12/19/2005

Advice from Nashville's leading Financial Aid Advisor Dave Ramsey

 
Dave Says
By Dave Ramsey
Author of:
Financial Peace and
The Total Money Makeover

"Spouses, full-time students, and in debt!"


Dear Dave,

My husband and I are both full-time students, and he makes about $52,000 a year. Our parents discouraged us from getting student loans, so we ended up putting about $23,000 on credit cards paying for school expenses. We’re barely making the minimum payments on the cards, have a $400 house payment and we’re also investing $500 a month in his 401(k) because the company matches his investment. Sometimes we’ve barely got enough money for food and gas. What can we do?

Roxy in Houston, TX

Dear Roxy,

Maybe we should stop the 401(k) for a while. If you’re telling me that you’ve barely got enough money for something as basic as food, then the 401(k) can just sit there. I think I’d stop doing pretty much everything except working down this credit card debt. Cut them all up, Roxy – have a plastic surgery party! Then take all your debts, list them from smallest to largest, pay minimum payments on the big ones and attack the smallest one with a vengeance.

More than anything, you guys need to get on a written budget and set it in stone before the first of the month. You’ve got more money than you think if your husband is bringing home $52,000 and your house payment’s only $400 – even with $23,000 in credit card debt. 

- Dave

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