Spin-off on Dave Ramsey's 25% mtg rule...

[rafiki]

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[Guest jerryklarke]

Hello, my husband is going to need a new work car cause his about shot and he drives 50 miles a day to work. But we already have a car loan on my vehicle. It is our only debt of 14000 and my husband makes 45-50k depending on over time and work load. Would it be hard to get a small loan to get a car? And what it is a good debt to income ratio when getting another car loan?

[Scarlett]

Hello, my husband is going to need a new work car cause his about shot and he drives 50 miles a day to work. But we already have a car loan on my vehicle. It is our only debt of 14000 and my husband makes 45-50k depending on over time and work load. Would it be hard to get a small loan to get a car? And what it is a good debt to income ratio when getting another car loan?

 

If I were in your situation, I would not get another car loan. But my goal is to be debt free. That is why I am driving a 14 year old car. Maybe think outside of 'normal' for a bit....the car that you owe 14K on is probably a newer vehicle...so let your dh drive it and you take the one that is older.

[Rhonda in TX]

I haven't yet read all 3 pages of responses but as I was reading through some of this discussion I thought of a key word - LOCATION.

 

 

Say what you will about Houston, but it is incredibly affordable.

[Tracey in TX]

What about people who can't afford housing at that percentage?

 

I guess he doesn't really address that, other than to say, "Get a job," but I was wondering. Sometimes it seems like there's a point below which one can hardly live responsibly because there's not enough that can be done w/ the money available to *be* responsible.

 

Not that I'm arguing that, just that...sometimes I wonder how the financial responsibility topics hit those who are scraping by. I know these are issues that need to be addressed & that the advice is not really aimed at those who fall into the below-mid-class status, but still...I wonder...

 

I was raised in a family so poor & so foreign to any of these concepts that I feel pretty...inclined to understand & apply them? At the same time, we're not exactly in that season w/ dh in sch. But then...is there an allowance for seasons like that?

 

And I think about my mom as a single parent. I'm sure she broke all the financial "rules" (that she didn't know about), but she kind-of had to, to survive, kwim?

 

Anyway, just musing.

Aubrey,

 

We've never read DR, but that was what DH's dad taught him growing up. As a result we live by this rule. Certain places in the USA are more conducive for following a 25% housing guideline, such as DFW. One can rent a dump in undesirable section of town or multi-million dollar mansion. Most of us live somewhere inbetween the two. The homes are certainly available. The east and west coasts homes are SO much more expensive and would be amazed if majority of people could follow the 25% rule.

 

We have friends whose 'rule' is to spend ONE YEAR'S income on their home. ie: make $100,000 so their home is same. They truly live below their means.

[Wundermom]

You guys should really listen to DR's radio program. In my area it plays from 5-8 every night, but if you can't get it there you can listen to his podcast for free. Also, check out http://www.livinglikenooneelse.com

 

I will admit that at this stage of our life we are not scraping pennies. However, many many people he counsels are. Even in very low income families who are behind on bills, there are steps to take to get yourself up and out of the hole. Just having some focus and a plan and then working it without worrying about it (too much ;)) can do wonders for a person.

 

The ease of obtaining credit has really changed this generation. My mom, a single mother who received no help from our father, graduated college owing a friend $300 and a student loan of about $1500 which she had forgiven because she taught in a poverty school. Those were a tough 4 years for us, but we always ate, always had lights and heat, and never one time even had a utility shut off. Of course my mom apparently was widely regarded as possessing some sort of secret power to stretch a dollar. :) My best friend's mom told me not long ago that every really one admired my mom as she was raising us alone with so very little money. We did without things. I remember clearly her saying, 'no, we can't go visit our friends (8 miles from town) because I have just enough gas to get back and forth to work/school next week.' I imagine these days many people would have just charged the gas.

 

And I'm not saying that is the case with you guys who are struggling. Sometimes it is not anyone's fault...things just get tough. However, I do believe that a systematic approach to handling and finding resources can help.

 

Thanks for posting that link to that site! I just joined the forum and am excited about getting advice there. Cool!!!

[LisaKinVA]

There were some things I've read on the site, books, etc. that truly depress me. We've been so far out of the housing game in No. VA for the past 6-7 years, it's just sad.

 

We've been eeking by in my parent's partially-finished basement. If we don't transfer to Italy, we have another 18 months here -- 900 sq. ft. of space, one bathroom for 7 people. It's tight -- and right now, even with the lights off, I'm still sweating. Nothing cozy about it.

 

We will be doing a 30-year mortgage on our home -- but since we're doing a lot of the work ourselves (about 30%), we're also saving a lot of money on the down-payment usually required.

 

We've made tons of sacrifices over the past 7 years -- we don't have much more we can give up -- and getting 2nd jobs are out. I've been working 2 jobs now for nearly 2 years. What was sacrificed for that 2nd job was my children, and my relationship with my husband -- plus numerous health issues from being overly tired and under a lot of stress. My 2nd job dissappears in August -- and it can't happen fast enough.

 

There are just a few things I am no longer willing to sacrifice -- time with my family is a major one. We can't get that time back. And, it is a HUGE regret for both my dh and me. Frankly, the 2nd job wasn't worth the money.

 

It may take longer to reach financial goals, it may mean paying "more" for a home over time than if we worked 2nd jobs -- but it isn't worth sacrificing my marriage, our relationships with our children, the education of our children, or a decent home we can all live in.

 

Housing in No.VA isn't reasonable. If we were living in Houston, a 15yr. mortgage and 25% of income would be an easy "given." Here, it's not,

[Kay in Cal]

Our rent (no, we can't afford to own) is about 40% of our income. We live on cash (no credit cards at all), but it's hand to mouth, we don't have anything left over for savings. Nada. Zip. Zilch.

 

In some areas of the country our income would probably go farther, but here we are definately lower middle class. Prices are high. I don't make much in ministry, and I'm not willing to give up my call to make more money. My dh is a SAHD, but also permanently disabled now. Sorry, Mr. Ramsey, I'm never going to be able to live according to your "rules"!

 

I seem to remember a comment once about clearing purchases of more than $300 with your spouse, and I had to laugh--I don't think we ever MAKE purchases of more than that! If I need to buy new underwear I call my dh and we check the bank account and usually decide the elastic can hold out a little longer... lol!

 

Generally I skip those thread because it can be very disenheartening to read about people who have more money than I ever will talk about being "frugal". Remember the income poll? I could hardly believe the number of people who make more than $100,000 a year--a third of the board! http://www.welltrainedmind.com/forums/showthread.php?t=19581&highlight=income+poll

 

I know these threads aren't intended to make the poor among us feel bad, but it's hard... so I just smile and move on...

[Renee in NC]

OH MY! 2/3 of the board lives on more than $50K?!?!?!?!

 

Now I *know* I am poor! LOL