Pick Your Community: | Hopkins | Muhlenberg | Daviess | Christian | Henderson | Lakes | McCracken | Webster
Davis Motor Sales banner ad
Impressions pre-reset: 420826 Clicks pre-reset: 872

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.

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

Most Read This Week

November 22, 2014 5308

One Injured in Two Vehicle Collision in Greenville

in Local (Muhlenberg) Top News by Miria Thomas
November 24, 2014 3464

Two Charged for Possession of Meth After…

in Local (Muhlenberg) Top News by MCSO/PIO Alex Piper
November 21, 2014 3392

Kentucky Employers to Save About $112 million

in General News For All Sites by Cathy Lindsey
November 25, 2014 2743

Call for Help Results in Arrest for Possession of…

in Local (Hopkins) Top News by Madisonville Police Department
November 25, 2014 2731

Madisonville Man Charged for Selling Cocaine

in Local (Hopkins) Top News by Madisonville Police Department
November 22, 2014 2535

Greenville Representatives Taking Part in Austin,…

in Local (Muhlenberg) Top News by Paul McRee, SurfKY News
November 24, 2014 2444

Madisonville Police Charge Woman with Terroristic…

in Local (Hopkins) Top News by Madisonville Police Department
November 22, 2014 2336

SAR Planning 'Triple' Revolutionary War Patriot…

in Local (Muhlenberg) Top News by Geoff Baggett
November 24, 2014 2335

Hopkins County Sheriff's Reports Released

in Hopkins News by Sheila Hopper
November 21, 2014 2334

KSP Announces 'Cram the Cruiser' to Feed the…

in Top News For All Sites Touching Hopkins by Stu Recke

Stories Trending Today

November 26, 2014 1562

Greene Leaf Boutique Offers Style for Less

in Local (Muhlenberg) Top News by Charles W. Riley II, SurfKY News
November 26, 2014 1306

Madisonville Man Charged with Selling Cocaine

in Local (Hopkins) Top News by Lt. William W. Poe
November 27, 2014 1099

Sons of American Revolution Hold Triple Grave…

in Local (Muhlenberg) Top News by Geoff Baggett
November 26, 2014 1077

Don't Let Your Thanksgiving Go Up in Smoke

in General News For All Sites by Kip Diggs
November 27, 2014 1009

MCTI Presents 'The Santaland Diaries'

in Local (Muhlenberg) Top News by Paul McRee, SurfKY News
November 26, 2014 982

Thanksgiving is Top Day for Cooking Fires

in Top News For All Sites by Ricki Gardenhire
November 27, 2014 919

MSA Thanksgiving Food Box Drive

in Top News For All Sites Touching Hopkins by Joyce Riggs
November 27, 2014 913

Caretender's Staff Care About Feeding Needy…

in Top News For All Sites Touching Hopkins by Amber Averitt, SurfKY News
November 26, 2014 856

Gift Exchange Dos and Don'ts

in General News For All Sites by SurfKY News
November 26, 2014 669

Henderson County Middle and High School Students…

in Local (Henderson) Top News by HCS Publication Team

SurfKY News Group, Inc.
Corporate Office & Studio
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