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Dear Dave, I’ve been on medical leave from my job due to an injury. My doctor recently advised extending the leave another six months, but during this time I wouldn’t be paid. My husband makes $75,000 a year, and we owe $40,000 on our cars. This includes a $30,000 note on one of them. Should we take money out of our 401(k) to make it through the additional time off? Crystal Dear Crystal, Absolutely not! You guys have dug a hole for yourselves, and borrowing from one place to fix another will only make that hole deeper. In cases like...

Dear Dave, Is there ever a time you should dip into emergency fund savings in order to pay off your home early? Eric Dear Eric, The only time I would advise this is when your emergency fund is too big, and you have a very small amount left to pay on the house. Keep in mind that your emergency fund should be three to six months of expenses, not three to six months of income. Besides, paying off the house doesn’t fall into the category of an emergency. The fact that you have to pay for your house doesn’t catch...

Dear Dave, My younger sister moved to Atlanta, and she came to live with my husband and me a few months ago. She’s 19, has a job, and is attending a local college. But even though she’s working, she hasn’t said anything about helping out with utilities or paying rent. We don’t need the money, but do you think it’s time for us to push her out of the nest so she can start living as an adult? Molly Dear Molly, The way you’ve described your little sister makes me think she’s a pretty good kid. She’s doing all the...

Dear Dave, My daughter is 14, and she was recently offered a steady weekend modeling job. Do you have any advice on how to handle the money she earns? Cynthia Dear Cynthia, In terms of investing some of the money she’ll make, a Roth IRA would be pretty cool. You would have to oversee it, of course, and you’d have to file a tax return, but starting something like this when she’s 14 would help set her up for some serious money later. I think the biggest thing, however, is to make sure you create lots of teachable moments for...

Dear Dave, I want to buy an inexpensive car, and I was wondering what you think about salvage titles. Eric Dear Eric, It’s not impossible to find a decent salvage car. But I’d take extra precautions to find out exactly why it was salvaged. If it’s a salvage car because it was wrecked, I’d take a look at what kind of wreck caused the damage. Lots of people know how to repair and rebuild cars, so it might end up in better condition than before if you find the right mechanic. On the other hand, I’d probably walk away if...

Dear Dave, I’m 27 and married, and we have two kids. I make $90,000 a year, but we have $80,000 in consumer debt—$48,000 of which is in car loans. The rest is credit card debt. My wife’s parents have offered to let us move in with them so we can get out of debt faster. Do you think this is a good idea? Kevin Dear Kevin, If I were in your situation, I would not move in with the in-laws. You’ve got an absurd amount of money wrapped up in those cars. I’d sell the stupid things, start living on...

Dear Dave, I’m a general contractor, and I was recently offered some business by a large corporation. I’d need new equipment to handle the job, and the purchase would use most of my cash flow. I’m wondering if the opportunity is worth the risk. Wayne Dear Wayne, I’m glad you realize that, on the surface, not all growth is good growth. The number-one thing that causes small businesses to fail is accounting and cash-flow problems. The second biggest thing is that they grow too quickly and fall in on themselves. Owners are sometimes scared to turn down anything, so they...

Dear Dave, My wife and I make $140,000 a year, and we’re working on our debt snowball. We’re almost out of debt, but we still have two small car payments and some credit card debt. She wants to get rid of the credit card debt but doesn’t mind us having car payments. Can you help me understand this? Kelly Dear Kelly, I’m not sure I understand her thinking either. The car payments and the credit card debt are the same thing. They’re both debt payments, and you’re being charged interest on both of them. The only difference is that one...

Dear Dave, What do you think about the practice of credit card churning? Ethan Dear Ethan, I think it's a pretty dumb idea. The concept is to run up the balance on one card as high as you can, then flip the balance from card to card in order to get perks like airline miles. But if you want to go through all the trouble and hassle over such a small amount of money, be my guest. I've met thousands of millionaires, and none of them have ever credited their success to credit card churning. Think about it: With all...

Dear Dave, My mother-in-law has a serious credit card problem. She can’t afford stuff, but she shops anyway, acquires more and more credit and thinks she’ll pay for it all later somehow. Her husband has bailed her out a few times, but he’s unwilling to do it anymore. My wife and I, and her sister, want to address this issue, but where do we start? Jonathan Dear Jonathan, First of all, you need to stay out of the discussion. This is something for her daughters to handle, and her husband needs to be part of it, too. He’s closer to...

