Paying off credit debt

[Shank]

My cousin, who has a business or finance degree, can't remember exactly, thinks a little bit along these lines.

He will have $100k in the bank and go buy a $50k car and finance most of it, because he'd rather have the money in the bank. Of course it's different when you have the liquidity to just go close the loan on a whim, and that strategy makes some sense to me if your money is growing faster than the loan interest. Most people, including myself, don't live in a situation to leverage that. Most people borrow because they don't have the cash.

I was stupid and got loans on things I didn't need and have since got rid of all except a vehicle loan that is almost the exact rate of my savings account. I can pay it off but it would take a decent portion of my cash so I choose not to in fear of the economy crashing.

There is a lot of good advice in here, but say I was just out of college I don't know that I could follow much of it. Fortunately I graduated 4 years ago and it was a much better time to buy a home/etc....

 

[Apparition]

My cousin, who has a business or finance degree, can't remember exactly, thinks a little bit along these lines.

He will have $100k in the bank and go buy a $50k car and finance most of it, because he'd rather have the money in the bank. Of course it's different when you have the liquidity to just go close the loan on a whim, and that strategy makes some sense to me if your money is growing faster than the loan interest. Most people, including myself, don't live in a situation to leverage that. Most people borrow because they don't have the cash.

In college I remember a classmate whose father had passed away early saying that the one thing he learned from him was that he can make money using other people's money.

Well managed and not risking your needs it can be a good strategy.

 

[Squatch]

hat is exactly Ramsey's theory behind his blanket prohibition against using credit cards. At least one person calls in to his show every day with the same old question - Dave I pay off my credit card every month so using it doesn't hurt me, why do you still think it's a bad idea. He then goes on to cite numerous studies that show you spend some percentage more when using a credit card as opposed to cash because when handing over cash you are literally feeling the loss/pain in real time whereas with a credit card you don't, you just swipe it & put it back in your pocket so you're not 'giving anything up', the whole transaction is merely conceptual. I guess that's true if you're retarded.

But then he goes on in the same breath to say use a debit card instead

Don't they look & act identical to credit cards, so you're still not parting with anything on the spot; the whole thing makes no sense from that vantage point. Seems to me a debit card would be helpful to those that can't control themselves because when you have no money the card is useless.

I'm one of those folks who is acutely aware of my cc balance, as well as my checking account balance. I've always kept track of my checking account balance by simply keeping that number (amount) on the calculator on my phone. With every debit card purchase I make, I immediately subtract that amount from the balance. Do it right there at the checkout stand. This has always kept me in tune with my finances. As for credit card purchases, I have always known that it inevitably comes out of my checking account, so again, I pay attention to the impact it will have on my funds. I've done it this way for decades, and now that I no longer have an income coming in, I'm even more fanatical about it. As for Ramsey, I agree with most everything he has to say, and feel more folks would do well to follow his advice.

 

[freedom_in_4low]

I was stupid and got loans on things I didn't need and have since got rid of all except a vehicle loan that is almost the exact rate of my savings account. I can pay it off but it would take a decent portion of my cash so I choose not to in fear of the economy crashing.

There is a lot of good advice in here, but say I was just out of college I don't know that I could follow much of it. Fortunately I graduated 4 years ago and it was a much better time to buy a home/etc....

I think in general most of it could be distilled down to keeping your balance sheet positive.

I follow most of Ramseys advice except for his seemingly arbitrary rule that your house should be on a 15 year term with a payment no greater than 25% of your net pay. You'll absolutely be comfortable that way and if I could, I would, but that might have worked in 2012 when housing was half what it is now and you could get sub 3 interest; in 2023 it's just not practical. If I stuck to that rule I would have been shopping for the same house in 2022 with a wife and 2 kids as I had in 2012 and divorced...even though my income has doubled in that time.

 

[bucky]

Unfortunately most people do not have a life plan. They just go with the flow. If you are not making enough money at your present job get a better one. I know it’s not as simple as that but it can be done. After getting laid of from my job again in 91 I decided I needed to change careers. At 32 I went to college for 4 yrs and got a degree and license to become a X-ray Tech. I had 2 kids at the time and found a new job working full time nights and weekends while attending school. It was Hell but I made it. I graduated with $0 school debt. I was working full time at 1 hospital and part time at 2 others for a total of more than 70 hrs/wk. 10yrs later not being happy with my pay scale and hours I went back to school full time for a yr again working nights and weekends still to become a Radiation Therapist. I still found time to spend with my family. I do not spend time sitting and watching TV. My overall goal was to retire at 55 and I missed it by 1 year.
We have choices in life but most of us take the short easy way out. This is America and we have unlimited opportunity you just have to figure it out and work hard at it.

