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The Truth About Car Payments
I'll always have a car payment. You might have said that yourself or heard it from others—with a defeated, woe-is-me tone of voice. So what's the deal? Are car payments really just a way of life?
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The Truth About Car Payments  I'll always have a car payment. You've probably heard that comment before, right? You might have even said it yourself—with a defeated, woe-is-me tone of voice. So what's the deal? Are car payments really just a way of life? Well, that's the normal way of thinking. But, as Dave always says: When it comes to money, normal is broke. You want to be weird, and weird people don't have car payments. So how, exactly, do you live without a car payment? Here's the deal. Recent statistics show that one-third of car buyers sign up for a six-year loan at an average interest rate of 9.6%. Among these buyers, the average price of the car is just over $26,000. This means that one-third of the cars you see on the road are dragging a $475 payment behind them. The car dealer won't tell you that your awesome new car loses about 25% of its value the instant you drive it off the lot. After four years, your car has lost about 70% of its value! What does that mean? After six years, you've paid almost $33,000 for a $26,000 car, which is now worth maybe $6,000. Not a good deal. Here's a new plan. What if you bought a cheap $2,000 car just to get around for 10 months? Then you take that $475—the average car payment—save it every month, and pay for a new car (with cash!), instead of giving it to the bank. After 10 months of doing that, you'll have $4,750 to use for that new ride. Add that to the $1,500–2,000 you can get for your old beater, and you have well over $6,000. That's a major upgrade in car in just 10 months—without owing the bank a dime! But the fun doesn't end there. If you keep consistently putting the same amount of money away, 10 months later you would have another $4,750 to put toward a car. You could probably sell that $6,000 vehicle for about the same price you paid 10 months before, meaning you now have $11,000 to pay for a car, just 20 months after this whole process started. The bottom line with this exercise is simply this—what could you do with that $475 if you weren't paying for the car every month? Anything you wanted! Think about it this way: If you were to invest that $475 (remember, this is the average car payment in the U.S.) into a good mutual fund with a 12% rate of return, you would have over $100,000 in 10 years! At 20 years, you would have made $470,000. And at 30 years? That mutual fund would be worth $1.6 million! The numbers will make your head spin, but it really just comes down to simple math. The less money you are spending on your car every month, the more money you have to put into other more important things: your kids' college fund, your retirement, and paying off any other debt you might have. If you'll just follow this simple plan, your life could be dramatically different 10 years from now. You can live without a car payment! Does this get you fired up? If so, check out Financial Peace University! Dave will teach you how to get on a plan for getting out of debt, saving for retirement, college, and real estate ... all debt free! Getting rid of car payments is just the beginning of changing your life forever, so get started today! Back to Top
The Road To Millions: Meet The Hudsons
 10-year-old Allen went through some tough times with his family, but now, thanks to his parents’ sacrifice and dedication, he has an adopted sister, 15-year-old Darian.
Poor money choices and even cancer haven't kept this family from becoming millionaires. The only constant in life is change—sometimes for the better, sometimes not. But every change is an opportunity to learn. Several life-changing events in the last seven years have given the Hudson family opportunities to learn. Their story begins like many others. They were in debt after years of supporting a lifestyle they couldn't afford. They were keeping up with the Joneses, and it didn't matter that they didn't have the money for it. Credit was easy to get, and they always assumed they'd make more money the next year and be able to pay off their debt. How We Used to Spend
"It became a tiresome cycle of debt," Margaret Hudson said. "We owed everyone." The Hudsons had more than $10,000 in debt and owed the IRS more than $5,000. They were also driving a "fleeced" car to the tune of $600 a month. "We had no savings, and I looked forward to cashing out the equity in our home to pay off the bills," she said. Then, just before her 30th birthday, Margaret's husband, Boyce, told her they were losing their home. Even though she knew they were barely afloat, she had no idea things had gotten that bad. So, with no other choice, the family of three sold their home and moved into an apartment. It was painful and embarrassing, but Margaret said it was also eye-opening. How We Save Now
"We re-evaluated our lives at that point," Margaret said. "We knew we had some big changes to make."
