I think Dave Ramsey’s advice is basically sound. Some things that really bug me though. People get on and scream they are debt free, and oh, by the way, they still have a mortgage. Whereas the person with a car loan isn’t? I “hear” that the local programs all have a religious overtone. I suspect this is helpful for many, but I don’t really need the Christian messaging for my personal financing and it would totally turn off the kids.
Dave Ramsey is Evangelical Christian, so that is the way he is, and that is what Evangelicals do.
I actually do have the Total Money Makeover on CDs because they came free with some of the other stuff I ordered. However I understand the principles from the book and radio program/web site, so haven’t listened to them.
Once someone has paid off debt, the next step is paying off mortgage. Some do it all and pay it off before doing their debt free scream. I think they are careful to have the examples where people truly paid off their debt, and not with the ‘shell game’ of taking out a home equity line of credit to clear up other personal debts.
The reason he is OK with a mortgage (although he insists on 15 year, and only 25% of income for mortgage payments), I believe, is because for most it would be too hard to get into a home w/o a mortgage - unnecessary delay. But he does encourage the ‘baby steps’ so you pay off your debt before you purchase a home.
He really likes one to pay off a home as quick as possible, but we have a 2.5% interest that was for the last 10 years of our mortgage, and the only way we could pay it off would be to stop 401(k) and then lose the employer matching, which doesn’t make sense.
IMO, he has a plan that people can learn from, and adapt as it fits their circumstances. Dave only likes debit cards - he often says having credit cards is like playing with snakes. He just has such a distaste from what he went through with his bankruptcy and creditors calling his home and saying dumb things to Sharon Ramsey.
Cars depreciate, but for most, a home can appreciate. He does not go for manufactured homes due to them depreciating just like cars do. He recently said a new car with depreciate 60% of its value in 4 years.
He has his show on pod cast and IHeart Radio.
I would recommend the two books “Total Money Makeover” and “Financial Peace Revisited” - I got the first for $1 at a local resale book opportunity; I ordered the other. My copies are both 2003 publications - Dave often says he isn’t talking about newer concepts now. One thing he often says is about giving the same advice as your grandmother, but keeping his teeth in.The first book includes some budgeting forms; the second book has new chapters on marriage, singles, kids and families. On Amazon can probably see what the chapters are in these two books. Once someone looks at the books, they may be interested in listening to some of the broadcasts.
One of the little radio plugs is a woman saying “if I knew at 22 what I know now…” - I think that is the approach with children to encourage them to learn about personal money management.
Young adults that have worked hard in school and career soon can realize that it is very hard to out-earn bad money management/bad spending habits or big school loans…Some people call in and they just don’t have enough income - Dave’s suggestions are pretty general, but really true - getting a second job for example. Having enough term life insurance. How to invest money to have a rate of return suitable.
One thing new graduates do almost right away after landing a job is buying a new car with debt. That is a mistake, but unless a parent explains why…
They just put up a free, new personal money management tool called EveryDollar Budget that may appeal to the computer age/instant access/smartphone user.
I believe our two kids realize being smart with their money will have them living with less stress and more financial resources. My parents left my four siblings and me a fairly nice estate (and I hope to have the same for my kids), considering dad had to sell his business earlier than planned due to outside circumstances. He didn’t listen to the bankers and built some very nice apartments that had great cash flow. He also did other things. Other grandparents have been able to live much longer and have different grandparent influences - the importance of family and family gatherings.
I haven’t looked at his stuff in years, correct me if I’m wrong, the steps are
1 - get current on bills (hardest step for many people)
2 - save 1,000 in emergency money (in case something small comes up like car repairs)
3 - pay off outstanding bills except mortgage (snowballing by listing accounts smallest to largest, make minimums of everything except the smallest and when that is paid off take that payment and apply it to the next smallest)
4 - save 10% in a retirement account
5 - save for kids college education
6 - pay off mortgage
7 - live like no one else
I think 3a may be saving 6 - 12 month of expenses, I know it’s in there, I don’t remember what number.
