Happy Birthday to Me
Today I have finally turned 25 and am glad I am at the point where I am with my life. I remember back when I was 15 what high school was going to be like, and then at 20 dealing with the challenges of college. Now at 25 it seems like what was once so complex is now much simpler than it used to seem. Sure I have made mistakes, made good choices and bad ones, got into some debt, but I’m finally working on moving towards a more positive direction.
So for the past few weeks I have been listening to The Dave Ramsey Show and am starting to understand why people become motivated by him to handle their debt and take control of their money. It isn’t completely him that makes this happen, it’s the callers who have real life situations probably much similar to some of our own, and people almost help other people through the show. At any rate my wife got me his Total Money Makeover book for me to read about his system. I also went on his website and found his software for only $10 along with another book I want to read, The Millionaire Next Door. I am cautious to consider his system because he does not believe in credit period.
The question you have to ask yourself, is do you want to be ‘normal’ and want/need/use credit, or be weird, and Not want/need/use credit. So far, credit has been good to you, no? Not to beat you up, but I can tell you, when you control all of your income, you will not need credit, as you will pay cash for everything. We also bought a home, with manual underwriting. (matter of fact the bank approved us for double the house we bought, due to our income - zero debt ratios). If we had used fico lender, we would have been penalized. Not sure which copy you have, but, if it’s the latest, we’re on 116…
A mortgage is still a form of credit or a loan as most of us can’t come up with the cash. Sure you don’t need a grand FICO score to get one, although most banks will tell you otherwise. I saved a lot of money for college but still ended up needing student loans to pay for my education. To me it is beyond STUPID to stop going to college ‘because you’re too stubborn to take out a student loan’ in order to finish. I know people who did that and they went and got a job with school half finished, and did not come back. Unlike my parents I plan to take the proper steps so that one day my kids will not have to resort to student loan debt hanging over their heads. Student loans are not the same as credit cards, they are only used as an investment in yourself and are not a habit.
By the way he says that debt is normal, be weird and have no debt. I think it’s great to be able to use cash and just pay for everything. I’m trying my best now to take the steps to get rid of my credit card debt within the next two years. It should take both me and my wife about 5 years to be completely out of debt with the exception of our house. The point of this blog is I got tired of trying to get by and want to change things for the better.
Even Student Loans have their disadvantages. We currently owe over $60,000 in them. My husband and I both have degrees, and he has his MBA. All paid for with Student Loans. Sure the interest rate is good. But the “tax deductible”-ness is overrated. Even without me working (SAHM), we earn too much to deduct everything. We can only deduct about half of the interest we pay every year. We can’t work on that extra now because of other pressing debt obligations, but if we ever get them off of the balance sheet, it would free up over $400 a month. Like getting a car or your groceries for free. I wish I had been more determined to stay out of debt in college. It might seem stupid to stop college, but I feel pretty stupid (and it tortures my husband) that we took out the debt too.