It seems like a good way of switching up cars if you want to sample them. A friend who grew up so poor in Ukraine does it and given opportunity to sample a Lexus, MB E350 diesel and now a $50k Ram 1500. He is really happy trying out these cars as his home experience was a Russian junkpile newish car and then for him a "reliable" 15 year old VW Golf.
Leasing vs. Buying. What is your side?
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Originally Posted By: rjundi
It seems like a good way of switching up cars if you want to sample them. A friend who grew up so poor in Ukraine does it and given opportunity to sample a Lexus, MB E350 diesel and now a $50k Ram 1500. He is really happy trying out these cars as his home experience was a Russian junkpile newish car and then for him a "reliable" 15 year old VW Golf.
That is a good point, my Dad was thinking of getting an A6 for a while and I recommended leasing a new one or even a used one with warranty for a while over buying a used one. Plus he could've written off a portion of it for his business.
The warrantied lease lets you get a fixed cost for ownership atleast. May cost a bit more than a trouble free car, but could save you lots as well if its a lemon...
It seems like a good way of switching up cars if you want to sample them. A friend who grew up so poor in Ukraine does it and given opportunity to sample a Lexus, MB E350 diesel and now a $50k Ram 1500. He is really happy trying out these cars as his home experience was a Russian junkpile newish car and then for him a "reliable" 15 year old VW Golf.
That is a good point, my Dad was thinking of getting an A6 for a while and I recommended leasing a new one or even a used one with warranty for a while over buying a used one. Plus he could've written off a portion of it for his business.
The warrantied lease lets you get a fixed cost for ownership atleast. May cost a bit more than a trouble free car, but could save you lots as well if its a lemon...
Originally Posted By: Jimkobb
I think a lot of people here would benefit from listening to Dave Ramsey on the radio . I may not make a lot of money but when I do retire I will be as debt free as one can be. I say that because there always will be living expenses , taxes ,utilities ,food, etc.
If I would have listened to him I wouldn't have been able to retire at 58 years of age. You know, it's easy for a multi - millionaire to say "pay cash for everything!" I have credit cards-and they pay me to use them and they get paid off at the end of every month. I have had $1,000.00s of dollars of benefits from my credit cards.
He does give some sound advice - one should be out of debt to enjoy retirement- I just disagree on how to get there.
I think a lot of people here would benefit from listening to Dave Ramsey on the radio . I may not make a lot of money but when I do retire I will be as debt free as one can be. I say that because there always will be living expenses , taxes ,utilities ,food, etc.
If I would have listened to him I wouldn't have been able to retire at 58 years of age. You know, it's easy for a multi - millionaire to say "pay cash for everything!" I have credit cards-and they pay me to use them and they get paid off at the end of every month. I have had $1,000.00s of dollars of benefits from my credit cards.
He does give some sound advice - one should be out of debt to enjoy retirement- I just disagree on how to get there.
Dave Ramsey's main complaint about credit cards is that the vast majority of people with credit cards carry a balance and end up paying ridiculous interest rates. He also maintains that when you pay cash you don't tend to spend as much as when you pay with a card- and there are some studies that back that argument up. That said, my wife and I have a budget that we stick to and we do use credit cards- but we do pay them off every month.
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Originally Posted By: MCompact
Dave Ramsey's main complaint about credit cards is that the vast majority of people with credit cards carry a balance and end up paying ridiculous interest rates. He also maintains that when you pay cash you don't tend to spend as much as when you pay with a card- and there are some studies that back that argument up. That said, my wife and I have a budget that we stick to and we do use credit cards- but we do pay them off every month.
Why not use them? If handled responsibly they are like a free loan! We still shop carefully and spend wisely, and a CC is just a convenience.
It seems that folks who use a CC to artificially enrich their lifestyle are always going to be in trouble. Seems financial responsibility should be taught in school at an early age!
