Family, not son’s golf game, should come first financially

Dear Dave: Our 10-year-old son has been playing golf since he was three, and he’s very good. He likes it, he’s already placed very high in some tournaments and we think he could make a wonderful living at it one day. We’re 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 can’t live every second of your lives for a 10-year-old’s golf game. Your family as a whole should come first, so you need to figure out what’s a reasonable percentage of your life and income to dedicate to the little guy’s talent.

It’s not reasonable if you’re going into debt to support this, or if your household budget is blown every month and you’re 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.

You’re looking for balance, Debbie. And you’ve 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 Junior’s 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: It’s 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 don’t want to hold a particular fund that long. So, that way, I’ve 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 don’t buy them personally, but there’s nothing wrong with them. — Dave

Tap into reserves?

Dear Dave: We’re debt-free except for our house, and we have $25,000 in our emergency fund. There’s $124,000 remaining on our mortgage, and we’re 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 didn’t 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 you’d 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, you’ll be a living, breathing definition of financial peace! — Dave

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