Weekly financial Q&A, with advice on student loans and playing the lottery.


 

Dear Dave,

Our daughter has one year left in college. She’s going to a state school here in Texas, and we’ve already taken out two loans to help her out. She’s living in nice apartment off-campus. She doesn’t work so she can concentrate on her studies. Should we get another loan for her last year?

David

Dear David,

I’ve got a better idea. Keep in mind I said a better idea, not an easier idea.

She needs to be working full-time and then some, all summer long. If she does this and also works part-time during the school year, and you guys chip in a little, you may not need to think about another loan.

I really don’t give a hoot about her lifestyle while she’s in college. No college kid, especially one who’s not working to help make things happen, deserves to be put up in a fancy apartment while her parents go into debt or break their backs working to support them. I worked all the way through college, and so did thousands of other people.

Statistics show that the average in-state cost of tuition for college in this country is about $6,000 a year. It costs about $5,000 to live in a dorm, plus you’ve got books and food and a few incidentals. So the average total will be between $12,000 and $15,000 year. That means you guys have to come up with about $1,000 to $1,200 a month. I really believe that if you’ll all work together, and involve everyone in the process, you can make this happen without taking another loan!

In the long run, you’ll all be happier if you do it that way.

Budgeting for stupid

Dear Dave,

Do you think it would be a good idea to budget a little money each month for playing the lottery? I spent $10 on scratch tickets the other day and won $100. I think it might be a pretty good idea to save $90 and put the other $10 toward more tickets.

Edward

Dear Edward,

Here’s a thought. Just stuff 10 bucks down your garbage disposal each month and save the cost of driving to the nearest convenience store.

Really, now, you can’t be serious! The lottery is a tax on the poor and on people who can’t do math. I’m not riding a moral high horse. Research shows that people from lower-income brackets, folks who can’t afford to be throwing their money away on some ridiculous game, spend four times as much on lottery tickets as anyone else. Rich people don’t mess with this garbage, because they know the lottery isn’t a wealth-building tool. When was the last time you saw a line of BMWs and Mercedes’ pulled up to your local convenience store to buy lottery tickets?

The only winners in the lottery game are the students who get scholarships, but in reality they are riding to school on the backs of the poor masses who gamble away their grocery money.

Lots of people think winning the lottery will mean life on easy street. The truth, however, is that it rarely works out that way. Did you know that 65 percent of lottery winners go bankrupt in less than 15 years? Your chances of winning big are about 125,000,000 to 1. You’re more likely to be bitten by a snake or die in a car accident on the way to buy the stupid lottery tickets!

If you’ve got money to throw around, do something smart with it, like get out of debt! Do you have an emergency fund? Are you investing for your retirement, or your kid’s education? If you’ve done all of this, give it to someone who’s hurting, or invest it in your community. Don’t waste it on something as dumb as the lottery!

Dave Ramsey is a nationally known personal finance expert. Visit www.davesays.org for more financial advice.