When it comes to DR...

[Sara Noel]

What do you disagree with? Or what do you modify and why?

[Greebo]

We don't agree (anymore) that all debt is by definition bad. We agree more with Robert Kiyosaki that about 90% of debt is bad. We agree that debt adds risk, by all means, but there are risks and there are risks.

Example, if you can put down a down-payment on a rental property that pays for itself, and you've got the knowledge necessary to evaluate the return on the property, it's a very low risk prospect to buy a rental with an attached mortgage. Our rental rents for $1,350 a month total. The mortgage is $800. We put another $200 towards the HELOC we used to buy the property. Net cashflow, about $300/month. We keep a cash reserve to cover 4 months of the mortgage in a separate account. Thus, this debt *makes us money*. That's good debt, in our book.

Now we'd NEVER do what Dave did that drove him into bankruptcy, which was to take out short term notes to raise the money for a downpayment. THat's way too risky, IMO.

[Greebo]

Oh, and we modified our baby emergency fund somewhat - higher than $1000.

And we kept our cars. The payments weren't killing us, so we didnt' see the point of getting rid of cars we liked a lot to be out of debt faster. Not that we'll EVER buy new cars again...

[Katybird]

My main disagreement with the DR plan is only driving a beater if you can't afford to pay cash. I drive a distance to work through a rural area and I am never going to drive a beater and risk being left stranded on the side of the road. I will always have a decent car and probably a car payment but I am ok with that, we just budget for it and don't purchase more car than we can afford.

[Preston]

I still have a credit card which will be through my current bank. I pay this in full every two weeks in lieu of carrying cash. I am very strict with myself regarding budget and I track every expense via quicken.

I did not bother getting up to $1000 EF first off.. I got to $500 then I started depositing $100 a paycheck after that to get it up to the $1000 so I could star the debt snowball sooner.

If I get a CC within $1000 of being paid of I just pull from the EF and knock it out and spend the next paycheck refunding the EF. I also sometimes use the EF as a payday loan.

We got a 3% union raise this year and instead of putting the extra income toward the snowball I just started a 401k. My paychecks are the same.

I also took out a 30 year mortgage this year instead of a 15 but I have a plan to pay it off in 7-10 years. I did this to keep the payments lower while I work off the rest of the debt.

For those of you who are wondering why I would buy a house while in debt there are several reasons -- first being that a relative gave us $20000 to buy a house, plus we will get the $8000 tax credit, and our landlord tried to raise our rent by nearly $100/month.

My mortgage payment is less than my rent was, and we are a lot happier.

To each their own.

[larabelle]

I am doing everything to the letter except I kept one credit card. But I am very careful what I charge on it and I pay if off every two weeks.

[Michelle]

I use a CC for major purchases vs. cash. My EF is bigger than $1K as I don't think that's high enough. And when I paid off my CC debt, I paid off the balances with higher interest first.

[frugalfriend]

We have kept one credit card for a specific purpose and are very diligent with it so pay no fees or interest. Dave says if you play with snakes you're gonna get bitten, but we have used this one card to our advantage so far. We own a small business and recently have started using the cc to put specific business expenses on it and then pay it off before it is even due. We do this so we can rack up "points" for hotel stays when we visit family out of state. By doing this we can have free hotel stay the whole time we are there. Works for me!

[fixer]

I disagree with his stance on credit cards. It is very insulting to think someone lacks the discipline or free will to control spending. I also think his $1000 emergency fund has impoverished some people during this recession. While it does have it's good points, his plan is overly simple and one-size-fits all.

[craftypam]

I still have a credit card which will be through my current bank. I pay this in full every two weeks in lieu of carrying cash. I am very strict with myself regarding budget and I track every expense via quicken.

I did not bother getting up to $1000 EF first off.. I got to $500 then I started depositing $100 a paycheck after that to get it up to the $1000 so I could star the debt snowball sooner.

