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Dave Says

Address The Deeper Issues

 

 

Dear Dave,

 

My boyfriend is not very good with money, and he is in a bad situation right now. He has a huge car payment every month, plus about $30,000 in credit card debt. He also lives in a very expensive apartment. He recently quit a really good job because he doesn’t like his boss anymore. He has talked about filing bankruptcy, and yesterday he asked if he could move in with me. I love him, but I’m also scared. I try to manage my money well by saving, investing for retirement and staying out of debt. What does this mean for our future together?

 

Crislyn

 

 

Dear Crislyn,

 

My guess is the guy’s not really bankrupt, but it sounds like he has some maturity and character issues that need to be addressed. I’m not saying things can’t change, but this is not someone to move in with or consider marrying anytime soon. You two would have a hard time as husband and wife unless he makes some real course corrections in his attitudes about money and life.

 

For starters, he needs to get another job, sell the expensive car and find a cheaper place to live. Leaving one position for another is okay, but deciding you just don’t like something and walking away from it without another job waiting—especially when you’ve got bills and a bunch of debt—is just plain irresponsible.

 

Lots of people identify too strongly with what they drive or where they live. They come to believe those things are indications of their value or worth, and that’s sad. It means something inside them is broken, and bankruptcy isn’t going to fix that.

 

All this doesn’t mean he isn’t basically a decent guy, but it does mean he needs to get control of his finances—and that he’s got some soul searching and growing up to do.

 

—Dave

 

 

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.


Work Together, and Be Intentional

 

 

Dear Dave,

 

My husband is a union member and works at a paint factory near our home. His union’s current contract will expire in nine months. We have about $27,000 of debt left to pay off, and he makes a little over $80,000 a year. I’m nervous because his slow season is coming up between now and then. During this time, he usually gets about half the hours — and, of course, less money — than he does during the rest of the year. I’m a little scared, even though there hasn’t been a strike in the last six years. Do you think we should go ahead and pay off our remaining debt or hold onto every penny in case they walk out?

 

— Cheyanne

 

 

Dear Cheyanne,

I’m going to tell you something that might just blow your mind: You two can pay off the debt and have some money set aside to live on in that length of time. If you do that, you’ll actually be more ready for a strike than ever before. You’ll both have to be on the same page financially and do things with a sense of urgency, but right now, I don’t think you’ve got too much to worry about.

 

The likelihood of them going on strike is pretty low. Chances are, they’re just rattling their sabers and talking big to posture for the negotiations. Most factories are behind right now, and the last thing they want is to get even further behind. Everything has been so screwed up by COVID-19 that unless the union demands some completely ridiculous stuff, things will probably work out fine.

 

I think you guys are going to be fine, Cheyanne. Should you be intentional and thoughtful about the situation? Absolutely. It’s always wise to look ahead and plan for the future. Getting that debt paid off and saving up a bunch of cash will give you real peace of mind.    

 — Dave

 

Dave Ramsey is a seven-time No. 1 national bestselling author, personal finance expert and host of “The Ramsey Show,” heard by more than 18 million listeners each week. He has appeared on “Good Morning America,” “CBS This Morning,” “Today,” “Fox News,” “CNN,” “Fox Business” and many more. Since 1992, Dave has helped people take control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.


There Are Better Options

 

 

Dear Dave,

 

I’m coming up on a transition phase in my life. I’ll be leaving the military soon, and I’ve been evaluating my living situation once I am out. My parents said I could live with them for a while, but I am not sure that would work out well. I have done some research on renting versus buying a home, but I understand that you hate VA loans. Can you clarify as to why you feel this way and give some advice for a person in my situation?

 

Tyler

 

 

Dear Tyler,

 

Hate might be a strong word for how I feel about VA loans, but there are some things you should know about them. Number one, VA loans are usually more expensive, with the interest rate and all the fees, than FHA or conventional loans. Number two, the reason most people gravitate toward a VA loan is they can get a house with no money down. But if you’re trying to buy a house with no money down, it means you’re too broke to buy a house!

 

When you buy a house, and you’ve got no money in the bank, that house is going to be a curse instead of a blessing. What happens if you buy a home this way, and the air conditioner goes out next week? What happens if your car needs a new transmission next month? Most people who find themselves in situations like this start piling on debt to fix things, and that’s not a wise answer.

 

VA loans and other “no down payment” mortgage loans allow you to buy a home from a position of financial weakness rather than a position of financial strength. Don’t get me wrong, I want you to own a home someday. I just don’t want the home—and a bunch of other debt stacked on top—to own you.

 

My advice is to rent a decent, affordable place for a while and concentrate on getting your new life and career off the ground while saving some money. You might even consider a roommate situation for a while to help cut costs. But you don’t need to be buying a home right now.

