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Ask Dave

EE bond dilemma

Cash in EE bonds to pay off debt? Dave likes the idea, and he walks Patrick through the steps that will move him closer to financial peace.

QUESTION: Patrick asks if he should cash in some EE bonds, and use the money to pay off his school loans and get rid of a truck he can’t afford. Dave thinks it’s a great idea, and he walks Patrick through the steps he should take to begin gaining control of his money.

ANSWER: The bonds might be taxed, but it won’t be much to worry about. EE bonds make less than one percent, so you haven’t really earned much. Those things are a horrible investment.

A $30,000 truck doesn’t work with a $50,000 income. So, cash in the bonds immediately, sell the truck, and use some of the money from the EE bonds to pay off the school loans. Then, find yourself a cheap, little truck that will get you around for a few years.

You can do this, Patrick. I want you to have a nice truck one day, but I don’t want that truck to be a burden. This one’s got you by the throat, and you’re feeling it, aren’t you?

Drive like no one else for a little while now, so that later you can really drive like no one else.