Dear Dave,

I’m going to sell a rental cabin I own, and the sale should bring me about $388,000. Should I take the proceeds from the sale and use it to pay off my home and other debt or use the money to buy another, similar rental property where I could collect about $1,500 per month in rent? Right now, I owe $200,000 on my home, and I have just under $50,000 in miscellaneous debt.

Valerie

Dear Valerie,

Let me start by asking you a question. If your home were paid for and you didn’t have a mortgage at all, would you take out a loan against your home to buy a rental property? Let me give you a hint. The answer should be a big, fat no.

The shortest distance between where you are right now and a high-quality financial life—including wealth building—is getting your home and other debt paid off. Then, use the cash flow that’s freed up, and the increased peace of mind, to rapidly pile up a bunch of money and buy another rental property.

There’s nothing wrong with owning rental properties and other kinds of real estate, Valerie. I love real estate, and today, I have several rental properties of my own. The difference is I bought all of mine with cash. I didn’t go into debt for them. I learned my lesson about debt the hard way over 30 years ago, and I don’t want you to take a chance on suffering through all that crap too.

Use the money from the sale of the cabin to pay off your home and other debt, and to make sure you’ve got a solid emergency fund of 3–6 months of expenses set aside. After that, if you want to start saving aggressively for another rental, go for it. Just make sure it’s a smart buy when the time comes and that you pay for it in cash!

— Dave

* Dave Ramsey is an eight-time national bestselling author, personal finance expert and host of The Ramsey Show. 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 the company Ramsey Solutions.

Dear Dave,

I’m 20 years old, and I’m planning to buy a home in the next year. Besides having a 20% down payment, what other tips do you have for a first-time home buyer? Also, is there anything I need to guard against when it comes to buying a house?

Jacob

Dear Jacob,

I’m glad you’re planning on making a down payment of at least 20%. That’s a smart move, because it’ll help you avoid the added expense of private mortgage insurance (PMI). Also, remember to get a 15-year fixed-rate mortgage loan, one where your payments are no more than 25% of your monthly take-home pay.

Now, the next pieces of advice are for you, Jacob, and anyone else who’s planning to buy real estate. Always get title insurance. Always! If you’re buying a piece of property that’s not a traditional subdivision-type lot, have a survey done. This isn’t as much of a worry with a standard subdivision lot, something that’s pre-platted and has changed hands three or four times. But you don’t want to buy a piece of land under the impression that it’s 3 acres and then find out the hard way it’s only 2.25 acres. Get a home inspection too. Unless you happen to be an electrician, contractor or something like that, you’re probably not an expert on things relating to home construction.

This last piece of advice may sound funny, but don’t buy a house with a great, low price if it looks ugly from the street. I did that with the very first house I bought, and it’s a bad idea. No matter what you think, when it comes to houses, you can’t fix ugly. You can change out carpet, and you can put up new shutters or gutters and stuff like that. Those things aren’t a ton of work. But there’s a reason you can get a screaming deal on an ugly house—it’s ugly. And the guy you sell it to down the road is going to get a great deal on the house. Why? Because it’s just an ugly house.

If you’re not careful, you can get a little too excited on your first home purchase. So stay smart, look at everything involved, and don’t let a case of house fever push you into a big, expensive mistake!

— Dave

* Dave Ramsey is an eight-time national bestselling author, personal finance expert and host of The Ramsey Show. 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.

Dave,

Recently, I made a few hires for the upcoming season for my lawn care business. They’re all good, motivated people, but one really stands out from the rest. I could see him moving out of the field and into a sales position before the end of the year. How should I begin laying the groundwork for this idea?

Dan

Hi, Dan,

This is great to hear. Believe me, I know the feeling when you look at roomful of people and realize you’ve built a really good team. I’m excited for you!

One of the first things I’d do is talk to some other owners of landscaping companies outside your area that are about your company’s size and pick their brains as to how they’re structured. Let them know you’re thinking about hiring your first salesman, and find out how they pay their team and if it’s working well for everyone.

What we’re talking about here is called best practices in business. Find something that works for someone else in your industry and apply it to your specific situation. Think about it this way: If you wanted to lose weight, you’d begin by doing what people who have shed some pounds are doing, right? You want to emulate behavior that’s been proven to generate positive results.

I’d also advise you to make sure the person you’re talking about is on board with the idea and that he understands that any compensation agreement you initiate in the beginning will be implemented on a trial basis for a specified length of time. You’re venturing into uncharted territory here, Dan, so come up with a temporary compensation plan that’s satisfying to you both at the onset. Then, have an agreement to revisit the plan in 90 days, six months or even a year down the road. There may be a little bit of give and take involved, and it’ll take some time, but at the end of the day, you’ve both got to be okay with the upside and downside of the scale and the results.

You’ll both be really happy if he’s busting it and making himself and the company successful. But as a business owner, you’ll want him to feel a little pressure if he’s not producing—for himself and for you!

* Leadership and small-business expert Dave Ramsey is CEO of Ramsey Solutions. He has authored eight national bestselling books, including EntreLeadership, and is a host of The Ramsey Show and The EntreLeadership Podcast.

