Dear Dave,
Iām getting married this summer, and Iām on Baby Step 4 of your plan. My fiancĆ© is getting onboard with your advice, too, and sheās currently in the process of paying down her student loan debt. Would it be a good idea to go ahead, and put most of my emergency fund savings toward helping pay off her debt now?
Aaron
Dear Aaron,
Youāve got a generous heart, and I know you love this lady, but I wouldnāt recommend being involved in paying any of her debt until after the wedding. At that point, you two are joined together as one, and the concepts of āmineā and āhersā and āhisā disappear. It all becomes āours,ā and you can adjust your money situation to reflect your marriage and your financial makeover as a couple.
Make sure that āweā have an emergency fund of at least $1,000 in the bank at that point. Then, if youāre both in agreement on the issue, you can throw the rest of what you previously had in your emergency fund at the debt. Both of you can also pile up cash between now and the big day, so that when youāre āofficialā youāll have even more cash on hand.
Congratulations, and may God bless your lives together!
āDave
Dear Dave,
My husband and I are 24, weāre debt-free, and weāre just a few weeks of saving away from having a fully-funded emergency fund. Each of us has a 401(k) plan at work, and right now weāre concentrating on life insurance purchases. You always recommend term insurance, but how long should the coverage last?
Jenny
Dear Jenny,
Congratulations on being super smart with your money! It sounds like you two are starting out on the right foot.
Generally, I recommend 15- or 20-year level term policiesāunless you have children. Since you didnāt mention any kids, I can only assume theyāre not in the picture at this point. However, if you two decide to grow your family in the future, Iād advise converting those to 30-year term policies. Youāll want the insurance there to protect everyone in the family, until the kids are grown and out on their own. In the years after, continued saving and wealth building will lead you to a point where youāre both self-insured.
You two have done an excellent job with your finances. Keep up the good work!
āDave
* Dave Ramsey is CEO of Ramsey Solutions. He has authored seven best-selling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 15 million listeners each week on 600 radio stations and multiple digital platforms. Follow Dave on the web at daveramsey.com and on Twitter at @DaveRamsey.