DEAR DAVE: I just got married and my husband and I want to book a combination honeymoon and New Year’s trip to celebrate. We don’t have all the money for it right now, but will have in a few weeks. We were thinking about booking the trip on a zero-interest credit card, and paying it off when we have all the money. I know you hate debt, but would this be OK since it would be a very short-term debt?
— Laura
DEAR LAURA: I know you guys are excited and happy about being married. And I wish you all the happiness in the world. But I don’t recommend credit cards of any kind, for any reason, whatsoever.
I don’t want to burst your bubble, but if you can’t pay for this trip up front you can’t afford it. Believe it or not, lots of people postpone wedding trips until they’ve had a chance to save up a little bit of money. Some folks have never even gone on a honeymoon trip, and they have great, loving marriages.
My advice to you and your new husband is to work, and save up a little bit more. Maybe one or both of you could pick up extra jobs for a little while, and make it happen sooner. Then, when you can pay cash for the trip, go have a blast on a honeymoon you can afford.
Monday, December 29, 2014
Monday, December 22, 2014
What to do if lost job and have debt
Question:
My husband and I both lost our jobs over a month ago. I’ve been interviewing, and he started a two-week training program for a new job the other day, but right now we’re in survival mode. We just cashed in an annuity, and were wondering if we should pay down debt and reduce the money going out each month, or just live on it?
Right now, it’s raining and you need an umbrella. If it were me, I’d just sit on the money for the time being.
Dave Says:
Don’t misunderstand me. You need to be honorable and pay your debts, but you may have to put that on hold for a while. Right now, it’s more important to have food in the house and keep the heat on. This kind of situation is scary and can be really stressful, so make sure you hug and hold on to each other a lot, too.
It’s been rough for you guys, especially right here during the holidays. But it sounds like things may be taking a turn for the better. Your husband is about to start making money again, and you may have some possibilities on the horizon.
Through this stretch, honest communication can make a huge difference. Make sure your creditors know what’s happening. Let them know that you want to make things right, and that you will make things right as soon as you can.
My husband and I both lost our jobs over a month ago. I’ve been interviewing, and he started a two-week training program for a new job the other day, but right now we’re in survival mode. We just cashed in an annuity, and were wondering if we should pay down debt and reduce the money going out each month, or just live on it?
Right now, it’s raining and you need an umbrella. If it were me, I’d just sit on the money for the time being.
Dave Says:
Don’t misunderstand me. You need to be honorable and pay your debts, but you may have to put that on hold for a while. Right now, it’s more important to have food in the house and keep the heat on. This kind of situation is scary and can be really stressful, so make sure you hug and hold on to each other a lot, too.
It’s been rough for you guys, especially right here during the holidays. But it sounds like things may be taking a turn for the better. Your husband is about to start making money again, and you may have some possibilities on the horizon.
Through this stretch, honest communication can make a huge difference. Make sure your creditors know what’s happening. Let them know that you want to make things right, and that you will make things right as soon as you can.
Thursday, December 18, 2014
How to deal with Child stealing from parents
Dear Dave,
I gave my wife $350 for Christmas shopping at Walmart. While she was there with our six-year-old daughter, she cashed her bonus check to put with the Christmas money.
When she tried to check out, the money was gone. My wife even asked our daughter if she took the money out of mommy’s purse, and she said no. Later, we found the money in our daughter’s coat, and she didn’t seem sorry at all for having taken it. How should we address this?
Jonathan
Dear Jonathan,
Most children that age really have no idea something like this is such a big deal. But this is more than just a money thing. It’s something of great value, and it’s someone else’s stuff. Not only that, but she took it, lied about it and then showed no remorse. I’ve got a really short fuse when it comes to lying, but the lack of repentance and sorrow associated with something like this are my biggest problems.
First of all, you and your wife have to present a united front when you talk about this with your child. This is an incredible example of a teachable moment, but you two have to be on the same side and treat it with appropriate seriousness. You have to make your daughter understand that what she did was wrong and why it was wrong.
Perhaps you could also use an example of someone taking something from her — something that was very valuable to her — and ask how she would feel in that situation.
Lots of times this approach, especially with little kids, will touch their hearts and help them realize the magnitude of their actions. In a case like this, I think I’d hand out very little in the way of punishment. Regardless, you have to nip this kind of thing in the bud immediately.
This is the kind of violation you cannot allow to happen unaddressed. And whatever the consequences of her actions end up being, you must make sure she clearly understands why she’s being punished and why what she did was wrong.
Dave
- See more at: http://greertoday.com/greer-sc/dave-ramsey-this-is-an-incredible-example-of-a-teachable-moment-with-a-child/2014/12/17
I gave my wife $350 for Christmas shopping at Walmart. While she was there with our six-year-old daughter, she cashed her bonus check to put with the Christmas money.
When she tried to check out, the money was gone. My wife even asked our daughter if she took the money out of mommy’s purse, and she said no. Later, we found the money in our daughter’s coat, and she didn’t seem sorry at all for having taken it. How should we address this?
Jonathan
Dear Jonathan,
Most children that age really have no idea something like this is such a big deal. But this is more than just a money thing. It’s something of great value, and it’s someone else’s stuff. Not only that, but she took it, lied about it and then showed no remorse. I’ve got a really short fuse when it comes to lying, but the lack of repentance and sorrow associated with something like this are my biggest problems.
First of all, you and your wife have to present a united front when you talk about this with your child. This is an incredible example of a teachable moment, but you two have to be on the same side and treat it with appropriate seriousness. You have to make your daughter understand that what she did was wrong and why it was wrong.
Perhaps you could also use an example of someone taking something from her — something that was very valuable to her — and ask how she would feel in that situation.
Lots of times this approach, especially with little kids, will touch their hearts and help them realize the magnitude of their actions. In a case like this, I think I’d hand out very little in the way of punishment. Regardless, you have to nip this kind of thing in the bud immediately.
This is the kind of violation you cannot allow to happen unaddressed. And whatever the consequences of her actions end up being, you must make sure she clearly understands why she’s being punished and why what she did was wrong.
Dave
- See more at: http://greertoday.com/greer-sc/dave-ramsey-this-is-an-incredible-example-of-a-teachable-moment-with-a-child/2014/12/17
Monday, December 8, 2014
Dave Ramsey on how to negotiate a car purchase
Dear Dave,
My husband and I are looking at getting a second vehicle. We found one we like, and it’s in great shape, but they’re asking more than we can afford to pay. How do you make a low offer without making someone angry or insulting them?
Angela
Dear Angela,
It’s always a smart move to try and stay on the seller’s good side. You want to be classy and diplomatic, and never point out the bad things about an item someone’s selling just to drive down the price.
If you insult their merchandise or insinuate the price is unfair, you’re likely to blow the whole deal right off the bat.
How about this? Tell them it’s a fine vehicle, and their price is fair, but the amount they’re asking is outside your budget. Let them know how much you want to work out a deal, but, in order for it to fit into your lifestyle, you can only pay a certain amount. You might throw in that a lot of people are selling things right now because of the economy, and you’re just looking for the very best deal.
Maybe that, and letting them know you’re standing there with money in hand, will help swing this thing in your favor. Good luck, Angela!
— Dave
VIA http://www.timesreporter.com/article/20141203/NEWS/141209956/1378/FRONTPAGE
My husband and I are looking at getting a second vehicle. We found one we like, and it’s in great shape, but they’re asking more than we can afford to pay. How do you make a low offer without making someone angry or insulting them?
Angela
Dear Angela,
It’s always a smart move to try and stay on the seller’s good side. You want to be classy and diplomatic, and never point out the bad things about an item someone’s selling just to drive down the price.
If you insult their merchandise or insinuate the price is unfair, you’re likely to blow the whole deal right off the bat.
How about this? Tell them it’s a fine vehicle, and their price is fair, but the amount they’re asking is outside your budget. Let them know how much you want to work out a deal, but, in order for it to fit into your lifestyle, you can only pay a certain amount. You might throw in that a lot of people are selling things right now because of the economy, and you’re just looking for the very best deal.
Maybe that, and letting them know you’re standing there with money in hand, will help swing this thing in your favor. Good luck, Angela!