Our Valentine's Day tradition continues There are quite a few things in life that are more foolish and desperate than using the Dave Ramsey pickup lines to woo someone—taking an interest-only mortgage, going within 50 feet of a payday loan store, and buying lotto tickets, just to name a few. But while all of these actions are avoidable, February 14 is not. And if it’s Valentine’s Day, it must be time for Dave Ramsey … pickup lines, that is. So without further ado, here they are: the sixth-annual list of Dave Ramsey pickup lines. If I had a dollar for...

Dear Dave,I’m looking at buying term life insurance. Currently, I’m in medical school doing my last year of residency and making $35,000 a year. Should I base the amount of insurance coverage on what I’m making now or what I’ll make when I’ve finished medical school? AmandaDear Amanda,In most cases, I advise basing the amount of life insurance coverage on the income you’re earning at the moment. After all, that’s the amount your family is used to living on, right? However, if you’re finishing up your medical degree this year, it’s a virtual certainty you’ll earn lots more in 2014....

Dear Dave, My fiancée has a small photography business, and she wants to form a partnership with a college student who is majoring in business. I think this is a bad plan, but I’m pretty sure she’s not going to listen to me. What do you think about the idea?BruceDear Bruce,A partnership is always a bad idea. There’s absolutely no upside for her, and if you feel there’s nothing you can do to keep her from making such a ridiculously bad mistake, then you guys are going to have issues in your marriage, too. It sounds like she’s looking for...

Posted: 01/27/2013 Last Updated: 10 minutes ago Anica Padilla Anica Padilla | Email Me BOULDER, Colo. - A grand jury investigating Jonbenet Ramsey's death voted to indict her parents on child abuse resulting in death in 1999, according to an exclusive report by our partners at The Boulder Daily Camera. However, then-Boulder County District Attorney Alex Hunter refused to sign the indictment and prosecute the case, the Camera reports. Hunter reportedly believed he could not prove beyond a reasonable doubt. The 6-year-old beauty queen was found dead in her home on Christmas night in 1996. Police initially suspected family members,...

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?KristenDear 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...

Dear Dave, My daughter died. She was 32 years old and single, and she had lived with me for the last few years because she was recently disabled. I did not support her financially, and when she died she had no assets and no will. Is it my responsibility to pay the student loans and medical bills she left behind?JimDear Jim,I’m so sorry you’re experiencing this kind of grief. Losing a child is a heartbreaking experience, no matter their age.The short answer is this: If you didn’t sign for it, you’re not liable. If a friend were to move in...

Dear Dave, In your opinion, how do you know when a hobby officially becomes a business? Dan Dear Dan, This is a great question. But when it comes to something like this, my opinion doesn’t matter nearly as much as what the Internal Revenue Service says. According to the IRS, if you run a business for two years or more without making a profit, then it is not a business. You have to become profitable at some point. Otherwise, the IRS will declare your endeavor a hobby. Personally, I think that’s a pretty good marker. I mean, if you’re making...

In this January 3rd, 2013 edition of Majority Report, Sue Jeffers and Dan McGrath discuss Ramsey County Election Manager Joe Mansky's recent refusal to provide public access to 2012 election records, even though he has made them available for previous elections and they are vital to detect and prove voter fraud. Watch the video and call Joe Mansky at 651-266-2171 to demand transparency in our election system.

Dear Dave, My wife and I are 70, and we have $950,000 in annuities in the market, plus $68,000 in our emergency fund. The only debt we have is our mortgage. I’m considering converting our stocks to a money market account to lower the risk. What do you think?HowardDear Howard,There are two sides to this. One is the asset allocation method, where as you grow older you move away from equities like mutual funds toward safer, more conservative investments like money markets, bonds and certificates of deposit. This is standard financial planning theory.I disagree with that theory, and here’s why....

Dear Dave, I’m trying to help my son and daughter-in-law by encouraging them to get out of debt and live on a budget. It hasn’t been a problem to give them money when they’ve asked in the past, but I’m afraid they’re still in a mess. How can I make sure I’m doing the right thing?MargaretDear Margaret,The first thing you need to do is sit down and have a serious, loving talk with them. If they’ve asked for money before, and it has become something of a trend, you have a right to know more about their circumstances. In addition,...