dave ramsey turq 300KENTUCKY (9/8/13) – This week Dave discusses 'Serious talk time' and 'Big car debt, small income'
 
Dear Dave,
My wife and I make together about $100,000 a year, almost $50,000 in an IRA and no debt except for our home. The problem is I’ve had several health issues lately, and we’ve diverted a lot of money we’d put into saving and investing toward medical bills. We also have two kids in high school who want to go to college. Do you think we should cash out the IRA to help send our boys to school? - Jeff

Dear Jeff,
You guys make $100,000, and expenses at a good in-state school would be roughly $17,000 a year. If I were you, I’d trim the household budget and make the kids get to work. Look around and see what you can sell, too. There’s no reason you all can’t pull together and cash flow an education for these guys.

Providing an education for your kids is a noble pursuit, but you’re low on money right now because of health problems and medical bills. You didn’t do anything wrong to create this scenario. It was just a case of life happening. So, you shouldn’t feel ashamed to sit down with your kids and say, “Okay, serious talk time. You guys know what’s happened recently, so if you want to go to college, you need find a good, affordable institution and start applying for every available scholarship. You also need to plan on working after school and on weekends—now and when you’re off at college—and saving money like crazy. Your mom and I will help out some, but we all have to pull together to make this happen.”

There’s a better way to do this than borrowing money and going into debt. There will be times when it’s not easy, but walking around with student loans hanging over your head—or nothing set aside for retirement—is no fun, either! - Dave
 
Dear Dave,
My mom has about $35,000 worth of debt from a $17,000 car and $18,000 in student loans. She makes $20,000 a year. How can she get out of this mess? - Christina

Dear Christina,
No one needs a car that’s worth nearly all of their yearly income. That’s just ridiculous. If you listen to me on the radio, I’m sure you’ve already heard me say what I’m about to say now—sell the car! That will get rid of almost half her debt, then find her a little $2,000 beater to drive until she can save up for a better car.

Remember this simple rule: Never buy a car that costs more than half of your annual income. Also, never go into debt to buy a car. Automobiles go down in value like a rock, and you never want that much money wrapped up in something that’s depreciating.

We also have an income issue here. Your mom has to do something in the short term to get her income up and pay off debt. A part-time job nights and weekends would be a really good idea. Then, she needs to address her long-term situation with an eye toward a decent job. Whether it’s more formal education or technical training in a particular field, she needs to find a career that will significantly increase her income. - 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.

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.

Posted on 2/2/14

In Other News...

Celebrate Children's Book Week with Magic at HCMPL

HOPKINS COUNTY, Ky. (5/5/15) — Celebrate Children's Book Week with magic at 5 p.m., May 8, 2015, Parkway Plaza Mall.… Read More

May 2015 In-House Rabies Clinics' Schedule

HOPKINS COUNTY, Ky. (5/5/15) — There will be no rabies clinics out in the county this year. The local vets will conduct… Read More

Most Read This Week

April 28, 2015 4306

Search for Stolen Vehicle Ends with Woman Charged…

by SurfKY News
April 28, 2015 3460

Man Charged with Stalking Smoke Shop Clerk

by MPD
May 05, 2015 3250

Meth Charge Follows MPD Investigation into…

by SurfKY News
May 05, 2015 3159

School Board Studies Further Spending Cuts

by Charles W. Riley II, SurfKY News
April 30, 2015 2946

Family Says 'Goodbye' to Dog After It Allegedly…

by Doreen Dennis, SurfKY News

Most Read This Month

April 17, 2015 15837

An Open Letter from an Addict

by Olivia Kirks
April 23, 2015 8581

Man Charged with Sodomy, Incest/Victim under 12

by SurfKY News

Stories Trending Now

May 05, 2015 3250

Meth Charge Follows MPD Investigation into…

by SurfKY News
May 05, 2015 3159

School Board Studies Further Spending Cuts

by Charles W. Riley II, SurfKY News
May 06, 2015 1319

Gant Chosen as Pupil Personnel Director

by Tammy Holloway, SurfKY News
May 05, 2015 1127

Madisonville Man Goes to Hospital after…

by SurfKY News
May 05, 2015 934

Two on Moped Injured in Collision with Car

by Doreen Dennis, SurfKY News
May 05, 2015 882

Madisonville Police Arrest Reports - May 5, 2015

by SurfKY News
May 05, 2015 823

Baptist Health Madisonville Establishes Foundation

by Kristy J. Quinn
May 05, 2015 522

SurfKY Spotlight: First Kentucky Bank

by Gary Gates, SurfKY News
May 05, 2015 456

May 2015 In-House Rabies Clinics' Schedule

by Barry L. Franklin
May 05, 2015 421

Kentucky Lottery Results for Monday May 4, 2015

by Kentucky Lottery