How We're Financially Illiterate In Bidenista....Financial Advisor To The Rescue...

[SIZE=7]A man asked Dave Ramsey if he and his wife should borrow money —
they make $180K/year but spend $80K on the kids. This was the guru’s scathing reply[/SIZE]

“Dave from Philadelphia” called finance guru on a recent Ramsey Show episode that he was “barely making it” on the family income of $180,000.
He was unsure whether to save more or take out a loan to make ends meet. While he’ll see the number rise once his wife finishes medical school…
(she currently makes $70K as a resident), the family of four has debts and payments to wrangle.

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Dave Ramsey on borrowing for child care costs

As per his trademark style, Ramsey voted for another choice.

“Option ‘C,’ work more…Can you explain to me why you can’t get by with an income of $180,000?
I’m going to be as nice as I can, Dave. You guys have lost your minds.”

Forced to dig deeper, Dave from Philadelphia revealed some eyebrow-raising kiddo expenses: at least $50,000 in daycare tuition for two, with before- and after-school care and paying a nanny in the summer months.

Maybe you’re thinking what Ramsey said: “Are they going to Harvard? What the crap!”

The man admitted it was a pretty fancy school — especially given that his kids were still pre-school age. In fact, the average cost of child care in Pennsylvania remains just above $17,000 per year per child, slightly more in the suburbs, according to child care website TOOTRiS.

“We’re going to take out student loans for the four-year-old,” Ramsey teased. “That’s what we’re coming down to.”

Budgeting for cost-effective child care is even more critical considering the expenses many Americans can’t readily escape: gas, insurance, groceries, and utilities, for starters. Budgets can play a crucial role in bringing things under control — especially if you start by tallying your last three months of spending. What’s costing the most? What are the non-negotiables? Where can painless, sensible cuts be made?

Read more: Here’s how much money the average middle-class American household makes — how do you stack up?

[SIZE=6]What about Ramsey’s ‘Option C’?[/SIZE]
As Ramsey suggested, income from added work can countervail the dollar figure of a loan. Ramsey stays away from loans in general, so taking on a side hustle or even a part-time job while you create an emergency fund can turn the numbers in your favor.

These days, a side hustle can be as simple as renting out your shed as storage — which could net you around $160 for a 10’x10’ unit in Philly, according to RentCafe. Or if you have a parking space you don’t use, you could rent it out for around $300 per month, according to WhereiPark. Pull off those two moves and that’s $5,500-plus over the year right there.

[SIZE=6]When to consider a loan[/SIZE]
Dave from Philadelphia clearly needed a reality check on his children’s “Harvard” childcare costs. Yet his wife has zero med school debt, meaning that their $180,000 income has relatively little financial drag — and represents more than twice the $71,000 made by the average American household as of 2021, according to the United States Census Bureau.

Would a combination of cost-cutting and a smaller loan make sense for the time being, then? Perhaps — but only if you start by avoiding high-interest credit cards as the source. If it’s a personal loan you have in mind, shop around. Banks and other loaning agencies want your business, so make them compete to give you the best rate.

Of course, married people who sit down with a neutral party — in this case, a professional financial adviser — will get a much clearer picture in terms of separating needs from wants and waste. After all, no one wants to stay stuck in financial pre-school.

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