Save, Pay Down, or Buy?

[Mai72]

I always knew that asshole was a piece of shit. Then I saw this recently .....

Dave Ramsey's company fires employees over premarital sex, court documents say

Ramsey Solutions said it did not fire an employee for being pregnant, but for having premarital sex. She disagrees.

www.nbcnews.com

I agree. Dave was wrong. He's a devout Christain. It's also why Chris Hogan left the show. He was fooling around with a coworker and Dave did nothing.

 

[MtnMan]

Im afraid income taxes are going to be increased to pay for all this profligate spending, which is just getting started. So much as been added to the National Debt that future interest payments may become overwhelming.

Keep the money for emergencies.

Trump's tax cut for the rich made sure that taxes would increase for the under 1,000,000 income suckers when it passed years ago. Hell he didn't really cut taxes in the first place, he only had the withholding rates lowered, so people took more home every payday. And of course his base, not being that smart, were completely duped.

I suspect the working man will not be the target of the tax increases to actually benefit the country.

Remember that only 50 people have more wealth than the bottom 50% of the US population. Those 50 people could easily finance rebuilding the infrastructure.

 

[Svnla]

What is the interest on the debt? I bet it will be a lot higher than you can get if you put the money into savings. My best savings rate (reward checking account) is a little over 4.xx%.

My vote is to pay off the debt.

 

[MtnMan]

There is nothing as liberating as being debt free, and it's so easy to then save money for your wish list, and have emergency funds at the ready.

 

[Spacehead]

There is nothing as liberating as being debt free, and it's so easy to then save money for your wish list, and have emergency funds at the ready.

It is really odd(to me) the number of people i know that absolutely cannot save a dollar.

I can't specifically remember my parents telling me to save, though they probably did. I'm just that way though.

 

[s0me0nesmind1]

Every now and then, I like to hear the average 401k retirement savings just so I can have a good laugh.

Anyhow my vote is for investment. paying off debt (other than minimums) is only applicable for debt with an interest rate > 5%

Before I put anything extra to my 2.825% Mortgage or my 2.25% auto loan, I at minimal put away money to.
-Max out 2 401ks (19500 x2)
-Max out a family HSA (7200)
-Max out 2 ROTH IRAs (6000 x2)
-Put 200/month to each of my kids 529 accounts
-Put 200/month to a cushion after tax investment account

As of late, what I have leftover has gone to some home improvements that I'm replenishing my piggy bank on such as new ACs and Water heaters.

But even if I didnt have to replenish my cash, I still would probably just increase my after tax investment and 529s and maybe balance it with a little extra to mortgage principle.

 

[Svnla]

It is really odd(to me) the number of people i know that absolutely cannot save a dollar.

I can't specifically remember my parents telling me to save, though they probably did. I'm just that way though.

It is NOT what you make, but what you spend.

Look at examples of professional athletics/celebrities being dead broke soon after the big money are gone.

I saw how people struggle to make it and I would not want to be like that, therefore, I don't do the lifestyle creep and save/invest as much as possible. A few more short years (about 4-5) and I will be free from the rat race.

 

[Red Squirrel]

Personally I would just put it on any debt. I suppose the financial right decision is to invest it in something that can yield higher interest than whatever debt you may have though.

I have around 10k on my credit line and close to 40k in company stocks that are in the positive, so if I followed my own advice I'd be paying down the 10k, but reality is I'm making more in dividends than what the loan interest costs me so it just makes sense to keep the stocks. Saving up for a property so once I do buy one that will rack my credit line up way higher, so at that point it will make sense to take out the stocks.

 

[killster1]

buy a home warranty, and then use the rest to travel, who wants to wait to retire and be a old man to visit the world? ive already gone everywhere i ever want to go and only in my 30's.

Stupid government gave me 8400$ lulz, used it to buy more real estate overseas since i already have my travel plans covered, no debt except 2% interest house payment.

