@mkelly1075 That’s true. It’s free money OP is passing up and the risk level tolerance can be easily controlled. You’ve swayed me.
That being said any debt with 10% (or really any over 7+%) outside a mortgage is not a fun one to have hanging over ones head and should be tackled with expediency
@jessy200 That's fair. I personally have some problems with a lot of his advice, but I'll acknowledge that a person in OP's situation sound right in the demographic that Dave can help the most by keeping it as simple as possible.
@jessy200 That's awesome! I'm happy you were able to accomplish that. I'm also happy that while you use Dave's advice, you give it enough critical thought to not take all of it as gospel and know that you can discard some of his advice when it doesn't work for you like credit cards. Best of luck on your financial journey going forward.
@jessy200 Ya I think he does that for people who just don’t have the self discipline to use them as essentially debit and pay em off before any interest accrues. He’s generally speaking to ppl in mounds of debt and so he gives harsher advice to those and tell them they flat out shouldn’t have them.
But they are great tools for rewards and incentives if they are simply paid off immediately after use. They’re also credit building tools
@jessy200 A 100% return is a lot higher than 10% you’d get back on the loan. It’s a full order of magnitude higher. That’s huge. Getting the company match should be priority #1, because forgoing that is the same as just telling your employer to knock a few percent off of your salary. The next priority should be paying off the debt in order of highest rate to lowest rate. OP should cut costs to do this, because they’re spending an absurd amount of lonely for what they make and can definitely cut costs on wants that they think are needs.
@mssonya84 I think part of the problem is you think you make more than you do. It's not time to but an expensive car, you can barely make ends meet without that. Get your budget in order. Get a reasonable car, work on lowering expenses and start putting into retirement. Lower the amount of money you have available. You should be saying you bring home 6k a month after retirement.
@bryanjohnmaloney As stupid as the car purchase was at the time (and they absolutely should not do anything like that again) they probably have to stick with the car. They are 20k underwater on a car that will continue to lose value. They just need to run that car to the ground until it dies and then hopefully have enough saved in cash for a new car.
They already have one personal loan and would have to take out another one to cover this car just to sell it and get out from the loan. They would then have to get a different car. Even a used car is going to probably be at least around 7-10k. That's a total of 30k they would need to come up with. The 4% interest rate they currently have on the car is not fun but it is much better than the interest rate they would get on the personal loan to get out from under the car.
@bryanjohnmaloney Suggestions on what a reasonable car may be? I owe 30k on my Honda accord hybrid 3.25% loan at $600/mo. Curious what a more reasonable used car would cost?
@saskia I bought a 2008 Civic with about 120,000km for about $10,000. If you had to take a loan out on it, it would save probably $300-400 a month depending on your rate.
@mssonya84 The good news is you are 37 so you have 25+ years to fix your situation. A couple years to get out of your debt situation and a couple decades to save enough for retirement.
I don’t agree with everything that Dave Ramsey has to say, but he’s spot on on getting out of debt. Suggest you listen to his podcast for advice on getting out of debt.
Once you get a little breathing room I would take advantage of your employer’s match ASAP. You’re passing up free money.
@jane_doe I agree with Buck here. Good news is your young and plenty of time, sure you won't retire at 55 or maybe 60, but most won't either unless things change. I know it's just a joke, but remember Elon didn't sign on the dotted line. It's time to buckle down and cut out unnecessary expenses.
@mssonya84 You need to cut lifestyle and burn down your debt. As soon as you can, drop the Tesla and drop to a much cheaper used car. Get rid of the debt and start investing what you can to supplement your teachers pension. There are no simple solutions.
@mssonya84 Get the employer match, that’s 100% return on your money.
After that you should attack the 10% loan before investing anything else.
Save as much as you can, and look at any unnecessary spending to see if you can save money anywhere, or find a side gig to bring in extra cash.
After your personal loan is paid off then you can start putting more towards your 401k or a Roth IRA. Since your car is at 4% you could probably just make minimum payments on that while contributing towards retirement plans.
