Dear Dave,
My best friend from college and his wife are always talking about how much your teachings have helped them with their finances. I was wondering if you have any suggestions for single people when it comes to getting control of their money and managing it wisely.
Nate Dear Nate,
Honestly? The first thing I’d say is the very same thing I say to married couples — spend less than you make, and live on a written monthly budget. This means sitting down at the end of each month and writing down all your expenses and income for the upcoming month on paper. Give every dollar a specific job to do, then spend everything, down to the last penny, on paper before the next month actually begins.
I know, a lot of folks hear the word “budget,” and their brains immediately turn off. They assume the process will be painful, boring and complicated. But when you stop to think about it, budgeting really isn’t difficult. All it takes is basic math skills and a few minutes of your time. Think about it. Some expenses, like your mortgage payment or rent, will be the same. If you have a car payment, it should remain constant, as well. Things like utilities and groceries may fluctuate a little based on the season, but you can estimate these pretty accurately by looking at past months.
I’d also recommend finding a mature family member or friend to help you along, and function as an accountability partner. This person should also be good with money, and your relationship should be strong enough that they’re not afraid to call you out, or hurt your feelings a little, if you start acting irresponsible with your cash. In your case, maybe the friend who turned you on to my principles for handling money.
Sit down, just the two of you, once a month and talk about your finances. You can even go over your income and budget line by line if it helps. The point is to get support fromsomeonewhocaresabout you, has experienced financial success and is willing to hold you accountable for the financial decisions you’re making. Great question, Nate. You can do this!
— Dave Dear Dave,
Ourdaughteris30,andshe used to live a completely irresponsible lifestyle. This irresponsible behavior extended into the way she handled her finances, too. While she was in college, she took on $20,000 in student loan debt against our advice. About a year ago, she was in a bad car accident. She has recovered, but the experience really changed her. Her outlook on life, her finances and spiritual matters, in particular, are so much more mature. We were thinking about paying off the remainder of her student loans, just as a way to help and celebrate her big turnaround. What do you think?
Richard Dear Richard,
Sometimes the best gift you can give a person is to let them wallow around for a while in the mess they made. Being forced to work your way out of bad decisions and irresponsible behaviors is a great remedy in lots of cases. But in this situation, coupled with the fact that she’s now being more responsible with money, behaving like an adult and making better life choices, I’d want her to be as free as possible as she enters this new phase of her life. So, if I were in your shoes, and I had the means to pay off her studentloandebtwithoutputting myself at risk financially, that’s exactly what I’d do.
Right now, I hope you two will take every opportunity you have to be a blessing to your daughter. She’s a lot like the Prodigal Son at this point. Shehasexperiencedsomebad things, come around in her thinking and she realizes now what’s right and what really matters.
I hope both of you will give her the biggest hugs she has ever had, and tell her you love her and that you’re proud of her. Then, throw a big party and write a check to knock out the rest of that student loan debt!
— Dave