 

[s0me0nesmind1]

buy a home warranty, and then use the rest to travel, who wants to wait to retire and be a old man to visit the world? ive already gone everywhere i ever want to go and only in my 30's.

Stupid government gave me 8400$ lulz, used it to buy more real estate overseas since i already have my travel plans covered, no debt except 2% interest house payment.

A home warranty... is sincerely... just about one of the worst things you can do with your money.

Their "exclusions" list is basically books and books of bullshit.

 

[Red Squirrel]

A home warranty... is sincerely... just about one of the worst things you can do with your money.

Their "exclusions" list is basically books and books of bullshit.

Lol yeah, and wouldn't insurance cover anything serious anyway? For minor things like an appliance breaking down or something it's way cheaper to just eat the cost if it happens, rather than paying a monthly fee "just in case".

 

[Lost_in_the_HTTP]

I'll guess the dude makes a living calling random phone numbers selling home warranties.

 

[s0me0nesmind1]

Lol yeah, and wouldn't insurance cover anything serious anyway? For minor things like an appliance breaking down or something it's way cheaper to just eat the cost if it happens, rather than paying a monthly fee "just in case".

It's basically for stuff like home appliances (refrigerator, oven, ACs) whereas insurance is covering the home itself (flood, fire, etc.)

Like I said, though - they have a huge list of exclusions of shit that doesn't qualify - and anytime you do call someone out to look at stuff and/or repair - it's a $100+ "co-pay".


Since some folks were talking of Dave Ramsey, he even talked about this stuff as well: https://www.daveramsey.com/askdave/home-buying/never-buy-a-home-warranty

 

[Red Squirrel]

It's basically for stuff like home appliances (refrigerator, oven, ACs) whereas insurance is covering the home itself (flood, fire, etc.)

Like I said, though - they have a huge list of exclusions of shit that doesn't qualify - and anytime you do call someone out to look at stuff and/or repair - it's a $100+ "co-pay".

Yeah makes no sense to pay for something like that, I mean even if a high end appliance breaks down that you paid over a grand for, if you're paying this company $50-100/mo or whatever the cost is, you're basically paying for a new appliance every few years. You want to reduce your monthly expenses as much as possible, not add more that you don't need.

I'm stuck on a hot water heater rental contract, I don't know why that is so popular here, but once it breaks down I will try to get out of the contract and just install my own. A basic water heater is no more than like $1,000 tax in and at least I pay for it only once. I probably paid for my current one at least 3 fold since I lived here. They still want like $800 for the buyout too even though it's over 10 years old.

 

[deadlyapp]

Yeah makes no sense to pay for something like that, I mean even if a high end appliance breaks down that you paid over a grand for, if you're paying this company $50-100/mo or whatever the cost is, you're basically paying for a new appliance every few years. You want to reduce your monthly expenses as much as possible, not add more that you don't need.

I'm stuck on a hot water heater rental contract, I don't know why that is so popular here, but once it breaks down I will try to get out of the contract and just install my own. A basic water heater is no more than like $1,000 tax in and at least I pay for it only once. I probably paid for my current one at least 3 fold since I lived here. They still want like $800 for the buyout too even though it's over 10 years old.

The general idea (and why most people can get tricked into getting home warranties) is that the annual cost (usually about $600/yr) is less than any individual appliance, and certainly less than multiple appliances. People get duped into worst case scenario expectations (like their fridge and their AC die) and that they won't be able to afford it. And it's probably true, that for people with older appliances may break even or even come out on top over a short time frame with a home warranty.

I had a home warranty that was rolled into the purchase of my house and I did use it to fix an issue with my oven. It still cost me I think $50 for the service call, but getting the oven repaired myself would have probably cost around $300-400 and definitely wasn't a warranty issue. I did not renew my warranty though, as all my appliances other than water heater and AC are new, and water heater is inexpensive and AC is likely fine for 5 years or so.

It would be interesting to read the terms of your water heater contract. Might be worth dumping some corrosives into the tank to accelerate the leak to get it replaced, then buy it out afterwards

 

[Torn Mind]

It is really odd(to me) the number of people i know that absolutely cannot save a dollar.