Dear Dave,

How do you handle a situation where someone needs financial help, but has misspent money you’ve given them in the past? My wife and I have been trying to help a young man we recently met. He told us he was trying to get his life together after a divorce and job loss, and he just needed a little money for groceries and household items. He has asked us a couple of times since for more money, but we discovered he was buying alcohol with most of the cash we gave him. We learned from friends what he said about losing his job and being divorced was true, but we are unsure what to do next.

Andrew

Dear Andrew,

This young man’s problem sounds as much like a mismanagement of money as it is a lack of money. He seems to have an issue with lying, and possibly an addiction problem, too.

I’ve never been against helping people who have good hearts and just need a break. But if someone is bold enough to ask for your money, you have every right to attach requirements to the help you give—especially when it’s for their own good. If he really needs food or household things, you can just buy them for him. At least that way, you’d know you were providing necessities. 

But in many cases, truly helping someone is a lot more work than just giving them money. Sometimes, you have to get down in their mess, get real with them and walk with them. If you haven’t been put off by what has already happened, and you still really want to help, I’d suggest getting to know this young man and his situation a little better. Be straight with him, and let him know you’ve learned he hasn’t been honest with you in the past. Hopefully, as a result he’ll apologize and start making better choices. If he does, you might even offer to arrange for him to talk to a good pastor or counselor.

This whole situation is much bigger than helping someone with a little cash. This guy needs someone who cares enough to help him get his life back together.

— Dave

* Dave Ramsey is an eight-time 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.

Dear Dave,

I have an uncle who wants to gift some property to one of his sons, myself and my sister. The property is about two-and-a-half acres, and it’s probably worth around $125,000. My wife and I are trying to pay off debt in Baby Step 2 of your plan, and we’re not sure how we feel about the situation. What do you think?

Dave

Dear Dave,

If your uncle asked me if he should do this, my answer would be no. The thing is, you’ve got three different sets of people with different lives and very different situations. Not only that, but these three potential co-owners probably have differing ideas about the land and what should or shouldn’t be done with it. To me, the whole thing sounds like a big family fight just waiting to happen.

If I were in his shoes, I’d just sell the property and split the money equally between the three of you. It’d be a lot easier that way, and you’d avoid the chance of hard feelings between you and your relatives down the road. Don’t get me wrong, your uncle sounds like a kind and generous man. He’s trying to be a blessing to all three of you, but it has a very real possibility of causing unintended problems he may not see coming.

That’s the way I’d handle it, Dave. A couple of acres of dirt split between three people isn’t worth all the squabbles and bad feelings it could cause.

— Dave

 * Dave Ramsey is an eight-time national bestselling author, personal finance expert and host of “The Ramsey Show.” 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 regain control of their money, build wealth, and enhance their lives. He also serves as CEO of Ramsey Solutions.

Dear Dave,

I’m an anesthesiologist, and I make between $260,000 and $270,000 a year. My wife is a stay-at-home mom who takes care of our preschool-age kids. We have about $50,000 in a retirement fund, $50,000 in consumer debt, $220,000 in student loan debt, and we owe $280,000 on our house, which is worth around $500,000. We’re thinking about using our retirement fund to pay off credit cards and such, then selling the house and using the money to pay off the student loans. After that, we’d live in an apartment for a while, save up 20% or more for a down payment on the next home, and do things right financially moving forward. What do you think about this game plan?

Jake

Dear Jake,

Wow, I really appreciate your motivation, man. You’re willing to do whatever it takes, and that’s pretty cool. Not many people have the determination to do the kinds of things you’re talking about.

I almost never tell people to sell their homes. If you actually can’t afford it, that’s one thing—and in that case, we’d sell the house. If it’s the only way to avoid bankruptcy, we’d get rid of it in a heartbeat. But in your case, things are a little different. You’re in a pretty deep hole, but your income as an anesthesiologist gives you a really big shovel you can use to carve out some steps, get up out of that hole, and fill it in so you never fall in again.

Now, this is going to mean some real lifestyle changes for a few years. I’m talking about beans and rice, and no vacations. There’s no more living like a rich doctor, because you’re not a rich doctor—you’re a broke doctor. We’re going to temporarily stop adding to your retirement fund, not cash it out, and we’re going to start living on a written, monthly budget where every single dollar is given a name and a purpose.

Cleaning up $270,000 of debt sounds scary. But with a $260,000 income and the other changes we talked about, you could put $90,000 a year toward all this and have it completely cleaned up in just three years. That’s what I’d do if I woke up in your shoes. It will set you free for the rest of your lives to invest and save.

Get on it, doc. You can do this!

— Dave

 Dave Ramsey is an eight-time national bestselling author, personal finance expert and host of “The Ramsey Show.” 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 regain control of their money, build wealth, and enhance their lives. He also serves as CEO of Ramsey Solutions.

