Dear Dave,

I have a question about how to balance my financial obligations. I can’t afford my student loan payments.

Is the best approach to send them what I can afford, even if it’s not the minimum payment, or not send anything at all until I’m in a better financial position?

– Sydney

Dear Sydney,

Here is the deal. Those guys are not going to stop calling and bugging you, no matter which of those options you choose. But then, you probably already know that.

The benefit, however, of sending them $20 or $25 – if the minimum payment is $50 – is you’re forcing yourself to start thinking in terms of planning and living on a budget.

My advice? Do everything you can to honour your commitments. That’s the moral, legal and spiritual thing to do in these kinds of situations.

You know, lots of times when people say they can’t afford something, what they’re really saying is they don’t want to give up fun stuff in order to honour their obligations.

If that’s the case, I’m not the guy you need to be talking to or want on your team. You accepted the responsibilities that came with borrowing money. That means if you don’t get to eat in restaurants, go on vacation or buy cool new gadgets until you repay the debt, that that’s how it is.

However, if you’re already living on a crazy-tight, rice-and-beans budget, and $20 is truly all you can squeeze out, then give them $20 a month.

That way, at the very least, you’re trying to honour your obligation. And you can tell them with a clean conscience it really is all you can afford.

But there’s a bright spot in all this. If you’re already scrimping and saving and paying all the money you have – first towards running your household, then secondly to your creditors – you’ll find an amazing thing starts to happen.

Your dollars start to stretch a little bit further when you decide to seriously honour your financial obligations. This will help you clean up your student loan mess and enable you to have a little better life in the process.

Good luck, Sydney. You can do this!

– Dave

***

Dear Dave,

Where is the best place to keep my savings?

– Angie

Dear Angie,

In my mind, when it comes to savings, the idea is to park the money in a safe place – like a money-market account or basic savings account – and keep it separate from the rest of your cash, so you don’t accidentally spend it on the wrong thing.

I’m not really concerned with making money in a savings scenario, so things like setting money aside for an emergency fund or vacations fall into this category.

Investing, on the other hand, is when you’re going to leave the money alone for a bare minimum of five to ten years to grow it. Things like college planning and retirement fall into this category. In these instances, I recommend good, growth-stock mutual funds that have stable track records of at least ten years.

I hope this helps, Angie!

– Dave

• Dave Ramsey is an eight-times national bestselling author, personal finance expert and host of The Ramsey Show. He has appeared on Good Morning America, CBS This Morning, Today, Fox News, CNN, Fox Business and many more. Since 1992, Dave has helped people regain control of their money, build wealth, and enhance their lives. He also serves as CEO of Ramsey Solutions