cathmom Posted September 15, 2009 Share Posted September 15, 2009 DR is always saying this is the average. I just read the book by the Economides family and they say the same number. Where are they getting this from? I'm hoping - pretty much against all reason - that we can get our non-mortgage debt paid off in 5 years! Quote Link to comment Share on other sites More sharing options...
cathmom Posted September 15, 2009 Author Share Posted September 15, 2009 I think this average comes from those people who really can afford to pay off debt if they just quit blowing all their money on stupid stuff for a month or two. I have no idea if it is accurate. We are 7 years into debt pay off and have a min. of three years to go. Of course we couldn't keep up dh working 80 hr. a week for all of those years so it is slower than it technically could be. Dh worked 7 days a week for years but it takes it's toll and we have kids to raise so he had to cut back to more normal hours and we had to allow for some fun money. We didn't want to get out of debt only to find that our children were gone, hated their childhoods and we didn't even know each-other anymore. We also had to move. (druggies next door) Buying the house was outside of the DR plan, but got our family to a safer neighborhood. LOL at how you phrased that! I feel the same way about making sure my children have a life now. Quote Link to comment Share on other sites More sharing options...
Scuff Posted September 16, 2009 Share Posted September 16, 2009 Well, if you have so much debt or so little income that it's going to take 5-10 years, than yeah, slow it down and don't kill yourself. We only had the van and a pretty small CC. We were able to kill the CC & get the $1000 emergency fund with the tax return. So it jump started us and we've just had the van. Someone in our situation could take the extra job for a few months or a year or so if needed, and it wouldn't be such a big deal. We didn't, but we could have and not had our children or marriage suffer. Quote Link to comment Share on other sites More sharing options...
SheWillFly Posted September 16, 2009 Share Posted September 16, 2009 I think this average comes from those people who really can afford to pay off debt if they just quit blowing all their money on stupid stuff for a month or two. I have no idea if it is accurate. We are 7 years into debt pay off and have a min. of three years to go. Of course we couldn't keep up dh working 80 hr. a week for all of those years so it is slower than it technically could be. Dh worked 7 days a week for years but it takes it's toll and we have kids to raise so he had to cut back to more normal hours and we had to allow for some fun money. We didn't want to get out of debt only to find that our children were gone, hated their childhoods and we didn't even know each-other anymore. We also had to move. (druggies next door) Buying the house was outside of the DR plan, but got our family to a safer neighborhood.You point out many of the reasons why we are taking 5 years to pay off our debt. Being free from debt is important to us but not taking on any new debt and enjoying the relationships we have and the time we have together was more important. We refuse to take on more than one job because those relationships suffer in ways that are exceedingly more difficult to repair than repaying debt is. Quote Link to comment Share on other sites More sharing options...
BamaTanya Posted September 16, 2009 Share Posted September 16, 2009 When I read Dave (or any number of other financial gurus) I was left with the feeling that somehow they weren't understanding our situation -- that somehow we had some huge income and big house and luxury car payments. At the time we were living in a warm little house that was cheaper than rent and I was hanging cloth diapers on the line and kneading bread with my dc at the kitchen table. So . . . for FRUGAL people who still have tight budgets while making minimum payments, I think Dave's advice is still pretty awesome. It just has to be toned down. The snowball will move more slowly. That's OK. I adjusted our expectations and we both watched the debt reduction on a chart I posted on our bathroom door. Slow and steady . . . Quote Link to comment Share on other sites More sharing options...
Moni Posted September 16, 2009 Share Posted September 16, 2009 DR is always saying this is the average.! Average of what. Even if it were a true average, it simply means there are a lot of folks who can "afford to" pay off their debt anyway, even in 1, 2, or 3 months. Maybe the non-working spouse picks up a job taking home $5,000 per month. That's 20 grand paid down in a long winter. You never know what other folks are doing, whether they were just making unwise choices or were truly straped to begin with. For every person taking 4 months to pay off their bills, there is another family taking 3 years. :seeya: Quote Link to comment Share on other sites More sharing options...