Dear Dave,

The other day, my wife and I discovered a Thrift Savings Plan (TSP) we’d forgotten about for over 10 years from my time in the Army. There’s a little over $3,200 in there. We’re both in our thirties, and we’re trying to save up our starter emergency fund in Baby Step 1 of your plan. We were wondering if we should withdraw the money and use it toward Baby Steps 1 and 2, or just leave it in there.

Todd

Dear Todd,

The best thing to do is roll the money over into an IRA. Otherwise you’re going to be hit with a 10% penalty—plus your tax rate—and end up paying 30% to 40% of it to the government. That’s kind of like asking, “Would it be a good idea to borrow $3,200 at 30% interest to pay off debt?” Of course not! That would be a really dumb idea. And in a sense, that’s what you’d be doing by just taking the money out of the TSP.

It's not a ton of money, but conceptually, I hate the idea of giving the government 30% to 40% of my money just to get my money out. So yeah, do some research, find a good investment professional near you—one with the heart of a teacher—and roll it into an IRA.

Congratulations to you and your wife for deciding to take control of your money. And thank you for your service to our country, Todd. I hope this helped.

— Dave

 Dave Ramsey is an eight-time national bestselling author, personal finance expert and host of “The Ramsey Show,” heard by more than 18 million listeners. 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 regain control of their money, build wealth, and enhance their lives. He also serves as CEO of Ramsey Solutions.

Dear Dave,

My parents are both in their seventies. They have been healthy and active all their lives, but in spite of them both having good jobs they neglected to plan and save for retirement. Is it my responsibility now to provide them with financial help in their old age?

Reagan

Dear Reagan,

It sounds like you might be a little irritated that your parents haven’t been responsible with their money. The way you described the circumstances, it’s understandable—to a point. But in my mind, there’s a bigger question when it comes to helping your folks. How big is the burden?

Let me ask you a few things. Do you have the money to help? Now, can you provide this help without your own family suffering or going without? If both answers are yes, I think your question may be a little more about your own aggravation with your folks than any ethical or moral obligation.

A few years ago I spoke with a guy who was in really good shape financially. He made over $1 million a year, and he had plenty set aside in savings and retirement accounts. His father was in poor health and had never handled his money wisely. The son asked me if he should help out his dad by giving him some money every month.

In my mind, there’s no question the right answer was yes. And that’s what I told him. If you’re making millions, but don’t want to help out your sick dad, there’s something wrong with you. There’s something missing inside you that money just won’t fix. However, if you and your family are barely getting by—let’s say you bring home $3,000 a month—you’re not morally required to help a parent who was irresponsible with money their entire life.

I’m not sure what your situation is, Reagan, but I hope you’ll look at things with a little grace and reason. It’s a tough situation to be in, because it sounds like your heart is being pulled in different directions. My advice, above all else, is to pray about it. And, if you have a spouse, talk to them about everything, and make sure the two of you are in agreement on what should be done before moving forward.

God bless you, friend.

— Dave

* Dave Ramsey is an eight-time 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.

Dear Dave,

I’m single, and I make $35,000 a year. Next year, my salary and bonuses should be around $50,000. I have a little over $30,000 in debt right now, including student loans, and I’m not sure how I’ll be able to keep up with bills and everything else right now if I have to save $1,000 for a starter emergency fund like you recommend. Can I get by with a starter emergency fund of $500?

Jonas

Dear Jonas,

I really think you’re making this whole thing sound a lot harder than it really is. They key is making and living on a budget, and that’s not rocket science. It’s a simple, written planning process where you give a name and a job to every dollar you make before the month begins.

Food, shelter, clothing, transportation and utilities are necessities, so they come first. After that, make sure you’re current on your debts. Once all that is out of the way, put every spare dollar you can into your emergency fund. If you do this with a sense of urgency, and limit spending to necessities, you’ll be surprised by how fast it will happen. And you’ll love the newfound sense of security.

The truth is you really need a starter emergency fund of $1,000 if you’re at a point in life where student loans and other debts are in the picture. That may seem like an impossible goal right now, but it should be your first priority. And a written, monthly budget will go a long way toward helping you achieve that goal.

You can do this, Jonas!

— Dave

* Dave Ramsey is an eight-time 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.

Dear Dave,

Earlier this month, my husband and I both were laid off from our jobs within a few days of each other. The layoffs were not our fault. The company is letting several people go as a cost-cutting measure. We cashed in an annuity because our finances have been tight, but the good news is he began training for a new job last week. We don’t have children, so I am interviewing or filling out applications every day. Should we use the cash from the annuity to live on until things are stable again, or should we use it to pay off debt?

Anjanette

Dear Anjanette,

If you haven’t done so already, contact your creditors and explain what happened. Let them know the layoffs weren’t because either of you did anything wrong, and that you’ll get current with them as soon as possible. This is a scary situation you’re facing, so make sure you two keep the lines of communication wide open and encourage each other while you’re solving this problem.

The good news, though, is it sounds like things may be looking up. Support your husband all you can as he takes on his new job, and make sure you continue looking for work, too. A little extra money never hurts, so temporarily taking on a part-time gig while you’re looking for a permanent position isn’t a bad idea, either.

