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

Dave Says – July 14, 2013

dave ramsey blackwhite 300KENTUCKY (7/14/13) – This week Dave discusses "Roommate agreement with family?" and " Is converting to a Roth smart?"
 
Dear Dave,
My husband and I have been following your plan, and we’re debt-free. Recently he invited his sister, her husband and their two kids to live with us. His brother-in-law recently lost his job, and he did this without talking to me first. I agreed after the fact, but do you think we need a roommate agreement or some kind of understanding while they stay with us? They have about $70,000 in debt, and they haven’t been very responsible with their money. - Amanda

Dear Amanda,
I’ve got to tell you there’s zero chance that my wife or I would invite someone to live in our home without the other’s knowledge and agreement. Pulling a stunt like that is just plain wrong, and you two need to get on the same page long before you try to move these people into your house.

Now, once you’ve straightened things out between the two of you, and if you’re both in agreement, you need to understand that your purpose is to help these folks get back on their feet. Your home is not their home, and this is not an offer for them to stay as long as they like.

You’re going to have to ensure that they’re taking the steps necessary to straighten out their lives. This means working, and it means they start managing their money by living on a budget. Don’t charge them rent, because the “rent” will be that they work and go over their finances with you. Plus, you put a limit on the time they’re going to spend with you. Regardless of what happens, they’re out and back on their own by a certain, specific date.
I wouldn’t suggest allowing $70,000 worth of time for them to get back on their feet. I’m thinking maybe four to six months, but don’t let this thing drag on with no definitive end in sight. That will only cause trouble and hard feelings down the road. You guys might be able to pull this off—and keep the relationships intact—if you set fair and loving expectations on the front end. - Dave
 
Dear Dave,
I’m following your plan, and I’ve just completed Baby Step 3. I’ve got my emergency fund of three to six months of expenses in place, and I’ve paid off all my debts, except for the house, so I’m ready to tackle investing. I currently have $100,000 in a traditional IRA. Should I convert this to a Roth IRA? - Levi

Dear Levi,
You’ll have to pay taxes on the amount you withdraw, and that will amount to roughly a fourth of what you roll from a traditional IRA to a Roth IRA. If you move $100,000, it will cost you about $25,000 in taxes.

If you have that kind of money saved above your emergency fund, and separate from retirement savings, then yes, I’d convert to a Roth IRA. Don’t cash out your retirement or dip into your emergency fund. And please, please don’t run out and borrow money to make it happen!

The traditional IRA is growing on a tax-deferred basis, while the Roth IRA would grow tax-free. So, if you can pay the taxes out of pocket, I say go for it! - 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 www.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.

In Other News...

Friends of Lake Malone Busy Hiding 1,500 Easter Eggs

DUNMOR, Ky. (4/18/14) — The Friends of Lake Malone State Park are hosting an Easter Egg Hunt Saturday, April 19, at the… Read More

Muhlenberg Job Corps Employee of the Month

MUHLENBERG, Ky. (4/18/14) — Miranda Hope is Student Counselor at the Muhlenberg Job Corps. She is a very dedicated and… Read More

Most Read This Week (Site-Wide)

April 16, 2014 19326

UPDATE- Sheriff's Office Following Leads…

in Top Stories by Taylor Riley, SurfKY News Reporter
April 17, 2014 4317

KSP Nabs St. Charles Man Wanted by U.S.…

in Top Stories by Trooper Stu Recke
April 15, 2014 3152

Police Searching for Sureway's 'Baby…

in Top Stories by Taylor Riley, SurfKY News Reporter
April 16, 2014 3096

Sheriff's Deputies Nab Central City…

in Top Stories by Sheriff Curtis McGehee
April 15, 2014 2787

Multi-Agency Investigation Leads to Drug…

in Top Stories by Lori Blakeley

Most Read Stories from Hopkins County

April 17, 2014 4317

KSP Nabs St. Charles Man Wanted by U.S.…

in Top Stories by Trooper Stu Recke
April 15, 2014 3152

Police Searching for Sureway's 'Baby…

in Top Stories by Taylor Riley, SurfKY News Reporter
April 15, 2014 2787

Multi-Agency Investigation Leads to Drug…

in Top Stories by Lori Blakeley
April 15, 2014 1085

State Approves $500K for Hopkins Archery…

in Top Stories by Rebecca Hanchett
April 18, 2014 1018

Talking Teen Trashed Telephone Pole,…

in Top Stories by MPD

Most Read Stories from Owensboro

April 15, 2014 1745

Owensboro Police Investigate Auto Accident

in News by Michael Hathaway
April 15, 2014 1386

Owensboro Parks Offers Tennis Lessons

in News by Britni Bunn
April 15, 2014 1051

Happenings and Meetings Owensboro

in News by Dennis Beard, SurfKY News
April 16, 2014 871

New Home Health Care Opens in Owensboro

in News by Dennis Beard, SurfKY News
April 15, 2014 813

OPD’s Annual 5K Run and Police Awareness…

in News by Owensboro Police Department

Most Read Stories from Muhlenberg County

April 16, 2014 3096

Sheriff's Deputies Nab Central City…

in Top Stories by Sheriff Curtis McGehee
April 15, 2014 2058

'Walk Right Back' An Everly Brother's…

in Top Stories by Paul McRee, SurfKY News Reporter
April 15, 2014 1914

Local MCHS Students Train at Job Corps

in Top Stories by Karen Robinson
April 15, 2014 1560

Thumbpickers Unite at Mose Rager Day

in Top Stories by Paul McRee, SurfKY News Reporter
April 16, 2014 1206

South Carrollton Woman Injured in Head-on…

in Top Stories by Trooper Stu Recke

SurfKY News Group, Inc. Central Office & Printing Division
1125 Nebo Rd.  •  Madisonville, KY 42431  •  270.452.2249 (fax)
Main Number: 270.452.2727 (phone)  •  Printing Division Direct Line: 270.821.8600 (phone)

SurfKY Owensboro News Bureau
920 Frederica St. / Suite 210  •  Owensboro, KY 42301  •  270.683-8060 (phone)


Contact a member of our staff: www.surfky.com/contact
Copyright © 2014 SurfKY News Group, Inc.  •  Terms of Use  •  Site Map

social 06social 21social 22social 04social 03