Originally posted by: spidey07
He is entertaining to listen to because when you hear his callers and the situation they got into it can be very funny.
Oh, I saw a great one on Suze Orman's show.
- I believe her income was somewhere in the mid $30s
- She had a ~$50k loan on an SUV that was probably worth much less than that
- She got herself into an endless cycle of paycheck advance loans. She would use each paycheck to pay off her previous $250 loan, then she would get depressed because she had no money so she would take out another $250 loan to buy clothes. There was a service charge of $50 on the loan, plus ~20% interest.
So figuring she essentially borrowed $250 in perpetuity, over the course of a year she would pay 26 * $50 in service charges and about $50 in interest. It cost her $1350 over the course of a year to get $250 TWO WEEKS SOONER.
No doubt Dave Ramsey's advice would have been great for her, but given that she was in the situation she was in I don't think she would have followed his advice. Suze told her to sell the SUV and stop taking out the loans, but I doubt she listened.
I was in a discussion on another forum where a member had (IIRC) somewhere in the range of $20k in credit card debt. She could afford to pay about $500 per month in addition to the minimum payments on the cards. She also had a luxury item, I'll call it a boat, and she had a loan on that. I and others suggested that she should sell the boat to pay off the debts faster. She insisted that she could afford the boat. She meant that she could afford the payments on the boat. I tried to explain to her that it was that very attitude that landed her in $20k of credit card debt in the first place, but she insisted on keeping the boat. In the end she asked to have the thread locked, because she didn't like the advice she got. Some people just won't listen to sound financial advice.