Any Dave Ramsey fans in here or financial gurus? Need advice..

CobraLucci

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Hello all, needing a bit of financial advice. following Ramseys baby steps, I saved an emergency fund of 12 months and payed off all my debt except my home. Owe 179k, worth about 225k according to my realtor friend. Not yet contributing to any IRAs or retirement accounts. Im 34, not married, no kids. Currently giving myself a 700 dollar a week salary, I am an auto technician at a local auto dealer and make flat rate Average about 1200 take home. Putting 500 away as an extra payment towards my principal of the home. My question is should I sell my 03 Cobra that is payed off to pay down my principal lower, or should I keep it and continue doing whay I am doing. Thanks in advanced

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Blk04L

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1. Do you have another car?
2. Seems like you have a good plan already in place.
3. IMO if you set on selling it, I would put it towards retirement funds.

JMO, and not a guru or Ramsey fan.
 

DSG2003Mach1

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if you enjoy the car I wouldn't sell it.

My home being my only debt wouldn't be a big concern for me, you can still make an extra payment or two per year towards the principle only. Also, how does having the mortgage factor into your taxes? If the mortgage interest is allowing you to take a bigger deductible that's something to consider.

Lastly, with nothing in retirement yet the time it would take to pay off the house is going to be a lot of missed opportunity on compounding interest in an investment account.

I just dont buy the whole thing about all debt being bad.
 

RedVenom48

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Hello all, needing a bit of financial advice. following Ramseys baby steps, I saved an emergency fund of 12 months and payed off all my debt except my home. Owe 179k, worth about 225k according to my realtor friend. Not yet contributing to any IRAs or retirement accounts. Im 34, not married, no kids. Currently giving myself a 700 dollar a week salary, I am an auto technician at a local auto dealer and make flat rate Average about 1200 take home. Putting 500 away as an extra payment towards my principal of the home. My question is should I sell my 03 Cobra that is payed off to pay down my principal lower, or should I keep it and continue doing whay I am doing. Thanks in advanced

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Auto tech here as well. Is that 1200 take home per week or per bi-monthly pay period?

If that Cobra is paid for KEEP IT. Part of Ramsey's strategy is to get out of debt and get your home paid for. Well, you have your ride paid off, no extra expenditures like a family or CC debt. You have 1 full year in savings as an emergency fund. Selling the Cobra only puts a hole in your budget inthe future. Im assuming you enjoy the car and are a guy that wants a fast ride in your life.

Brother, you are in a better spot than probably 80% of the guys on here.
 

Zemedici

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God i abhor these threads, asking strangers on the internet how you should financially plan your life.....inb4 all the ‘OMG YOU DONT HAVE 25 YEARS OF BILLS SAVED?! YOURE A WASTE’ posters come in.....

You seem to be able to pay your bills fine. Keep doing what you’re doing. I would NOT sell a paid off toy, unless it was an emergency. You’d be surprised what these little glyphs of happiness can do for ones mental state.

Keep it.

Keep doing what you’re doing.

If it ain’t broke don’t fix it.
 

earico

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Sounds like you are on top of things based on the info given. Keep it. You have to treat yourself for your hard work or life is just boring.

What's the interest rate on your mortgage? If it's low enough it will make more sense to invest the $500 a month rather than paying the note down.
 

CobraLucci

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Auto tech here as well. Is that 1200 take home per week or per bi-monthly pay period?

If that Cobra is paid for KEEP IT. Part of Ramsey's strategy is to get out of debt and get your home paid for. Well, you have your ride paid off, no extra expenditures like a family or CC debt. You have 1 full year in savings as an emergency fund. Selling the Cobra only puts a hole in your budget inthe future. Im assuming you enjoy the car and are a guy that wants a fast ride in your life.

Brother, you are in a better spot than probably 80% of the guys on here.
thanks for the reply, that is about 1200 a week take home. As a tech I can make 800 a week take home as much as 1800 a week take home. But usually average 1200 a week take home. Definately love my car and dont want to sell it. But I see what you mean that selling it may hurt my budget in the future.

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oldstv

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Missing some info. What are you doing with the excess money, sometimes an object like a hobby car can save you money in the long run.
If your company does a match you are loosing money every paycheck. Actually, you are loosing money every week that you don't contribute. You might not need to sell the car but rather redirect some of the money that you are spending someplace else but defiantly get into a retirement fund!
 

CobraLucci

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Sounds like you are on top of things based on the info given. Keep it. You have to treat yourself for your hard work or life is just boring.

