Dear Dave: How do you decide whether or not to sell collectible memorabilia when you’re getting out of debt?
Dear William: In most cases, there’s a pretty wide spectrum of emotional involvement when it comes to this sort of stuff. I mean, there’s a big difference between having a baseball signed by Mickey Mantle from a day that you and your dad met Mickey at the stadium, and buying a baseball a few years ago that he autographed and seeing it has gone up in value.
With the first, I’d be tempted to tell you to keep it unless you’re literally about to lose everything. In it, you have a deep, emotional connection — a personal story about you, your dad and one of the greatest baseball players of all time. It was a sentimental, once-in-a-lifetime kind of thing. In the second case, it’s just a purchase you made as a hobby. That kind of thing can go without a whole lot of thought. If what you own doesn’t have some kind of deep sentimental and emotional connection to family or a major life event, then it’s just stuff.
I hope this helps a little, William. There’s nothing wrong with having some nice things. But there’s a big difference between you having things and your things having you. Never let “stuff” stand between you and your family’s sense of security and financial well-being!
Dear Dave: Recently, I got a speeding ticket. I’m also following your plan, so I was wondering if a speeding ticket is a good reason to dip into my emergency fund.
Dear Ariel: Well, it depends. Certainly you have to pay the ticket. In most states you could lose your driver’s license for not paying a speeding ticket. You’d have a real emergency then, wouldn’t you?
I would advise looking at the situation this way: what is the amount of the ticket in relation to your income and overall financial health? If the ticket is $100 and you make $200,000 a year, then stop worrying and pay the ticket. But if you got slapped with a $300 ticket and you only make $20,000 a year, then that could be an emergency.
If you can cash flow it out of your budget, then leave the emergency fund alone. If not, then dip in for just enough to pay the fine and replace the amount as quickly as possible. I mean, you’ve got to get it paid, right?
That’s an interesting question, Ariel. I’m glad you’re working to get control of your money. Just remember to slow down a little when you’re behind the wheel!
Dave’s latest project, EveryDollar, provides a free online budget tool. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.