Of course, you need to be honorable and pay your debts if possible. But that may have to be put on hold for a while. Right now, the important thing is keeping food in the house and the lights and heat on. Hug on each other, stay determined and keep each other’s spirits up. You’re a team, and you’ll get through this.

Always remember, too, that prayer’s a good thing.

— Dave

* Dave Ramsey is an eight-time 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.

Dear Dave,

My husband and I just heard of your plan. We are excited to learn more about money, and we have already saved up $1,000 for our beginner emergency fund. Right now, we have a problem. My father has never taken his finances seriously, and the other day he asked us for $400 to pay his cell phone bill and overdraft fees at his bank. Even as an adult, he would go to his parents regularly before they died asking for money when he always had a good job. Giving him the money right now would make things really tight for our family, and we don’t want to lose the ground we have gained where our finances are concerned. Do you have any advice?

Brooke

Dear Brooke,

Way to go! It makes me to happy to hear folks so charged up and on fire to get control of their finances. You won’t regret the decision.

I’m going to be straightforward with you, ok? You and you husband need do the right thing, no matter how dad reacts to this. And the right thing, right now, is taking care of your family first and not putting your finances in jeopardy. If I were in your situation, my answer to dad would be no.

I understand there’s a feeling of obligation to help your father. But it sounds like dad needs to learn a lesson or two about life and money. When you say your dad is irresponsible with money, handing him more of it won’t help. It would be like giving a drunk a drink. On top of that, it will reinforce the idea he can continue being dumb with money and there will be no consequences.

Trust me, I understand the emotions involved in helping out a parent. If you feel this is a situation where there is literally no alternative, I’d suggest making the $400 contingent on your dad beginning—and successfully completing—a good financial counseling course. Whatever you do, be gentle and respectful when you talk to him. And make sure he understands it hurts when you see him struggling.

But let him know, too, it’s his responsibility to work through his bills and take care of his finances.

— Dave

* Dave Ramsey is an eight-time 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.

Dear Dave,

Our next-door neighbor was an older single man with no family, and my wife and I always tried to look out for him and help with things. He died recently, and in his will, he left us his home, his car and the money he had in his bank account. The will was handwritten, and it said the house was worth around $350,000, with $150,000 left on the mortgage. The car is worth about $10,000. Officials at our county office building said the money in the bank account wouldn’t have to go into probate since I was listed as the beneficiary, and I was given a check for that amount. We’ve just never handled anything like this before, and my wife and I were hoping you would help us navigate things.

Steven

Dear Steven,

There are a couple hundred thousand dollars in equity involved here. The fact that the will is handwritten doesn’t necessarily invalidate it, but it does increase the possibility of encountering some bumps down the road.

I’m not a lawyer, so the first thing I’d do is talk to a couple of probate attorneys in your county. Find out what they’d charge to handle things. I wouldn’t spend thousands of dollars to get this done, but I would pay $500, maybe $1,000, to let someone who knows what they’re doing handle things. If your county affairs people are right and everything’s easy and straightforward, it’s not a lot of legal work for an attorney.

On top of that, if the attorney you work with knows folks at the courthouse and is familiar with how things work there, then it’s kind of like traffic court, you know? It’s almost automatic. I mean, we’re only talking about three assets here—a bank account that’s already been handed off, a car and a house that’s mortgaged. For me, it’d be worth a little money to have someone on my side who knows the path through the woods.

I’m sorry to hear your friend and neighbor passed on, Steven. But I hope I’ve been able to help.

— Dave

* Dave Ramsey is an eight-time 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.

Dear Dave,

I’m 32 and a teacher. My house is my only debt, and there’s $55,000 left on my mortgage. My parents always taught my brother and I about saving and being smart with money. The other day, mom and dad offered to pay off the rest of my mortgage by loaning me the money with a very small interest rate. I know you don’t like the idea of mixing money and family, but considering I have a great relationship with my parents, what do you think about this offer?

Lacy

Dear Lacy,

I’m going to make a suggestion before saying don’t do this. See what I did there?

But seriously, I’d recommend they just make the money a gift and reduce your portion of any later inheritance by that amount. By doing this, you could help reduce the possibility of your brother feeling slighted in any way.

I would never loan my kids money. And here’s why: One hundred percent of the time, the Bible says the borrower is slave to the lender. That doesn’t exempt parents and their kids. No matter how nice your masters are, you’re still a slave in this kind of situation—and you’ll feel it. Family dinners and get-togethers are different when you’re sitting down to eat with your masters—your creditors—instead of just good ol’ Mom and Dad.

Don’t get me wrong, I’m not suggesting you should act ungrateful that they offered a loan instead of a gift. It’s a generous thing either way. But if they don’t want to go the gift route, that’s fine. You have a good job, a nice home, and you’ll be okay. The thing is, I just wouldn’t want to take a chance on straining a great relationship—or even ruining it—because of money.

Lacy, you’re 32, a teacher and a homeowner. In my mind that says a lot about you, your maturity and your work ethic. That being the case, I get how this could be a weird thing for you to do. So, I’m going to give you an out: Blame me. Just tell them you talked to me, and I said don’t do the loan idea. Tell them I gave you the make-it-a-gift-tied-to-the-inheritance idea.