cathmom Posted September 16, 2009 Author Share Posted September 16, 2009 When I read Dave (or any number of other financial gurus) I was left with the feeling that somehow they weren't understanding our situation -- that somehow we had some huge income and big house and luxury car payments. At the time we were living in a warm little house that was cheaper than rent and I was hanging cloth diapers on the line and kneading bread with my dc at the kitchen table. So . . . for FRUGAL people who still have tight budgets while making minimum payments, I think Dave's advice is still pretty awesome. It just has to be toned down. The snowball will move more slowly. That's OK. I adjusted our expectations and we both watched the debt reduction on a chart I posted on our bathroom door. Slow and steady . . . Right. My dh used to listen to DR and got very frustrated listening to the stories. Every once in a while, someone would call in with our kind of situation and DR would say, "You just need to increase your income." Well, dh is already working 7 days a week! We can only afford minimum payments right now. But I made up a debt chart and write down the new balance on every debt each month and then total them. This was very helpful for me to see that we WERE making progress just paying the minimums, albeit slow progress. Quote Link to comment Share on other sites More sharing options...
cathmom Posted September 16, 2009 Author Share Posted September 16, 2009 Average of what.:seeya: Well, that's what I was wondering. Has somebody done a study or are they just pulling this number out of the air to motivate us? (or depress us if there's no way!) Quote Link to comment Share on other sites More sharing options...
Moni Posted September 16, 2009 Share Posted September 16, 2009 DR would say, "You just need to increase your income. Exactly. Most all of the "Great financial/debt advice" presupposes that there is ample or more than ample income, and that low income is not the issue. I always thought there wasn't a whole lot to the concept. :001_huh: Charge less, charge none, and make payments and/or larger payments. Period. DR would say, "You just need to increase your income. He's right though. If you want to be part of the "average 18 month" club, you'd need to increase your income. Otherwise, you probably aren't going to be counted in that because you aren't "playing the DR game" properly. :seeya: Quote Link to comment Share on other sites More sharing options...
Moni Posted September 16, 2009 Share Posted September 16, 2009 Well, that's what I was wondering. Has somebody done a study ) There are always studies done, but you know, in the last 40+ years, no one has asked me anything, so how valid is that? ;) Who are the sample? :lol: So a study was done.... what were the parameters? Was it just families who actually "did" DR's advice, such as "increase your income"? Like the tootsie pop I think.........the world may never know :lol: :seeya: Quote Link to comment Share on other sites More sharing options...
JoyfulMama Posted September 16, 2009 Share Posted September 16, 2009 Maybe the non-working spouse picks up a job taking home $5,000 per month.That's 20 grand paid down in a long winter. I've been reading up on DR, as I like to be mindful of what others are talking about, and DR has been increasingly on the radar. But I *haven't* read any of his books, but have one on reserve at the library. So far it seems that he has a logical approach to debt elimination. I agree that it appears DR's approach is assuming a substantial income. He looks at cutting out the fluff that most frugal families have already eliminated. Seriously, though, picking up a side job usually won't net $60,000/yr as per the above example, at least not where I am. If I were to go back to work full-time, I'd make that, but I'd also have to subtract child care and school tuition expenses (a requirement for us if we don't homeschool), plus have to increase my transportation expenses and clothing expenses, meaning I'd certainly be able to put less than that $60,000 into my snowball. (Not picking on you here - seriously. But this is why I'm not completely sold on the DR approach for lower-middle class or lower families.) Quote Link to comment Share on other sites More sharing options...
TravelingChris Posted September 16, 2009 Share Posted September 16, 2009 WE aren't dong the Dave Ramsey plan but we are paying down debt. However, I am not sacrificing our current life to future plans. THat means we do pay for my son's college. That means we occasionally eat out and go to performances. I had a scary antibiotic resistant infection this year and while I am not spending money we don't have to have a little enjoyment, I am also not cutting out all enjoyment to pay down credit cards any faster. Quote Link to comment Share on other sites More sharing options...
sunflowerlady Posted September 16, 2009 Share Posted September 16, 2009 Wow, if I could work part time for 5,000 dollars per month, I would do it. I can't think of anything both legal and moral that would pay that in my area. Dh works full time and doesn't even make that. :001_huh: We are on the low end of the income scale, so DR plan would not work for us in exactly the way it may work for others, but there is some wisdom there we could apply, I am sure. Quote Link to comment Share on other sites More sharing options...
FairProspects Posted September 16, 2009 Share Posted September 16, 2009 Well, we were doing awesome on the DR plan and were on track to be debt free except for the massive student loans for grad school, within the 18-24 month period he cites as average, until the economy tanked and dh was forced to take huge hours cuts at work. On top of that we lost all of our side business income due to the economy and people cutting back. I'm all for increasing your income through second job/overtime, but we have taken some major hits on creative income streams this year through no fault of our own, so now it looks like it will take a bit longer to get all the debt paid off :(. DR seems to be great at microeconomics, but when something macro (like the economy tanking and jobs disappearing) happens, his advice doesn't seem to be so relevant. Dh actually looked for a pizza delivery 2nd job after his hours were cut this summer and even they weren't hiring. So much for the "if you want it bad enough you will be able do it" DR theory! Quote Link to comment Share on other sites More sharing options...
