NEW CASTLE —
Dear Dave: Recently, my husband had to quit his job due to an old back injury. We have $25,000 in debt, but I’ll be receiving a $38,000 inheritance in a couple of weeks. Should we use the money to pay off our debt, or hold on to it in case he needs surgery? — Kristen
Dear Kristen: Now is the time to keep the cash piled high. You’re in the middle of an emergency, and that means you push the pause button on your Total Money Makeover and stop paying extra on debt. Surgery is a possibility at this point, plus you may need some of that money to live on until his job situation improves.
Then, the moment he returns to work and things are stabilized, you jump back into getting control of your finances. Use whatever is left of the $38,000 to pay off debt that very day. But right now, you don’t need to worry about becoming debt-free, only to turn around and be in a mess in the event he has trouble finding another job.
Let me give you a warning too. Thirty-eight thousand dollars is a great gift. If someone handed me a check for that amount, I’d cash it in a heartbeat. But it’s not $380,000 or $3.8 million. It’s easy to develop a false sense of security if you’ve never received a check of that size. This kind of money is enough to keep the wolf away from the door for a while, but it’s nothing to retire on.
This little nest egg is a real blessing, Kristen. Just make sure you handle it wisely, and take into account all of the possibilities over the next couple of months. In a best-case scenario your husband won’t need surgery, he’ll find a job pretty soon, and you guys won’t have to dig in to the inheritance money. Hang on to as much as possible, though. This sounds like a time of personal and professional transition for you both, and having that kind of extra cash around could be a lifesaver. — Dave
Dear Dave: My husband and I are on Baby Step 2 of your plan. We move every two or three years due to our jobs, so would it ever make sense in our situation to buy a house? — Janelle
Dear Janelle: In most cases like this it doesn’t make sense to buy a house, especially if the real estate market in your area is lethargic. Some markets have bounced back and are doing very well, while some are worse than slow. It all depends on where you’re moving.
Here’s the big question: Can you get the place sold quickly the next time you have to move? Another thing to consider is whether or not you can sell it for more than it cost when the time comes. If not, you’ll be writing a check for home ownership, and that’s not a good plan.
As a general rule, a two- to three-year window is not enough time to own a home. There are rare exceptions to this rule, places where you have a hot, escalating price market. But if you’re not careful you’ll end up leaving behind a rental property and playing landlord, whether you want to or not. — Dave
(For more financial advice please visit daveramsey.com.)
All About You ...
Related Photos
-
For years Dave Ramsey has been the host of the popular ‘Dave Ramsey Show’ on radio stations across the nation. Now, his financial advice column is carried by more than 300 publications. It will appear each Friday on The News website.
Discussion
Dave Ramsey: Crisis? Put debt on back burner
- All About You ...
-
-
Dave Ramsey: Move or set family boundaries?
“Dave Says" is a weekly column featuring financial advice from nationally syndicated radio host Dave Ramsey. His column is filled with timely, relevant questions and answers taken from actual letters and calls on Ramsey's radio program, “The Dave Ramsey Show.”
-
Lori Brothers: Body awareness can help manage stress
Are you an “inny” or an “outy”? I’m not referring to your belly button, even though the concept also applies there. I am talking about how you manage your stress. Do you internalize or externalize?
-
Sarah Stright-Hartley: Top trends for men as the weather warms
We frequently talk women's fashion around these parts, so today I wanted to give the men a bit of a shout-out. Men's fashions are less likely to change year to year, but there are still "trends" each season that men will find in stores. To the right you'll find some of the top trends for spring/summer 2013.
-
Your Tax Money: Four districts undecided on vo-tech budget
Four school districts are still deciding whether to support the Lawrence County Career and Technical Center’s 2013-14 budget. The New Castle, Wilmington, Mohawk and Ellwood City school boards are waiting until June to vote on the proposed spending plan as they contemplate a growing debt the center owes to six of its eight member school districts.
-
Making a Difference: Volunteers put up home for young mother, son in three days
The Blitz was on this weekend in New Castle. Habitat for Humanity had a “Blitz Build” for its latest Lawrence County house at the corner of Newell and Madison avenues in Mahoningtown. Over Thursday, Friday and Saturday, concrete block was laid for the basement, the ground floor was constructed, the roof was built and walls went up.
-
Culinary Conversation: A day in France— or close to it
Here’s some advice: If your spouse packs your lunch, never complain about the contents. I wasn’t actually griping. I just noted that it lacked excitement. The response from spouse was — our kitchen isn’t the Ritz Carlton.
-
Dave Ramsey: Avoid college loans if you can
“Dave Says" is a weekly column featuring financial advice from nationally syndicated radio host Dave Ramsey. His column is filled with timely, relevant questions and answers taken from actual letters and calls on Ramsey's radio program, “The Dave Ramsey Show.”
-
Lori Brothers: Be ready to stay healthy during storms
At any time during the spring and summer, we may get a signal from our local officials that there is inclement weather that can turn threatening. It is always important to pay attention during alerts to assure that your family, including your pets, are safe in the event of an emergency such as tornado, flood or power outage.
-
Sarah Stright-Hartley: Looking for stylish way to pack your possessions? It’s in the bag
One of the most personal things a woman buys is a handbag. It holds all of her prized possessions. So when shopping for a new bag, there are a lot of things to consider. Size, color, quality, fabric and length of use. Is she looking for something to use year round, or something that can be changed each season?
-
Kali Davies-Anderson: I’m now a year older — and a lot wiser
On May 7, I turned 28 years old. I understand this is still considered “young,” but I feel as though I have lived many lives in my 28 years. And in those many “lives” I have learned vast and various lessons.
- More All About You ... Headlines
-