— Dave
VIA http://www.timesreporter.com/article/20141203/NEWS/141209956/1378/FRONTPAGE
Monday, December 1, 2014
Going to school Debt Free is better
DEAR DAVE: My husband and I both work two jobs. Together we make about $53,000 a year, and we’re trying to get out of debt. We have $35,000 in debt, and most of that is on our truck. I’d like to go back to school and become an ultrasound technician, so we’ll have more money. Do you think this is a good idea?
— Sarah
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| Dave Ramsey |
DEAR SARAH: Getting more education is always a good idea. For starters, I’d begin doing some research to find out what ultrasound technicians in your area are earning. Then, look into the cost of training at a nearby school.
But I would only recommend starting school after you guys have done some work and cleaned up your finances.
You’ve got a bunch of debt hanging over your heads, and the truck you mentioned is a big part of the problem.
Sell the truck and move down to something very inexpensive to drive for a little while.
Then tear into the remainder of the debt and get it paid off as fast as you can. After that, save up a bunch of money so you can go to school debt-free.
I know that may seem like a long time before you can start school, but chances are you can get this done in less than two years.
And trust me, going to school debt-free will feel a whole lot better than having another bunch of payments buzzing around your heads for years to come.
VIA http://newsok.com/article/5371256
Monday, November 17, 2014
Dave Ramsey: Buy vs Rent house
Dear Dave,We've got our starter emergency fund in place, and we've paid off the last of our debt. Currently, we rent an apartment but my wife really wants us to buy a house now. She also wants us to use a 30-year, 100 percent financing plan, and says this wouldn't cost any more than we're paying in rent. I disagree with her idea, and she's upset with me. How can I make her see this is a bad plan?
— Alan
Dear Alan,
I think she probably knows deep down this isn't a good plan. She's found something she really likes, and she's mad because you're not going along with the idea. It's called “house fever.”When you buy a home with nothing down and little to no money in the bank, you're inviting Murphy and his cousins — Broke, Desperate and Stupid — to move in with you.
In other words, you'll find yourselves in a mess because you didn't have the maturity and wisdom to wait until you had your fully funded emergency fund of three to six months of expenses in place, plus a 20 percent down payment saved up for a house.
The idea that you save money because your house payment is the same, or even a little less than your rent, is a myth. It costs more to own a home, period. As a homeowner, you're exposed to all kinds of things you never have to worry about as a renter.We all have times when we get excited by something we want and do things we shouldn't. I've done it, and I'll bet you have, too. But in situations like this, you've got to sit down and talk things out. I'm not sure how to get your wife to realize this or act more mature, but I do know that people who charge into things of this magnitude without thinking are the very ones who end up in my office for financial counseling or filing bankruptcy!
— Dave
From http://www.heraldnet.com/article/20141116/BIZ04/141119507/Wifes-house-fever%26%238217-threatens-familys-finances
— Alan
I think she probably knows deep down this isn't a good plan. She's found something she really likes, and she's mad because you're not going along with the idea. It's called “house fever.”When you buy a home with nothing down and little to no money in the bank, you're inviting Murphy and his cousins — Broke, Desperate and Stupid — to move in with you.
In other words, you'll find yourselves in a mess because you didn't have the maturity and wisdom to wait until you had your fully funded emergency fund of three to six months of expenses in place, plus a 20 percent down payment saved up for a house.
The idea that you save money because your house payment is the same, or even a little less than your rent, is a myth. It costs more to own a home, period. As a homeowner, you're exposed to all kinds of things you never have to worry about as a renter.We all have times when we get excited by something we want and do things we shouldn't. I've done it, and I'll bet you have, too. But in situations like this, you've got to sit down and talk things out. I'm not sure how to get your wife to realize this or act more mature, but I do know that people who charge into things of this magnitude without thinking are the very ones who end up in my office for financial counseling or filing bankruptcy!
— Dave
From http://www.heraldnet.com/article/20141116/BIZ04/141119507/Wifes-house-fever%26%238217-threatens-familys-finances
Monday, November 3, 2014
Dave Ramsey advice on debt collectors
DEAR DAVE: We had our first child a few months ago and some of the bills have gone to collections. We’ve paid what we could, but we each make only about $15,000 a year. Now, we’re getting calls and letters from collectors wanting our checking account information and electronic access. When we won’t give it to them, they accuse us of not following the terms and conditions of the agreements. They say we’ll be penalized if we don’t comply. What should we do?
— Stephanie
DEAR STEPHANIE: You’re doing the right thing by not giving them your account information and electronic access. The stuff they’re saying is just collector talk, and they’re full of crap.
The next time you talk to one of them, just let them know you have every intention of paying what’s owed. But the bill is going to be paid by you. There’s nothing in an this kind of agreement that gives them the right to your account numbers or electronic access. These people can stop lying and act right, or they can go jump in the lake.
The biggest issue here is your income. If I’m your husband, I’m going to find an extra job delivering pizzas a few nights a week for the time being. He could make an additional $1,000 a month for the next 10 months, and that problem would be solved.
Instead of working 40 to 45 hours a week, try working 60 to 80 for just a little while.
Still, you both need to examine your career track for the future. Look into different types of training and education with the attitude of doubling or even tripling your income in the next five years. I want you both to develop long-term plans to increase your income, and a short-term plan to get out from under this debt in a hurry.
— Stephanie
DEAR STEPHANIE: You’re doing the right thing by not giving them your account information and electronic access. The stuff they’re saying is just collector talk, and they’re full of crap.
The next time you talk to one of them, just let them know you have every intention of paying what’s owed. But the bill is going to be paid by you. There’s nothing in an this kind of agreement that gives them the right to your account numbers or electronic access. These people can stop lying and act right, or they can go jump in the lake.
The biggest issue here is your income. If I’m your husband, I’m going to find an extra job delivering pizzas a few nights a week for the time being. He could make an additional $1,000 a month for the next 10 months, and that problem would be solved.
Instead of working 40 to 45 hours a week, try working 60 to 80 for just a little while.
Still, you both need to examine your career track for the future. Look into different types of training and education with the attitude of doubling or even tripling your income in the next five years. I want you both to develop long-term plans to increase your income, and a short-term plan to get out from under this debt in a hurry.
Monday, October 27, 2014
Fixing up the house before selling can reap benefits
My husband and I recently inherited my parents’ home. It’s in a small, rural town with little industry, and we’ve been told that the place would be worth $85,000 if it’s cleaned up, compared to $75,000 as-is. Should we spend about $10,000 to really clean it up, replace a few things and make it presentable to sell it faster?
— Terri
Dear Terri,
It’s really up to you guys, because both options — whether you’re sitting on the house or rehabbing it — are going to take time and emotional energy. From a real estate person’s perspective, houses always sell better when they’re shined up and looking nice. When prospective buyers walk in and see and smell new carpet and fresh paint, they don’t have to strain their imaginations looking past everything. When you force potential buyers to look past things, it usually ends up costing you money.
In most cases, if you spend $10,000, you gain more than what you put into the house. Honestly, I think one of the numbers you’ve given me is wrong — either the $85,000, the $75,000 or the $10,000 you think it will take to fix up the place. In other words, if you spend $10,000 on a project like this, you’ll usually gain $20,000 when you’re talking about stuff like a thorough cleaning, new carpet and flooring, fresh paint and basics like that. My guess is if the place is worth $85,000 fixed up, it’ll probably bring about $65,000 as-is.
If it’s me, I’m going to clean the place and fix it up. I’ve done hundreds, if not thousands, of these kinds of deals, and I can’t stand trying to sell something that’s dumpy, grungy and out of shape.
— Dave
— Terri
Dear Terri,
It’s really up to you guys, because both options — whether you’re sitting on the house or rehabbing it — are going to take time and emotional energy. From a real estate person’s perspective, houses always sell better when they’re shined up and looking nice. When prospective buyers walk in and see and smell new carpet and fresh paint, they don’t have to strain their imaginations looking past everything. When you force potential buyers to look past things, it usually ends up costing you money.
In most cases, if you spend $10,000, you gain more than what you put into the house. Honestly, I think one of the numbers you’ve given me is wrong — either the $85,000, the $75,000 or the $10,000 you think it will take to fix up the place. In other words, if you spend $10,000 on a project like this, you’ll usually gain $20,000 when you’re talking about stuff like a thorough cleaning, new carpet and flooring, fresh paint and basics like that. My guess is if the place is worth $85,000 fixed up, it’ll probably bring about $65,000 as-is.
If it’s me, I’m going to clean the place and fix it up. I’ve done hundreds, if not thousands, of these kinds of deals, and I can’t stand trying to sell something that’s dumpy, grungy and out of shape.
