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

Dave Says – Nov. 24, 2013

dave says2 300KENTUCKY (11/24/13) – This week Dave discusses 'Giving their son some problems' and 'Retirement first, or debt?'

Dear Dave,
We’ve been supporting our son while he’s in college. He just finished his sophomore year, but he told us the other day he has dropped out of school and isn’t going back. He’s been playing in a band on weekends, and he has this vague idea of becoming a musician. We don’t think this is a good idea, but we still want to be supportive … just not too supportive. We want him to be financially independent, as well. How should we handle this? - Karen

Dear Karen,
This kid is about to have some problems. Not only has he made a bad decision, but he should have consulted with you guys before he quit school. He owed you that much if you were supporting him this whole time.

In my opinion, you and your husband have one job right now. That job is to stand back and let life happen to this kid. If he thinks he’s a man, let him go out and prove it. Wish him the best and tell him you hope he becomes the rich and famous rock star he wants to be. But make sure he understands you’re not going to support him financially when he’s doing something you both feel is a bad idea. The First National Bank of Mom and Dad is officially closed!

Understand that I’m not suggesting you turn your backs on this guy. Let him know how much you both love him and that you’ll be praying for him. Invite him over for dinner once in a while, stay in touch, and make sure he knows that family deals like Thanksgiving and Christmas are still business as usual. However, as far as paying for his rent, utilities, gas, food and cell phone bill? That stuff’s not happening. This may sound tough, but it was his decision.

In the end, let him know you’ll be there to help just like before if he wises up and decides to finish school. But until then? Little boy, you signed up for this trip! - Dave
 
Dear Dave,
Should I lower my 401(k) contributions in order to pay off my car and home? - Jack

Dear Jack,
If you’re following my plan, the first thing you should do is set aside an emergency fund of $1,000. That’s Baby Step 1. Next comes Baby Step 2, which means paying off all of your debt except for your house. This would include your car. During this time you should temporarily stop any kind of investing and retirement contributions.

Once the only debt left is your mortgage, it’s time to move on to Baby Step 3. Now you concentrate on growing your emergency fund to the point where you have three to six months of expenses set aside. Once this is done, you can attack Baby Step 4, which is investing 15 percent of your pre-tax income for retirement. For you, it would mean re-starting the contributions to your 401(k).

The rest of the plan goes like this. Baby Step 5 is putting money into your kids’ college funds, while Baby Step 6 is putting everything you can scrape together towards paying off the house early. After that comes the real fun. Baby Step 7 is the point where you simply build wealth and give.

Follow these steps, Jack, and I promise you’ll have lots of fun and lots of cash. You’ll have financial peace! - 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.

Most Read This Week (Site-Wide)

April 16, 2014 19314

UPDATE- Sheriff's Office Following Leads…

in Top Stories by Taylor Riley, SurfKY News Reporter
April 17, 2014 4299

KSP Nabs St. Charles Man Wanted by U.S.…

in Top Stories by Trooper Stu Recke
April 15, 2014 3149

Police Searching for Sureway's 'Baby…

in Top Stories by Taylor Riley, SurfKY News Reporter
April 16, 2014 3088

Sheriff's Deputies Nab Central City…

in Top Stories by Sheriff Curtis McGehee
April 15, 2014 2785

Multi-Agency Investigation Leads to Drug…

in Top Stories by Lori Blakeley

Most Read Stories from Hopkins County

April 17, 2014 4299

KSP Nabs St. Charles Man Wanted by U.S.…

in Top Stories by Trooper Stu Recke
April 15, 2014 3149

Police Searching for Sureway's 'Baby…

in Top Stories by Taylor Riley, SurfKY News Reporter
April 15, 2014 2785

Multi-Agency Investigation Leads to Drug…

in Top Stories by Lori Blakeley
April 15, 2014 1081

State Approves $500K for Hopkins Archery…

in Top Stories by Rebecca Hanchett
April 18, 2014 1005

Talking Teen Trashed Telephone Pole,…

in Top Stories by MPD

Most Read Stories from Owensboro

April 15, 2014 1739

Owensboro Police Investigate Auto Accident

in News by Michael Hathaway
April 15, 2014 1381

Owensboro Parks Offers Tennis Lessons

in News by Britni Bunn
April 15, 2014 1046

Happenings and Meetings Owensboro

in News by Dennis Beard, SurfKY News
April 16, 2014 862

New Home Health Care Opens in Owensboro

in News by Dennis Beard, SurfKY News
April 15, 2014 801

OPD’s Annual 5K Run and Police Awareness…

in News by Owensboro Police Department

Most Read Stories from Muhlenberg County

April 16, 2014 3088

Sheriff's Deputies Nab Central City…

in Top Stories by Sheriff Curtis McGehee
April 15, 2014 2056

'Walk Right Back' An Everly Brother's…

in Top Stories by Paul McRee, SurfKY News Reporter
April 15, 2014 1911

Local MCHS Students Train at Job Corps

in Top Stories by Karen Robinson
April 15, 2014 1555

Thumbpickers Unite at Mose Rager Day

in Top Stories by Paul McRee, SurfKY News Reporter
April 16, 2014 1196

South Carrollton Woman Injured in Head-on…

in Top Stories by Trooper Stu Recke

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