Dave Ramsey's main complaint about credit cards is that the vast majority of people with credit cards carry a balance and end up paying ridiculous interest rates. He also maintains that when you pay cash you don't tend to spend as much as when you pay with a card- and there are some studies that back that argument up. That said, my wife and I have a budget that we stick to and we do use credit cards- but we do pay them off every month.
Why not use them? If handled responsibly they are like a free loan! We still shop carefully and spend wisely, and a CC is just a convenience.
It seems that folks who use a CC to artificially enrich their lifestyle are always going to be in trouble. Seems financial responsibility should be taught in school at an early age!
Originally Posted By: SteveSRT8
Why not use them? If handled responsibly they are like a free loan! We still shop carefully and spend wisely, and a CC is just a convenience.
It seems that folks who use a CC to artificially enrich their lifestyle are always going to be in trouble. Seems financial responsibility should be taught in school at an early age!
The problem is the modern desire for immediate gratification- running up huge balances and making the minimum payment on every card(the 21st Century equivalent of "I can't be overdrawn- I still have some checks left"). In my view that doesn't make a CC bad, it's just an easy way for the financially illiterate to dig a hole that they will probably never be able to get out of. @55% of men and 60% of women carry a balance- which is just idiotic.
By the way, do you know what people in the CC industry call those of us who pay off our balances every month?
"Deadbeats"
Another thing that I use trips up a lot of people- 0% interest financing. I've used that for eyeglass purchases, electronics- even a couple of ZTR mowers. But at least 20% of people with 0% interest deals end up paying the finance charges.
Why not use them? If handled responsibly they are like a free loan! We still shop carefully and spend wisely, and a CC is just a convenience.
It seems that folks who use a CC to artificially enrich their lifestyle are always going to be in trouble. Seems financial responsibility should be taught in school at an early age!
The problem is the modern desire for immediate gratification- running up huge balances and making the minimum payment on every card(the 21st Century equivalent of "I can't be overdrawn- I still have some checks left"). In my view that doesn't make a CC bad, it's just an easy way for the financially illiterate to dig a hole that they will probably never be able to get out of. @55% of men and 60% of women carry a balance- which is just idiotic.
By the way, do you know what people in the CC industry call those of us who pay off our balances every month?
"Deadbeats"
Another thing that I use trips up a lot of people- 0% interest financing. I've used that for eyeglass purchases, electronics- even a couple of ZTR mowers. But at least 20% of people with 0% interest deals end up paying the finance charges.
Originally Posted By: SteveSRT8
Originally Posted By: MCompact
Dave Ramsey's main complaint about credit cards is that the vast majority of people with credit cards carry a balance and end up paying ridiculous interest rates. He also maintains that when you pay cash you don't tend to spend as much as when you pay with a card- and there are some studies that back that argument up. That said, my wife and I have a budget that we stick to and we do use credit cards- but we do pay them off every month.
Why not use them? If handled responsibly they are like a free loan! We still shop carefully and spend wisely, and a CC is just a convenience.
It seems that folks who use a CC to artificially enrich their lifestyle are always going to be in trouble. Seems financial responsibility should be taught in school at an early age!
It is a nice free loan isn't it. Don't have to walk around with $500+ in cash on a regular basis, or carry checks; one can buy stuff online too. Wise or not I used a CC to make it through the last semester of college. Paid it off pretty quickly once I landed a job.
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What I don't understand is how cash rewards work. They give me money to use their card? No one gives out money for nothing. I know CC's used to incur an extra cost, and am pretty sure they still do, it's just that the vendor somehow eats the cost.
OTOH, being able to hire cashiers who a) don't have to be able to count/subtract/make change and b) no longer have to carry money enveolopes to/from the bank is probably worth the extra cost.
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I haven't figured out just yet what I'm going to do to teach my kids financial wisdom, but I'm quite sure I'm not expecting much from the public school on this front.
