Best ways to save money $

scottIN · 06-21-2016, 06:39 AM

I follow the Dave Ramsey plan - no debt except for your house on a (max) 15 year loan. No credit cards - cash (or debit card) for everything.

I know a lot of posters said 'But I get X% cash back!' Well, the problem with that is that every study shows you spend more money using a credit card vs. a debit card. So to get your couple hundred dollars at the end of the year, it's probably cost you thousands. And as Dave says, he's never had a millionaire tell him 'Wow! Getting that cash back is what made me a millionaire!'.

Another thing that came up in here was 0% financing then investing the cash you would have paid. That works until it stops working. Let's say you did that on a zero down car. Two months later, the economy tanks, the market crashes, your investment is worth 50% of what it once was, and you lose your job. Oh - and you're upside down $5K in your car already. You can't make the payments or sell the car. Trying to arbitrage 0% / investing doesn't factor in risk. If you don't believe there is any risk, you should go borrow as much money as you can on your house, your cars - whatever - and put it into the market.

A year ago, my GF and I were doing ok - no problem making payments, went on vacations, went out all the time. But we had huge payments - mostly the cars. Doing the debt snowball, we're down to just one payment and paying it off @ $5K / mo. When we're done in a couple of months, you know where that $5K goes? In my pocket! So let's say I want a new(er) car. I can now save $20K in 4 months, add that to my paid off car, and have $45K for something new. And still no payments. We're already planning a vacation to Costa Rica for New Year's. Know how long we have to save up for it? One week. Because our only payment will be our house ($800 on a 15 year fixed).

I've sort of become a Dave Ramsey evangelist. When you understand what debt does to you, it all makes sense. Did you know that debt is the most heavily marketed product? Why? That's how car dealers, furniture stores, banks and so many others make their money. My banker has 3 Porsches. My debt paid for those. I understand that now.

Chuck33079 · 06-21-2016, 06:47 AM

Quote:

Originally Posted by scottIN

Another thing that came up in here was 0% financing then investing the cash you would have paid. That works until it stops working. Let's say you did that on a zero down car. Two months later, the economy tanks, the market crashes, your investment is worth 50% of what it once was, and you lose your job. Oh - and you're upside down $5K in your car already. You can't make the payments or sell the car. Trying to arbitrage 0% / investing doesn't factor in risk. If you don't believe there is any risk, you should go borrow as much money as you can on your house, your cars - whatever - and put it into the market.

You're right to a point. You absolutely can arbitrage the difference assuming the interest rate you're trying to beat is low enough. Hell, you can get a bank CD that'll beat a 0.9% car loan.

Now if you're paying 6%, you're absolutely right, it's too much risk to try and beat that.

The one thing you left out of that scenario where everything goes to **** is your savings. If you don't have six months to a year's worth of an emergency fund sitting in cash you have no business trying to be slick and make a couple of bucks by investing what you would have put down on a car.

7midgits · 07-22-2016, 09:21 PM

Quote:

Originally Posted by scottIN

I follow the Dave Ramsey plan - no debt except for your house on a (max) 15 year loan. No credit cards - cash (or debit card) for everything.

I know a lot of posters said 'But I get X% cash back!' Well, the problem with that is that every study shows you spend more money using a credit card vs. a debit card. So to get your couple hundred dollars at the end of the year, it's probably cost you thousands. And as Dave says, he's never had a millionaire tell him 'Wow! Getting that cash back is what made me a millionaire!'.

Another thing that came up in here was 0% financing then investing the cash you would have paid. That works until it stops working. Let's say you did that on a zero down car. Two months later, the economy tanks, the market crashes, your investment is worth 50% of what it once was, and you lose your job. Oh - and you're upside down $5K in your car already. You can't make the payments or sell the car. Trying to arbitrage 0% / investing doesn't factor in risk. If you don't believe there is any risk, you should go borrow as much money as you can on your house, your cars - whatever - and put it into the market.

A year ago, my GF and I were doing ok - no problem making payments, went on vacations, went out all the time. But we had huge payments - mostly the cars. Doing the debt snowball, we're down to just one payment and paying it off @ $5K / mo. When we're done in a couple of months, you know where that $5K goes? In my pocket! So let's say I want a new(er) car. I can now save $20K in 4 months, add that to my paid off car, and have $45K for something new. And still no payments. We're already planning a vacation to Costa Rica for New Year's. Know how long we have to save up for it? One week. Because our only payment will be our house ($800 on a 15 year fixed).

I've sort of become a Dave Ramsey evangelist. When you understand what debt does to you, it all makes sense. Did you know that debt is the most heavily marketed product? Why? That's how car dealers, furniture stores, banks and so many others make their money. My banker has 3 Porsches. My debt paid for those. I understand that now.

