Why I'm not a Ramseyite

[Nutria]

@disneysteve and nutria.

I would consider those bills to be an expense that are expected to be paid in full when the bill is received. If it isn't paid in full then it becomes a bad debt.

IOW, it's a debt originated by the vendor and not a "money company" (bank, mortgage broker, etc), even though we don't consider them "debt".

Think I'm experiencing deja vu on this subject.

[Nutria]

Do you consider yourself to be in constant debt to the utility companies?

No. But were I to use the strict definition of "debt", then... yes, I'm in debt to the utility companies about two weeks every month.

If we place an order for supplies at my office, the company ships us the order along with an invoice, and we mail back the invoice with our payment, I don't count that as debt. I'm pretty sure most others don't either.

If you don't pay for those supplies, OfficeMax doesn't send the "expense collectors" to get their money back, do they?

https://www.merriam-webster.com/dictionary/debt

2 :something owed, obligation

3 :a state of being under obligation to pay or repay someone or something in return for something received :a state of owing

Of course not. They send the debt collectors. Which means that -- strictly speaking -- those "expenses" (which your accountant sees as "Accounts Payable") are really short-term debt.

http://www.investopedia.com/terms/a/accountspayable.asp

Accounts payable (AP) is an accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors.

[bjl584]

Seems like we're splitting hairs here.

I have no idea how much Dave practices what he preaches.
Maybe he does 100%.
Maybe he is a complete fraud.
Maybe he is somewhere in the middle.

All that I do know is that he is an extremely smart and successful business man and a good salesman. He's built an empire and a net worth of $55 million dollars around his ideas and programs to eliminate debt. Whether or not he adheres to all of it or not, you can't deny that he has created a winning formula for wealth and success.

[TyreneJones]

You all seem to have such a problem with the "cut up credit cards" philosophy, which I find funny. If you don't like that, don't do it?

What bothered me about it was that he had a lot of really good advice, but he wrapped it in a very religious/Christian package. Getting rid of debt doesn't have to be about religion, right?

[disneysteve]

You all seem to have such a problem with the "cut up credit cards" philosophy, which I find funny. If you don't like that, don't do it?

What bothered me about it was that he had a lot of really good advice, but he wrapped it in a very religious/Christian package. Getting rid of debt doesn't have to be about religion, right?

But the very foundation of his program is no debt ever with the possible exception of a mortgage. He considers credit card usage to equal debt, which I do not. I also don't have a problem with other forms of debt used properly and responsibly.

The religious stuff bothers me some as I'm not Christian, but that isn't where I find fault with his advice.

[Gailete]

The thing is with debt, to get out of it, you must do what works for you. In our town we have a couple that went the DR and were doing an on air 'scream' I guess that they do when completely out of debt. That was several years ago. My son bumped into her in the last few weeks and asked her flat out if they were still out of debt and the answer was yes. For a long while there, I knew the woman worked 3-4 minimum wage type jobs and they managed to get out of $30k+ debt. They did it with the DR system.

Other use the Your Money or Your Life system. When our debt was at its most horrible with my ex, I followed the "Get out of Debt with the Money You Already Have" advice. There are many other books out there promoting get out of debt, probably as many as there are diet books. Well maybe not as many as diet books, but there are a lot of them. I know I was very influenced by Charles Long's book How to Survive Without a Salary as his focus was very much on frugal living more than getting out of debt.

It doesn't matter which system/program you use if it makes sense to you (and your spouse). Besides making sense you need to be able to do the steps that are suggested and stick to them. Getting out of a chasm full of debt is a very tough thing to do. The last thing a person trying to get of debt needs is having the system that they are trying to use being disparaged.

[AJSimon]

You all seem to have such a problem with the "cut up credit cards" philosophy, which I find funny. If you don't like that, don't do it?

What bothered me about it was that he had a lot of really good advice, but he wrapped it in a very religious/Christian package. Getting rid of debt doesn't have to be about religion, right?

