someone who is good at the economy help me budget this, my family is dying

The Something Awful Forums > Discussion > Debate & Discussion > someone who is good at the economy help me budget this, my family is dying

Anubis: Oct 9, 2003; It's hard to keep sand out of ears this big.; Fun Shoe

AsInHowe posted:

[b]
First, you should absolutely start paying down and settling things with high interest rates first. That will save you a lot of money, and is legitimate common sense. The reason why Dave is against that is because he is trying to make the small feeling of victory that comes from paying off a bill turn into your main focus and desire moving forward. Like with Step 1, Dave is trying to cloud your better judgment by focusing on short-term wins that really aren't wins at all. (There are some Washington parallels here, if you know what I mean. It's the same playbook.)

Second, we live in a society where having available credit is important, and anyone who doesn't realize it is only hurting themselves.

I used to actually agree with you on this until I realized that I'm not his target demo at all. People with zero financial understanding and who managed to rack up 10s of thousands in CC debt while still having a decent income are his demo. In that case, freeing up smaller monthly payments can actually work out better, because the "gain" of seeing monthly payments fall off, along with the monthly flexibility of having that payment available during months where expenses are unpreventable higher than average, leads to better results. Financial planning in this sense is less about a giant spreadsheet and more about keeping these people on plan, on budget and continuing the goal. It's completely psychological but watching a couple friends get out of debt, I finally understood where this came from. Paying off that smaller CC completely gave them a measure of self confidence that, yes, this is actually possible and there is a light at the end of the tunnel.

I also agree with you on the credit thing, however again we aren't his target demo. His target demo will typically already have a completely trashed credit score and frankly would be better off to a creditor as a blank slate than their current existence. If you ignore the religious stuff (if that's not your thing, and even if it is get out of debt before you crank giving up to 10% if you feel morally obligated to reach that level) and then go deal with a financial planner or something after you pulled yourself out of debt, then yes his advice actually works.

# ¿ Jul 21, 2017 14:22

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# ¿ May 22, 2024 17:31

Anubis: Oct 9, 2003; It's hard to keep sand out of ears this big.; Fun Shoe

WampaLord posted:

Here's a good question, does Ramsey ever tell people to file for bankruptcy or is that seen as the ultimate no-no?

I honestly didn't know the answer and was curious myself, google says yes. He sees it as a last resort, of course, rather than a robust tool for getting out of preditory loans which isn't always great but that's more a problem with a generic one size fits all plan.

https://www.daveramsey.com/blog/the-truth-about-bankruptcy

Anubis fucked around with this message at 14:39 on Jul 21, 2017

# ¿ Jul 21, 2017 14:37

Anubis: Oct 9, 2003; It's hard to keep sand out of ears this big.; Fun Shoe

Sphairon posted:

Your point is probably right in an American context, but man, whenever I read about this it strikes me as incredibly odd. This might just be a result of cultural priming and the American system might actually be superior in some way, but still.

The idea of "building up credit" is completely foreign to my Euro neck of the woods. As someone with precarious and irregular income, my credit card limit is �100 and 10 years ago I might not even have gotten a credit card. If I go into debt and pay it off, nothing improves for me. But if I fail to pay up, I'll have to deal with lifelong (not sure about that) negative entries in a debtor archive, which might end up costing me loan, housing or even employment opportunities.

So when I think of debt, I think "this can only make it worse for you", and someone like Ramsey immediately makes sense to me. And I suppose Americans could be excused for feeling that way if they were unfamiliar with the American system of "credit building".

Unfortunately, credit cards are too often our version of a social safety net. It's just that if you get in too deep with them and have to declare bankruptcy you don't get access to that safety net again for another 7 years.

# ¿ Jul 21, 2017 23:56

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