I can't specifically remember my parents telling me to save, though they probably did. I'm just that way though.

Because they are encouraged or "allowed in a state of complete ignorance" to spend viscerally on disposable pleasures and not aim to "float on interest" later in life. Certain pleasure products make them repeat buyers, such as cigarettes, alcohol, etc.

The conditions of living and pay in this country are not quite desparate enough to force people to learn, unlike those who grew up in the Depression or came from lands far worse off, possibly living in times of famine like great leap forward.
Related to this is familial culture passed down through generations. Certain people come from groups that encourage financial responsibility as a matter of principle rather than that of evil thing that oppresses the pursuit of pleasure; the Jews, Persians, and Chinese are examples of such.

. It is partially biological. The feeling of "want" battles with the feeling of "not having", and the presence of Washingtons in the wallet cures this dissonance.

This creation of goods hunger in a batch of consumers is systemically valuable to both business(from Wall St down to the shady car dealership) and the welfare state politicians.
However, small businesses suffer because due to the lack of comprehension of expenses, the consumerist tends to vote for policy that presumes that small businesses are not already charged through the moon for "business grade" capital expenditures.

 

[Torn Mind]

Yeah makes no sense to pay for something like that, I mean even if a high end appliance breaks down that you paid over a grand for, if you're paying this company $50-100/mo or whatever the cost is, you're basically paying for a new appliance every few years. You want to reduce your monthly expenses as much as possible, not add more that you don't need.

I'm stuck on a hot water heater rental contract, I don't know why that is so popular here, but once it breaks down I will try to get out of the contract and just install my own. A basic water heater is no more than like $1,000 tax in and at least I pay for it only once. I probably paid for my current one at least 3 fold since I lived here. They still want like $800 for the buyout too even though it's over 10 years old.

The purpose of the warranty is for the ignorant to pay for their ignorance. If someone gains the human capital, and that's easy with sites like partselect literally handing out knowledge of little fixes on youtube, to fix an appliance and is both present and has time to service the device, the person is able to be his/her own warranty.

Stoves especially, are easy to DIY as they are steady state devices with certain specific wear points. .

 

[s0me0nesmind1]

Because they are encouraged or "allowed in a state of complete ignorance" to spend viscerally on disposable pleasures and not aim to "float on interest" later in life. Certain pleasure products make them repeat buyers, such as cigarettes, alcohol, etc.

The conditions of living and pay in this country are not quite desparate enough to force people to learn, unlike those who grew up in the Depression or came from lands far worse off, possibly living in times of famine like great leap forward.
Related to this is familial culture passed down through generations. Certain people come from groups that encourage financial responsibility as a matter of principle rather than that of evil thing that oppresses the pursuit of pleasure; the Jews, Persians, and Chinese are examples of such.

. It is partially biological. The feeling of "want" battles with the feeling of "not having", and the presence of Washingtons in the wallet cures this dissonance.

This creation of goods hunger in a batch of consumers is systemically valuable to both business(from Wall St down to the shady car dealership) and the welfare state politicians.
However, small businesses suffer because due to the lack of comprehension of expenses, the consumerist tends to vote for policy that presumes that small businesses are not already charged through the moon for "business grade" capital expenditures.

I used to live in a lower-middle class neighborhood.

It's the only place I've ever seen an absolute ton of people parking their vehicles always in the drive-way - and a good number of them even parking on the street every day/night so that I have to weave left and right to avoid them daily to get back home. So you just generally would think - oh maybe they have a bunch of vehicles from kids 16+ living there or something.

Nope. Catch them with the garage open. It's filled to the brim with shit. Complete and utter shit that they would be FAR better off simply throwing in a dumpster than ever holding on to. It won't return any real sum of money. It would actually cost you more in time than it is worth to try and sell DVDs for $0.50 each.

