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

Dave Says – October 13, 2013

dave ramsey turq 300KENTUCKY (10/13/13) – This week Dave discusses 'How much term do I need? and 'Budgeted fun'
 
Dear Dave,
Should term life insurance be purchased based on your current earnings or future, projected earnings? - Dan

Dear Dan,
I usually recommend people have 10 to 12 times their current annual income in a good, level term life insurance policy. However, if you have a solid reason to project your income jumping significantly in the near future, there’s nothing wrong with basing your amount of life insurance coverage on that figure—as long as you can afford it.

Now, when I say a solid reason, I’m not talking about having an attitude of, “I’m smart. So, I’m going to make tons more money soon.” That’s ego, not reason. But if you’re in a residency finishing your medical degree, you can realistically look at making $40,000 to $50,000 for another year or two then making the jump to $200,000. That’s the kind of logical thinking and planning I’m talking about. In that scenario, a huge jump in income is almost assured. There’s nothing wrong with going ahead and getting more coverage.

The purpose of life insurance is to take care of your family if something unexpected should happen to you. You don’t want to go nuts and buy too much unnecessarily, but you should have enough to ensure that they’re well taken care of when you’re not around. - Dave
 
Dear Dave,
My husband and I are debt-free except for our house. I’ve been having a discussion with a coworker over how much money to allow for fun in your budget. I think $100 for a bottle of wine is okay, but she says something like that is unreasonable. What do you think? - Elizabeth

Dear Elizabeth,
It depends entirely on your financial situation. Paying $100 for a bottle of wine is pretty dumb if you make only $20,000 a year. But what if you make $200,000 a year? Quit worrying and buy the wine! When you have a great income-to-asset ratio—and you’re living debt-free, have control of your money, and are saving and investing for the future—that’s the time to relax and enjoy a few things.

You’ve got to take the whole picture into account. Otherwise, you’ll get caught up in the whole envy and jealousy thing. I know a guy who makes $15 million a year, and recently he bought a $400,000 car. Now, I grew up in a small town in Tennessee. I can’t wrap my head around the idea of a $400,000 automobile. But as a ratio, that’s a very small part of his income. It would be like someone who makes $150,000 a year buying a $400 car.

That’s a good rule of thumb for determining if something constitutes an outrageous purchase. If it’s a big-enough percentage of your income to rock your world and mess with your finances, then you’re spending too much. But to say that a certain item is too expensive or an irresponsible purchase based on price alone, that’s kind of silly. - 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
Genovese - http://www.mchky.org/staff/bio.php?doc_id=35646&sub= Lewis - http://www.mchky.org/getpage.php?name=bracken_lewis Holt - http://www.mchky.org/getpage.php?name=drholt Napier - http://www.mchky.org/getpage.php?name=dr.napier_page Newman - http://www.mchky.org/staff/bio.php?doc_id=50353
Genovese - http://www.mchky.org/staff/bio.php?doc_id=35646&sub= Lewis - http://www.mchky.org/getpage.php?name=bracken_lewis Holt - http://www.mchky.org/getpage.php?name=drholt Napier - http://www.mchky.org/getpage.php?name=dr.napier_page Newman - http://www.mchky.org/staff/bio.php?doc_id=50353
3/12 - 718 switched from reg 2 to hopkins only
2/6/2014 - posted
3/13 - 16
Started 11/8/2013
Started 11/8/2013
Genovese - http://www.mchky.org/staff/bio.php?doc_id=35646&sub= Lewis - http://www.mchky.org/getpage.php?name=bracken_lewis Holt - http://www.mchky.org/getpage.php?name=drholt Napier - http://www.mchky.org/getpage.php?name=dr.napier_page Newman - http://www.mchky.org/staff/bio.php?doc_id=50353
Genovese - http://www.mchky.org/staff/bio.php?doc_id=35646&sub= Lewis - http://www.mchky.org/getpage.php?name=bracken_lewis Holt - http://www.mchky.org/getpage.php?name=drholt Napier - http://www.mchky.org/getpage.php?name=dr.napier_page Newman - http://www.mchky.org/staff/bio.php?doc_id=50353
3/12 - 718 switched from reg 2 to hopkins only
2/6/2014 - posted
3/13 - 16
Started 11/8/2013
Started 11/8/2013
Genovese - http://www.mchky.org/staff/bio.php?doc_id=35646&sub= Lewis - http://www.mchky.org/getpage.php?name=bracken_lewis Holt - http://www.mchky.org/getpage.php?name=drholt Napier - http://www.mchky.org/getpage.php?name=dr.napier_page Newman - http://www.mchky.org/staff/bio.php?doc_id=50353
Genovese - http://www.mchky.org/staff/bio.php?doc_id=35646&sub= Lewis - http://www.mchky.org/getpage.php?name=bracken_lewis Holt - http://www.mchky.org/getpage.php?name=drholt Napier - http://www.mchky.org/getpage.php?name=dr.napier_page Newman - http://www.mchky.org/staff/bio.php?doc_id=50353
3/12 - 718 switched from reg 2 to hopkins only
2/6/2014 - posted
3/13 - 16
Started 11/8/2013
Started 11/8/2013
Genovese - http://www.mchky.org/staff/bio.php?doc_id=35646&sub= Lewis - http://www.mchky.org/getpage.php?name=bracken_lewis Holt - http://www.mchky.org/getpage.php?name=drholt Napier - http://www.mchky.org/getpage.php?name=dr.napier_page Newman - http://www.mchky.org/staff/bio.php?doc_id=50353
Genovese - http://www.mchky.org/staff/bio.php?doc_id=35646&sub= Lewis - http://www.mchky.org/getpage.php?name=bracken_lewis Holt - http://www.mchky.org/getpage.php?name=drholt Napier - http://www.mchky.org/getpage.php?name=dr.napier_page Newman - http://www.mchky.org/staff/bio.php?doc_id=50353
3/12 - 718 switched from reg 2 to hopkins only
2/6/2014 - posted
3/13 - 16
Started 11/8/2013
Started 11/8/2013