 

Good luck and God bless, Tyler. And thank you for your service to our country! 

 

—Dave

 

 

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.

 


Let's Tweak That Idea a Little

 

 

Dear Dave,

 

I am on Baby Step 2, and I started a YouTube channel earlier this year that led to a new opportunity to make additional income. I try on and review clothing, and I’m paid $30 for each clip that’s anywhere from 30 seconds to two minutes long. Right now, I have about 1,000 viewers. This requires me to buy items from several brands. I usually return the items when I’m through filming, but I’m currently funding this with a credit card I only use for this project. I only pay the minimum each month until I get the refund, so at any given time there can be up to $4,000 on the card in rotation. I make about $86,000 at my normal job, so is this an okay way to fund my project and chalk it up as a business expense?

 

Amber

 

 

Dear Amber,

You’re taking a risk here, from a business perspective, by playing around with $4,000 in debt to make $30 a pop. That’s inordinate. And you shouldn’t be paying for the clothes in the first place. These brands should be giving you clothes to review—that you keep—for the marketing exposure, but I’m not sure you’ve got enough eyeballs on you yet to justify them giving you the clothes for free.

 

Basically, it sounds like you’re trying to put yourself in a position to be an influencer. And the way influencers get paid is by monetizing eyeballs. Obviously, YouTube and other platforms will pay you if you can get the eyeballs. But 1,000 viewers really aren’t a lot these days. You’re getting there, though, and I’m glad you’re working at it and trying to make things happen.

 

You make good money, Amber. I want you to set aside $2,000 or $3,000 for this business, maybe out of the business income, and prime the pump one time. By that, I mean open a separate checking account that’s for your clothing exchange process only. Here’s the thing, let’s say you bought $1,000 worth of stuff from one of these companies, and they suddenly decide they’re not taking it back. You just ate that $1,000. And guess what else? Now, you really have credit card debt.

 

There are three things you can always be sure of in business. One, it’s going to cost twice as much as you think it will. Two, it’s going to take twice as long as you think it will. And three, you are not the exception to these things. While we’re at it, add this to the list of stuff you can always be sure of—you’ll never find me advising or endorsing credit card debt!

 

—Dave

 

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.


Protect Against Inflation?

 

 

 

Dear Dave,

 

All the talk on the news about inflation is a little scary. Is there any way to protect yourself against it on a day-to-day basis?

 

Garret

 

 

Dear Garret,

 

When people start talking about inflation, it seems like there are always some who want to start collecting gold, fill every container they own with gasoline and stick their cash under their mattresses. But listen, you can prepare for inflation and address the results without being panicked.

 

You are still in control of your money, inflation or not. You’ll be able to make sure your money is going toward the right things, while being able to find places where you can cut spending, if you’re living on a written, monthly budget. If you’re noticing the prices of things like food and gas rising in your area, you’ll need to adjust your budget to account for this. That way, you’ll know exactly what you’re working with, and it will help you avoid any nasty surprises.

 

If you’re really feeling the pinch and want to save even more, look for specific ways to lower your grocery bill or save money on gas. Maybe it’s time you switched to generic brands, or started a carpool into work. If you find great deals on canned food and things you can stock your pantry with—I’m talking about stuff you’ll actually use—go ahead and buy a little extra. Just make sure you’ve budgeted for it before heading to the grocery store. You’ll want to already know exactly what you’re going to spend, so you don’t get swept up into impulse buying.

 

Like it or not, inflation is a thing. If you plan on retiring one day, it’s pretty much guaranteed that the cost of a loaf of bread, a tank of gas and even a cup of coffee will have gone up by then. The best way to protect yourself against inflation that’s bound to happen is to invest your money—and the sooner the better. But remember, if you still have debt other than your mortgage, and don’t have an emergency fund of three to six months of expenses, you need to take care of those things first!

 

— Dave

 

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.


Teaching The Value Of Work

Dear Dave,

 

What are your views on teaching children good work habits? Many of our friends don’t require their kids to help out or work around the house, but we both strongly feel that instilling a strong work ethic early in life is one of the best things you can do as a parent for your children.

 

Deshay

 

Dear Deshay,

I’m so glad you both feel that way. Our culture has made many great advances to ensure the happiness and well-being of children. But too many parents today are so centered on what their children want that they have lost perspective on what their children need.

 

Perspective, or looking at life over time, demands that you teach children to work. Teaching a child to work is not child abuse. We teach them to work not for our benefit, but because it gives them dignity in a job well done today and the tools and character to win as adults in the future.

 

In my mind, children should be taught to work just like you’d teach them to bathe or brush their teeth—as a necessary life skill. An adult who has no clue how to tackle a job and finish it with pride is every bit as debilitated as an adult with body odor or green teeth. If your child graduates from high school, and his or her only skill set consists of playing video games, eating fast food and believing the world owes them something, you’ve set up your child to fail.

