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Dear Dave, Is it okay to pay two employees who do the same jobs different salaries? Eric Dear Eric, Sure, it’s okay. Fair isn’t always equal, and equal isn’t always fair. There are no two people on earth who do the same, exact jobs with the same, exact levels of competency and precision. Here’s a more detailed example. Let’s say I had two personal assistants within my organization. Both of them worked as assistants to vice presidents, but one has been on my team for 10 years and is the assistant to someone whose department is very large and profitable....

Dear Dave, I borrowed $30,000 from my aunt to buy a condo eight years ago. We had a deal that she would get her money back, plus a piece of the profits, when it sold. If there were no profits, she would get back her original $30,000. Recently the condo sold and I lost the money I put into it, plus my aunt’s money as well. I make good money and don’t have any other debt, but I’m a little resentful now that she wants me to pay her back. Do you have any suggestions? Christine Dear Christine, I don’t...

Dear Dave, My son has a $115,000 mortgage at 5.8 percent. He also has a home equity line of credit of $40,000 at 9 percent. Currently, he can get a 30-year loan at 3.5 percent, or a 15-year note at 2.75 percent. His take-home pay is between $70,000 and $80,000 a year, and these are his only debts. Should he combine the mortgages into one loan? Daniel Dear Daniel, First, I only recommend mortgages of 15 years or less. Now we’re looking at a 2.75 percent loan versus a 5.8 percent loan versus a 9 percent loan. I advise people...

Dear Dave, I live outside Houston with my wife and our 9-month-old daughter. I’ve received a job offer from a company on the other side of the city that would pay, with bonuses, $25,000 a year more than I’m currently making. This would require moving to a new house and away from our extended family. My wife wants to move because my mom can be a little overbearing. I understand how she feels, but I’m not certain I want to move or take a new job. What’s your advice? David Dear David, I’m not so sure this is a job...

I listen to you often and enjoy your radio show, but why don’t you ever ask women to go to work? When a family is broke, and the woman is at home raising one child who is already in the fifth grade, why can’t the wife get a “second job?” George Dear George, I think far too many ladies, in the name of paying for stuff they don’t need, have left the household and the children for the workplace. Many of them didn’t even want to do this; they just felt obligated to do it by people like you. There...

Dear Dave, Can you please define “necessities” in today’s world while trying to get out of debt and live on a budget? Matthew Dear Matthew, Whether you’re talking about the world today or 50 years ago, necessities haven’t changed. Necessities are still food, shelter, clothing, transportation and utilities. We’re talking about needs versus wants. The problem is that many people were never taught that there’s a difference between the two—a big difference. Most people have enough food to eat and a decent place to live. Those are necessities. I’m not talking about eating out or having a big, fancy house....

Dear Dave, I’m a stay-at-home mom now, and my husband brings home $2,600 a month. We’re trying to get out of debt, but we need more money coming in. I want to go back to work, but emotionally part of me feels like I should stay home with our 2-year-old daughter. What do you think? Kayla Dear Kayla, I understand the feelings involved, especially if you’ve spent all of your time home with your child. But don’t make the mistake of blaming the debt if you simply want to go back to work. You’re not a bad person if you...

Dear Dave, My divorce will be final in a month, and I’ll have $100,000 when everything is over. I will also have $8,000 in credit card debt, and I’m currently unemployed. Do you have any suggestions to help me move forward? Meryl      Dear Meryl, The first thing I want you to do is raise your right hand and promise never to use credit cardsagain. Then, if you still have any of those awful things, I want you to cut them up and close out the accounts. The next step is for you to find some kind of income, whether it’s...

Dear Dave, I’m following your plan, and currently I have $14,000 in my emergency fund. What are essentials for three to six months of expenses? Brian Dear Brian, Basically, you should ask yourself this question: What would it take to operate my household for a month? There are several different things that could be classified as “essentials,” but if you take those things and multiply the number by three, four, five or six, you’ll see how much money you need to have a fully loaded emergency fundof three to six months of expenses. This is Baby Step 3 in my...

Dear Dave, I’ve been on medical leave from my job due to an injury. My doctor recently advised extending the leave another six months, but during this time I wouldn’t be paid. My husband makes $75,000 a year, and we owe $40,000 on our cars. This includes a $30,000 note on one of them. Should we take money out of our 401(k) to make it through the additional time off? Crystal Dear Crystal, Absolutely not! You guys have dug a hole for yourselves, and borrowing from one place to fix another will only make that hole deeper. In cases like...

