dave says2 300KENTUCKY (11/24/13) – This week Dave discusses 'Giving their son some problems' and 'Retirement first, or debt?'

Dear Dave,
We’ve been supporting our son while he’s in college. He just finished his sophomore year, but he told us the other day he has dropped out of school and isn’t going back. He’s been playing in a band on weekends, and he has this vague idea of becoming a musician. We don’t think this is a good idea, but we still want to be supportive … just not too supportive. We want him to be financially independent, as well. How should we handle this? - Karen

Dear Karen,
This kid is about to have some problems. Not only has he made a bad decision, but he should have consulted with you guys before he quit school. He owed you that much if you were supporting him this whole time.

In my opinion, you and your husband have one job right now. That job is to stand back and let life happen to this kid. If he thinks he’s a man, let him go out and prove it. Wish him the best and tell him you hope he becomes the rich and famous rock star he wants to be. But make sure he understands you’re not going to support him financially when he’s doing something you both feel is a bad idea. The First National Bank of Mom and Dad is officially closed!

Understand that I’m not suggesting you turn your backs on this guy. Let him know how much you both love him and that you’ll be praying for him. Invite him over for dinner once in a while, stay in touch, and make sure he knows that family deals like Thanksgiving and Christmas are still business as usual. However, as far as paying for his rent, utilities, gas, food and cell phone bill? That stuff’s not happening. This may sound tough, but it was his decision.

In the end, let him know you’ll be there to help just like before if he wises up and decides to finish school. But until then? Little boy, you signed up for this trip! - Dave
 
Dear Dave,
Should I lower my 401(k) contributions in order to pay off my car and home? - Jack

Dear Jack,
If you’re following my plan, the first thing you should do is set aside an emergency fund of $1,000. That’s Baby Step 1. Next comes Baby Step 2, which means paying off all of your debt except for your house. This would include your car. During this time you should temporarily stop any kind of investing and retirement contributions.

Once the only debt left is your mortgage, it’s time to move on to Baby Step 3. Now you concentrate on growing your emergency fund to the point where you have three to six months of expenses set aside. Once this is done, you can attack Baby Step 4, which is investing 15 percent of your pre-tax income for retirement. For you, it would mean re-starting the contributions to your 401(k).

The rest of the plan goes like this. Baby Step 5 is putting money into your kids’ college funds, while Baby Step 6 is putting everything you can scrape together towards paying off the house early. After that comes the real fun. Baby Step 7 is the point where you simply build wealth and give.

Follow these steps, Jack, and I promise you’ll have lots of fun and lots of cash. You’ll have financial peace! - 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.

Most Read This Week

July 27, 2015 5799

Death of Central City Man in Dawson Springs Under…

by SurfKY News
July 27, 2015 3761

School System Announces Free Lunch/Breakfast at…

by SurfKY News
July 30, 2015 3146

Webster Man Leads Police on Chase through Parts…

by SurfKY News
July 31, 2015 3102

Miss Hopkins County Fair 2015 Chosen

by Tammy Holloway, SurfKY News
July 28, 2015 2505

Hanson, Owensboro, Bowling Green Youths Win at…

by Tammy Holloway, SurfKY News

Most Read This Month

July 17, 2015 16193

Muhlenberg Most Wanted - Top 10

by SurfKY News
July 23, 2015 15155

UPDATE: Family Confirms Body of Missing Teen…

by Shawn Freels, SurfKY News

Stories Trending Now

July 31, 2015 3102

Miss Hopkins County Fair 2015 Chosen

by Tammy Holloway, SurfKY News
August 01, 2015 1842

24th Annual Miss Teen Hopkins County Fair Pageant…

by Tammy Holloway, SurfKY News
August 01, 2015 1701

Little Miss, Mister Hopkins County Fair Chosen

by Tammy Holloway, SurfKY News
July 31, 2015 1079

State Fair President Commends Hopkins County Fair…

by Tammy Holloway, SurfKY News
July 31, 2015 922

Hopkins District Court Fines Handed Down

by SurfKY News
July 31, 2015 670

Henderson Woman Faces Rape Charges

by SurfKY News
July 31, 2015 632

House of Onyx's Crystal Gallery Opens in…

by SurfKY News
July 31, 2015 609

Hopkins County Sheriff's Reports Released

by SurfKY News
July 31, 2015 593

A.G. Conway Announces Two Cybercrimes Arrests for…

by SurfKY News
July 31, 2015 503

Four Wheeler Pursuit Results in Charges

by SurfKY News