If I get a CC within $1000 of being paid of I just pull from the EF and knock it out and spend the next paycheck refunding the EF. I also sometimes use the EF as a payday loan.

We got a 3% union raise this year and instead of putting the extra income toward the snowball I just started a 401k. My paychecks are the same.

I also took out a 30 year mortgage this year instead of a 15 but I have a plan to pay it off in 7-10 years. I did this to keep the payments lower while I work off the rest of the debt.

For those of you who are wondering why I would buy a house while in debt there are several reasons -- first being that a relative gave us $20000 to buy a house, plus we will get the $8000 tax credit, and our landlord tried to raise our rent by nearly $100/month.

My mortgage payment is less than my rent was, and we are a lot happier.

To each their own.

I have always been good at budgeting money and only came to this site to learn even more. I have watched your posts and I think you are doing a great job. I also took out a 30 year mortgage because dh worked in a seasonal job. I paid the payment in winter months and paid alot more the rest of the year. I have always been a person who hates debt and when I have it I cannot wait to pay it off.

[Preston]

I also don't agree with his politics and I really wish he would stick to financial discussion instead of diving into the political garbage. We have plenty of other venues that are giving enough commentary on it.

[McD]

I don't think the 1K emergency fund is nearly enough. One emergency can easily wipe it out and cause someone to lose hope/focus pretty quick.

We also keep credit cards for our online purchases as well as our big expenses. We earn rewards points and so far, it works for us.

[xtena]

I was never comfortable with less than 5K in the EF. I also have a credit card through my credit union. I will NOT use a debit card for online purchases I haven't paid a dime of interest on my credit card in several years. We also bought a new car this year :paid for with cash, and it was a tremendous bargain. I know it lost value as soon as we drove off the lot and I would have settled for a late model used car but DH wanted new and we are happy with our decision.

[missmanny]

I to had a modified DR plan that worked for me.

1. I had a lower EF then DR suggested. I put only $500 aside for an emergency and then started to attack my debt by putting every spare dollar I had towards debt repayment. (while I was doing my debt snowball I did add another $100 every month to the EF so that it woud keep growing) I figured that having $500 in the bank for an emergency was much improved on what I had ever had before - nothing. so I was comfortable with that, by the time I had finished my snowball I had $1500 in the EF.

2. I sincerely agree with DR's advice on Debt, I see the difference that being Debt free has made to my life. I now save over 50% of my income, and previously about 90% of that money wentto paying my debts. I will never gain borrow for any consumer products again...

that being said...

• I have kept one of my credit cards, it hs a small limit and I use it if I need to pay for something online or book a hotel room etc. I pay it off religiously - usually as soon as I have made the transaction. I don't pay any interest on this card for up to 55 days. I know I could change to a VISA debit, I don't know why I haven't, it is mostly lazyness. If I ever run that sucker up again and have to go through the pain of paying it back aain then I will definately cancel it next time, but at the moment I am trusting myself to be good.
  
• there is no way that we wil be able to get a home paid for in cash. I live in Autralia and housing here costs 9x the average income (no drops with the GFC). luckily DSO and I earn above average wages, we will definately strive to get to 20% down but even that will take us a good two years to save. If we ever want to have children our loan will have to be over 30 years (with an aim to pay it off sooner).

My aim is to never have consumer debt again - I hate it, I couldn't sleep at night while had it and now that it is gone I am so much more free.

[Palooka]

My main disagreement with the DR plan is only driving a beater if you can't afford to pay cash. I drive a distance to work through a rural area and I am never going to drive a beater and risk being left stranded on the side of the road. I will always have a decent car and probably a car payment but I am ok with that, we just budget for it and don't purchase more car than we can afford.

Yeah this!

I disagree with his stance on credit cards. It is very insulting to think someone lacks the discipline or free will to control spending. I also think his $1000 emergency fund has impoverished some people during this recession. While it does have it's good points, his plan is overly simple and one-size-fits all.

Agree.


Plus the tithing thing....*runs away*