What would you do if you had $15,000? Would you give some to charity, or perhaps buy a new car? Maybe you could finally get that watch or purse that you’ve always wanted. The problem is that many people thought they had this much money. Unfortunately, it was all on a credit card and now they are paying 18% extra on their purchases; in some cases, even more than that. That equates to you paying roughly $18,000 dollars for something that only cost $15,000. Many Americans are faced with these bills today, but there is hope. There are people out there who want to get us out of debt, and back on our feet. This essay will look at two of those people; Dave Ramsey and Suze Orman. You will have to decide which will work best for you. Hopefully …show more content…
Their methods are again different, but both effective strategies when paying off your money owed. The Debt Snowball is something that Dave Ramsey believes whole heartedly in. Make a list of all of your debt excluding the mortgage, starting with least owed all the way up to your highest obligation. The first step is to save $1000 for emergencies. Dave Ramsey’s website then says this about his process, “You 'll use the debt snowball to knock out your debts one by one…Pay off the first one. Then add what you were paying on it to the next debt.” By the time you get to your last debt, you should be making a huge payment on it and have it paid off in no time. He also postulates that you don’t need to worry about how high the interest rate is. By paying off the smallest debt first, you’ll see progress and want to continue paying off your debt. Suze believes that paying off your highest interest rate loan makes the most sense. She even suggests that you should consolidate your debt, but only if you can find a lower overall interest rate. Her way of paying off debt is like Dave’s, but instead of starting with lowest amount owed, you start with the hightest interest rate and work your way down. You will be out of debt as long as you maintain your self discipline and keep working at getting your debts paid off. One of the differences between these two is that she still believes in building up your emergency fund …show more content…
One thing is for sure, they both think debt is a bad thing! Owing money to somebody will never get you ahead when trying to be fiscally responsible. Make sure you are only spending money that you physically have, and not what the credit card says your limit is. Dave asserts that this goes beyond just what you can do for yourself. This is not just about setting yourself up for success, but also setting your children, and even your children’s children up for the responsibilities of being penny wise. Orman concludes that every little bit counts. In fact, by adding a “13th” mortgage payment per year, you can knock off five years. On a $250,000 mortgage, that could save you upwards of $61,000 in
Maxed Out Rough Draft The United States lending industry’s main focus has become accentuating profits; therefore, they have made it impossible to live without a credit card in today’s economy and to avoid being taken advantage of by the banks. James Scurlock, director and producer of the film, “Maxed Out”, devotes his movie to informing the audience of the credit card system and its many flaws and gives examples of people who are majorly affected by the pressure the lenders apply. Throughout the movie, numerous statistics, and expert testimonies are presented, as well as comparisons and appeals to emotion. Through the use of this support, Scurlock, is able to convey his overall message and propose numerous minor arguments that clarify his argument and make it more credible. One particular minor argument that Scurlock presents in “Maxed Out” is that banks prey on those people who are most likely unable to make payments, are in college, or who have already filed for bankruptcy, which isn’t ethical.
Author, columnist, motivational speaker, television host, the personal finance guru of our time, Suze Orman worked her way from the bottom to the top with her financial knowledge to acquire her notable reputation today. “Orman started out as a financial adviser at Merrill Lynch, founding the successful Suze Orman Financial Group in 1987” (Orman 2014). Opening her own restaurant, Orman decided to invest her money with a broker at Merrill Lynch. Having zero knowledge about investing or any financial knowledge for that matter, she signed over her money to the broker which she trust that he would take the best route for her; Orman went broke within three months. “After losing all her money, Orman decided to become a broker and applied to the same Merrill Lynch office where she had lost her earlier investment” (Orman 2014). Trying to learn all she could, she eventually learned that her broker did not follow all the required policies; suing Merrill Lynch for inadequacy, Orman won the case. Ever since then she began studying and working hard for all her clients, doing all she could for them. Feeling that she could only reach out to so many people sitting in an office, Orman decided to start writing and publishing all her financial information and tips into books; such as The Courage to Be Rich, and The Laws of Money, The Lessons of Life. Once her books started flying off the shelves, Orman took her career a little further and became the host of her own television show, The Suze Orman Show. After receiving many awards and nominations, Orman still continues her weekly show to this day. Today she is now also of the columnists for Oprah’s magazine, O, and also a columnist for Yahoo Finance where she published the article, How to Take Control...
Start the debt snowball by paying minimums on all of your debts except the smallest one. Place any extra money to that smallest debt. This will make that debt paid off much quicker.
Total Money Makeover is Dave Ramsey’s is a book on using some of his financial fairly simple principles of money management. The process is summarized like this: first save a $1000 emergency fund, second eliminate all debt except for house payment using the debt snowball, third finish the emergency fund 3–6 months of expenses, fourth invest 15% into retirement and start a college fund, fifth pay off your home mortgage, and finally build wealth without going into debt. The idea of this “debt snowball” strategy has been written a...