If your mom or dad wants to talk to me about things, that’s fine. I’ll be kind to them. But I’ll tell the truth like I always do.

— Dave

* Dave Ramsey is an eight-time national bestselling author, personal finance expert and host of “The Ramsey Show,” heard by more than 18 million listeners. 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 regain control of their money, build wealth, and enhance their lives. He also serves as CEO of Ramsey Solutions.

Dear Dave,

Is it even worth it to buy a house these days? I’ve always been told buying a house is the adult thing to do and that it’s a great investment, but I can’t find anything decent and livable in my area for less than $350,000. My wife and I are debt-free, and we’re expecting our first baby in January. I was hoping to get your advice.

Craig

Dear Craig,

I can understand how things might feel a little hopeless in your current situation. You’re probably feeling the weight of the responsibility a new life brings to the picture. Things are getting real really fast, aren’t they? Believe me, I get it.

The truth is you may not be ready to buy a house today. And that’s okay. Having a new baby on the horizon doesn’t mean you have to run out and buy a home. That little boy or girl isn’t going to know the difference between a house and an apartment for a long time. Right now, giving your child a safe, loving environment is the most important thing.

Now, looking down the road, is owning a house worth it? Yes. But it’s not worth doing it at the wrong time or in a stupid way. You first need to make sure the income is there. Then, you need an emergency fund of three to six months of expenses in place along with a strong down payment. So, what if you don’t buy a home for another two or three years? Home buying should always be done with patience and wisdom.

There are two or three things that make buying a home a great long-term investment versus renting your whole life:

1. Rents go up every year. If you lock in a good, fixed-rate mortgage, that payment will stay the same.
2. The value of your home will increase. When you rent, you don’t own your residence, and you won’t benefit from the value of it going up.
3. Our study of 10,000 millionaires showed that most say two things were integral parts of their ability to build wealth: Good retirement investments and a paid-off home.

A house is a great wealth-building tool, and it can also stabilize the biggest line item in your budget—housing.

God bless you guys, Craig!

— Dave

* Dave Ramsey is an eight-time national bestselling author, personal finance expert and host of “The Ramsey Show,” heard by more than 18 million listeners. 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 regain control of their money, build wealth, and enhance their lives. He also serves as CEO of Ramsey Solutions.

Dear Dave,

My dad and his wife asked my husband and I for $55,000. They want the money so they can pay off their debt. We’re debt-free and have a net worth of between $2 to 3 million, but we’re also retired. We don’t keep that much in the bank, so we’d have to draw from our retirement accounts—which is something we don’t want to do. They’ve already approached other family members about this too. His wife is owed money at some point from a family settlement, but they don’t want to wait that long. My dad said we should do this if we want them to get ahead and have anything left in their later years. My dad is 80, and his wife is in her late 70s. My husband and I are both in our 50s. Please tell me how to handle this.   

Karla

Dear Karla,

In their later years? I’m not trying to be mean, but they’re already in their later years.

I’m really sorry you’re in this situation. Even though you’re in your 50s, he’s still your dad, and I know this hurts your heart. It’s probably even tougher to accept the fact that he’s being manipulative. I mean, seriously. What dad calls up his daughter with the idea he’s entitled to $55,000 of her money and starts acting like a travel agent for guilt trips in the process? That’s just wrong.

Look, if the relationship and the situation were different, we might have something to talk about. With your net worth, you’re not going to miss $55,000 out of $2 to 3 million. In a good relationship, I’d help my mom or dad like that in a heartbeat—just to help them out because they’re older. But this situation already is what it is. Something tells me this isn’t the first time he’s behaved in a manipulative way. And if you say yes to this, then I’ve got a feeling it isn’t the first time you’ve caved into him. I’m worried you won’t be able to live with yourself if you do this, and that it may cause a big rift between you and your husband.

It’s wrong of your dad to treat you this way and put you in this situation. If you want to tell him your money’s tied up, which it is, or you just don’t like the way it feels, that’s fine. But my advice is to try to step back from the emotions and come to the realization in your own head that no is a complete answer.

You don’t have an ethical or moral obligation to give manipulative people money just because they’re related to you.       

— Dave

* Dave Ramsey is an eight-time national bestselling author, personal finance expert and host of “The Ramsey Show,” heard by more than 18 million listeners. 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 regain control of their money, build wealth, and enhance their lives. He also serves as CEO of Ramsey Solutions.

Dear Dave,

I use a debit card for all my regular, day-to-day purchases. However, I use a credit card for plane tickets, big ticket items, or when I shop online because someone told me it’s easier to dispute purchases when they’re made with a credit card. Are you putting your checking account at risk by using a debit card for these types of purchases?

Wendy

Dear Wendy,

I don’t know who this “someone” is, but they’re a lousy financial advisor. The firm of Someone, They Said, and I Heard? That’s a financial planning company you don’t want to work with.

A debit card has the exact same protections for fraud that a credit card has. It does come out of your checking account, but the bank has to put it back once you dispute the charge and prove your dispute. It may take a day or two, but they’ll get it done.

