Posted on 11/20/2012 11:36:41 PM PST by Altariel
Dear Dave,
I’m in a very fortunate position when it comes to my finances. I’m 25, and I make $50,000 a year. I’m also completely debt-free. In your opinion, when is it appropriate to let someone you’re dating know about your financial situation?
Anonymous
Dear Anonymous,
Wow, you are in a great position for someone so young. I’m not sure how you got there, but it certainly wasn’t by being dumb or immature.
I think it’s only natural in a dating situation to reveal more about oneself as time passes and the relationship gets deeper and more serious. In my mind, people who start throwing around financial information on a first date are either extremely superficial or just plain weird.
But after you’ve been dating a while, and definitely before you’re engaged, you should know everything about the other person. There should be complete disclosure in every area of your lives. That’s called intimacy. There’s no room for skeletons in the closet when it comes to a healthy relationship.
Just take your time and make sure you’re both committed to being open and honest about things. Then, as the relationship progresses, the depth of intimacy and the depth of information will progress in all areas of your lives.
—Dave
Dear Dave,
My wife and I want to do a live-in/flip real estate purchase. The idea is to buy a fixer-upper and rent out the basement to help with the mortgage payments. What do you think about the idea?
Brian
Dear Brian,
I love real estate. I’ve flipped a few houses in my day too. But the particulars of the deal make me a little nervous.
In a situation like this you need to do a basic business analysis. You’ve got to have a plan and figure out the worst case scenario. Part of this is determining whether or not you can survive if things fall apart. In this case, the worst case is that you can’t get a renter and the house doesn’t sell. It puts your family in jeopardy if this happens, so to me it’s not an option.
Honestly, I think you’ve got house fever right now. The possibility I just mentioned isn’t a rare occurrence. Lots of people have had the same idea, with the best of intentions, and still end up in a big mess. But if you and your wife are willing to accept the possibility of things not working out like you planned—and the fact that you might have to take additional jobs for an unknown period of time just to make ends meet—then it might be a play. Me? I don’t like putting myself into skin-of-my-teeth positions intentionally. When I wore a younger man’s clothes, I was willing to do stuff and ignore the risk involved. Going broke years ago knocked that out of me in a hurry. Any deal that runs the risk of leaving you bankrupt, or the victim of a foreclosure, just isn’t worth it!
—Dave
* Dave Ramsey is America’s trusted voice on money and business. He’s authored four New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. The Dave Ramsey Show is heard by more than 5 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.
Time to ping like no one else so that later you can PING like no one else.
(Or freep like no one else so that later you can FREEP like no one else. Take your pick. ;) )
I had a lady try to get me to discuss how to get out of debt the other day.
She starts by telling me how in debt she was and she is down to “x” dollars in just two short years.
1st I was thinking the original amount didn’t sound that bad, so her accomplishment seemed pretty unremarkable to me.
2nd I didn’t find her credible and since she was goading me I told her I have no debts except the IRS and there’s only so much I can do about them.
She then goes into how I just took a loan on the car I just bought and I tell “Look, my car broke down, I needed a new car and since I rarely write checks anymore I didn’t have a check with me”.
I took a loan and the day I get my 1st bill ill call and find out what payoff amount is and have my bank create a cashier check for it”.
I don’t care for paying for things on credit but it’s not a big deal if you need it temporarily.
She was floored and wanted to know how I do it.
I told her don’t have the money for that thing you want? you don’t needI.
Like fancy clothes, watches, jewelry? fine but never pay retail and always pay cash.
If you have to use a credit card make it for emergencies or temporary problem solving.
You’ll sleep better and certainly better than your idiot neighbors do today and you old age years will be focused on having fun.
When it comes to dating I never, ever discuss my financials. None of their business, causes problems and just ain’t smart.
I also never tell anyone how they should money if they ask me. Wouldn’t want to blamed if their decision were irrational or went south or they didn’t really have a good plan.
And that’s the key “PLAN”. It’s a good discipline and you’ll sleep better.
Screw what your neighbors think they can afford. They are a joke usually and kidding themselves.
I can afford a Mercedes or BMW but, no one is impressed with what I drive as they rarely see it and I like Ford anyway. just bought the Fusion and in a year, for my 50th, I’ll lease a shinny red porsche. I don’t get attached to cars so owning the Ford makes sense as I can dump it in 2 or 3 years and get whatever new model Ford I want and leasing the Porsche affords the Sam opportunity.
It took us 7 years to get debt free. That was 10 years ago. Add up how much interrst you pay in a month. Then get rid of it. I pay no interest. Could not get a car loan if I wanted one. We pay cash for cars and everything else. Amazing how poor interest payments will make you and how rich borrowing yourself to the poor house will make srem.
Good for guys. I always get a smile when I see people drop that addiction.
Sometimes more than a drunk getting sober.
You are free as God intended
The vehicle loan is the greatest impoverishment I have seen, with a new vehicle losing 20-30% of its value when you drive it off the lot. Take that loan to payout, and you can go time and a half on the sticker price, easy.
Used vehicles resell closer to what you paid for them, especially if you get them cheap.
Aside from off-lease and former rental vehicles, prowl the papers for estate sales, often the heirs don't need or want another vehicle, the vehicle has low mileage even though it is older, and it usually has been well kept.
Sometimes, because the vehicle might be ten years old or older (but with only 40,000 or so miles on it), these vehicles can be bought cheap and driven for 40-50,000 miles before they need anything other than basic servicing and tires.
It helps to know a couple of really good mechanics, and be able to do the light work yourself, too.