Personally - I’m on 6. But you can be doing 4, 5 & 6 at the same time. One thing hubby and I don’t see eye to eye, but he goes along anyway - I’m a believer in saving in our 401k and he thinks the miniscule amount of tax avoidance isn’t worth it. We own a small business and my thought is - should we get sued or something horrible happens - no one can take the 401k, but we could be wiped out personally. And we’d at least have that. However, my brains works more on doomsday scenarios and he’s a believer that things always work out.
Agree with eyeamom’s list, and agree that while getting out of debt is definitely an ideal goal, the religious tone of Dave ramsey’s show was a turnoff for me.
As we approach DS’s wedding, I am missing my parents more. Wish they were here to celebrate with us…
Jym, a friend was touched that her nephew included a picture of the deceased uncle at the reception and mentioned him among the toasts. Would that help? It meant a lot to that family.
And be sure to have someone mention them in either the ceremony or the toast. My best friend died weeks before my wedding and I was very touched that the priest brought it up during the ceremony. I also enjoy toasts when people remember those before them.
I need help from this wonderful community about estate documents! I’m getting a huge amount of family pressure and hostility. Just some background. My parents both have dementia. It is mild in that they can live independently in their CCRC. Their executive functioning is terrible, but the world at the CCRC is small enough that they can manage quite well. I check up on they once or twice a week. I pay the bills and do the taxes. I don’t believe they are always of sound mind to make decisions and they both have a diagnosis of Alzheimer’s dementia in their medical records. Dad is taking both Namenda and Aricept. Mom is taking neither as it’s best to trust her with no medications due to compliance.
I am the primary financial and health power of attorney. My only other sibling, my brother, was secondary and he died suddenly 6 months ago. My plan was to add my niece, his oldest daughter, as a secondary power of attorney. However, I have been given the advice that since they are not of sound mind, I cannot change the documents or draw up new ones. Presently, with the way the will is drawn up, I will inherit 50% of the estate and my brother’s heirs, my niece and nephew will each inherit 25%.
My parents have a fairly large estate. I am now accused by SIL of making financial decisions without consulting my niece (in fact she demanded I give her a quarterly spreadsheet of their finances and yearly “audited” tax forms). I have given my niece the spreadsheet at the beginning of the year, I just didn’t give it to SIL as I’m not sure it’s her business. Her daughter can decide to share it if she would like. My niece and I communicate regularly and I have been open and transparent about Mom and Dad’s finances and have given her the contact number for their 2 money managers. SIL is getting a bit hostile and I need advice. She live on the west coast, my and my parents are on the east coast. She even accused me of giving my parents as wards of the state if I died. Of course, I’m the one who goes to the doctors with them and celebrates holidays, birthdays and makes sure their need and wants are met.
But, I do need some way to assure that if I die, there is a back-up plan. Any ideas or experience of how to set one up for parents with dementia? Thanks so much.
Close @eyemamom
Totally stop using credit cards.
Making sure to have lights/rent/food taken care of first. Monthly budget plan, and follow (cash basis, or using debit card, using envelope system, spreadsheet, whatever works)
If all debts are current, pay minimums and do the following:
1 Emergency Fund of $1000. When finished, next step
2 Start the debt snowball - list debts smallest to largest, and pay off in that order. When finished, next step
3 Fully funded emergency fund (3 - 6 months of expenses).
if you don’t own a home yet, don’t buy until after finishing step 3. Save up at least 20% for down payment to avoid PMI.
4 invest 15% of your income into retirement
5 Save for College
6 Pay off home mortgage
Sometimes pause with things. 4/5/6 can be situational (if student going to college and need to cash flow) - of course he doesn’t want you to take student loans. Some are working on 4/5/6 together.
If there is ‘old debt’, that would be 2b. He recommends getting caught up on current debts and have them paid off. When building up more cash, contacting old debtors one at a time - offer a settlement, etc.
Wow @GTalum that is an awful situation. But one that I imagine an estate attorney could handle pretty easily. It’s not an unheard of situation and yes you want to make sure if something happens to you that there is a good person to step in and do what’s right for your parents.
