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.

Posted on 2/2/14
3/13 - 16
3/13 - 16

Most Read This Week

July 23, 2015 14208

UPDATE: Family Confirms Body of Missing Teen…

by Shawn Freels, SurfKY News
July 23, 2015 4216

Woman Accused of Striking Juvenile with Metal Belt

by SurfKY News
July 22, 2015 4060

No. 9 Steakhouse Suffers Fire; Owners Vow to…

by Doreen Dennis, SurfKY News
July 27, 2015 3785

Death of Central City Man in Dawson Springs Under…

by SurfKY News
July 22, 2015 3770

UPDATE - GPD Recovers Stolen Vehicle, Arrest Made

by SurfKY News

Most Read This Month

July 02, 2015 19238

Emergency Response Team on Scene of Standoff on…

by Doreen Dennis, SurfKY News
July 17, 2015 15182

Muhlenberg Most Wanted - Top 10

by SurfKY News

Stories Trending Now

July 27, 2015 3785

Death of Central City Man in Dawson Springs Under…

by SurfKY News
July 27, 2015 3082

School System Announces Free Lunch/Breakfast at…

by SurfKY News
July 26, 2015 1572

Bikers Ride to Support Teen with Brain Cancer

by Doreen Dennis, SurfKY News
July 26, 2015 1369

Muhlenberg County Traffic Advisory

by SurfKY News
July 26, 2015 938

Sounds of UK Talents Fill the Summer Air in…

by SurfKY News
July 27, 2015 846

Family Needs Help in Paying 18-Year-Old's Funeral…

by SurfKY News
July 27, 2015 841

Baptist Health Names Regional Marketing, Public…

by SurfKY News
July 27, 2015 764

New Madisonville Public Parking Area Announcement

by SurfKY News
July 26, 2015 746

Contemporary Christian Artist Inspires Muhlenberg…

by Mike Groves, SurfKY News
July 26, 2015 664

Legislator's Log - Week of July 26, 2015

by SurfKY News