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Dave Says: How to Put Kids through College When You're in Debt

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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

* 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.

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