 

[Zorba]

Unfortunately most people do not have a life plan. They just go with the flow. If you are not making enough money at your present job get a better one. I know it’s not as simple as that but it can be done. After getting laid of from my job again in 91 I decided I needed to change careers. At 32 I went to college for 4 yrs and got a degree and license to become a X-ray Tech. I had 2 kids at the time and found a new job working full time nights and weekends while attending school. It was Hell but I made it. I graduated with $0 school debt. I was working full time at 1 hospital and part time at 2 others for a total of more than 70 hrs/wk. 10yrs later not being happy with my pay scale and hours I went back to school full time for a yr again working nights and weekends still to become a Radiation Therapist. I still found time to spend with my family. I do not spend time sitting and watching TV. My overall goal was to retire at 55 and I missed it by 1 year.
We have choices in life but most of us take the short easy way out. This is America and we have unlimited opportunity you just have to figure it out and work hard at it.

That's right. My wife and I both had good careers, we invested wisely (wife's ideas mostly), we had a good inheritance which CERTAINLY helped - but most importantly, we didn't waste money on fripperies and monthly subscriptions (Read: No fucking smartphones, cable subscriptions, etc, etc). I retired at 57, wife was 56 I think when she was done.

 

[Gunnersmate]

I am back to the major problem I see is "kids and young adults" have no phquing clue about finance, Interest Rates, Debt, Taxes and credit cards, Schools do not teach it parents are either to stupid or to lazy or to busy to teach their children about finances and how hard life is when your swimming in debt. Teachers and the School systems preach go to college and you can get a good job thats bullshit now you are indebt up to ears with school loans and credit cards and still making 40k a year. Interesting story My dad was a plumber a Master Plumber owned his own business Went to do a service call in Edmond Okla at a Professors home Guy answers the Door my Dad says Mr. so and so I am here to fix your plumbing problem, Guy says I am Dr so and so I have a PHD in English and you can call me Dr. my dad not missing a beat says Well I am a Master Plumber and you can call me Master. Now the big take away here is when your taking a shit and flush the toilet and that shitter stops up and the turd water touches your ass that college degree doesn't mean jack shit because the guy that comes over to fix it is making more than you and you don't care what its going to cost because you don't ever want that turd water touching your ass ever again. Interesting how Most people in the trades make way more money than the teachers that preached college.

 

[Apparition]

I am back to the major problem I see is "kids and young adults" have no phquing clue about finance, Interest Rates, Debt, Taxes and credit cards, Schools do not teach it parents are either to stupid or to lazy or to busy to teach their children about finances and how hard life is when your swimming in debt. Teachers and the School systems preach go to college and you can get a good job thats bullshit now you are indebt up to ears with school loans and credit cards and still making 40k a year. Interesting story My dad was a plumber a Master Plumber owned his own business Went to do a service call in Edmond Okla at a Professors home Guy answers the Door my Dad says Mr. so and so I am here to fix your plumbing problem, Guy says I am Dr so and so I have a PHD in English and you can call me Dr. my dad not missing a beat says Well I am a Master Plumber and you can call me Master. Now the big take away here is when your taking a shit and flush the toilet and that shitter stops up and the turd water touches your ass that college degree doesn't mean jack shit because the guy that comes over to fix it is making more than you and you don't care what its going to cost because you don't ever want that turd water touching your ass ever again. Interesting how Most people in the trades make way more money than the teachers that preached college.

One comment to that is I had a professor in college that I looked up his salary and I think it was about $240k a year, roughly 20 years ago. Seems like a fair amount, especially when you factor in he only taught 2 classes a week for an hour each and had some “office hours” at some point plus he really only worked 9 months a year.

I don’t want to get into the fact the classes he taught were hot garbage electives that were more of a drain on society than a benefit.

 

[Gunnersmate]

One comment to that is I had a professor in college that I looked up his salary and I think it was about $240k a year, roughly 20 years ago. Seems like a fair amount, especially when you factor in he only taught 2 classes a week for an hour each and had some “office hours” at some point plus he really only worked 9 months a year.

