Dave Says: Don’t be afraid to discuss finances with your adult children

Dear Dave,

My husband and I are both teachers, and we’re on Baby Step 7. We’re struggling with things where our wills are concerned. Three of our four adult children aren’t being wise with their money, and my husband and I disagree on how to talk to them about it and how it may affect us re-structuring our wills. We don’t want to be judgmental, but at the same time we agree something needs to be said or done.

Danielle

Dear Danielle,

Let’s say someone is working at my company, and taking my money in the form of a paycheck. Let’s also say this person isn’t doing a good job. If I don’t talk to them about their performance because I don’t want to be seen as judgmental, I’m not doing my job. I owe them the feedback necessary for them to become a good team member. Otherwise, they could just get fired one day without really knowing what happened because I refused to “judge” them.

You’re supposed to judge people. The idea that you’re not supposed to is ridiculous. But you don’t have to be a jerk about it. There’s a big difference between judging people and being judgmental. But it’s unkind not to share insights or suggestions for a better way of life with those you love most. Holding back and telling yourself the way someone behaves is just the way they’re made is wrong in most instances. Overspending and not saving money aren’t character traits — they’re decisions.

They’re adults now, and they’re going to do what they want. They don’t have to understand or support your ways of handling money, but you and your husband have every right to tell them they have to start behaving in certain ways if they expect to receive your money when the time comes. If they’re misbehaving, and you give them money, you’re funding that bad behavior. That’s not love, that’s enabling. And a big pile of money isn’t going to heal the bad things—it’s only going to magnify them.

Sit down with your kids, and have a loving, clear discussion about the situation. Remind them that they’re adults, and you and your husband are no longer able to tell them how they have to live. But let them know in no uncertain terms, gently but firmly, they will not receive your money if they continue to behave in ways you both consider foolish or unreasonable. Let them know they’ll always have your love, just not your money, unless they begin behaving more intelligently and maturely with their finances.

You can’t make them do anything, Danielle. But you can ensure they understand you two won’t be sharing your wealth with people who can’t handle it and use it wisely.

—Dave

Clean ‘em out, and move ahead!

Dear Dave,

I’m 22, and I just recently graduated from college. I’m lucky enough to be walking into a job making $60,000 a year with a company I interned with during school, and I’ll be living with parents for the next few months. I have about $50,000 in student loan debt, but I also have $25,000 in savings, along with an E-Trade account with two single stocks that was given to me a couple of years ago. Those stocks are now worth about $13,000 combined. Should I sell the stocks to help pay off debt, or put the money from their sale into mutual funds?

Tyler

Dear Tyler,

In situations like yours, I teach folks to pull out any money they have that’s not in retirement plans, and use it to pay off debt. The shortest distance between where you are now, and wealth, isn’t a couple of stocks in an E-Trade account. The shortest distance between you and wealth is becoming debt-free and taking control of your largest wealth-building tool—your income.

If I’m you, I’m going to clean out everything, including my savings—down to $1,000—and throw it at debt. After that, I’m living on a strict budget with no unnecessary spending until that debt is all gone. Man, with the money you’ll make right out of college you can be debt-free, and on your way to building a fully-funded emergency fund and wealth, so fast it’ll make your head spin.

Get this done, Tyler. Today!

— Dave

On the job training

Dear Dave,

I’ve been in sales for 15 years. I love my job, and I love my company. Our business wasn’t affected as much as some during the pandemic, but my numbers have become stagnant. They’re still good, but I feel I can do better. Do you have any advice for someone who wants to raise their sales and become a more productive team member?

Sara

Dear Sara,

Boy, I wish more people had the same attitude about their jobs. Folks with that kind of drive and sense of responsibility are almost always successful in their professional and personal lives.

I want you to think about one simple word—serving. It isn’t just a word or an idea, it’s an attitude. Serving means you provide what you have to offer in a way that makes customers happy to trade their money and time for it.

But don’t make the mistake of confusing serving with subservient. What I’m talking about is being proactive with customers individually and in the marketplace. It means being excited about what you have to offer, and believing you’ve got a great product at a great price. It means you’re determined to give your customers a great experience 100% of the time, and that going the extra mile—whether you have to or not—is just business as usual. And, it means if something goes wrong, you’ll step up and make things right in a way that will make them forget a glitch ever happened.

If you help enough people, and make that the first order of your business and those relationships, you’ll never have to worry about success!

— Dave

Put your education first

Dear Dave,

I’m 19, and I’m about to finish up my first year of community college. I have enough money through scholarships and help from my family to get a bachelor’s degree. After that, I plan on going to law school and cash flowing that part of my education. I’ve already started a Roth IRA with money I’ve made working, but I’m wondering if I should continue contributing to retirement when I will have to pay for law school out-of-pocket.

Jonathan

Dear Jonathan,

No, I wouldn’t recommend that. You should stop saving for retirement for now and put all that money aside to pay for your education.

An education that’s usable in the marketplace to increase your income is more valuable to you right now than a mutual fund. A degree in left-handed puppetry or underwater bubble blowing definitely is not. Believe it or not, people spend years, and tens of thousands of dollars—sometimes hundreds of thousands of dollars—getting degrees in silly things that have no real value whatsoever. But, if you’re going to get a law degree, and use that degree to create value to society and an incredible income for yourself, that is going to give you a better mathematical return on your investment at this point in your life.

You have plenty of time ahead to invest for retirement. I don’t want you to put it off forever, but a debt-free education is the right investment for you right now. Just keep piling up cash, and let’s pay for this law degree out of pocket. And hey, if you end up with a bunch of money left over when you’ve graduated and are ready to become a lawyer, that’s not the worst thing in the world, is it?

Good luck, Jonathan. Keep up the hard work!

—Dave

Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 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, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.

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