— Dave
Monday, October 20, 2014
Invest in stocks or pay mortgage ?
Dear Dave,
If you have a mortgage that will be paid off in the next two or three years, should you pay extra toward the house or invest that money over and above the 15 percent you recommend putting toward retirement?
— Walt
Dear Walt,
I would pay extra on the house. You know, a magical thing happens when you pay down a house and sell it somewhere down the road. The money comes back. You didn’t lose it.
Honestly, you’re not doing a bad thing by putting it into retirement either. But you don’t know exactly what will happen over the next several years of your life or the life of your investments. You might think you know. You might even have a plan. But the truth is even the best plans don’t always work out the way we want.
And if that happens, it sure would be neat to own your home outright.
— Dave
If you have a mortgage that will be paid off in the next two or three years, should you pay extra toward the house or invest that money over and above the 15 percent you recommend putting toward retirement?
— Walt
Dear Walt,
I would pay extra on the house. You know, a magical thing happens when you pay down a house and sell it somewhere down the road. The money comes back. You didn’t lose it.
Honestly, you’re not doing a bad thing by putting it into retirement either. But you don’t know exactly what will happen over the next several years of your life or the life of your investments. You might think you know. You might even have a plan. But the truth is even the best plans don’t always work out the way we want.
And if that happens, it sure would be neat to own your home outright.
— Dave
Monday, September 15, 2014
How to stop small expenses from getting bigger
My husband and I have been living on a budget for a few months, and for some reason there seem to be leaks in our budget. It’s just a few dollars here and there, but added together it makes a huge dent. Can you give us some advice?
Dave Says:
This kind of thing happens a lot in household budgeting, especially to folks who are new to the game. Here are some ideas to help stretch your dollars and plug those leaks.
Use the cash-only method, especially when shopping for groceries. Take only the amount you have budgeted, and don’t use your debit card or a check. Also, use coupons only for items you would buy anyway. In addition, you can stock up on items you use often when there is a big sale. These little things will add up.
Try eating out only on special occasions, drink water as your beverage and don’t be afraid to use coupons in restaurants, either. When it comes to buying clothes, make a habit of checking out the sale rack first. You can shop at thrift and consignment stores, and sell the clothes you don’t wear anymore.
With entertainment, use dollar-off and buy-one-get-one-free coupons whenever you can. See a matinee or a second-run movie, and if you’re going somewhere with a bunch of people, call ahead and ask for a group discount. You’ll be amazed at how much money these tactics will save.
Dave Says:
This kind of thing happens a lot in household budgeting, especially to folks who are new to the game. Here are some ideas to help stretch your dollars and plug those leaks.
Use the cash-only method, especially when shopping for groceries. Take only the amount you have budgeted, and don’t use your debit card or a check. Also, use coupons only for items you would buy anyway. In addition, you can stock up on items you use often when there is a big sale. These little things will add up.
Try eating out only on special occasions, drink water as your beverage and don’t be afraid to use coupons in restaurants, either. When it comes to buying clothes, make a habit of checking out the sale rack first. You can shop at thrift and consignment stores, and sell the clothes you don’t wear anymore.
With entertainment, use dollar-off and buy-one-get-one-free coupons whenever you can. See a matinee or a second-run movie, and if you’re going somewhere with a bunch of people, call ahead and ask for a group discount. You’ll be amazed at how much money these tactics will save.
Tuesday, September 2, 2014
Unlikely government will seize someone's 539 asset
Dear Dave,
I have a 5-year-old daughter, and I want to start a 529 for her. However, I'm concerned that the government might seize the 529 assets in order to pay off debt and give people treasury bonds instead. Do you think this might happen?
Barry
Dear Barry,
I think there's less than a 1 percent chance they'd seize the actual assets. Really, I don't believe they're any more likely to come take investments away than they are to come take your home. I mean, we're really talking about private property here. If you have $100,000 in a retirement fund, and they say they're going to take that away from you, it's like taking a person's home. I just don't see that happening.
The big question, I think, is this: Are they likely to take away some of the tax benefits – like the 529 plan's ability to grow tax-free? As in, they just come in and say they're making it all taxable to pay the bills they've accumulated up in Washington, D.C., from all their stupid behavior. That kind of thing actually could happen.
-Dave
I have a 5-year-old daughter, and I want to start a 529 for her. However, I'm concerned that the government might seize the 529 assets in order to pay off debt and give people treasury bonds instead. Do you think this might happen?
Barry
Dear Barry,
I think there's less than a 1 percent chance they'd seize the actual assets. Really, I don't believe they're any more likely to come take investments away than they are to come take your home. I mean, we're really talking about private property here. If you have $100,000 in a retirement fund, and they say they're going to take that away from you, it's like taking a person's home. I just don't see that happening.
The big question, I think, is this: Are they likely to take away some of the tax benefits – like the 529 plan's ability to grow tax-free? As in, they just come in and say they're making it all taxable to pay the bills they've accumulated up in Washington, D.C., from all their stupid behavior. That kind of thing actually could happen.
-Dave
Tuesday, August 26, 2014
How to ask for a Raise at work
Dear Dave,
What’s your advice on asking for a raise at work when you have more responsibility than a co-worker but the same title on paper? After being with my company four years, I feel like I should make more money and I have the right to complain about this.
Vanessa
Dear Vanessa,
Sorry, no. You don’t have a right to complain. You agreed on your pay, and you are doing your job the way your character and integrity tell you to do the job. If someone else is a slacker in the same position, that doesn’t mean a whole lot in terms of your personal compensation.
I’ve got several people at my company who hold similar positions and make similar money. Some of them have been here for years, while others are relatively new. I don’t pay people for how long they’ve been in the building, and I don’t want anyone on my team who doesn’t give 100%. Now, that may be a different issue than pay, but at the same time I don’t want someone who gives 50% and I pay them 50%. I want everyone at 100%, but that kind of thing isn’t your problem. It’s the company’s problem, because she works for them and not you.
If you honestly feel like you deserve a raise because of your effort and performance, that’s fine. Sit down with your leader and make a logical and reasonable argument for why you deserve more money. But don’t bring up your co-worker and what he or she makes in the discussion. That’s just not relevant. What is relevant is your worth and the value you bring to the organization.
But a comparative analysis with someone else on staff just isn’t a good idea. I’d stay away from that, Vanessa.
-Dave
via http://www.foxbusiness.com/personal-finance/2014/08/19/real-reasons-deserve-pay-raise
What’s your advice on asking for a raise at work when you have more responsibility than a co-worker but the same title on paper? After being with my company four years, I feel like I should make more money and I have the right to complain about this.
Vanessa
Dear Vanessa,
Sorry, no. You don’t have a right to complain. You agreed on your pay, and you are doing your job the way your character and integrity tell you to do the job. If someone else is a slacker in the same position, that doesn’t mean a whole lot in terms of your personal compensation.
I’ve got several people at my company who hold similar positions and make similar money. Some of them have been here for years, while others are relatively new. I don’t pay people for how long they’ve been in the building, and I don’t want anyone on my team who doesn’t give 100%. Now, that may be a different issue than pay, but at the same time I don’t want someone who gives 50% and I pay them 50%. I want everyone at 100%, but that kind of thing isn’t your problem. It’s the company’s problem, because she works for them and not you.
If you honestly feel like you deserve a raise because of your effort and performance, that’s fine. Sit down with your leader and make a logical and reasonable argument for why you deserve more money. But don’t bring up your co-worker and what he or she makes in the discussion. That’s just not relevant. What is relevant is your worth and the value you bring to the organization.
But a comparative analysis with someone else on staff just isn’t a good idea. I’d stay away from that, Vanessa.
-Dave
via http://www.foxbusiness.com/personal-finance/2014/08/19/real-reasons-deserve-pay-raise
Tuesday, August 19, 2014
Rental property vs Mutual Funds
Dear Dave,
I’m retired, and my husband plans to work for several more years. We have $130,000 in savings accounts, plus a rental property. The rental property has a $150,000 mortgage, but we have no other debt. Should we sell the rental and reinvest in the stock market?
Barbara
Dave Ramsey
Dear Barbara,
If I were in your shoes, I’d be investing in mutual funds and paying off the rental property as fast as possible. That would be my game plan.
