'Dave Ramsey' Caller Asks If It's Appropriate To 'Dig Into' An Employee's Personal Finances To Decide Their Pay, And It Gets Complicated Fast

Yahoo

02-07-2025

A business owner who recently called into 'The Ramsey Show' found himself in a tricky spot: he wanted to know if it was okay to ask an employee about their personal finances in order to 'dig into it' to decide how much to pay them. The answer, unsurprisingly, was layered.
The caller, Joe, from San Diego, explained that he had taken over another business owner's book of business in exchange for offering that person a job. 'We had a document drafted that pretty much gave us the book of business in exchange for their employment guaranteed for six months,' Joe said. The acquisition helped Joe's business grow from $300,000 to over $1 million in revenue.
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However, the employee he took on had run the original business into the ground. Joe described issues ranging from unpaid taxes to a lack of proper insurance coverage. 'He was overpaying himself, taking on debt they didn't need,' Joe said, adding that the employee hadn't paid taxes in three years and owed more than $20,000.
Despite all this, Joe wanted to be generous. 'I'm weaning them off being used to be able to live frivolously,' he admitted.
But Ramsey co-host George Kamel stepped in with a clear boundary: 'At Ramsey, we never look at someone's personal finances to figure out how much we're going to pay them.'
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Kamel said the only reason to ask for a budget in the hiring process is to make sure someone can actually live on the salary being offered. It's not about tailoring pay to match someone's debt. 'We don't do it to say, well, they need $10,000 to live, let's pay them $10,000 a month,' he explained.
Co-host Ken Coleman jumped in to say: 'You already have a pretty good idea about what's a healthy number, and anything above that is you doing charitable work.'
Joe estimated that the going market rate to run a branch like this is around $75,000 to $80,000. At most, $90,000. Coleman pressed him: 'You can't justify a nickel beyond that, true or false?' Joe replied, 'That's true.'
Coleman also made it clear that exceeding that amount would only result in problems. 'If you pay him any more than the number you just gave us and he doesn't make any changes at all... you become resentful,' he warned.The hosts advised Joe to make a clean offer just like he would to any other candidate. 'Treat him like I would any other person who is applying for this job. Give him that dignity,' Kamel said.
If the employee turns down the offer or becomes entitled, that might be a sign it's time to hire someone else. 'In all honesty, business numbers, I'd rather hire someone else, train them,' Joe admitted by the end.
Coleman closed with this reminder: 'Be careful trying to be kind that we don't make bad business decisions on a personal decision.'
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