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  • 3Princes 06-08-07 | 10:13 PM
  • Question for ya...
    What does good old Dave say about inheritances you may receive... as in what does he say to do with them?
  • Dopey406 Dopey406's Avatar 06-08-07 | 10:16 PM
  • Ooh, Jeanne---are you receiving something?

    His advice is to usually use it in the baby steps. So if you're on Baby Step #2 (Debt Snowball) use it to pay off your debt snowball, then use extra toward your fully-funded emergency fund.

    If you're lucky enough to be past all of that and onto Save For College and Pay Off Your House Early, then use it accordingly.

    He advocates using it wherever you are in your Baby Steps until it's all accounted for.

    I'd be happy to help if you need it.
  • 3Princes 06-08-07 | 10:21 PM
  • Yeah.. I took a chunk of it and paid off our cc debt. Our student loans are both paid off too. We have our cars and our house really. I guess I'll have to read the book
    My problem is that no matter how many times it's been explained to me I still do not understand the different types of investments and stuff.
  • Dopey406 Dopey406's Avatar 06-08-07 | 11:29 PM
  • Dave Ramsey considers car loans to be debt that falls into the debt snowball category, too. In his plan, the only regular payment (aside from utilities) that you should make each month is a mortgage--until the house is paid off. So car debt is also in that debt snowball.

    After that, he suggests that you have 3-6 months EXPENSES (note this is not INCOME, but expenses) in an emergency fund. Following that, he suggests doing the next three steps concurrently:
    ***Investing 15% of your income into retirement (first up to your employer's match in 401(k) and then into Roth IRAs to reach 15%).
    ***College funding for children (he recommends ESA's--Educational Savings Accounts, not 529 Plans).
    ***Pay off your house early.

    After you have completed these baby steps, the last is Build Wealth and Give.

    So wherever you are in your Baby Steps would dictate how you disseminate the extra cash that has come in. Windfalls can be amazing gifts if they're handled appropriately, which it sounds like you've done.