When it comes to mutual funds, you shouldn’t be jumping in and out. The key is to find good ones with long track records of success and stability. Then, leave the money alone for several years and let it do its thing!
—Dave
I’m retired, and my husband plans to work for several more years. We have $130,000 in savings accounts, plus a rental property. The rental property has a $150,000 mortgage, but we have no other debt. Should we sell the rental and reinvest in the stock market?
Barbara
Dave Ramsey
Dear Barbara,
If I were in your shoes, I’d be investing in mutual funds and paying off the rental property as fast as possible. That would be my game plan.
When it comes to mutual funds, you shouldn’t be jumping in and out. The key is to find good ones with long track records of success and stability. Then, leave the money alone for several years and let it do its thing!
—Dave
Wednesday, July 30, 2014
Becareful when pulling money out of a 529 fund
DEAR DAVE: My wife and I have $25,000 in credit card debt, $2,500 in medical bills and $89,000 each in student loan debt from when we each got our master’s degrees. We make about $100,000 combined. Our son is 6 years old, and we have $18,000 in a 529 plan for him. Should we use that money to pay off debt instead?
—Sean
DEAR SEAN: I wouldn’t do that, if I were you. You’ll get destroyed with penalties, because if you take money out of a 529 for anything other than college, you’ll be taxed at your current tax rate and hit with a 20 percent penalty. The other thing is, you’ll have this weird feeling that you took money away from your kid.
Technically, it’s your money. You put it there. But when you did, it was in your child’s name. Plus, that doesn’t really solve your problem. You’ve got a ridiculous amount of debt, and that little bit won’t move the needle very much. Having more money in your hands isn’t the big answer here. What you both need is a behavior change when it comes to money.
My advice is to leave the 529 alone. Stop adding to it for the time being. Put any retirement saving you’re currently doing on hold, too. You guys need to start living on a budget, working a debt snowball plan and looking for extra income. Even tutoring would bring in some additional cash. I’ve got a feeling, too, that those master’s degrees can provide you with more money than you’re currently making.
It can be done, Sean, but it’s going to take a lot of hard work and discipline. It may even take four or five years to get this mess cleaned up, but you can’t keep living without a plan.
—Dave
—Sean
DEAR SEAN: I wouldn’t do that, if I were you. You’ll get destroyed with penalties, because if you take money out of a 529 for anything other than college, you’ll be taxed at your current tax rate and hit with a 20 percent penalty. The other thing is, you’ll have this weird feeling that you took money away from your kid.
Technically, it’s your money. You put it there. But when you did, it was in your child’s name. Plus, that doesn’t really solve your problem. You’ve got a ridiculous amount of debt, and that little bit won’t move the needle very much. Having more money in your hands isn’t the big answer here. What you both need is a behavior change when it comes to money.
My advice is to leave the 529 alone. Stop adding to it for the time being. Put any retirement saving you’re currently doing on hold, too. You guys need to start living on a budget, working a debt snowball plan and looking for extra income. Even tutoring would bring in some additional cash. I’ve got a feeling, too, that those master’s degrees can provide you with more money than you’re currently making.
It can be done, Sean, but it’s going to take a lot of hard work and discipline. It may even take four or five years to get this mess cleaned up, but you can’t keep living without a plan.
—Dave
Friday, July 25, 2014
Dave Ramsey: Find mutual funds with 12percent returns
DEAR DAVE: Where can I find mutual funds with a 12 percent rate of return?
—Jason
DEAR JASON: There aren’t a lot of them, but they are out there. Currently, there are about 8,000 different mutual funds floating around. You have to get online and do some serious research, or talk with an investing professional with the heart of a teacher, but I own several mutual funds that have an average annual return in excess of 12 percent over the lifetime of the fund.
Now, do they make that every single year? Of course not. The figure I’m talking about is an average. I own one in particular that has done that for about 70 years. But the stock market in general has averaged just under 12 percent a year since its inception. So yes, with solid research and due diligence on the part of the investor, it is possible to get that as an average annual rate of return.
—Dave
—Jason
DEAR JASON: There aren’t a lot of them, but they are out there. Currently, there are about 8,000 different mutual funds floating around. You have to get online and do some serious research, or talk with an investing professional with the heart of a teacher, but I own several mutual funds that have an average annual return in excess of 12 percent over the lifetime of the fund.
Now, do they make that every single year? Of course not. The figure I’m talking about is an average. I own one in particular that has done that for about 70 years. But the stock market in general has averaged just under 12 percent a year since its inception. So yes, with solid research and due diligence on the part of the investor, it is possible to get that as an average annual rate of return.
—Dave
Tuesday, June 24, 2014
Keep Timeshare or ditch them
Dear Dave,
My mom passed away recently, and she left behind three timeshares. I inherited them, plus I’m the executor of the estate. They’re all paid for, except for the yearly maintenance fees, which total about $1,500. I don’t think I want them, but I’m not sure what to do. Do you have any advice?
Joe
Dear Joe,
I’m really sorry to hear about your mom. I know you’ve got a lot of emotions going on right now, and taking on the task of overseeing the estate is a serious responsibility.
There are two issues here. One, as the executor you have to decide what’s best for the estate. Number two, do any of the other heirs want these things? I wouldn’t want them, I can tell you that. I realize they’re basically free things—all you have to do is pay the maintenance fees—but by the time you do that, you probably could’ve gone somewhere else. For that kind of money, you can stay in some pretty nice spots and not have the ongoing liability.
Right now, the estate has the responsibility for the maintenance fees. I would call the timeshares and tell them the estate isn’t going to keep them, and that you’re going to deed them back to the companies. The way I look at it, you can have a lot of fun for $1,500 a year. You can go where you want, when you want. You’re not roped into a specific place and date. Part of the appeal of getting away is being able to go where you like at a time that’s right for you.
I understand there may be some sentimental value attached to these, Joe. But timeshares are a horrid, inconvenient product. My sentiment would be, “I’m out of here!”
—Dave
via http://finance.townhall.com/columnists/daveramsey/2014/06/11/dave-says-dont-get-tied-down--ditch-the-timeshare-n1850011
My mom passed away recently, and she left behind three timeshares. I inherited them, plus I’m the executor of the estate. They’re all paid for, except for the yearly maintenance fees, which total about $1,500. I don’t think I want them, but I’m not sure what to do. Do you have any advice?
Joe
Dear Joe,
I’m really sorry to hear about your mom. I know you’ve got a lot of emotions going on right now, and taking on the task of overseeing the estate is a serious responsibility.
There are two issues here. One, as the executor you have to decide what’s best for the estate. Number two, do any of the other heirs want these things? I wouldn’t want them, I can tell you that. I realize they’re basically free things—all you have to do is pay the maintenance fees—but by the time you do that, you probably could’ve gone somewhere else. For that kind of money, you can stay in some pretty nice spots and not have the ongoing liability.
Right now, the estate has the responsibility for the maintenance fees. I would call the timeshares and tell them the estate isn’t going to keep them, and that you’re going to deed them back to the companies. The way I look at it, you can have a lot of fun for $1,500 a year. You can go where you want, when you want. You’re not roped into a specific place and date. Part of the appeal of getting away is being able to go where you like at a time that’s right for you.
I understand there may be some sentimental value attached to these, Joe. But timeshares are a horrid, inconvenient product. My sentiment would be, “I’m out of here!”
—Dave
via http://finance.townhall.com/columnists/daveramsey/2014/06/11/dave-says-dont-get-tied-down--ditch-the-timeshare-n1850011
Thursday, June 19, 2014
Dave Ramsey on buying new vs used
Dear Dave,
What things do you advise buying used versus buying brand new?
Amy
Dear Amy,
I’m afraid there’s not one good, across-the-board answer, because it all depends on where you are in your financial plan.
When it comes to cars, you should always buy good, used vehicles, unless you have a million dollars or more in the bank. New automobiles drop in value like a rock, so buy smart and let someone else take the hit in depreciation. You don’t become wealthy by investing in things that go the wrong way.
If you’re talking about clothing, and you’re broke or trying to get out of debt, there’s absolutely nothing wrong with shopping consignment stores — especially for kids. They wear things three times, and then they’ve outgrown them. “Experienced” clothing is a great buy for adults, too.
Of course there are other things, but here’s the deal. As your money situation improves, you’ll be able to buy more new things. The price of “new” will become a smaller and smaller percentage of your financial world.
