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Question: Kimberly in Washington and her husband have two kids with hearing aids. Her daughter needs new ones, which cost $6,500. She and her husband will have to come up with $3,500 to cover the purchase. They have some savings, but her husband is insistent on not dipping into the emergency fund. Should they charge the hearing aids in order to keep the emergency fund intact?
Answer: Do you charge money in order to keep your husband's emergency fund in place? No. Absolutely not. That's absurd. Your husband is insistent on having an emergency fund. Yes, you need to have an emergency fund. What you and your family need to decide is if this is an emergency. If it's not an emergency, then we save up and pay for them.
You guys have to budget for the rest of your lives—while you're raising these children anyway—for periodic replacement of hearing aids. Every month, you need to set money aside knowing that you're on a four-year schedule. You have to have a hearing aid savings item in your budget every month for the rest of your lives. This shouldn't sneak up on you, is my point. This time is okay, but in the future, it should not sneak up on you again.
Your mortgage should not be your guideline for having an emergency fund. An emergency fund should be three to six months of household expenses, so your emergency fund in general is a little low today. The question is, is this at an emergency level yet? As a mom, you're starting to get there. Dad may not quite be there. How quickly could you scrimp and save most of the $3,500 to put with this other money? The child's probably not going to be permanently set back in school over three months of having less-than-stellar hearing aids. She can hear; she just can't hear as well because they've gradually gotten weaker.
The Ramsey family would probably be saving up to do this, and then we'd be saving up going forward to do this. The other thing you can do is this: The hearing aid business has a lot of margin in it. The actual hard cost to produce a $6,000 or $8,000 set of hearing aids is very low. I would tell your audiologist that we're going to go shopping if you don't get us some help on this. You don't want us to go shopping. The truth is that you can buy hearing aids a lot of places and have them serviced in your town. You get online and start looking at the brands and find out what's out there and all of those kinds of things—what different methodologies there are to buy them—and you start knocking $1,000 or $2,000 or $3,000 off this price—I'm not sure you can, but you won't if you don't try—then you go back into your audiologist and say, "Here's what we've got. You need to go back to your supplier and say this is a child situation. This is very important to us. Get some help on this. The price you're giving us is retail price." I'm going to bargain if I'm in your shoes.
Yes, I'm going to save. Yes, I'm going to bargain. Yes, if it comes down to the child being able to hear, it's an emergency, and we're going to use some of the emergency fund. That would be my last resort. I don't agree with the way you presented your husband's stand of, "That's just off the table and not open for discussion." Of course his daughter is more important than his emergency fund. That's absurd. But I want you to try a lot of other things first. I would never charge to do this. There's no need to charge to do it. Between shopping a high-margin item and really leaning in on them and asking for help, between saving up money, and between delaying the purchase just a little bit to be able to save up the money, I think you can avoid hitting the emergency fund, and I think you're going to get these done pretty quickly.
The beautiful thing about the whole conversation is that you're actually stopping and thinking. Most people in America just go buy whatever they want and put it on a credit card, and then they wake up a few years later and go, "Oh, we had to buy hearing aids. We were forced to do this, and it was our little baby, and we were stuck." They have all these rationalizations on how they ended up $55,000 in credit card debt instead of stopping and thinking of other ways to do things. That's what you're doing. I appreciate where you are, and I think you're heading in a really good direction with your overall money philosophy.