Dear Dave, Is there ever a time you should dip into emergency fund savings in order to pay off your home early? Eric Dear Eric, The only time I would advise this is when your emergency fund is too big, and you have a very small amount left to pay on the house. Keep in mind that your emergency fund should be three to six months of expenses, not three to six months of income. Besides, paying off the house doesn’t fall into the category of an emergency. The fact that you have to pay for your house doesn’t catch...

Dear Dave, My younger sister moved to Atlanta, and she came to live with my husband and me a few months ago. She’s 19, has a job, and is attending a local college. But even though she’s working, she hasn’t said anything about helping out with utilities or paying rent. We don’t need the money, but do you think it’s time for us to push her out of the nest so she can start living as an adult? Molly Dear Molly, The way you’ve described your little sister makes me think she’s a pretty good kid. She’s doing all the...

Dear Dave, My daughter is 14, and she was recently offered a steady weekend modeling job. Do you have any advice on how to handle the money she earns? Cynthia Dear Cynthia, In terms of investing some of the money she’ll make, a Roth IRA would be pretty cool. You would have to oversee it, of course, and you’d have to file a tax return, but starting something like this when she’s 14 would help set her up for some serious money later. I think the biggest thing, however, is to make sure you create lots of teachable moments for...

Dear Dave, I want to buy an inexpensive car, and I was wondering what you think about salvage titles. Eric Dear Eric, It’s not impossible to find a decent salvage car. But I’d take extra precautions to find out exactly why it was salvaged. If it’s a salvage car because it was wrecked, I’d take a look at what kind of wreck caused the damage. Lots of people know how to repair and rebuild cars, so it might end up in better condition than before if you find the right mechanic. On the other hand, I’d probably walk away if...

Dear Dave, I’m 27 and married, and we have two kids. I make $90,000 a year, but we have $80,000 in consumer debt—$48,000 of which is in car loans. The rest is credit card debt. My wife’s parents have offered to let us move in with them so we can get out of debt faster. Do you think this is a good idea? Kevin Dear Kevin, If I were in your situation, I would not move in with the in-laws. You’ve got an absurd amount of money wrapped up in those cars. I’d sell the stupid things, start living on...

Dear Dave, I’m a general contractor, and I was recently offered some business by a large corporation. I’d need new equipment to handle the job, and the purchase would use most of my cash flow. I’m wondering if the opportunity is worth the risk. Wayne Dear Wayne, I’m glad you realize that, on the surface, not all growth is good growth. The number-one thing that causes small businesses to fail is accounting and cash-flow problems. The second biggest thing is that they grow too quickly and fall in on themselves. Owners are sometimes scared to turn down anything, so they...

Dear Dave, My wife and I make $140,000 a year, and we’re working on our debt snowball. We’re almost out of debt, but we still have two small car payments and some credit card debt. She wants to get rid of the credit card debt but doesn’t mind us having car payments. Can you help me understand this? Kelly Dear Kelly, I’m not sure I understand her thinking either. The car payments and the credit card debt are the same thing. They’re both debt payments, and you’re being charged interest on both of them. The only difference is that one...

Dear Dave, What do you think about the practice of credit card churning? Ethan Dear Ethan, I think it's a pretty dumb idea. The concept is to run up the balance on one card as high as you can, then flip the balance from card to card in order to get perks like airline miles. But if you want to go through all the trouble and hassle over such a small amount of money, be my guest. I've met thousands of millionaires, and none of them have ever credited their success to credit card churning. Think about it: With all...

Dear Dave, My mother-in-law has a serious credit card problem. She can’t afford stuff, but she shops anyway, acquires more and more credit and thinks she’ll pay for it all later somehow. Her husband has bailed her out a few times, but he’s unwilling to do it anymore. My wife and I, and her sister, want to address this issue, but where do we start? Jonathan Dear Jonathan, First of all, you need to stay out of the discussion. This is something for her daughters to handle, and her husband needs to be part of it, too. He’s closer to...

Our Valentine's Day tradition continues There are quite a few things in life that are more foolish and desperate than using the Dave Ramsey pickup lines to woo someone—taking an interest-only mortgage, going within 50 feet of a payday loan store, and buying lotto tickets, just to name a few. But while all of these actions are avoidable, February 14 is not. And if it’s Valentine’s Day, it must be time for Dave Ramsey … pickup lines, that is. So without further ado, here they are: the sixth-annual list of Dave Ramsey pickup lines. If I had a dollar for...