Pick Your Community: | Hopkins | Muhlenberg | Daviess | Christian | Henderson | Lakes | McCracken | Webster

Dave Says – September 8, 2013

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.

© Copyright 2014 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 by using one of the social media links below.

In Other News...

Henderson County Police Reports

HENDERSON, Ky. (9/15/14) — The Henderson Police Department released the following reports. On Sept. 12, 2014, officers… Read More

Sen. Ridley Named to Governor’s Youth Bullying Prevention Task Force

KENTUCKY (9/15/14) — Senator Dorsey Ridley, D-Henderson, was appointed last week by Governor Steve Beshear to the… Read More

Most Read This Week (Site-Wide)

September 12, 2014 17116

Woman's Body Found in Theater Day After…

in Top Stories by Rita Dukes Smith, SurfKY News Director
September 13, 2014 3478

MPD Responds to a Disturbance at Baptist…

in Top Stories by Madisonville Police Department
September 11, 2014 3165

Subject of Officer-Involved Shooting…

in Top Stories by Rita Dukes Smith, SurfKY News Director
September 11, 2014 2533

Suspect Arrested for Possession of…

in Top Stories by Madisonville Police Department
September 11, 2014 2413

Two Accidents Occur on U.S. 62 Within…

in Top Stories by Trooper Stu Recke

Most Read Stories from Hopkins County

September 13, 2014 3478

MPD Responds to a Disturbance at Baptist…

in Top Stories by Madisonville Police Department
September 11, 2014 2533

Suspect Arrested for Possession of…

in Top Stories by Madisonville Police Department
September 11, 2014 1995

Three Injured in Early Morning Two-Car…

in Top Stories by Officer Falon Graham
September 12, 2014 1863

Madisonville Man Arrested for Disturbing…

in Top Stories by Madisonville Police Department
September 12, 2014 1538

Earlington Woman Jailed for Trying to…

in Top Stories by MPD Officer Matt Sanderson

Most Read Stories from Owensboro

September 11, 2014 1462

Owensboro Police Department Activity…

in News by Dennis Beard, SurfKY News
September 11, 2014 1421

Owensboro Parks Plans Fall Day Camp

in News by Brittni Bunn
September 11, 2014 1200

Special Events Committee Meeting Date,…

in News by Beth Cecil
September 11, 2014 1200

Daviess County Public Library Plans Events

in News by Leslie McCarty
September 12, 2014 1150

Ursuline Presentation 'Spirituality of…

in News by Jennifer Kaminski

Most Read Stories from Muhlenberg County

September 11, 2014 3165

Subject of Officer-Involved Shooting…

in Top Stories by Rita Dukes Smith, SurfKY News Director
September 11, 2014 2413

Two Accidents Occur on U.S. 62 Within…

in Top Stories by Trooper Stu Recke
September 15, 2014 2101

Man Accused of Stalking Woman During Her…

in Top Stories by GPD PIO Wes Miller
September 11, 2014 1911

Job Corps Students Volunteer with…

in Top Stories by Karen Robinson
September 12, 2014 1825

Paradise Residents Plan First Reunion…

in Top Stories by Paul McRee, SurfKY News

SurfKY News Group, Inc. Central Office & Printing Division
1125 Nebo Rd.  •  Madisonville, KY 42431  •  270.452.2249 (fax)
Main Number: 270.452.2727 (phone)  •  Printing Division Direct Line: 270.821.8600 (phone)

SurfKY Owensboro News Bureau
920 Frederica St. / Suite 210  •  Owensboro, KY 42301  •  270.683-8060 (phone)


Contact a member of our staff: www.surfky.com/contact
Copyright © 2014 SurfKY News Group, Inc.  •  Terms of Use  •  Site Map

social 03social 04social 22social 21social 06