I’ve used a debit card for decades, and I haven’t owned a credit card since way back in my dumb-with-money days. I’ve never had any problems using a debit card, and I’m not going to make the mistake of playing around with debt ever again.

I hope you won’t either!  

— Dave

Dave Ramsey is an eight-time national bestselling author, personal finance expert and host of “The Ramsey Show,” heard by more than 18 million listeners. 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 regain control of their money, build wealth, and enhance their lives. He also serves as CEO of Ramsey Solutions.

Dear Dave,

My mom took out a Parent PLUS loan in 2009 to help pay for my college education. I also took out $70,000 in student loans myself. My mom never made a payment on the loan she took out for me, and now the amount due on the Parent PLUS loan has ballooned to $100,000. She recently told me in her mind it was my loan in her name, and I should be the one to make the payments after I became financially stable. Thankfully I just got a new job making $140,000 a year. With this I can finally make a dent in my own loans, but she asks me every week if I’m going to pay the Parent PLUS loan. My mom is a nurse practitioner, so she makes good money, but she recently financed two new luxury cars within 24 hours of each other—one for work and one for church. She also has loans out from borrowing on her 401(k) and credit card debt. Should I take over the Parent PLUS loan under my name? 

Tommy

Dear Tommy,

Wait, are you serious? Your mom has a church car? I’ve never heard of such a thing. But hey, I’m going to talk to my wife about this. I knew I needed another car, I just didn’t know I needed a church car. Oh, my goodness!

Ok, here’s the deal. If you had an agreement with your mom, or promised at any time to pay back the Parent PLUS Loan when you were able, you should cover it. But that’s not what you told me. It sounds like your mom has a good heart and was just trying to help, but she did it in a dumb way. From what you told me, she’s done a lot of dumb things with money.

Under no circumstances do you take the loan back under your name. In fact, I’m not certain you can even do that with a Parent PLUS Loan. You need to get your debt cleaned up first before trying to help her. If you choose to be a bigger help after that, you need to start things by having a serious conversation with your mom. She needs to hear that she’s being absolutely silly with her money. Let her know you’re willing to help because the loan was for your benefit. But make sure she understands you won’t pay it all, and you won’t do it while she’s making two luxury car payments—including one on a church car. That’s ridiculous.

Offer to be her biggest cheerleader, and help her find a good financial coach—someone with the heart of a teacher. You might want to let her know you’ll match whatever she pays toward the loan, so it’ll feel like a team effort. But also make sure she understands if she pays nothing in any given month, you’ll match that, too.

Good luck, Tommy!   

— Dave

* Dave Ramsey is an eight-time national bestselling author, personal finance expert and host of “The Ramsey Show,” heard by more than 18 million listeners. 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 regain control of their money, build wealth, and enhance their lives. He also serves as CEO of Ramsey Solutions.

Dear Dave,

I lost my job a couple of years ago. As a result, I ended up in about $25,000 of debt through credit cards and a consolidation loan. Now I have a great job making more than I’ve ever made before, plus a car loan for about $13,000. The older debts went to collections, but I’m not being hounded by collectors at this point. I want to get control of my money and do things the right way, so how should I handle things? 

Mike

Dear Mike,

Well, being hounded isn’t the issue. Morally, you owe the money. You took money under agreements that you’d pay it back, and that means you need to pay it—both the old and new debts.

I’d start by running two debt snowballs. Let’s do one for the car and any other active debts you have first since the collectors aren’t after you about the old, dead debt. Then, smallest to largest, start knocking out the debt that’s in collections. When it comes to these guys, reach out and get an agreement in writing detailing exactly how much you owe and the monthly payment amounts. Remember, do not give any of these folks direct access to your bank accounts.

There’s no upside to not paying what you owe. It’s an integrity issue, it’s a legal issue, and it’s a credit issue. Did I mention it’s an integrity issue, Mike?

You want this stuff out of your life. If you don’t take care of it, I guarantee it’ll come back to haunt you somewhere down the road!

—

Dave

Dave Ramsey is an eight-time national bestselling author, personal finance expert and host of “The Ramsey Show,” heard by more than 18 million listeners. 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 regain control of their money, build wealth, and enhance their lives. He also serves as CEO of Ramsey Solutions.

Dear Dave,

My wife and I are looking to move from Washington, D.C., to Greenville, South Carolina, in a couple of months, and then sell our current home in February or March after she gets things wrapped up with her job. We are a little worried, though, because of all the things we’re hearing about the housing market crashing. Could you speak to this, please?

Nick

Dear Nick,

Your emotions and things you hear can creep up on you. I get that. But the fact is, there are still four buyers out there for every house that’s up for sale. Now, are the buyers and the market as active and frenzied as they were several months ago? No. But you have to remember, the last couple of years have been crazy-strange times for the housing market.

I’ve been in the real estate business since 1978, and I’ve never seen anything like it. Usually, it takes about 90 days to sell a house. You’ll get some offers, and none of them will be at full price, but everyone will have time to think about things. That’s normal, and it’s probably a lot closer to how things will work themselves out for you now in Greenville.

