Pick Your Community: | Hopkins | Muhlenberg | Daviess | Christian | Henderson | Lakes | McCracken | Webster

Dave Says - October 6, 2013

dave ramsey blackwhite 300KENTUCKY (10/6/13) - This week Dave discusses 'This is your college fund' - and 'Should we stop paying commission?' - and 'Emergency funding'

Dear Dave,
Our daughter is 11 years old, and we save $50 a month for her. Right now, we’ve accumulated $4,200 for college, a car or just savings in general. Should we be investing this money, instead of putting it in a savings account? - Jill

Dear Jill,
If I’m in your shoes, I’d choose college as the focal point over the other things you’ve mentioned. My advice would be to move that money into a 529 Plan with mutual funds inside. That way, it will grow tax-free from this point forward. Then, if you continue to set $50 a month aside for her for seven more years—and the stock market averages 11 to 12 percent—you’d have about $16,000 sitting there when she turned 18. That wouldn’t fully pay for college, but it’d be a great start. Plus, she can apply for scholarships and grants and work and save to help make it happen.

As far as a car is concerned, I’d set up a separate savings account and agree to match whatever she saves. That way, if she can put aside $3,000 to $4,000, with the match she’ll have a pretty nice car. But in my mind, college is the most important thing here. If you guys can afford these contributions, and she wants to go to college and will hold up her end of the deal, you can work together as a family and make the idea of a college education a reality! — Dave

Dear Dave,
Should families who are struggling to pay off debt still give their kids commissions for doing chores? - Steve

Dear Steve,
Yes, but it doesn’t have to be a lot of money. Kids seldom get paid an amount that is equal to what the chore is worth. To be perfectly honest, the chores most kids do—especially the little ones—aren’t worth that much. I wouldn’t pay a kid five dollars a day, or even per week, to feed the dog. I mean, it takes less than 30 seconds to scoop the food into the bowl!

When it comes to paying kids commissions for chores, the biggest thing we’re trying to do is find teachable moments. We want the kids to learn that money is tied to work. Then, when they have some money, we want to teach them about the three uses for money—spending, saving and giving.

Teaching them wise ways to do those three things while you’re teaching them to work is the key. And you can do that for a small amount of money.— Dave

Dear Dave,
How long should it take someone to fully fund their emergency fund? - Chris

Dear Chris,
On average, building an emergency fund takes six months to a year. It takes about 18 to 24 months for most people to pay off all of their debt, except for the house. That’s if they’re gazelle intense, and have no life other than getting control of their finances.

Baby Step 1 is saving $1,000, and not paying extra on your debts until you have that money in the bank. Once you’ve got a $1,000 starter emergency fund, then your list all of your debts except the house from smallest to largest and attack them with a vengeance. All you do is work and pay off debt until you clean up the mess. Once that’s done, you move on to the next Baby Step, which is adding to your emergency fund until you have three to six months of expenses set aside. Most people can accomplish that in six months to a year.

There are always various factors involved because everyone’s situation is different. But in most cases, if you approach my plan with the kind of intensity I talk about, you can become debt-free except for your house and have a fully-loaded emergency fund is place in just two or three years!— 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.

3/13 - 16
3/13 - 16
button coupons

Stock Report

1 DOW 17,356.87
+288.00 (1.69%)    
2 S&P 2,012.89
+40.15 (2.04%)    
3 NASDAQ 4,644.31
+96.48 (2.12%)    
3/13 - 16
3/13 - 16
button classifieds

In Other News...

Mustangs Earn District Win over Ohio County

GREENVILLE, Ky. (12/17/14) — Host Muhlenberg County, under the direction of head coach Tony Hopper, pulled away to… Read More

Crime Stoppers Fugitive of the Week – Dec. 17, 2014

HOPKINSVILLE, Ky. (12/17/14) — The above photos are local fugitives that are currently being sought by local… Read More
3/13 - 16

Most Read This Week

December 16, 2014 8816

Coal Miner Fatally Injured in Underground Mining…

in Top News For All Sites by Dick Brown
December 14, 2014 8283

Muhlenberg Pays Homage to U.S. Armed Forces

in Local (Muhlenberg) Top News by Charles W. Riley II, SurfKY News
December 12, 2014 7855

Man Allegedly Threatening Medical Staff with…

in Local (Muhlenberg) Top News by Wes Miller
December 17, 2014 4948

Elderly Couple Found Shot to Death in Muhlenberg

in Local (Muhlenberg) Top News by Trooper Stu Recke
December 17, 2014 4780

Three Men Charged with Burglary

in Local (Hopkins) Top News by Madisonville Police Department
December 15, 2014 4664

Hopkins County Woman Charged Second Time in Two…

in Local (Hopkins) Top News by Charles W. Riley II, SurfKY News
December 12, 2014 4556

Man Allegedly Hits Brother with Pickup Truck…

in Local (Muhlenberg) Top News by Wesley Miller
December 15, 2014 4211

Woman Leads Police on High-Speed Chase in Stolen…

in Local (Hopkins) Top News by Madisonville Police
December 12, 2014 3727

Man Accused of Public Intoxication, Stealing…

in Local (Hopkins) Top News by Madisonville Police Department
December 15, 2014 3171

Vehicle Careens down 150 Foot Embankment with…

in Local (Hopkins) Top News by Madisonville Police Department

Stories Trending Today

December 17, 2014 4948

Elderly Couple Found Shot to Death in Muhlenberg

in Local (Muhlenberg) Top News by Trooper Stu Recke
December 17, 2014 4780

Three Men Charged with Burglary

in Local (Hopkins) Top News by Madisonville Police Department
December 17, 2014 1347

Madisonville Police Arrest Reports - Dec. 17, 2014

in Hopkins News by Madisonville Police Department
December 17, 2014 1010

Princeton Road Drug Investigation Results in…

in Local (Hopkins) Top News by Madisonville Police Department
December 17, 2014 971

Harney-Led Lady Mustangs Top Ohio County

in Local (Muhlenberg) Top News by Steve LeMaster
December 17, 2014 884

KSP Charges Grayson County Man with Crimes…

in General News For All Sites by Sherry H. Bray
December 17, 2014 868

KYTC Announces Winners of 2014 Adopt-a-Highway…

in General News For All Sites by Lisa Tolliver
December 17, 2014 839

Mustangs Earn District Win over Ohio County

in Local (Muhlenberg) Top News by Steve LeMaster
December 17, 2014 814

Change to Holiday Schedule for LBL Administrative…

in Local (Lakes) Top News by Land Between The Lakes
December 17, 2014 650

MFD Summoned to Seminary Street for Garage Fire

in Local (Hopkins) Top News by SurfKY News

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