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Your Money: College savings takes priority

Dave Ramsey advises readers to choose saving for college as the focal point over saving for a car or other expenses.
Oklahoman Published: October 7, 2013
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When it comes to paying kids commissions for chores, the biggest thing we're trying to do is find teachable moments. We want the kids to learn that money is tied to work. Then, when they have some money, we want to teach them about the three uses for money — spending, saving and giving.

DAVE

DEAR DAVE: How long should it take someone to fully fund their emergency fund?

CHRIS

DEAR CHRIS: On average, building an emergency fund takes six months to a year. It takes about 18 to 24 months for most people to pay off all of their debt, except for the house. That's if they're gazelle intense, and have no life other than getting control of their finances.

Baby Step 1 is saving $1,000, and not paying extra on your debts until you have that money in the bank. Once you've got a $1,000 starter emergency fund, then your list all of your debts except the house from smallest to largest and attack them with a vengeance. All you do is work and pay off debt until you clean up the mess.

Once that's done, you move on to the next Baby Step, which is adding to your emergency fund until you have three to six months of expenses set aside. Most people can accomplish that in six months to a year.

There are always various factors involved because everyone's situation is different.

DAVE

Email questions for Dave Ramsey to davesays@daveramsey.com.