But in any economy, my advice to you would be don’t buy another house until yours has sold. If you end up with two house payments and your old house is sitting empty while you’re having to pay for the mortgage, taxes, utilities and all the upkeep to make sure it’s ready to show, you’re going to become what’s known as a motivated seller. I don’t want you to just give it away, but you’ll need to be very careful to make sure the timing on this deal makes sense.

Personally, I wouldn’t buy another house until the first one sells.    

* Dave Ramsey is an eight-time national bestselling author, personal finance expert and host of “The Ramsey Show,” heard by more than 18 million listeners. 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 regain control of their money, build wealth, and enhance their lives. He also serves as CEO of Ramsey Solutions.

Dear Dave,

I am on Baby Step 2 of your plan, and I am about four months away from being debt-free. My younger brother is a good person, but he is very careless with his finances. He is always asking to borrow money from me. I don’t want to be mean or damage our relationship, but what is the best way to respond to a sibling who continually asks for money?

James

Dear James,

Honesty is always a good thing. If I were in your shoes, I’d just tell him the truth. Sit down with him, and have a friendly—but real—conversation where you let him know you’re working hard to get out of debt and don’t have any cash to spare. Explain that you’ve decided being in debt is dumb, you want a better life and that you don’t plan to borrow or loan money anymore.

You’ve got to look at the big picture in situations like this. You’re not helping someone if you participate in their misbehavior with them. Sometimes, especially when it comes to family, you have to love someone enough to tell them the truth. And in some cases, that can mean saying no and telling them to grow up and get their act together.

You’re not responsible for your brother’s reaction to all this, James, but you can control your words and use them in a caring manner. Do this with a kind spirit, and remember we all make mistakes. He may take it well, or not so well. But you’re not really helping someone who’s immature or irresponsible with money when you give them cash. At that point, you’re an enabler. It’s like giving a drunk a drink.

God bless you, James!

— Dave

* Dave Ramsey is an eight-time 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.

Dear Dave,

After hearing you talk about financial infidelity, I have to admit that I hide money from my husband. I have been setting aside money for emergencies without his knowledge. He is not terrible with money, but he always seems to find something to spend it on. Before I started doing this, we never managed to save much money at all. But now I feel like I have been doing something wrong. What should I do?

Lana

Dear Lana,

I believe in saving up for emergencies. I mean, I’m the guy who tells people to have three to six months of expenses saved in an emergency fund, right? But deception is never a positive thing in a relationship—especially a marriage. You need to talk to your husband about this.

I know it won’t be easy for you, so you have to make sure you tell him in the right way. Playing the blame game won’t help. Basically, you’ve been deceiving him about this. Sure, it sounds like he has been immature when it comes to your household finances, but you made the decision to hide things. You chose to do this instead of talking to him about your concerns.

Let’s start here. Tell your husband you need to talk to him about something important, and sit down together with no distractions. Explain what’s been going on, and that you’re sorry for not being honest about things, but you also need to speak up and tell him why you were doing this secretly. If you were afraid to disagree with him, tell him that. Tell him why, too, and let him know you just want the two of you to have a successful financial future, and that you’re committed to never hiding things again.     

Managing money in a marriage isn’t a “his” or “hers” thing. It’s a “we” thing. You can fix this, but it’s going to take some honesty, understanding and making an effort to work together toward the same goals—like saving or living on a written, monthly budget.

You each have a vote, but it also means you have to stand up and vote no, Lana, if he wants to blow money on silly stuff when you guys don’t have your finances in order.

— Dave

* Dave Ramsey is an eight-time 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.

Dear Dave,

I need help. I am way behind on my basic utilities and my taxes. I have tried to start the Baby Steps, but everything is so overwhelming right now that it is easy to get discouraged. I am 33, I live in Los Angeles, and I average around $30,000 a year doing behind-the-scenes work in the entertainment industry. My total debt is about $10,000. Can you give me some advice?

Cameron

Dear Cameron,

I know you’re in a scary place right now, brother. But I’m glad you’re getting on board and that you want to move in the right direction with your finances.

Before you start the Baby Steps, you should get current on all your bills. Make a list of all the bills you’re late on and how much it will take to get current on each one. Then, create a written, monthly budget. Once that’s done, and all your expenses and income are accounted for, you’re going to squeeze every penny you can from there and work your late list from smallest to largest until everything’s current. You’re going to feel a sense of relief—and accomplishment—every time you flip one of these bills. And believe it or not, the act of simply making a list will help reduce the stress you’re feel, because just by doing that you’ve established the size of the dragon. This dragon must die, and you are the knight who’s going to kill it.

But listen, there are two sides to this equation—income and outgo. No offense, but $30,000 a year as an income in Los Angeles stinks. You’ve got to do something to make more money. Hey, $10,000 would literally change your life. Not everyone can say that. The bad news is, you’ve got $10,000 worth of debt. The good news is, you’ve got only $10,000 worth of debt. I’m not talking about some little minimum wage deal, either. I want you making some real money. Don’t do anything illegal, or something that would compromise your morals, but get after making some good money.