Most Read This Week (Site-Wide)

August 29, 2014 8202

Luke's Flea Market Vendors' Home Away…

in News by Charles W. Riley II, SurfKY News
August 30, 2014 7564

One Hospitalized After Officer-Involved…

in Top Stories by Charles W. Riley II, SurfKY News
August 28, 2014 7555

Police Pursuit Spans Parts of Northern…

in Top Stories by Alex Piper, MCSO
August 31, 2014 4778

Passenger in Officer-Involved Shooting…

in Top Stories by Rita Dukes Smith, SurfKY News Director
August 29, 2014 3938

Business Spotlight - Magical Memories…

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

Most Read Stories from Hopkins County

August 30, 2014 3187

Ponderosa Madisonville to Donate 10…

in Top Stories by Rita Dukes Smith, SurfKY News Director
August 30, 2014 1304

City of Madisonville Says 'Goodbye' to…

in Top Stories by Amber Averitt, SurfKY News
September 01, 2014 912

Hopkins County Misdemeanor Indictments

in Top Stories by Karen McKnight
August 29, 2014 894

MCC Announces New Board Members

in Top Stories by Joyce Riggs
August 29, 2014 579

Trover Health Endowment Reaches $100,000…

in Top Stories by Joyce Riggs

Most Read Stories from Owensboro

August 29, 2014 2566

Daviess County Sheriff’s Office Activity…

in News by Dennis Beard, SurfKY News
August 29, 2014 2481

Owensboro Police Department Activity…

in News by Dennis Beard, SurfKY News
August 28, 2014 2191

Downtown Trolley to Run on Labor Day

in News by Abby Shelton
August 30, 2014 1678

Owensboro Traffic Advisory

in News by Keith Todd
August 28, 2014 1469

Daviess County Sheriff’s Office Activity…

in News by Dennis Beard, SurfKY News

Most Read Stories from Muhlenberg County

August 28, 2014 7555

Police Pursuit Spans Parts of Northern…

in Top Stories by Alex Piper, MCSO
August 29, 2014 3938

Business Spotlight - Magical Memories…

in Top Stories by Charles W. Riley II, SurfKY News
August 28, 2014 3596

Another Greenville Home Invasion Being…

in Top Stories by Wes Miller, GPD
August 28, 2014 2362

Whitfield, Yonts Pay Tribute to Bob and…

in Top Stories by Paul McRee, SurfKY News
August 28, 2014 2264

Stanton Barrett's NASCAR Mustang Gets…

in Top Stories by Charles W. Riley II, 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