I thought I'd Heard Everything,

RJM62

RJM62

Touchdown! Greaser!
Gone West
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Jun 15, 2007
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Upstate New York
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Geek on the Hill
but apparently I hadn't.

I have a client who tells me he can't pay his bill because he's following Dave Ramsey's get-out-of-debt plan. Ramsey apparently is some sort of zero-debt guru who instructs his proteges not to use credit for anything, and my client is a follower of his; so he told me he can't pay his bill until he has the cash in hand. On Ramsey's advice, he's simply refusing to take on any more debt.

My reply was that if he didn't pay the bill he would still be taking on debt -- to me. But that didn't seem to register with him. So I told him fine, he could pay when he has the cash in hand. However, I also told him that if his bill isn't paid by the due date, then I will shut down his site and services until I have the cash in hand.

I thought I'd heard every sob story and excuse in the book, but none of my late payers have ever blamed Dave Ramsey before.

Rich
 
I read Dave Ramsey's book. He doesn't tell you anywhere not to pay your bills. This guy's messed up
 
ROFL! Wow. I don't think he quite gets it. I assume this is a business website he uses at least partially to make his living?
 
SixPapaCharlie said:
I read Dave Ramsey's book. He doesn't tell you anywhere not to pay your bills. This guy's messed up
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Yeah, I suspect he is.

This is a father-son situation. The father used to pay his bills like clockwork. The son, not so much. Every quarter it's like pulling teeth to get paid.

Rich
 
denverpilot said:
ROFL! Wow. I don't think he quite gets it. I assume this is a business website he uses at least partially to make his living?
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Yes, it is. I built the first version of it about 10 years ago when his father started the business. Since the son took it over, he's doing his best to drive it into the ground.

Rich
 
Sounds like son has a "spender" lifestyle and he's just now figuring it out.

Kinda. Not really. Haha. He hit the "holy crap!" stage so he probably *bought* a Dave Ramsey book. LOL!

(He probably doesn't have a library card either. Grin...)

I bet dad was a "saver".

No wait. He didn't buy the book or didn't read it if he's not paying his bills. I bet he heard Dave on his syndicated radio show say something like "don't go further into debt" to a caller and he's decided that's how it works. LOL.
 
The ONLY time Dave says anything about not paying bills, is when you are so deep in debt, and you have already defaulted on all your cards and loans and are being sued. He then says put a roof over your head, food on the table and keep the lights and water on. Once you do that, anything left over goes to the overdue bills.

I suspect that the son hasn't read Financial Peace, and only half listens to Dave on the radio.
 
denverpilot said:
Sounds like son has a "spender" lifestyle and he's just now figuring it out.

Kinda. Not really. Haha. He hit the "holy crap!" stage so he probably *bought* a Dave Ramsey book. LOL!

(He probably doesn't have a library card either. Grin...)

I bet dad was a "saver".

No wait. He didn't buy the book or didn't read it if he's not paying his bills. I bet he heard Dave on his syndicated radio show say something like "don't go further into debt" to a caller and he's decided that's how it works. LOL.
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Probably something like that. What he told me was that he didn't have the cash on hand and refused to put it on a credit card. And frankly, had it been his first time, I would have cut him some slack on it. I'm not heartless. But this kid has never once paid his bill on time. I've always given him extensions if he made partial payments, but this quarter he's paid nothing. If he pays something before the due date, I'll give him some more time. But he has to show me some good faith.

I think Ramsey may be the guy I was listening to on the radio while making a long trip back home one night. People would call in on the phone and exclaim that they're debt free, and the host would congratulate them and ask how they did it. It didn't sound to me like he was encouraging people to be irresponsible. Quite the opposite, actually.

Rich
 
Well I agree with not living off of debt, I'm not a credit card or payment type of guy, everything is free and clear.

That said if he didn't have cash to pay you why did he hire you in the first place? Sounds like this guy figured out he has a problem but still hasn't figured out really how to fix it.
 
RJM62 said:
I think Ramsey may be the guy I was listening to on the radio while making a long trip back home one night. People would call in on the phone and exclaim that they're debt free, and the host would congratulate them and ask how they did it. It didn't sound to me like he was encouraging people to be irresponsible. Quite the opposite, actually.

Rich
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That is the guy and your client is NOT following the program.
 
James331 said:
Well I agree with not living off of debt, I'm not a credit card or payment type of guy, everything is free and clear.

That said if he didn't have cash to pay you why did he hire you in the first place? Sounds like this guy figured out he has a problem but still hasn't figured out really how to fix it.
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His dad gave him (or more likely sold him) the business.