I'm a fairly hard-boiled atheist, but I've found it easy to tease out the religious rationale for his financial advice from the basic practical message. And his Baby Steps program is, as far as I know, completely divorced from any biblical teachings.

[Gailete]

You all seem to have such a problem with the "cut up credit cards" philosophy, which I find funny. If you don't like that, don't do it?

What bothered me about it was that he had a lot of really good advice, but he wrapped it in a very religious/Christian package. Getting rid of debt doesn't have to be about religion, right?

Well the thing is, his advice is good for anyone of any religion. For Christians a careful reading of the Bible, which incidentally has a lot of messages about handling wealth and money, shows that Christians aren't to be walking around loaded down in debt but handle their money responsibly and also to trust in God for your needs.

So no, getting out of debt doesn't have to be about religion, but Ramsey's religion does have a lot to say about money. Also many references to money use in the Old Testament which I believe that Jewish folks follow.

I would find it hard to believe that any religion would encourage debt and frivolous spending. Some things just make practical sense.

[Radiohead1]

IOW, throw the baby out with the bathwater instead



Yes, your suggestion is crazy, because paying your card off every month MEANS that YOU ARE saving up for what you want before you buy it.

(Where did all the smilies go?)

Dave's entire product is directed at people that are in debt because they cannot control their spending. Why would he direct his message towards someone that doesn't need his help (and therefore doesn't care what he says)?

[Radiohead1]

I find this discussion interesting. I don't follow DR although for most things I do agree with him. However, my youngest son does follow him as much as he is able, and a very good thing too. He makes enough to live on, but just barely. He has a debit card which has been ample for him to use for plane tickets, car rentals and motel fees. But those trips he takes only after saving up for them. I would shudder to think what would happen if he got a credit card and used it 'just this once'. Not become he is frivolous with his money, but because he can't afford to put even $100 on a credit card and expect to pay it all back when the bills comes around. Those little charges he might make, such as for gas, instead of using gas cards that he gets for doing surveys. He might never let himself get in bad debt but knowing he can't pay it all off would drive him crazy and wouldn't be good for his finances. So even though he doesn't have a credit card problem, he refuses to get one. He knows it wouldn't be good for him.

How does he make "barely enough to live on" but can afford to save up for plane tickets, car rentals, and motel fees? Those two positions are mutually exclusive.

I see some interesting definitions of "barely enough to live on" for sure...

[Nutria]

Dave's entire product is directed at people that are in debt because they cannot control their spending. Why would he direct his message towards someone that doesn't need his help (and therefore doesn't care what he says)?

Don't think that people stop listening to him after they get out of debt. After all, you need to stay out of debt once you finally get out of debt.

There are two ways to do that:

1. Discipline yourself (which, as a Christian, you should be doing anyway) so as to be able to use a CC without falling into debt again.
2. Avoid the problem by throwing out your cards.

An analogy, for someone who drinks too much but is not an alcoholic, a good analogy is:

1. Discipline yourself (which, as a Christian, you should be doing anyway) so as to be able to drink the occasional beer or glass of wine without getting smashed.
2. Avoid the problem by throwing out all the alcohol.

Both methods require a lifestyle change, but method #2 leaves you in perpetual fear that you'll backslide into debauchery.

[Nutria]

How does he make "barely enough to live on" but can afford to save up for plane tickets, car rentals, and motel fees? Those two positions are mutually exclusive.

I see some interesting definitions of "barely enough to live on" for sure...

No mention in grandparent of how long it takes for Gailete's son to

1. save up for those expenses, nor
2. how often he takes them, nor
3. whether he saves for a rainy day.

[Gailete]

How does he make "barely enough to live on" but can afford to save up for plane tickets, car rentals, and motel fees? Those two positions are mutually exclusive.

I see some interesting definitions of "barely enough to live on" for sure...

