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Dave Ramsey

Dave Says – Responsibilities come first

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

 

Responsibilities come first

 

Dave Ramsey

Dear Dave,
My husband runs a small business that has never done very well. We have three kids, and I make $55,000 annually in my job. Part of what I make has been going into the business for over a year to help keep it afloat, and we don’t have a lot of money in savings. What do you think we should do?
Stephanie

Dear Stephanie,
If you’re putting other money into a business account, that’s a pretty good sign you’re not making money in the business. You and your husband need to sit down together, and do a household budget and a profit and loss statement on the business. You’ve got to get on the same page financially.

Put all his business expenses on the profit and loss statement in detail, and write out what it would take for him to break even each month.  But honestly, with everything that’s been going on with your finances, if he’s not at least breaking even at this point, then it’s time for him to do something else for a living full-time.

I’m an entrepreneur and business owner. Trust me, I totally understand the allure and excitement that goes with running your own business. But your own household and its immediate financial responsibilities come first. The only money that should go into the business account is income the business creates.
—Dave

READ: Dave Says – Tithe on stimulus check?

 

No free passes

 

Dear Dave,
I own a small business, and recently a relative asked for a job with the company. I hate to say this, but I’ve got reservations about hiring her. She’s basically a good kid, but not the most reliable person in the world. Do you have any advice on how to handle a situation like this?
Bill

Dear Bill,
As an entrepreneur, you have the right and responsibility to do what’s best for your company. That means you shouldn’t hire anyone who isn’t a good fit—even a relative.

If a relative is qualified, and the kind of person who understands they’ll have to bring it every single day, performing at a level equal to or above your other team members, that can be a special and rewarding thing. But if that relative is the kind of person who expects special treatment or is a problem child, that kind of situation can be a nightmare for you, your company, and the whole family.

Would you hire this person because they’d make a good team member? Would you hire this person if they weren’t part of the family? If the answer to either of these questions is no, don’t hire them. It’s as simple as that.

The bottom line is you have to do what’s best for your business, your immediate family, and your team.
—Dave

 

 

Examine your business needs carefully

Dear Dave,
I own a small company, and we lease the building we operate from. As an entrepreneur, how do you know when it is time to stop leasing and buy a place of your own?
Peter

Dear Peter,
You should only buy a building when you have solid track record of success, and a really good idea of what your building needs will be. A growing business is always a good thing, but you don’t want to focus too much on real estate and not enough on generating revenue and managing that growth intelligently. You would also want to make sure you’re going to be in anything you buy for a good, long while.

I’m a big fan of leasing the first few years after starting your own business. It’s even better if you can work out of your home, but I understand that’s not always practical. Down the road, you can choose to lease with an option to buy, or in the right situation, just buy a building.

Remember, make sure you do it all with cash. Don’t add debt to the equation!
—Dave

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