Dave Ramsey

Dear Dave,

I was wondering why you recommend doing a fresh budget every month. Once you’ve figured out your expenses and income, won’t the same budget work month to month?

Kara

Dear Kara,

I understand what you’re saying, but if you look closely at every month, you’ll see pretty quickly that they’re not all created equal in terms of expenses. On top of that, if you work a commission-based job, your monthly income will fluctuate throughout the year.

Now, there are some things that will remain pretty standard. A few things like your rent or mortgage payment will probably be the same month to month. But what about things like utilities and food? Chances are your electric or gas bills will be higher during certain months as you heat and cool your home depending on the weather. What about holidays and special occasions? It’s likely you’ll end up spending more on food, gifts and related items around Thanksgiving and Christmas or other months when family and friends have birthdays and other events.

These are just a few of the reasons it’s a good idea to customize your budget every month. A good, accurate monthly budget should always reflect your reality, Kara. Not only will this give you a more realistic idea of where your money is going, but the knowledge also helps you control your money instead of it controlling you!

—Dave

Dear Dave,

One of my husband’s credit card bills was turned over to a collection agency. They’ve offered three different payment options. If we accept one of the options, does this mean the original creditor accepts the agreement as well?

Cheryl

Dear Cheryl,

In a situation like this, the collection agency either owns the debt outright or they’re directly representing the credit card company. This is pretty much standard operating procedure when someone has defaulted on a loan.

I’d go ahead with the deal they’ve offered that makes the most sense for you guys. You’ll have a ding on your credit report, showing settlement on a defaulted credit card, but it’s really no big deal since you’ve already got a mark against you for having it turned over to collections.

Want another piece of advice? Never use credit cards again!

—Dave

Dear Dave,


Dave Ramsey

Dave Ramsey is a personal money management expert, popular national radio personality and the author of three New York Times bestsellers.
 
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