This month, one of Dave's radio show listeners emailed to get some advice:
We have a few thousand saved up for a trip this summer as a way to reward ourselves for working so diligently on our debt snowball lately. We deserve a break! Should we go? Is now the best time?
What did Dave say?
Waaaahhhh! I didn’t go on vacation for two years while I was cleaning up my mess. Listen, your life has been a trip to the beach. Now it’s time to clean up your mess! I’m not saying that you should never go on a vacation. Just don’t go when you’re $20,000 in debt! Suck it up and live like no one else now so later you can live like no one else. That’s what I did. Now I can go to the beach any time I want! You’ve got to break this cycle in your head that you deserve stuff. None of us deserve squat. Listen to the radio show clip here.
Traveling somewhere for a vacation is a luxury, not a necessity. We must remember that. So many people don’t understand the difference. And whoever said you have to travel and spend lots of money on a vacation? Ever heard of a “staycation”? It’s a vacation from everyday life where you stay close to home—what a novel idea! You can be a hometown tourist, spend extra quality time with your family, and forget about work for a while. If you’re still working on your debt snowball, this is the way to go.
If you’re out of debt, have the money saved, and have planned your vacation, by all means, go! Go now while the sale light is on! You’ve sacrificed, and your hard work and dedication have literally paid off. Let me remind you that everything is on sale big time! And if you pay with cash, you’re more likely to get even greater deals!
Don’t fall for the line that the economy will slump if you don’t do your part by traveling this summer. That is completely absurd. The economy will continue to improve regardless of how you choose to spend a few days off. Once again, you have to be a mature adult and do what’s best for you.
Whether you’re going on a Mediterranean cruise or grilling out at the neighborhood park, you can have an absolute blast on vacation this summer. It’s all about your attitude and staying within your budget. Don’t be like the family below who lets their vacation follow them home!
Buying a house can be a gut-wrenching experience. There are a lot of moving parts, and when something goes wrong, it either drags out the process or ruins the deal.
However, if you enter the process with some basic tips, you’ll be more likely to make the best buying decisions.
Don’t buy what you can’t afford. It’s the most basic rule and the most commonly ignored one. In case you haven’t noticed, there are a lot of foreclosures happening. The reason why is that people bought more house than they could afford. When you are getting a loan, don’t take out a mortgage where the payments are more than a quarter of your take-home pay on a 15-year fixed-rate mortgage.
Get the right agent. You want someone who communicates well with you and does what you want. Remember, they are working for you. Get someone who is high octane and high protein, will return your phone calls and give you service. Don’t just pick the first agent who walks in the door; interview more than one to get a feel for the person you want.
Know what you want in a house. This can be a fun thing to do on a weekend. Pick a neighborhood that you would like to live in (and can afford). Drive around it for a while. Check out the houses and get ideas of what you like. Do you want a covered porch? Garage? Big yard? How close do you want to be to your job? Have some fun with this, and you’ll gather some answers for when your realtor asks you the questions.
Get that deal! It’s a buyer’s market, so get as much as you can for as little as you can. Interest rates are very low, so if you are debt-free and have an emergency fund of three to six months of expenses in place, it’s an excellent time to buy. Work the numbers to find what you can afford, which will help in negotiating the price.
Get an inspection done. Know what you are buying. Make sure anything that is broken or needs repair is fixed before you sign on the dotted line. You don’t need to worry about offending anyone by asking for an inspection because you want to know you are buying a quality house.
It’s a great time to buy! But do it so that the house is a blessing and not a curse.
Learn more! Dave fans are talking about various real estate issues in the MyTotalMoneyMakeover.com community. Join in the conversation!
The Town Hall for Hope movement is still going strong! Over 40,000 people are fans on Facebook and 8,000 people are Twitter followers! Get plugged in to our official social media sites for frequent updates from us and other fans who choose to not participate in the recession!
There are a couple of ways for you to still watch the event and share it with others. A fan posted the 90-minute event on Vimeo so you can still watch it online. If you prefer the DVD format, we have a 10-Pack of DVDs available for you to give to others.
Help us spread hope and change this nation one family at a time!
