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Get a Grip on Your Money

By Dave Ramsey
Author, The Total Money Makeover

CBN.comFinancial expert Dave Ramsey, who learned through the pain of personal bankruptcy how to successfully manage his money and prosper, gives this advice.

Survival Mode

Dear Dave,

My husband and I both lost our jobs over a month ago. I’ve been interviewing, and he started a two-week training program for a new job the other day, but right now we’re in survival mode. We just cashed in an annuity, and were wondering if we should pay down debt and reduce the money going out each month, or just live on it.


Dear Veronica,

I’d sit on the money for now. It’s raining, and you need an umbrella. Don’t misunderstand me. You need to be honorable and pay your debts, but you may have to put that on hold for a while. Right now, it’s more important to keep food in the house and keep the heat on. Make sure you hug on each other a lot, too. This kind of situation is scary and can be very stressful.

It’s been a rough winter for you guys, but it sounds to me like you’re seeing a light at the end of the tunnel. The great news is that the light isn’t an oncoming train! Your husband is about to start making money again, and it sounds like you’ve got some possibilities.

Through this stretch, honest communication can make a huge difference. Make sure your creditors know what’s happening. Let them know that you want to make things right, and that you will make things right as soon as you can.

God bless!


Let the Military Handle It?


Dear Dave,

My husband has been active-duty Navy for 22 years. He plans to stay in for 30 years and retire with a pension equal to 75 percent of his base pay. Considering that he’ll receive that money, should we still go ahead and save 15 percent in a Roth IRA for retirement?


Dear Megan,

That’s a pretty nice pension, so I don’t mind if you turn down the retirement saving a notch or two. I’d be okay with 10 percent instead of 15, but I still want you guys to save lots and lots of money!

Even though a military or government pension seems pretty stable, you should never rely on things that are beyond your control. So, don’t assume the Navy is going to take care of you. I’m not knocking the military, Megan. I just want you to have a separate nest egg over and above what they will provide. If something unforeseen happened and your husband couldn’t make it to 30 years, you guys would need an additional source of income more than ever!


Figuring the Net Worth


Dear Dave,

I’m in the middle of filling out an application for life insurance, and they are asking me for my net worth. Is there a formula for figuring this out?


Dear Sheila,

Assets minus liabilities equal net worth. That’s the fancy way of saying it. The easiest way to think of it is this: what you own, minus what you owe, equals your net worth.

Let’s say your home is worth $200,000. If you owe $150,000 on it, you have $50,000 in equity to apply toward your net worth.

You want to be careful not to significantly overstate or understate your net worth. Generally, things like furniture and everyday jewelry aren’t part of the calculation. Now, if you’ve got a $30,000 Rolex strapped to your wrist, that’s different. On the other hand, if a watch like that is a big part of your net worth, you probably shouldn’t have bought it the first place!

Things like bank accounts, investments, and maybe businesses or real estate are the kinds of things that usually show up on a net worth statement.


For more financial advice and a special offer to our readers, please visit  or call 1-888-22-PEACE.

Dave SaysDave Ramsey is a nationally-syndicated radio talk show host and author of the New York Times bestselling books, Financial Peace Revisited and The Total Money Makeover. His life-changing advice in the area of personal finance helps people get out of debt, stay out of debt and build wealth that will last a lifetime and beyond.

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