Dear Dave,
Should you budget for mad money, or just carrying-around cash, when youíre trying to get out of debt?
Dear Aurora,
What really matters is the amount of mad money you allow yourself to have. Everyone needs a little pocket money. Itís probably not going to throw you off too much if you put $10 or $20 in there. But $100 or $200? Thatís a bit much when youíre scrimping, saving and supposedly working hard to get out of debt.
Think of it as a safety valve, Aurora. Everyone needs a break and a little fun now and then. Whether itís grabbing lunch out, or going to a movie once in a while, you need to relax and let off little steam.
Just make it part of your regular monthly budget, and stick to the amount. Little things like this will help keep your total money makeover moving in the right direction without wearing you out!
ó Dave

Itís a better idea to pre-plan

Dear Dave,
My wife passed away last year, and she was just 43 years old. I paid cash for the funeral and all the arrangements. Now Iím getting solicitations from the funeral home, wanting me to prepay my own funeral. Iím 45 years old. Is this a good idea?
Dear Dave,
God bless you and your family. Iím so sorry you have to go through this, but Iím glad to hear you were in good enough shape financially to handle the burden. That means you were both very wise with your money.
My advice is to pre-plan, but donít prepay. As you discovered, having to make important decisions in the midst of that kind of grief is a hard thing to do. Sometimes, people are so emotional during times like these that they make bad decisions. So pre-planning and making selections ahead of time is a great idea.
But itís never a good idea to prepay for this kind of thing, and hereís why. If you live to an average age, for what youíd prepay today at age 45, you could invest the amount, be self-insured for that kind of thing, and in all likelihood have a ton of money sitting there when your time comes.
Events like this make you realize the need for proper planning, but donít ever prepay them. Lots of people in the funeral industry donít like me for this stance, but thatís just because they make lots of money on prepayment plans.
ó Dave

Dave Ramsey is Americaís trusted voice on money and business. He has authored five New York Times best-selling books, including ďSmart Money Smart Kids.Ē ďThe Dave Ramsey ShowĒ is heard by more than 8.5 million listeners each week on more than 550 radio stations. Follow Dave on Twitter at @DaveRamsey and on the Web at