DEAR DAVE • My husband and I 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?
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Blasha
DEAR BLASHA • 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.
DEAR DAVE • I'm a new doctor, and I drive a car that's 9 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?
Mario
DEAR MARIO • I like not having a car note, too. I'd walk, ride a bike or drive a car 9 years old with more than 200,000 miles on it and a few dings in the doors before I had a car payment!
As a new, young doctor, you've probably got six figures in student loans hanging over your head. You need to get out from under all that before you think 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!
E-mail questions for Dave Ramsey to davesays@daveramsey.com. For more financial advice, go online to www. davesays.org or call (888) 227-3223.
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