Dave's Sound Money Advice
By Dave Ramsey
Author, The Total Money Makeover
Stuck in debt? Need to know whether you should buy a new car or a new house? Don’t know if you should get life insurance? Dave Ramsey is your man! In this series of reader questions, Dave gives his two cents on various topics so you don’t make these same mistakes.
Does Driving an Ugly Car Matter?
I’m a new doctor, and I drive a car that’s nine years old, has more than 200,000 miles on it and a few dings in the doors. I’ve heard image is everything when you’re a doctor, but I like not having a car payment. Should I just get over being self-conscious about the fact that my car is surrounded by fancy doctor’s cars every day in the parking lot?
I like not having a car note, too. I’d walk, ride a bike, or drive a nine-year- old car with more than 200,000 miles on it and a few dings in the doors before I had a car payment!
As new, young doctor, you’ve probably got six figures in student loans hanging over your head right now. So you need to get out from under all that before you start thinking about driving something fancy.
If this car is truly on its last legs, then I’d say save up for a few months and upgrade to a decent, used $3,000 car. A Mercedes doesn’t prove you’re a doctor, and you need to be worrying about what’s smart for YOU instead of what other people think!
My husband and I both work, and we just bought a great house for $150,000. He makes $50,000 a year, and I make about $30,000. We’ve been getting lots of different mortgage life insurance offers in the mail. They say they will pay off the house if one of us dies. Do you think we should take advantage of this?
No! These kinds of offers are terrible, unless you’re uninsurable. Here’s why.
Mortgage life insurance is about five times more expensive than term life insurance. You and your husband both need about eight to 10 times your annual incomes wrapped up in good, level term policies.
Forget that overpriced stuff. These will take care of you both and the house for a lot less if something unthinkable happens.
Getting Permission for a Side Job
I’m a sales rep, and I’ve come across an opportunity to work as an independent phone rep in a different industry and region. Do you think it would be unethical to take advantage of this part-time opportunity, as long as it doesn’t interfere with my current, full-time job?
I think the best way to answer these kinds of questions is to reverse them. Ask yourself, if you were the boss and someone on your team wanted to do this, how would you feel?
When members of my team travel and I pay for their tickets, meals, and hotels, I expect them to work for me. That’s only reasonable. Now, if one of them was going out of town and asked if they could meet with someone about a side deal after hours, after our business was taken care of, and it wouldn’t affect my company, then I’d be okay with that. But I probably wouldn’t be too thrilled if I found out they were just working a side deal on my nickel!
Really, I think the Golden Rule applies here. Go talk to your boss, and be honest. If you’ll do this, then I think you’ll probably be cleared to rock and roll with this thing.
For more financial advice and a special offer to our readers, please visit www.davesays.org or call 1-888-22-PEACE.
Dave Ramsey is a nationally-syndicated radio talk show host and author of the New York Times bestselling books, Financial Peace Revisited and The Total Money Makeover. His life-changing advice in the area of personal finance helps people get out of debt, stay out of debt and build wealth that will last a lifetime and beyond.
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