dave says1KENTUCKY (10/20/13) – This week Dave discusses 'Life insurance vs. 529' and 'Better car, better gas mileage?'

Dear Dave,
An insurance salesman told me it’s better to use a life insurance policy for college savings rather than a 529 plan because the child can use it for anything instead of just college. Is that true? - Rusty

Dear Rusty,
Of course that’s what he told you. He’s an insurance salesman!

He was right on one point. If the kid doesn’t go to college, the savings inside an insurance policy can be used for anything. But here’s the catch: There won’t be much waiting for you, because you saved it inside a life insurance policy. The returns stink! Savings inside a life insurance policy won’t get you anywhere near the cash you’d have by investing in a 529 plan.

If you’re going to save for your kids’ college fund, there needs to be lots of talk around the house about actually going to college. It’s not really brainwashing them so much as it’s letting them know the importance of a good education. And they need to know, on no uncertain terms, that the money you’re saving for them is for one thing: college.

What you experienced, Rusty, was an insurance salesman trying to sell insurance. Stay away from it when it comes to saving up for college! - Dave

Dear Dave,
Is it a good idea to sell your car in order to get one that gets better gas mileage? - Trey

Dear Trey,
Only if the other car is really cheap, or cheaper than the one you’re selling. I think it’s funny when people run out and upgrade on their $7,000 car to buy a $30,000 Prius to save gas. Think about it. That’s an extra expenditure of $23,000 to save gas. Where are you planning on driving, to the moon?

Actually saving money is a much better plan than some of the ideas people dream up in the name of saving money. When it comes to things like this, you need to sit down and do the math. Crunch some hard, cold figures and see what happens. “Well, if we got this kind of gas mileage, instead of what we’re getting now, how much money would we save?” But if you spend $5,000 more to save $50 it will take forever to get back the money you’ve already spent.

Getting better gas mileage is good thing, but I wouldn’t recommend spending any more than the value of the car you’re currently driving to make it happen. Moving down in car but up in mileage is a great plan. If you do that, you’ll really start making headway with your money.

This kind of scenario is a simple math thing, Trey. The problem is lots of times people’s emotions get caught up in stuff, and next thing you know they think they have a real reason to buy an expensive, new piece of automotive technology. I call that car fever, and it’ll wreck your finances in a hurry! - 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.

e-max.it: 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.

Stock Report Sponsored by

In Other News...

Storm Water Quality Advisory Committee Meeting Thursday

OWENSBORO, Ky. (9/2/15) — The Owensboro-Daviess County Storm Water Quality Advisory Committee will meet at noon on… Read More

City of Owensboro's Labor Day Schedule

OWENSBORO, Ky. (9/2/15) — City Hall, Owensboro Transit System and Parks Administration will be closed for the Labor Day… Read More

Most Read This Week

August 31, 2015 6796

Man Convicted of Hopkins Countian's Death Granted…

by Doreen Dennis, SurfKY News
September 02, 2015 6026

Madisonville Gaining Two New Businesses

by Ron Sanders
August 30, 2015 3990

UPDATED: 'He Fought the Law ... but, the Law Won'

by Doreen Dennis, SurfKY News
September 02, 2015 3189

Investigation Leads to Meth Trafficking Charge

by SurfKY News
August 29, 2015 2683

Kentucky State Park Camping Deal Offered in…

by SurfKY News

Most Read This Month

August 06, 2015 19539

Muhlenberg Woman Reportedly Suffers Violent…

by SurfKY News
August 24, 2015 12217

Teen Reports Slasher Attempted to Attack Him on…

by Doreen Dennis, SurfKY News

Stories Trending Now

September 02, 2015 6026

Madisonville Gaining Two New Businesses

by Ron Sanders
September 02, 2015 3189

Investigation Leads to Meth Trafficking Charge

by SurfKY News
September 02, 2015 2546

UPDATE: Missing Teen Located

by SurfKY News
September 02, 2015 2395

Woman Allegedly Passed Out at Wheel Charged with…

by SurfKY News
September 02, 2015 1963

Crime Stoppers Top Most Wanted - September 2, 2015

by SurfKY News
September 02, 2015 1266

Madisonville Police Arrest Reports Released -…

by SurfKY News
September 02, 2015 1200

Gov. Beshear's Statement on County Clerks,…

by SurfKY News
September 02, 2015 1150

Hopkins County Sheriff's Reports Released

by SurfKY News
September 02, 2015 1058

GPD Conducting Safety Checkpoints

by SurfKY News
September 02, 2015 1053

Blood Drive Boosts Blood Bank Deposits

by Tammy Holloway, SurfKY News