Pick Your Community: | Hopkins | Muhlenberg | Daviess | Christian | Henderson | Lakes | McCracken | Webster
Davis Motor Sales banner ad

Dave Says – September 8, 2013

dave ramsey turq 300KENTUCKY (9/8/13) – This week Dave discusses 'Serious talk time' and 'Big car debt, small income'
 
Dear Dave,
My wife and I make together about $100,000 a year, almost $50,000 in an IRA and no debt except for our home. The problem is I’ve had several health issues lately, and we’ve diverted a lot of money we’d put into saving and investing toward medical bills. We also have two kids in high school who want to go to college. Do you think we should cash out the IRA to help send our boys to school? - Jeff

Dear Jeff,
You guys make $100,000, and expenses at a good in-state school would be roughly $17,000 a year. If I were you, I’d trim the household budget and make the kids get to work. Look around and see what you can sell, too. There’s no reason you all can’t pull together and cash flow an education for these guys.

Providing an education for your kids is a noble pursuit, but you’re low on money right now because of health problems and medical bills. You didn’t do anything wrong to create this scenario. It was just a case of life happening. So, you shouldn’t feel ashamed to sit down with your kids and say, “Okay, serious talk time. You guys know what’s happened recently, so if you want to go to college, you need find a good, affordable institution and start applying for every available scholarship. You also need to plan on working after school and on weekends—now and when you’re off at college—and saving money like crazy. Your mom and I will help out some, but we all have to pull together to make this happen.”

There’s a better way to do this than borrowing money and going into debt. There will be times when it’s not easy, but walking around with student loans hanging over your head—or nothing set aside for retirement—is no fun, either! - Dave
 
Dear Dave,
My mom has about $35,000 worth of debt from a $17,000 car and $18,000 in student loans. She makes $20,000 a year. How can she get out of this mess? - Christina

Dear Christina,
No one needs a car that’s worth nearly all of their yearly income. That’s just ridiculous. If you listen to me on the radio, I’m sure you’ve already heard me say what I’m about to say now—sell the car! That will get rid of almost half her debt, then find her a little $2,000 beater to drive until she can save up for a better car.

Remember this simple rule: Never buy a car that costs more than half of your annual income. Also, never go into debt to buy a car. Automobiles go down in value like a rock, and you never want that much money wrapped up in something that’s depreciating.

We also have an income issue here. Your mom has to do something in the short term to get her income up and pay off debt. A part-time job nights and weekends would be a really good idea. Then, she needs to address her long-term situation with an eye toward a decent job. Whether it’s more formal education or technical training in a particular field, she needs to find a career that will significantly increase her income. - 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.

© 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.

Posted on 2/2/14
2/6/2014 - posted
3/13 - 16
Started 11/8/2013
Started 11/8/2013
2/6/2014 - posted
3/13 - 16
Started 11/8/2013
Started 11/8/2013
2/6/2014 - posted
3/13 - 16
Started 11/8/2013
Started 11/8/2013
2/6/2014 - posted
3/13 - 16
Started 11/8/2013
Started 11/8/2013

Most Read This Week

October 17, 2014 11770

UK Women's Soccer Welcomes Ole Miss, No. 5/4…

in General Sports For All Sites by UK Athletics
October 20, 2014 5146

Uncle Lee's in Greenville is Closing Its Doors…

in Local (Muhlenberg) Top News by www.unclelees.com
October 15, 2014 3820

Family Business, Graphics Pros to Open Friday

in Top News For All Sites by Shawn Freels
October 15, 2014 3670

Chamber Meeting and More Announced

in Local (Muhlenberg) Top News by Dorothy Walker
October 17, 2014 3596

Single Vehicle Collision Results in One Injury

in Local (Muhlenberg) Top News by Trooper S. C. Recke
October 19, 2014 3528

Kentucky Energy Department Releases Virtual Solar…

in General News For All Sites by Dick Brown
October 15, 2014 3484

Madisonville Police Arrest Reports - Oct. 15, 2014

in Hopkins News by Madisonville Police Department
October 15, 2014 2932

Woman Arrested for Domestic Dispute in the Street

in Local (Hopkins) Top News by Madisonville Police Department
October 16, 2014 2816

Madisonville Police Arrest Reports - Oct. 16, 2014

in Hopkins News by Madisonville Police Department
October 17, 2014 2709

Woman Arrested at Taco Bell for DUI

in Local (Hopkins) Top News by Madisonville Police Department

Stories Trending Today

October 20, 2014 5146

Uncle Lee's in Greenville is Closing Its Doors…

in Local (Muhlenberg) Top News by www.unclelees.com
October 20, 2014 2569

Man Charged for Assaulting Pregnant Wife

in Local (Hopkins) Top News by Madisonville Police Department
October 21, 2014 2278

UPDATE: Pedestrian Struck by Vehicle on Shamrock…

in Local (Hopkins) Top News by Officer C.P. Haynie
October 20, 2014 1857

Man Arrested for Shoplifting, Assaulting Police…

in Local (Hopkins) Top News by Madisonville Police Department
October 20, 2014 1790

Hopkins County Sheriff's Arrest Reports Released

in Hopkins News by Sheila Hopper
October 20, 2014 1693

Paul Simon Headlines COPD Tribute for Phil Everly

in Top News For All Sites by Paul McRee, SurfKY News
October 20, 2014 1667

Hopkins County Board of Education Recognizes…

in Local (Hopkins) Top News by Tammy Holloway, SurfKY News
October 20, 2014 1643

Madisonville Police Arrest Reports - Oct. 20, 2014

in Hopkins News by Madisonville Police Department
October 20, 2014 1589

Muhlenberg Community Hospital Prepares for…

in Local (Muhlenberg) Top News by Erin Warren
October 20, 2014 1464

KU and LG&E to Fund Qualified Tree-Planting…

in General News For All Sites by Cliff Feltham

SurfKY News Group, Inc.
1125 Nebo Rd.  •  Madisonville, KY 42431
270.452.2727 (phone)
  •  270.452.2249 (fax)


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

social fbsocial twsocial yt
social gpsocial flrsocial rss