 

Another benefit of teaching a child the wonder of work is they may grow to lose a little respect for those who refuse to work. I’m not talking about folks who lost jobs due to unforeseen circumstances and are trying to get back on their feet, or someone who genuinely cannot work. I’m talking about folks who refuse to look for, or accept, gainful employment.

 

My wife and I noticed that our kids, as they grew older, didn’t pursue relationships with people who didn’t understand the value of work and demonstrate the character traits of mature, hardworking people. And that was wonderful news to us!

 

— Dave

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.


Sounds Suspicious to Me

 

 

Dear Dave,

 

My husband and I have a rental property in South Carolina we want to sell. The current renters’ lease is up in December, but our property manager tells us the renters won’t let anyone in the home, not even just for photos to post online due to COVID-19. How do you think we should handle this situation?

   

Tracy

 

 

Dear Tracy,

I don’t know much about current COVID-19 restrictions in South Carolina, but this sounds suspicious to me. I’m also thinking your property manager is kind of a wuss, but I have the spiritual gift of cynicism.

 

I’m old school, and if I own a house, I’d like to go in it any time I want—within reason, of course—if renters are in there. They have the legal right of quiet enjoyment, meaning I don’t get to show up at all hours and harass them. But I’m not letting them stiff-arm me and use COVID-19 as an excuse. I mean, tenants thinking they have the right to give the landlord and owner zero access? Maybe places like the Socialist Republic of California allow this kind of crap, but most states have common sense, plus reasonable tenant and landlord protections. Yeah, the whole feel of this makes me think there’s something very wrong going on inside this house.

 

I can imagine your frustration, Tracy. It makes me angry just thinking about it. If they’ve got a sick child or adult in the home, or someone’s out of work but actively looking for a job, then I’ll show a lot of compassion and back off a little. I’ll try to work with them to resolve things in a way that’s good for everyone. But if they’re just playing games or misbehaving and using COVID-19 as an excuse on top of that, I’d have no problem removing them.

 

I think you need to dig a little deeper on this one. Check the current laws in South Carolina, especially any laws concerning a possible eviction moratorium and get in touch with a good real estate attorney. There are times when we’re called upon to be understanding and generous. But I have very little tolerance for someone who tries to take advantage of me.

 

— Dave

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of “The Ramsey Show,” heard by more than 20 million listeners each week. He has appeared on “Good Morning America,” “CBS This Morning,” “Today,” Fox News, CNN, Fox Business, and more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.


And Baby Makes Three

 

Dear Dave,

 

My wife and I are expecting our first child in a couple of weeks. I bring home $35,000 a year teaching at a local high school, and she just completed her master’s degree in speech therapy. She has a job waiting for her after the baby is born, and they are being very flexible about when she starts. I have heard you tell some people to leave just $1000 in savings for Baby Step 1, and use any other saved cash to pay off debt. But I am concerned about the new expenses we will have once the baby is home. Should we hang on to our savings, so we have extra cushion for those costs or if something unexpected happens?  

David

 

 

Dear David,

Congratulations! I know you two are excited to welcome a little one into the world.

 

In your situation, I’d advise pushing the pause button on the Baby Steps for now. Forget about paying down debt, until mom and the baby come home, and you’re sure everyone’s healthy and safe. You could even hang on to it all until she decides to start work. But the bottom line is if everybody’s okay, the baby and all those connected expenses—like formula, diapers, and daycare—just become part of a regular monthly budget.

 

Your wife is going to be making pretty good money once she starts her job. And the truth is babies are not all that expensive. There are costs involved in having kids, but it’s not like we’re talking thousands of dollars a month out of your budget just because you had a baby. Can you buy lots and lots of things for a baby? Can those things cost a ridiculous amount of money? Of course! The list of things you could buy goes on and on. But a healthy, new baby doesn’t need much, and having one at home isn’t going to break the bank.

 

I think any financial fear or uncertainty you may be experiencing right now will disappear once you’ve got a couple months of adjusting your budget and getting used to the new normal under your belt. Then, when you and your wife decide it’s time to start her career, you can begin paying off debt in a really big way!

 

—Dave

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.

 


Does My Mom Need Long-Term Care Insurance?

 

 

Dear Dave,

 

My dad passed away about a year ago, but he left my mom in really good shape financially. They never had any consumer debt, the house is paid for, and they had about $1 million in assets. Dad also left her a $500,000 trust. Mom is going to be 60 next year. She is in good health, but considering her age and financial situation, do you think she needs long-term care insurance?

 

Darby

 

Dear Darby,

 

I’m so sorry to hear about your dad. Losing a spouse, or a father, is tough at any age. The good news is your dad did a great job of planning to take care of your mom. He left her in fine shape money-wise, but yes, she needs long term care insurance and a good estate planner. You need to help your mom do everything possible to handle her situation wisely.

