DAVE SAYS

Living without eating out
Dave Ramsey

Dear Dave,

When it comes to taking control of your money and living on a budget, what’s the biggest thing a family can live without?

Will Dear Will,

There are always the shiny things people can do without. Sometimes people sell a fancy car or boat and get rid of a $600-a-month payment right off the bat. But on a regular, day-to-day basis, I think maybe the biggest and best thing you can amputate from your life is eating out.

I love a good restaurant, and I’ve got nothing against the industry. The problem, though, is that people are struggling to pay their bills or set aside something for retirement because they’re eating out all the time. Most folks simply don’t realize how much money they throw away by heading to the drive-through for lunch or going out to dinner “once in a while.”

I want people to enjoy life, and a great part of that can be going out and having a meal with your family and friends. Just don’t do it when you’re broke. If you’re having financial issues, the only time you should see the inside of a restaurant is if you’re working there!

—Dave

Is this an emergency?

Dear Dave,

My wife just had our first child. As a result, we now have $2,500 in medical bills not covered by insurance. We’ve got $7,000 in our emergency fund, and I make about $25,000 a year. Should we dip into our savings for this or set up a payment plan with the hospital?

Matthew Dear Matthew,

Congratulations on your new baby! I know this is going to make the new year extra-special for you.

If I were in your situation, I’d write a check today and knock out that hospital bill. This definitely falls under the heading of “emergency” in my mind, so pay the bill and jump back into rebuilding your emergency fund.

You’ve done a good job of saving on $25,000 a year, but let’s look around and see what you can do about making more money, too. Additional classroom education or extra training in your field could increase your income pretty quickly. Your emergency fund probably needs to be a little bit bigger as well, and it’ll be a lot easier to make this happen if you’re bringing in more cash.

I’m sure you’re a hard-working guy, but the truth is it’s going to be pretty tough for even a small family to make it on what you’re bringing home now. Life happens, and the unexpected can become a common occurrence when there’s a little one loose in the house!

—Dave

Dave Ramsey is a trusted voice on money and business. He’s a best-selling author and his radio show is on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.


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2013-01-10 digital edition



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