Readers pose questions about finding right financial path

By Michelle Singletary

Although I can’t answer all the questions during my online discussions, I try to get to some that are particularly interesting.

Many people are trying to follow the right path to pay off student loans. Or they are dealing with family and financial issues that can strain a relationship. Or they struggle with whether they should follow their passion or the money.

Let me start with student loans: “My current student loan balance is $48,233,” one reader wrote. “I plan to stop putting money into my savings account, which currently has a balance of about $29,000. I then plan to pay off the remaining balance, which will be about $21,000, give or take, in one large lump sum. Can you give me some advice as to whether this is a good plan?”

The person has an extra $2,500 to $3,000 a month to put toward the loan balance.

There was one key piece of information that makes this aggressive debt reduction a good plan: The reader has some savings.

Readers often ask if they should save or pay down debt. You need to do both. If you have no savings and an emergency comes up, you’ll likely push yourself further into debt trying to resolve that financial crisis. But at some point when you have a solid savings balance, which this person has, you can stop saving and focus on paying down the debt.

If you have job security, or as good as that can get these days, I’m OK with taking a significant amount of the emergency-savings money and finishing off the debt. But once the debt is erased, immediately go back to building up the emergency pot using the money you had been devoting to your loan.

Another common concern for people is dealing with a relative who is financially irresponsible. Some will argue that you should let such a person suffer if he or she digs a deep hole, so that a lesson might be learned.

But what if it’s your beloved parents?

This is the case with another reader, who wrote: “My parents live above their means. My mom quit her job to care for my nephew. They are too young for Social Security but don’t want to work anymore. Their house isn’t worth enough to support them in retirement, and even now with my dad still working, their credit card bills are getting bigger, not smaller. I’ve tried to set them up with budget software, but my mom keeps spending and won’t use it because she’s ‘afraid to look.’ I know what they need to do but can’t make them do it. What’s my responsibility as I watch this train wreck?”

There’s a biblically inspired phrase that’s so appropriate for this situation: “You can’t be a prophet in your own land.”

In this case, it means, despite your having the knowledge to help and the foresight to see what your parents can’t, they won’t listen to you. I’ve experienced this myself with some family members. Maybe your parents won’t accept your assistance because they still see you as a child. Sometimes friends or relatives won’t heed advice because they need to hear it from an outsider. Whatever the reason, it can be very frustrating for the person who is trying to help.

So what’s your responsibility when relatives are reckless with their money?

If you haven’t co-signed on any of their debt, you aren’t accountable for their mistakes. As long as they are legally competent — even if they are financially incompetent — you can’t take over. I know it’s wearisome to watch their financial lives crumble. Love them but don’t you go broke cleaning up their money mess. And when or if they crash, maybe then they will listen.

I want to end with a question that is a particularly common dilemma among younger professionals. When deciding about a new job, should you pursue more money or more happiness?

“I’m 24 and have a decent-paying job in Washington, D.C., with great benefits (retirement account and health insurance). I’m thinking about moving closer to home, which will probably result in a significant salary cut. But my living expenses will go down and my happiness will go up. Am I crazy to consider this move financially?”

A survey by the Intelligence Group found that 64 percent of young adults would rather work at a job they love making $40,000 a year than earn $100,000 doing a job they consider boring.

If you can earn enough to have decent housing, pay for health care, cover the necessities and save for your future needs, you’re not crazy for taking a pay cut to increase your joy. More money isn’t everything.