Dear Dave,
My wife and I have plans to enter the mission field as soon as we have paid off our debt and get a full emergency fund in place. We only have about $12,000 in credit card debt left, and we don’t own a home, but my father does not want this debt to stand in our way. He has offered to pay off the credit cards, and make it a loan where we would pay him back over time. It is a tempting offer, but we both feel strange about accepting it. What do you think we should do?
Brandon
Dear Brandon,
Your dad sounds like a generous, good-hearted man. But considering the goal you and your wife have, I want you to think for a minute about the spiritual implications of a situation like this.
Proverbs 22:7 says the borrower is slave to the lender. Now, the Bible doesn’t say debt is a sin, but it definitely discourages debt, and it teaches us to live our lives differently than the rest of the world. That’s the case when it comes to handling money, too.
If you do this, you’d be turning your dad into your creditor in a very real sense. That’s going to make family dinners taste different, because you’ll be eating with your lender instead of just good old dad. Money has a way of changing the family dynamic, and it’s almost never for the good. Suddenly, you’re getting raised eyebrows if you buy something for yourself, because even the nicest, most generous folks have opinions.
If it were me, I’d say thanks, but no thanks. There’s no way I’d be in financial debt to my dad.
Now, if he were to offer to make paying off your debt a gift—one that was given with no strings attached to help you two get into the mission field quicker—I’d be okay with that and I’d be deeply grateful and honored.
But I would never tell you to go into debt to a parent. Your dad is probably thinking it’s better for you to be in debt to him rather than some uncaring bank or credit card company. But I just wouldn’t want to do anything that might jeopardize your relationship.
— Dave
Dear Dave,
I finished college a couple of years ago, and I have a good job making $65,000 a year. The only debt I have is about $5,000 remaining on a car loan, and I am paying that off as quickly as possible. At the same time, my mom and dad need repairs on their small house, and I am not sure they can afford to fix things. They both work hard, but they don’t make a lot of money. Plus, they have some debt. I have enough saved to pay for fixing their roof, with plenty left over. What do you think about the idea of pausing paying off my car to help them?
Samantha
Dear Samantha,
You’re a caring young lady with a great heart, who’s also making good money. There’s no reason you can’t do both things. Help your mom and dad with the roof, then turn around and finish knocking out that car payment and re-build your savings. From what you’ve said, it won’t put you in a financial bind, right? I’m really proud of you for wanting to help your folks this way.
I know your mom and dad work hard. And they’re obviously good people to have raised a daughter like you. But I want you to think about one thing. If you make a habit of fixing their lives without them having a hand in fixing their lives, this scenario could become a nightmare for everyone.
I’d go ahead and help them, but the only way I’d do it is if they promise to let you help them address the reasons they don’t have any money—and if they agree to get financial counseling. I can tell you love your mom and dad a lot. And I’m sure they work too hard to be broke. I’m not talking about fussing at them or shaming them, I’m talking about sitting down and having a loving discussion about the issues and what they can do to start making positive financial changes in their lives.
The fact that your folks have worked their entire lives, and can’t come up with money for roof repairs on a small home, tells me something’s wrong. The fact that they don’t have any money is the symptom. The problem is they’ve made poor decisions and mishandled the dollars they earned. Even if you don’t make a lot, you can still have a little cash set aside for emergencies if you manage it well.
— Dave
Dear Dave,
Our son is 13, and he has been doing some part-time work for a friend of the family. He makes $40 to $60 a week, and he would like to begin investing the majority of what he earns. Do you have a suggestion for a good place he could put his money?
Lindsay
Dear Lindsay,
Well, here’s the thing. At this point in his life, the goal of this investment isn’t wealth. Number one, it’s not a lot of money. Number two, well, it’s not a lot of money. The goal is to create knowledge, reward his interest in the subject and teach him how to handle his finances when he’s an adult.
I’ve got no problem with you helping him open checking or savings accounts at a local bank or credit union. There are lots of good lessons to be learned in reconciling a bank statement, and the value of spending, saving and giving. Then, you could get with a good financial pro, one with the heart of a teacher, and let him open a mutual fund for $50 a month with you as the custodian. He could learn about compound interest, how to calculate the value of his shares and other things, and all that would be a good learning exercise, too.
We did these things with our kids. But keep in mind that over the course of a year— and when you’re 13, that’s an eternity— there’s not going to be a lot of action on the investing side of things. It could be kind of boring for him at times. But he’s better off to learn now that good things don’t always come with flashing lights and whistles.
When it comes to wealth building, things aren’t sexy. Slow and steady wins the race!
— 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.