Dave Ramsey: Listen to your heart

Dear Dave,

I was recently notified that I am one of the beneficiaries of a class action lawsuit against a previous employer. The amount I can receive is just $200, but I don’t feel like this past employer wronged me in any way. Everyone around me is urging me to take the money, but I feel kind of weird about accepting anything under the circumstances. What do you think I should do?

— Randy

Dear Randy,

I don’t know all the details of the episode you’re talking about, or what happened with this particular company. But I don’t agree with the idea that we’re supposed to beat up anyone we can, or milk everything we can get out of every company or human being we come across. Some people are just incredibly opportunistic. They live like it’s anarchy, and they have no sense of fairness or decorum. But you do.

The people who are telling you to take the cash don’t think the way you do. They’re the kind who would take any money, no matter the reason. But you sound like the kind of person who wouldn’t do that, so you shouldn’t be taking advice from those people.

I think your heart has already told you what to do, Randy. If I were in your shoes, I wouldn’t take it. If it were $100,000, I wouldn’t take it. You were not wronged, and that money is for someone who was wronged.

You have a sense of dignity and pride about yourself and your behavior, and I respect that. My advice is to listen to your heart.

— Dave

Dear Dave,

I just became debt-free, and I live in an apartment. I’m also 28 and single, and I make about $75,000 a year. Do you think I should get a mortgage and go back into debt, or save up and pay cash for a house? I’d like to keep the price of a new home around $200,000, and I think I can save about $15,000 a year.

— Kevin

Dear Kevin,

Congratulations on becoming debt-free! It feels awesome, doesn’t it?

When it comes to saving, how about rounding that figure up to $20,000 a year? Going that route, you’re only 10 years away from a nice new paid-for home, and you’re still debt-free. That’s one way to do it.

I don’t borrow money, Kevin. And I don’t tell people to do things I won’t do. The one exception to that is I don’t yell at people for taking out a 15-year, fixed-rate mortgage where the payments are no more than 25 percent of your monthly take-home pay. You could save like crazy for a couple of years and put down a really strong down payment on a home in the price range you’re talking about. Then, you could pay off that house in 15 years max — or even sooner.

I don’t have a big problem with it either way. But wouldn’t it be great to be only 38 years old and still completely debt-free?

— Dave

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