Posted on 11/04/2009 11:35:01 AM PST by CSM
Prioritizing saving as an adult
Dear Dave,
I'm 20 years old, and I'm working my way through college. I've never been in debt, and I've already got a good emergency fund in place. But it seems like there are so many things to plan for down the road. How do you prioritize and manage saving for a better car, investing, marriage, kids and everything else in life? It all seems so overwhelming.
Eric
Dear Eric,
You've done a great job so far! I'm glad you're looking toward the future, too. You're right, it can be overwhelming if you look at all these things as if they have to be accomplished today. But here's the good news: You don't have to do everything right now. It's great to have a plan, but you're just 20 years old. You've got plenty of time to decide what's important to you and plan accordingly.
All the things you mentioned are great goals. But, in my mind, finishing college is your number one priority right now. Then, let's look at the other stuff. If you have a girl you're crazy about, marriage may be next on the list. If your car is about to roll over and die, the next step may be a better vehicle.
Don't be too intimidated, Eric. Things are often easier to deal with when you break them down into smaller components and address them individually. Nobody can do four or five things at once, and do them all to the best of their ability. Just decide what matters most, put it at the top, and list everything else in descending order of importance. Then just go down the list, and knock them out one after the other.
That's how you eat an elephant, Eric. One bite at a time!
- Dave
Using the emergency fund
Dear Dave,
My husband and I are debt-free, and we've got a fully funded, six-month emergency fund in place. The problem is that he lost his job last month. I'm still working part-time and bringing home $150 a week. But we're unsure if we should cut our budget down to bare bones or continue living like normal since we have so much saved?
Jennifer
Dear Jennifer,
You definitely want to live on as little as you can. This way, the money in your emergency fund will last longer. You may be bringing in $600 a monthand that's okay for a part-time jobbut it's not nearly enough to run a household.
It's beans and rice time, girl. This means no vacations, no movies, no restaurants, and no $100 sneakers for the kids. In other words, no life until he finds another job and you guys are on your financial feet again. Keep the lights on and food in the pantry. Those are your priorities right now. I'd rather see you go into crunch time now without completely draining your emergency fund before he goes back to work.
This is the living, breathing definition of an emergency, Jennifer. Praise God you guys were smart enough to plan ahead. So yes, use it; but be wise. Spend only when it's absolutely necessary!
- Dave
Enjoy.
Dave Ramsey Fan Ping List.
If you would like to be added to the “Live like no one else, so that you can LIVE like no one else” list, feel free to Freepmail me.
I love Dave Ramsey, his common sense has helped me a lot.
Very good advice.
Thank you, as always, for the Ping — much appreciated. :)
You and I are in the same boat!
Nice to meet you FPU FRiend.
Ditto! I saw a car recently that had a sign on it that said “Dave said to sell the car” I knew where he got it!!!
I’ve been aware of Ramsey for about three years now, and always embraced his commonsensical ‘subversiveness’, if you know what I mean. So I have been surprised that, in the age of Obama, he hasn’t become even more prominent or high-profile than he was three years ago. He would seem to be one of the ESSENTIAL go-to guys during a recession, especially one engineered by the most IRRESPONSIBLE SPENDERS OF OUR MONEY IN AMERICAN HISTORY.
But maybe Dave is simply more moral/biblical in his perspective than overtly political. Otherwise, I can’t figure out why he hasn’t come out more to the forefront of our current consciousness.
I agree. I know his show is on Fox Business, but his radio show has been on for a while.
I dont use credit cards thanks to Dave. I pay cash for everything, and that means I have to wait a long time for things.
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