By Dave Ramsey
Q. My son is a freshman in college. Do you think he should work during his first year in school or focus all his attention on his classes?
A. I don’t think there’s anything wrong with either direction during a child’s first year of college. But as a parent, I’d urge you not to fall into the trap of thinking that a kid’s grades will go down if he’s working while in school. Research shows that kids who work while in college carry higher grade point averages than those who don’t.
To me, the reason for this is pretty simple. If you’re working and going to school at the same time, you have to learn how to manage your life and your time effectively. Lots of kids could pay their way through college and not have to worry with student loans if they just used the time they spend on social activities and watching television at a job.
I never required my kids to work during the school year. But they all have good work ethics, and they’re definitely not bums. During the summer, though, there was no such thing as sitting around. They had jobs. My youngest just finished his sophomore year, and he’s already started a job. Being a vegetable for the entire summer is useless, and we don’t do useless in our family.
But the philosophy of not wanting kids to work so they can spend all their time studying is misguided. For the most part, kids who work while they’re in school will make better grades and develop into more mature and well-rounded individuals. And besides, if they’re working they can’t waste all their time playing beer pong.
Q. I plan to move to Los Angeles to chase my dream of working in the television and film industry. I’m not married, have no kids and I have $2,500 saved to live on until I can pick up a couple of jobs. I may have to finance a car, though. I’m not sure mine will survive the trip. Under these circumstances, how much of an emergency fund should I shoot for?
A. So, you’re looking at moving to California with $2,500 in your pocket, a car payment and no job waiting. This is a disaster waiting to happen, my friend. Don’t get me wrong: I want you to live your dream, but I don’t want it turning into a nightmare.
There’s no way I’d take a car payment to California. And you’re going to need a lot more than just $2,500 unless you have a job lined up. Even if there’s work waiting for you, $2,500 will disappear in about 20 minutes in Los Angeles.
Slow down and take your time. Plan a trip to the coast and figure out what your living arrangements and expenses are going to look like first. Then, line up a job that will pay you enough to cover your expenses. In the meantime, save enough money to fix your car, or if it’s in really rough shape, to buy a good, used one.
Once all this is done, then you make the move – without a car payment. Moving when you’re broke with no job prospects and a car payment hanging around your neck is a recipe for disaster.
Dave Ramsey has authored four New York Times best-selling books, and “The Dave Ramsey Show” is heard by more than 5 million listeners each week on more than 500 radio stations. Follow him on Twitter at @DaveRamsey and on the web at daveramsey.com.