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Dave Says - Dave Ramsey

You’re an employee, not a bank

Dear Dave,

I recently got a new job that requires monthly expenses of almost $5,000 that are reimbursed. I can’t swing that kind of money right now, and my company told me to get a credit card to cover things. I’m trying to get out of debt, and I don’t like this idea. What should I do?

– John

Dear John,

Your company should be fronting the money for these expenses. When you talk about the cost of doing business, it’s the responsibility of the company – not the employee – to pay expenses.

If I send someone on the road to make money for my company, I pay the bills. It doesn’t matter if you’re talking about hotel rooms, airfare, or rental cars, those are my expenses. If it’s someone who travels a lot, we give them a company debit card. If it’s just an occasional thing, we’ll give them money out of petty cash. But a company shouldn’t treat its employees this way. That’s just plain wrong.

It’s a mystery to me how some segments of corporate America have sold their employees on the idea of being the company bank. Ultimately, the decision is yours. If you don’t mind covering your company’s expenses and getting reimbursed, but you don’t want to go into debt, you’ll have to save and build up a $5,000 business expense fund in a separate checking account. This should be used only for business expenses, and what’s spent should be replenished immediately when they reimburse you.

You’re in an unusual spot, John. Personally, I think this is an unprofessional way to run a business. But if you like your job, and want to stay without taking on any more debt, the good news is you’ll only have to fill up your expense account one time.

Good luck!

– Dave

Dear Dave,

My sister has bad credit due to a lot of late payments. She has finally started to change her ways and get control of her finances, because she and her fiancé want to make an offer on a house. The bank won’t approve it if she is on the loan, and his income alone isn’t enough to get the amount they need. His parents are well-off, and they have offered to co-sign on the loan. Is this a bad idea?

– Rhonda

Dear Rhonda,

It’s a really bad idea. Those two have no business thinking about a house right now, and his parents are about to make things even worse with their loving, misguided help.

If you need a co-signer, you’re nowhere near ready to buy a home. They need to slow down. I mean, they’re just engaged. They don’t even need a house at this point. They should get married, live in a cheap apartment for a while, and work on paying off their debts. After that, they need to save up an emergency fund of 3 to 6 months of expenses, then start setting cash aside for a huge down payment on their first, modest home.

These two have a bad case of house fever. Mom and Dad need to step back, look at things objectively, and realize they would not be blessing these kids by helping get them into a home they obviously can’t afford!

– Dave

Follow Dave on Twitter (@DaveRamsey), or go to daveramsey.com. 

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