QUESTION: John in Indiana wants to know when to fire an employee. He has a guy who’s a rock star most of the time but has let things go this spring. John thinks the real problem is arrogance. Dave helps him with the approach.

ANSWER: Have you ever been fired? I have. It’s a bad day in most cases. Sometimes you get fired, and you think, God, I should’ve quit earlier, but most of the time, it’s a bad day. What I always do is try to walk in the other person’s shoes for a few minutes and say I would want to have given someone every chance and have been very clear. I wouldn’t want to be surprised. He wouldn’t be surprised because you’ve just gone through reprimanding with him.

You’re really frustrated with him. For you to be unclear with him about where he stands is to be unkind. This is not a time for you in the name of being nice to not tell him where he stands.

I think you’ve got to take him for a cup of coffee and go, “Listen, here are some things you do right. I really like you as a person. You’re a good guy, but I’ve got to be real clear with you. I’m starting to have conversations in my head and with my wife about letting you go. I’ve got to be real clear with you. I’ve got to tell you this is where you stand, and here’s why. This is not a game with me. I have to have this stuff right. I have my name on this business. I take pride in the outcome. If you can’t do that, then we need to talk about why, and we need to talk about if today’s the last day or not. I need to let you know that. Is there something else going on? Is there some kind of a problem at home?” And then if he says everything’s fine, you say, “If everything’s fine in your life, then it’s getting ready to not be because you’re getting ready to not have a job. This meeting is what’s known as your final warning, and you need to bring it. If you don’t want to do that, I’m good with that. We’ll still be friends. But you can’t work here anymore, because this place is a place of excellence. You’ve got to bring it. It’s game on. We’re in the Super Bowl every freaking day. Strap on the helmet. Knock it out, baby. And if you cannot do that, it’s okay. We just need to figure that out now, but you need to know that the next time I have to babysit you after you’ve been doing this a year will be the last time, because I’m not running a babysitting service. And I’m not running a business in a half-butt manner.”

It doesn’t need to be any longer than what I just did. That was a minute and a half. I timed it. Don’t camp out on it and just beat on him. But just be very clear and very direct. If you remember in the book EntreLeadership, we talk about the one-minute manager model of the proper reprimand. You compliment the person and remind them that they are of value, you destroy the bad behavior, and then you come back and compliment the person. It’s called a reprimand sandwich. The meat in the middle is very uncomfortable. It’s not about you being a bully, and you’re not going to raise your voice. You’re not going to use any slang or swear words. You’re going to just be very kind and very firm and very, very direct. If you don’t see his body language shift in the chair, you were not blunt enough.

That’s being kind to him because that’s what I would want somebody to tell me. “Dude, if you don’t bring it, you’re gone.” That’s what I’d want somebody to tell me, and then I’d know what the rules are. Then if I don’t bring it, I’ve fired myself. It’s natural consequences of crappy behavior.

I tell the story in the book EntreLeadership, and I tell the story all the time. I had a kid here who was killing it in sales. He just couldn’t manage to get to work on time. I’m old-school. You’ve got to come to work on time.

I think if you set a formal situation where you’re having a cup of coffee in a quiet place without a bunch of people listening in and not embarrassing him in public or something like that, but you’re also not standing out on the job site. This is a sit-down, final, eyeballs-looking-in, very uncomfortable meeting. Then you’ve given him every chance, and fire his butt. If he doesn’t respond to that, let him go right then. I’ve done that too. I’m not mean about it, but that just means we’re not able to work together. That’s all that means because this is the level I play at. It’s pedal to the freaking metal, dude. I don’t play any other way. I don’t play halfway. I’m so brutally honest that no one on the team is scared of me because I’ve got some side agenda. They know exactly where we are and where we’re going. It’s easy for all of us to communicate. Some of them communicate back to me that way, too, and I’m fine with that. I don’t mind if they go, “Hey, man, that pissed me off when you did that.” That’s okay. We’ll talk about it. Let’s do it. That’s how we process stuff. But all of this behind the scenes thing and …

I used to get so frustrated, John, because I was always trying to be nice. I was always trying to be nice. I was always trying to be nice. Meanwhile, I’m about to explode. Then finally I would—not explode in anger—but the frustration would just boil over, and I would just fire somebody. It was like, no, you can’t do that. That’s not how you work because then everybody’s scared all the time. If someone leaves our organization, everyone in the organization knows that that person was given every chance to turn it around with the exception of bizarre things like if you steal, I’ll just fire you right then. There’s no second warning. I’m not going to teach you to not be a thief. You’re just gone. We don’t do that. I’m talking about performance issues. That’s where you are.

You’re in a right-to-work state—an employment-at-will state—and so you don’t have any issues with legalities.