And long term? Dude, you might want to think about taking a step up in your industry or even a full-blown career change. I mean, you don’t want to be making $30,000 a year and still working a side job when you’re 50, right?

You could be debt-free, and have a much better life, in a year or less, Cameron. Go do this.

I want you to win!

— Dave

  * Dave Ramsey is an eight-time 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 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.

Dear Dave,

I am getting older, and health issues over the last year have made me begin thinking about selling my small business. I have spoken with a couple of potential buyers recently, and one of them seems to be the kind of person who would handle the company very well. How and when do I tell my employees about what is going on and what may happen?

Marjorie

Dear Marjorie,

In my mind, to be a good, effective leader you have to be willing to share and discuss things with your team—whether they’re good or bad. When talking to the folks at my company, I try not to get into a lot of unnecessary stuff, but if there’s any doubt, I’m going to over-share rather than leave them fearful, uninformed or confused.

Think about it this way. If the roles were reversed, and you were in their shoes, when would you want to know? If you’d worked for someone a few years, would you feel betrayed if you didn’t know about something like this? It might sound simple, but I think that’s a good, fair way to process the situation.

If I make a mistake with my team, it’s always going to be in terms of over-communication. I expect and trust them to be mature adults in the workplace, and they know this ahead of time. Still, I try to make sure I’m very transparent about how we’re doing as a team and as a company. No small business owner can be successful unless they have great people around them. Your team needs to hear that once in a while, too, in addition to knowing you’re always going to keep them in the loop and shoot straight with them.

Human beings just want to be treated with dignity and respect. They want to know what’s going on where they work. When it’s something that impacts their day-to-day lives—and potentially their livelihoods—they deserve to know the facts as quickly as possible.

— Dave

  * Dave Ramsey is an eight-time 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.

Dear Dave,

My wife and I are in our late-twenties, and we have a full emergency fund saved up. Our only debt is our home. We have talked about having a child sometime next year, but I am on the road three weeks a month for my job. I don’t want to be gone so much once we have a child, and I am thinking about opening my own business, so I can eliminate the travel and control my hours better. Do you have any thoughts on this situation?

Mike

Dear Mike,

An entrepreneur is the person I know who can go from sheer terror to sheer exhilaration and back every few hours. You’ve got to have a strong mind and a strong heart to be successful, plus there’s a good chance your idea won’t last long if you don’t love what you’re doing. Remember, too, you’re basically on straight commission as an entrepreneur, and there probably wouldn’t be a regular paycheck you could count on for a while.

Okay, that was a quick dose of reality. Now, if time and money weren’t considerations, what would you rather do—stay at your current job or run your own business?

My advice to anyone, entrepreneur or not, is to make sure your work falls in line with the passions, skills and talents you were born with. You don’t need to work in the construction business if you don’t like being outdoors and working with your hands, just like you don’t want to be stuck in a call center if you hate talking on the phone and being cooped up inside all day.

Everyone wants to be successful in their job, enjoy what they do and make lots of money. But personal happiness is just as important. If you wake up excited about what you’re facing every day, chances are you’ll be successful and happy. If you wake up dreading the day and your job, I can almost guarantee you won’t be successful or happy.

You’ve got a lot more thinking and research to do, Mike. There’s nothing wrong with wanting to change jobs or be an entrepreneur. Being able to spend more time with your family is a noble and worthwhile thing, too. But I’m not hearing a lot of direction in what you’re saying right now. Maybe work with a career coach, and spend some time tossing ideas around with your wife. I know you both want great things for your child, but you’re not going to make the best possible decisions for yourself—and your family—without a lot more planning and thoughtful discussion.

* Dave Ramsey is an eight-time 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.

Dear Dave,

We are ready to start Baby Step 2, and we have about $35,000 in total debt. Our two smallest debts, a credit card and a truck we financed, are both $4,500 right now, and we have a combined income of about $95,000 a year. Since the credit card has a higher interest rate, my wife thinks we should pay it off first. To me, the truck is a necessity, and we should pay it off first for that reason. What do you say?

Grant

Dear Grant,

When the rule of paying off debts from smallest to largest doesn’t apply, I think you should attack the one with the larger interest rate first. In your case, that’d be the credit card debt.

I get what you’re saying about the truck. And I agree that transportation is a necessity. You guys might be in a bind if something happened and you lost a vehicle, but it’s also a situation you could probably work around for a little while if you had no choice. My guess is you have friends or relatives who could loan you a car in a pinch, and public transportation is an option for some folks. So yeah, knock out the credit card first, then move on to the truck.

Do you understand my reasoning, Grant? Going this route serves two purposes: First, it will save you a little money. And second, I’ve got a feeling it will fire up your wife, and get her on board with the idea of you two getting your finances in order even more than she already is.

She’s taking this whole thing pretty seriously if she’s eyeballing interest rates, buddy. She loves the thought of you two having control of your money. Use this momentum to work together as a team, and knock out that debt!

— Dave

* Dave Ramsey is an eight-time 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.