Dave Ramsey has blunt words on what to do with your money now

Most people often find themselves wrestling with the question of how and when to spend money they have earned and saved on special events such as well-deserved vacations.

For those trying to piece together this financial puzzle, radio host and personal finance bestselling author Dave Ramsey has some guidance on the subject.

Related: Dave Ramsey shares major 'reality check' on buying a car now

A woman, identifying herself as Jill, recently sought Ramsey's advice about exactly this dilemma. The conversation was forwarded to TheStreet in an email from Ramsey Solutions. 

"Dear Dave," she wrote. "My husband and I bought a franchise recently, and we are opening our business in a couple of months. We've got $40,000 saved up, but my husband wants us to take a two-week vacation before we open for business."

"He feels that the business will completely consume us for the next two or three years, and he wants to go into things relaxed and refreshed," she continued. "How do you feel about this idea?"

Ramsey offers some straight talk

The personal finance expert suggested what he called some "reality" to be considered.

"I understand where your husband's coming from," Ramsey wrote. "A business is very time consuming, and to make it a success you'll both have to eat, sleep and breathe it for a very long time."

"But here's the reality of your situation," he added. "Right now, you're basically unemployed. On top of that, you have just $40,000 with which to start a business. It's time to rev up your engines and get to work, not spend a bunch of money vacationing."

Ramsey suggested a nice vacation can be in order in the future, but pointed to some reasons why now is probably not the time.

"Trust me, there'll be plenty of time to celebrate after you've won, maybe in even bigger and better ways, if you'll just delay gratification and put in the dedication and hard work now," he wrote.

"When it comes to opening a new business, a good rule of thumb is this: Everything's going to take twice as long to accomplish as you thought it would, and everything's going to be twice as expensive as you thought it'd be," he emphasized. "I'm sure you're both smart people, but my guess is you're not exceptions to this rule when it comes to opening and running a small business."

The difference between 'survival and going under'

Ramsey warned the couple about the financial risk involved in running a business.

"Think about it, every single dollar connected with your business could mean the difference between survival and going under," he wrote. "Like I said, I kind of get your husband’s thought process, but it would be a very unwise idea right now. You've got to look at the big picture. You're going to be heartbroken, and maybe in a real financial bind, if you have to close up shop in a few months because you ran out of money."

The author suggested a positive thing to to think about while putting in the hard work of getting the business started.

"On the other hand, if you work hard now, stay smart and make this thing a success, you can take a vacation — and really celebrate — when the time is right!"

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