But when you’re broke, deep in debt or don’t have a big income, the money you spend on anything is a big percentage. At times like this, a decent $50 washer or dryer in the classifieds can be the best deal on the planet!
— Dave
Via http://www.the-leader.com/article/20140618/News/140619619
What things do you advise buying used versus buying brand new?
Amy
Dear Amy,
I’m afraid there’s not one good, across-the-board answer, because it all depends on where you are in your financial plan.
When it comes to cars, you should always buy good, used vehicles, unless you have a million dollars or more in the bank. New automobiles drop in value like a rock, so buy smart and let someone else take the hit in depreciation. You don’t become wealthy by investing in things that go the wrong way.
If you’re talking about clothing, and you’re broke or trying to get out of debt, there’s absolutely nothing wrong with shopping consignment stores — especially for kids. They wear things three times, and then they’ve outgrown them. “Experienced” clothing is a great buy for adults, too.
Of course there are other things, but here’s the deal. As your money situation improves, you’ll be able to buy more new things. The price of “new” will become a smaller and smaller percentage of your financial world.
But when you’re broke, deep in debt or don’t have a big income, the money you spend on anything is a big percentage. At times like this, a decent $50 washer or dryer in the classifieds can be the best deal on the planet!
— Dave
Via http://www.the-leader.com/article/20140618/News/140619619
Wednesday, May 14, 2014
Debt Snowball from smallest to largest
Q. I owe the IRS $6,000 and currently I’m making monthly payments. Should I roll this debt into my debt snowball, and then really attack it when it gets to the top of the list?
A. My advice would be to put the IRS at the very top of your debt snowball. Usually, when it comes to paying off debt, I advise people to arrange their debt snowball from smallest to largest, then start with the smallest one and work their way up. This doesn’t always seem to make mathematical sense, but the truth is personal finance is 80 percent behavior and only 20 percent head knowledge. Paying off some small debts quickly energizes you and gives you motivation. It makes you feel like you can really do it. Besides, if you were such a math genius you wouldn’t have debt in the first place.
But the IRS is a different animal altogether. Their interest rates and penalties are ridiculously high. Plus, they have virtually unlimited power to collect. So put them at the top of the list, and get them paid off as fast as you can.
Article originally published at http://djournal.com/news/dave-ramsey-dont-cash-401k-pay-debt/
A. My advice would be to put the IRS at the very top of your debt snowball. Usually, when it comes to paying off debt, I advise people to arrange their debt snowball from smallest to largest, then start with the smallest one and work their way up. This doesn’t always seem to make mathematical sense, but the truth is personal finance is 80 percent behavior and only 20 percent head knowledge. Paying off some small debts quickly energizes you and gives you motivation. It makes you feel like you can really do it. Besides, if you were such a math genius you wouldn’t have debt in the first place.
But the IRS is a different animal altogether. Their interest rates and penalties are ridiculously high. Plus, they have virtually unlimited power to collect. So put them at the top of the list, and get them paid off as fast as you can.
Article originally published at http://djournal.com/news/dave-ramsey-dont-cash-401k-pay-debt/
Monday, May 12, 2014
Cash out 401K to pay debt good idea or bad ?
Q. I’m 23, transitioning jobs, and I make $32,000 a year. I have $11,000 in a 401(k), and about $15,000 in debt. Should I cash out the 401(k) to pay down my debt?
A. I don’t think so. When you take money out of a 401(k) they charge you a 10 percent penalty, plus your tax rate. Your tax rate is about 20 percent, so that means you’re going to take a 30 percent hit. While I love dumping debt, your idea would be kind of like saying, “I want to borrow $11,000 at 30 percent interest to pay off my debt.” That doesn’t make a lot of sense, does it?
I never tell folks to cash out a 401(k) or IRA to pay off debt, unless it’s the only way to avoid foreclosure or bankruptcy. You’re not facing either one of those situations, so my answer is no.
A. I don’t think so. When you take money out of a 401(k) they charge you a 10 percent penalty, plus your tax rate. Your tax rate is about 20 percent, so that means you’re going to take a 30 percent hit. While I love dumping debt, your idea would be kind of like saying, “I want to borrow $11,000 at 30 percent interest to pay off my debt.” That doesn’t make a lot of sense, does it?
I never tell folks to cash out a 401(k) or IRA to pay off debt, unless it’s the only way to avoid foreclosure or bankruptcy. You’re not facing either one of those situations, so my answer is no.
Wednesday, May 7, 2014
Dont spend more than you can afford on a car
Dear Dave,
I think I made a big mistake when I bought my car. I’m having a hard time affording the $500 a month payments because I only make minimum wage at my job and work 35 hours a week. My boyfriend, who was supposed to help me pay for it, has moved out and left me. I owe $20,000 on the car, but I know it’s still worth about $19,000. What can I do?
— Rachel
Dear Rachel,
Sell the car. You went car crazy and bought a vehicle that was way out of your league.
Right now, your entire financial world is wrapped up in paying for this thing. And depending on a boyfriend to help make the payments was a big mistake, too. When he left, so did the financial support.
At this point, all you need is enough to cover the hole you dug. Go to your local bank or credit union and try to get a very small loan from them — about $3,000. I hate debt, but you really don’t have a lot of options here. Then, if the car will sell for $19,000, get it sold and use $1,000 to cover the difference.
After that, take the remaining money and buy yourself a little beater. I’m talking about basic, ugly transportation. The next step is to pick up a part-time job on the side and work like crazy for a few months to get that loan paid back as quickly as possible. Don’t ever do this kind of thing again, Rachel.
— Dave
I think I made a big mistake when I bought my car. I’m having a hard time affording the $500 a month payments because I only make minimum wage at my job and work 35 hours a week. My boyfriend, who was supposed to help me pay for it, has moved out and left me. I owe $20,000 on the car, but I know it’s still worth about $19,000. What can I do?
— Rachel
Dear Rachel,
Sell the car. You went car crazy and bought a vehicle that was way out of your league.
Right now, your entire financial world is wrapped up in paying for this thing. And depending on a boyfriend to help make the payments was a big mistake, too. When he left, so did the financial support.
At this point, all you need is enough to cover the hole you dug. Go to your local bank or credit union and try to get a very small loan from them — about $3,000. I hate debt, but you really don’t have a lot of options here. Then, if the car will sell for $19,000, get it sold and use $1,000 to cover the difference.
After that, take the remaining money and buy yourself a little beater. I’m talking about basic, ugly transportation. The next step is to pick up a part-time job on the side and work like crazy for a few months to get that loan paid back as quickly as possible. Don’t ever do this kind of thing again, Rachel.
— Dave
Tuesday, May 6, 2014
Retirement funding is more important than kids college fund
Dear Dave,
I noticed that your Baby Steps list puts saving for retirement before saving for your kid’s college fund. Sending your kids to college would come first on the timeline, so what is your reasoning behind this?
— Jen
Dear Jen,
I advise this approach because everyone is going to retire someday, unless, of course, they happen to die before reaching retirement age. Retiring and eating are necessities. College is a luxury. Lots of people succeed in life without going to college, and thousands have worked their way through college. I worked 40 to 60 hours a week in college, and I still graduated in four years.
Having a college fund set aside by your parents is really nice, if they can afford that kind of thing. But you can go to school by getting good grades, applying for scholarships, working your tail off and choosing a school you can afford. I believe in education, but there are lots of ways to get a college degree other than having your parents foot the bill. Besides, the last time I checked there weren’t any good ways to retire that didn’t include saving and preparing for retirement beforehand. I mean, you can always try to live off Social Insecurity, but I don’t consider that a plan.
In short, college funding is not a necessity. That’s why it follows saving for retirement in the Baby Steps. Should you try to save up for your kid’s college education? Sure, if you can. But there are lots of parents out there who won’t be able to pay a dime toward someone’s college education. And that doesn’t make them bad parents.
— Dave
I noticed that your Baby Steps list puts saving for retirement before saving for your kid’s college fund. Sending your kids to college would come first on the timeline, so what is your reasoning behind this?
— Jen
Dear Jen,
I advise this approach because everyone is going to retire someday, unless, of course, they happen to die before reaching retirement age. Retiring and eating are necessities. College is a luxury. Lots of people succeed in life without going to college, and thousands have worked their way through college. I worked 40 to 60 hours a week in college, and I still graduated in four years.