What's the interest rate on your mortgage? If it's low enough it will make more sense to invest the $500 a month rather than paying the note down.
i have a fixed 3.75 that i pay a PMI on for the life of the mtge. FHA loan

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CobraLucci

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Missing some info. What are you doing with the excess money, sometimes an object like a hobby car can save you money in the long run.
If your company does a match you are loosing money every paycheck. Actually, you are loosing money every week that you don't contribute. You might not need to sell the car but rather redirect some of the money that you are spending someplace else but defiantly get into a retirement fund!
currently not investing any of the 500 a week im saving towards the principal of the house. Whatever I have left over from my 700 a week salary I am giving myself I out towards the principle. Im looking into a roth ira

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MG0h3

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i have a fixed 3.75 that i pay a PMI on for the life of the mtge. FHA loan

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WTH why you paying PMI for life?

So having 12 months of bills sitting in the bank is a waste and really archaic.

You could put the vast majority of that towards the principal on your home, be saving XYZ a month in interest, and access the money via a home equity loan in an emergency. Ya ya it's not immediate so keep some cash on hand.

You really should get a retirement account set up, like yesterday. I'd do the max ROTH contribution for 2018 (you still have time) and then continue for the max this year.

Don't sell the car.
 

MG0h3

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Oh and look at doing a refi to get rid of PMI. I know they changed the rules from the 20% LTV to the first five years PLUS 20% LTV.
 

72MachOne99GT

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Definitely look to refinance when you can break the 20% mark...maybe even look at refinancing to a shorter term if the % difference is worth it.

Other than that, find some retirement advice, even if minimal.

Finally, either stay single, or find a woman who has a career she would return to after the birth of a child, planned or unplanned.

Whoever said some of these strategies are for people with zero self-control is right...

Edit: And don’t sell the car. Consider it as part of your rainy day fund if it makes you feel better.
 

earico

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i have a fixed 3.75 that i pay a PMI on for the life of the mtge. FHA loan

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As others said refi that as soon as you are able to so you can drop the PMI....that is if you plan to keep it long enough to even out the refi closing costs. Do the math to see how long it would take at the reduced payment to get those costs back. If the time line is shorter than your planned stay in that home then pull the trigger. If it's not then don't refi.

If your mortgage note percentage is less than the investment return percentage that you could make then paying off the note at a rapid pace doesn't make sense. Instead I'd pay 1 extra payment a year and invest the rest. The 1 extra payment will reduce a 30 year term to about 22 years if I recall correctly.
 

Dr. Gonzo

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If your realtor is right about your house's appraised value, you're are the 80% threshold for PMI. I'd look hard into refinancing out of your current mortgage. The amount of money you'd save on PMI can be thrown into IRA's, making you money for retirement. I'd be more concerned about starting to save for retirement that paying off your house at your age. A house is (should be) an appreciating asset, so paying a mortgage isn't a big deal as long as you can afford it.

Don't sell the Cobra if it's paid off. Like others have said, you need some enjoyments in life.
 

wundrbird

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Hello all, needing a bit of financial advice. following Ramseys baby steps, I saved an emergency fund of 12 months and payed off all my debt except my home. Owe 179k, worth about 225k according to my realtor friend. Not yet contributing to any IRAs or retirement accounts. Im 34, not married, no kids. Currently giving myself a 700 dollar a week salary, I am an auto technician at a local auto dealer and make flat rate Average about 1200 take home. Putting 500 away as an extra payment towards my principal of the home. My question is should I sell my 03 Cobra that is payed off to pay down my principal lower, or should I keep it and continue doing whay I am doing. Thanks in advanced.

No offense intended, but you're not following Ramsey's baby steps. If you actually follow them, you'll be further ahead in a shorter amount of time.

Step 1: $1000 emergency fund DONE
Step 2: Debt snowball DONE (since you only owe on your house)
Step 3: Save 3-6 months expenses DONE, with at least 6 months extra
Step 4: Save 15% into a retirement account ***GET STARTED***
Step 5: Save for child's college. ***FUHGEDABOUDIT***
Step 6: Pay off house early

Keep the car, especially if it's your only one. Heck, keep it even if it's a second car. You don't owe a dime on it, and I know it's a blast to drive.

Start putting 15% into retirement immediately. If you don't have anything at work, max out a Roth each year (making up for 2018!) and check around for good mutual funds for the remainder of the 15%. The ones I have through Vanguard have earned over 9% annually for the lives of each.

Take six months of expenses from step 3 and refi your house on a 15-year fixed. That extra money is being wasted sitting in a low interest bearing account. That'll save you the PMI charge, a buttload of interest, and it probably won't affect your monthly payments since you're already putting more towards the principal each month.

By the time you're 55 you'll probably have close to $675,000 in a retirement account, and that was a simple interest calculator, not taking into account pay raises through the years and an increase in $$ to the account each pay period. Add that to the value of your paid-off house, and you'll technically be a millionaire.

Either way, you're killing it. Congrats! Keep the beast!
 

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