Originally Posted By: MCompact
Dave Ramsey's main complaint about credit cards is that the vast majority of people with credit cards carry a balance and end up paying ridiculous interest rates. He also maintains that when you pay cash you don't tend to spend as much as when you pay with a card- and there are some studies that back that argument up. That said, my wife and I have a budget that we stick to and we do use credit cards- but we do pay them off every month.
Why not use them? If handled responsibly they are like a free loan! We still shop carefully and spend wisely, and a CC is just a convenience.
It seems that folks who use a CC to artificially enrich their lifestyle are always going to be in trouble. Seems financial responsibility should be taught in school at an early age!
It is a nice free loan isn't it. Don't have to walk around with $500+ in cash on a regular basis, or carry checks; one can buy stuff online too. Wise or not I used a CC to make it through the last semester of college. Paid it off pretty quickly once I landed a job.
*
What I don't understand is how cash rewards work. They give me money to use their card? No one gives out money for nothing. I know CC's used to incur an extra cost, and am pretty sure they still do, it's just that the vendor somehow eats the cost.
OTOH, being able to hire cashiers who a) don't have to be able to count/subtract/make change and b) no longer have to carry money enveolopes to/from the bank is probably worth the extra cost.
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I haven't figured out just yet what I'm going to do to teach my kids financial wisdom, but I'm quite sure I'm not expecting much from the public school on this front.
The trick with leasing is that for the average Joe/Jane Sixpack the math does not make sense, but it is sold to the said Joe/Jane Sixpack in a way that he/she thinks they're saving money via a lower monthly payment. CCs use the same principal with their minimum monthly payment option.
Why pay off the full balance when the bank is so gracious that they want only $10 from me? Same with car payments. Why pay $500 a month when I can pay $250? And all of the sudden a many people can "afford" a Lexus or a BMW.
Why pay off the full balance when the bank is so gracious that they want only $10 from me? Same with car payments. Why pay $500 a month when I can pay $250? And all of the sudden a many people can "afford" a Lexus or a BMW.
Originally Posted By: supton
What I don't understand is how cash rewards work. They give me money to use their card? No one gives out money for nothing. I know CC's used to incur an extra cost, and am pretty sure they still do, it's just that the vendor somehow eats the cost.
It's not only the vendors, it's the poor fools who are paying huge finance charges by making the minimum payments on their card balance(s).
What I don't understand is how cash rewards work. They give me money to use their card? No one gives out money for nothing. I know CC's used to incur an extra cost, and am pretty sure they still do, it's just that the vendor somehow eats the cost.
It's not only the vendors, it's the poor fools who are paying huge finance charges by making the minimum payments on their card balance(s).
JHZR2
Staff member
Originally Posted By: SteveSRT8
Originally Posted By: MCompact
Dave Ramsey's main complaint about credit cards is that the vast majority of people with credit cards carry a balance and end up paying ridiculous interest rates. He also maintains that when you pay cash you don't tend to spend as much as when you pay with a card- and there are some studies that back that argument up. That said, my wife and I have a budget that we stick to and we do use credit cards- but we do pay them off every month.
Why not use them? If handled responsibly they are like a free loan! We still shop carefully and spend wisely, and a CC is just a convenience.
It seems that folks who use a CC to artificially enrich their lifestyle are always going to be in trouble. Seems financial responsibility should be taught in school at an early age!
+1
Im a pretty big DR fan, but I agree with this. As opposed to car loans and whatnot which create a culture of buying to a monthly payment, CCs in lieu of cash for things you HAVE to buy anyway, to effectively get a discount or in-kind benefit to me is smart. Plus it minimizes the need of usng cash.
I get it that cash hurts to use, and for people with a history of lack of self-control or consideration for the limits of their ability to spend, cash may be better. But if you can be half-organized and know what you can/do spend, and budget, then I see no issue with CCs. Dave is right, nobody got rich by getting free frequent flyer miles off a credit card... But they do effectively present as a discount if done right, and so there can be benefits.
