| Dave's Thoughts on "Cash for Clunkers" |
 With all the buzz about Cash for Clunkers, it’s easy to think that it was a great way for people to get a better set of wheels. But was it really? No way! Cash for Clunkers was simply a way for broke people to buy cars that they really couldn't afford. It was a bad idea on multiple levels. But before digging into that, let’s take a little history lesson.
About a decade ago, a fair housing program was started, called a sub-prime lending market. The idea behind it was that everyone “needed” to own a home—including broke people. The government decided to start a program to reinvest in communities, which allowed pretty much anyone to borrow money to buy a house. Lending companies charged high interest rates, causing already struggling families to go even further into debt.
Basically, this was a program designed to encourage broke people to buy houses. Most people didn’t even know it existed until it unraveled and became the number-one cause of our recent recession. The government took those stupid loans back and securitized them, which created the financial mess last fall. Helping broke people buy houses didn’t turn out to be a great government program. Guess what? Helping broke people buy brand-new cars—and now home appliances—will turn out just as bad.
The Cash for Clunkers program was designed exactly for people who should not take advantage of the program. You trade your $2,000 clunker in for a brand-new, shiny $20,000 car, and the only way you can afford it is with a high-interest payment. That just means you really couldn’t afford it to begin with. Doesn’t this sound like the sub-prime mortgage problem all over again?
When you drive that new car off the lot, you’re immediately going to lose $4,500. The worst car accidents happen on the showroom floor. New cars go down in value like a rock. The government thinks it’s going to save the American auto industry by putting broke people into cars they can’t pay for. It’s going to come back to bite them—and the rest of us—in the form of taxes galore.
Another bad thing about this program is that we, the taxpayers, are paying for the new cars! It’s morally wrong of the government to take money away from us—against our will—in the form of taxes and give that money to someone else to buy a stupid car they can’t afford in the first place! This is theft, plain and simple.
Cash for Clunkers is a program that redistributes wealth in the name of the environment, and it’s going to be a curse on the car dealer and the manufacturer that carries the paper. It’s going to hurt the broke person who bought a car he couldn’t afford. And it’s already a problem for our country, because it’s adding dollars to the national debt.
There’s always a twist with government programs like this. They try to think of creative ways to help people, but the situation usually ends up worse than it did before they “helped.” In the end, I should decide what to do with my own money. If I want to buy you a car, I will! And if you can’t buy a car without actually paying for the whole thing, then you’re better off keeping your “clunker.”
So good riddance to a really bad program that has done more damage than good.
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| How to Bring HOPE to Your Community |
 Elkhart, Indiana hasn’t exactly been a place of economic boom or successful industry news over the past year; actually, it’s been quite the opposite. It seems like every time the media does a story on Elkhart, it’s all about the “18.9% unemployment rate,” or about being “hammered by the recession.” Well, in spite of all these circumstances, we’ve got a story of inspiration and real hope from a couple of positive and resilient people in Elkhart who are doing what they can to help their community.
It all started with Jenny Keen. Jenny is the Assistant Activities Coordinator at the local YMCA. She realized that the people of her town needed to be empowered with real hope and a plan for the future, so she called one of Dave's Live Event advisors, Brenda.
“When Jenny first called, she expressed to me the severity of the issues that have faced her community during this economic crunch. With so many of their local industries shutting down, many families have had a tremendous amount of financial strain,” Brenda said.
As Jenny and Brenda discussed the situation, they knew that bringing Dave’s unique and energetic event to the community would reignite a fire of real hope in the people of Elkhart. Brenda suggested that Jenny bring Dave’s nationwide Total Money Makeover LIVE Simulcast Event to the YMCA.
Unfortunately, the YMCA did not have the technology to host the simulcast event, but they promised to help promote the event if someone in the community would host it.
Hometown Hero Steps Up to the Plate
Insert Don. Don Florea attends Zion Missionary Church in Elkhart, and he also realized the people of Elkhart needed a common-sense plan for their money. At Dave’s live event last year in Grand Rapids, Don experienced first-hand the energy and passion Dave brings to the world of personal finance. He knew the powerful information would have a huge effect on his community if they were able to experience it.
When Don saw that there were no locations within 50 miles of Elkhart hosting the Total Money Makeover LIVE Simulcast Event, he signed up Zion Missionary to host it.
“When Don committed Zion Missionary to hosting the event, it was definitely an answer to our prayers! I was very excited to have someone step up to the plate and bring this to the area,” Jenny said.
Don personally picked up the cost to host the event at his church and is now working with Jenny and other churches in the area to promote the event. Between the efforts of the church and the YMCA, he hopes to reach those who are struggling to make ends meet.
