the pain of staying the same is too great.  I’m excited to see what the future chapters contain.

Books that have changed our lives

To some, the above title will probably seem melodramatic.  However, it is true.  There have been books that have forever changed our lives. 

The first is of course, the Bible.  I’ve been using BibleYear.com to track my reading plan.  I’ve used it for over two months now and I really like it.  You pick the reading plan you would like to use and then it keeps track for you.  Even if I miss a day, I know where I need to be and can get caught up.  This program only takes about 15 minutes a day and will work through the entire Bible in one year.

The second book is Created to be His Helpmeet by Debi Pearl.  I can honestly say that if it was not for this book there would not be a Sammy or Kaitlyn.  This book changed my marriage and my life.  This book is not for the faint of heart and is very difficult.  In fact, I could use a refresher, I think I’ll read it again soon.

We recently bought and received a box of books that I know will be life-changing.  We purchased Dave Ramsey’s Starter Special.  As you may remember, we have been trying to get out of debt and we’re not going to incur any new debt, including a mortgage.  Well that obviously did not happen, since we are now buying a house.  Whenever I ask Rod what he would like most he always says “to be out of debt”.  This was my Christmas present to him.  We are working through The Total Money Makeover as a family and then More Than Enough as a couple.  I will be writing everyday (or try to) what we are learning and how we will implement it.  I’m excited to see how this will change our lives!

What books have changed your life?