Is pre-paid legal coverage a good idea?
Dear Dave,
I’ve heard lots of my friends talking about pre-paid legal coverage. Do you think this is a good idea?
Phil
Dear Phil,
Pre-paid legal isn’t a BAD thing, and it’s not a rip-off. It’s usually pretty inexpensive, too. You can get it for between $18 and $25 a month. With some packages you’ll even get a free will in the deal, and that alone will save you about $300.
Still, I wouldn’t recommend buying it. Twenty-five dollars a month over 10 years is $3,000. Most people won’t have $3,000 worth of legal needs in that period of time.
So it’s not really worth it.
- Dave
Can't get wife to break the habit!
Dear Dave,
My family and I are on the verge of being debt-free, but I can’t get my wife to stop using credit cards. It’s like she is in love with them. We pay them off every month, and it still scares me. I’ve suggested a debit card, but she doesn’t like the idea of having $500 in the bank and finding something she wants that costs $1000. Do you have any suggestions?
Dan
Dear Dan,
I’ve never met a person who was in love with a credit card. I’ve met PLENTY who were in love with what they represent and what they do.
To most people credit cards represent three things. One, they represent convenience. They’re easier to use because you don’t have to fool with a checkbook in the grocery store line. Two, they represent security. If you’re away from home and need money, you can just pop it into a machine. And number three, they’re a way to get stuff you can’t afford. This doesn’t sound like the case here, because you pay them off every month.
Here’s the deal. A debit card will do anything a credit card will do. I think the real issue is that you guys aren’t working together on your money. I also think she’s just a little bit spoiled. It sounds to me like she does whatever she wants and then you cover it. She’s got a sugar daddy, Dan, and it’s you!
I want the two of you to sit down together and start doing a written budget every month. I want you to ask her how much extra she’d need in the account each month to feel comfortable. Come to an affordable agreement on this. Then, you both pull out the scissors, cut up the credit cards and start using a debit card!
We need some flexibility here, but she also needs to grow up a little and get over the idea that she’s supposed to have whatever she wants the moment she wants it.
- Dave
Re-qualify for better interest rate?
Dear Dave,
Our current mortgage rate is 11 percent on a 30-year balloon note. Over the years we’ve been late on credit card payments several times. Things are looking better now, and I was wondering how long we’d have to wait to refinance our home at a reasonable rate.
Sonya
Dear Sonya,
Chances are you won’t qualify for a standard or conforming mortgage until you’ve had two or three years of clean credit AND a good explanation for why the bad credit issues won’t come back later. But 11 percent is a horrible interest rate, so you’ll want to do that as quickly as possible.
When you do refinance get a 15-year fixed rate. Stay away from 30-year mortgages and balloon payments. You’ll be amazed at how quickly you guys can get out of debt, save and get the house paid off when all that interest money isn’t going into the bank’s pocket!
- Dave
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Dave Ramsey is a nationally syndicated radio talk-show host and best-selling author. His life experience gives him an unusually deep perspective and insight into life and money matters. Be sure to get Dave's "Total Money Makeover: A Proven Plan for Financial Fitness." If you'd rather order by phone, call WND's toll-free customer service line at 1-800-4WND-COM (1-800-496-3266).