Nevermind important shit like protecting a motor vehicle that costs $20k+




You can call it ignorance - uneducated - blah blah blah. There's really no excuse - it's something a normal person would say "Hey, we bought all these toys and the kids played with it for 3 days - maybe we should stop buying so much fucking shit?" but they just keep repeating it over and over and over and over.

I got a brother in law that has a kid - and every birthday and Christmas it's just a huge pile of presents for him of action figures, multiple nerf guns, race cars, and other shit. Year after year.

 

[Fritzo]

Correct order of doing things:

1) Build emergency fund with 1 month pay.
2) Buy bare minimum/used essentials
2) Pay down lowest debt first.
3) Once paid off, apply that payment to the second lowest debt.
4) Continue to pay off debts until complete
5) Build savings account with one year salary and pay cash for everything.

Note: Debts with low interest rates (under 5%) are OK to keep- house, car, etc.

 

[Fritzo]

I always knew that asshole was a piece of shit. Then I saw this recently .....

Dave Ramsey's company fires employees over premarital sex, court documents say

Ramsey Solutions said it did not fire an employee for being pregnant, but for having premarital sex. She disagrees.

www.nbcnews.com

Yeah, the Dave Ramsey is the financial equivalent of the My Pillow guy. He even stole a lot of his financial advice from other people and claimed it as his own since he put it in pretty book form.

 

[Scarpozzi]

I always knew that asshole was a piece of shit. Then I saw this recently .....

Dave Ramsey's company fires employees over premarital sex, court documents say

Ramsey Solutions said it did not fire an employee for being pregnant, but for having premarital sex. She disagrees.

www.nbcnews.com

Pre-marital sex.....When else would you have sex? After you're married....hah....that simply doesn't happen.

 

[MtnMan]

Correct order of doing things:

1) Build emergency fund with 1 month pay.
2) Buy bare minimum/used essentials
2) Pay down lowest debt first.
3) Once paid off, apply that payment to the second lowest debt.
4) Continue to pay off debts until complete
5) Build savings account with one year salary and pay cash for everything.

Note: Debts with low interest rates (under 5%) are OK to keep- house, car, etc.

Should also add, pay off the lowest debt first, THEN apply what you were paying on that to the next lowest, then both of those payments to the third lowest.

 

[s0me0nesmind1]

Should also add, pay off the lowest debt first, THEN apply what you were paying on that to the next lowest, then both of those payments to the third lowest.

Or just be a grown up adult that understands middle-school level math and pay based on which has the highest interest rate - not the lowest amount of debt.


$12,700 Credit Card @ 21.95% interest
$5,000 Credit Card @ 0.00% Interest for first 12 months
$10,000 Home Equity Line of Credit (HELOC) @ 6.00%
$7,500 Student Loans @ 4.50%

If anyone ever tells you to pay off the $5,000, $7,500, or $10,000 first - you're simply a complete idiot.

 

[Fritzo]

Or just be a grown up adult that understands middle-school level math and pay based on which has the highest interest rate - not the lowest amount of debt.


$12,700 Credit Card @ 21.95% interest
$5,000 Credit Card @ 0.00% Interest for first 12 months
$10,000 Home Equity Line of Credit (HELOC) @ 6.00%
$7,500 Student Loans @ 4.50%

If anyone ever tells you to pay off the $5,000, $7,500, or $10,000 first - you're simply a complete idiot.

Not true. It will take longer to pay off $12700 than it will $5000 at 0%. You need ammunition for snowballing payments, so the quickest battle won gives you momentum.

 

[dank69]

Around 2.5

But it's variable based on a certain Fed Rate. It was something like 4.75 a year or so ago. When it will go back up, or how much remains to be seen. Kind of why I'd like to knock some off the far end if I can.

I'm thinking of splitting it up a bit, maybe in thirds. IF we get anything at all.

Get that converted to fixed rate while the rates are low if your credit score is good and you can find someone offering low fees to do so. Saving is a waste, what kind of interest are you going to earn on that? 0.05% annually? If you need shit, buy it. If you don't need shit, invest it.