dave says2 300KENTUCKY (5/18/14) — This week Dave discusses paying the right amount for a house and should you have more than one life insurance policy.

Dear Dave,

I know you recommend that no more than 25 percent of your take-home pay should go toward rent or a mortgage payment. Should taxes and insurance be figured into this amount?

Kayla

Dear Kayla,

Yes, they should. Mortgage companies will qualify you for twice as much house as you can realistically afford. They’ll try to put you on a 30-year, adjustable rate mortgage and leave you in debt up to your eyeballs for half of your life. Payments like that can easily equal 36 percent or more of your take home pay. That’s just nuts.

I see so many people who can’t take a decent vacation or save anything for retirement or their kids’ college fund because their mortgage payment is through the roof. That’s called being “house poor.” And I’ve even seen it push people into debt just to buy groceries.

It’s fine if you want to follow my guidelines. But what I’m really trying to do is get you to think. Engage in some critical thinking when it comes to your finances. There’s so much more to life than that building we call a house. I want you to think about your future and your family’s future and make smart money decisions that will change your family tree for years to come.

—Dave


Dear Dave,

Can you have more than one life insurance policy, and is there ever a reason to do this?

Chad

Dear Chad,

Sure, you can. And there are several different reasons you might choose to do this.

One, like in my case, I have lots of insurance regarding our business, our estate plan and those kinds of things. In some cases, I’ve reached the limit on the amount of a policy a company will write on me. Most life insurance companies will only write so much in coverage for one person. So when this has happened, I’d go to another carrier for additional coverage.

Another reason people do this is to feel more secure from a company standpoint. If one insurance company goes out of business, they’ll still have another policy, or policies, in place. Usually, that’s not much of an issue. Most insurance companies are financially stable or have insurance to back them up with the state.

The only real problem with having more than one life insurance policy is that it complicates your life a little bit. You’d have two or three premium checks or withdrawals to worry about each month and possibly even additional policy fees. So generally speaking, it’s cheaper to have just one policy. And I’d recommend having 10 to 12 times your annual income wrapped up in a good, level term policy.

But no, there aren’t any rules against having more than one life insurance policy.

—Dave

Dave Ramsey is America’s trusted voice on money and business. He has authored five New York Times best-selling books: "Financial Peace, More Than Enough," "The Total Money Makeover," "EntreLeadership and Smart Money Smart Kids." His newest best-seller, "Smart Money Smart Kids," was written with his daughter Rachel Cruze, and recently debuted at #1. The Dave Ramsey Show is heard by more than 8 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 30, 2015 3742

Webster Man Leads Police on Chase through Parts…

by SurfKY News
July 31, 2015 3683

Miss Hopkins County Fair 2015 Chosen

by Tammy Holloway, SurfKY News
July 28, 2015 2794

Hanson, Owensboro, Bowling Green Youths Win at…

by Tammy Holloway, SurfKY News
August 01, 2015 2477

24th Annual Miss Teen Hopkins County Fair Pageant…

by Tammy Holloway, SurfKY News
July 29, 2015 2414

Crime Stoppers Top Most Wanted - July 29, 2015

by SurfKY News

Most Read This Month

July 17, 2015 16615

Muhlenberg Most Wanted - Top 10

by SurfKY News
July 23, 2015 15579

UPDATE: Family Confirms Body of Missing Teen…

by Shawn Freels, SurfKY News

Stories Trending Now

August 02, 2015 1419

Poole Wins Hopkins County Fair Talent Show

by Tammy Holloway, SurfKY News
August 02, 2015 1130

Community Helps ‘Cram the Hummer’ for School…

by Tammy Holloway, SurfKY News
August 02, 2015 1054

Tiniest Division of Hopkins County Fair Pageants…

by Tammy Holloway, SurfKY News
August 02, 2015 780

Spinal Cord Injury Patient's Foundation Sponsors…

by SurfKY News
August 03, 2015 724

Two Injured in Motorcycle Accident

by SurfKY News
August 03, 2015 614

Man Accused of Using Craig's List to Encourage…

by SurfKY News
August 02, 2015 527

Legislator's Log - Week of Aug. 2, 2015

by SurfKY News
August 02, 2015 490

'The Free' Gets Greenville Crowd Groovin'

by Mike Groves, SurfKY News
August 02, 2015 432

Dave Says - Aug. 2, 2015

by SurfKY News
August 02, 2015 400

MCCH Celebrates World Breastfeeding Week

by SurfKY News