My grandfather was an immigrant..He said "You have a choice. You can spend your adult life as a debtor or creditor" simple as that.

JARblue · 06-21-2016, 08:05 AM

ALWAYS expect to spend double your budget on repairs/renovations. It never fails.

Chuck33079 · 06-21-2016, 08:08 AM

Quote:

Originally Posted by JARblue

ALWAYS expect to spend double your budget on repairs/renovations. It never fails.

I keep learning that lesson over and over. My house is 100 years old. Nothing goes according to plan.

JARblue · 06-21-2016, 08:10 AM

Quote:

Originally Posted by Chuck33079

I keep learning that lesson over and over. My house is 100 years old. Nothing goes according to plan.

Mine is only 20. But it's a shitty builder home with every corner possible cut and low quality materials. Everything I touch has to be completely rebuilt

Rusty · 06-21-2016, 08:10 AM

Quote:

Originally Posted by JARblue

ALWAYS expect to spend double your budget on repairs/renovations. It never fails.

Tell me about it. Just spent $40,000 on a kitchen remodel job.

JARblue · 06-21-2016, 08:19 AM

Quote:

Originally Posted by Rusty

Tell me about it. Just spent $40,000 on a kitchen remodel job.

My parents' kitchen remodel included installing an I-beam in the ceiling because they discovered the structure supporting bathroom above was not sufficient

Rusty · 06-21-2016, 01:25 PM

Quote:

Originally Posted by JARblue

My parents' kitchen remodel included installing an I-beam in the ceiling because they discovered the structure supporting bathroom above was not sufficient

We removed the wall between the kitchen and dinner room. We had to put a beam up because the wall was load bearing.

Hotrodz · 06-21-2016, 08:14 AM

I'm in the middle of a home mod right now and have already spent my budget and I am only about half way there lol!

Sent from my SM-N910P using Tapatalk

JARblue · 06-21-2016, 08:20 AM

Quote:

Originally Posted by Hotrodz

I'm in the middle of a home mod right now and have already spent my budget and I am only about half way there lol!

You're right on track!

Hotrodz · 06-21-2016, 08:27 AM

Yup, and my car is not happy about it at all!

Sent from my SM-N910P using Tapatalk

SouthArk370Z · 06-21-2016, 08:32 AM

I know what you mean about blossoming project budgets.

Sometimes it's cheaper, in the long run, to pay a pro to do the job - they have the knowledge/experience to assess the job, the proper tools to get the job finished quickly, and, if the job is not something you are good at, the repairs will be done better and last a lot longer. I'll do my own electrical (I was an industrial electrician) but get a plumber to do any big plumbing jobs (I'm not a plumber; I have a hard time getting water to flow downhill).

JARblue · 06-21-2016, 08:36 AM

Quote:

Originally Posted by SouthArk370Z

I know what you mean about blossoming project budgets.

Sometimes it's cheaper, in the long run, to pay a pro to do the job - they have the knowledge/experience to assess the job, the proper tools to get the job finished quickly, and, if the job is not something you are good at, the repairs will be done better and last a lot longer. I'll do my own electrical (I was an industrial electrician) but get a plumber to do any big plumbing jobs (I'm not a plumber; I have a hard time getting water to flow downhill).

But it doesn't matter whether you or the contractor tear open a wall and find $5K worth of unexpected repairs. The budget is shot right there, and then it happens two more times

Macman · 06-21-2016, 09:01 AM

Stay off car forums, they tend to make you want to purchase more car parts!

On a serious note, live within your means or below it if at all possible.

06-21-2016, 06:39 AM	#1 (permalink)
scottIN Track Member Join Date: Aug 2011 Location: New Castle, Indiana Posts: 764 Drives: '12 370Z Rep Power: 55	I follow the Dave Ramsey plan - no debt except for your house on a (max) 15 year loan. No credit cards - cash (or debit card) for everything. I know a lot of posters said 'But I get X% cash back!' Well, the problem with that is that every study shows you spend more money using a credit card vs. a debit card. So to get your couple hundred dollars at the end of the year, it's probably cost you thousands. And as Dave says, he's never had a millionaire tell him 'Wow! Getting that cash back is what made me a millionaire!'. Another thing that came up in here was 0% financing then investing the cash you would have paid. That works until it stops working. Let's say you did that on a zero down car. Two months later, the economy tanks, the market crashes, your investment is worth 50% of what it once was, and you lose your job. Oh - and you're upside down $5K in your car already. You can't make the payments or sell the car. Trying to arbitrage 0% / investing doesn't factor in risk. If you don't believe there is any risk, you should go borrow as much money as you can on your house, your cars - whatever - and put it into the market. A year ago, my GF and I were doing ok - no problem making payments, went on vacations, went out all the time. But we had huge payments - mostly the cars. Doing the debt snowball, we're down to just one payment and paying it off @ $5K / mo. When we're done in a couple of months, you know where that $5K goes? In my pocket! So let's say I want a new(er) car. I can now save $20K in 4 months, add that to my paid off car, and have $45K for something new. And still no payments. We're already planning a vacation to Costa Rica for New Year's. Know how long we have to save up for it? One week. Because our only payment will be our house ($800 on a 15 year fixed). I've sort of become a Dave Ramsey evangelist. When you understand what debt does to you, it all makes sense. Did you know that debt is the most heavily marketed product? Why? That's how car dealers, furniture stores, banks and so many others make their money. My banker has 3 Porsches. My debt paid for those. I understand that now. Chuck33079 and 7midgits like this.

