Dave Says: How to Invest with Less Risk

by Dave Ramsey | January 30, 2014 | Finances

Dear Dave, I’m a little worried about investing in the stock market due to volatility. Are there safer investments? Matt Dear Matt, You’re right; the market is volatile. It’s not a volatile as some things, but you have to remember that anywhere there’s money to be made—including long-term investing—there are ups and downs. For instance, I like real estate. It’s not as volatile as the stock market, but there are no guarantees. We experienced that big dip over the last few years, and it was probably one of largest dips ever in the real estate market, except for the Great Depression....


Dave Says: How to Deal with State Tax Debt

by Dave Ramsey | January 23, 2014 | Finances

Dear Dave, My husband has his own business installing windows. As a result, we now have IRS and state tax debt. We’re managing the payments, but where should these debts be placed in the debt snowball plan? Olivia Dear Olivia, I don’t usually cheat on the smallest to largest progression of the debt snowball, but I’d recommend moving these debts to the top of the list.  Both state and federal taxes come with ridiculous penalties and interest rates, and the authorities at either level have virtually unlimited power at their disposal to screw with your life if something bad happens. The...


Dave Says: Save Up for Low-Income Seasons

by Dave Ramsey | January 16, 2014 | Finances

Dear Dave, My husband works construction, so we barely scrape by during the winter months. Should we build an emergency fund for the slow times? Cathy Dear Cathy, I think that’s a great idea. Although, I’d probably call it something other than an emergency fund. How about a squirrel fund? Squirrels need to have nuts saved up for winter, and in your case you’d be setting money aside during the summer to get you through the slow winter months. You may think I’m playing games with the name, but really I’m not. This sort of saving isn’t for emergencies. It’s a...


Dave Says: When You Can't Afford Your Student Loan Payments

by Dave Ramsey | January 9, 2014 | Finances

Dear Dave, I have a lot of student loan debt, and I can’t afford the payments right now. Should I send them what I can, even if it’s not the minimum payment, or should I not send anything at all? Tina Dear Tina, They’re not going to stop bothering you no matter which option you choose. The benefit of sending them $5, even if the minimum payment is $50, is that you’re forcing yourself to start living on a budget and do all you can to honor your commitment. That’s the moral, spiritual and legal thing to do in this situation....


Dave Says: What to Do When You Can't Afford Your Loan Payments

by Dave Ramsey | January 4, 2014 | Finances

Dear Dave, My husband and I have about $60,000 in federally insured student loans. Can our wages be garnished if we’re paying less than the actual payment amount? If so, how far behind do we have to be for that to happen? Jennifer Dear Jennifer, To the best of my knowledge there’s no set formula for making this determination. In counseling people, we find some folks who are two years behind making payments before anything is done, while others are flagged at just a couple of months. In reality, they can garnish you immediately if you’re paying less than the agreed-upon...


Dave Says: Pay Off the House First

by Dave Ramsey | December 21, 2013 | Finances

Dear Dave, My wife and I make about $100,000 a year. We have $63,000 in the bank, and we owe $47,000 on our home. The house is worth about $250,000, and it’s our only debt. We’d like to go ahead and pay off the house, but we’re worried about depleting our savings to that extent. What would you do? Matt Dear Matt, If I were in your situation, I’d cut a check and pay off the house. Keep in mind that by doing this we’re not saying you’ll keep your savings at that lower point. Once that mortgage payment is off...


Dave Says: How to Knock Out Debt

by Dave Ramsey | December 19, 2013 | Finances

Dear Dave, What would you recommend for 401(k) contributions while getting out of debt? Chaz Dear Chaz, I recommend putting a temporary stop to investing while you’re getting out of debt. Lots of people are shocked by this advice, because they’re afraid of missing out on the wonders of compound interest or their employer’s match. But the key word here is “temporary.” Millions of people have followed and been successful with the program found in The Total Money Makeover. The first step, Baby Step 1, is to save $1,000 as a starter emergency fund. Baby Step 2 is pay off all...


Dave Says: Costs of Mortgage Accelerator Programs

by Dave Ramsey | December 5, 2013 | Finances

Dear Dave, Should I pay a nominal fee to be enrolled in a mortgage accelerator program? Jennifer Dear Jennifer, No, you should not. Mortgage accelerator programs are similar to the biweekly mortgage deals floating around out there. Paying on your mortgage biweekly is fine. Paying for the privilege is not. In the biweekly mortgage program, you make a half-payment every two weeks. By doing this you will pay off the typical 30-year note in about 22 years. It works because there are 26 two-week periods in a year, and 26 half-payments equals 13 whole payments. It pays off your mortgage early...


Dave Says: Teach Your Kids to Give for Christmas

by Dave Ramsey | November 19, 2013 | Finances

Dear Dave, What are some good ways to teach a 13-year-old kid about giving versus getting during the holiday season? Phillip Dear Phillip, One of the best things you can do is simply talk about it—a lot. Kids are bombarded with messages about how important they are, and how they should always have what they want. It’s okay to have some stuff, but advertising and other marketing messages in today’s culture can make them think it’s all about them. It can lead kids to believe the axis of the world runs through the tops of their little heads. Think about this....


Dave Says: How to Help Your Wayward Child

by Dave Ramsey | November 13, 2013 | Finances

Dear Dave, My daughter used to live an irresponsible lifestyle and was bad with money, too. While she was in college she also took on $20,000 in student loan debt. Since that time she experienced a serious illness. She’s recovering now, and it has really changed her behavior and her outlook on life, spiritual matters and money for the better. I could pay off the loans for her, but I’m wondering if there’s a better way to help. Eddie Dear Eddie, If I were in your shoes, and I had the means to pay off her student loan debt without putting...