Dave Says – Planning and success

Need some financial advice? Debt and Income Crisis? Pay off the house first? Check cashing? Taxes? Credit Cards? Check out what folks are asking Dave Ramsey.

 

Dear Dave,

I’m stuck in a dead-end job, and I only have a high school diploma. I’ve never minded long hours and hard work, but I’ve begun to realize I need to have a better career, so I can spend more time with my kids. I feel like I’m missing out on their lives, because I work 65 to 70 hours every week. Do you have any advice on how to change my situation?

Tim

 

Dear Tim,

Asking questions and exploring your options like this is a much smarter move than simply walking away from an unsatisfying job situation — especially when you have a family to think about. I’m glad you’re wise enough to take a thoughtful look at the situation, instead of making a rash decision that could have a negative impact on you and your family.

There’s absolutely nothing wrong with wanting to improve yourself in terms of education or your career. But before you do any of that, you’ve got to have a definite direction in mind. You need an in-depth, detailed game plan for the next three or four years that’s designed to put you where you want to be. It may involve going back to school for some classes, additional training in your field, or even getting a full-blown degree. If you identify your long-term goals in detail, it will lead you to some of the short-term goals that will help you arrive at your final destination.

Have you tried talking to your boss about your goals and your situation? See if you can have a sincere conversation with him or her, and discuss your feelings about your career and what’s going on with your family, too. Your company may be very receptive to the idea of increasing your value in the workplace. A good leader will also understand the importance of family.

Also, there’s a great book by Dan Miller that addresses this topic. It’s called 48 Days to the Work You Love. In this book, he lays out the steps to discovering what you really love to do and how to get there.

Best of luck, Tim!

—Dave

 

Secured vs. unsecured debt

 

Dear Dave,

What exactly is unsecured debt, and how is it different from secured debt?

Rich

 

Dear Rich,

“Unsecured” debt generally means someone loaned you money, but they don’t have a lien on anything. Credit cards and student loans are examples of unsecured debt, because there’s nothing they can directly repossess if the borrower doesn’t pay. However, they can sue you if you don’t pay, and get a lien against something after they sue you. In some cases, this is done against your income by garnishing your wages.

Some examples of “secured” debt would be things like a home mortgage or car loan. A home mortgage loan is secured by the home. If you don’t pay, they can foreclose and take the house. The same is true with a car loan. If you don’t make the payments, they can take the car.

Typically, unsecured debts will be the last debts you pay if you’re in financial trouble. You’d make the car payment before paying on your student loan, and you’d make your house payment before paying on a credit card.

Hope this helps, Rich!

—Dave

 

A burden to help?

 

Dear Dave,

Do you believe the adult child of a senior citizen, who is physically and mentally healthy but has neglected to plan for retirement, should be burdened with providing financial assistance to that parent?

Robbie

 

Dear Robbie,

Based on the wording in your question, I can only believe you don’t think the adult child should be “burdened” to provide this assistance. My guess is you’re talking about one of your own parents. I understand that you might be aggravated with a parent who has been irresponsible with their money. But in my mind, there’s a bigger question. How big is the burden?

I talked to a guy recently who was making $1.5 million a year. He was questioning whether he should help his dad — an older man in poor health, who didn’t handle his money well — by giving him $1,000 a month. There’s no question you give that guy money. You’re making millions, but you don’t want to help your sick dad? Come on! But if you bring home $2,000 a month, and your family is barely getting by, you’re not morally required to financially take care of a parent who was irresponsible with their money.

It’s all relative. Do you have the money? Can you provide this help without placing an undue burden on yourself and your family? If the answer is yes, you may be asking more about your own aggravation than any sort of moral obligation.

But no, you’re not morally obligated to destroy your own life, or your family, to take care of a relative who didn’t take care of themselves financially.

—Dave