Moni Posted September 16, 2009 Share Posted September 16, 2009 (edited) Seriously, though, picking up a side job usually won't net $60,000/yr as per the above example, at least not where I am. Which is partially my point. If you have a [professional] at-home mom who could go earn $80,000 a year that's going to tie into this "average" we are talking about. And again, the presumption that DR's followers need to trim fluff and temporarily increase income. And that both have not been done yet. There are a lot of DR followers that fit into this category and make that 18 month come to an average. Again, that 'average' is of a certain sample. Also, consider that those who have already trimmed the expenditures and are not willing to increase income (or already have) are not going to be the folks "following" DR. They are already doing it. (cutting expenses, increasing income, or both) There would be no real benefit to paying for a seminar, book, or reporting their progress. So those folks (frugal homeschoolers) I wouldn't expect to be included in the stated 'average' this is why I'm not completely sold on the DR approach for lower-middle class or lower families Exactly my point. :-) :seeya: Edited September 16, 2009 by Moni Quote Link to comment Share on other sites More sharing options...
Moni Posted September 16, 2009 Share Posted September 16, 2009 THat means we do pay for my son's college. That means we occasionally eat out and go to performances. I. And this was my point. YOu would not be "following DR" and thus you wouldn't be in the cited 'average' figure either. :seeya: Quote Link to comment Share on other sites More sharing options...
.... Posted September 17, 2009 Share Posted September 17, 2009 Don't forget that the debt-payoff "snowballs" itself. So, you make a lot less progress in the beginning than you will later. Quote Link to comment Share on other sites More sharing options...
Paula in MS Posted September 17, 2009 Share Posted September 17, 2009 I believe many of these people who pay off debt quickly have 2 large car payments. When you sell two cars and pay cash for 2 clunkers, you might free up $800 a month just from this. A snowball will move pretty fast with $800 a month attached. In just 18 months, you could generate $14,400 with just this $800. Subtract $5,000 to finance the 2 "new" cars and you still have $10,000 to pay down debt. This does not include any other money added to the snowball. In this situation, you have cancelled out the car debt and paid off $10,000 in credit cards. This doesn't work; however, if you already drive inexpensive, paid-for cars. Paula Quote Link to comment Share on other sites More sharing options...
Quiver0f10 Posted September 17, 2009 Share Posted September 17, 2009 (edited) We are living as tight as we can, have no extras what so ever and are slowly paying down out debt. I would love to cut out fluff and still have a $1200( or whatever lol) snowball each month. It isn't happening here. I used to get very frustrated reading his books and listening to others talk about their large snowballs or how they paid of a gazillion dollars of debt in 4 months LOL. I am impatient to get the debt gone, but I know we are doing the best we can and unless I go back to work ( which we tried and it doesn't work) or DH get a second job, we will take @ 3 more years and we have been at this for over two now. It will happen eventually. Edited September 17, 2009 by Quiver0f10 Quote Link to comment Share on other sites More sharing options...
LibraryLover Posted September 17, 2009 Share Posted September 17, 2009 Wow, if I could work part time for 5,000 dollars per month, I would do it. I can't think of anything both legal and moral that would pay that in my area. . True! When I go over this in my mind, all I can come up with is Phone Sex. I might be really good at that, buit there are kids home during the day. Maybe I could do it from the barn? :D Quote Link to comment Share on other sites More sharing options...
.... Posted September 17, 2009 Share Posted September 17, 2009 We never got a second job for our snowball, but Dave says that the more debt you start off with, the faster your snowball can roll. So, like the other poster was saying...we had a $700 a month car payment and a $290 car payment (before Dave - of course). Once those were gone, it seemed like there was money everywhere. We completely stopped everything - dish network, eating take-out, preschool, etc - and that freed up some massive income also. Although, if you are already to that point anyway, then your snowball is just going to take longer (like my sister's situation). At that point, Dave says you have a couple of choices, either get a bigger shovel (add some income in from somewhere) or just be patient with your snowball. You can only cut out so much stuff. You still have to eat and have running water (or do you? :tongue_smilie:- if I could cut running water out of my budget, I could save an extra 30 bucks a month...hmmmm...). :D Quote Link to comment Share on other sites More sharing options...
