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Monday's Money Tips with Dave Ramsey

Dave Ramsey offers practical tips for budgeting in your everyday life and ways to tackle unexpected expenses.

"Importance of small business capital reserve"

Dear Dave,

I’ve had my own business for a few years, and I’m finally starting to see some real money. I want to make sure I don’t mess things up now. How important is it for a small business to have some kind of cash reserve?


Dear Ken,

This is a great question, and I hope other small business owners and folks thinking about opening a business will pay attention. You always need capital reserves for a small business – always!

You know how I stress the importance of having an emergency fund of three to six months of expenses in your personal finances? The same principle applies to business. When business slows down or the economy does a nosedive, having a cash reserve will soften the blow and help you make it through the lean times. And if something goes wrong or breaks down, it will turn a disaster into nothing but a minor inconvenience.

Not only that, but it can help grow your business debt-free. At some point you’re going to hear about a good opportunity. Good opportunities have a way of becoming great when you’re paying with cash!

- Dave

"Getting rid of private mortgage insurance"

Dear Dave,

We bought a home a couple of years ago, and we’re currently paying private mortgage insurance. I’m tired of seeing extra money go out the door, so is there anything we can do to keep from paying this?


Dear Eddie,

You can get the PMI dropped if your home has appreciated enough to cover the cost of the insurance. This can be done through a standard appraisal. It might cost you about $400, but it’s worth it if that gets the insurance charge out of your life for good.

Just make sure the appraiser you pick is approved by your mortgage company. You don’t want to pay for the same job twice!

- Dave

"Renting a vehicle without a credit card?"

Dear Dave,

I love your philosophy on money. But I travel a lot, and was wondering how I’m supposed to rent a car without a credit card.


Dear George,

I use a Visa debit card. I’m traveling somewhere almost every week, and a debit card can do virtually anything a credit card will. There are a couple of car rental agencies that don’t accept debit cards, but they’re too expensive anyway. So it’s always a good idea to call ahead.

Probably the biggest advantage, George, is that you’re using your own money with a debit card. With credit cards you’re always borrowing someone else’s money and paying extra for the “privilege.” Why go into debt and pay more for something when you don’t have to?

- Dave

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