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 16,643.01
-11.76 (-0.07%)    
2 S&P 1,988.87
+1.21 (0.06%)    
3 NASDAQ 4,828.33
+15.62 (0.32%)    
3/13 - 16

Most Read This Week

August 24, 2015 10812

Teen Reports Slasher Attempted to Attack Him on…

by Doreen Dennis, SurfKY News
August 24, 2015 6032

Alleged Burglar Calls 911 to Report Fire

by SurfKY News
August 24, 2015 4967

UPDATE: Four Dead, Two Survive Boating Accident

by SurfKY News
August 27, 2015 4474

All is Well after MNHHS Lockdown

by Doreen Dennis, SurfKY News
August 24, 2015 4048

MPD Coducting Sobriety Checkpoints

by SurfKY News

Most Read This Month

August 06, 2015 15512

Muhlenberg Woman Reportedly Suffers Violent…

by SurfKY News
August 24, 2015 10812

Teen Reports Slasher Attempted to Attack Him on…

by Doreen Dennis, SurfKY News

Stories Trending Now

August 28, 2015 1282

Two Webster County Residents Injured in Hopkins…

by Doreen Dennis, SurfKY News
August 28, 2015 1153

Hopkins County Health Department Food Scores Thru…

by SurfKY News
August 28, 2015 919

Madisonville Police Arrest Reports Released -…

by SurfKY News
August 29, 2015 825

All Occasions Formals to Host Celebration to…

by Rita Dukes Smith, SurfKY News Director
August 28, 2015 695

Rep. Montell Proposes Bill to Stop Sweeping of…

by SurfKY News
August 28, 2015 571

Two-Vehicle Accident Results in Possible Injuries

by Doreen Dennis, SurfKY News
August 28, 2015 560

Rep. Gooch, Others Argue against Burden Caused by…

by SurfKY News
August 28, 2015 549

TVA Seeks Input on Study for Closing Coal Ash…

by SurfKY News
August 28, 2015 545

Kentucky High School Football Schedule

by Steve LeMaster
August 28, 2015 491

Alleged Passed out Parents Face Charges of…

by SurfKY News