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The Money Five
As some of you may know I am a huge Dave Ramsey fan. www.daveramsey.com Dave stresses debt repayment and saving. These questions were inspired by him.
1. What are your thoughts on the use of credit cards?
I highly dislike using credit cards and as soon as a small balance on a card I have now is taken care of I am done with them for good. Not only is it the most expensive way to spend money when you can't afford something but I think the credit card companies are a bit too blood thirsty for me. I just don't want to do business with people like that anymore. The only card I have left had a 9.9% rate on it and the increased it to 19.9 sometime in the last year. I called them and they assured me it wasn't due to any problems but they just increased a lot of rates. I decided then I was done forever.
2. When it is time to get a new car will you buy new, used or lease and why?
I will buy used as I have always done. In my opinion buying new cars is wasting money because they depreciate so quickly. A lease is the most expensive way to purchase a car because you gain nothing for your payment that is concrete. It is like renting instead of buying. Even though cars depreciate at least when the payment book is gone (if you did that) then you still have a car. With a lease when the term is up you have nothing. Not to mention the milage restrictions. Car companies lease because it is a really good deal for them not you. I once considered a car lease and Mike Genova's dad quickly talked me out of it and he was the salesman! What a great guy!
3. Tell us something major in your life you saved up for and if you had to do it again would you save up for it or do it differently?
When I was younger and foolish I used to like to buy stereo gear on credit. If I could only go back and slap myself. One time I decided to save up for the next piece I wanted. I got a little boost with some birthday money to start it and instead of just putting it on the ole GECAF card I paid cash. It felt good to know I would have zero payments to think about in the future. I now do everything that way. I have paid off a few credit cards in my life. They pay off much harder than saving the same money. Our society is obsessed with instant gratification and easy money. Debt is never the answer. I will say it again that debt is NEVER the answer. I know there is someone who will read this that needs to hear that. A statistic that I find facinating is that during the great depression something like 2% of the houses owned were purchased by borrowing. Everyone saved up! These days only 2% if the houses that are owned are paid for with cash. They are all mortgaged.
4. If you had to watch your pennies a lot tell us one guilty pleasure you would not curb spending on?
Probably netflix. I get so much enjoyment out of the movies I have been watching. It also isn't a bad deal really. Of course I say this as I am flipping through the new Griots Garage book with tons of new stuff in it. Help me!
5. What do you think your retirement will look like financially and will you be ready?
I think if most people were honest they would say they could be doing better and I am no exception. I am working Dave's plan right now though and hope to turn that around but honestly you can never make up for lost time. There is a savings tool called compounding interest that is very powerful. Many people don't realize that if they were to save $100 a week from their pay between the ages of 18 and 28 they could stop saving and the interest alone would give them enough to retire on. Interest plus time equals rich and it doesn't take much to start. Why didn't anyone tell me?
1. What are your thoughts on the use of credit cards?
I highly dislike using credit cards and as soon as a small balance on a card I have now is taken care of I am done with them for good. Not only is it the most expensive way to spend money when you can't afford something but I think the credit card companies are a bit too blood thirsty for me. I just don't want to do business with people like that anymore. The only card I have left had a 9.9% rate on it and the increased it to 19.9 sometime in the last year. I called them and they assured me it wasn't due to any problems but they just increased a lot of rates. I decided then I was done forever.
2. When it is time to get a new car will you buy new, used or lease and why?
I will buy used as I have always done. In my opinion buying new cars is wasting money because they depreciate so quickly. A lease is the most expensive way to purchase a car because you gain nothing for your payment that is concrete. It is like renting instead of buying. Even though cars depreciate at least when the payment book is gone (if you did that) then you still have a car. With a lease when the term is up you have nothing. Not to mention the milage restrictions. Car companies lease because it is a really good deal for them not you. I once considered a car lease and Mike Genova's dad quickly talked me out of it and he was the salesman! What a great guy!
3. Tell us something major in your life you saved up for and if you had to do it again would you save up for it or do it differently?
When I was younger and foolish I used to like to buy stereo gear on credit. If I could only go back and slap myself. One time I decided to save up for the next piece I wanted. I got a little boost with some birthday money to start it and instead of just putting it on the ole GECAF card I paid cash. It felt good to know I would have zero payments to think about in the future. I now do everything that way. I have paid off a few credit cards in my life. They pay off much harder than saving the same money. Our society is obsessed with instant gratification and easy money. Debt is never the answer. I will say it again that debt is NEVER the answer. I know there is someone who will read this that needs to hear that. A statistic that I find facinating is that during the great depression something like 2% of the houses owned were purchased by borrowing. Everyone saved up! These days only 2% if the houses that are owned are paid for with cash. They are all mortgaged.
4. If you had to watch your pennies a lot tell us one guilty pleasure you would not curb spending on?
Probably netflix. I get so much enjoyment out of the movies I have been watching. It also isn't a bad deal really. Of course I say this as I am flipping through the new Griots Garage book with tons of new stuff in it. Help me!
5. What do you think your retirement will look like financially and will you be ready?
I think if most people were honest they would say they could be doing better and I am no exception. I am working Dave's plan right now though and hope to turn that around but honestly you can never make up for lost time. There is a savings tool called compounding interest that is very powerful. Many people don't realize that if they were to save $100 a week from their pay between the ages of 18 and 28 they could stop saving and the interest alone would give them enough to retire on. Interest plus time equals rich and it doesn't take much to start. Why didn't anyone tell me?