http://www.daveramsey.com/ Real Life Money Stories en-us Thu, 09 Feb 2012 01:02:46 CST 180 Saturday Sunday http://www.daveramsey.com/articles/articleList/category/100423/storyid/68782 http://www.daveramsey.com/articles/articleList/category/100423/storyid/68782 Thu, 02 Feb 2012 09:33:55 CST This story is true, though it seems simply unbelievable. In the end, it didn’t end up costing me money, but I certainly lost about 2 years of life after the horrible day I had yesterday, that ended relatively better than expected. My wife and I have had our home on the market as a short-sale since last year. We found buyers for the home and set about getting the terms approved with our bank and theirs. We received the acceptance letter from our bank with “full deficiency waived” in December, provided we closed by January 13. We packed up and moved to a new rental home where we plan to stay until we finish Dave Ramsey FPU (we’re on week 2) and are well past baby step 3, with a substantial amount of money for a down payment. I contacted all my creditors, banks and institutions to change my address and phone number, except for one bank, BANK X, with whom we financed both of our vehicles. BANK X simply slipped through the cracks, and it came back to bite us big time… All through the rest of December and beginning of January, the buyers of our home were doing their best to secure financing and make the January 13 closing deadline. Unfortunately, the buyers chose a second-rate credit union who didn’t quite understand the urgency of the timeline. We were forced to request an extension from my (selling) bank twice, which cost us and the buyers $1,500 in penalties. We finally had a date set for closing last week, only to discover the buyer’s wife was sent to the emergency room with an undisclosed health issue. So another extension was requested from the selling bank, which approved with another $500 penalty. The closing date was, once again, moved to February 1st at 9:00 am. Needless to say, we were anxious to get the deal done and move on with our lives. So yesterday morning at 7:30, I opened the garage to take the kids to school and then head to the closing, only to discover that, not one, but both of our cars were GONE! As I did a mental inventory of how bad the situation was, I realized that the cashiers check for closing, my wife’s ID and the key to the house was inside the center consol of my truck and my truck, along with my wife’s vehicle were simply gone. After a few minutes to clear my mind, I decided it was unlikely someone would steal two vehicles from the same home, and that this simply must have been bank repossession. The closing at 9:00 am was simply not going to happen. I could only imagine that this mistake was going to send another $500 the way of the selling bank if we couldn’t get this worked out. I walked my children to school and headed back to the house, prepared for battle with my credit union, BANK X. You see, I know for a fact I paid the payments for December, and I was not going to accept responsibility for this mistake. After a few calls, I got in touch with the collections agent from BANK X who was assigned to my account. She insisted the bank did not make a mistake, I did not pay my December payment, we were over 30 days late and the cars now belonged to them. She said they had tried to contact us multiple times through the month of January and we never responded, not even once. Remember, this is the bank that I failed to update my information, so they were calling a disconnected number. While on the phone with her, I found the transactions on the statement showing the payment had been made online through their own website using an EFT from my checking account at another institution. I forwarded her a copy of the statement from that institution and she said she would investigate. After several calls to her and to the towing agency, I realized I needed to call on her superiors if the closing was going to happen that day. I was put in touch with her manager who was the most professional and polite collections manager I have ever spoken with in my life. I explained my situation regarding the closing, how the information I needed was inside my vehicle and how the towing company wouldn’t let me have it without doing their “inventory” of my belongings, which could take up to 24 hours. Acknowledging that BANK X may have made a mistake, while not accepting responsibility, he contacted the towing company and requested they release those items. Finally, things began to turn around for the good. Borrowing my sister’s vehicle, I was able to pick up the cashiers check, my id and the house key and drove to the closing agency for a re-scheduled 1:00 pm appointment. During the signing of the paperwork, I received a call back from the BANK X collections manager. They FOUND my money and were finally ready to acknowledge their mistake. Having been very professional and as stern, yet polite as possible while I dealt with the employees and management at the bank, the manager was ready to offer me one month’s payments on both loans as consolation for our troubles. We finished the closing and drove to the towing agency to get our cars out of car jail. There are several lessons learned in this fiasco. Number one: always update your contact