Friday, 06 April 2018 10:09

Dave Ramsey has the Answers to Your Questions!

Written by  Dave Ramsey
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Keep Your Money in Your Own Pocket

 

Q.  I just filed taxes, and it looks like I’ll get a pretty big refund this year. A friend of mine told me I should adjust my withholding, so I don’t get a refund. This seems pretty dumb to me. Why would I change my withholdings when I’m getting money back?

 

 

A.  The only reason you’re getting a refund is because you had too much taken out of your paychecks in 2017.

 

Let’s say your refund is $3,500. Basically, you loaned the government $3,500 of your own money, interest-free. A refund isn’t a gift or reward, James. It’s your own cash that you get back because you paid in too much during the previous year. In your case, that adds up to almost $300 a month!

 

Instead of loaning the government money that you worked hard to earn, wouldn’t it be better to keep it in your pocket?

 

 

Debt and Income Crisis

 

Q.  I received a call the other day from a company saying it could negotiate the balance on my credit cards to a lesser amount. The caller also said they could get me a zero-percent interest rate until the debts were paid off, and then the accounts would be closed. I’m kind of starting over again financially, because I sold a company I had run for almost 15 years, then got into real estate and lost almost everything. I’m making just enough to squeeze by, and my credit card debt totals $40,000. Would this be a good idea?

 

 

A.  No, this is not a good idea. You’re looking at two major problems with a company such as this one. One, they will absolutely destroy whatever credit you may have. Their plan is to take your cash, and spend some time beating down the credit card companies until they agree to accept a lesser amount. Then, they use your cash to settle loans you will have — by that time —defaulted on. This will put you in a situation very similar to if you had filed Chapter 13 bankruptcy. Stay away from these people.

 

You have an income crisis, in addition to a debt crisis, at this point. For starters, I want you to start living on a tight, written, monthly budget. I’m talking rice and beans, no vacations, and no eating out until you pay off this debt. Where your income is concerned, maybe you should consider getting back into the kind of business you ran previously for a while. Look for a managerial or supervisory position in that area, at least until you’re able to get back on your feet and save some cash.

 

Finally, cut up the credit cards, close the accounts, and put as much money as you can spare toward paying off that debt using the debt snowball system. Never go back into debt again!

 

 

Last modified on Friday, 06 April 2018 10:17
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