Help Others Overcome Fear on September 19!
Like Jenny, you can turn back the tide of fear in your community by hosting this nationwide simulcast event on September 19! Dave will present in an entertaining way his proven plan that has helped millions of people take back control of their money. Find a location or find out how you can host this powerful event and help change lives in your community!
Economic source: Bloomberg.com
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Family Tree Is Forever Changed
By Keith in GA
My wife Leslie (age 26) and I (age 29) started our Total Money Makeover last August with two auto loans, five credit cards and several doctor bills totaling over $50,000.
Last Friday, I paid off our last loan, her car. In almost 10 months, we not only paid off a little over $50,000 in debt, but we also cash flowed Christmas, doctor bills, birthdays and a $500 pump for our pool. We sold everything we didn't have to have, I worked lots of overtime, we created and stuck to a budget and yes, our parents and friends think we are crazy!
We have also given our four-year-old daughter a chance to learn about and earn money. We take out $10 every two weeks, and she has a small, simple chore to do for each dollar. She has put the majority of her money into her "save" jar, and I have taken it to the bank and put it in her account!
My wife is due with our second child on October 6—a boy! My son will be brought home in a paid-for 2006 Nissan Altima!
The only payment that we have is our house payment! Woohoo! We are debt-free! Now we are on to Baby Step 3. I would love to thank Dave for my new life!
Our family tree has been forever changed!
This can be your family! Get started now with Dave's Seven Baby Steps.
Read other We Did It! stories
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Why I Will Never Cosign Again
By Todd in TX 
After I got out of college and got myself situated, my best friend was struggling with money problems. He had landed a good job and was finally making a decent income. But because of his past issues, his credit score was low.
When he applied for a car lease, he was told that he would need somebody to cosign. I had "high hopes" that he was on the road to financial recovery, so I agreed to help him out.
A couple of years into the lease, I started receiving calls from collection agencies that my "friend" had failed to make several payments on his lease. Ultimately, he turned in the car and I paid off the balance of the lease to save my credit score.
Lessons learned: 1) There is a good reason why people get turned down for a loan/lease. 2) Never cosign for a loan/lease.
Dave fans are talking: How do you get out of a mortgage you cosigned for? Get advice now.
Read
other Stupid Tax stories
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| Summer's Over. Time To Refocus. |
 It's really easy to let the budget slide during the summer break. Hey, we've all done it before—taking that extra day of vacation, going to the pool too many times, or sending the kids to the movies because they're "bored." Many people find themselves back in debt or struggling with money when fall comes around.
And then you have the fall expenses. Back-to-school supplies are being marketed everywhere we turn. Mommy, I want that Hannah Montana backpack! And the glow-in-the-dark pens! And the 1,000 crayons! Sound familiar? What happened to the days when eight crayons lasted for a whole year?
Have you noticed how the car dealerships have increased their marketing, trying to get you to buy the "perfect" vehicle so they can get the new models in? And of course, all the retailers are screaming, "Come buy some new clothes for your fall wardrobe because you deserve it!" Really? You deserve it? No you don't.
Now's the time to refocus and get back on track with your money. Here are some tips to help you do just that:
-
Sit down and evaluate.
Take a few minutes to look at your bank accounts and really understand what you see. If you don't, you run the high risk of living these next few months like Gomer Pyle on Valium, with no clue about your money. You don't want that, do you?
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Update your game plan or start one for the first time.
A budget is your game plan, where you tell your money what you want it to do. This isn't rocket science! Just give every dollar a name on paper before you get your paycheck so it won't all be gone in a week. Get free budgeting forms here.
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Use the envelope system.
Studies show that you spend 12–15% more when you use plastic than when you use cash, try the envelope system. Take some envelopes, write the budget categories on the envelopes, and use only the allotted money to purchase specific things. If an envelope is empty, don't buy anything else in that category for the month. It can wait.
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Set boundaries for yourself and your family.
A lot of this centers around the ability to say the word NO and really mean it! Sometimes you're going to have to tell yourself, your spouse and your kids "NO! It's not in the budget!". So be prepared. It's a phrase you'll be glad you know how to say.
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Start saving now for Halloween and Christmas!
Now is the time to start planning and setting aside any money you want to spend around these huge retail seasons. Make a list and commit to sticking to it! If you start now, you can keep these holidays from following you into next year!
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| Three Steps For Stress-Free Home Buying |
 Is buying a home fun? Absolutely! But it can be frustrating, too. Follow these tips to help make the process more fun and less stressful.
Get your money in order
Make sure you are financially ready to buy a house. You need to be debt-free with a fully funded emergency fund (Baby Step 3). Ask yourself these questions:
- Can I make at least a 10% (preferably 20%) down payment?