Originally Posted By: MCompact
Dave Ramsey's main complaint about credit cards is that the vast majority of people with credit cards carry a balance and end up paying ridiculous interest rates. He also maintains that when you pay cash you don't tend to spend as much as when you pay with a card- and there are some studies that back that argument up. That said, my wife and I have a budget that we stick to and we do use credit cards- but we do pay them off every month.
Why not use them? If handled responsibly they are like a free loan! We still shop carefully and spend wisely, and a CC is just a convenience.
It seems that folks who use a CC to artificially enrich their lifestyle are always going to be in trouble. Seems financial responsibility should be taught in school at an early age!
+1
Im a pretty big DR fan, but I agree with this. As opposed to car loans and whatnot which create a culture of buying to a monthly payment, CCs in lieu of cash for things you HAVE to buy anyway, to effectively get a discount or in-kind benefit to me is smart. Plus it minimizes the need of usng cash.
I get it that cash hurts to use, and for people with a history of lack of self-control or consideration for the limits of their ability to spend, cash may be better. But if you can be half-organized and know what you can/do spend, and budget, then I see no issue with CCs. Dave is right, nobody got rich by getting free frequent flyer miles off a credit card... But they do effectively present as a discount if done right, and so there can be benefits.
Dave Ramsey gives good advice, the problem people have with him is he dumbs it way down. He does this so even the most financially incompetent, debt-ridden people with no spending self-control can follow it and get out of debt. He doesn't create gray areas by saying "Never use credit cards... except in this situation, or that situation, or unless this, or that." It's a lot easier to simply eliminate the gray areas, dumb it down, and just say "No credit cards! Use cash!" Those of us who have self control and understand there are exceptions to the rule can figure the rest out on our own and use credit cards to our advantage. In fact if you know how to use credit cards to your advantage (read: responsibly) you probably didn't need Dave Ramsey's advice in the first place. I certainly have never needed him, and I've never paid a penny in CC interest in my life, and take advantage of cash back rewards all the time.
Originally Posted By: supton
I haven't figured out just yet what I'm going to do to teach my kids financial wisdom, but I'm quite sure I'm not expecting much from the public school on this front.
I started by saying to my daughter, that we go to the bank to "buy" some cash, as it is not a reward.
Like we buy grocery, buying cash means it does not come free... and as much as I want.
As for interest on CC, I never paid interests on them, and I have two of them with payment date separated by two weeks, so I can maximize the length of time before paying my buys.
I also have an excel budget file, where I put all my daily expenses to compare to my planned budget based on my annual salary minus the taxes and regular payments (insurances, house loan and such).
I haven't figured out just yet what I'm going to do to teach my kids financial wisdom, but I'm quite sure I'm not expecting much from the public school on this front.
I started by saying to my daughter, that we go to the bank to "buy" some cash, as it is not a reward.
Like we buy grocery, buying cash means it does not come free... and as much as I want.
As for interest on CC, I never paid interests on them, and I have two of them with payment date separated by two weeks, so I can maximize the length of time before paying my buys.
I also have an excel budget file, where I put all my daily expenses to compare to my planned budget based on my annual salary minus the taxes and regular payments (insurances, house loan and such).
Originally Posted By: exranger06
Dave Ramsey gives good advice, the problem people have with him is he dumbs it way down. He does this so even the most financially incompetent, debt-ridden people with no spending self-control can follow it and get out of debt. He doesn't create gray areas by saying "Never use credit cards... except in this situation, or that situation, or unless this, or that." It's a lot easier to simply eliminate the gray areas, dumb it down, and just say "No credit cards! Use cash!" Those of us who have self control and understand there are exceptions to the rule can figure the rest out on our own and use credit cards to our advantage. In fact if you know how to use credit cards to your advantage (read: responsibly) you probably didn't need Dave Ramsey's advice in the first place. I certainly have never needed him, and I've never paid a penny in CC interest in my life, and take advantage of cash back rewards all the time.