06-21-2016, 08:05 AM	#4 (permalink)
JARblue A True Z Fanatic Join Date: Mar 2011 Location: Austin, TX Age: 44 Posts: 36,450 Drives: 11 Z34, 98 E36 M3 Rep Power: 2684441	ALWAYS expect to spend double your budget on repairs/renovations. It never fails. __________________ 2011 370Z 6MT Sport Gun Metallic \| ARC \| CJM \| Ecutek \| FI \| Fujimura \| R2C \| SPL \| Stillen \| TWM \| Z1 \| ZSpeed \|

06-21-2016, 08:14 AM	#10 (permalink)
Hotrodz A True Z Fanatic Join Date: Aug 2012 Location: NW, AZ Posts: 9,330 Drives: 10 Nissan 370z Nismo Rep Power: 2684385	I'm in the middle of a home mod right now and have already spent my budget and I am only about half way there lol! Sent from my SM-N910P using Tapatalk __________________ *Fast Intentions TT Installed and Tuned by Seb at SpecialtyZ 610whp 560tq:\|Fast Intentions 3" TT-TDX*\|SpecialtyZ/Fast Intentions 72 Row Oil Cooler\|SZ 6 Puck Clutch & Flywheel\|3GsCustoms\|Z1\|Wavetrac\|Hotchkis\|Whiteline \|Blitz\|Fortune Auto 500\|Fujimura\|SPL\|H&R\|TK\|TWM\|RPM Rollbar\|Sparco\|Next Level Performance\|TrackSpec\|AeroFlow Dynamics\|Pioneer\|

06-21-2016, 08:27 AM	#12 (permalink)
Hotrodz A True Z Fanatic Join Date: Aug 2012 Location: NW, AZ Posts: 9,330 Drives: 10 Nissan 370z Nismo Rep Power: 2684385	Yup, and my car is not happy about it at all! Sent from my SM-N910P using Tapatalk TerribleONE and JARblue like this. __________________ *Fast Intentions TT Installed and Tuned by Seb at SpecialtyZ 610whp 560tq:\|Fast Intentions 3" TT-TDX*\|SpecialtyZ/Fast Intentions 72 Row Oil Cooler\|SZ 6 Puck Clutch & Flywheel\|3GsCustoms\|Z1\|Wavetrac\|Hotchkis\|Whiteline \|Blitz\|Fortune Auto 500\|Fujimura\|SPL\|H&R\|TK\|TWM\|RPM Rollbar\|Sparco\|Next Level Performance\|TrackSpec\|AeroFlow Dynamics\|Pioneer\|

06-21-2016, 08:32 AM	#13 (permalink)
SouthArk370Z Premium Member Join Date: Nov 2010 Location: South Arkansas Posts: 8,435 Drives: 2014 Challenger Rep Power: 324198	I know what you mean about blossoming project budgets. Sometimes it's cheaper, in the long run, to pay a pro to do the job - they have the knowledge/experience to assess the job, the proper tools to get the job finished quickly, and, if the job is not something you are good at, the repairs will be done better and last a lot longer. I'll do my own electrical (I was an industrial electrician) but get a plumber to do any big plumbing jobs (I'm not a plumber; I have a hard time getting water to flow downhill). JARblue likes this. __________________ Steering Lock Links - Search The370Z Bookmarklet - FSM @ NICOclub Mankind has progressed past the need for war but we haven't evolved that far. - NachoMahma

06-21-2016, 09:01 AM	#15 (permalink)
Macman Base Member Join Date: Apr 2016 Location: Nova Scotia Posts: 21 Drives: 16 370Z M6 Rep Power: 10	Stay off car forums, they tend to make you want to purchase more car parts! On a serious note, live within your means or below it if at all possible. SouthArk370Z and Hotrodz like this.

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