Ask Dave: Crummy family's lack of boundaries
By Dave Ramsey
My grandfather passed away a couple of months ago. I'm 32 and the only relative still living in town, so I helped take care of him and his place so he wouldn't have to go into an assisted living facility. In his will, he left his entire estate - the house and property plus about $270,000 - to me. I'm debt-free except for my house, and now my family is acting weird and telling me I'm making excuses for them being left out of the will. Do you have any advice? - Jason
Let me ask you something. Did you love your grandfather? It sure sounds to me like you did by taking care of him and his stuff. It sounds like he loved you a lot, too. So my advice is to do what he wanted and accept this generous inheritance. And your family needs to just shut up.
When you die, you can leave your belongings to whoever you choose. I mean, it was your grandfather's stuff, so it was his decision. Period. He could have left it directly to his children, grandchildren, a friend or even his dog if he'd wanted.
Let these family members with the problems contest the will. And you can spend the money grandfather left fighting them. The man left what he left, and there's no more. It was his money, his house and his property. They're not entitled to it just because they're breathing.
In the meantime, you need to learn how to be a wise investor and become debt-free, including the house. Start educating yourself on mutual funds and Roth IRAs. And don't beat yourself up over this, Jason. You haven't done anything wrong.
I love your plan, but I have one question before getting started. Should I catch up on any past-due bills before saving up $1,000 for Baby Step 1? - Solita
Absolutely. First, get current or make payment arrangements with anyone who's willing to work with you. Make sure your necessities come first. I'm talking about food, clothing, shelter, transportation and utilities. After that, get current with any credit cards and other types of debt you may have. Once you have these things taken care of, it's time to launch your Total Money Makeover!
You've already mentioned getting $1,000 in the bank for a starter emergency fund. That's Baby Step 1. After that, begin your debt snowball, which is Baby Step 2, and pay off your debts from smallest to largest. In Baby Step 3 you'll save up and increase your emergency fund from $1,000 to three to six months of expenses.
Once you reach this point, you really start looking to the future. In Baby Step 4 you start investing 15 percent of your income into Roth IRAs and other pre-tax retirement plans. College funding for any little ones is next in Baby Step 5, and Baby Step 6 is a biggie - pay off your house early.
But Baby Step 7 is the real deal. When you're able to build wealth and give, you've reached the pinnacle of smart money management. Not only are you securing your family's future for years, but you can help others and your community in a big way.
For financial help, visit daveramsey.com.