We were doing so well with our budget, but late one night as I was going through my email, I saw an ad for a free LG washer and dryer. All I had to do was complete 13 offers.
On the ninth offer, they wouldn't let me complete anymore offers. I decided the next morning to cancel everything, so I spent another two or three hours cancelling my account. I decided to change my banking numbers, and I lost too much sleep over it.
I knew not to fall for the free washer and dryer, but I did it anyway.
Since we never got around to calling in and yelling "We're Debt Free," I'll just do it here: WE'RE DEBT FREEEEEE!
Prior to last April, we were your typical American family. My husband received a big bonus check, and what did we do with it? We spent it on new patio furniture, a grill, lawnmower, and new concrete driveway, of course!
While visiting some family members, my brother-in-law told my husband about Dave Ramsey. He lent us the Financial Peace University CDs from the course, which we listened to on our six-hour drive home. After that, we were on our way to a Total Money Makeover!
We started out with $36,000 of debt—two car payments, two student loans, credit card debt, lifetime membership fees, and even a 401(k) loan! I was also the kind of person that likes the security of money in the bank, so the whole time we were in debt, we were sitting on about $19,000 among our accounts. All that money just sat there earning minuscule interest while we made minimum payments on the cars and loans!
Thanks to Dave's Baby Steps, we took that savings all the way down to $1,000 and used it to start the debt snowball. I became the budget enforcer and started paying cash for all of our everyday things. In just eight months, we had that debt wiped out! Four months later, we had our $15,000 emergency fund. We're now in our first month of saving the appropriate amount for retirement and college savings with the help of one of Dave's Endorsed Local Providers.
It's so exciting to know we've drastically turned our money situation around in just one year. My husband still gets teased at work about being on a budget and not enjoying life by their standards. But he knows that, thanks to Dave's Total Money Makeover plan, we really are going to live like no one else later!
You’ve heard Dave say that you need to negotiate in order to get a good deal. If you’ve never tried to wheel and deal before, the very thought of it can be intimidating. But, it certainly doesn’t have to be that way—once you learn the rules of negotiating, you’ll become a bargaining pro!
When you set out to search for a bargain, always keep in mind the three ground rules for proper negotiation:
Never misrepresent the truth while bargaining.
Never have intentions to harm the other party.
Create a win-win deal.
Flash the cash
Dave has found that win-win deals really work, so don’t be afraid to ask for a deal. And learn how to use the power of cash. Cash is emotional, visual and has immediacy, so use it to your advantage!
Demonstrate patience
Remember that you need to demonstrate patience when hunting for a good bargain. Never get married to a purchase. If that happens, your chances of getting a good deal are slim. Know when to exercise walk-away power, and use it when necessary. If you can show that you have the ability to say no, then you hold the upper hand in the bargain. Dave’s key phrase is “That’s not good enough!” After you exclaim that, shut up. Sometimes silence can be the key to getting the deal you want.
Find the deals
A final key to finding good bargains is to know where to find deals. Common places to find great deals include:
Garage/estates sales
Public/online auctions
Coupons
Individuals
Repo lots
Flea markets
Refunds/rebates
Foreclosures
Pawn shops
Classified ads
Consignment shops
Conventions
Keep in mind that you can always trade something of value when trying to negotiate. Consider exchanging something you own or barter your services in exchange for a good bargain. Babysitting, running errands, and mowing a lawn make great trade services.
But the most important thing to remember when trying to get a good deal is to ask yourself, “Can I use this? Do I really need this?” If it’s something you don’t need or can’t use then it’s not a good deal.
For more great bargaining tips, check out Dave’s Financial Peace University. In this class, he reveals the power and influence that marketing has on your everyday buying decisions, as well as the seldom-used secrets of buying only big, big bargains.
Saving for retirement is easier than you may think. It’s more of an exercise in behavior than head knowledge. That means anyone can save for retirement. All it takes is a little determination and discipline. Unfortunately, in our I-want-it-now culture, discipline seems to be running quite low.
