News from the Tennessee Valley Columnists

Dave Ramsey

Family, not sonís golf game, should come first financially

Dear Dave: Our 10-year-old son has been playing golf since he was three, and heís very good. He likes it, heís already placed very high in some tournaments and we think he could make a wonderful living at it one day. Weíre debt-free except for our house, so what do you think is a reasonable amount to spend in order to support his golf activities? —Debbie

Dear Debbie: This sounds really cool, but you and your husband canít live every second of your lives for a 10-year-oldís golf game. Your family as a whole should come first, so you need to figure out whatís a reasonable percentage of your life and income to dedicate to the little guyís talent.

Itís not reasonable if youíre going into debt to support this, or if your household budget is blown every month and youíre going without necessities. He can learn to play golf on a public course and without traveling to tournaments, or having the best clubs and a personal coach.

Youíre looking for balance, Debbie. And youíve done a great job to get where you are. Just take care of regular family stuff like having an emergency fund, putting college savings in place and not going into debt as a result of Juniorís golf game.

If you do this, everything will be fine. — Dave

A or B shares?

Dear Dave: Our financial advisor recently told me about A and B mutual fund shares. What shares do you recommend? — Randy

Dear Randy: Itís not going to matter which shares you choose in most cases, as long as you hold the fund seven years or more. The big difference is that with B shares you pay the fees on the back, and with A shares you pay them on the front.

I buy A shares because sometimes I donít want to hold a particular fund that long. So, that way, Iíve already paid my fees.

A lot of mutual fund brokers push B shares because it gives you a reason to stay in the fund. I donít buy them personally, but thereís nothing wrong with them. — Dave

Tap into reserves?

Dear Dave: Weíre debt-free except for our house, and we have $25,000 in our emergency fund. Thereís $124,000 remaining on our mortgage, and weíre paying $940 a month on the note.

We also have $125,000 in a mutual fund and other stocks outside our IRAs, and a combined income of about $90,000. Are we in good enough shape to pay off the house by cashing out our non-retirement investments? — Will

Dear Will: If you didnít have a house payment you could easily save $1,500 a month. And in about five years you could save up everything you cashed out of your investments and re-fund them, plus youíd have a paid-for house that entire time.

Write a check today and pay off the house, Will. With no house payment and your emergency fund and IRAs still in place, youíll be a living, breathing definition of financial peace! — Dave

For more financial advice and a special offer to our readers, please visit or call (888) 22-PEACE.

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