I don’t want to get into the fact the classes he taught were hot garbage electives that were more of a drain on society than a benefit.

Nice LJ in your Pic you lucky dawg

 

[cliffish]

One comment to that is I had a professor in college that I looked up his salary and I think it was about $240k a year, roughly 20 years ago. Seems like a fair amount, especially when you factor in he only taught 2 classes a week for an hour each and had some “office hours” at some point plus he really only worked 9 months a year.

I don’t want to get into the fact the classes he taught were hot garbage electives that were more of a drain on society than a benefit.

Surprised it was that much, did not think professors mad that kind of coin.

 

[cliffish]

I am back to the major problem I see is "kids and young adults" have no phquing clue about finance, Interest Rates, Debt, Taxes and credit cards, Schools do not teach it parents are either to stupid or to lazy or to busy to teach their children about finances and how hard life is when your swimming in debt. Teachers and the School systems preach go to college and you can get a good job thats bullshit now you are indebt up to ears with school loans and credit cards and still making 40k a year. Interesting story My dad was a plumber a Master Plumber owned his own business Went to do a service call in Edmond Okla at a Professors home Guy answers the Door my Dad says Mr. so and so I am here to fix your plumbing problem, Guy says I am Dr so and so I have a PHD in English and you can call me Dr. my dad not missing a beat says Well I am a Master Plumber and you can call me Master. Now the big take away here is when your taking a shit and flush the toilet and that shitter stops up and the turd water touches your ass that college degree doesn't mean jack shit because the guy that comes over to fix it is making more than you and you don't care what its going to cost because you don't ever want that turd water touching your ass ever again. Interesting how Most people in the trades make way more money than the teachers that preached college.

100% agree, the trades have been shit on for years. Yeah go get that women's studies degree and wait for the "Brandon" bail out...makes me sick. I saved every year for my kids college so they would not have debt...fuck those hand out waiting graduates!

 

[Gunnersmate]

100% agree, the trades have been shit on for years. Yeah go get that women's studies degree and wait for the "Brandon" bail out...makes me sick. I saved every year for my kids college so they would not have debt...fuck those hand out waiting graduates!

Most the Trades are Job Security they cannot be shipped over Seas

 

[Apparition]

Surprised it was that much, did not think professors mad that kind of coin.

You could say he was a cultural hire. I’m sure he was on several boards too.

 

[Gunnersmate]

100% agree, the trades have been shit on for years. Yeah go get that women's studies degree and wait for the "Brandon" bail out...makes me sick. I saved every year for my kids college so they would not have debt...fuck those hand out waiting graduates!

I am not shitting on Teachers but most have no phquing clue they went to school graduated then went to college got a teaching degree and graduated then got a job teaching and they have no idea how the real world works short of working in fast food or baby sitting, they have zero understanding of how things are built, made, repaired, or shipped. Oh get a college degree 200k indebt and you can make 50/60k a year like me and they completely shit on the trades

 

[cliffish]

My son is a PE/health teacher in a middle school in NH, no debt, can't turn a screw driver but likes it. Starting salary was $38/K year probably will never make more than $70k in his lifetime there. No state income tax or sales tax and the cheapest alcohol in the country...lol

 

[RangerTJ]

Just because someone is educated it doesn't necessarily mean they're smart.

I had to do some work in an Atlanta middle school a few years ago.

It was near the beginning of the school year and as you first entered the building someone had written on a big whiteboard in a fancy script the following:

We do not aim for competence but strive for excellence.

Competence and Excellence were both misspelled. They had Compitance and Exellence.

Maybe the janitor wrote it. But none of the teachers had corrected it.

Interesting video...

 

[freedom_in_4low]

I am back to the major problem I see is "kids and young adults" have no phquing clue about finance, Interest Rates, Debt, Taxes and credit cards, Schools do not teach it parents are either to stupid or to lazy or to busy to teach their children about finances and how hard life is when your swimming in debt. Teachers and the School systems preach go to college and you can get a good job thats bullshit now you are indebt up to ears with school loans and credit cards and still making 40k a year. Interesting story My dad was a plumber a Master Plumber owned his own business Went to do a service call in Edmond Okla at a Professors home Guy answers the Door my Dad says Mr. so and so I am here to fix your plumbing problem, Guy says I am Dr so and so I have a PHD in English and you can call me Dr. my dad not missing a beat says Well I am a Master Plumber and you can call me Master. Now the big take away here is when your taking a shit and flush the toilet and that shitter stops up and the turd water touches your ass that college degree doesn't mean jack shit because the guy that comes over to fix it is making more than you and you don't care what its going to cost because you don't ever want that turd water touching your ass ever again. Interesting how Most people in the trades make way more money than the teachers that preached college.