It's not a lot of money we're talking about, and it's not like I'm hurting for it. In fact, in terms of pocket money, I'm sort of flush at the moment because I had a lot of cash set aside for my tax bill, and it turned out to be a lot less than I thought it would be. I'm going to have to buy my CPA dinner the next time I'm downstate. Or post his bail. One of the two.

I just posted here because I thought the Dave Ramsey connection was humorous.

Rich
 
Call into Ramseys show. He may have to remind his accolytes that 'not a borrower be' includes paying debts you have already incurred.
 
RJM62 said:
I think Ramsey may be the guy I was listening to on the radio while making a long trip back home one night. People would call in on the phone and exclaim that they're debt free, and the host would congratulate them and ask how they did it. It didn't sound to me like he was encouraging people to be irresponsible. Quite the opposite, actually.
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That's him. A great program for people who have lost track of their financial situation and need outside guidance to dig themselves out of a hole. It mostly applies to personal finance, he intentionally stays away from giving any kind of business financial advice. He knows that what works for an individual to get out of debt may not be the right path for a business.
 
RJM62 said:
His dad gave him (or more likely sold him) the business.

It's not a lot of money we're talking about, and it's not like I'm hurting for it. In fact, in terms of pocket money, I'm sort of flush at the moment because I had a lot of cash set aside for my tax bill, and it turned out to be a lot less than I thought it would be. I'm going to have to buy my CPA dinner the next time I'm downstate. Or post his bail. One of the two.

I just posted here because I thought the Dave Ramsey connection was humorous.

Rich
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LOL, you'll be the one posting bail, not him.

It always amazes me the lengths people will go to feel better about screwing someone else, I would have that guy on cash in advance.
 
PaulS said:
LOL, you'll be the one posting bail, not him.

It always amazes me the lengths people will go to feel better about screwing someone else, I would have that guy on cash in advance.
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He is. The invoice is for the coming three months. So technically, he doesn't "owe" me anything unless he doesn't pay by the due date and I continue his service.

His dad used to pay annually in advance and get a hefty discount, plus pay separately for special work ordered during the year. The son said he couldn't pay annually, so I made him semi-annual, and then quarterly, but retained the discount. Now he's talking about monthly, which I'll do if he wants. I really don't care. If monthly makes it easier for him to pay without all the drama every time he's due, that works for me.

Rich
 
I believe he was the one we used to redo our entire budget and it's made a huge difference in our lives. All of our combined debts (credit cards, student loans, car payments, ...) will be paid off in 10 years based on our current income. As both of us continue to get bring more home, we will redo our budget again. With his plan we can keep our bills paid, allocate 10% towards savings, contribute to our retirement, and continue to live comfortably.

Debt snowball, I believe it was called.

We only use credit cards for online transactions and immediately pay the balance off. If we don't have the cash, we don't use the credit card.
 
@Cpt_Kirk keep at it. Was right there where you're at not that long ago.

Ramsey is big on debt free which some of his detractors don't like, but it works for us.

For those struggling to remember who he is, his first book was "Total Money Makeover" which is the basis for most of the rest.

More recently he's been working from a more religious standpoint through his "Financial Peace University" which basically goes around to both churches and non-church organizations and bases the concepts in Biblical principals.

He's had PBS specials (similar to Orman) and the syndicated radio show for a long time also.

Most of what he teaches is simply common sense budgeting and "priority of operations" so to speak, nothing new there, pay the highest interest stuff off first, snowball that payment into the next highest, etc...

I've heard people call in who've got huge finances asking about big things, and people call in who are dealing with nearly nothing and he treats them all kindly and coaches them at whatever level they're at.

The "debt free scream" segment is one person or a couple who've travelled to his studio lobby to celebrate, so to speak. He interviews them for a bit about how they decided to get on a budget and plan, what it was like to squirrel away the money toward their debts, how long it took, etc... And then they get to scream "We're debt free!" at the end and he congratulates them. The segment isn't super interesting reading it like that, but I've heard some amazing/astronomical numbers paid off in incredibly short periods of time by some folks who really got after it.

He's a Tennessee boy so he has that southern baritone with a mild accent that goes well with "homey" encouraging phrases like, "Rice and beans, beans and rice" (in reference to eating cheaply on a budget to meet the goal), and whenever anyone positively asks how he's doing he always says, "Better than I deserve!"

There's other catch phrases and phrases that mean things to regular listeners like, "Baby Steps", which are the steps to getting out of debt, and whatnot.

His business really is in linking folks to fiscal planners and sellers of insurance and what not through a network he's created. Some critics say that he shouldn't sell things but I think he keeps it relatively low key and has decent standards for those "certified" to be on his local lists (they pay for the privilege).

He's also partnered up with other authors including his own daughter on other topics. Hers is a book teaching kids to save, and other authors go into other topics like retirement more in-depth. Dave's kinda the "front man" and knows frankly folks have to get off the debt treadmill before they can do pretty much anything.

