Financial guru Dave Ramsey drops a few jewels for staying with in that budget for Valentines Day. Some of it is corny but being broke is corny too so have it your way lol, check it out:
Sure, the occasional elaborate gift can be fun, but most people will cherish a gift from the heart for many years to come. Dave’s reliable Facebook fans responded to the call for romantic, yet budget-friendly, Valentine’s Day celebration and gift ideas. Here are some highlights:
We’ve been married two years. Every year, I write 95 reasons I love my hubby (the number of days from Valentines Day to our anniversary on May 19th) and put them on strips of red paper. They fill up a mason jar nicely. Every morning before he leaves for work, he pulls a reason I love him. It really makes his day and makes me realize what a great hubby I have! –Christy
I taught myself how to play, “The Love of My Life” by Jim Brickman and Michael W. Smith for my wife. Sheet music was around $5 and about 16 hours of my time. Well worth it. –D.J.
One year I made 101 paper hearts and on each one wrote something I loved about him. I stuck them all over the house. It took him a week to find them all. –Rhonda
One year, I gave my husband a card saying, “In lieu of a gift, contributions have been made in your name to the mortgage company, the electric company, the phone company…” We both had a good laugh! –Julie
My husband makes me a photo calendar each year for Valentines Day. It costs approx $30, but I get to enjoy it every day of the year. Each month has different photos of our kids, family and special days of the year. I can’t wait to get it each year! –Stephanie
We go to the Hallmark store and show each other the cards we would have bought if it were in our budget! –Christopher
For a inexpensive date, have your local pizza parlor make a pizza in the shape of a heart with “love” written in pepperoni. Drop off some flowers at the restaurant and make arrangements for the pizza and the flowers to be delivered unexpectedly. She will love you for it, and you can do this for less than $40. –Jack
If you’ve ever been in the market for a home, you can relate; you walk into the “perfect” home, and you can’t believe it’s still on the market. The family loves it, you love it, the location is perfect, and the price tag is…well, a “little more than we wanted to spend.” By now you’re drooling over the home, the family has emotionally committed, and the sudden pressure to make the numbers work begins to overtake you. The realtor mentions “alternative financing options” that are sure to get you into the home and keep the payments affordable. In a few hours on a Sunday afternoon, you’ve gone from financially responsible to being ready and willing to do almost anything to get this perfect house!
Never make a permanent decision based on a temporary emotion! Remember this on every outing with your realtor! When you come across a home that seemingly fits all your wants and needs but breaks the budget, the temptation to get way too creative in your financing can overtake you.
Always know your boundaries before even looking at homes! Nothing is more frustrating than making a quick decision on something as large as a home, only to realize you’ve just traded your life for a house. It happens every day when people choose to put emotion above sound financial principles. Remember that once you take out a mortgage, the payments NEVER drop unless you pay the house off in full or refinance later. Additionally, while using financing tools such as an Adjustable Rate Mortgage (ARM) or balloon mortgage may give you lower payments, they also translate into little or no equity for 5-10 years. The best way to combat buyer’s remorse is to avoid it. Always have a financial plan in every situation. This plan should tell you how to behave with money instead of letting your emotions control your choices. I am a strong advocate of fixed-rate, conventional mortgages, specifically a 15-year fixed. I recommend a minimum of 10% down, preferably 20% to avoid paying Private Mortgage Insurance (PMI). Your monthly payments should never exceed 25% of your net (take home) pay each month.
A sound plan like this:
Sets boundaries for your next home purchase before you even start looking
Builds equity
Saves for emergencies
Sets you free from being a slave to your mortgage
Nothing will ruin a new house faster than paying too much for it. Set your boundaries early, and you’ll enjoy your new home for many years to come.
A job loss is not the end of the world. For many people, it’s just the launching pad to a new, more fulfilling career. It can also be a great time to re-prioritize the plan for your money or actually create a plan. Here are seven things to get you started on a plan that works in the good times and bad.
Stop paying extra on your debt. If you’ve been attacking your debt snowball like crazy, refocus that money and momentum to save a big emergency fund.
Sock away the extra money to build up your emergency fund. If you get a severance, make it a part of your shopping emergency fund.
Do a budget.Download free budgeting forms. Focus on your necessities first food, shelter, utilities, transportation, and basic clothing. The creditors can wait.
Cut way back on your lifestyle. Home-cooked meals and library books should become the norm.
Cut up the credit cards. Nothing good can come from using them. If you don’t have the cash, don’t buy!
Get a part-time job. Yes, they are available. Do everything you can to still generate some income until you find a new full-time job.
Think about your skills and decide if now is the time to start a small business or change careers. Your options are limitless!
Some people who find themselves unemployed will go into new careers or start their own businesses where they have the best year of their lives professionally, financially and emotionally. Their current job loss is actually a blessing in disguise. That’s how they are looking at the situation and formulating a game plan based on it. It’s the best outlook anyone can have! If you haven’t lost your job but dread going to work, maybe it’s time to fire your employer and go in a new direction. When you have a game plan for your money and career, you will have a sense of empowerment because you aren’t a slave to the lender (or employer).
This is a great show to keep track of, if you want to learn how to become and stay debt free. Dave Ramsey provides great insight to financial freedom from a holistic view point, Check it Out!
QUESTION:: Alex presents a theory. If you have $1 million in the bank, why would you take $300,000 out to buy a house instead of just putting 20% down and keeping the money in the mutual fund to make money? If need be, he can pay off the house. Dave tells him about the two major factors that he doesn’t factor into his equation.
