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

Dave Says – July 14, 2013

dave ramsey blackwhite 300KENTUCKY (7/14/13) – This week Dave discusses "Roommate agreement with family?" and " Is converting to a Roth smart?"
 
Dear Dave,
My husband and I have been following your plan, and we’re debt-free. Recently he invited his sister, her husband and their two kids to live with us. His brother-in-law recently lost his job, and he did this without talking to me first. I agreed after the fact, but do you think we need a roommate agreement or some kind of understanding while they stay with us? They have about $70,000 in debt, and they haven’t been very responsible with their money. - Amanda

Dear Amanda,
I’ve got to tell you there’s zero chance that my wife or I would invite someone to live in our home without the other’s knowledge and agreement. Pulling a stunt like that is just plain wrong, and you two need to get on the same page long before you try to move these people into your house.

Now, once you’ve straightened things out between the two of you, and if you’re both in agreement, you need to understand that your purpose is to help these folks get back on their feet. Your home is not their home, and this is not an offer for them to stay as long as they like.

You’re going to have to ensure that they’re taking the steps necessary to straighten out their lives. This means working, and it means they start managing their money by living on a budget. Don’t charge them rent, because the “rent” will be that they work and go over their finances with you. Plus, you put a limit on the time they’re going to spend with you. Regardless of what happens, they’re out and back on their own by a certain, specific date.
I wouldn’t suggest allowing $70,000 worth of time for them to get back on their feet. I’m thinking maybe four to six months, but don’t let this thing drag on with no definitive end in sight. That will only cause trouble and hard feelings down the road. You guys might be able to pull this off—and keep the relationships intact—if you set fair and loving expectations on the front end. - Dave
 
Dear Dave,
I’m following your plan, and I’ve just completed Baby Step 3. I’ve got my emergency fund of three to six months of expenses in place, and I’ve paid off all my debts, except for the house, so I’m ready to tackle investing. I currently have $100,000 in a traditional IRA. Should I convert this to a Roth IRA? - Levi

Dear Levi,
You’ll have to pay taxes on the amount you withdraw, and that will amount to roughly a fourth of what you roll from a traditional IRA to a Roth IRA. If you move $100,000, it will cost you about $25,000 in taxes.

If you have that kind of money saved above your emergency fund, and separate from retirement savings, then yes, I’d convert to a Roth IRA. Don’t cash out your retirement or dip into your emergency fund. And please, please don’t run out and borrow money to make it happen!

The traditional IRA is growing on a tax-deferred basis, while the Roth IRA would grow tax-free. So, if you can pay the taxes out of pocket, I say go for it! - 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 www.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.

Most Read This Week (Site-Wide)

July 28, 2014 2877

Madisonville Woman Arrested for Being a…

in Top Stories by Madisonville Police Department
July 28, 2014 2456

Madisonville Man Arrested for Endangering…

in Top Stories by Madisonville Police Department
July 25, 2014 2288

No One Injured in Truck-Train Collision

in Top Stories by Ami Clayton, SurfKY News
July 28, 2014 2001

Disagreement Over Killing Snake in House…

in Top Stories by Madisonville Police Department
July 25, 2014 1595

Business Spotlight - McQuady's Automotive

in Top Stories by Charles W. Riley II, SurfKY News

Most Read Stories from Hopkins County

July 28, 2014 2877

Madisonville Woman Arrested for Being a…

in Top Stories by Madisonville Police Department
July 28, 2014 2456

Madisonville Man Arrested for Endangering…

in Top Stories by Madisonville Police Department
July 25, 2014 2288

No One Injured in Truck-Train Collision

in Top Stories by Ami Clayton, SurfKY News
July 28, 2014 2001

Disagreement Over Killing Snake in House…

in Top Stories by Madisonville Police Department
July 28, 2014 1514

Two Injured in Vehicle Collision on…

in Top Stories by William Roundtree

Most Read Stories from Owensboro

July 28, 2014 902

Zuberer Takes Over at Quarterback for…

in News by Steve LeMaster
July 28, 2014 826

Dont Miss Out on a Howl of a Good Time

in News by Brittni Bunn
July 28, 2014 619

Instant Admissions Day is Aug. 1, 2014

in News by Bernie Hale
July 28, 2014 343

Prosecutors Mull Over Whether to Charge…

in Top Stories by Dennis Beard, SurfKY News
July 28, 2014 234

Owensboro Police Department Activity…

in Top Stories by Dennis Beard, SurfKY News

Most Read Stories from Muhlenberg County

July 25, 2014 1595

Business Spotlight - McQuady's Automotive

in Top Stories by Charles W. Riley II, SurfKY News
July 25, 2014 1390

Business Spotlight - Blue Moon Car Wash

in Top Stories by Charles W. Riley II, SurfKY News
July 28, 2014 1080

Foot Pursuit Ends with Arrest

in Top Stories by Christopher Rogers
July 25, 2014 1030

Open Mic, Bike Night Offer Good Times in…

in Top Stories by Paul McRee, SurfKY News
July 28, 2014 1010

Boys of Broad to Launch Video at Cinema 4

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 06social 21social 22social 04social 03