Dave Ramsey on Managing Your Money

Company Needs to Step Up!

Dear Dave,

My company makes me use my personal credit card for overseas travel. They take care of my expenses, but sometimes they don’t send the money until after the payment is due. Does this affect my credit score?

Marshall

Dear Marshall,

Unless you pay on time instead of waiting for their money, you bet it affects your credit score. It’s your card! You signed for it, and it’s in your name. Every late payment affects your credit bureau score.

I don’t know who you work for, but this is a very dangerous and bad practice – both by you and your company. Your company is using your credit and abusing you in the process. Talk to them about furnishing you with a corporate card. Better yet, a corporate debit card! If your employer is going to send you overseas, or anywhere on the road, it shouldn’t cost you money or cause you problems.

Dave

Stick With Term 

Dear Dave,

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?

Blasha 

Dear Blasha,

No! These kinds of offers are terrible unless you’re uninsurable, because most mortgage life insurance policies are a lot 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.

Dave

Just What She Needs

Dear Dave,

My daughter is a student and has $13,000 in student loan debt. Recently, her grandparents dissolved an LLC, and they want to give her a gift of $12,500. Should she use this money to pay off the loans, or invest it in a Roth IRA and keep working to pay off the student loans herself?

Meg

Dear Meg,

Let’s look at it this way. Pretend she didn’t have any student loan debt. Would it be wise for her to borrow money on a student loan in order to invest in a Roth IRA? Of course not. If you don’t pay off the loans, and invest it instead, it’s just like you borrowed money to invest. That’s not a good plan.

Your daughter needs to get her student loan mess cleaned up, and this is the perfect opportunity to do just that. And I think it’s pretty cool that God gave her what she needs to fix things. Besides, she can’t do a Roth IRA, except to the point that she has an earned income, anyway.

The last thing this girl needs is a pile of debt waiting on her when she gets out of school. She’s not in a position to be an investor right now. The minute she pays off her student loans, she should get to work on saving a pile of money for an emergency fund so she can complete her studies without racking up more debt!

Dave

**Dave Ramsey is a nationally syndicated radio talk show host and host of The Dave Ramsey Show on Fox Business Network. He’s a best-selling author of many books, including The Total Money Makeover. For more financial help, please visit daveramsey.com.