information if you move or change your number. We would have discovered this error weeks ago and it would never have gotten this far if we had simply done this one task. Number two: never leave personal belongings and important papers inside your vehicle overnight. If a thief had run off with our vehicles, there is no possible way we would have closed yesterday and the whole house deal could have simply fallen through. Finally, Number three: buy your cars with cash! That way, you will never have to deal with the repo man again!!! http://www.daveramsey.com/articles/articleList/category/100423/storyid/68767 http://www.daveramsey.com/articles/articleList/category/100423/storyid/68767 Tue, 31 Jan 2012 10:53:48 CST So I thought I was doing a smart thing by paying my taxes last year with a zero % interest check. Even though I knew exactly what Dave has said about how bad things happen, I thought, well shoot those things happen to other people. So I paid off the IRS with a credit card check last April, and set up an auto payment, and just let it run from there. Well I went to go pay it off this past weekend and lo and behold there was an extra $500 more than I anticipated on the account. I of course hadn't looked at any statement in over 6 months, so as I looked at the past statements I noticed I was being charged interest. Well of course I called customer service to get an explanation. I was about to light into them, when she said, well you used an expired check, there's nothing I can do to help you. So basically I paid an extra $500 that I didn't have to because I thought I was smarter than the credit card company. In the memo field of Quicken I put Stupid Tax. http://www.daveramsey.com/articles/articleList/category/100423/storyid/68770 http://www.daveramsey.com/articles/articleList/category/100423/storyid/68770 Tue, 31 Jan 2012 04:15:59 CST My first semester of college I got my first credit card. I only used it for little things and paid the balance off each month. I did this in hopes of creating credit so that in a few years I could purchanse a house (instead of renting). Everything was going great until my car hit 120,000 miles, then a little of this and that started going bad. I had no savings account so I would charge the repairs to my credit card then work like crazy to pay off the balance. It got to the point where the balance was never going down much. By this point I started charging other stuff to the plastic, thought I might as well since there was a balance. Thankfully one day my mom said ya know you wouldn't have to keep charging to the credit card if you started a savings account; pay the minimum for the next few months and save as much as you can (this is the part where i located the sign on the wall that says bang head here bc youre a idiot) So I openend a savings account and a few years later I was introduced to the envelope system. I still have a credit card balance but I am finally fed up with paying the stupid tax. Just finished an entire month on a budget and the goal is to get that darn credit card paid off in 2013. http://www.daveramsey.com/articles/articleList/category/100423/storyid/68712 http://www.daveramsey.com/articles/articleList/category/100423/storyid/68712 Mon, 23 Jan 2012 01:50:33 CST I was a very successful twenty some year old back in the late 90's. I was working for a top 5 fortune 500 companies as a road warrior consultant in the IT field making well over $100K! I saved every penny I could save. When my parents wanted to put a retail shop together in 2004, I agreed to help. I gave them $85K cash I saved up and let them use my credit. The next thing I knew, they racked up more than $130K debt under my name in less than 2 years buying inventory. Well, I was helping my parents right? By the time I found my Mr.Right and got married and ready to purchase a house, our application for mortgage got turned down. I didn't realize that over the years when my parents had free access to my credit, they built up so much debt under my name, that my credit is no longer worthy. The lender told me that my husband had to go solo on the mortgage. But since he doesn't make enough income alone, we could not qualify for the house we wanted. Although I was still making really good money, it didn't matter. We opted for a tiny house with no garage and a complete fix upper with no insulation nor plumbing. When I had a baby, the living condition got pretty terrible. My parents were shocked too after they found out what they did to me and vowed to pay off the debt under my name as soon as possible. And they did. It took them over 5 years to pay off the credit cards under my name and restored my credit. I just bought a beautiful house with my husband a month ago. I don't regret helping my parents. But if I knew the consequences of letting someone borrow my credit, I probably would try to come up with some other ways to help them. http://www.daveramsey.com/articles/articleList/category/100423/storyid/68683 http://www.daveramsey.com/articles/articleList/category/100423/storyid/68683 Wed, 18 Jan 2012 08:28:01 CST In August of 2008, I co-signed for a pickup with my younger brother so he could lower his car payment. I felt uneasy about it at the time, but with the help of some pressure and guilt, I did it. My brother made his first four