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Dave Says

By Dave Ramsey
Author, The Total Money Makeover – Financial guru Dave Ramsey answers questions about wise financial decision-making.

Money Matters and Marriage

Dear Dave,

My wife and I are $60,000 in debt, and all of our credit cards are maxed out. I make $30,000 a year, and we’ve got virtually no savings or emergency fund. The other day I took all the cards and cut them up and closed the accounts. She’s a little angry about this, because she wants them in case of emergencies. What can I do?

- Leon

Dear Leon,

First of all, you’ve never heard me tell anyone to take credit cards away from another person – especially a spouse - and just start chopping. Even if they have your name on them, this kind of thing requires careful discussion and agreement between two people. I can understand why she’s angry right now, boss. I’m guessing you may have spent a night or two on the couch over this one!

Communication is an essential part of any good marriage. Now, I agree with your logic. You guys are $60,000 in debt, so it’s about time the cards were cut up. But I don’t agree with your method. The bottom line, Leon, is that emergencies are a valid concern even though her answer to them is wrong. If she’s angry it’s going to make it even tougher to get her on board with the idea of establishing an emergency fund and getting out of debt.

If I were you, I’d apologize. You just took over, wrenched control of the situation away from her, and that’s one of the reasons she’s angry. Then, I’d sit down with her and find out how much it would take in an emergency fund to make her feel comfortable. I recommend three to six months of expenses. So, if your total household expenditures for the month are $2,000, then you’d need anywhere from $6,000 - $12,000.

After this, the two of you can decide together how you want to build this emergency fund. Try to agree on how much to pump into it each month, and you might even want to sell a few things and use the money to help build it even faster. It’s a lot easier to pull a rope than to push it, Leon, and you can’t convert someone with a baseball bat. You can beat them into submission or fear, but you don’t convert them that way and you don’t win someone’s heart by using force. Cooperation, not coercion, is the key.

- Dave

Sell stock to get out of debt?

Dear Dave,

I have about $5,000 in individual stock, and $6,000 in debt. Should I sell the stock and pay off the debt?

-Leann via email

Dear Leann,

Let’s look at it this way. Pretend you only had $1,000 in debt, and you had a credit card with a $5,000 open line of credit. Would you go borrow $5,000 on it to buy that stock? Of course not. It’s the same kind of thing in reverse.

If I woke up in your shoes tomorrow morning, I’d have only $1,000 in debt before the coffee started brewing. Sell the stock, and pay off the $5,000. Then, I’d formulate a plan, get on a budget and fix that thing in my life called overspending so that I could knock out the remaining debt in no time and start building wealth!

- Dave


Bank trust departments good or bad?

Dear Dave,

I was listening to your show recently, and you seemed to have a bad opinion of bank trust departments. Why is this? For someone who doesn’t have the knowledge to be their own trustee or executor, the service they provide can be worth every penny spent.

- Janelle

Dear Janelle,

I think you misunderstood. I don’t dislike bank trustees, but my experience with them has led me to believe that there are many other people who can do a better job in this area. They tend to be ultra-conservative, moving money to CDs within the bank itself, or the get just plain silly and act like they’re a stockbroker doing day trading.

Instead, I’ve found that just general people in the population – friends or relatives that have some business acumen – make much better trustees. For that matter, most attorneys make much better trustees because they don’t end up having conflicts of interest.

Now, there are a percentage of bank trustees who are truly excellent. There are always exceptions to the rule. But the truth is there are very few really good ones out there, and there’s no chance in the world you’ll find a bank trust department managing my estate when I pass away.

- Dave

* For more advice on credit cards, debt and investments, go to

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