Dave Ramsey is a money management expert, national radio personality and best-selling author. His nationally syndicated radio program, The Dave Ramsey Show, is heard by 4.5 million listeners each week on more than 450 radio stations throughout the United States.
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My husband makes about $35,000 a year before taxes, and we have one child. Weve also got a mortgage and $60,000 in student loan debt. About a year ago, my husband started work on a masters degree because he thinks he wants to teach when he retires. He quit school after the baby was born, because he didnt think we could afford it any longer. I think he should finish the degree. Otherwise, hes just throwing away the $10,000 weve already got invested in the program. What do you think?
Amanda in Buffalo, N.Y.
Dave Says: You guys need to clean up the mess youve made before he goes after his masters degree. You might be able to justify it if the degree immediately raised his income, but you two cant afford to make investments in vague educational goals right now. If you want to call it throwing the money away, then yeah, throw it away. Thats exactly what Id do. You guys have done a poor job of planning, and now you need to climb out of a big hole before you do anything else. The point is not the $10,000, Amanda. The point is that youre barely making ends meet. Youve already got a house payment and $60,000 in student loan debt hanging over your heads, not to mention the added expense of a baby in the house. The last thing you need is to go even deeper into debt for something he wont even use until retirement! Thats just silly. Im all for education, but youve got to plan things and get a better payback on your educational spending. Thats when it becomes an investment. But he doesnt need to even think about a masters degree until you guys have first cleaned up your mess. Besides, Im not sure that money youve already spent is wasted. He can probably use at least some of the classes hes already taken and finish the degree somewhere down the roadafter you guys get your finances straightened out!