- Can I afford a 15-year fixed-rate loan?
- Can I keep the house payments at or below 25% of my monthly take-home pay?
If you answered “yes” to all three, then you can afford a house. Otherwise, Dave strongly suggests you wait to buy a home.
Prepare for extra expenses
The mortgage won’t be your only monthly home expense. You’ll have all types of other costs. Some examples may include:
- Property taxes—The amount you’ll pay depends on the location of your new home. Taxes can add hundreds of dollars to your monthly payment.
- Utilities—If you’re moving from an apartment or upgrading to extra square footage, you might have a higher utility bill.
- Insurance—Don’t even try to get around this cost! You need homeowner’s insurance, which provides protection against fire, theft and some natural disasters.
Call in a pro
A real estate agent who helps you buy a house is called a buyer’s agent. So what’s the point in having a buyer’s agent on your side?
- Save money. In most cases, the home seller pays the commission for your agent. That means you pay nothing to get expert help. It’s not uncommon for a good agent to save you thousands of dollars. Not only that, but they’ll also represent you in price negotiations. Not a bad deal!
- Save time. Without a buyer’s agent, you’ll get weighed down by countless hours of filing paperwork. Because your agent will know all of the laws and regulations specific to your city, it only makes sense for you to let them take care of all the red tape. Let the experts do their job!
Make sure you get an exclusive buyer’s agent, one who will protect your interests as the buyer.
Which real estate agent does Dave recommend for you? Find out now.
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| Single Mom of Five Overcomes Debt One Step at a Time |
 Many people are faced with unbelievable challenges while moving toward financial peace—maybe you’re one of them. Some have a mountain of debt and only one income, some get laid off, and some feel like Murphy moved into their spare bedroom and won’t leave! And don’t forget the nonstop car repairs, broken air conditioner and trip to the emergency room thrown in there just for fun!
Whatever challenges you may face, remember that there are always Dave fans with whom you can relate. Take Teresa, for example … a single mom of five with one income. She kicked the victim mentality to the curb and is well on her way to putting her money to work.
Teresa was a 49-year-old active member of the United States Navy Reserve when she went through Financial Peace University (FPU). As a single mother of five sons, she’s seen her fair share of struggles. “I raised my sons alone with little support from their father. We have dumpster dived, lived in a borrowed car, been homeless, and stayed in a shelter,” she said.
In spite of her difficulties, Teresa managed to provide for herself and her family. She enrolled in an FPU class and began the Baby Steps. At the start of the class, Teresa had several money issues that she needed to deal with. She owed $14,000 on her car, $1,000 on an extended warranty balance, $16,000 in student loans for grad school, $700 on a credit card, and $3,000 on a personal loan from her mom. She was nearly $35,000 in debt!
As she plugged her way through the FPU class, Teresa learned the importance of an emergency fund and how to create a budget on one income. “As I followed the FPU steps, I was able to complete Baby Step 1 right away and then immediately begin Baby Step 2,” she said.
During the FPU class, Teresa was able to pay off $20,000 in debt and put $3,000 in her emergency fund. “I’ve slowly added to my emergency fund because my comfort zone for this is important as a single woman,” Teresa said.
How you can do it, too
In order to do an amazing turnaround like Teresa, you must get on a plan and stick to it. Even though it’s tough, a monthly budget will help you gain control of your money. When starting a budget, it’s important to remember the four walls—food, shelter, transportation and clothing. Once those things are covered, establish a $1,000 emergency fund. After that, start paying off debt with gazelle intensity using the Baby Steps.
Singles often deal with “I owe it to myself” syndrome and struggle with impulse buying. Teresa learned to overcome those feelings, instead gaining a sense of empowerment once she had a working budget.
It’s also important to develop an accountability relationship with someone you trust. Your accountability partner must love you enough to be brutally honest with you about money. Whenever you need to make a major purchase or discuss your budget, talk to your accountability partner first.
Financial Peace University is a 13-week course that will help anyone, regardless of age or marital status, learn how to set up a budget, become gazelle intense, develop accountability, and much more. Thousands of classes are starting over the next few weeks, so now is a great time to check it out. Type in your ZIP code below to find a class in your town.
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| Answers To Your Debt Snowball Questions |
 People call into Dave’s show all the time with questions about paying off debt. One of the most popular topics is Baby Step 2, the debt snowball. That’s the step where you list your debts smallest to largest and make minimum payments on everything but the smallest debt, which you attack with a vengeance.