payments on time, no problem; however, he was late on EVERY payment since then and often missing payments for months at a time. We did a workout loan in December of 2010 in order to lower the payment to something he could afford, which extended the life of the loan another 84 months. He missed the December payment, the January payment, the February payment... you get the idea. By November of 2011 he had made a total of maybe three payments (one every few months). After three years my relationship with my brother, and consequently the rest of my family, is almost non-existent. My parents support him and tell me I need to be more compassionate; I was told not to worry about the truck anymore because he had it taken care of. In November of 2011, I received a repossession call. I scrambled to buy more time so I could try and figure things out. My brother threatened to let it get repossessed if I didn’t help him out by paying for the truck. I told him I would only pay for the truck if I has possession of it- he dropped it off at my place the next day as a “sacrifice” for the restoration of our relationship- I had to pay $2500 to bring it current just to avoid repossession… Long story short, he paid less than $4000 on the truck over three and a half years. The truck Blue Books for $17,000 but is not in the best shape. It has been posted online and sitting by the mall for three months now and I have lowered the price to about $15,000 praying that someone will buy it (your prayers for the same would be much appreciated). Oh, and I still owe $23,000; I will be using my savings to pay off the loan once I sell the truck. PLEASE learn from my stupid tax. When someone asks you to co-sign for them, do yourself a favor and RUUUUUUN!!! http://www.daveramsey.com/articles/articleList/category/100423/storyid/68667 http://www.daveramsey.com/articles/articleList/category/100423/storyid/68667 Sat, 14 Jan 2012 09:49:41 CST In '08 I gave a client $22k to invest in Florida real estate b/c it looked like such a great deal. We were doing okay financially but we certainly werent getting rich fast. So I took advantage of this terrific opportunity. It gets worse. b/c we didn't have enough saved and credit cards were so readily available I borrowed $15k from them to do this. Fast forward 4 years - I have only received $4k back from him in total so I'm still out $18k of which $12,600 is still on the credit cards plus all the interest charges b/c that 0% on the credit card didnt stay 0% for long. Lesson learned-trying to jump ahead only ended up getting us further behindthe tortoise had it right-slow and steady wins the race http://www.daveramsey.com/articles/articleList/category/100423/storyid/68539 http://www.daveramsey.com/articles/articleList/category/100423/storyid/68539 Thu, 22 Dec 2011 12:26:08 CST One Christmas I bought an ornament for my kids at Hallmark. I wrote a check for just over $16 for it. I wasn't paying much attention to my checking account, and sure enough it dipped into the red. And yes, that $16 check got returned. Hallmark called and I had to go into the store and give them $50 to pay for the ornament and the returned check fees. I also got slapped with a $30 NSF fee from my back. That cheesy $80 plastic ornament is a good reminder to pay attention to my finances! http://www.daveramsey.com/articles/articleList/category/100423/storyid/68537 http://www.daveramsey.com/articles/articleList/category/100423/storyid/68537 Thu, 22 Dec 2011 08:34:47 CST My wife and I went to the local farmer's market and saw a bakery. We went in and looked at their breads. None of their items had price tags on them. We decided to buy 2 loaves so we picked them up and went to the counter. The nice lady rang them up - the total was $11 - for 2 loaves of bread! We were shocked, but since we already touched them, we felt compelled to purchase the loaves. Next time, we will ask for the price before picking anything up. We just didnt want to appear cheap. In turn, the baker got rich! Good lesson learned. http://www.daveramsey.com/articles/articleList/category/100423/storyid/68477 http://www.daveramsey.com/articles/articleList/category/100423/storyid/68477 Wed, 14 Dec 2011 02:28:57 CST About 30 months ago my wife and I bought a 15 passenger van for a really good deal easily saving $5000. It only had 13,000 miles and cost us $13,500. According to the dealer, it had a salvage title because it was a theft recovery vehicle. Prior to purchasing, we asked for the VIN number but he never had it available. My wife asked several times if it had ever been in a flood and he always said no. Late in the afternoon on a Saturday my wife and I and our two younger kids who were still in diapers made the four hour drive to look it over and test drive. The kids made it difficult to give it a good inspection. At 9:30 p.m. we closed the deal. He repeated a couple times, "I'm honest. My family's been in the business for over 40 years. If you don't buy it, I have a waiting list for people wanting to buy it." We drove the van home. The next day I inspected it more and saw rusty springs under the seats and saw that the shocks were beat up. They were not round. On Monday we did a carfax and saw that it had a flood salvage title. We put a stop order on the check and called the dealer to let him