 

I usually suggest folks wait until age 60 to buy long-term care insurance, because the likelihood of filing a claim before then is very slim. In fact, about 95% of long-term care claims are filed for people over 70. That’s why, in most cases, it doesn’t make sense to get long-term care insurance earlier than age 60.

 

Insurance isn’t a one-size-fits-all kind of thing, though. If someone has a family history of illness or other health issues at a younger age, they may need to get long-term care insurance earlier. But you shouldn’t buy long-term care coverage at a young age just because you’re paranoid of what might happen, or because you think you’ll save money. That’s just not true.

 

In the event your mom becomes unable to take care of herself at some point, long-term care insurance would be an absolute necessity. The cost of nursing home care these days is astronomical. Again, your mom is in a great place financially, but a prolonged stay in a nursing home somewhere down the road could eat up her nest egg in a hurry.

 

Long-term care insurance is a wise part of any good asset management plan.

 

—Dave

 

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.

 


They'll Play on Your Emotions

 

 

Dear Dave,

 

I’m on Baby Step 2. I’ve paid off almost all my debt, and I’m living on a monthly budget. Recently, I got a call from a debt collection company about an old medical bill. They threatened to garnish my wages, and from the way they talked I’m afraid they may actually do it. How should I handle this situation?

 

Gwen

 

Dear Gwen,

 

First of all, they won’t garnish your wages. They can’t. For that to happen, they would have to go through all the formal, legal steps of suing you, and then they’d have to win the case. Debt collectors like to play with people’s emotions because, many times, folks will give in and do whatever they want—whether they can afford it or not.

 

The worst thing you can do in these situations is react with panic or fear. Talk to them calmly and rationally, and explain your financial situation. You may be able to reach a compromise that works for both of you. If they get nasty, or continue to lie to you, let them know you’ll file a complaint with the FTC (Federal Trade Commission). Pushy debt collectors have a habit of getting polite and reasonable in a hurry when faced with the possibility of the federal government stepping in.

 

Do everything you reasonably can to pay your debts, Gwen. You owe the money, and that means you have a legal and moral obligation to pay them. But you don’t have to put up with a collector’s lies and harassment!

 

—Dave

 

 

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions


Honesty Matters

 

 

Dear Dave,

 

My wife and I are in our late 20s, and we’re on Baby Step 6. Recently, my mom reached out to me for help. She has a car lease that ends next month, and she asked to borrow $2,000 so she can pay it off. It’s a weird situation, because my parents keep separate accounts and don’t combine their finances. My mom also asked me not to tell my wife about all this. What’s your advice?

 

Daniel

 

Dear Daniel,

 

I don’t do anything I can’t tell my wife about—ever. If I’m in a meeting, and someone tells me what’s said in that room has to stay in that room, that I can’t talk to anyone else about it under any circumstances, I’ll get up and leave. In my mind, keeping things from my wife is against the law.

 

Your mom is out of control to even think about asking you to do this, and you need to have a serious talk with her. Let her know you love her, but she has no right to ask this of you, and it’s not something you’d do. Let her know, too, that she’s never to ask for anything like this again.

 

If she needs $2,000, she should be talking to her husband about the idea. They should be living with combined finances anyway. So, it sounds like they’ve got issues to straighten out between themselves.

 

It’s time folks started laying their cards on the table and stopped sneaking around. That’s no way for a husband and wife to live, and your mom has no business trying to drag you into all of it behind everyone’s back!

 

—Dave

 

 

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.

 


On The Job Training

 

 

Dear Dave,

 

I’ve been in sales for 15 years. I love my job, and I love my company. Our business wasn’t affected as much as some during the pandemic, but my numbers have become stagnant. They’re still good, but I feel I can do better. Do you have any advice for someone who wants to raise their sales and become a more productive team member?

 

Sara

 

 

Dear Sara,

 

Boy, I wish more people had the same attitude about their jobs. Folks with that kind of drive and sense of responsibility are almost always successful in their professional and personal lives.

 

I want you to think about one simple word—serving. It isn’t just a word or an idea, it’s an attitude. Serving means you provide what you have to offer in a way that makes customers happy to trade their money and time for it.

 

But don’t make the mistake of confusing serving with subservient. What I’m talking about is being proactive with customers individually and in the marketplace. It means being excited about what you have to offer, and believing you’ve got a great product at a great price. It means you’re determined to give your customers a great experience 100% of the time, and that going the extra mile—whether you have to or not—is just business as usual. And, it means if something goes wrong, you’ll step up and make things right in a way that will make them forget a glitch ever happened.

 

If you help enough people, and make that the first order of your business and those relationships, you’ll never have to worry about success!

 

—Dave

 

 

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.