Once you’ve gotten rid of the first debt, take the extra money you used to apply to it and throw it toward the next smallest debt. Once the second debt is paid off, do the same to the next debt and the next, until you are debt-free. That’s where the phrase “debt snowball” comes from … as you go along, you pick up more “snow” and the momentum continues to grow!
But some people have questions about how the debt snowball applies to their situation. Let’s look at a few:
Why do we pay debts in that order?
You pay off the smallest debts first so that you have some quick wins. If you go on a diet and lose weight the first week, you’ll stay on the diet. Paying off debts quickly will get you fired up to become debt-free and stick with it. If you have seven debts and knock out four in a couple of months, won’t you be excited?
Why don’t I pay off the debts with higher interest rates first?
If the first debt you try to get rid of is a huge debt with a big interest rate, you won’t get it paid off for a while and you’ll become discouraged. Yes, the math works out better when you pay off the debt with the big interest rate first, but remember this: If you were doing math correctly, you wouldn’t be in debt!
Are there debts that may not go in the debt snowball?
Yes. If you have a second mortgage that is more than half your annual income, you should put it in Baby Step 6 (where you pay off the house) instead of Baby Step 2. If you have a huge car debt that you can’t pay off in 18 to 24 months, sell the car and get a beater car.
Is there any time you should rearrange debts?
About the only time a debt might take priority over others is when you owe the IRS. For example, if you owe $5,000 in tax debt and $4,000 on a car loan, flip the order and pay off the IRS debt first. You want those people out of your life as soon as possible.
Get Dave’s answers to all of your questions about the debt snowball.
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| Behind the Scenes at CheckingFinder.com |
 We want to help people learn more about the wonderful products and businesses that Dave endorses and how they can enhance your life. This month we talked with the brains behind CheckingFinder.com, CEOs Gabe Krajicek and John Waupsh.
Why should you stay away from mega banks?
John: This question ignites a lot of passion in me. In my mind, it’s simple. People are sick and tired of being treated like a number by their financial institution. They want the individual attention and respect they deserve, but they certainly won’t find it with a mega bank.
Gabe: I’m proud to say that our mission is basically a declaration of war against the mega banks. They caused the largest economic collapse since the Great Depression. Their service stinks. They still treat people like a number, and when the going gets rough, their fees go up.
Why is it better to bank at community banks and credit unions?
Gabe: Community banks and credit unions treat all of their customers the way mega banks treat only their wealthiest customers. They also offer all the modern conveniences anyone could want like debit cards and free online banking.
Where did the idea for CheckingFinder come from?
John: People would call and write to us, asking for one website where they could find the free, high-interest checking accounts they were reading about in their local newspapers. Thanks to their suggestions, we created CheckingFinder.com—the only place you can find, compare, and open one of these accounts—all in a matter of minutes.
Gabe: There is a framed letter in my office from a person who wanted to know where the closest bank was that offered a high-interest checking account. We figured if people would handwrite a letter asking where our clients are, surely they would go online to find them. They do.
How can CheckingFinder banks and credit unions offer such great rates?
Gabe: The accounts encourage the use of technology instead of brick and mortar services. If an account holder uses a debit card instead of writing checks, receives an online statement instead of a paper statement, and takes advantage of online banking instead of jamming up the teller lines, this saves the bank or credit unions a lot of money. Those savings are passed back to the account holder in the form of high interest and ATM fee refunds. Let’s see a mega bank do that!
How do CheckingFinder’s principles align with Dave Ramsey’s?
John: Much like Dave, CheckingFinder helps all people get the most out of their money. So I think it’s safe to say that both CheckingFinder and Dave are passionate about giving people the financial respect they deserve—something the mega banks lost sight of a long time ago.
Find a free, high-interest checking account now!
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 There
are plenty of free resources available at daveramsey.com
to help you with everything from setting up a budget that
really works to getting a free annual credit report. Here
are a few highlights:
- Annual Credit Report
Don't get scammed into paying for your credit report by slick TV commercials! AnnualCreditReport.com is the central site to help you get your free report once every 12 months from each of the nationwide consumer credit reporting companies. Get your credit report now.
- Find Dave's Class In Your Town
Financial Peace University classes are beginning all over the country, so get involved with one in your area.
- Free,
High-Interest Checking on CheckingFinder.com
Dave says, "Start making your money work harder right
now on CheckingFinder.com. Enter your ZIP to find and
open a free, high-yield checking account with no minimum
balance. It's easy to do, and you're done in just
minutes. I've never found a better checking account."
Get
more useful tools here
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Dave Ramsey Updates |
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Magazines, websites, live events, TV—Dave's everywhere!
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all the up-to-date info.
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There are over 450 affiliates nationwide.
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The will to succeed is important, but what's more important is the will to prepare. —Bobby Knight
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