Pick Your Community: | Hopkins | Muhlenberg | Daviess | Christian | Henderson | Lakes | McCracken | Webster
Davis Motor Sales banner ad
Impressions pre-reset: 420826 Clicks pre-reset: 872

Dave Says – Dec. 15, 2013

dave says2 300KENTUCKY (12/15/13) – This week Dave discusses 'intense focus' and 'savings and security.'

Dear Dave,
What would you recommend for 401(k) contributions while getting out of debt? — Chaz

Dear Chaz,
I recommend putting a temporary stop to investing while you’re getting out of debt. Lots of people are shocked by this advice, because they’re afraid of missing out on the wonders of compound interest or their employer’s match. But the key word here is “temporary.”

Millions of people have followed and been successful with the program found in The Total Money Makeover. The first step, Baby Step 1, is to save $1,000 as a starter emergency fund. Baby Step 2 is pay off all of your debts, except for your house, from smallest to largest with the debt snowball plan. During this time you’re attacking your debt with incredible intensity and putting every penny you can scrape together toward knocking out debt.

The average person working my plan can pay off all their debt, excluding their home, in 18 to 24 months. Some folks can do it faster, and for some it takes a little bit longer. But during this time I want your financial focus to be squarely on getting out of debt. Once that’s done, you’ll find that you have a lot more control over your biggest wealth-building tool: your income.

Many times in life we try to accomplish too many things at once. One problem with this is often it diminishes our ability to focus. When you spend all your time nickel-and-diming everything, the result is that nothing gets done very well. You need to really move the needle and see results because personal finance is 80 percent behavior and only 20 percent head knowledge. It’s not really a math issue because if you’d been doing the math all along, you wouldn’t have a bunch of debt.

That’s why, for a short period of time, I want you to concentrate with laser intensity on knocking out debt. Once that’s out of the way, you can pour even more money into saving, investing and achieving financial peace! — Dave
 
Dear Dave,
My wife and I make about $100,000 a year. We have $63,000 in the bank, and we owe $47,000 on our home. The house is worth about $250,000, and it’s our only debt. We’d like to go ahead and pay off the house, but we’re worried about depleting our savings to that extent. What would you do? — Matt

Dear Matt,
If I were in your situation, I’d cut a check and pay off the house. Keep in mind that by doing this we’re not saying you’ll keep your savings at that lower point. Once that mortgage payment is off your backs, you’ll be able to save more and save faster than ever!

That’s my advice. Pay off the house and become completely debt-free today. You’ll still have $16,000 dollars in the bank and a six-figure income. It won’t take you long to rebuild your savings all the way back to what you had before, if that’s what you both want. You could do it in just a few months.

I’m looking at this as an opportunity to achieve the kind of financial independence everyone wants but few actually have. Go for it, Matt!
—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.

Posted on 2/2/14
3/13 - 16
2/6/2014 - posted
3/13 - 16
Started 11/8/2013
Started 11/8/2013
button coupons
2/6/2014 - posted
3/13 - 16
Started 11/8/2013
Started 11/8/2013
2/6/2014 - posted
3/13 - 16
Started 11/8/2013
Started 11/8/2013
button classifieds
2/6/2014 - posted
3/13 - 16
Started 11/8/2013
Started 11/8/2013

Most Read This Week

November 22, 2014 5282

One Injured in Two Vehicle Collision in Greenville

in Local (Muhlenberg) Top News by Miria Thomas
November 24, 2014 3436

Two Charged for Possession of Meth After…

in Local (Muhlenberg) Top News by MCSO/PIO Alex Piper
November 21, 2014 3335

Kentucky Employers to Save About $112 million

in General News For All Sites by Cathy Lindsey
November 25, 2014 2730

Call for Help Results in Arrest for Possession of…

in Local (Hopkins) Top News by Madisonville Police Department
November 25, 2014 2725

Madisonville Man Charged for Selling Cocaine

in Local (Hopkins) Top News by Madisonville Police Department
November 22, 2014 2514

Greenville Representatives Taking Part in Austin,…

in Local (Muhlenberg) Top News by Paul McRee, SurfKY News
November 24, 2014 2440

Madisonville Police Charge Woman with Terroristic…

in Local (Hopkins) Top News by Madisonville Police Department
November 24, 2014 2327

Hopkins County Sheriff's Reports Released

in Hopkins News by Sheila Hopper
November 21, 2014 2320

KSP Announces 'Cram the Cruiser' to Feed the…

in Top News For All Sites Touching Hopkins by Stu Recke
November 22, 2014 2314

SAR Planning 'Triple' Revolutionary War Patriot…

in Local (Muhlenberg) Top News by Geoff Baggett

Stories Trending Today

November 26, 2014 1478

Greene Leaf Boutique Offers Style for Less

in Local (Muhlenberg) Top News by Charles W. Riley II, SurfKY News
November 26, 2014 1272

Madisonville Man Charged with Selling Cocaine

in Local (Hopkins) Top News by Lt. William W. Poe
November 27, 2014 892

Sons of American Revolution Hold Triple Grave…

in Local (Muhlenberg) Top News by Geoff Baggett
November 26, 2014 889

Don't Let Your Thanksgiving Go Up in Smoke

in General News For All Sites by Kip Diggs
November 27, 2014 856

MCTI Presents 'The Santaland Diaries'

in Local (Muhlenberg) Top News by Paul McRee, SurfKY News
November 26, 2014 851

Thanksgiving is Top Day for Cooking Fires

in Top News For All Sites by Ricki Gardenhire
November 27, 2014 741

MSA Thanksgiving Food Box Drive

in Top News For All Sites Touching Hopkins by Joyce Riggs
November 27, 2014 722

Caretender's Staff Care About Feeding Needy…

in Top News For All Sites Touching Hopkins by Amber Averitt, SurfKY News
November 26, 2014 719

Gift Exchange Dos and Don'ts

in General News For All Sites by SurfKY News
November 26, 2014 654

Henderson County Middle and High School Students…

in Local (Henderson) Top News by HCS Publication Team

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 © 2014 SurfKY News Group, Inc.  •  Terms of Use  •  Site Map

social fbsocial twsocial yt
social gpsocial flrsocial rss