The Hudsons found Dave on the radio and read Dave's best-selling book The Total Money Makeover. With the pain of losing their home and Dave's guidance as motivation, they committed to living below their means. First, they got rid of the expensive car (and the payment) and drove used cars. With the extra money, they began paying off the tax bill and credit card debt. With a $120,000 income, they were able to move quickly. Next, they began saving, and just two years after they were forced out of their home, they moved into a new home—one they could afford. Now, four years later, they have more than $100,000 equity in their home and over $70,000 in savings. That would be impressive enough, but during that time, Boyce was diagnosed with and overcame cancer. They also adopted their 15-year-old daughter, Darian, to join their 10-year-old son, Allen. Turning What They Have Into Millions
Recently, Boyce suggested meeting with a Dave Ramsey investment Endorsed Local Provider (ELP) to see if the family could do more to meet their savings goals. Margaret was skeptical. "Why do I need to go to a financial planner when I already know how to save money?" she asked. "I would never have guessed that an hour discussing my finances would have been so life-changing!" They visited with Brandt Spesshardt, ELP in Raleigh, NC, who started out by addressing Margaret's fears about losing money and how that fear was keeping them from reaching their goals. "When you've lost your house, you tend to react to money out of fear," she said. "He taught me to let go of that fear and how I can use money to help me get ahead." Next, Brandt showed the Hudsons how, with no debt and a solid emergency fund, they could put their income, their best wealth-building tool, to work for the future. Starting with an initial investment of $6,000 divided between three mutual funds, their plan is to continue to invest $3,000 a month. Based on the last 25 years of their funds' performance, they can expect their portfolio to grow to over $3 million in the next 25 years, according to Brandt's conservative projections. That means they could draw approximately $150,000 each year from their nest egg when they retire! "I wish all of my friends and family could have had the benefit of my discussion with Brandt," Margaret said. "It sounds cliché to say it was life-changing, but that is the only way to describe it. My husband and I both agree that our outlook regarding our finances has been dramatically altered and our excitement about our future has never been better." For this family, the road to millions started out rough. And, once they were on track, illness threatened to block their progress. Even now, with the road mapped out before them, it will take some sacrifice and commitment to get to their destination. But knowing the lessons they've learned and the desire they have to reach their goal, this is one family that has a great chance to finally live like no one else! Start On Your Road To Millions Today
Find out how an investment ELP can help you make the most of your savings. Dave's ELPs follow his investment teachings and will take the time to help you understand your options. Get connected with your ELP today!
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We Did It: Using Cash Works!  By Dave in Atlanta
My wife and I went through Financial Peace University (FPU) with a group at our church last year. The best thing about the class for us was the discipline of using cash. We work the envelopes shrewdly every month, and doing so has really made a huge difference. Here's an example. I called a local furniture store and told an employee what we wanted. I also told him that we were big Dave Ramsey people, so we'd be paying cash. I also told him the exact amount we had to spend. He said he'd work the price up and call me back. He called back a bit later when we had company, so I let the call go to voicemail. The message gave me a list of prices, admitted that the total was a few hundred dollars over my budget, and suggested that I call him back to talk about it. I didn't. The next day, I got a courtesy call to make sure I got the message regarding prices, and there was another request to return the call to discuss the deal. Once again, I didn't return the call. The following day, I got a phone call during my son's swimming lesson, so I couldn't answer it. This voicemail said the assistant manager was in the store the day before, but the manager was on duty today and could offer a better deal if I would call back. About six hours later, I did. The deal was close to the price I had set (which, honestly, was a couple of hundred dollars less than we could've done), plus a large delivery fee. I told him I wanted to buy the warranty on the pieces because of small children and high traffic volume. The warranty was twice as much as the delivery, so I asked if we could add the warranty and drop delivery fees. He agreed. I had him state it twice and give me the final cost three times to make sure we were on the same page and so I'd know how much cash to take. The next day I showed up to pay for it, and the salesman told me the manager said they would have to charge me something for shipping because it's a service (or premium service or some jargon like that) and not a product. Essentially, the price just jumped $100! I told him that wasn't going to work, I didn't have the money for it. He laughed and said to me, "C'mon, man. Yes you do!" With some degree of incredulity I said, "No, I don't. I told you I'm paying cash. You told me three times what the final price was, and that's how much cash I have. It's here in this envelope, and I'll be glad to count it with you right here." Without counting the money, he said, "Okay, meet me in guest services, I'll be there in a couple of minutes." When he showed up, he asked if I'd like to talk about delivery times, and I said, "Not until we talk about the difference in price." He said, "I got it covered." I actually wound up paying less than the quoted price he gave me over the phone the day before! Here are the top three things I learned from this experience: 1. Cash rocks! 2. Salesmen aren't necessarily bad people; they're in a bad system. So, don't think they can be trusted because they're nice. Being nice is their job. Getting your money is their job. Keeping your money is your job. 3. A tangible limit to what you can pay is an excellent negotiating tool. It also saves you from the pressure of wanting something enough to spend more than you need to spend. Way to go, Dave! Get more great advice for becoming a bargaining pro! 