I don't always 100% agree with him (nobody should - make your own fiscal plans!) but his tenets are sound. I do have two debts, both I could pay off tomorrow if I wanted, one is a loan on a toy that I could pay off tomorrow, and the other would be my share of the airplane LLC's debt. (Can't do anything about the latter one. It's just how it's structured.) He likes to tell people to pay stuff like that off, because he's worried they'll add more. I wouldn't touch adding anything without paying off the toy, so it's just a cash flow thing for me. Interest on it is cheap and fully deductible, so it essentially costs me $0.

Don't know what's on his website these days, but probably at least the basic "Baby Steps"... DaveRamsey.com
 
Never needed advice on money....parents brought me up to pay cash except for house and car. Car paid off in a few months, house paid off in 7 years. If I didn't have the cash, I didn't need it. They also taught me to buy well under what I could afford. Current house was HUD repo, now worth 5x what I paid for it. I plan to sell it next year, move into something smaller, closer to the airport.
 
RJM62 said:
He is. The invoice is for the coming three months. So technically, he doesn't "owe" me anything unless he doesn't pay by the due date and I continue his service.

His dad used to pay annually in advance and get a hefty discount, plus pay separately for special work ordered during the year. The son said he couldn't pay annually, so I made him semi-annual, and then quarterly, but retained the discount. Now he's talking about monthly, which I'll do if he wants. I really don't care. If monthly makes it easier for him to pay without all the drama every time he's due, that works for me.

Rich
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Not sure how old your client is, but saw a poll recently that a majority of Millennials do not regard mortgages as debt. Seems he thinks the same way about your invoices :confused:

If you go to monthly doesn't that mean you have to deal with this same issue 12 times a year instead of the current 4 times?
 
GRG55 said:
Not sure how old your client is, but saw a poll recently that a majority of Millennials do not regard mortgages as debt. Seems he thinks the same way about your invoices :confused:

If you go to monthly doesn't that mean you have to deal with this same issue 12 times a year instead of the current 4 times?
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That's actually my worry. But I could set the invoicing software to just suspend him without confirmation if the invoice is unpaid. As it is now it asks me first.

Actually suspending a site usually inspires clients to find the money very quickly.

Rich
 
RJM62 said:
That's actually my worry. But I could set the invoicing software to just suspend him without confirmation if the invoice is unpaid. As it is now it asks me first.

Actually suspending a site usually inspires clients to find the money very quickly.

Rich
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At least you have some leverage. Otherwise he is going to allow you the dubious privilege of being his "banker" by allowing him to carry a perpetual "loan".
 
Tell him you are not a bank.
Payment is due when services are rendered.
No payment, services terminated.

My flying club relies on a web site for sharing information between the membership, schedules, aircraft data and training information. We pay yearly (in advance) for web posting and domain name service.
 
Never needed advice on money....parents brought me up to pay cash except for house and car......snip-DT.... If I didn't have the cash, I didn't need it. They also taught me to buy well under what I could afford.
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THIS answers ALL. Parents for the most part today do not teach their kids a thing about money!
It. Is. So. Simple. - but not having financial skill training from parents, combined with zero self-restraint and desire for instant gratification today means a huge segment of the nation is in financial distress (I have seen so many friends and acquaintances, plus have some in my extended family with this).

Make your kids work around the house from an early age. Make them put $1.00 from cleaning their room each week into their own bank account! Don't GIVE them so much STUFF! Let them go WITHOUT just a little. Don't be constantly bailing them out! Buying large gifts should be a gift for working hard on something. Do them a favor and kick them outta the house by 18 unless they are in school or working and paying rent.

(admission: I am childless...however I deal with the results of others' lack of childrearing skills)
 
Either he's worth being a PIA....or you don't need his business and cut him loose.

As a slum lord....I regularly weigh risk reward when a tenant becomes a problem.
 
James331 said:
Well I agree with not living off of debt, I'm not a credit card or payment type of guy, everything is free and clear.
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Why pay cash when you can put it on credit card, pay it off each month, and get cash back from the credit card company? Plus, it's a little difficult to pay cash (or check) at self serve fuel pumps that require a credit card.
 
RJM62 said:
I have a client who tells me he can't pay his bill because he's following Dave Ramsey's get-out-of-debt plan.
Rich
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Yeah, I gotta call BS on that one. Have internet? Have TV? Have enough money to pay for learning about getting out of debt? Then you have money to pay for your bill.
 
EdFred said:
Why pay cash when you can put it on credit card, pay it off each month, and get cash back from the credit card company? Plus, it's a little difficult to pay cash (or check) at self serve fuel pumps that require a credit card.
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I get some cash back on my PayPal debit card, works a fuel pumps too.

