Dave Says

Retirement or debt?
Dear Dave,
Do you think I should lower the amount I’m contributing to my 401(k) so I can pay off my house and my truck?
Jamie
Dear Jamie,
If you’re following my plan, the first thing you should do is set aside a beginner emergency fund of $1,000. That’s Baby Step 1. Next comes Baby Step 2, which means paying off all your debt except for your house. This would include your car. During this time, you should temporarily stop any kind of investing and retirement contributions.
Once your mortgage is the only debt you have left, it’s on to Baby Step 3. This means you start saving money and growing your beginner emergency fund into a fully-funded emergency fund of three to six months of expenses. When that’s done, you can attack Baby Step 4—investing 15 percent of your pre-tax income for retirement. In your case, that would mean re-starting the contributions to your 401(k).
The rest of the plan goes like this. Baby Step 5 is putting money into your kids’ college funds, if you have kids, while Baby Step 6 is putting everything you can scrape together towards paying off the house early. After that comes the real fun. Baby Step 7 is the point where you build wealth and give like crazy.
It may take a little time in some cases, but following these steps will lead you to financial peace.
—Dave
 
The key is serving
Dear Dave,
I just accepted my first job in sales. In your mind, what is the key to becoming an excellent salesperson?
Bobbie
Dear Bobbie,
The key to becoming a great salesperson can be summed up in one simple word—serving. I’m not talking about being subservient. I’m talking about always giving 110 percent towards ensuring customers and potential customers are served well. It’s all about being proactive.
Serving means you believe in what you represent, and you’re excited about what you have to offer. It means you’re determined to give people a great experience. If an issue happens to arise, you’ll take care of it quickly and completely. You’ll do this in a way that will make them forget it ever happened.
Really, serving is an attitude. You can pressure people if you want, but that’s going to lead to a dull and frustrating life of one-shot deals. But if you serve people well, you’ll have clients for life and they’ll send their friends and associates your way.
Make helping people your first order of business, Bobbie. If you do that, you’ll never have to worry about money.
—Dave
Strained relationship over borrowed money
Dear Dave,
I borrowed some money from my parents in January, and it took a few months longer to pay them back than originally planned. Since then, I’ve noticed our relationship seems to be strained. They will sometimes make remarks about money when I’m around, and it’s obvious the things they say are aimed at me. I don’t want things to be like this between us during the holidays. I have taken steps to become more financially responsible, like watching my spending and living on a budget, so how can I address this issue with them?
Robbie
Dear Robbie,
I’m sorry you’re going through this, but I hope everyone has learned a valuable lesson. It’s okay to give money sometimes, as long as you’re not enabling irresponsible behavior in the process. But loaning money to or borrowing from friends and relatives will often lead to bruised feelings.
If you paid them back, especially if it took longer than expected or agreed upon, there’s not much you can do if they choose to hold a grudge. With some folks, it just takes a little while for those kinds of things to heal. And considering it’s your parents, my guess is they’ll become more and more forgiving with time.
Until then, maybe you could look for opportunities during conversations with them to mention your new approach to finances. Something as simple as referring your budget, or getting excited about how much you were able to put into savings from your last paycheck, might get their attention. A few subtle hints that you’re actively working to gain control of your finances might go a long way with your parents.
If they realize you’re starting to handle your money more wisely, I’ll bet you’d start to notice a real difference in their attitudes.
—Dave
* Dave Ramsey is CEO of Ramsey Solutions. He has authored seven best-selling books. The Dave Ramsey Show is heard by more than 14 million listeners each week. Follow Dave on the web at daveramsey.com and on Twitter at @DaveRamsey.