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Stupid Tax: Addicted to Spending
 By Rick
Let me start out by saying my wife and I make over $120,000 a year, but we were living paycheck to paycheck because of our unknown addiction to Stupid Tax. We both came into our marriage four years ago with student loans and credit card debt. We both were paying car payments, and we decided to buy a condo and split the cost with my parents. (If you're a Dave Ramsey follower, you're already smiling, I know.) We worked hard and slowly started paying off debt, only to be absolutely blindsided by a timeshare we had to have! We have had it for three years and have used it twice. We have paid thousands into it, though. Then we decided to sell one of our cars to pay down some debt. But then we had to lease a car because my wife got a new job and needed a reliable car, right? Wrong! Don't lease cars—it's like paying half the price of something you don't get to keep. So once we started to pay down debt, we decided to refurnish our house on credit and then upgrade our timeshare that we didn't use. As the debt tornado kept chasing us, we picked up another timeshare to improve the one we already were not using. We were so close to filing bankruptcy; we were at the tail end of Chapter 6! Then the icing on the cake was my decision to put all our debts into a debt settlement law firm. What a joke! We paid them a fee, and then we "settled" for about 80% of the debt owed. So in the long run, we would have saved money by paying it off ourselves! Since following Dave's principles and going through Financial Peace University (FPU), we have paid off all of our credit cards and closed all those accounts. We are gazelle intense, but we still have a lot to deal with because of our destructive debt past. It took us four years to dig a hole that will take us longer to get out of. Don't ever kid yourself in thinking that you can get out of debt quickly with some scheme. It's a cancer, and it needs to be dealt with swiftly and strongly. All that said, be patient with money and don't buy things you can't afford, because when you get to the point in life when you can afford them, you will still be paying for the ones you aren't using anymore. 
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Start Fresh Today!  Have you ever had a bad day and just wished that it would end? We've all experienced that. And not just a bad day. It could be weeks or months where the breaks all seem to go against you. As much as stuff may stink, every day you wake up, you have a chance to start fresh and get things moving in the right direction. A single mom in the My Total Money Makeover community forums had this to say about a rough month, and what she's doing about it:
I've had a rough start. I received another hospital bill for my daughter in the amount of $3,970. I also am expecting another bill for $800, plus an ultrasound bill; who knows how much that will be? I've been working more hours the past couple of weeks, plus I'm doing a lot of work for a client on the side, so the income has still been pretty decent. I hope things will continue for a while longer until I have a chance to get some things caught up. Rather than throw in the towel, she's choosing to start from where she is and move forward. The past is in the past. You can't go back. But don't let rough spots that you've hit drag you so far down that you don't take advantage of the road ahead. If you hit a pothole as you drive down the street, you don't pull the car over and cry. You made it past that one rough spot. Keep going! Each month brings with it its own successes and challenges. You have a new budget, new expenses, a new pace at work, new celebrations and so on. There is something about a clean slate that gives you a sense of hope. You can make up your mind to be positive about whatever comes up. We admit that it's not easy, but it's either that or sit in the muck. You've got too much potential to sit in the muck. Fight through it and fulfill that potential. The greatest stories and accomplishments come from people who had lots of obstacles to overcome. Even if you have a lot of past mistakes (and who doesn't?), there are plenty of opportunities to make things right. And each time you take advantage of one, you get a new start. Want to start new with your money and join the same group of supporters this single mom has? Visit mytotalmoneymakeover.com and become a member today. Special offer on yearly memberships ends July 31! Back to Top
10 Ways to Achieve Your Goals With FPU  Before you know it, the kids will be back in school, the trees will be changing colors, and summer will be over. But don't let that get you down! Fall is the second New Year's, meaning it's time to revisit all those resolutions you made for yourself at the beginning of the year.