QUESTION: Latrell in Nashville and her husband plan to purchase a home within the next year or so. Her credit is bad, so they’ve decided to work on her husband’s credit in order to qualify for a mortgage. She has $104,000 in debt, and $92,000 of that is a student loan. He has $13,000 in debt, with $7,000 of that being a repossession on a car he co-signed for. Can she file bankruptcy for just her debts?

ANSWER: You don’t get to file bankruptcy for just certain things. By the way, student loans are not bankruptable. You will still have all the debt. Almost all your debt is student loan debt.

I want you to get a house, but I don’t want your house to get you. I want the house to be a blessing for you and not a curse. Neither one of you have done very well with money. If we take out your student loan, which is a big mess, then you guys are fairly equal in terms of the amount of debt that you have.

What I would beg you to do is you need to lay a stronger foundation in your life before you buy a home and that means both of you need to get your debts cleaned up. To be as kind as I can be, I think you’re asking the wrong question. I don’t want to look for a way to escape this situation through bankruptcy, I want to clean up and get a good, organized plan in your life where you have control of money. Buying a house when you are broke and deeply in debt is going to do nothing but bring you problems.

Instead, buy a home when you get yourself cleaned up and have learned to live on a plan and have a sense of power, a sense of dignity, a sense of having control of your money for a couple of years. Neither of you have ever had that, and I didn’t either during the old days. I know what stupid looks like. I’ve done stupid with zeroes on the end.

I would just beg you to say to yourself that before you try a marathon, let’s run around the block a time or two. Buying a house is a marathon, and the trips that you guys have made around the block haven’t been successful yet with money.

QUESTION: Patty in Winston-Salem says her son is about to graduate from law school. She and her husband allowed him to get a student loan, but they paid for two years. The loan is about $76,000. They could pay it off for him, but her husband is hesitant. Dave says it depends on how hardcore they want to be.

ANSWER: I would want some concessions were I to do this at this stage of the game. Number one, I think it’s perfectly okay for a young lawyer to go and earn a living and pay off his lawyer debt. There’s nothing wrong with that whatsoever. There’s no deal broken here. It’s not going to kill him. He can roll up his sleeves and clean up the mess that he participated in making.

If you choose to pay it off, I don’t think that’s a bad thing either. But I don’t want you to think you’re obligated to do that. You’re not. This should be a gift. It should be accompanied by two things on his part. One is a signed letter of agreement that he will never borrow money again the rest of his life, thereby you have changed his life. You can decide how hardcore to be.

Never borrow money again. You called Dave Ramsey, remember that? That’s the number you dialed.

In other words, I want some permanent commitment that I changed my family tree. I want his kids to be affected by this decision and this gift. That’s the first thing I want from him. The second thing I want from him is unbelievable levels of gratitude—worshipful levels of gratitude.

QUESTION: Christine in New York borrowed some money from her aunt to buy a condo eight years ago. Now she sold the condo and lost both her $30,000 and her aunt’s $30,000 as well. Christine is resentful that she has to pay her aunt back the money that was lost, but Dave explains an unpleasant fact to her.

ANSWER: It’s the deal you signed up for. You knew going in. She didn’t mislead you, right? She didn’t do anything wrong, honey. All she did was give you $30,000, and now she dares to want it back.

If I were in her shoes and it was my kid, I might have some mercy. I might do some things if she were calling, but as far as you’re calling, I’m going to challenge your right to be resentful here. If the agreement was that she loaned you $30,000 and you pay it back and she gets a piece of profit—that was the agreement—there was no profit, so now you owe her $30,000. You don’t really have a reason to be resentful. She might, but you don’t.

Please, God, just pay this back quickly and get it out of your life. I don’t want to be mean or anything, but you’re completely wrong.

Let me help you with how I deal with that sometimes. Sometimes it helps me. I don’t always get through it. Everybody has the feeling. She’s got plenty of money. She’s kind of like your mom. Why doesn’t she just forgive the debt and forget it? It was a bad deal. It wasn’t like you made any money. You lost your shirt and your shoes. You lost everything. I get how mercy would be in order toward you, so I can kind of go where you are. Sometimes in these things, I can switch shoes with the other person and walk a mile in their moccasins and then I know what I’m supposed to do. In other words, if the roles were reversed, you or I might grant mercy and just say forget it. I’ve got plenty of money. I don’t need it back.

The good news is you don’t have any debt except this, and you’ve got a great income. Honestly, I think this is causing you more angst than the math—if you told me you make $32,000 a year, I might say go have a cup of coffee with her and beg for mercy. You make enough money. Just knock it out and be done with it. Forget it. I wouldn’t put the relationship at risk.

Just say out loud what you’ve been thinking. If you want to call that kicking your butt, that’s fine. We’ll call it kicking your butt. You were already thinking part of that, and then there’s a little girl part of you that goes, “Oh, come on! Just let me go.” The grownup part says, “Yeah, I know what I need to do.”