 


Clean 'em Out, and Move Ahead!

 

 

Dear Dave,

 

I’m 22, and I just recently graduated from college. I’m lucky enough to be walking into a job making $60,000 a year with a company I interned with during school, and I’ll be living with parents for the next few months. I have about $50,000 in student loan debt, but I also have $25,000 in savings, along with an E-Trade account with two single stocks that was given to me a couple of years ago. Those stocks are now worth about $13,000 combined. Should I sell the stocks to help pay off debt, or put the money from their sale into mutual funds? 

 

Tyler

 

 

Dear Tyler,

 

In situations like yours, I teach folks to pull out any money they have that’s not in retirement plans, and use it to pay off debt. The shortest distance between where you are now, and wealth, isn’t a couple of stocks in an E-Trade account. The shortest distance between you and wealth is becoming debt-free and taking control of your largest wealth-building tool—your income.

 

If I’m you, I’m going to clean out everything, including my savings—down to $1,000—and throw it at debt. After that, I’m living on a strict budget with no unnecessary spending until that debt is all gone. Man, with the money you’ll make right out of college you can be debt-free, and on your way to building a fully-funded emergency fund and wealth, so fast it’ll make your head spin.

 

Get this done, Tyler. Today!

 

—Dave

 

 

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.


A Calling or a Job?

 

 

Dear Dave,

 

When it comes to your career and profession, how can you tell if you’ve truly found your calling in life?

 

Tony

 

 

Dear Tony,

 

I don’t think it’s common for most folks to feel like they’ve experienced some kind of grand revelation, and suddenly they know what they’re supposed to do with their lives. Personally, I believe this kind of thing usually starts out as an activity or idea connected to something they enjoy and want others to experience. Often, that can grow into a job, and then maybe into a career—or even a business.

 

I think it takes a lot of time, reflection, insight, and self-evaluation before anything can be termed a calling. I know this is true in some cases, because that’s how it happened with me. I can’t honestly tell you that when I first started on radio, or began formally teaching and writing I knew it was God’s plan for my life. I knew early on I was drawn to it, and felt there was a need for it, but it took a while for me to understand and accept that it was what I was really meant to do.

 

I hope this helps a little bit, Tony. Just be honest with yourself, think about it, and pray about it a lot, too. God wants what’s best for you, so make sure you include Him in everything. It worked for me. I’ve been doing what I do for nearly three decades now, and I still love it. I’m convinced that it is God’s calling on my life.

 

—Dave

 

 

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.

 


Being on the Same Page is Vital to Your Family's Future

 

 

Dear Dave,

 

My wife and I are in our 20s, and together we make about $80,000 a year. Our first baby is due in early 2022, so being debt-free has become a top priority in my mind. Right now, we have two cars. The one I drive is paid off and has a lot of miles on it, but it’s in really good shape. We still owe $30,000 on the other one, and the rest of our debt is about $90,000 in student loans. My wife puts 40,000 miles a year on the other car traveling for work. I talked to her the other day about us moving down a little in car, but she’s particular about what she drives. I even found out she has her eye on a newer vehicle that costs about $48,000. I don’t know what to do. Can you help?  

 

Zach

 

 

Dear Zach,

 

Okay, let’s start slow. I’m glad you’ve seen the wisdom in getting control of your money and getting out of debt. That’s the first step toward financial peace.

Now, where the car thing is concerned, there’s not a chance in the world I’d do this. And honestly, I don’t give a crap what your wife is particular about. You guys are broke! You’re up to your eyeballs in debt, and now she’s talking about buying a $48,000 car—when you still owe $30,000 on one—then putting 40,000 miles a year on it and destroying its value quicker than you can say “fast.”

 

This whole idea and attitude is dumber than a rock. Absolutely not! You may have seen the light where your finances are concerned, but it sounds like your wife is still in the dark and needs to grow up some. You two should have a long, serious talk about things, and get on the same page financially—especially with a baby on the way. Your family’s future depends on it.

 

I hope I wasn’t unclear.

 

—Dave

 

 

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.


More Than Any Amount of Money

 

Dear Dave,

 

My husband and I are both 29, and we have good jobs that allow us to bring home $100,000 a year combined. Recently, we began talking about starting a family. We live on a budget, but we still have about $15,000 in credit card debt and student loans we’re working hard to pay off. Do you think couples should wait until they are debt-free to have children?

 

Missy

 

 

Dear Missy,

 

You and your husband are chipping away at your debt, and that’s a good thing. It sounds like you two are determined to get it paid off and take control of your finances. You’re also making pretty good money, so keep up the good work!

