You’ve been granted free access to this subscribers only article.
The tuition payment plan
Financial Straight-TalkDecember 26, 2012 | 1,143 views | Post a comment
Our son is graduating from high school next spring. We’ve saved cash to pay for his first year of college, and we have enough in mutual funds to pay for another semester. When should we pull out the money to use for his education?
I wouldn’t touch the money until right before you write the checks. However, I don’t want you to follow my advice just because I said so. My mutual funds have made a little more than 16 percent this year. If they stay at that pace, or if they make just 10 percent during the first part of 2013, I’d want it to just sit there a while longer. Why not let the power of compound interest do its thing and make you as much money as possible?
The biggest question is what are you going to do for cash after the first three semesters? Your son needs to make sure he’s working summers, and maybe even part-time during school, in order to fuel his education. And neither of you should borrow money to make it happen. You guys have gotten him off to a great start. So if he does his part there’s no reason for either of you to go into debt for his college degree!
If someone is following your plan, and they experience a health crisis, should they stop putting money into their debt snowball?
Absolutely! When you’re stuck in the middle of an emergency you always push the pause button on your Total Money Makeover and save as much as you can.
Think of it this way. Cash is your umbrella when it rains, and you never know just how bad the storm will be or how long it will last. Even if you have great health insurance, you’re likely to end up paying a chunk out of pocket in situations like this. That’s why it’s important to have a big pile of cash on hand.
Remember, things like this are often just a bump in the road. They can be expensive, but taking care of important issues doesn’t have to mean giving up on taking control of your finances. Take care of immediate issues with yourself or your family first. Then, the come back when things are better and pick up where you left off on your Total Money Makeover!
Dave Ramsey is a best-selling author of The Total Money Makeover and the nationally syndicated host of “The Dave Ramsey Show,” which airs locally on radio station 550 KTSA. View column archives at www.daveramsey.org. Questioners’ identities have not been verified by the Dave $ays column or this newspaper.
Your Opinions and Comments
Be the first to comment on this story!
You must be logged in to post a comment.
Section A: General News Archives
Agencies uncover $400K in stolen vehicles, parts (February 3, 2016)
China Grove begins vote on tax rollback (February 3, 2016)
Clock running out for Floresville recall issue (February 3, 2016)
Connally expands high-tech health care (February 3, 2016)
Council action changes boards (February 3, 2016)
Court Update (February 3, 2016)
Deputies charge Floresville spurned lover with arson (February 3, 2016)
Deputies investigate recent thefts (February 3, 2016)
Editorial: The demand for villains (February 3, 2016)
Editorial: What’s in a city charter? Is it like a … Constitution? (February 3, 2016)
Eight-liner opponents face deadline (February 3, 2016)
FELPS pools tornado damage claim with city, Floresville ISD (February 3, 2016)
Floresville USDA accountant resigns (February 3, 2016)
Free CERT disaster course (February 3, 2016)
Get a free heart health screening in Kenedy Feb. 12 (February 3, 2016)
Greater LV Chamber to meet (February 3, 2016)
H-E-B recalls cookware (February 3, 2016)
Hold on for now (February 3, 2016)
It’s all happening at Nixon-Smiley Elementary (February 3, 2016)
Kicaster area will have fire coverage (February 3, 2016)
Landfill welcomes China Grove junk (February 3, 2016)
Letter: Apple Pie author extends thanks (February 3, 2016)
Letter: Gonzales differs with writer’s conclusion (February 3, 2016)
Letter: Talamantez truly a man of the people (February 3, 2016)
Life Line Screening event set in Floresville Feb. 28 (February 3, 2016)
Mock Republican Debate Feb. 20 (February 3, 2016)
Nixon-Smiley livestock show set for March (February 3, 2016)
One dead in game-room robbery (February 3, 2016)
Pioneer Award honors Burnside (February 3, 2016)
Pirates Cove in Poth offers after-school care service (February 3, 2016)
Police Blotter (February 3, 2016)
Save the date for Lincoln Dinner (February 3, 2016)
School district cops ink deal with city, county (February 3, 2016)
Second responders to meet (February 3, 2016)
Stockdale, La Vernia units respond to back-to-back fires (February 3, 2016)
Tanneberger is top agent (February 3, 2016)
Weigh in on Loop 410 changes (February 3, 2016)
Wilson County Hermann Sons lodges meet new-member goal (February 3, 2016)
‘Loving’ heart-shaped treats are for the birds (February 3, 2016)