Personally like to own what I have and I don't like buying things I don't have the money for.

Just seems like the whole "put it on my (credit) card" mentality is what tanked this country
 
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I have enough cash (liquidity) in my accounts to cover my credit card limits 10 times over. Why not make some interest for an extra 20 days before the bill comes due? I've paid a total of 50 cents (maybe it was 75) in credit card interest in 20+ years - and that was 20 years ago. But I've made way more than that on interest by using other people's money for 20 days at a time.
I guess I've ruined the country.
 
EdFred said:
I have enough cash (liquidity) in my accounts to cover my credit card limits 10 times over. Why not make some interest for an extra 20 days before the bill comes due? I've paid a total of 50 cents (maybe it was 75) in credit card interest in 20+ years - and that was 20 years ago. But I've made way more than that on interest by using other people's money for 20 days at a time.
I guess I've ruined the country.
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Now do you think you're the exception or the rule?
 
James331 said:
I get some cash back on my PayPal debit card, works a fuel pumps too.

Personally like to own what I have and I don't lie buying things I don't have the money for.

Just seems like the who "put it on my (credit) card" mentality is what tanked this country
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I have a PayPal debit card that I used for practically everything until a few months ago, when I realized that I wasn't actually getting the 1 percent back on every purchase. This wasn't PayPal's nor The Bancorp's fault, but had to do with the way some merchants process debit card transactions. The cash back applies only if the transaction is processed as a credit transaction. If it's processed as a "Pinless Debit" transaction, then the cash back is not paid. (That's in the cardholder agreement, by the way.)

I'd never heard of a "Pinless Debit" transaction, but apparently there's some benefit to merchants for doing it that way.

The problem, of course, is that there's no way to know how the transaction will be processed until after it is. A cashier is not likely to know, and there's no one to ask when doing an online transaction. In fact, I only noticed the discrepancy because I made a very large purchase using my debit card, and I was expecting a larger-than-usual cash-back credit that month. But it didn't happen, so I called and asked about it. That's when I learned about "Pinless Debit" transactions.

So I sat down and added up all my purchases, and even exclusive of that large one, I found that I was only getting the cash back on roughly two-thirds of my purchases. That realization inspired me to apply for and receive two 1.5 percent cash back credit cards. They were the highest-paying plastic I could find that didn't involve annual fees, and I get paid regardless of how the cards are processed.

Rich
 
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EdFred said:
I have enough cash (liquidity) in my accounts to cover my credit card limits 10 times over. Why not make some interest for an extra 20 days before the bill comes due? I've paid a total of 50 cents (maybe it was 75) in credit card interest in 20+ years - and that was 20 years ago. But I've made way more than that on interest by using other people's money for 20 days at a time.
I guess I've ruined the country.
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Most people are not in that position and don't have that kind of discipline.
 
How is paying a bill taking on more debt? Isn't it paying off EXISTING debts? I think Ramsey would approve of that.
 
Greg Bockelman said:
Most people are not in that position and don't have that kind of discipline.
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That's one part of it.


The other part is with how high most card companies will set your limit, compared to what the average Jo makes and factoring in the devaluing dollar and increased cost of living plus all the predatory taxes, there's a good chunk of people who have a hard time saving that kind of money in the first place...without living on dog food and stale bread diet.
 
bullwinkle said:
How is paying a bill taking on more debt? Isn't it paying off EXISTING debts? I think Ramsey would approve of that.
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He would have to use a credit card to pay my bill. Somehow, in his mind, that's different from not paying the bill and thereby being in debt to me if I choose to continue his service without being paid.

He has until midnight to come up with at least a partial payment. If he sends me pretty much any amount, I'll give him more time. It does me no good to shut down his business if he's at least making a good-faith attempt to pay.

Rich
 
I'm heard Ramsey's show on the radio, he never advocated not paying bills that are due to avoid incurring charges. That's some BS right there.
 
James331 said:
That's one part of it.


The other part is with how high most card companies will set your limit, compared to what the average Jo makes and factoring in the devaluing dollar and increased cost of living plus all the predatory taxes, there's a good chunk of people who have a hard time saving that kind of money in the first place...without living on dog food and stale bread diet.
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I'm pretty sure I could live for a year or more quite comfortably on my combined credit card limits. When you have a habit of paying in full, card issuers have a habit of increasing your credit lines in the hope that you'll actually finance something some day.

Consumerism in general is another reason why most people have no money. I drive a base model Kia Soul, one of the cheapest cars you can buy. But it's reliable, I actually like its quirky design, it gets about 35 MPG on average, it has a great warranty, and it gets my ass from A to B as well as any other car on the road.

Spending more than you have to for a depreciating asset just makes no sense to me.

Rich
 
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