Having a college fund set aside by your parents is really nice, if they can afford that kind of thing. But you can go to school by getting good grades, applying for scholarships, working your tail off and choosing a school you can afford. I believe in education, but there are lots of ways to get a college degree other than having your parents foot the bill. Besides, the last time I checked there weren’t any good ways to retire that didn’t include saving and preparing for retirement beforehand. I mean, you can always try to live off Social Insecurity, but I don’t consider that a plan.
In short, college funding is not a necessity. That’s why it follows saving for retirement in the Baby Steps. Should you try to save up for your kid’s college education? Sure, if you can. But there are lots of parents out there who won’t be able to pay a dime toward someone’s college education. And that doesn’t make them bad parents.
— Dave
Tuesday, April 1, 2014
Should landlord refund deposit or not
Dear Dave: I own a one-bedroom condo that I'm using as a rental property. The current tenant's old agreement is up soon, but she signed a new lease less than a month ago and gave me a deposit, plus the first month's rent. Just the other day, she called and wants to back out of the agreement. She said she discovered after she signed that her ex is having serious health problems, and she needs to move to help take care of their kids. What do you think I should do? —Flavia
Dear Flavia: I own a bunch of rental properties, so I know for a fact that as a landlord you run into all kinds of situations. Some are more genuine than others. I would want some proof as to what's going on, but on the surface it sounds like she's got a valid reason for wanting to cancel the agreement.
Basically, she's asking for your understanding and mercy. If it were me, and what she's said turned out to be true, I'd try to lease the place to someone else as quickly as possible, and I'd refund her the deposit plus any money it doesn't cost you in the process. In other words, if it took two weeks to find another tenant, then I'd give back the deposit and two week's rent. Of course, if she's in really bad shape — and you're on solid enough financial ground to withstand the blow — you could let her out of the agreement completely and move on to finding another tenant.
You don't want to profit from someone who's genuinely struggling. But you have to look out for yourself and, if possible, try to break even.
Regardless, I wouldn't take advantage of anyone who's truly going through hard times. That's just not right.
Via - http://www.postbulletin.com/business/dave-ramsey-keep-the-lifestyle-simple/article_72dcdd8f-0b48-5886-b66d-39a9a6c70062.html
Dear Flavia: I own a bunch of rental properties, so I know for a fact that as a landlord you run into all kinds of situations. Some are more genuine than others. I would want some proof as to what's going on, but on the surface it sounds like she's got a valid reason for wanting to cancel the agreement.
Basically, she's asking for your understanding and mercy. If it were me, and what she's said turned out to be true, I'd try to lease the place to someone else as quickly as possible, and I'd refund her the deposit plus any money it doesn't cost you in the process. In other words, if it took two weeks to find another tenant, then I'd give back the deposit and two week's rent. Of course, if she's in really bad shape — and you're on solid enough financial ground to withstand the blow — you could let her out of the agreement completely and move on to finding another tenant.
You don't want to profit from someone who's genuinely struggling. But you have to look out for yourself and, if possible, try to break even.
Regardless, I wouldn't take advantage of anyone who's truly going through hard times. That's just not right.
Via - http://www.postbulletin.com/business/dave-ramsey-keep-the-lifestyle-simple/article_72dcdd8f-0b48-5886-b66d-39a9a6c70062.html
Tuesday, March 25, 2014
Increased job income is not permanent
Dear Dave: I recently got a new job that will increase my income by $20,000 per year. I've got $65,000 in debt, and I'm trying to pay it off, so I know I need to adjust my budget. Do you have any suggestions for a situation like this? —Mitchell
Dear Mitchell: Congratulations on your increased income. The first thing I'd tell you is not to get used to any permanent luxuries while you're paying off debt. Go out and celebrate with a really nice dinner or something like that after you get your first paycheck. But don't go nuts or pick up any big, new stuff. The more you put toward debt, the faster it goes away.
I've been doing this financial thing for a lot of years, and the one thing I've found that gets people out of debt is passion. I want you to be so passionate about getting out of debt that you don't even consider doing anything else until it's all gone. Your thought process needs to be, "Wow, I got a new job making more money. I can get out of debt even quicker!"
Again, I'm okay with you adjusting a bit that first month and having a little fun to celebrate your good fortune. But after that, I want you to turn around and attack the debt with even more intensity than before. Way to go, Mitchell!
Article originally published on http://www.postbulletin.com/business/dave-ramsey-keep-the-lifestyle-simple/article_72dcdd8f-0b48-5886-b66d-39a9a6c70062.html
Dear Mitchell: Congratulations on your increased income. The first thing I'd tell you is not to get used to any permanent luxuries while you're paying off debt. Go out and celebrate with a really nice dinner or something like that after you get your first paycheck. But don't go nuts or pick up any big, new stuff. The more you put toward debt, the faster it goes away.
I've been doing this financial thing for a lot of years, and the one thing I've found that gets people out of debt is passion. I want you to be so passionate about getting out of debt that you don't even consider doing anything else until it's all gone. Your thought process needs to be, "Wow, I got a new job making more money. I can get out of debt even quicker!"
Again, I'm okay with you adjusting a bit that first month and having a little fun to celebrate your good fortune. But after that, I want you to turn around and attack the debt with even more intensity than before. Way to go, Mitchell!
Article originally published on http://www.postbulletin.com/business/dave-ramsey-keep-the-lifestyle-simple/article_72dcdd8f-0b48-5886-b66d-39a9a6c70062.html
Monday, March 24, 2014
Dave Ramsey on buying deals
Dave Ramsey advice to people is to not waste money buying something you may not really need or use fully.
"Hey, remember that time we bought a laser hair-removal deal for 78 percent off from that start-up place all the way across town and used it for the full amount and within the specified time limit? Neither do we."
"Hey, remember that time we bought a laser hair-removal deal for 78 percent off from that start-up place all the way across town and used it for the full amount and within the specified time limit? Neither do we."
Tuesday, February 25, 2014
Payoff debt vs Invest in Roth IRA
Dear Dave,
I went to medical school, and now I have $70,000 in debt. I just started a three-year residency making about $50,000 a year, while my wife makes $40,000. The student loans represent our only debt. Do you think we should be paying this off or investing in a Roth IRA?
-David
Dear David,
If I were in your shoes, I’d work on paying down the student loans. That means you may never be in a Roth, but there are other things you can invest in and grow wealth.
I realize this may not seem right mathematically, but I don’t always make financial decisions based exclusively on math. Many times I do things based on changing money behaviors—stuff like paying off debts from smallest to largest because it actually works. Personal finance is 80% behavior, and only 20% head knowledge. So sometimes you have to go with what actually works best overall, in spite of what the technical math shows.
In your case, I think it’s going to be very valuable to have no student loans by the time you complete your residency. With three years to go, and living on a $90,000 a year income, you can do it. Then, when you come through the other side as a full-fledge doctor, you’ll have the great income and be sitting there debt-free. Not a bad place to be, right?
I understand the Roth seems like a pretty good idea right now, but my advice is to stick with becoming debt-free as quickly as possible. Once that’s done, you and your wife will be able to invest, save, and build wealth like crazy!
-Dave
I went to medical school, and now I have $70,000 in debt. I just started a three-year residency making about $50,000 a year, while my wife makes $40,000. The student loans represent our only debt. Do you think we should be paying this off or investing in a Roth IRA?
-David
Dear David,
If I were in your shoes, I’d work on paying down the student loans. That means you may never be in a Roth, but there are other things you can invest in and grow wealth.
I realize this may not seem right mathematically, but I don’t always make financial decisions based exclusively on math. Many times I do things based on changing money behaviors—stuff like paying off debts from smallest to largest because it actually works. Personal finance is 80% behavior, and only 20% head knowledge. So sometimes you have to go with what actually works best overall, in spite of what the technical math shows.
In your case, I think it’s going to be very valuable to have no student loans by the time you complete your residency. With three years to go, and living on a $90,000 a year income, you can do it. Then, when you come through the other side as a full-fledge doctor, you’ll have the great income and be sitting there debt-free. Not a bad place to be, right?
I understand the Roth seems like a pretty good idea right now, but my advice is to stick with becoming debt-free as quickly as possible. Once that’s done, you and your wife will be able to invest, save, and build wealth like crazy!
-Dave
Tuesday, February 18, 2014
How to end credit card offers
DEAR DAVE: How can I get credit card companies to stop sending us preapproved offers?