There's another side to that coin though, and that's that for every tradesman worth anything there's 25 more that are either incompetent or dishonest or both. Having lived in Edmond for 7 years I can tell you the trade situation is trash.

A previous house I had was built in the 60s with cast iron drain piping. Had a shower that would gurgle when the clothes washer drained and eventually the shower itself stopped draining. Had a plumber come out and quote me to go into debt to rip out all the iron and replumb it with PVC. At that time he probably was making more money than me but it wasn't for good reason, because it only took me crawling down there to see the house had already been redone except for the last 5 feet before it went out through the foundation, where it was inadequately pitched and accumulating hair and food from the shower, kitchen, and laundry upstream. So I chopped that out and redid it, and in that process found the previous plumber that had redone the rest didn't use any PVC primer so every time I moved the pipe the next joint upstream came loose. So that incident involved at least 2 plumbers that were incompetent and one that was also dishonest, and the correct diagnosis and repair was done (though perhaps not as quickly and requiring more return trips to the supply house) by a 25 year old with a student loan.

Fast forward 15 years and now I have a $2400 stove that the plumber connected the gas line and then pushed in by the control knobs so they're all tweaked and rubbing the markings off the front panel, and then left and when questioned told the GC it was that way out of the box. I saw it before install and I know it wasn't, but don't have any proof so I guess I'm screwed. Another one, both incompetent and dishonest.

I could keep going with specific examples of how I've dealt with far more scumbags than not, in other trades such as HVAC and roofing, but it's long enough.

All that I guess to say is it should never be assumed that someone is hiring work done because they aren't capable of doing it or learning how, because it may be that they do make enough money that they can hire someone and effectively buy some time for themselves to do something else.

I'm not justifying a pompous English PhD demanding to be addressed as doctor by anyone that isn't one of his students but I also expect a tradesman not to come at me like a pompous ass thinking i was born yesterday because I went to college.

 

[red02tj]

I am back to the major problem I see is "kids and young adults" have no phquing clue about finance, Interest Rates, Debt, Taxes and credit cards, Schools do not teach it parents are either to stupid or to lazy or to busy to teach their children about finances and how hard life is when your swimming in debt.

This man… I’ve got two younger brothers, we all went to state school and our parents put the fear of Gd in us about CC debit, and budgeting. My younger brother and I got the message, my middle one didn’t, and he married someone who didn’t either. Individually and collectively they needed to be bailed out.

To this day, neither is willing to put in the work to get ahead at their jobs, and get “gifted” things like laptops, internet service etc…and can never manage to meet more than twice a year because they have a ski trip to Vail and they have so much on their CC and don’t have the credit scores to take advantage of any of the signup bonuses, which is how I can take my family of 5 on most vacations (and keep a zero balance)

I’m determined to make sure my kids don’t make the mistakes of my brother. They earn allowance for chores, they get docked when they don’t do their jobs, and they can earn extra for extra jobs.

Target/amazon nonsense comes from their allowance after a conversation about the value of what they want to buy. Sometimes they really want that nail polish, and sometimes a months worth of allowance isn’t worth the throwaway toy.

Like most things, it starts and ends with the parents.

 

[LukesfirstJeep]

One comment to that is I had a professor in college that I looked up his salary and I think it was about $240k a year, roughly 20 years ago. Seems like a fair amount, especially when you factor in he only taught 2 classes a week for an hour each and had some “office hours” at some point plus he really only worked 9 months a year.

I retired, as a staff member, from a large university, and my wife was on faculty at one point. The only way a full professor could make anywhere near $240K, today, is if they were bringing in a lot of research $.

 

[cliffish]

Instant gratification, my nephew is a graduate from a good school, $120K in debt. He is constantly going to high end coffee shops, eats out or has food delivered and wants it all now. Bitching about student loan repayment not happening, then him and his girlfriend both lease out new Subaru's hoping that the student loan repayments won't come back...pisses me off.