Good analysis- and it is unbelievable how financially inept most people are. One of my friends in the new car business once told me about a guy who accused him of ripping him off on payments on a 60 month 0% loan. My friend could not convince the doofus that his monthly payment would be the amount financed divided by 60...
Dave Ramsey gives good advice, the problem people have with him is he dumbs it way down. He does this so even the most financially incompetent, debt-ridden people with no spending self-control can follow it and get out of debt. He doesn't create gray areas by saying "Never use credit cards... except in this situation, or that situation, or unless this, or that." It's a lot easier to simply eliminate the gray areas, dumb it down, and just say "No credit cards! Use cash!" Those of us who have self control and understand there are exceptions to the rule can figure the rest out on our own and use credit cards to our advantage. In fact if you know how to use credit cards to your advantage (read: responsibly) you probably didn't need Dave Ramsey's advice in the first place. I certainly have never needed him, and I've never paid a penny in CC interest in my life, and take advantage of cash back rewards all the time.
Good analysis- and it is unbelievable how financially inept most people are. One of my friends in the new car business once told me about a guy who accused him of ripping him off on payments on a 60 month 0% loan. My friend could not convince the doofus that his monthly payment would be the amount financed divided by 60...
JHZR2
Staff member
Originally Posted By: CKN
Originally Posted By: Jimkobb
I think a lot of people here would benefit from listening to Dave Ramsey on the radio . I may not make a lot of money but when I do retire I will be as debt free as one can be. I say that because there always will be living expenses , taxes ,utilities ,food, etc.
If I would have listened to him I wouldn't have been able to retire at 58 years of age. You know, it's easy for a multi - millionaire to say "pay cash for everything!" I have credit cards-and they pay me to use them and they get paid off at the end of every month. I have had $1,000.00s of dollars of benefits from my credit cards.
He does give some sound advice - one should be out of debt to enjoy retirement- I just disagree on how to get there.
Seriously? So somehow the "thousands" in freebies from the credit cards were the deciding factor that let you retire at 58??!? You must have a pretty darn low cost of living if thousands of dollars of freebies were the determinant...
Originally Posted By: Jimkobb
I think a lot of people here would benefit from listening to Dave Ramsey on the radio . I may not make a lot of money but when I do retire I will be as debt free as one can be. I say that because there always will be living expenses , taxes ,utilities ,food, etc.
If I would have listened to him I wouldn't have been able to retire at 58 years of age. You know, it's easy for a multi - millionaire to say "pay cash for everything!" I have credit cards-and they pay me to use them and they get paid off at the end of every month. I have had $1,000.00s of dollars of benefits from my credit cards.
He does give some sound advice - one should be out of debt to enjoy retirement- I just disagree on how to get there.
Seriously? So somehow the "thousands" in freebies from the credit cards were the deciding factor that let you retire at 58??!? You must have a pretty darn low cost of living if thousands of dollars of freebies were the determinant...
Originally Posted By: SteveSRT8
Originally Posted By: MCompact
Dave Ramsey's main complaint about credit cards is that the vast majority of people with credit cards carry a balance and end up paying ridiculous interest rates. He also maintains that when you pay cash you don't tend to spend as much as when you pay with a card- and there are some studies that back that argument up. That said, my wife and I have a budget that we stick to and we do use credit cards- but we do pay them off every month.
Why not use them? If handled responsibly they are like a free loan! We still shop carefully and spend wisely, and a CC is just a convenience.
It seems that folks who use a CC to artificially enrich their lifestyle are always going to be in trouble. Seems financial responsibility should be taught in school at an early age!
I know a woman that purchased / financed her breast implants (LOL
) using her credit card. Then six months later she and her husband declared bankruptcy, they were compulsive with their credit card spending habits.
Originally Posted By: MCompact
Dave Ramsey's main complaint about credit cards is that the vast majority of people with credit cards carry a balance and end up paying ridiculous interest rates. He also maintains that when you pay cash you don't tend to spend as much as when you pay with a card- and there are some studies that back that argument up. That said, my wife and I have a budget that we stick to and we do use credit cards- but we do pay them off every month.