You might even see if the CCRC has any resources for you. My folks are getting ready to move into one and they have been very helpful with resources and referrals.
GTalum,
So sorry you are going through all that. As the financial POA you can manage their finances and are not obligated to share the information with anyone. If you choose to share with your niece, that is nice of you, but if your late brother’s wife is being hostile, you do not need to respond to any of that. And she has no right to any of that information. I do agree that you should not try to change the documents that your parents made up, as if they are not competent to participate in the decision, you set yourself up for being accused of “undue influence”. In our case, my husband was the secondary POA if for any reason I could not do it, and I had been the successor trustee of the estate’s trust, but I believe it was changed to my being the co-trustee at my dad’s request ant the attorney’s recommendation. I would suggest you talk to an estate attorney, if you have one, to make plans for their care and financial management should you be unable to perform these duties, and also executor/executrix of the estate. Good luck.
GTalum,
I agree that it’s time to see a lawyer, both for advice for a successor POA and about how to handle your sister-in-law. I am so sorry–it really s*cks to have to deal with this kind of hostility on top of the burdens of care of your parents and the loss of your brother. Of course your sister-in-law must be hurting to have lost her husband so suddenly, but that doesn’t give her the right to dump this garbage on you.
(((((hugs)))))!
For those who, in the past, were concerned about parents having difficulty putting on and taking off compression stockings, there are some products here that may (or may not) be useful. I have dealt with this company with no problems at all.
http://blog.brightlifedirect.com/help-i-cant-get-these-compression-socks-on/885/
I have gotten advice from the estate attorney who drew up my parent’s documents who advised I do not change the documents and this advice has been seconded by the investment adviser who has met with my parents and could see that they are not capable of making such decisions. Of course, SIL is now saying I am getting bad advice. I am now asking my estate attorney if there is a change I can make to my estate documents to assure a smooth line of succession for decision making if something happens to me.
Thanks for reassuring me that I am not obligated to share financial information to anyone else. SIL wants to be involved and seems to be going about it the wrong way.
GTalum,
Your SIL has no right, NONE, to opine about what advice you are getting. She is the one giving bad advice. My advice-- ignore it.
Your sister-in-law doesn’t have the right to the financial information, but I do suggest consulting her and your niece about the line of succession if something happens to you. I assume they’ll be involved in that unlikely event, so you all should discuss what should happen.
Does my sister in law need to be involved? If I die, there are 4 beneficiaries, my two kids and her two kids, all adults. DH is here in the area and helps with my parents and is involved in their lives. I trust him and my niece to look after their well-being.
No, you do not need to involve or include your SIL in the decision-making. You have the legal authority to make these decisions and she sounds a bit inappropriate and intrusive. Whatever you decide, I would strongly advise against making any 2 people co-executors or co-POA’s. That requires BOTH of them to sign off on EVERY decision and its a nightmare, especially if hey don’t agree on something. Sounds like you can and probably should make your DH the POA, if he is willing, and then a successor one like your kids. You may need them to sign some doument that the attorney draws up. I cant quite recall.
Also, the issue of who has POA and is healthcare proxy for your parents is separate from who is a beneficiary or who is executor/executrix of the estate when they pass away. Keep it simple. If you/your DH are local, keep it in your family.
You can give each poa independent authority, but even so, that can be tricky unless they’re in agreement. You do need legal guidance.
Agree SIL has no legal right to info, especially as your parents are living. This is their arrangement with you.
And co-executors can be allowed, by agreement in the will, to make independent decisions. The problem here, is that if anything happens to you, there are no remaining residuary executors or trustees. AFAIK, you can’t appoint or assign additional executors for your parents’ estates…it would likely be handled by statute in your jurisdiction. I’m not sure how that would work for POA or heath care proxy prior to death, but I suspect that if they are not competent (by legal definitions), they can no longer appoint or designate persons to handle their affairs…you might need to have a guardian or conservator appointed to handle their affairs.