Only once in the last eight vehicles did I get a lemon, and then I didn't have enough money in it to fight it--I gave it away. Some might regard the lack of warranty as a risk, but the lack of a dealer markup helps, too.
An addiction... Boy, you nailed that right there.
It took us 6.5 years to clear $97,000 in debt - $59,000 of which was non-mortgage debt. (cars, consolidation loans, credit cards)
We now owe $65,000 on a mortgage on a house that we’re trying to sell.
We were living ‘like everyone else’ in the ‘90’s and couldn’t see our way clear. Heck, I couldn’t see how we could make it month-to-month. We were coming up short and having to put gas and groceries on the credit card.
My best friend had been doing DR for a couple of years and she was getting the results that I wanted. Her way worked, mine didn’t, so I sat her down and asked her to go over my financials and teach me.
For two years, I treated her like my sponsor. I put my whole family on a ‘financial diet’. If we didn’t NEED it, it didn’t happen. No more eating out. Clothes were repaired before they were replaced. We got as much at GoodWill as possible when we did need to replace them.
Part of this, for me, was realizing the ‘wrong thinking’ that got us there in the first place.
One of my issues is that I’d buy things on sale that we didn’t NEED. I’d justify it by saying, “I saved $40!” and not realize that I just lost $60.
The other issue is that I didn’t take amounts under $10 seriously. No, it’s not a problem to stop by the thrift store and buy an adorable creamer set for $4.00, but if you do this every freakin’ day, it adds up.
Hoarding is a massive problem in my family and, as I looked around my house with new eyes, I saw the start. In order to stop buying, I had to prove to myself that I already had much more than I needed.
I started letting stuff go. For two years, I’d purge the house, then repurge a month or two later. If something didn’t have a PURPOSE, I let it go.
I stripped our house so bare that people started to feel sorry for me! Not accepting that I was trying to let go of my attachment to THINGS, people started bringing over furniture, art, etc. (Yes, I told them, but the response was usually something like, “But you NEED this!” No. No I don’t.)
Now, when I do buy, it’s carefully thought out, planned and shopped for. I only get THAT item. I have learned how to admire something without possessing it. Everything in our home is personal, functional or serves a dual purpose.
Last month and this month, we hit several SERIOUS financial road bumps. We were able to handle them without going into debt or touching our savings. We have a beautiful home and we actually have things worth taking care of.
It took a ton of work - physical, mental and spiritual - but we got there and it was so worth it!
I’m counting today as a Friday, so that makes me only 4 more weeks away from completing Baby Step 6! Keep it up folks, you can do it!
Dave Ramsey Fan Ping (keeping my fingers crossed that this does not double ping)
I’m counting today as a Friday, so that makes me only 4 more weeks away from completing Baby Step 6! Keep it up folks, you can do it!
Dave Ramsey Fan Ping (keeping my fingers crossed that this does not double ping)
Great job! You are a Great American and with folks like you we may have a future after all.....
Great job! I’ll be you can’t wait to actually OWN the land under your feet! :)
We’re almost half way done with Step 3. We had to take a detour and do Step 5 for our youngest first.
Once we sell the house, we’ll be saving up to pay cash for our land and retirement house.
My friend wants me to start retirement investing, but I’m leery of doing that right now. I saw too many FReepers lose their butts in ‘08 and, if the rumors are true, this administration wants to take over 401Ks and IRAs in a couple of years. (I don’t put anything past them.) Bonds aren’t safe right now either.
I think I’ll feel better with banking and waiting until this storm blows over.
Let me roll out the BS6 welcome mat. Looking forward to you joining those of us who are one step closer to BS7 and the pinnacle point.
Getting out of or reducing debt significantly is a very good idea. These next few years may be rocky times financially so its very wise to not be a slave to debt. I still contribute to my 401-K but also have cash accounts in case the market tanks severly again.
I did the same thing as you, too. Started stripping down and organizing my home and belongings, stopped going out, stopped buying cute little things at Goodwill (it's just a few blocks from me so it's like an alcoholic living next to a liquor store.) I let the car go and I've walked or ridden the bus for 3 and a half years now.
I finally have a savings account, and my first goal is to save up the proverbial six-months-salary's worth. Then maybe... MAYBE... I'll buy a car. It's actually not urgent, my job is a 35-minute bus ride from my house and I can walk everywhere else. Laundry's the only real hassle.
And I don't know about you, but not only am I so relieved not to sit down and spread out 9 or 10 bills every payday on the kitchen table and wonder how the heck I'm going to survive the month, I also notice that my home is so stripped to essentials -- comfortable but simple-- it practically cleans itself. Seriously, my home is never messy anymore. And I have four cats. It's amazing the difference it makes when you finally get your life under control.
Yes! Cleaning is a DREAM now!
We also let all the animals go. (Put down the sick kitty and let my daughter take the other cat and the old dog.) NO MORE HAIR. I can wear solid, dark slacks! :-D
I also love how easy it is to FIND things. It’s so much less stress.
Congratulations! Keep pushing. It is SO worth it!
Thanks for the (double :) ping.
Yeah, my cats are the only mess-producing element in the house now. I love them and will always keep cats, but I have to acknowledge that without them my house would be as clean as an operating room with very little effort on my part.
You know, it was a complete turn-around for me. I used to have several credit cards and waiting for letters announcing my credit line had been increased. Now I don't go to the mailbox for weeks because I never get bills in the mail.
I was in the check out and the girl told me I could get 10% off my purchase if I took out a charge card at the store. The words "no thanks" came out of my mouth so fast.
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