 

Ok, so the truth is kids can be expensive. From medical costs and diapers, to childcare and beyond, it costs money to raise a family. But here’s the thing: If you let money alone, or the perfect financial situation, determine whether you have kids or not, you may never have them. Now, would it be easier from a financial standpoint only to wait on having kids until you’re debt-free and there’s a huge pile of cash in the bank? Sure, it would. But children are worth more than any amount of money. If you love each other and want to be parents, and you’re mature adults in every other area, don’t let this debt stop you. 

 

A child isn’t going to derail your journey to financial peace. Having kids might cause you to press pause for a while on some financial matters, or slow your pace a little bit, but as long as you both stay focused and determined to manage your money wisely, chances are things will work out fine.

 

Just don’t make the mistake lots of parents do—especially first-time parents. Many of them think they have to run out and buy a new, "safer" car, spend a fortune on a fancy crib, or buy all things baby from some overpriced boutique. Do you get what I’m saying, Missy? Why buy a brand-new, $400 stroller, when a friend or relative has a perfectly good, barely used one they’re willing to give you?

 

It’s easy to get carried away spending for a baby. But children will be just fine as long as they have food, clothing, shelter—and most importantly—loving, caring parents. God bless you two!

 

—Dave

 

 

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.

 


It'll Work Out Better In the Long Run

 

Dear Dave,

 

My wife and I are having a financial disagreement. I would like to go ahead and fully fund our Roth IRAs, even though we have about $10,000 in car loan debt. She, on the other hand, thinks we should pay off the debt first. We can probably have either one completed by the end of the year. What do you think we should do?

 

Mark

 

 

Dear Mark,

 

I’ve got to go along with your wife on this one. I’m glad you two are having money discussions, and working toward making decisions together, but you’ll never get control of your finances until you rid yourself of the mindset that debt is okay. Once you lose that idea, you’ll begin to understand missing a year of funding your Roth IRAs isn’t going to kill you. It’s also not going to prevent you from becoming wealthy and living like no one else when it’s time to start thinking about retirement.

 

If you stay in the mindset that having debt is okay, or that you’re going to let it hang around, eventually it will really mess you up financially. Winning with money is more about behavior than math. Don’t get me wrong, you need to crunch the numbers and be mindful of them, but all the mathematical components are nothing but theory if the behavior doesn’t kick in.

 

So yeah, I’m siding with your wife on this one. Just follow the Baby Steps plan. Have all your debt paid off, except for your home, and an emergency fund of three to six months of expenses saved and set aside before you start any long-term investing. A lot of folks will tell you my way isn’t mathematically correct, but it will work better in the long run—for your money, your marriage, and in other areas of your life!

 

—Dave

 

 

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 16 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.

 


Are You Willing To Do What It Takes?

 

Dear Dave,

 

I owe $17,000 on my car, and it is my largest and only debt. I think I can have it paid off in two years, because I bring home about $2,800 a month and my monthly expenses are $2,100. I also just got a $2,000 tax refund. Should I pay it off as fast as possible, or sell the car?

 

Justice

 

 

Dear Justice,

 

If you think you can have the car paid off in two years or less, that’s what I’d do. The question is this: Are you willing to do what it’ll take to make that happen? It’s going to mean lots of discipline and hard work on your part, in addition to living on a really strict budget. But in return, you’ll have that car loan off your back for good.

 

You don’t want the debt on all your vehicles to be more than half of your annual income. If that’s the case, it means you have too much money tied up in things that are going down in value. If you bring home $2,800 a month, you probably make around $40,000 a year. Technically, your car loan is under half in this scenario, but it’s still pretty expensive. I’d get serious about getting out of debt, and pay the thing off!

 

—Dave

 

 

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 16 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.

 


You May Already Have Some

 

Dear Dave,

 

I started listening to your radio show recently, and I heard you say people should have 10 to 12 times their yearly income in life insurance. I’m single, with no plans to get married. Plus, I don’t have any children. Do I still need a big life insurance policy like that?

 

Kris

 

 

Dear Kris,

 

I do recommend most people, if they work outside the home and are married—especially if they have kids—have 10 to 12 times their annual income in a good, level term life insurance policy. You only need life insurance to take care of things you leave behind when you die. So, when it comes to this kind of coverage, just think about anyone who might be left in a bad financial situation if you died. Your family could never replace you, but in most cases, they would need to replace your income.

 

Someone in your shoes might not need a traditional life insurance policy, especially if you’ve been smart with your money and saved up a pile of cash. A simple, inexpensive burial policy might work. There’s also a good chance you already have a small amount of life insurance coverage built into an existing health insurance policy or bank account.

 

Good question, Kris. I’m glad you’re looking for answers!

 

—Dave

 

 

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 16 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.


It's Just Not Worth It

 

Dear Dave,

 

Do you think I should get a new hybrid car to save money on gas? A lot of my friends have done this, and with the rise in gas and oil prices lately, they’re telling me I should, too. According to them, I’ll save a ton of money, especially since I have a bigger car and a longer drive to work. What are your thoughts?

