380Guide offers eclectic content to assist residents and newcomers in discovering activities and services in the 380 corridor. Our lifestyles section will keep you up to date with new business openings and their locations as well as events in our area. 380Guide will also focus on culture, fashion and the latest products and procedures to keep you looking and feeling your best.
Lifestyles | Archive
Dave $ays...
Advice on personal finances from popular radio personality, live event speaker and best-selling author, Dave Ramsey.
Question: Dear Dave, Should the 15 percent of my income that I invest toward retirement be done after taxes or before? Also, should I include my company match in that amount? David
Answer: Dear David, I usually put 15 percent of my gross income into retirement before taxes, but you can do it either way. I don’t count the company match.
Keep in mind that with the 15 percent we’re talking about a rule of thumb here. The point is to be planning for and doing something about retirement. Start doing this before you put the kid’s college fund in place and pay off your home, but not until after you’ve got a fully-funded emergency fund and all other debts paid off except the house.
Way to be thinking ahead, David! Dave
Question: Dear Dave, I’m 61 years old and just lost my job with the only company for which I’ve ever worked. I’ve got $120,000 in my retirement fund, but I owe $57,000 on my home and $8,000 on a car. Should I pay off my debts using my retirement savings? Peggy
Answer: Dear Peggy, Your idea makes me a little nervous if this is your only nest egg, because you won’t have much money left to live on. You’ll have taxes taken out, and depending on your tax bracket that will probably leave you with about $50,000 if you pay everything off.
Now, if you’ve got another source of income in the home providing $50,000 to $60,000 a year you’d probably be okay. And if that’s the case I’d say go for it. Write the checks and get the house and car off your back today!
Just be careful that you don’t put yourself in a tight situation. Remember this, Peggy. Money is fun – if you’ve got some. Dave
Question: Dear Dave, What happens to the money that is owed when someone files bankruptcy? Do creditors just have to write it off, or do other people pay the price through taxes or higher interest rates? Grace
Answer: Dear Grace, In most cases the creditor just loses the money. That’s one of the risks businesses face. Of course, any bankruptcy is also a seriously bad mark against the filer’s credit record.
Chapter 13 filings may be considered a little less severe than Chapter 7 because you’re showing an interest in retiring the debts. They often allow – if you have a regular income and limited debt – to keep some of the property you might otherwise lose. Also, some debt balances may be partially discharged, with the filer agreeing to make monthly payments to the trustee for distribution among remaining creditors.
A Chapter 7 bankruptcy is lots tougher on the one who files. It involves liquidating all assets that aren’t exempt. Some of the filer’s property may be sold by a court-appointed official – a trustee – or just turned over to creditors.
It’s really a lose-lose situation, Grace. The business loses money, and the filer suffers the emotional pain of participating in a shameful process. Dave
* For more financial advice and a special offer to our readers, please visit www.davesays.org or call 1-888-22-PEACE.