Remember all those financial, physical, spiritual and mental goals you made? Fall is the perfect time to create a schedule that allows you to meet them! Why not get started with the help of Financial Peace University? The life-changing information you will learn in Financial Peace University (FPU) will help you take control of your money, but have you ever realized that money is tied to all areas of your life? Once you work toward getting your financial house in order, your other goals will follow suit and build upon each other. Here are 10 ways FPU will help you improve your money ... and your life! 1. Helps couples get on the same page with money.
No more money fights! Couples learn how to make decisions about their money together. 2. Forces you to do a budget and actually use it.
Guessing games are a thing of the past! Learn how to make a written plan for your money. 3. Explains the importance of an accountability partner for singles.
Gain a sense of empowerment over your money by acquiring an accountability partner help you make smart decisions. 4. Shows you how to teach your kids about money.
Tell your children how to save, spend and invest their money and help them make a great future for themselves! 5. Teaches you how to get out of debt—for good this time.
Time to kick out Sallie Mae and get rid of the car loan! Using the debt snowball, you'll learn how to pay off your debt. 6. Lets you know what insurance you need and don't need.
Learn how to cover yourself with the right type of insurance for you, your family and your assets. 7. Tells people how to bargain and get great deals.
Learning how to negotiate deals will save you hundreds, if not thousands, of dollars! 8. Prepares you for a happy and stress-free retirement.
Planning now saves you heartache and money in the long run. Figure out how you can retire with no money worries. 9. Helps parents plan ahead for their kids' college funding.
If you have kids, preparing now for their college funding will save them from student loans later in life. 10. Demonstrates the importance of working in a job you love.
Instead of dreading Mondays and loving Fridays, you will learn how to do work you love. There's more great news! Starting in August, you can attend the first lesson of Financial Peace University for free with absolutely no strings attached!. If you want to continue the rest of the class, you can purchase a lifetime membership at the host location. This is a great way for you to try out the program before you purchase the membership! Learn more about this life-changing class now. Don't let fall pass you by and the next New Year's hit you in the face before you accomplish your resolutions! Back to Top
Tired of Keeping Up with the Joneses?  We all know the Joneses. They're the ones who just got back from a two-week trip to Europe dragging suitcases stuffed with souvenirs. They drive their 2.5 kids to private school in their new car, and every weekend, they head out on the town ”fashionably dressed” to eat at their favorite restaurants. No budget. No worries. They've got it all. Or so it seems... "How do people do that?" you may be wondering. That was Rachel's question when she took Financial Peace University with her husband, Eric. As a newlywed, she didn't understand how other couples in their early twenties were buying big houses and driving new cars while they were renting an apartment and having to say no to going out to eat with their friends. Like Dave says, most young couples expect to attain their parents' standard of living within about five years. Only it took their folks 25 years to get there! It's a trap. Don't fall for it. When Rachel asked some of her friends how they had all that stuff, she quickly found out they didn't really own anything. All of their "toys," like motorcycles, boats and cars, were financed like crazy. They admitted to only putting $700 down on their fancy new home—after living free in a family member's extra home for three years! They were building a house of cards that wouldn't even stand up to a light breeze, let alone a rainy day! It's easy to look like you have more than you do. That's what credit lures us into. But spending your life trying to look like something you're not isn't all it's cracked up to be. At the end of the day, you're the one stuck with the bill. Grass That Isn't Greener
You see, seven out of 10 families in America are living from paycheck to paycheck. That means that if they missed one paycheck, bills would literally go unpaid. They may look like they've got it all together, but realistically—and statistically—it's just not the case.
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There are going to be some tough headlines written about the housing market over the next several months. They may create apprehension and in some cases outright fear. The good news is these headlines will not reflect what is actually taking place in real estate. Some in the industry say we should just ignore this media blitz of problematic stories. That would be similar to trying to ignore a growling creature lurking in the shadows in the corner of the room. Instead, we want to shine a bright light into that corner to honestly evaluate how dangerous the creature actually is.