Commentary

dave says

By Dave Rams

Dear Dave,

My mom died a few years ago, and she left me an inheritance of $60,000 in stock. She was always investing and saving money. I could sell this and be debt-free while still having plenty left over, but I feel like I’ll lose a part of her if I do this. Do you have any advice?

David

Dear David,

I didn’t know your mom, but from what you’ve told me, it sounds like she was a pretty smart and responsible lady. I don’t visualize her as the kind of person who would’ve said, “I’m going to leave you this stock.

Always keep it and never cash it out, no matter what happens.”

A gift like this is someone wanting to bless another person with some of the good they accomplished in this world. It’s your mom’s way of giving you an opportunity to have a better life. In my mind, the best way for you to have a better life is to use the money to become debt-free then use the cash that used to go toward debt payment to invest.

I know you loved your mom, but I think you’ve given this stock more power than she gave it. You’ve gotten her blessing, and that was to be a blessing to you. You know, you can be a blessing to others in lots of different ways. She just accomplished it with the stock.

Honor your mom and go be debt-free today. The time is now!

—Dave

Thinking long term

Dear Dave,

My husband and I are in our 60s, and we don’t have long-term care insurance. It would cost us $8,000 a year at this point, and our annual income is $200,000. Do you think we should get this type of coverage?

Toni

Dear Toni,

I’m a strong proponent of long-term care insurance once a person turns 60. Prior to that age you have less than a one percent chance of spending time in a nursing home, so I wouldn’t spend a dime on it until then.

A lot of agents and companies try to sell long-term care insurance to people who are 40 or 50 years old, and I just don’t believe in that stuff. But once you hit age 60, your chances of using it increase almost daily. At that point, it’s a smart buy, and you’ll get a great return on the investment. Eight thousand dollars annually is a lot of money, but nursing home costs can run $50,000 a year.

My advice, Toni, is to buy long-term care insurance. I believe in having this type of coverage, even if you can afford to pay for care out of pocket. It takes a lot of stress and worry out of growing older. Most ladies outlive their husbands, and a frequent scenario is that the man goes into the nursing home and drains the nest egg to pay for everything. Of course, this can happen the other way around, but I’m sure neither of you wants to leave the other in a bad situation.

—Dave

Coupons a waste of time?

Dear Dave,

Is it worth the time and effort to use coupons, or are they just a waste of time and a ploy to get you to buy things?

Tammy

Dear Tammy,

Coupons are definitely a ploy to entice you to buy something you may not have purchased otherwise. But that doesn’t mean they’re bad things. The practical and sensible application of coupons can definitely help you save money.

The main things to watch out for when using coupons are overbuying and spending your money on things you don’t really need. Seriously, you don’t need to hit Sam’s or Costco and walk out with nine gallons of mustard. I’ve even heard of people buying things they know they don’t like just because it was on sale or they had a coupon. I mean, how dumb is that?

I guess there is a time factor involved in collecting coupons, especially if you still like to clip them from the newspapers or flyers that come in the mail. Plenty of folks still do that every week. I think online coupons are a lot easier to search for and save though. There’s a company I love called eMeals that will work with you to plan recipes and also give you information on coupons and sales in your area to make the meals.

I’m definitely not anti-coupon, but at the same time couponing alone won’t change your family tree. It’s like any other tool. If used in a smart way, it can help you save money. And that’s not a bad thing!

—Dave

Use birthday money as a last resort

Dear Dave,

What’s the best way to save or use money given to a baby as a birthday present?

Ron

Dear Ron,

I think it depends on your financial situation along with your plans and goals. If you’re at a place where you can’t afford necessities, then there’s absolutely nothing wrong with using birthday money for food, diapers or clothes. That’s not a fun answer, but sometimes you have to do whatever it takes to properly care for your family.

If money isn’t a big issue though, you’re left with figuring out a plan. In our case, we invested lots of it toward their college funds. Then we taught them to save for other things themselves. For instance, we didn’t buy any of our kids their first cars. But we did agree to match whatever they saved when it came to this purchase.

There’s also nothing wrong with just setting up a simple savings account and watching it grow. As they get older, you can involve them in the process and begin to teach them about the three uses for money: spending, saving and giving. And if you start something like this when they’re really little, chances are they’ll already have a nice pile of money already stashed away when they become old enough for those teachable moments.

The point is to have a plan. Once you have a definite idea in mind, it’s a lot easier to achieve the goal!

—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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The burn ban for Milam County has been lifted. Burning is always prohibited in the county's municipalities.


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