Posted on 05/31/2012 7:08:51 AM PDT by Kaslin
Dear Dave,
We’re on Baby Step 1 of your plan, and we have $1,000 saved. We have a baby, my husband brings home about $2,000 a month, and we have $50,000 in debt, the majority of which is student loans. My mother-in-law has offered to let us move in with her for a while in order to pay off our debts more quickly and save up to buy a house. Does this sound like a good idea?
Ann
Dear Ann,
If your husband can get his income up, I’d prefer that you guys maintain your own residence. Moving in with a parent would be my last choice, if for no other reason than keeping your independence and maintaining some dignity. Plus, it’ll just be better for your marriage. But you don’t need to even think about buying a house until you first clean up the mess you’ve made.
Still, if things get so tight you feel like you have to take your mother-in-law up on her offer, make it for a very limited amount of time. Write it down as an agreement too. I’d say a minimum of six months, but definitely no more than a year. During this time you guys need to get on a killer budget, knock out a bunch of debt, and pile up as much cash in savings as you can. Then, find yourselves an inexpensive place to rent for a while. Hopefully, by that time your husband’s income will have increased.
But the big thing is to get stuff straight in your mind about this situation. Make sure everyone involved knows the arrangement is temporary and that you and your husband are serious about doing the hard work it’ll take to put your financial house in order. You guys shouldn’t still be living with a parent two or three years down the road!
—Dave
Dear Dave,
Recently, I got married and I have $10,000 in student loan debt. I have $50,000 that came from my grandmother, but the money is in a trust controlled by my father, who is an attorney. He says I should use it all to buy a small house outright. I think it makes more sense to pay down my student loan debt. Who’s right?
Elizabeth
Dear Elizabeth,
Why not completely pay off the student loan, and put $40,000 toward a big down payment on a house? I’m sorry, but your dad is just plain wrong on this one. You should be debt-free before you buy property, because if you aren’t, Murphy will move into your spare bedroom. Plus, he’ll bring his three cousins—Broke, Desperate and Stupid—with him.
Now, part of the reason I’m saying your dad is wrong is based on the assumption that you guys are going to be responsible and live on a plan that’s logical and mature. If he knows better and has seen evidence that you’re irresponsible, he may have decided he’s not releasing the money in a way that would allow you to potentially blow it all.
So really, a lot of it depends on where you and your husband are in the growth process as a young married couple. Are you going to budget and live on less than you make? Are you going to have a plan and clearly defined goals for your future and your money, perhaps use the remaining $40,000 as a methodology to build up an even bigger down payment? Or, are you going to use the fact that the student loan is gone to consume even more?
In other words, how grown-up are you going to be?
—Dave
Dear Ann,
Get a job and pay your debt off.
I think independence and dignity are overrated.
Or more seriously, they aren’t worth the cost of maintaining a separate residence, if there are adequate facilities available cheaper at a family home.
Historically, families stayed together much more than in modern times, with generations living in large houses or even smaller homes built on the same property. As a practical matter, why waste the money?
If a parent doesn’t want a child living at home, that’s a choice. But if the parent is OK with it, and the families get along, I don’t think we should stigmatize the arrangement by calling it “undignified”.
Of course, I moved out of my parent’s house right after I graduated college, so I’m not a “hanger-on”. I don’t expect to kick my kids out, but I probably would strongly encourage it after they are married. But if I can help them financially by putting them up for a while, at no real cost to myself, I will certainly offer. I get along well with my kids, so maybe others have a different perspective.
The problem with living with other people is that they tend to decide to control you, AND if they don’t like your personal philosophies, attitudes, values, or even your looks, they can toss you out the door leaving you with nothing.
It’s never good to be dependent upon family and friends if you don’t have to be. Human nature tends to take advantage of those who have few or no defenses.
Live as cheaply and wisely as you can, pay off your debt and don’t sell your soul to those who seek to control you for their own satisfaction. Stand on your own two feet!
If possible, and a second job is needed, divide the child care between you so that YOU are still raising your own child, yourselves. Adding child care expenses defeats the purposes of working. I’m not an advocate of dumping children off on others, to raise, especially for convenience sake. Children shouldn’t have to sacrifice their right to parents for the sake of paper fiat.
I think the advice person is totally correct.
“I’d say a minimum of six months, but definitely no more than a year…Hopefully, by that time your husband’s income will have increased.”
Dear Ann, please come down to the real world. Even if dumbass husband gets a raise within that time frame, in this economy, it’s going to be what??? 5% at most.
People don’t get raises like they used to without being promoted, so the best way for him to increase his income is for the 3 bosses above him leave.
Yes, people can control you. But that is a rather dark view of a familial relationship.
Similarly, I would say the church family relationship wouldn’t be so dark. Some say that churches exist to control you, but I think I could live in a communal church relationship and truly enjoy it.
While i consider myself a loner, I’m also an extrovert, and have always felt drawn to the commune philosophy, even though I’ve never desired to carry out that philosophy in practice. Interestingly, I just spent 4 days at a steam punk convention, and I could feel that sense of “community” that interests me so.
Dave Ramsey ping
In other words, learn to live like no one else and in a surprisingly short amount of time, you will be able to LIVE like no one else.
Thanks Altariel for the ping.
Dave Ramsey Fan Ping List.
If you would like to be added to the “Live like no one else, so that you can LIVE like no one else” list, feel free to Freepmail me.
In other words, learn to live like no one else and in a surprisingly short amount of time, you will be able to LIVE like no one else.
Thanks Altariel for the ping.
Dave Ramsey Fan Ping List.
If you would like to be added to the “Live like no one else, so that you can LIVE like no one else” list, feel free to Freepmail me.
Thank you for maintaining this list.
Dave is the biggest $nakeoil salesman out there. He packages common sense and $ells it to people who don’t have money to spend.
You don’t have to buy his books.
A fine institution called the library will let you check them out for free.
I hear that a lot...turns out the folks making that claim are usually broke and unwilling to change....
Indeed; if a conservative doesn’t like Dave Ramsey, he doesn’t read Dave Ramsey nor does he feel the need to enter a Dave Ramsey thread to leave disparaging remarks about him.
Disparaging one whom one does not like, on a thread for those who do like that individual, reveals more about the poster than about Mr. Ramsey.
That being said, my mother then excelled in her field (with the help of family caring for her kids) and eventually bought a house, sent me and my sister to private schools etc. etc.
I don't agree with Dave
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