Is This Plan Too Intense?
Dear Dave,
My wife and I make a little over $50,000 a year combined, and we’re almost debt-free. Right now, we have $50,000 left on our mortgage and $4,000 in student loans left to pay. We’re both really excited about the future, and we’re thinking about selling our home and moving into a trailer her parents own. On top of this, we’d like to save my wife’s entire salary for five years to buy another, better house. What do you think of this plan? —Travis
Dear Travis,
Man, I’m really excited for you two. You’re working hard to take control of your finances and pay off debt. This is what I mean when I use the phrase “gazelle intensity.”
However, I think selling your home is going a bit too far at the moment. Despite a really rocky road the last several years, the housing and real estate market is finally starting to rebound. At this point, there’s every indication that your home is going to go up in value. If you go with your plan, you’re going to lose all that appreciation value and lower your standard of living at the same time.
While you have something of a modest income, I think you make enough money to pay off the house and become prosperous during the next five to seven years, without going to the extreme.
Keep up the great work! —Dave
Health Insurance Options
Dear Dave,
My husband and I are self-employed, and we currently pay almost $1,000 a month for health insurance. I’ve heard you talk about the potential for rates to increase as much as 40 to 60 percent next year. Are there other options, such as just saving the money in case of medical emergencies? —Anna
Dear Anna,
You don’t want to go completely without insurance, because you’ll get penalized by the government. Remember, when it comes to health insurance, the problem usually isn’t a kidney stone or a trip to the emergency room for a few stitches. The problem is a cancer diagnosis, which ends up costing $500,000 or more.
You might want to check into an HSA (Health Savings Account) type of plan within the exchanges. Another thing you could look at is one of the medical sharing programs through a Christian organization such as Christian Healthcare Ministries.
But a higher deductible, HSA-type plan might help keep your premiums down. It’s sad, but this is what Obamacare has done to independent people like you and me who are self-employed. It’s destroying small group plans, and I guess that was their intent. I suppose they wanted to put those companies out of business, so the government could take it over. —Dave
Dave Ramsey
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