Advice from Nashville's Financial Guru Dave Ramsey

Dave Says
By Dave Ramsey
Author of Financial Peace and The Total Money Makeover
12/28/2004

Wife's income is supporting husband's floundering business!

Dear Dave,

I have a good job and bring home about $50,000 a year. I have four children and we were doing well living within our means. I remarried and my husband has his own welding business. However, the business is faltering and is now at the point where I’m paying to support our household and his business. He does well when he works, but the less business he has, the less motivated he is to drum up more. I’ve tried to work with him to straighten this out, but he just won’t commit to do anything to improve the situation.

Worse yet, this really came to my attention back when we filed our taxes. I noticed his income showed $60,000 for the year. I started wondering why it shows he’s bringing in more money, but I’m paying all of the bills and we’re at the point of foreclosure. I can’t make my $900 a month mortgage payment. I can’t even take my son to the orthodontist because we have no money to pay for it.

I just have no clue where to start to unravel all of this.

Paige in Nashville, TN



Dear Paige,

The first thing you have to do is turn off the TV tonight, sit down together, pull out all of the bills and start working on a monthly profit and loss statement for his company – and do this every month. A profit and loss statement is pretty simple. It’s the income that comes in minus the expenses that go out. What’s left over is profit. If expenses are more than income, you’ve got a loss. 

Next get a separate checking account for his business, if you don’t already have one. You don’t pay any business expenses except from that account and you use only his business income to pay his business expenses. If you have to put money into that account to pay for business expenses, then you have a clue that he’s not making a profit. He’s losing money. He could have grossed $60,000 last year and still not had any net profit if he had $5,000 a month in expenses. 

Then you both need to make a list of exactly what it will take for you to make enough income each month for this business to break even. If he can’t make this business at least break even, then it’s time to go do something else. 

Finally, it sounds more like your husband has a work ethic problem than a business problem. He needs to commit to correct this situation or it’s time to close shop. You make enough money from your job to pay your mortgage and pay for your family’s necessities. It’s time to take care of your family and stop trying to float your husband’s business. Pay your mortgage so you don’t lose your house. Your priority is to take care of your family first.

-Dave

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