Should I Refinance?

By Dave Ramsey
Author, The Total Money Makeover

CBN.com – These days it pays to be smart about money. That's why it's important to take this wise counsel from financial expert Dave Ramsey.

Pulling the plug on a bad job

Dear Dave,

My husband and I are completely debt-free. He makes about $100,000 a year with great benefits, plus we have $80,000 in savings. The problem is he hates his job. He wants to try something else, but he’s not sure where his passion lies. When is it okay to pull the plug?

– Sarah

Dear Sarah,

In a situation like this, I think you need to combine the desire to do something you love with enough wisdom that won’t leave your family in jeopardy. In other words, let’s run to something, not from something.

I’d suggest that he grab some of Dan Miller’s books, like 48 Days to the Work You Love and No More Mondays, and begin a process of reading, studying, and thinking about what he really loves to do. Then, figure out a way to monetize that idea. You’re more creative and passionate when you love what you’re doing, and with the right plan in place you’ll make more money, too!

Now, doing this will probably result in a temporary pay cut. But even if he goes from making $100,000 to $50,000 that first year, you guys can adjust your lifestyle and still live comfortably. You can get by on way less than a hundred grand, and if needed, you can live for a little while off bits and pieces of that big pile of cash you’ve got in savings.

I can’t imagine spending my entire life doing something I hate. If every Monday morning looks and feels like you’re having a root canal, then it’s time to find something else. Just make sure you’ve got a plan, and be smart about it!

– Dave

Refinance for a lower payment?

Dear Dave,

How do you feel about people refinancing their homes? Is it smart to refinance a house in order to have a lower mortgage payment?

– Anonymous

Dear Anonymous,

No, it’s not. But it is smart to refinance a house to get a lower interest rate. By doing this, you pay off the home faster.

Think about this. Right now, with a 15-year fixed rate mortgage and one point paid, you can get an interest rate under four percent. That’s awesome! Let’s say you have a $300,000 mortgage, and you refinance from six percent to four percent. A two percent savings equals $6,000 a year, and that’s $500 a month in interest saved. In my book, that’s worth doing!

So, refinancing definitely makes sense in cases where you’re going to stay in the home a long time and you get a lower interest rate. Good question!

– Dave

The first team meeting

Dear Dave,

Our company is about to have its first-ever employee meeting. Do you have any suggestions on how to conduct something like this?

– Brooke

Dear Brooke,

If you have an existing company, and you’ve never had an employee meeting in the past, I think the first one should be spent explaining why you’ve decided to have employee meetings.

We have staff meetings every week with all 300 team members, mainly for the purpose of communication between the different departments and divisions. We cheerlead when things are going right, and lots of times I’ll read email letters bragging on various team members.

Now, no company is perfect, and sometimes there’s housecleaning to be done. That kind of stuff isn’t always pretty, but we tell the truth and shoot straight with the team about these issues. Occasionally, I’ll even use one of the meetings to teach on the principles of the way we run the company. This can cover accounting, marketing, or even the concepts of unity and loyalty.

Just do things gradually, and don’t hit your team with too much right off the bat. You might even take suggestions from your team as to what they feel would be beneficial in your meetings!

– Dave

For more financial advice and a special offer to our readers, please visit www.davesays.org.

Dave Says Dave Ramsey is a nationally-syndicated radio talk show host and author of the New York Times bestselling books, Financial Peace Revisited and The Total Money Makeover. His life-changing advice in the area of personal finance helps people get out of debt, stay out of debt and build wealth that will last a lifetime and beyond.