Timothy J Penny, Steve Schier. Payment Due: A Nation In Debt, A Generation In Trouble
As stated by Franklin D. Roosevelt, “the test of our progression is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.” Many people may agree with this statement considering that the United States is such a wealthy country and in 2012, 46.5 million people were living in poverty in the United States and 15% of all Americans and 21.8% of children under age eighteen were in poverty.The honest truth is that many people do not know the conditions this group of people must live in on a daily basis because of the small number of people who realize the struggle there is not a great amount of service. In the article Too stressed for Success, the author Kevin Clarke asks the question “What is the cost of being poor in America?” and follows the question by explaining the great deals of problems the community of poverty goes through daily by saying, “Researchers have long known that because of a broad reduction in retail and other consumer choices experienced by America's poor, it is often simply more expensive to be poor in the United States.
The Millionaire Next Door written by William Danko and Thomas J. Stanley illustrates the misconception of high luxury spenders in wealthy neighborhoods are considered wealthy. This clarifies that American’s who drive expensive cars, and live in lavish homes are not millionaires and financially independent. The authors show the typical millionaire are one that is frugal, and disciplined. Their cars are used, and their suits were purchased at a discount. As we read the book from cover to cover are misconceptions start to fade. The typical millionaire is very frugal in all endeavors and finds the best discounts possible. A budget is implemented daily, monthly, and annually for a typical millionaire. They live by the budget and are goal oriented. Living well below their means is crucial for a millionaire, and discovering ways to allocate time and money more efficiently. The typical millionaire next door is different than the majority of America presumes. Let’s first off mention what it is not. The typical millionaire is surprisingly not the individual with the lavish house worth a million dollars, owning multiple expensive cars, a boat, expensive clothes, and ultimately living lavishly. The individual is frugal and often looks for discounts for consumable goods. The book illustrates the typical millionaire in one simple word: frugal. It is shocking to believe that this is true, but it does make sense. To achieve financial independence is inherently more satisfying and important than accumulating wealth. According to the book the majority of these millionaires portray characteristics of being sacrificial, disciplined, persistent and frugal. In the book it states, “Being frugal is the cornerstone of wealth-building. Yet far too often th...
The wealth inequality debate should focus on what public policies will aid the accumulation of wealth by more, not fewer, American families. The first step American’s need to make toward transforming our consumer culture is to understand it better.
Smith, Noah. “How to Fix America's Wealth Inequality: Teach Americans to Be Cheap.” The Atlantic. Atlantic Pub., 12 March 2013. Web. 06 April 2014. .
Gordon Ramsay is a well known chef for his numerous television series and famous restaurants across the globe. He worked to become the successful chef and television personality he is today in many places. This allowed his work to spread across the globe and gain popularity. He is a successful chef that has been awarded multiple awards for his achievements in cooking. He helps others learn cooking through his television shows and ways of cooking. He is known to have a successful career for many reasons.
We now live in a society where kids start their adult lives “in the red”, as their debt exceeds their income. (Draut, 2005) 60 years ago this wasn’t the case, as told by Studs Terkel in Hard Times-An Oral History of The Great Depression, “I had no idea how long $30 would last, but it sure would have to go a long way because I had nothing else. The semester fee was $22, so that left me $8 to go.” (Turkel, 1970) Imagine that! 60 years ago tuition was $22 dollars a semester! Furthermore, 45% of adults under 35 state they find themselves resorting to credit card use for basic living expenses like rent, groceries and utilities, (Draut, 2005) adding to their mounting debt. This use of credit puts them into an entirely different category of indebtedness: survival debt. (Draut, 2005) Imagine being forced to borrow to live! (Draut, 2005) If a car breaks down or someone gets sick, the only option available is using a credit card. (Draut,
Dave Ramsey has a philosophy that when you consider taking on debt you need to weigh the risk in your life. He does not condemn all forms of debt. He actually encourages homeownership. However, he encourages it under the correct circumstances. He reccommends that you are debt free and that you have a heathly savings with several months income on reserve for emergencies. Dave Ramsey seems to desire that his students of finance become fiscally responsible so that they will have more peace in their financial life. I agree with this philosophy.
Dave’s second step is to pay off all of your debt. His method for this is called the debt snowball effect. You list every debt you have in order from smallest to largest, leaving out your mortgage. And you pay off the smallest debt first, once that is paid you take what you were paying towards that debt, and apply it to the next debt, and so on. This is exactly what the church advises us to do in the One for the Money Guide to Family Finance written by Elder Marvin J. Aston, in the debt elimination calendar. I believe that is probably one of the fastest ways to get out of debt
Many Americans are at financial risk and they don't even know it. Let's take a minute and think….time is the most valuable thing in our lives, yet we spend most of our time working, isolated from the lives of our loved ones. Today I will educate you about two lifestyles that will provide ongoing income and allow you to spend more time doing the things you want. Financial independence and financial freedom. Financial independence and financial
Rich Dad, Poor Dad is a book that educates readers about financial literacy. Robert Kiyosaki, the author, has two dads – one rich and one poor, although the rich dad is not his, but his friend’s dad. Both dads have different views about earning money, and Robert had the choice of contrasting both views while growing up. His rich dad’s views were more powerful and useful to Robert. The author guides the reader through six main lessons his rich dad taught him on how to let money work for you, instead of working for money.