Financial peace

Perhaps you’ve heard of Dave Ramsey, the personal finance guru.

The foundation of Dave’s advice is simple: before you invest in or spend on anything, you must be debt-free and have an emergency fund large enough to cover 3 to 6 months of living expenses. Anyone who followed this advice before the crises of 2001, 2008 or 2020 found themselves on much better footing, at least financially.

This advice is also valid for businesses. Think of a business that was recently forced to close for several months because of the pandemic, and imagine that it was debt-free and could cover payroll and other expenses for 6 months. Can you see the financial benefits for both the owner and the employees? Now imagine an entire country where small businesses are set up this way.

We readily see the moral obligation of a parent to protect the household from financial ruin. It’s time we conceive of a similar ethical obligation for employers.

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