 

Daneen

 

 

Dear Daneen,

 

I get lots of questions about these kinds of scenarios, and how it plays into people’s budgets. Many folks wonder if it would be better to go out and get a new vehicle with better gas mileage. Well, do you really want to lose more money?

 

Let's say you currently drive a vehicle worth $10,000 that gets 15 miles per gallon. There's a $25,000 hybrid you're thinking about buying that gets 25 miles per gallon. That's a $15,000 price difference just to get 10 more miles a gallon. If you drive 100 miles a week, that's about a $10 difference a week. That would be about $40 extra you're spending a month in gas if you stuck with the current car. A monthly car payment is a whole lot more than that! In short, the math doesn’t work. You'd have to drive to the moon and back to make it worthwhile.

 

There are a lot smarter things you can do to cut down on your fuel bill. Have you thought about trading for something smaller? If you’re driving a gas guzzler, trade it in on another car worth no more than your current car's selling price. This means better fuel efficiency without a car payment. Carpooling is an option, too, even if you split the driving just a few days a week.

 

If you want to get a little more radical with the money-saving ideas, you could think about moving closer to work. Spend some time doing the calculations and looking at the specifics to see if it makes sense in your case. Finally, and this may be a last ditch effort, you could consider changing jobs. No one’s forcing you to work where you do, especially if you’re spending a lot of time and money on the road just getting to and from your job. If you’re really spending a ridiculous amount on gas each month, it might even be time to look into ideas you may have once had to start your own business.

 

But don't use better gas mileage, or bad advice from your friends, as a rationalization for buying a new car. It’s just not worth it!

 

—Dave

 

 

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 16 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.


Limit The Potential For Damage

 

Dear Dave,

 

My husband started working at a new company about a year ago. As part of his sign on, they gave him $5,000 in company stock. The stock has nearly doubled in value since then, and we were wondering if we should buy more, considering how well it has done.

 

Cathi

 

 

Dear Cathi,

 

I totally get why you two might be excited over a stock that doubled in value over the course of a year. But what you’re talking about doing right now is a very risky proposition. The truth is any stock that doubles in value over the course of just one year is highly volatile. It’s unusual for stocks to do things like that, and it also means it could go down just as fast—or even faster.

 

I don’t know where you and your husband are in your overall financial situation, but I recommend people become debt-free except for their homes, and have an emergency fund of three to six months of expenses saved up before investing. Once you reach that point, I strongly advise to begin putting 15 percent of your income toward retirement before you start any outside investing.

 

Don’t get me wrong, I don’t mind a little selective and educated dabbing here and there once the basics are taken care of first. However, I’d never recommend putting more than 10 percent of your nest egg into a single stock. The reason? If the single stock tanks and you lose it all, then your loss is only a blip on your financial radar.

 

Of course, it would be fantastic if this single stock went through the roof and you two made a ton of money. Just make sure you limit the potential for damage in this kind of scenario by limiting your exposure.

 

—Dave

 

 

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 16 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.

 


Put a Little More Thought Into It

 

Dear Dave,

 

I don’t like admitting this, but I absolutely hate my job. Last year I almost cashed out part of my 401(k) to start my own business or open a franchise, and doing something like this is still on my mind. Considering how I feel, do you think this would be a good idea?

 

Kurt

 

 

Dear Kurt,

In your current state of mind, this entire idea is a trap. Don’t misunderstand, I love the idea of someone living their dream and owning their own business. But you just mentioned starting your own business in same breath with opening some sort of franchise. That tells me you don’t really know what you want to do.

 

Have you ever heard someone say they’re “going all in”? When you’re playing cards, that means you’re about to bet everything on a single hand. But here’s the deal, it’s never smart to go all in when it comes to small business. That’s a good way to turn a dream into a nightmare.

 

I’m urging you to really think about this before you take action. You didn’t mention anything about your financial situation, other than you have a 401(k). That’s a good thing, but if it’s all you have—and you don’t have any other savings set aside—you could be in real trouble. If you decided to leave your job, and your idea for your own business doesn’t pan out, you’ve lost a chunk of your retirement savings. It’s gone for good. Bankruptcy also becomes a real possibility. Opening a business just because you don’t like your current job, or you’re angry at “the man,” is a bad idea. You need to find something you truly love doing, because to have any chance of success you’ll have to live and breathe that business day and night, seven days a week.

 

Don’t make any rash decisions about your current job right now. If you really want to start your own business, begin by doing a lot of research, saving as much money as you can, and thinking about things you could do for a living that would make you smile every day. Once you figure that out, the next step is devising a plan that will allow you to open a business without putting your entire financial world in danger. In other words, how can you start small with the money you have, instead of damaging your retirement funds or taking out a loan?