ANSWER: The spread that you’d make between the mortgage (at 6%) and the mutual fund )at (11% or so) is about 5%, and that’s assuming nothing goes wrong and that you can get your mutual fund out if you need. What you’re talking about is a theory, and what I’m talking about is actual life. In your theory, you’ve left out two major issues … paying taxes on the mutual fund (which makes your yield less) and risk.
You’ve compared a zero risk investment with a risk investment, and you don’t do that. You must factor in risk so you accurately compare one investment to another. Every time you pay your mortgage off, the bank no longer charges you interest. That’s a zero risk, compared to a mutual fund that does have risk. Remember, if your house was paid for, you would not borrow $300,000 against it to invest in mutual funds
The good news is that there’s not some magical, mystical formula to good debt management. The solution is common sense and having a plan for your Total Money Makeover. Grandma’s simple way of handling money. Good debt management is 80% behavior and 20% head knowledge. It isn’t rocket science as some debt management companies try to make you believe.
Is it easy? No. In fact, it’s really hard most of the time. But it’s worth it. It’s amazing to see people change their lives through simple determination and having a plan that works…every time. Once you have areal debt management plan in place, its only a matter of time.
We have people every week email or call us about how they have paid off $10k, $20k, sometimes even $100,000 in debt. Now, you may be thinking, “Yeah, right. They must be making 6 figures to do that.” NO! These are just people who are serious about getting out of debt. Many of them are making $30,000 to $50, 000 when they decided to be debt free. It’s all a matter of attitude.
Question: If you invest in the stock market, and the market goes down, what happens to the money? Is it lost?
Answer:This is a great question! So many people misunderstand how investments work when the market declines. No actual money disappears. What goes away is value!
Think about it this way. What happens when you buy a car for $25,000 and its value drops to $15,000? There’s no actual money involved. It’s not like you took bills out of your wallet and threw them away, although it may seem like it when you first roll off the showroom floor. You bought an item for $25,000, and now, after time has passed, it’s not worth $25,000 anymore. It works the same way with stocks. If you bought a company’s stock at $50 and the price of it drops to $40, that $10 didn’t go anywhere. It’s just lost in terms of market value, or what someone else will pay you for it. Make sense?
So many people believe we operate with a fixed-pie economy. They think money is gone forever if it leaves one place, but this is a faulty premise, because it can just as easily go to another place. My good friend, Rabbi Daniel Lapin, has a wonderful explanation for how this works. He calls it a comparison of cake versus candles. If you slice a cake and give yourself a bigger piece, there’s less for me. But money isn’t like the cake, it’s like the candles! If you light a candle and use it to light other candles, no candle is diminished. There is even more light!
Communists and socialists believe money is like a cake, and if you get some, there’s less left for me. But if you understand and believe that money is more like the candles, then you’re probably a capitalist. In capitalism, it doesn’t mean you lose just because I win; it can just as easily mean that we both win. Once you get adjusted to this kind of thinking, the marketplace isn’t nearly as scary!
Myth: Debt consolidation saves interest and you have one smaller payment.
Truth:Debt consolidation is nothing more than a “con” because you think you’ve done something about the debt problem. Debt consolidation is dangerous because you treat only the symptom. The debt is still there, as are the habits that caused it. You just moved it! Our counselors will not recommend debt consolidation for a client.
The reason that we do not use debt consolidation to get out of debt is because it doesn’t work. You end up paying about the same amount, which doesn’t really help you pay your debts off faster. Most people end up taking on more debt after consolidation and several end up in bankruptcy. Get more information on debt consolidation.
Dave Ramsey is a best selling author and a financial counselor. Although I have been highlighting Donald Trump and Robert Kiyosaki book which is a bit of a contrast to Dave’s philosophy I still do appreciate his insight on finances and living a debt free life. Dave maps out a investing plan for beginners who are trying to get into the game.
Invest 15% of household income into Roth IRAs and pre-tax retirement.
College funding for children.
Pay off home early.
Build wealth and give! Continue to invest in mutual funds and real estate.
Investing For Those Just Getting Started:
Be sure you have completed the first 3 Baby Steps.
Begin by doing pre-tax savings in (401k, 403b, TSP, Traditional IRA) and tax-free savings (Roth IRA, Roth 401k)
NOTE: If you receive a match in your (401k, 403b, TSP), invest here first up to the match. Then, fully fund a Roth IRA for you (and your spouse, if married). Then, come back to the (401k, 403b, TSP).
If you are still on Baby Steps 1-3, be patient; put off investing for now. Avoiding a crisis with a fully funded emergency fund and paying off high-interest debts is a fantastic investment!
Question: Bud asked if there is anything wrong with buying big things on 12 months same as cash. Dave tells him all the reasons why it’s stupid.
Dave Ramsey’s advice: It’s a stupid idea, Bud. First off, if I buy the item with cash, I’ll get a deal that is better than the $80 that you’ll save. Plus, if you play with snakes, you’ll get bitten. If they record your payment wrong and it’s late, they’ll backcharge you through the entire term of the deal at about 24 to 38% interest. You’ll spend the next year and a half cleaning up this mess. It actually happened with one of our clients here. There’s all kinds of problems with that!
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Question: Adria and her husband have been married for 11 years and gotten into about $40,000 in credit card debt. Her husband says it will take them four years to get rid of this. Dave thinks that’s crazy.
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