Dear Dave,
I have $100,000 in student loan debt. Since the amount is so large, is there a special place in your Baby Steps plan for it?
Jules Dear Jules,
I hope you have a nice, large income with which to fight that big pile of student loan debt. I’ve seen even worse situations, though. I’ve talked to people who went $200,000 into debt for a four-year degree in a field where they’ll make $45,000. Yes,thatkindofthinkingand behavior is out there, and it’s ridiculous.
The fact that it’s a large amount of student loan debt doesn’t change anything. Baby Step 2 is where you pay off all debt except for your home. So, don’t let this student loan debt hang around for years and years. You’ve got to get focused and intense about getting control of your money. That means living on a strict, basics-only monthly budget. After that, start throwing every nickel and dime you can scrape together, and save toward payingoffthosestudentloans as fast as possible.
Your income is your largest wealth-building tool, Jules. You can’t save, and plan for the future, when all your money is flying out the door to pay off debt.
— Dave Dear Dave,
I’m pretty responsible with finances, but my girlfriend is in a bad situation with her money and her career. She has a huge car payment, and lots of credit card debt. On top of this, it takes almost 40% of what she brings home each month just to pay rent, and she quit her job because she decided she didn’t like it anymore. She’s been floating lots of ideas, like filing bankruptcy or moving in with me. She thinks us living together will help her learn to be more responsible with her finances. I’m concerned that if she can’t handle herfinancesonherown,what will happen if we move in together? Your advice would be appreciated.
Dan Dear Dan,
I can’t say if she’s technically bankrupt at this point. But for starters, she definitely needs to sell the car and find a cheaper place to live. I’m also not sure how long you two have been seeing each other, but this is someone to keep dating, not marry or let move in.
The hard reality is that bankruptcy’s not going to solve anything if she’s got a heart problem. By “heart problem,” I mean if she buys things thinking stuff will make her happy and living way beyond her means in the process. Lots of folks mistakenly think they are where they live or what they drive. Those are the kinds of heart problems I’m talking about. And it’s the way I was years ago before going broke knocked some sense into me. It wasn’t until then I realized I had to make some serious changes in my life.
Don’t get me wrong. What I’ve just said doesn’t mean this lady’s a bad person. It just means she’s got some growing up to do. And all the money matters aside, you don’t just up and quit your job without a solid plan in place unless there’s a serious matter of principle at stake, or you’re the victim of abuse or harassment. Leaving one job for another is fine. But the idea of suddenly deciding you just don’t like something, then walking away from it when you’ve got a bunch of financial obligations, is just plain irresponsible. You don’t jump off the dock until the boat arrives!
Again, I don’t know all the details behind her finances, but chances are she’s not bankrupt. There are some character issues in all this that need to be addressed, though. If it were me, I’d suggest she spend some time seeing a good financial counselor— one with the heart of a teacher. Then, you can act as her support system to help keep her on track, and encourage her to keep moving forward toward getting control of her money.
— Dave Dear Dave,
My husband lost his job four months ago, and we’re close to losing our home. I’m working three jobs trying to keep our heads above water, while he’s “waiting for the right opportunity.” I understand his feelings, but at the same time I’ve been encouraging him to find a job like delivering pizzas to help out. Should we continue this way, or should I quit my really hard job, and just let him take responsibility? I love my husband, and I hate the idea of losing the house, but this is driving me crazy.
Janet Dear Janet,
Many guys are taskoriented, and if they’re not careful, they can start defining themselves by what they do rather than who they are. So, when a guy, in particular, loses a job it can be a huge deal in his life and a massive blow to his ego.
When I went broke a few decades ago, I had to re-think who I was in my own mind. I’d lost my business, and in many ways, I looked at that company as who I was. My
Dave Ramsey is a seventime #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, buildwealthandenhancetheir lives. He also serves as CEO for Ramsey Solutions.
identity was suddenly gone, and lots of guys go through that very same thing with a job loss.
If he’s not willing to listen to you, I think you two need to sit down with a good, objective marriage counselor, because he’s confused as to why he works. There are two reasons we work. One is to provide for our families. That’s our primary job. The second reason is to exercise our calling—the reason we were put on this planet. But you can’t accomplish the second one when you’re not doing the first one. You’ve got to make sure your family has a place to live and food on the table. Four months of a guy sitting on his butt like this is unacceptable. I don’t want to hear about being over-qualified, or anything about a career path. Get a job and take care of your family! I don’t care if it’s cutting grass, shoveling snow or delivering pizza. In situations like this, you have to stand up, be a man and take care of your responsibilities.
I’m sorry if that sounds harsh, but it’s the truth. Believe me, I get it. Sometimes people go through problems, and they need a break of some kind to work through the pain. I did a little of that when I went broke. But at the end of the day, we didn’t lose our home because I was sitting around doing nothing. Even when I’d lost all my self-confidence, I still went out and tried to get things started again.
It’s time for your husband to stand up, brush himself off andmakesomethinghappen!
— Dave