Dave Says

Wednesday, April 16, 2008 at 2:37am

Dear Dave,

My son is a sophomore at a local college, and he wants to transfer to a very prestigious university. If he did this he would incur more than $100,000 in student loan debt, and that’s with us picking up half of the cost. What do you think I should tell him?


Dear Will,

I’d have a hard time telling anybody that one school is $100,000 more valuable than another one. The fact is that unless he has $100,000 lying around somewhere, he shouldn’t go to that other school for one very simple reason — he can’t afford it!

We hire people every week at my company, and where they attended college is a very minor blip on the radar screen. There will always be a few corporate types out there who play games and try to turn the office into some kind of snooty country club, but the fact is most employers don’t care where you went to college.

Here’s the deal, Will. It’s what you learn and being able to use that knowledge in the marketplace that’s really valuable. Knowledge is king, and we live in a knowledge-based economy. If you can’t retain and apply what they’re teaching, then the only thing more worthless than a college degree is a college pedigree.

This is a kid who needs guidance from his dad. Step up and explain it to him. Letting him walk out of school with a six-figure debt around his neck would be a huge mistake!

— Dave

Dear Dave,

My husband just finished school and is now a dentist. He can either build his own practice, which would involve start-up costs of about $500,000, or he can work for a company that would take 30 percent of what he makes. We also have $250,000 in student loan debt. What do you think he should do?


Dear Teresa,

I don’t think those are the only options. But I do think that you guys going another half-million dollars deeper into debt when you’ve already got $250,000 hanging over your heads is a really bad idea.

Why couldn’t he find an established practice to work in that offers the chance for him to eventually become the owner? Lots of dentists sell their practices every year. Plus, working as an associate instead of just a hired hand offers a lot more chance to gain valuable experience and opens the door to even greater possibilities.

So what if it takes 10 years or even a little longer to become the owner of a practice? That’s a whole lot better than starting out your professional life a million dollars in debt!

— Dave

Dear Dave,

I’m single and make $20,000 a year. Hopefully, this amount will increase to $30,000 next year thanks to a promotion I’m in line to receive. Do I really need $1,000 in my emergency fund or is $500 enough? I also have about $38,000 in debt right now, including student loans. I’m just wondering how to keep up with bills while trying to establish an emergency fund.


Dear Jane,

The best way to stay current on your bills and manage your money is by doing a written monthly budget. Give every dollar you make a name on paper before the month begins. That way, you’re controlling your money instead of it controlling you.

For instance, if you know you’ll get two paychecks during the month that are $750 each you plan how you’ll spend each of those checks before you get them. Take care of necessities first — food, shelter, clothing, transportation and utilities. After you’ve taken care of that, make sure you’re current on your debts then put every remaining penny you can squeeze out into your emergency fund. Make sure you keep all spending to necessities only!

You’re at a point where you really should have an emergency fund of $1,000. It will be a little tough, but that will be your first big goal. And do all this with a sense of urgency — like in a couple of months.

Remember Murphy’s Law, and how anything that CAN go wrong WILL go wrong? If you keep living without a plan and no emergency fund, Murphy will hunt you down and move into your spare bedroom!

— Dave

For more financial advice plus special offers to our readers, please visit www.davesays.org or call 1-888-22-PEACE.

Filed under: City Business
By: HokeyPokey on 12/31/69 at 6:00

Wow, I wonder if this tells us that Jesus Dave has the same college record as Uncle Phil: Well didn't actually finish. What other way to account for his disdain for folks who have a post secondary education?Now see, if Jesus Dave was as smart as Uncle Phil he'd tell those stingy parents to get second or third jobs cleaning toilets so they could afford their child's education. After all, when they can't work any more they're gonna need the kid's income to survive, having privatized Social Security and drowned government in a bathtub.

By: raharnisch on 12/31/69 at 6:00

Disdain for debt is not the same as disdain for post-secondary education or name-brand schools.Dave's right - a pedigree is worthless if one is mired in debt that will take decades to erase.I dropped out of college because I was amassing debt that frightened me (how quaint it seems to be sleepless over $3500 owed - but it might as well have been a million, because I didn't have it and didn't know how I was ever going to get it). I succeeded in spite of my lack of college degree. I make a point of that whenever I speak at college graduations.Now when I'm interviewing people who want to work for me, I look for debt-free rather than pedigree. Those without encumbrance are the REALLY smart ones. And they're less likely to be desperate for money. They have other values. That makes them less likely to steal or to be diverted during work hours by their money problems.One of my most valued staffers is an over-30 female who is still working on her college degree one affordable course at a time. And here's the kicker - now she doesn't have to pay for it, because we reimburse tuition and books.Here's another option. Students, if there's a company where you'd like to work, offer to apprentice yourself in exchange for tuition. I'm sure I'm not the only executive who would be thrilled to invest in a talented and ambitious young person who promised to spend a certain number of years in my employ.

By: NewYorker1 on 12/31/69 at 6:00

I'm soooo happy I don't have any kids. The expensive alone is enough of a deterrent not to reproduce. If that couple had decided to not have any kids, they could be spending that money on fabulous vacations, shopping sprees, entertaining friends, etc. I'd say, dump the college kid and take a Hawaiian cruise.

By: NewYorker1 on 12/31/69 at 6:00

I think President Bush went to an ivy league school and look at how dumb he is.

By: b_ellen on 12/31/69 at 6:00

Boy should show how intelligent he is by using what he already has to the maximum effect. If he really wants to spend all that extra money, he can use it for Post-graduate work. That is real prestige.

By: VanDSIRROM on 12/31/69 at 6:00

NewYorker1--You are a perfect example of "It's all about me" generation.FWIW, Children are a "Godsend" and will enrich you in ways you'll never imagine. Yes, you'll travel less and spend money on them instead of yourself but you'll be richer...much richer.BTW, when you become President of the USA then you qualify to call other Presidents "dumb"...not until then, dummy.