Because he plans his vacations up to a year in advance, where he saves what he needs in cash. Generally, the only 'vacations' that took a plane ticket were family/friends weddings. He plans, he prepares, he keeps a goal list, he works a 40 hour/week job and then always try to get a shift in with a temp job weekly. Two weeks ago, he pulled a double shift on his temp job. There are many weeks that yes, he barely has money for the weekly expenses, but that means he pinches pennies all week, not dip into his savings that have been set aside for a particular purpose. And with no credit cards, he can’t resort to that.

You haven't been with us long, but I refer to this kid often. Because at this point he is 34, has NO credit card debt, he is paying on a car and that is his only loan, and it was a used car. Oh, and by the way, he is autistic, but through sheer determination, he has managed to live on his own, by his own resources, he has been fired from jobs because he either couldn't keep up or he didn't understand what he needed to do. Yet for the major portion of his life since HS graduation, he has either worked full time, went to school and got his AA degree, and for about 10 or more years now, not only works full time, but part time when he can get it. He also devotes a lot of his Saturday’s before he works a shift at the temp job, helping me get groceries and run errands as I have a hard time on my own. He also does internet surveys, etc. that earn him gift cards for gas, Amazon, WM and CVS. He trades me the CVS gift cards for cash. He is going non-stop most of the time to be successful financially.

I have written you many posts to try to help you out in your situation. Many of those ideas are from real life. Our real life which my son watched as he was growing up. He latched onto DR and was reading him in HS. He read any of my books on frugal living and saving, etc. He is a frugal kid and you can both have at times barely enough to live on and be saving at the same time. That is called sacrificing for the greater goal.

[Gailete]

No mention in grandparent of how long it takes for Gailete's son to

1. save up for those expenses, nor
2. how often he takes them, nor
3. whether he saves for a rainy day.

Thanks Nutria. He saves. My reply post to radiohead explained it I hope. But some that have depended on cc can't see that the two items are NOT mutually exclusive.

[Radiohead1]

Because he plans his vacations up to a year in advance, where he saves what he needs in cash. Generally, the only 'vacations' that took a plane ticket were family/friends weddings. He plans, he prepares, he keeps a goal list, he works a 40 hour/week job and then always try to get a shift in with a temp job weekly. Two weeks ago, he pulled a double shift on his temp job. There are many weeks that yes, he barely has money for the weekly expenses, but that means he pinches pennies all week, not dip into his savings that have been set aside for a particular purpose. And with no credit cards, he can’t resort to that.

You haven't been with us long, but I refer to this kid often. Because at this point he is 34, has NO credit card debt, he is paying on a car and that is his only loan, and it was a used car. Oh, and by the way, he is autistic, but through sheer determination, he has managed to live on his own, by his own resources, he has been fired from jobs because he either couldn't keep up or he didn't understand what he needed to do. Yet for the major portion of his life since HS graduation, he has either worked full time, went to school and got his AA degree, and for about 10 or more years now, not only works full time, but part time when he can get it. He also devotes a lot of his Saturday’s before he works a shift at the temp job, helping me get groceries and run errands as I have a hard time on my own. He also does internet surveys, etc. that earn him gift cards for gas, Amazon, WM and CVS. He trades me the CVS gift cards for cash. He is going non-stop most of the time to be successful financially.

I have written you many posts to try to help you out in your situation. Many of those ideas are from real life. Our real life which my son watched as he was growing up. He latched onto DR and was reading him in HS. He read any of my books on frugal living and saving, etc. He is a frugal kid and you can both have at times barely enough to live on and be saving at the same time. That is called sacrificing for the greater goal.

I wasn't questioning your son. I was just questioning your statement. And not even maliciously.

FWIW, my oldest daughter has been "diagnosed" as "possibly" being on the spectrum. Sweetest child that ever lived but I worry about her every day and if she will want to or be able to be independent.

I stand by my statement, though. Barely enough to live on equals vacations aren't even in the discussion.