dave ramsey turq 300KENTUCKY (9/8/13) – This week Dave discusses 'Serious talk time' and 'Big car debt, small income'
 
Dear Dave,
My wife and I make together about $100,000 a year, almost $50,000 in an IRA and no debt except for our home. The problem is I’ve had several health issues lately, and we’ve diverted a lot of money we’d put into saving and investing toward medical bills. We also have two kids in high school who want to go to college. Do you think we should cash out the IRA to help send our boys to school? - Jeff

Dear Jeff,
You guys make $100,000, and expenses at a good in-state school would be roughly $17,000 a year. If I were you, I’d trim the household budget and make the kids get to work. Look around and see what you can sell, too. There’s no reason you all can’t pull together and cash flow an education for these guys.

Providing an education for your kids is a noble pursuit, but you’re low on money right now because of health problems and medical bills. You didn’t do anything wrong to create this scenario. It was just a case of life happening. So, you shouldn’t feel ashamed to sit down with your kids and say, “Okay, serious talk time. You guys know what’s happened recently, so if you want to go to college, you need find a good, affordable institution and start applying for every available scholarship. You also need to plan on working after school and on weekends—now and when you’re off at college—and saving money like crazy. Your mom and I will help out some, but we all have to pull together to make this happen.”

There’s a better way to do this than borrowing money and going into debt. There will be times when it’s not easy, but walking around with student loans hanging over your head—or nothing set aside for retirement—is no fun, either! - Dave
 
Dear Dave,
My mom has about $35,000 worth of debt from a $17,000 car and $18,000 in student loans. She makes $20,000 a year. How can she get out of this mess? - Christina

Dear Christina,
No one needs a car that’s worth nearly all of their yearly income. That’s just ridiculous. If you listen to me on the radio, I’m sure you’ve already heard me say what I’m about to say now—sell the car! That will get rid of almost half her debt, then find her a little $2,000 beater to drive until she can save up for a better car.

Remember this simple rule: Never buy a car that costs more than half of your annual income. Also, never go into debt to buy a car. Automobiles go down in value like a rock, and you never want that much money wrapped up in something that’s depreciating.

We also have an income issue here. Your mom has to do something in the short term to get her income up and pay off debt. A part-time job nights and weekends would be a really good idea. Then, she needs to address her long-term situation with an eye toward a decent job. Whether it’s more formal education or technical training in a particular field, she needs to find a career that will significantly increase her income. - Dave
 
Dave Ramsey is America’s trusted voice on money and business. He’s authored four New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.


Disclaimer: The content supplied by columnists and letters to the Editor on this site does not in any way, shape or form, implied or otherwise, necessarily express or suggest endorsement or support of any of such content, statement, or opinions therein. SurfKY News does not necessarily adhere to or endorse content provided by outside non-staff sources.

e-max.it: your social media marketing partner

LIKE SurfKY on Facebook - Click here to LIKE us now.

© Copyright 2015 SurfKY News Group, Inc. All rights reserved. This material may not be published, broadcast, or rewritten without permission. SurfKY News encourages you to share this story on social media.

Posted on 2/2/14
3/13 - 16
1 DOW 18,232.02
-53.72 (-0.29%)    
2 S&P 2,126.06
-4.76 (-0.22%)    
3 NASDAQ 5,089.36
0.00 (0.00%)    
3/13 - 16

Most Read This Week

May 22, 2015 6753

Madisonville Man Charged with First-Degree Rape

by SurfKY News
May 23, 2015 6454

Missing 5-Year-Old Boy Found

by Doreen Dennis, SurfKY News
May 19, 2015 6139

Owensboro Health Proposes Building $15M Health…

by Doreen Dennis, SurfKY News
May 19, 2015 3917

Two Charged with Marijuana Possession after…

by SurfKY News
May 20, 2015 3434

Pennyrile Forest State Resort Park Holding Beach…

by Gil Lawson

Most Read This Month

May 15, 2015 10625

New Madisonville Business In Full Operation Soon

by Tammy Holloway, SurfKY News
May 15, 2015 7465

Investigation of Local Barber Shop Leads to Drug…

by SurfKY News

Stories Trending Now

May 25, 2015 2417

Can Sunscreen Save Your Life?

by Melissa Patrick
May 25, 2015 1577

UPDATE - MPD Seeks Three in Residential Robbery

by SurfKY News
May 24, 2015 1290

MCC's Felicia Johnson Receives State KCTCS Award

by Tammy Holloway, SurfKY News
May 23, 2015 1091

'Cooking for the Cure' Fundraiser Brings Out…

by Tammy Holloway, SurfKY News
May 25, 2015 785

Hopkins Man Injured in Muhlenberg Motorcycle…

by SurfKY News
May 24, 2015 682

Reading Solutions Offers Students a Hand in…

by Charles W. Riley II, SurfKY News
May 24, 2015 638

Caldwell County Native Helping Unwrap Secrets of…

by Whitney Harder
May 24, 2015 526

Prosecutors from Kentucky, Tennessee to Attend…

by Leland Hulbert
May 23, 2015 522

Whitfield Meets with Kentucky Ambulance Providers

by Ed Whitfield
May 25, 2015 464

Damascus Road House Leads Young People to Christ

by Tammy Holloway, SurfKY News