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

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.

button coupons
button classifieds

In Other News...

Lady Mustangs Top Union County, Return to Win Column

MORGANFIELD, Ky. (12/16/14) — In an early-season girls' high school basketball matchup, Muhlenberg County defeated host… Read More

Madisonville Police Arrest Reports - Dec. 16, 2014

MADISONVILLE, Ky. (12/16/14) — The Madisonville Police Department released the following reports Tuesday, Dec. 16.… Read More

Most Read This Week

December 16, 2014 8051

Coal Miner Fatally Injured in Underground Mining…

in Top News For All Sites by Dick Brown
December 14, 2014 8032

Muhlenberg Pays Homage to U.S. Armed Forces

in Local (Muhlenberg) Top News by Charles W. Riley II, SurfKY News
December 12, 2014 7554

Man Allegedly Threatening Medical Staff with…

in Local (Muhlenberg) Top News by Wes Miller
December 15, 2014 4476

Hopkins County Woman Charged Second Time in Two…

in Local (Hopkins) Top News by Charles W. Riley II, SurfKY News
December 11, 2014 4461

Muhlenberg District Court Fines Handed Down

in Local (Muhlenberg) Top News by Charles W. Riley II, SurfKY News
December 12, 2014 4281

Man Allegedly Hits Brother with Pickup Truck…

in Local (Muhlenberg) Top News by Wesley Miller
December 15, 2014 4121

Woman Leads Police on High-Speed Chase in Stolen…

in Local (Hopkins) Top News by Madisonville Police
December 11, 2014 3989

Madisonville Police Arrest Reports - Dec. 11, 2014

in Hopkins News by Madisonville Police Department
December 12, 2014 3696

Man Accused of Public Intoxication, Stealing…

in Local (Hopkins) Top News by Madisonville Police Department
December 15, 2014 3084

Vehicle Careens down 150 Foot Embankment with…

in Local (Hopkins) Top News by Madisonville Police Department

Stories Trending Today

December 16, 2014 8051

Coal Miner Fatally Injured in Underground Mining…

in Top News For All Sites by Dick Brown
December 16, 2014 2238

Highway Crews Pre-Treating Roadways for Potential…

in Hopkins News by Keith Todd
December 16, 2014 2190

Madisonville Police Arrest Reports - Dec. 16, 2014

in Hopkins News by Madisonville Police Department
December 15, 2014 2119

Rich Brings Old, New Together in New Album

in Local (Muhlenberg) Top News by Charles W. Riley II, SurfKY News
December 16, 2014 2073

Muhlenberg Community Hospital Installs Biometric…

in Local (Muhlenberg) Top News by Erin Warren
December 16, 2014 1942

KFWC Proposes 2015-2016 Deer Season Dates and…

in General News For All Sites by Department of Fish and Wildlife
December 15, 2014 1937

Dawson Springs Police Reports Released

in Hopkins News by Melissa Heflin
December 16, 2014 1796

Galloway, Director of Provider Services MCH,…

in Local (Muhlenberg) Top News by Karen Robinson
December 16, 2014 1778

MCH Auxiliary Donates $16,000 for the Renovation…

in Local (Muhlenberg) Top News by Erin Warren
December 16, 2014 1471

Hopkins County Joint Planning Commission 2015…

in Hopkins News by Cindy Young

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