know that we stopped payment on the check. He had plenty of time to stop the registration process at our courthouse but never did. We returned the van the next day. A week or so later we received a letter from his attorney. We could either give him a good check or else pay $1000 for courthouse and attorney fees. I read that letter on a Friday evening. Either choice was due five days after the date of the letter which was the following Monday. I called my lawyer on that Monday. He suggested that I not make a rushed decision and wanted to contact the other lawyer. I ended up paying my lawyer $1000, had to buy the van back to avoid being sued from a second attorney that the dealer hired, and filed a complaint with my state's attorney general. After about a year, the AG determined that our case was not important enough to investigate anymore. We tried to sell it for about a year but the salvage flood title always turned buyers off. We owned it for over two years and drove it about 4,000 miles. We never had any major problems but it needed a new evap canister and began not starting as well. We sold it to a dealer for $6,000. Other dealers offered much less. One offered $1,500, another $3,000, another $4,000 and another $5,000. The dealer I sold to put on new tires, hopefully fixed the other two problems, and made it shine on Craigslist. He had it advertised for $13,500 and later it was gone from Criagslist. I would be interested in the rest of the van's life. We learned to always do a more thorough history search, have it inspected prior to purchase, don't rush into a deal, and don't believe any oral promises. Any claims must be written and signed. Fortuneately we have had a prosperous year and do not have that van looming in our minds anymore. http://www.daveramsey.com/articles/articleList/category/100423/storyid/68167 http://www.daveramsey.com/articles/articleList/category/100423/storyid/68167 Mon, 05 Dec 2011 05:18:17 CST My first taste of debt came on a trip to Spain in college. Every college student needs a “study” abroad experience, right? Well, I certainly believed so and even convinced my parents to pay for most of it. Key word: most of it. The rest was placed on a brand new credit card. It was all fun and games in Spain until the bill came due back in America. Fast-forward 4 years. I paid of the credit card right before I got married (4 years later!) and entered our marriage debt-free. My husband entered our marriage with about $10,000 in credit card debt and $30,000 student-loan debt. I thought no big deal, we’ve both got great jobs and we’ll pay it off in no time. Six months later, my husband needed a new vehicle. We’ve got great jobs, right? Why not buy a brand new truck for 0% interest…I mean, come on, 0%! Enter $30,000 more in debt. One year later, obviously we needed to buy a home. We STUPIDLY purchased a home with literally $0 down payment and maybe $1,000 in the bank. We rolled closing costs into the loan for a total of $163,000. We move in and decided that the home obviously needed some updating. Add another $6,000 on a brand new credit card for me and lots of sweat and hey…we’ve got new floors and new paint all around to boot. A mere 12-months from our STUPID purchase, we decided to move to our home-town to be closer to family. Just in-case you’re keeping track…we’re up to $239,000 (including the house). We were promptly able to get new great jobs in our home-town; however, the housing bubble was on the verge of popping and our newly remodeled home wouldn’t sell, and wouldn’t sell, and wouldn’t sell…Turns out there are foundation problems on our “so-cute” house. Who knew? Clearly we didn’t pay enough attention during our rush to buy a house. We could not keeping paying the mortgage on our vacant home, so we chose to try to rent it out. All was well and good for a few years. We continued to make minimum payments on all of our $239,000 debt and our tenants kept the rent checks coming. Meanwhile, we began to get more street smart and were aggressively paying down our debts. Then…the tenants had some “domestic disturbance” issues that they took out on our “so-cute” house. Read: drove a motorcycle through the house. We put it on the market again (in as-in condition), all the while debating whether we should move back and leave our family. (I forgot to mention…during this time, we had a baby. So that meant moving baby away from grandparents as well). We didn’t want to move. It didn’t sell again. Shocking, right? It was going to cost upwards of $5,000 to get the house in any condition to rent again and we did NOT want to go throwing good money into this money pit. We tried short sale, but ultimately our choice was to let the house go to foreclosure. A VERY embarrassing and stupid outcome for otherwise generally smart people. Today, the house situation is behind us. My husband has a foreclosure on his credit. Ouch! We owe about $50,000 in car loans, credit card debt, and student loans. We are gazelle focused on being debt free, having a fully funded emergency fund, and eventually saving for a house…the right way. Talk about stupid tax, yikes. We’re so glad to have found Dave Ramsey and can’t wait to call in a yell “We’re Debt Free!!” More importantly, we want to teach our son to pay attention and avoid such a high stupid tax.