Anyone else miss Suze Orman?

[disneysteve]

I know not many members on this board don't really like Dave Ramsey teaching method.

I take issue with specific pieces of DR's advice but overall I think his plan is rock-solid and I do believe it has helped thousands of people dig their way out of debt and get their spending under control going forward. His plan isn't right for everyone but it is certainly the way to go for lots of folks.

[Thrif-t]

I know not many members on this board don't really like Dave Ramsey teaching method. I didn't really care for Dave myself until started listening. The difference to me was Dave's passion about DEBT and using the envelope system which was easy to follow up along the way. It was something my wife and I needed to talk openly about our finances on regular basis. It fits our lifestyle and the transformation benefits on our budget was HUGE!. After a year, we rid all our debts except our mortgage.

Hey I have a question about Dave and his envelopes. Does he advocate saving in them too instead of using banks? Reason I ask is my kids tell me the neighbors use some sort of envelope system and they put their kids savings in envelopes too. Now these are going to college in the fall age kids. I can't understand why they aren't putting their money in the bank. It's not for financial aid reasons they have a business so wouldn't qualify anyway. Just wondered if it's part of Dave's system???

It's having an adverse affect on my kids who want to keep their money home in their drawers. I always tell them if the house burns down there goes your money! Get it to the bank.

[disneysteve]

Hey I have a question about Dave and his envelopes. Does he advocate saving in them too instead of using banks?

No, his system does not advise avoiding the banking system. The envelopes are for monthly spending, not for savings.

[tripods68]

No, his system does not advise avoiding the banking system. The envelopes are for monthly spending, not for savings.

I agree with Steve.

The envelope is mainly use for monthly spending like groceries, car maintenance, toiletries, entertainment/dining. The rest are electronically paid via bill payment like mortgage, gas, electric, and car insurance.

With our kids, sometimes we take them to the bank to bear witness where their money is going (e.g 529 plan). But they also have a small "piggy" bank at home.

[GrimJack]

What she said isn't factually wrong, and anything she says has to be weighed against your own financial strategy. I'm not sure when it was ever prescribed to blindly trust her. Instead, this whole thing works much better if you listen, and evaluate against your own strategy.

Keeping a Roth IRA as an emergency fund can be very strategic, and also beneficial...

http://money.usnews.com/money/blogs/...emergency-fund

But what she said is factually wrong! Distributions from a Roth IRA have very specific rules - the funds have to be in there for 5 years and a)you are 59.5 yrs old or b)you are disabled or c)your dead and it is going to your estate or d) the 'first home' exception.

Never mind that she is suggesting that you use your retirement funds - she also did not mention the 5 year rule. I am 66 years old and withdrew money from a Roth IRA to buy my military FERS contributions (will drain another one to buy my 4 years FERS as a temp working at NOAA) - I had to guarantee that the funds had been deposited for more than 5 years.

[tripods68]

I really do not understand the logic behind mixing EF and ROTH together. Its IDIOTIC!!!

The purpose of ROTH is for retirement. The purpose of having an EF is to use for Emergency situation ONLY. EF inside a ROTH do not make sense because each serve two distinct purpose. I do not care if you max out 15% in retirement contributions. You need sufficient EF. There is no substantive reason to prematurely touch ROTH until retirement. If you have to prematurely withdraw from ROTH to pay for emergency is because you've done a POOR job not saving enough outside retirement.

[sblatner]

You can withdraw your contributions to a Roth IRA anytime. The five year rule applies to the earnings. She was correct to say you can use a Roth IRA as an emergency fund. I don't mind that advice. You are letting the funds grow tax free and would only withdraw them in an emergency which hopefully will never come!

http://www.rothira.com/blog/the-five-year-rule-with-roth-ira-withdrawals

Any, my Saturday nights are not the same without Suze!

[Thrif-t]

I really do not understand the logic behind mixing EF and ROTH together. Its IDIOTIC!!!

The purpose of ROTH is for retirement. The purpose of having an EF is to use for Emergency situation ONLY. EF inside a ROTH do not make sense because each serve two distinct purpose. I do not care if you max out 15% in retirement contributions. You need sufficient EF. There is no substantive reason to prematurely touch ROTH until retirement. If you have to prematurely withdraw from ROTH to pay for emergency is because you've done a POOR job not saving enough outside retirement.

I don't think it's idiotic depending on how you handle it. I think it's smart tax planning. I have retirement Roths and an emergency fund roth. My emergency fund roth is with capital one 360

https://www.capitaloneinvesting.com/main/retirement/individual-retirement/choose-investments-SB-360.aspx?cmpid=360_S_MDDPR_IRA

It's just invested in a savings account, no way to lose the money, but at least I'm not taxed on the interest. I would just have it sitting in a savings account anyway, why not have it in the roth savings account so I don't pay taxes on the earnings? Seems pretty savy to me