Most people often wonder how and when to spend the money they have earned and saved on special events such as a well-deserved vacation.
For those trying to piece together this financial puzzle, radio host and best-selling personal finance author Dave Ramsey offers some advice on the subject.
Related: Dave Ramsey Shares a Major ‘Reality Check’ About Buying a Car Now
A woman, identifying herself as Jill, recently sought advice from Ramsey regarding this very dilemma. The conversation was forwarded to TheStreet in an email from Ramsey Solutions.
“Dear Dave,” she wrote. “My husband and I recently purchased a franchise and we will be opening our business in a few months. We have $40,000 saved, but my husband wants us to take two weeks of vacation before we open our doors.”
“He feels like the business is going to completely consume us over the next two or three years, and he wants to approach things in a relaxed and refreshed way,” she continued. ” What do you think about this idea ? »
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Ramsey offers candid speech
The personal finance expert suggested taking into account what he calls a “reality.”
“I understand where your husband is coming from,” Ramsey wrote. “A business takes a lot of time, and to make it a success you will both have to eat, sleep and breathe for a very long time.”
“But here’s the reality of your situation,” he added. “Right now, you’re basically unemployed. On top of that, you only have $40,000 to start a business. It’s time to rev your engines and get to work, without spending a lot of money on holiday.”
Ramsey suggested a nice vacation might be in order in the future, but pointed out some reasons why now probably isn’t the time.
“Trust me, you’ll have plenty of time to celebrate after you win, maybe in an even bigger and better way, if you just delay gratification and put in the dedication and hard work now,” he wrote .
“When it comes to starting a new business, a good rule of thumb is: everything is going to take twice as long to make as you thought, and everything is going to cost twice as much as you thought.” he pointed out. “I’m sure you’re both smart people, but I’m guessing you’re no exception when it comes to opening and running a small business.”
The difference between “surviving and sinking”
Ramsey warned the couple about the financial risk of running a business.
“Think about it, every dollar tied to your business could be the difference between survival and bankruptcy,” he wrote. “Like I said, I kind of understand your husband’s thought process, but it would be a very unwise idea right now. You need to look at the bigger picture. You’re going to be heartbroken, and maybe in a real financial problem. bind, if you have to close shop in a few months because you have no more money.
The author suggested a positive thing to think about while working hard to start the business.
“On the other hand, if you work hard now, stay smart, and make this business a success, you’ll be able to take a vacation—and really celebrate—when the time is right!”
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