Page 29 - Cornerstone Connection Magazine - Volume 22 - Issue 8

Live Like Your Income Hasn’t Changed is a smart buy? It’s less than $12 a month, but the minimum
coverage I can get is $15,000, and he probably has less than
Dear Dave, $1,000 worth of belongings there.
I’ll be graduating from college in December, and I’ll have Kevin
a job waiting for me that pays $50,000 a year. This will bring
our household income up to about $95,000. The problem is Dear Kevin,
we’ve got $18,000 in student loan debt, $2,500 in credit card I’d get renter’s insurance. My guess is it also comes with
debt, and $4,000 to pay in medical bills. We’re living in an five or six figures in personal liability coverage, as well.
apartment right now, so how should we handle this income That’s in case he’s out on the patio with his buddies, someone
increase regarding our debt situation? slips and falls, and they decide to sue because daddy’s on the
Mikayla lease.
In a case like this, because there’s so little to start with,
Dear Mikayla , it’s not theft or fire taking the contents of the apartment
Congratulations on your decision to get control of your that you’re worried about. It’s the liability portion of the
finances and your degree! If you two just keep living the coverage that makes it worth every penny of what you’d be
way you have been, minus the debt, and put the rest toward paying. That alone makes it worth $10 to $12 a month just to
the debt you’ve incurred, you could be debt-free in a year make sure a slip-and-fall doesn’t mess with your life!
or so.
Remember, just because you’ve got a lot more money —Dave
coming in doesn’t mean you should double your
entertainment budget, take an expensive vacation, or run
out and buy a new car. The first thing I’d recommend is This article was reprinted with permission from the Lampo Group, Inc. 2021. For more
sitting down together, and working out a written, monthly financial advice, follow Dave on Twitter @DaveRamsey and on the web at daveramsey.com.
budget. Give every dollar a name and a job to do before the
coming month begins.
Don’t forget the debt snowball, either! List all your debts
from smallest to largest and attack the smallest—that credit
card debt—first with a vengeance, while making minimum
payments on the medical bills and student loan debt. Once
you’ve paid off the credit card debt, roll the money from
that payment over and apply it, plus any other cash you
can scrape together, toward the medical bills. Once the
medical bills are out of the way, repeat the process and roll
the payments over again targeting the student loan debt.
At this point, you should have a bunch of cash to throw at
those student loans each month until all that debt is off your
backs once and for all.
I’m really proud of you two, Mikayla. If you’ll follow my
plan from here on out, you’ll gain control of your money
and be set to start saving and building real wealth!

—Dave

Renter’s insurance?

Dear Dave,
We just helped move our son into a cheap, off-campus
apartment a few blocks from where he is attending college.
We signed the agreement, and are paying the rent, because
he makes very good grades. Do you think renter’s insurance

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