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

May 27, 2015 7389

VIDEO: Sparks Fly Over Hanson Rezoning Issue

by Tammy Holloway, SurfKY News
May 30, 2015 6934

Study of Virus Attack on Cancer Sees Success

by Julie Heflin
May 28, 2015 6500

Four Charged with Burglary for Entering Elderly…

by SurfKY News
May 27, 2015 4235

Midnight Ride on Rabbit Ridge Ends in Jail

by SurfKY News
May 27, 2015 3726

Crime Stoppers Top Most Wanted - May 27, 2015

by Crime Stoppers

Most Read This Month

May 15, 2015 11297

New Madisonville Business In Full Operation Soon

by Tammy Holloway, SurfKY News
May 23, 2015 9232

Missing 5-Year-Old Boy Found

by Doreen Dennis, SurfKY News

Stories Trending Now

June 01, 2015 1318

Authorities Discover Meth Lab While Assisting…

by SurfKY News
May 31, 2015 1273

Hopkins District Court Fines Handed Down

by SurfKY News
June 01, 2015 1112

Madisonville Police Arrest Reports Released -…

by SurfKY News
May 31, 2015 1056

Survivors, Caregivers, Supporters Gather for…

by Tammy Holloway, SurfKY News
June 01, 2015 779

Human Relations Coordinator Identifies Possible…

by Tammy Holloway, SurfKY News
June 01, 2015 707

Dawson Springs Police Reports Released

by SurfKY News
May 31, 2015 661

Muhlenberg County High School Holds 2015…

by Charles W. Riley II, SurfKY News
June 01, 2015 615

KSP Post 2 Activity Report - May 2015

by Trooper S. C. Recke
May 31, 2015 575

Madisonville Fire Department Report - May 31, 2015

by Doreen Dennis, SurfKY News
June 01, 2015 537

UPDATE - Pursuit Ends in Two Vehicle Injury…

by SurfKY News