My daughter used to live an irresponsible lifestyle and was bad with money, too. While she was in college she also took on $20,000 in student loan debt. Since that time she experienced a serious illness. She’s recovering now, and it has really changed her behavior and her outlook for the better on life, spiritual matters and money. I could pay off the loans for her, but I’m wondering if there’s a better way to help.
If I were in your shoes, and I had the means to pay off her student loan debt without putting myself at risk financially, that’s exactly what I’d do.
Sometimes the best gift you can give a person is to let them wallow around for a while in the mess they made. Being forced to work your way out of bad decisions and irresponsible behaviors is a great remedy in lots of cases. But in this situation, with what you’ve told me about her previous health issue, and the fact that she’s now being responsible with money, behaving and making better life choices, I’d want her to be as free as possible as she takes up this new walk.
My advice is to try to be a huge blessing to your daughter. Right now, she’s a lot like the prodigal son. She’s come around in her thinking and realizes what’s right and what really matters. Give her the biggest hug she’s ever had. Then, throw a party and write a check to knock out that student loan debt.
Do you have any tips for how single people can stay on track with their finances?
It’s really pretty simple. The first thing is the same advice I give to married couples, and that is to live on a monthly budget. Sit down at the end of each month and write down—on paper—all your expenses and income for the following month.
When you think about it, budgeting really isn’t that difficult. Some of your expenses, like your rent or mortgage payment, will be the same. If you have a car payment (which I really hope you don’t), it will remain constant, as well. Things like groceries and utilities may fluctuate based on the time of year, but you can make a pretty accurate estimate by looking at past months.
The second thing I’d recommend is that you find someone to be your accountability partner. It should be someone who is wise and good with money and a person who loves you enough to call your bluff or hurt your feelings a little when necessary. They can be a close friend, parent or even your pastor. Just sit down together over a cup of coffee once a month and talk about your finances. You could even go over your budget together line by line.
Ideally an accountability partner is someone who’s ahead of you on a particular journey and can help direct you along the path to wisdom. It’s their job to hold you accountable for what you’re doing and the decisions you’re making, for your own good.
Dave Ramsey is America’s trusted voice on money and business. He’s authored four New York Times best-selling books: “Financial Peace,” “More Than Enough,” “The Total Money Makeover” and “EntreLeadership.” Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.