Posted on 2/2/14
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 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
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. your social media marketing partner

LIKE SurfKY on Facebook - Click here to LIKE us now.

© 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 on social media.

Most Read This Week

November 24, 2015 10068

Distillery to Operate in Old Graham School…

by SurfKY News
November 21, 2015 8790

Injuries Result from Beulah Road Accident

by Doreen Dennis, SurfKY News
November 23, 2015 7652

Relative Charged with Murder, Arson in Deaths of…

by SurfKY News
November 24, 2015 4677

Ohio County Most Wanted - Top 10 - November 24

by SurfKY News
November 24, 2015 3314

Man Injured When Vehicle Collides with Deer

by SurfKY News

Most Read This Month

November 17, 2015 15926

Ohio County Most Wanted - Top 10 - November 17

by SurfKY News
November 18, 2015 14496

Runaway Teen Returns on His Own

by SurfKY News

Stories Trending Now

November 26, 2015 2651

Muhlenberg Sheriff's Office Makes Cocaine Bust

by SurfKY News
November 27, 2015 2417

Madisonville Man Charged with Attempted Murder…

by SurfKY News
November 25, 2015 2409

Man Hospitalized after Early Morning Car Accident

by SurfKY News
November 26, 2015 1724

Hopkins County Health Department Food Scores…

by SurfKY News
November 27, 2015 1259

First United Bancorp Set to Purchase Town &…

by SurfKY News
November 25, 2015 940

Thanksgiving is Peak Day for Cooking Fires

by SurfKY News
November 27, 2015 923

Hooked on Science - Pinecone Hygrometer

by SurfKY News
November 27, 2015 819

Farm City Breakfast Recognizes Importance of…

by Tammy Holloway, SurfKY News
November 26, 2015 691

Hopkins County Warriors Go to National…

by SurfKY News