My wife continues to sign up for these, and now we have $40,000 in credit card debt. If you want to quit receiving credit card offers in the mail, one way to slow them down is to opt out of marketing offers on your credit bureau reports.
If you want to quit receiving credit card offers in the mail, one way to slow them down is to opt out of marketing offers on your credit bureau reports.
— Dan
DEAR DAN: Chances are you'll never get credit card companies to stop sending stuff, but there a few things you can do that might help slow things down. Access your credit bureau report, and opt out of marketing offers. You can also freeze your credit report, and send direct requests to the credit card companies to take you off their mailing lists.
I've been telling people not to use credit cards for 20 years and, believe it or not, even I get offers in the mail. The more mailing lists you get on, the more your mailbox will fill up with junk mail.
If you have magazine subscriptions and things like that, your contact information is circulating all over the place.
The next thing I'm going to say may sound cruel, but I really don't mean it that way. You don't have a junk mail problem, Dan. You have a relationship problem. You two are not on the same page about money. Either she doesn't feel like you two have enough money, and she's resorting to credit cards for this reason, or she does this because she's a spoiled brat who thinks she should always have what she wants when she wants it.
Via - http://newsok.com/article/3934409
My wife continues to sign up for these, and now we have $40,000 in credit card debt. If you want to quit receiving credit card offers in the mail, one way to slow them down is to opt out of marketing offers on your credit bureau reports.
If you want to quit receiving credit card offers in the mail, one way to slow them down is to opt out of marketing offers on your credit bureau reports.
— Dan
DEAR DAN: Chances are you'll never get credit card companies to stop sending stuff, but there a few things you can do that might help slow things down. Access your credit bureau report, and opt out of marketing offers. You can also freeze your credit report, and send direct requests to the credit card companies to take you off their mailing lists.
I've been telling people not to use credit cards for 20 years and, believe it or not, even I get offers in the mail. The more mailing lists you get on, the more your mailbox will fill up with junk mail.
If you have magazine subscriptions and things like that, your contact information is circulating all over the place.
The next thing I'm going to say may sound cruel, but I really don't mean it that way. You don't have a junk mail problem, Dan. You have a relationship problem. You two are not on the same page about money. Either she doesn't feel like you two have enough money, and she's resorting to credit cards for this reason, or she does this because she's a spoiled brat who thinks she should always have what she wants when she wants it.
Via - http://newsok.com/article/3934409
Monday, February 10, 2014
Starting business tips from Dave Ramsey
"Working for yourself is one of the toughest things you can do for a career, and you better make sure you're doing something you love because it'll take years of blood, sweat and tears to be successful.
Think about something you'd want to be doing every day five years from now and have anywhere from 20 to 200 people doing it with you. You'll always do a better job and have more fun when you're involved with something you love. When it comes to running the business, pay cash, have a written game plan and don't be afraid to grow slowly. Lay out a smart business plan ahead of time, and know everything from your marketing strategies and cost of start-up equipment and supplies to what your projected revenues are and the per unit charges for all your little widgets. Lay this all out like you had to prepare a report for a college class, and that's what a business plan looks like.
You might not make $100,000 your first year, but who does? Just take your time. Be patient, be smart and give people a quality product and professional service. If you'll do those things, chances are you'll be a success."
Source:The Holland Sentinel
Think about something you'd want to be doing every day five years from now and have anywhere from 20 to 200 people doing it with you. You'll always do a better job and have more fun when you're involved with something you love. When it comes to running the business, pay cash, have a written game plan and don't be afraid to grow slowly. Lay out a smart business plan ahead of time, and know everything from your marketing strategies and cost of start-up equipment and supplies to what your projected revenues are and the per unit charges for all your little widgets. Lay this all out like you had to prepare a report for a college class, and that's what a business plan looks like.
You might not make $100,000 your first year, but who does? Just take your time. Be patient, be smart and give people a quality product and professional service. If you'll do those things, chances are you'll be a success."
Source:The Holland Sentinel
Monday, February 3, 2014
What to do when employee should be paid more than you can ?
"That's a tough situation when you don't have control over financial compensation. At my company, the human resources handbook comes with one mandate: Treat people the way you would want to be treated. So I'll ask you. If you were the employee who deserved more money, how would you want to be treated?
Here's the hard truth. If a member of your team can make significantly more money elsewhere, there's a good chance they'll eventually leave. However, if I knew that my leader was fighting and trying to convince the decision makers that I deserved more money, plus doing other things to offset the financial issues, it would mean something to me.
There always are other gestures you can make to show someone they're valued and appreciated. You might let them off a little early when their kid has a ballgame. You even could make a special award presentation to this person or strongly recommend them for a promotion.
Still, at the end of the day, you either give people what the marketplace will pay, or you run the risk of losing them. Without control over the purse strings, there's only so much you can do in those kinds of situations."
Source: http://www.wickedlocal.com/x579269991/DEAR-DAVE-Control-the-overhead
Here's the hard truth. If a member of your team can make significantly more money elsewhere, there's a good chance they'll eventually leave. However, if I knew that my leader was fighting and trying to convince the decision makers that I deserved more money, plus doing other things to offset the financial issues, it would mean something to me.
There always are other gestures you can make to show someone they're valued and appreciated. You might let them off a little early when their kid has a ballgame. You even could make a special award presentation to this person or strongly recommend them for a promotion.
Still, at the end of the day, you either give people what the marketplace will pay, or you run the risk of losing them. Without control over the purse strings, there's only so much you can do in those kinds of situations."
Source: http://www.wickedlocal.com/x579269991/DEAR-DAVE-Control-the-overhead
Wednesday, January 29, 2014
Dave Ramsey: Student loans are mistaken for regular loans
The thing most people don’t realize about student loans is that a lawyer doesn’t have to be involved for them to garnish your wages. It’s a lot like the IRS in that they don’t have to sue you in order to take your wages. Congress gave them that power because it’s a federally insured loan. And in my mind, that’s way too much power.
Monday, January 27, 2014
Advice for small business with high expenses
Dear Dave,
I own a small business, and I'm having trouble scaling up while keeping expenses down. Do you have any advice for me?
-Josh
The best advice I can give you in a scenario like this is to take a deep breath and accept the fact that you need to slow down and grow slowly and steadily. If you let expenses get out of hand, you'll be chasing them and playing catch up for the life of your business. Overhead kills businesses, Josh. It's the death knell.
I own a small business, and I'm having trouble scaling up while keeping expenses down. Do you have any advice for me?
-Josh
The best advice I can give you in a scenario like this is to take a deep breath and accept the fact that you need to slow down and grow slowly and steadily. If you let expenses get out of hand, you'll be chasing them and playing catch up for the life of your business. Overhead kills businesses, Josh. It's the death knell.
Thursday, January 23, 2014
Daughter makes lot of money as model
Dear Dave,
I live in Los Angeles, and my daughter makes $3,000 to $5,000 a month modeling. I don’t want her to become spoiled by this job and the income, and I need advice on what to do with the money. Should it be put aside for a car, and do you think she should have to pay for something like that herself?
-Lisa
Dear Lisa,
So how do we keep a high-income, high-profile job from ruining this little girl? I think a lot of it has to do with her interaction with you, and how you gently mold her work ethic and attitude. Don’t let her become a diva. She’s not there to be fawned over or placed on a pedestal. She’s there to serve. That means working hard and doing the best she can. That’s her job whether she’s flipping burgers or making $5,000 a month modeling. The money’s nice, but what we’re really doing is making sure she learns some important life lessons. And you’re still being a parent, not a friend or peer, through every moment.
When it comes to the money, you guys should sit down and discuss some goals for the future. I think it’s important that any car purchase be reasonable, because the best thing a kid this age could do with that kind of money is save up for college. Even if she goes to school on a full scholarship, she should be driving something low-key. Just because she gets a free ride in college doesn’t mean she gets to cruise the streets in a Lamborghini. Set the rest of it aside for when life really begins—after college.
As her mom, it’s very important that you teach her these lessons now. It’s essential, too, that you don’t surrender the position of parent, teacher and leader. Chances are when this young lady is 34, no one will give a flip that she modeled for a while as a teenager. The most important things here are the lessons taught and learned, not the money.
-Dave
I live in Los Angeles, and my daughter makes $3,000 to $5,000 a month modeling. I don’t want her to become spoiled by this job and the income, and I need advice on what to do with the money. Should it be put aside for a car, and do you think she should have to pay for something like that herself?
