Pick Your Community: | Hopkins | Muhlenberg | Daviess | Christian | Henderson | Lakes | McCracken | Webster
Davis Motor Sales banner ad

Dave Says - October 6, 2013

dave ramsey blackwhite 300KENTUCKY (10/6/13) - This week Dave discusses 'This is your college fund' - and 'Should we stop paying commission?' - and 'Emergency funding'

Dear Dave,
Our daughter is 11 years old, and we save $50 a month for her. Right now, we’ve accumulated $4,200 for college, a car or just savings in general. Should we be investing this money, instead of putting it in a savings account? - Jill

Dear Jill,
If I’m in your shoes, I’d choose college as the focal point over the other things you’ve mentioned. My advice would be to move that money into a 529 Plan with mutual funds inside. That way, it will grow tax-free from this point forward. Then, if you continue to set $50 a month aside for her for seven more years—and the stock market averages 11 to 12 percent—you’d have about $16,000 sitting there when she turned 18. That wouldn’t fully pay for college, but it’d be a great start. Plus, she can apply for scholarships and grants and work and save to help make it happen.

As far as a car is concerned, I’d set up a separate savings account and agree to match whatever she saves. That way, if she can put aside $3,000 to $4,000, with the match she’ll have a pretty nice car. But in my mind, college is the most important thing here. If you guys can afford these contributions, and she wants to go to college and will hold up her end of the deal, you can work together as a family and make the idea of a college education a reality! — Dave

Dear Dave,
Should families who are struggling to pay off debt still give their kids commissions for doing chores? - Steve

Dear Steve,
Yes, but it doesn’t have to be a lot of money. Kids seldom get paid an amount that is equal to what the chore is worth. To be perfectly honest, the chores most kids do—especially the little ones—aren’t worth that much. I wouldn’t pay a kid five dollars a day, or even per week, to feed the dog. I mean, it takes less than 30 seconds to scoop the food into the bowl!

When it comes to paying kids commissions for chores, the biggest thing we’re trying to do is find teachable moments. We want the kids to learn that money is tied to work. Then, when they have some money, we want to teach them about the three uses for money—spending, saving and giving.

Teaching them wise ways to do those three things while you’re teaching them to work is the key. And you can do that for a small amount of money.— Dave

Dear Dave,
How long should it take someone to fully fund their emergency fund? - Chris

Dear Chris,
On average, building an emergency fund takes six months to a year. It takes about 18 to 24 months for most people to pay off all of their debt, except for the house. That’s if they’re gazelle intense, and have no life other than getting control of their finances.

Baby Step 1 is saving $1,000, and not paying extra on your debts until you have that money in the bank. Once you’ve got a $1,000 starter emergency fund, then your list all of your debts except the house from smallest to largest and attack them with a vengeance. All you do is work and pay off debt until you clean up the mess. Once that’s done, you move on to the next Baby Step, which is adding to your emergency fund until you have three to six months of expenses set aside. Most people can accomplish that in six months to a year.

There are always various factors involved because everyone’s situation is different. But in most cases, if you approach my plan with the kind of intensity I talk about, you can become debt-free except for your house and have a fully-loaded emergency fund is place in just two or three years!— 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 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 by using one of the social media links below.

Posted on 2/2/14
2/6/2014 - posted

Stock Report

button coupons
1 DOW 17,672.60
-141.38 (-0.79%)    
2 S&P 2,051.82
-11.33 (-0.55%)    
3 NASDAQ 4,757.88
+7.48 (0.16%)    
2/6/2014 - posted
2/6/2014 - posted
button classifieds

In Other News...

Two Die, Two Injured in Two-Vehicle Accident

DAVIESS COUNTY, Ky. (1/25/15) ― Two people are dead and two others injured after a two-vehicle collision last night on… Read More

Pyrotechnic Event for City's Bird Control Program Starting Jan. 26

OWENSBORO, Ky. (1/24/15) — In the interest of human health and safety, a pyrotechnic event, which is part of the City… Read More
2/6/2014 - posted

Most Read This Week

January 19, 2015 8853

Two-Year-Old Child Dies after Being Struck by…

in Top News For All Sites by Paul Ray
January 19, 2015 8743

UPDATE - Lady Mustangs Fall to South Warren

in Local (Muhlenberg) Top News by Steve LeMaster
January 23, 2015 7276

Local Church's Faith Restored; 71 Souls Saved…

in Video by Gary Gates, SurfKY News
January 22, 2015 6768

Nortonville Man Accused of Selling Drugs near…

in Local (Hopkins) Top News by Madisonville Police Department/Hopkins County Jail
January 20, 2015 6560

Bridal, Prom, Pageant Expo Planned for February…

in Hopkins News by Dana Brown
January 23, 2015 5319

Parents Face Charges after Marijuana Joint Falls…

in Local (Hopkins) Top News by Madisonville Police Department/Hopkins County Jail
January 21, 2015 5170

KYDOT Pre-Treating Roads Thursday in Antipation…

in Top News For All Sites by Keith Todd
January 21, 2015 4664

Man Arrested after Allegedly Nodding off on Baby…

in Local (Hopkins) Top News by Madisonville Police Department/Hopkins County Jail
January 22, 2015 4534

MCEA Head: Further School Mergers Might Ease…

in Local (Muhlenberg) Top News by Paul McRee, SurfKY News
January 18, 2015 4152

Single Vehicle Injury Collision On Cleaton Road

in Local (Muhlenberg) Top News by Stu Recke, KSP

Stories Trending Today

January 23, 2015 1865

School Board Hears Public Comments Regarding…

in Local (Muhlenberg) Top News by Charles W. Riley II, SurfKY News
January 25, 2015 1780

Dean’s List Announced

in Top News For All Sites Touching Hopkins by Joyce Riggs
January 24, 2015 1503

Five Injured in Two-Vehicle Collision

in Local (Muhlenberg) Top News by Chris E. King
January 24, 2015 1287

Happenings, Meetings Listed for Hopkins County

in Hopkins News by Amber Averitt, SurfKY News
January 24, 2015 1127

Kentucky 2014 Highway Fatality Figures Released

in General News For All Sites by Keith Todd
January 25, 2015 1110

Two Die, Two Injured in Two-Vehicle Accident

in Local (Owensboro) Top News by Dispatcher Dustin Staves
January 24, 2015 1086

PSC Bars $54 Million in Kentucky Power Fuel Cost…

in General News For All Sites by Andrew Melnykovych
January 24, 2015 1076

Spelling Bee Contest Winners Announced

in Local (Hopkins) Top News by Joyce Riggs
January 24, 2015 1037

Keeping the Faith - 'What It's Good For'

in General News For All Sites by Ronnie McBrayer
January 24, 2015 976

Busting the Myths of Leadership

in General News For All Sites by David Taylor

SurfKY News Group, Inc.
Corporate Office & Studio
1125 Nebo Rd.  •  Madisonville, KY 42431
270.452.2727 (phone)
  •  270.452.2249 (fax)


Contact a member of our staff: www.surfky.com/contact
Copyright © 2015 SurfKY News Group, Inc.  •  Terms of Use  •  Site Map

social fbsocial twsocial yt
social gpsocial flr subscribevideoitunessocial rss