QUESTION: Brittany in Denver has a 55-year-old father who is losing his house. She’s 22 and a newlywed, and her father plans to move in with her since he has nowhere else to go. What’s the best way to set some boundaries with him as he moves in?
ANSWER: If by “clean up the mess,” you mean you pay his bills, no, it is not your place. You’re 22 and newly married. I’m guessing you’re not wealthy. He’s a 55-year-old grown man. It is his job to clean up his mess.
Can you coach him to the extent he will accept the coaching? Yes, you can coach anybody and give anyone encouragement and be a cheerleader to anyone. I’ll help anybody who wants help and who will actually follow the advice. I’m not going to waste a bunch of time on people who aren’t doing anything. Yeah, definitely coach him to the extent he’ll accept the advice.
I have a feeling you don’t want him to move in.
I want you to be able to help your dad. I do not want him to mess up your life, and this guy does not know what a boundary is because he’s never even set boundaries in his life. If you move him in, you’re not going to move him out. You’re going to end up in the same position he’s in. That’s the problem.
I would talk to your husband and see if you want to help him get into an apartment that’s $250 or $300—a very, very, very inexpensive one-bedroom apartment—and the only way I would do that is under a couple of conditions. Condition number one is that he agrees to start doing handyman work on the side immediately and print up business cards and go knock on doors and go knock on apartments and go see real estate agents and get some work because he knows how to repair things. That’s actually a very valuable skill—a lot more than $14 an hour. And he probably has a decent set of tools.
He needs to rent him a little apartment. He’s got a way to get some work done. He can carry his tools and get some work done. In addition to being 40 hours a week at $14 an hour, he starts doing repairs on the side for other people starting today. He gets on a written budget that you review with him, and he doesn’t support anybody but himself. I think that’s what he needs to do.
He can’t move in with you unless he’s going to follow your instructions. Period. He’s going to stay there for five years if you don’t set some boundaries with this. If you move him in with you, he needs to have the boundary that he’s gone in one month. One month. One month. And really, I’ve got to tell you I wouldn’t even do that. I would spend some of your $1,000 to help set him up in an apartment that he takes from here forward, and don’t you co-sign for that lease either. You get him in there and get him going.
It’s not because you don’t love him. It’s because you guys are not in a position of strength to be gentle to him, and it’s going to end up going badly. He’s going to move in and then you’re going to toss him out because you haven’t given him boundaries and you haven’t made him do some of the things he has to do to straighten his life up, then he’s not going to be ready to leave.
He’s got to cancel these policies. He’s got to get on a budget. He’s got to get his income up. He’s got to get organized. He’s got to grow a life. And at 55, it’s time.
QUESTION: Tim in Denver and his wife have been trying to have a child for five years, but they’ve discovered they can’t have a child. They would like to adopt. Tim has $16,000 in a 401(k), and he and his wife are wondering if they should use that money to pay off some of the $40,000 student loan debt. They make $70,000 a year. Dave disagrees with cashing out the 401(k) and gives Tim some other ideas instead.
ANSWER: I can’t think of anything more important than having kids and raising kids if that’s what your call is, and I just think it’s awesome.
I certainly would not tell people to borrow. No, I would not cash out your 401(k). The government’s going to take half of your money if you do that. They’re going to charge you a 10% penalty plus your tax rate, and you’re in a 25% tax bracket, so that’s a 35% hit. So if you take out $16,000, they’re going to charge you $5,200 in taxes and penalties. It’s like saying, “Dave, I want to borrow money at 35% interest to pay off my debt.” Not a good plan. So we’re not going to do that.
Let’s leave that alone, but I might push pause on my debt snowball given your numbers in your situation and say, “Real quickly, we’re going to throw $15,000 into an account to do an adoption—with cash.” Then I’ll push play on my debt snowball again.
It’s kind of like you were pregnant and you had to pay for a delivery. You push pause your debt snowball for a little bit and take care of the delivery. Then you push play again after the baby came, right?
Please don’t call me back and tell me your adoption cost $35,000 because I will tell you that you did not do good research. Fifteen will do it, but you’ve got to get into it and learn. There is a book called Adopt Without Debt. Go get that book. You can get it on Amazon. The lady’s name is Julie Gumm who is the author. We’ve had her on the show.
QUESTION: Miles in Kansas City is on Baby Step 2. His son is getting married in February, but the wedding is in China. Miles and his wife don’t want to go into debt to go to the wedding, and they’re in an investment club with $15,000 in it. Should they take $5,000 out to go on this trip?
ANSWER: If I were in your shoes, I would.
What we’re doing is we’re slowing down your rate of getting out of debt by $5,000 for you to go to your son’s wedding. Yes, I would do that. But would I borrow the money? No. I’d find some other way to do it, which you have done.
We’re not even pushing pause on this. We’re just saying we’re going to go to China as economically as we can to see the wedding and a couple of other things while we’re there and then head back home. We’re not going to stay at something that’s $10,000 a night, obviously.
Obviously, there are a lot of reasons to do this, but here’s the thing: Any time I do something like this in my life, what I want to say is after 30 years of marriage, for one month, you’ve been focused on cleaning up your financial act, right? So if you’re going to take this little side step, so to speak, you have to really just internally—for your sake—you want to say when we come back, we’ve got to hit it that much harder. We’ve got to sacrifice that much deeper. We’ve got to work that much more to get out of debt just to offset the fact that we’re doing this, but it is the right thing to do.
I want you to break the back of this 30-year habit pattern. That’s what I’m most concerned about, and as long as you do that, if you spend $8,000 on the China trip, it doesn’t matter because $3,000 is no longer your problem or $5,000 is no longer your problem because you’ve addressed the habit patterns that we are now completely committed. And you and your wife are holding hands and saying, “We’re going to do this, but when we come back, it’s game on, baby!” As long as you’ve kind of got that attitude, then I definitely would do it, but I definitely think you should go to your son’s wedding. Yeah, definitely.
QUESTION: Lisa on Facebook asks how Dave justifies building wealth when there is so much need in the world.
ANSWER: I justify it because I am not Jesus. I am not a messiah. I am not God. I cannot—no matter how much wealth I attain or don’t attain—I cannot move a needle in the scope of the whole world—number one.
Number two, I’m not building personal wealth. I manage it for God. As a Christian, I don’t own anything. The wealth that we’re managing we’re managing first for the good of our family—that’s biblical, for the good of our future, and the good of our family tree—both of those are biblical—and for the good of others. Helping others around the world is something we do very, very regularly.
The personal consumption of our wealth is a small percentage of the overall net worth, and I’m perfectly fine with it. The problem some people have is they get confused about their doctrine on this, and they get confused about their philosophy on this. I just got over my messiah complex. I’m not God. He is.
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