 

It’s not an either/or proposition, Kurt. You don’t have to risk it all to get away from a job you hate and into one you love!

 

—Dave

 

 

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Dave Ramsey Show, heard by more than 16 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.

 


Don't Embrace the Wrong Things

 

Dear Dave,

 

Your plan has been a lifesaver for us. Why do you think some people are unwilling to listen to good advice, and make changes in their finances?

 

Tammi

 

 

Dear Tammi,

 

Thank you so much for all the kind words. I’m really proud of you two for putting in the effort and hard work that goes along changing your financial behaviors and gaining control of your money.

 

I think there are several reasons why some folks resist making changes in their lives, even when those changes would make things a whole lot better and easier for them. One of those things is often denial.

 

My dad used to tell me 90 percent of solving a problem is realizing and admitting a problem exists. I’m convinced that one of the major factors keeping people from winning with money is they don’t realize they even have a problem. If you are apathetic because you think things like debt and living paycheck-to-paycheck are okay or just the way things are, you’ll be unwilling—or even afraid—to make the big changes necessary to achieve big results. Debt is so ingrained into our culture that most Americans can’t envision a car without a payment, or college without student loans. We’ve been sold on the idea of debt so aggressively that most folks don’t believe life without a pile of payments is possible. 

 

Also, change is painful. Most people won’t change until the pain of where they are exceeds the pain of change. No matter who you are, where you’re at right now financially is, in large part, a sum total of the decisions you’ve made to this point. If you don’t like where you are, you have to acknowledge the fact that things need to change—you need to change.

 

Finally, there’s an element of ignorance involved. Don’t get me wrong, I don’t mean being dumb or stupid. What I’m talking about is a simple lack of good, solid information. Anyone can learn things, if they’ll just admit they don’t have all the answers and set their minds to studying and educating themselves. If you’re not careful, what you don’t know about money will make you broke and keep you broke!

 

 

 

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Dave Ramsey Show, heard by more than 16 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.


Do Some of All Three, and Enjoy the Ride

 

Dear Dave,

 

I was talking to a friend the other day, and I couldn’t remember what you said about the three good uses for money and why each is important. Would you go over them again?

 

Albert

 

 

Dear Albert,

 

I’ve been doing this for a lot of years, and after all that time studying finance and teaching people about money, I can still find only three good uses for money—spending, saving, and giving. You should be doing all three while you’re working your way out of debt and towards wealth, and after you become wealthy. 

 

The kid in us likes the spending part of this equation, because it’s so much fun. The problem with most people is they can’t really afford the fun they have. You should have some fun no matter where you are on the financial scale, but it should be inexpensive fun in the beginning. Then, the fun can get bigger, better, and more frequent once you’re out of debt and building wealth.

 

The grown-up part of us likes investing and saving, because that’s what can prepare you for retirement and make you wealthy. After a while, though, investing can feel a little bit like Monopoly. You can be up, or you can be down. Sometimes the market fluctuates, but a mature investor will ride out the waves and stay in for the long-term. If you have quality investments with long track records of success, they will come back up. Start investing 15% of your income for retirement once you’ve paid off all debt except for your home and you have three to six months of expenses saved for an emergency fund.

 

The most mature part of you will meet the kid inside when you give. Giving is the most fun you’ll ever have with money. Every financially, mentally, and spiritually healthy person I’ve ever met has been turned on by giving. I’ve met and talked with thousands of millionaires in my career, and one thing all the healthy ones have in common is a love of giving.

 

Someone who never has fun with money misses the point. Someone who never saves or invests money will never have any. And someone who never gives is holding on too tight. Do some of each, and enjoy the ride!

 

—Dave

 

 

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Dave Ramsey Show, heard by more than 16 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.


First, Define Long Term

Dear Dave,

 

What is your advice when it comes to investing a one-time, lump sum of $4,000 for a long period of time? I recently received an inheritance from an uncle who passed away, and I want to make the money work for me. I’m 33 and my home is paid for, plus I have no debt and an emergency fund of six months of expenses. I am also maxing out my 401(k) at work. Thank you for your advice.

 

Pat

 

Dear Pat,

 

I’m sorry to hear about your uncle, but I’m sure he was proud of the responsible young man you’ve become. You’ve made some very mature decisions where your finances are concerned, and as a result you’re at a great spot in life.

 

When it comes to investing, I consider a “long period of time” to be 10 years or more. If this is the case with you, I’d suggest a good mutual fund with a solid track record of between 15 and 20 years.

 

I know some folks like to take chances and play single stocks on a one-time investment like this, but I don’t think that’s a good idea. Single stocks just don’t consistently generate the kinds of returns a good mutual fund will over time.

 

— Dave

 

 

* Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Dave Ramsey Show, heard by more than 16 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.


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