Dave says

I’ve heard you talk about paying for college for your kids. Why is this a requirement? I’m not trying to shirk my responsibility, but I worked my way through college and so did my parents. My wife and I have talked about paying for their books and maybe rent. Am I missing something here?

— Thomas Dear Thomas,

First, I don’t believe it’s a requirement that all parents pay for college for their kids. It’s not a moral issue, and you’re not an immoral person if you don’t or can’t do it. I’ve told plenty of single moms, single dads and parents who don’t earn a big income that their kids need to apply for as many scholarships as possible, learn how to work, and choose an inexpensive school if they want to continue their education.

As a parent, one of your biggest jobs is to give your kids a moral compass and the tools they’ll need to succeed in the real world. And one of the keys to being a successful adult is engaging in a lifetime of learning. If the last time you readabookwaswhenyouwere in high school or college, and you’ve never done training of any other kind since, you’re probably not very successful. Never. Stop. Learning. If I’d stopped learning after getting my bachelor’s degree, do you think I would’ve been able to build Ramsey Solutions? Absolutely not!

Do you see where I’m going withthis,Thomas?Asanadult, learning is your job. An entire lifetime of learning is your job. And if you can encourage that in your kids with some level of help, financial or otherwise, then it’s your obligation to help them. You can’t expect a 17-year-old to figure it all out. They don’t have the tools yet.

The point is this: You don’t have a moral responsibility to pay for your kids’ college education. You do, however, have a moral responsibility to highlight the importance of knowledge, share what you have, and show them how to get more. If you can’t afford to helpwithmoney,doeverything else you can. There are plenty of more important things than cash. If you want to help financially, that’s fine too.

Just don’t use debt to make it happen!

— Dave

Dear Dave,

Is there any flexibility in your rule about not spending more than 25% of your take-home pay on rent or monthly mortgage payments? I live downtown in Washington, D.C., and I’m finding it’s pretty hard to do here. I make about $90,000 a year, but I’m spending a little over $2,000 a month in rent. Rent is my largest expense by far, and I don’t spend a lot of other money, so I’m still able to save a little and do other things. Can you give me your opinion about this approach?

— Tanner Dear Tanner,

True, I advise people to spend no more than 25% of their take-home pay on housing. Math still works in every city and state in the country.Youdon’tgetapass on math just because you live in Washington, D.C., even though Congress and a lot of other people there think you do.

But there’s really nothing magical about 25%. The purpose behind it is, I don’t want you to be house poor. If you find yourself still able to save and invest because you keep other financial aspects of your lifestyle so low, then you’re okay. The problem with most people starts when they’ve got a high cost of housing, and those payments put a real squeeze on their budgets. It doesn’t leave them enough room to save up to buy the next car, so that car becomes debt. The same thing happens with Christmas and vacations and everything else. They don’t have enough extra money to save for things because a huge chunk of their income is flying out the door every month wrapped up in rent or a house payment.

Now, you’re telling me your situation works for you because you’ve made room in your budget and live a very frugal lifestyle by choice. That’s cool. I’m not mad at you about that. But here’s the thing: Whatever you spend on rent disappears. And the more money you burn, the less you’ve got on hand for other things.

I’m not exactly sure how you adjust that in your situation. Maybe you move outside the city and commute, or perhaps you add a roommate into the equation. Or, maybe you’re fine with how things are and that’s the way you want to live. That’s okay too. But my reasoning behind the 25% figure—which is actually more of a guideline than a rule—issoyoudon’tbecome house poor. I want you to be able to save, invest and give generously. Plus, I want you to own your own home one day.

And you won’t be able to do that if everything you make is going toward big payments!

— Dave 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 withyou.There’ssomething missing inside you that money just won’t fix. However, if you and your family are barely getting by—let’s sayyoubringhome$3,000a 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 abouteverything,andmake sure the two of you are in agreement on what should be done before moving forward.

God bless you, friend.

— Dave 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!