Happy Posted September 17, 2009 Share Posted September 17, 2009 (edited) Dave also mentions on his show that a lot of people start his program at one income, but get a raise or a bonus as things progress. Dave always attributes this to God giving opportunity and blessing. We've had that happen in our lives. We made the decision to quit doing stupid with our money. A few months later, DH got a raise, then a few months later an incredible opportunity. Within two years we were completely out of debt.....just in time for 9/11 and the 'crash' of the aviation industry. Dh was unemployed for fifteen months. We lived frugally, but still racked up a few thousand in debt after we'd eaten up ALL of our savings. :glare: Doing his program is the best way I've found to handle money. We spend to make memories together (travel, mostly) and we still have Dish, but we have lots less debt right now, too. Our choice. If I had even a part-time job, we'd get out of debt a lot faster. (Two years ago, we had unexpected and large medical bills, plus a car wreck. And college expenses for one of our children. It skyrocketed our debt...and we are fighting that back down.)Choices, again. Edited September 17, 2009 by Happy Quote Link to comment Share on other sites More sharing options...
Tabrett Posted September 17, 2009 Share Posted September 17, 2009 I believe many of these people who pay off debt quickly have 2 large car payments. When you sell two cars and pay cash for 2 clunkers, you might free up $800 a month just from this. A snowball will move pretty fast with $800 a month attached. In just 18 months, you could generate $14,400 with just this $800. Subtract $5,000 to finance the 2 "new" cars and you still have $10,000 to pay down debt. This does not include any other money added to the snowball. In this situation, you have cancelled out the car debt and paid off $10,000 in credit cards. This doesn't work; however, if you already drive inexpensive, paid-for cars. Paula Just curious how much a person would spend to keep the "clunkers" running? Quote Link to comment Share on other sites More sharing options...
Moni Posted September 17, 2009 Share Posted September 17, 2009 Just curious how much a person would spend to keep the "clunkers" running? Depends on the clunker, what it needs, when, etc. If your car payment was $700 per month time 12 months That's $8,400 per year for another, what, one, twom three years? Somethwere down the line I imagine one breaks even ? :seeya: Quote Link to comment Share on other sites More sharing options...
cathmom Posted September 18, 2009 Author Share Posted September 18, 2009 Ok, I'm sorry but I have to do this - A $700 CAR PAYMENT?!?!?!?!? :lol: Quote Link to comment Share on other sites More sharing options...
Renee in NC Posted September 18, 2009 Share Posted September 18, 2009 Just curious how much a person would spend to keep the "clunkers" running? Very little, because a $5000 car is not really a clunker.;) Quote Link to comment Share on other sites More sharing options...
cathmom Posted September 18, 2009 Author Share Posted September 18, 2009 The other thing is, rising prices. They keep going up and our income does not. I taught two years ago at a charter school and most of my salary went to cover rising prices. When I had the baby and stopped, my dh began working guaranteed OT at his job on the weekends, so he has been working 7 days a week for a year now. So we could pay off a debt and then have to use that money to cover our health insurance or gas or groceries. Quote Link to comment Share on other sites More sharing options...
.... Posted September 18, 2009 Share Posted September 18, 2009 Yes, a $700 a month car payment. It was a $45,000 car. Quote Link to comment Share on other sites More sharing options...
.... Posted September 18, 2009 Share Posted September 18, 2009 As an explanation...husband made a huge amount of money when we were very young (late 20's). Obviously, we've become a lot wiser... :tongue_smilie: Quote Link to comment Share on other sites More sharing options...
cathmom Posted September 18, 2009 Author Share Posted September 18, 2009 As an explanation...husband made a huge amount of money when we were very young (late 20's). Obviously, we've become a lot wiser... :tongue_smilie: That's fine...I wasn't judging. Just never heard of a car payment that high. That's our mortgage LOL! Quote Link to comment Share on other sites More sharing options...
midwestbelle Posted September 18, 2009 Share Posted September 18, 2009 True! When I go over this in my mind, all I can come up with is Phone Sex. I might be really good at that, buit there are kids home during the day. Maybe I could do it from the barn? :D :lol: Quote Link to comment Share on other sites More sharing options...
KingM Posted September 18, 2009 Share Posted September 18, 2009 True! When I go over this in my mind, all I can come up with is Phone Sex. I might be really good at that, buit there are kids home during the day. Maybe I could do it from the barn? Maybe you could work the graveyard shift. ;) Quote Link to comment Share on other sites More sharing options...
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