Dear Dave: We have $21,000 in credit card debt and ongoing medical expenses for our special-needs child. My husband works very hard but only makes about $25,000 a year, and we're living in a 30-year-old trailer. My dad is willing to help us pay off some of the debt and get us moved into a house if we'll get financial counseling. Is there a better way out of this situation?
If you're going to have to make payments to your dad, in other words, if the money is going to be a loan, don't do it. The borrower is always slave to the lender. If you really want to ruin family events, have debt to your parents. It twists you up inside, and it'll be especially hard on your husband.
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Now, if this is going to be a gift and there are no expectations of re-payment being made, that's a little different. But if you were my child and I wrote you a $21,000 check, I'd expect you to go into financial counseling and start saving money for your child's future and for yours. That's only reasonable. You guys obviously aren't wasteful yuppies spending money right and left, but having a family and raising kids in the Dallas/Fort Worth area on $25,000 a year is tough – even without the credit card bills you're talking about.
Another thing I'd advise is that your husband get on a five-year game plan to improve his earning potential. Sit down with him, hold hands, and let him know he can be anything he wants to be. Then, help him decide what he wants to be in five years, what he wants to be making five years down the road, and the steps he's going to take educationally or in terms of training to achieve that goal.
He's a hard-working man, but today's culture doesn't reward hard work alone. You've got to engage the gray matter a little, and boost your brain power, too. You make more money when you plan to make more money!