-Lisa
Dear Lisa,
So how do we keep a high-income, high-profile job from ruining this little girl? I think a lot of it has to do with her interaction with you, and how you gently mold her work ethic and attitude. Don’t let her become a diva. She’s not there to be fawned over or placed on a pedestal. She’s there to serve. That means working hard and doing the best she can. That’s her job whether she’s flipping burgers or making $5,000 a month modeling. The money’s nice, but what we’re really doing is making sure she learns some important life lessons. And you’re still being a parent, not a friend or peer, through every moment.
When it comes to the money, you guys should sit down and discuss some goals for the future. I think it’s important that any car purchase be reasonable, because the best thing a kid this age could do with that kind of money is save up for college. Even if she goes to school on a full scholarship, she should be driving something low-key. Just because she gets a free ride in college doesn’t mean she gets to cruise the streets in a Lamborghini. Set the rest of it aside for when life really begins—after college.
As her mom, it’s very important that you teach her these lessons now. It’s essential, too, that you don’t surrender the position of parent, teacher and leader. Chances are when this young lady is 34, no one will give a flip that she modeled for a while as a teenager. The most important things here are the lessons taught and learned, not the money.
-Dave
Monday, January 20, 2014
Character and giving lessons for kids
None of our kids receive any kind of financial help from us at all, unless they’re already carrying their weight in their own lives. That’s not being cold. It’s teaching responsibility and self-reliance. Now it would be different if one of them developed a serious medical issue or something like that. But the whole idea that mommy and daddy have lots of money, and I can just get some from them? That doesn’t fly in our family.
You have to teach them character and giving in order for them to be valid recipients. Plus, it’s all about the kids’ attitude. But you’ve got to talk about it often and communicate the value system out loud. The gifting and generosity are contingent upon the humility that leads to gratitude that leads to contentment.
You have to teach them character and giving in order for them to be valid recipients. Plus, it’s all about the kids’ attitude. But you’ve got to talk about it often and communicate the value system out loud. The gifting and generosity are contingent upon the humility that leads to gratitude that leads to contentment.
Monday, January 13, 2014
2 types of business expenses
There are two types of expenses: fixed and variable. Variable expenses rise as the volume and size of your business grows. A good example of this would be shipping. The more stuff you move, the higher your shipping bill. Fixed expenses are there regardless of your income. Rent is a fixed expense. The amount doesn't change, and you have to pay it whether you're making money or not.
Sunday, January 12, 2014
Who is Dave Ramsey ?
Dave Ramsey is America's most trusted voice on money and business. He has 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 5 million listeners each week on more than 500 radio stations.
Thursday, January 9, 2014
Dave Ramsey: Dont give up if you cant make your payments
If you’re having trouble making your payments, don’t just throw up your hands and default. Talk to them about a deferral, and keep sending them whatever you can. It’s always better to be proactive than reactive in situations like these. Let them know you want to make good on your obligation, and ask what you can do to make this happen under terms you can afford.
Wednesday, January 8, 2014
Reader asks Buy or Rent house
Dear Dave,
My wife and I just bought a business with cash. We had been living with my brother and sister-in-law while we saved up, and things are starting to get a bit cramped. My brother has offered to co-sign on a house for us, but rent is pretty cheap in this area. What do you think we should do?
You need to forget about a house and plan on renting for a while. You just bought a business, and at this point you don’t even know if it’s going to be successful. Plus, if you need a co-signer to buy a house, car or anything else, it means you’re not financially ready for that purchase.
Take some time, maybe two or three years, to get your business up and running. Go find a decent, inexpensive place to rent then pay off any debt you have while saving up as much money as possible. I want you to have a nice house one day, Peter. But you’re just not ready now. A house should be a blessing, not a burden.
My wife and I just bought a business with cash. We had been living with my brother and sister-in-law while we saved up, and things are starting to get a bit cramped. My brother has offered to co-sign on a house for us, but rent is pretty cheap in this area. What do you think we should do?
You need to forget about a house and plan on renting for a while. You just bought a business, and at this point you don’t even know if it’s going to be successful. Plus, if you need a co-signer to buy a house, car or anything else, it means you’re not financially ready for that purchase.
Take some time, maybe two or three years, to get your business up and running. Go find a decent, inexpensive place to rent then pay off any debt you have while saving up as much money as possible. I want you to have a nice house one day, Peter. But you’re just not ready now. A house should be a blessing, not a burden.
Tuesday, January 7, 2014
Dave Ramsey on Vanderbilt College vs Tennessee
Studies show that college education is the one expense where people do not consider the cost of the product against what they actually get for their money. It costs $52,000 a year to go to Vanderbilt….the average cost of public universities is $6,000 a year.
Is Vanderbilt a better school than most public schools? Probably.
But is it TEN TIMES better? Probably not, since I went to University of Tennessee & I have guys working for me that went to Vanderbilt.
Is Vanderbilt a better school than most public schools? Probably.
But is it TEN TIMES better? Probably not, since I went to University of Tennessee & I have guys working for me that went to Vanderbilt.
Monday, January 6, 2014
Doesnt make sense
Nearly 70% of consumers live paycheck to paycheck…Fifty-five percent of Americans say they ‘always’ or ‘sometimes’ worry about their money…anyone else find those numbers a little funny?
What—are the other 15% of people on Prozac?
What—are the other 15% of people on Prozac?
Thursday, January 2, 2014
Advice for teaching children about money
I think there are three key factors when it comes to teaching children of any age about these concepts—humility, gratitude and contentment. In my mind, humility is where gratitude comes from, and gratitude leads to contentment.
I’m generous to my adult children, but they have no sense of entitlement. That’s due to their personal humility. They don’t feel that I owe them anything, and they already know that anyone who cops an entitlement attitude gets cut off. You’re no longer qualified for my generosity when you lose your gratitude.
You’ve got to spend time talking to kids about these things. Otherwise, you run the risk of them counting on the income. Here’s an example. We coach some family businesses at my company, and the best family businesses are the ones that teach non-employee family members who receive money from the business—dividends from the profits—never to live on those dividends. I’ve seen lots of cases where someone will start living on the business they don’t work in, and they immediately start feeling entitled to the money.
The same principle applies in your situation. If someone starts saying, “Well, since mom and dad are paying for our daycare, we can use that money we would have spent to buy a car.” That means they’ve started counting on mom and dad’s generosity to live, and that’s a form of entitlement mentality.
None of our kids receive any kind of financial help from us at all, unless they’re already carrying their weight in their own lives. That’s not being cold. It’s teaching responsibility and self-reliance. Now it would be different if one of them developed a serious medical issue or something like that. But the whole idea that mommy and daddy have lots of money, and I can just get some from them? That doesn’t fly in our family.
You have to teach them character and giving in order for them to be valid recipients. Plus, it’s all about the kids’ attitude. But you’ve got to talk about it often and communicate the value system out loud. The gifting and generosity are contingent upon the humility that leads to gratitude that leads to contentment.
I’m generous to my adult children, but they have no sense of entitlement. That’s due to their personal humility. They don’t feel that I owe them anything, and they already know that anyone who cops an entitlement attitude gets cut off. You’re no longer qualified for my generosity when you lose your gratitude.
You’ve got to spend time talking to kids about these things. Otherwise, you run the risk of them counting on the income. Here’s an example. We coach some family businesses at my company, and the best family businesses are the ones that teach non-employee family members who receive money from the business—dividends from the profits—never to live on those dividends. I’ve seen lots of cases where someone will start living on the business they don’t work in, and they immediately start feeling entitled to the money.
The same principle applies in your situation. If someone starts saying, “Well, since mom and dad are paying for our daycare, we can use that money we would have spent to buy a car.” That means they’ve started counting on mom and dad’s generosity to live, and that’s a form of entitlement mentality.
None of our kids receive any kind of financial help from us at all, unless they’re already carrying their weight in their own lives. That’s not being cold. It’s teaching responsibility and self-reliance. Now it would be different if one of them developed a serious medical issue or something like that. But the whole idea that mommy and daddy have lots of money, and I can just get some from them? That doesn’t fly in our family.
You have to teach them character and giving in order for them to be valid recipients. Plus, it’s all about the kids’ attitude. But you’ve got to talk about it often and communicate the value system out loud. The gifting and generosity are contingent upon the humility that leads to gratitude that leads to contentment.
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