You’re jeopardizing your future if you have a habit of:
Staying in debt
Debt does not help you build wealth for retirement, nor does it save you money. Debt is not a tool that can build prosperity. Every day that you’re in debt is a day that you sabotage your retirement.
If you want to be rich when you retire, then do what rich people do. According to Forbes magazine, most rich people agree that the best way to build wealth is to become and stay debt-free. If you haven’t yet begun your Total Money Makeover, start now!
Forgetting about taxes
Some people mistakenly assume that their retirement account is all theirs; Uncle Sam can’t lay a finger on it. That’s not entirely true.
Unless you have a Roth IRA or a Roth 401(k), you will pay taxes on the money you withdraw from your account when you retire. Therefore, your retirement account can easily be 25–30% less than you’re expecting.
Failing to plan
Many people assume that if they simply make a monthly deposit into their 401(k) or IRA, they’ll be able to retire with dignity. They don’t really have a true plan. These people are playing a risky game of roulette with their retirement.
Even if you’ve done the math and know that your family should have $2 million for retirement if you save a certain amount each month, that’s still just half a plan. What if one of you isn’t around next year?
Reliable retirement planning prepares for all the risks in life. From making sure you’ve got term life insurance to having long-term care at the appropriate age, you need a plan for it all. That’s why using a professional investment planner is such a great idea. Not only do they help pick the best funds for your situation, they also prepare you for all the risks you don’t even know exist. Even Dave uses a professional investment planner!
How to Avoid These Mistakes
Getting out of debt is up to you; follow Dave’s first three Baby Steps to find out how it’s done. To help overcome the last two mistakes, Dave recommends you use a local, professional investment planner that has the heart of a teacher. Many of these professionals exist and are endorsed by Dave; we call them our Endorsed Local Providers (ELPs). Contact an investing ELP now.
We want to help you learn more about the wonderful products and businesses that Dave endorses and how they can enhance your life. Last month we introduced you to SafeEyes, the award-winning InternetSafety.com software that Dave recommends and uses on his computers. This month we’re shining the spotlight on CheckingFinder.com.
With all the corruption and greed in the banking industry today, it’s nice to know that a powerful, nationwide network of community banks and credit unions still sets a good example for all of us. By putting the community, people and small businesses first, the banks and credit unions on CheckingFinder.com remind us that, despite all the negative news, good things are still happening in our country.
The Good Things They Offer
These institutions are still stable and fully insured by the FDIC or NCUA. Why? Because, unlike most of the megabanks, they didn’t participate in the bad lending practices that caused this recession in the first place. They also offer two things the big guys never will: free, high-interest checking accounts (4.51%APY or higher) and great personal service. Think of it this way: the institutions on CheckingFinder.com didn’t contribute to the recession, and they empower you to avoid participating in it!
If you happen to find an institution that’s a long way from home, don’t let that stop you. All of the community banks and credit unions on CheckingFinder.com offer free online banking and nationwide ATM fee refunds that make banking long-distance easy. Because these accounts have no minimum balance, you don’t have to be rich to earn interest!
How It Helps Us All
By supporting small businesses, community financial institutions help keep the wheels of our economy turning. According to the U.S. Chamber of Commerce, small businesses not only generate 60–80% of new job growth and most American innovations, but they will also be the ones to lead us out of this recession. That means opening an account on CheckingFinder.com actually helps the economy!
Don’t forget, every positive move you make—every time you pay down debt or cut costs—you are one step closer to realizing your goals. So don’t just complain about your current bank or accept the unfair treatment; take control of your money! Empowering yourself is a step-by-step process that gains momentum with every smart move you make. Switching to a community bank or credit union that offers a free high-interest checking account is a great example of how to make the most of that momentum.
There
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are a few highlights:
Dave's Library
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Life is no straight and easy corridor along which we travel free and unhampered, but a maze of passages, through which we must seek our way, lost and confused, now and again checked in a blind alley.
But always, if we have faith, a door will open for us, not perhaps one that we ourselves would ever have thought of, but one that will ultimately prove good for us.
Life is no straight and easy corridor along which we travel free and unhampered, but a maze of passages, through which we must seek our way, lost and confused, now and again checked in a blind alley.