Dear Dave,
I’m single, and I make about $70,000 a year. I’ve been able to set aside a nice bit of money in savings, and I’m paying off my student loans and car payment. One student loan is $4,000, the other is $30,000, and my car note is $21,000. Since I’m on the right track now, should I save up some for my dad’s retirement? He’s getting older, and he’s horrible with money.
Colby
Dear Colby,
Right now, you need to be getting out of debt, saving, and building wealth for you. As you do this you can choose to use some of your money to help family, friends, or your community, if you want. But just because you’re headed in the right direction, and being responsible with your money, is no reason to set up a “my dad’s an idiot with money” account.
In your situation, you need to be working the debt snowball. List your debts—and it’ll be easy since there are only three of them—from smallest to largest. For you, this means you’ll make minimum payments on the car and the big student loan while you attack the $4,000 loan with a vengeance. Scrape together every penny you can to throw at that thing, and once it’s paid off, take the money you were putting toward it, plus any other you can scrounge up, and knock that car out.
It may take you a couple of years of rolling up your sleeves and really attacking these things, but you can do it!
—Dave
* To see where Dave is appearing live this spring, please visit daveramesy.com.