Love Dave Ramsey, I’m still in the Davish mode and not full on Dave, working on it but the wife she just doesn’t get it. She grew up poor and thinks it’s ok to live like this. That we have a young family and life is expensive. I grew up middle class where my parents worked full time and farmed/cattle in the after hours. I was fortunate and my parents were able to help me through college, she did the student loan route. I’m trying to give my kids the debt free route. Can’t seem to pound that idea into my wife’s brain though. I’d like to grab life by the balls rather than the other way around!
If you asked my financial advice, which you didn't so feel free to skip, I'd say this based on the above:
Forget sending your kids to college with the "debt free" route. How old are they?
The first thing you should do is max out your retirement investing. There are a few reasons for this.
1) That's money your wife can't touch unless you die, in which case she'll need it and it will benefit her and your kids. If you live you'll know your future is being protected.
2)This way you know that whatever you are spending after your paychecks/investing, you can afford it since you are paying yourself first. (This obviously does not include credit card debt, which I hope your wife is not getting into.)
I would set up automatic contributions to an emergency savings fund that is in a separate high interest savings account. If you dont have one already you need one, pronto. It doesn't have to be much each month depending on what your emergency savings is now. Three months expenses is minimum, six months ideal. Once you have that you don't have to save for it anymore unless you need to replenish after an emergency.
So, at this point here's what you have and what you tell your wife.
1) Mortgage is automatically deducted each month. (Utilities are being paid each month I'm assuming)
2) Retirement is MAXED OUT every month (don't need to even tell her this)
3) Emergency savings is getting auto filled until we have X amount and then it can be put on hold
4) Spend the rest and be guilt free about it. "Spend the rest honey" works well. Give and take. Save=spend. This is the trade off. "Once we've saved X, you can spend the rest on anything and I won't question it at all."
Now when it comes to the kids and college, be realistic and honest with them about cost of college. The #1 thing your kids need is mom and dad to be married and loving each other. That's the most important thing they need to be successful in their lives. The second thing your kids will thank you for is being self-sufficient in your elder years. You want to be able to have enough retirement funds to take care of yourself without having to borrow money from your kids. That's FAR more important than paying for their college!
Then be honest with them about how much, or how little, you can help them with college. Guess what? It's their life and you've put a roof over their head, fed them, loved them, etc. Its up to them to get scholarships and be smart about their future. Don't mortgage your future and then they have to pay for it later!
If your wife wants to be responsible after all this, offer to save in a 529 plan for your kids. You can also try to tell her "lets try to save for a vacation" and then use all the money. She might like saving when she sees the rewards of it.
Bottom line, max your retirement before you pay for college.
