Dear Dave,I’m 26, single, and I’ve been working your Total Money Makeover plan to pay off my debt. Right now, I have just $25,000 left to pay off, including my car. Recently, I was offered a chance to move to Singapore for the next six months as part of my job. I won’t have any real expenses while I’m there, but I’m worried about the effect it might have on me getting out of debt. How can I make all of this balance out?Jared
Dear Jared,Why does there have to be a balance here? In my mind, this whole situation is a fantastic catalyst for helping you get out of debt even faster than before.
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Think about it. You’re single, and you’ve got no strings attached. This is a wonderful opportunity to travel and make more money and save more money than ever before! You’ll be able to accelerate your financial plan and have a great cultural experience, too!
Now, I’m not up for this idea if you’re going over there just to hang out and goof off. But if you’re committed to the plan and to getting out of debt, then this is something you absolutely must do. You could even go ahead and sell the car now. You’ll be rid of insurance payments, buying tags, and all that stuff. Plus, it’ll just sit there losing value while you’re gone, anyway.
I’m not hearing anything negative in this entire situation. Go for it, Jared!—Dave
Dear Dave,I called a creditor recently to settle an old debt. They offered a settlement, but said it was their policy not to put settlement offers in writing. Should I accept the deal?Joseph
Dear Joseph,No way! If you don’t have anything in writing, then you have no proof that they extended the offer or agreed to a specific amount. The only one who will have “proof” of anything in this scenario is the creditor, and that’s just asking for trouble.
My suggestion for handling this ridiculous situation goes something like this. Explain to them that you seem to have reached an impasse, because you have a policy of never accepting settlements and handing out money unless the settlements are in writing. No writing, no money! It’s not a hard concept to understand, and it’s fair to both parties.—Dave
Dear Dave,I’d like to move to Las Vegas when I retire in about 10 years. I’ve saved up quite a bit of money, and could pay cash for a property now. Should I go ahead and buy, and maybe rent it out for a while, or wait until I actually retire?Bruce
Dear Bruce,If you can pay cash now and still have plenty of savings left over, then there’s no reason not to go ahead and buy. The housing bubble has burst out there, and you’ll be able to find some real bargains in and around Vegas.
I’m not big on being a long-distance landlord, but I’d be tempted to do it in a situation like this. Keep in mind that you’ll probably have to renovate the place if you rent it out for several years. It’s just the nature of things in the rental world, so make sure you figure that into your cash plan—and your emotional plan, too!—Dave