Why not use them? If handled responsibly they are like a free loan! We still shop carefully and spend wisely, and a CC is just a convenience.
It seems that folks who use a CC to artificially enrich their lifestyle are always going to be in trouble. Seems financial responsibility should be taught in school at an early age!
I know a woman that purchased / financed her breast implants (LOL
I much prefer to buy outright and I like looking for good deals on used cars. I've had my pickup since I was 17 (25 now) and its been a great car. Slow but reliable and having a small truck is always useful. My civic I bought a few years ago for $7500 with only 32,000 on the odo. Now its got 84,000 and still runs perfectly.
No point IMO to buy a brand new car off the lot. Depreciation makes buying used a no brainer as long as you have the time + patience to sort through all the junk to find a good vehicle.
No point IMO to buy a brand new car off the lot. Depreciation makes buying used a no brainer as long as you have the time + patience to sort through all the junk to find a good vehicle.
Originally Posted By: silvercivicsi
No point IMO to buy a brand new car off the lot. Depreciation makes buying used a no brainer as long as you have the time + patience to sort through all the junk to find a good vehicle.
I agree, used is cheapest (unless if you buy someone else's lemon) but every vehicle you check out is a few hours of lost time. Hour drive (or more?) to get there, couple hours to check out, hour to get home. Half day minimum to "look" at a vehicle. Cheaper than paying a few extra grand for that depreciation, but costly in time.
No point IMO to buy a brand new car off the lot. Depreciation makes buying used a no brainer as long as you have the time + patience to sort through all the junk to find a good vehicle.
I agree, used is cheapest (unless if you buy someone else's lemon) but every vehicle you check out is a few hours of lost time. Hour drive (or more?) to get there, couple hours to check out, hour to get home. Half day minimum to "look" at a vehicle. Cheaper than paying a few extra grand for that depreciation, but costly in time.
Originally Posted By: Quattro Pete
Originally Posted By: lawman1909
With all my cases, adding up EVERY penny I spent, I saved a few hundred to a thousand dollars by leasing, then buying with cash.
I'd be interested in seeing your full math on this.
Exactly. If you're leasing it - you're leasing it from someone who OWNS it. Trust me - they aren't losing any money on the deal.
Leasing costs always equal the cost of ownership plus a (likely considerable) profit to the OWNER. If you think you got a particularly good deal because it was the end of a model year and they were clearing them out - you could have gotten just as great a deal by buying.
In the long run, leasing always costs more than owning. Many of us will come up with an infinite number of ways to convince ourselves that we are getting a better deal to rationalize what we really wanted to do in the first place - which was to drive a nicer car than we could afford to buy, or drive a new car every 2-3 years.
Originally Posted By: lawman1909
With all my cases, adding up EVERY penny I spent, I saved a few hundred to a thousand dollars by leasing, then buying with cash.
I'd be interested in seeing your full math on this.
Exactly. If you're leasing it - you're leasing it from someone who OWNS it. Trust me - they aren't losing any money on the deal.
Leasing costs always equal the cost of ownership plus a (likely considerable) profit to the OWNER. If you think you got a particularly good deal because it was the end of a model year and they were clearing them out - you could have gotten just as great a deal by buying.
In the long run, leasing always costs more than owning. Many of us will come up with an infinite number of ways to convince ourselves that we are getting a better deal to rationalize what we really wanted to do in the first place - which was to drive a nicer car than we could afford to buy, or drive a new car every 2-3 years.
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I was at TireKingdom last year and had a conversation with another customer that I drive my cars 10 years / 200K minimum. He was bragging about his leased Infinity SUV, 3 years and get rid of it cause past 3 years it will give trouble.
I chuckled and said OK. Guy was in his 50's but seemed very vain and image conscience.
I chuckled and said OK. Guy was in his 50's but seemed very vain and image conscience.
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