Dave Says

Friday, May 9, 2008 at 3:12am

Dear Dave,

Our 18-year-old doesn’t quite get where we’re headed in getting our finances in order and becoming debt-free.

He’s used to us handing him at least $30 on weekends, and that amount has dropped to $10 if he’s lucky. How can we explain it when we’re ashamed as parents that we let our own financial situation get so bad?

— Cheryl

Dear Cheryl,

Everybody’s fallen down at some point. Being imperfect doesn’t make you a bad parent. And if you’ve made mistakes with money it just means you’re alive and you’ve had money in your hands at some point.

I don’t think you’ve got any reason to be ashamed as parents. You’ve fed him, clothed him, he’s got shelter … that’s pretty much all you’re obligated to do.

The idea that you’re supposed to just hand kids stuff all the time is ridiculous!

At his age, he’s old enough to grasp a conversation that goes something like this: “We didn’t do a good job teaching you to handle money in the past because WE didn’t know how to handle money. We’re sorry about that. But it doesn’t mean we’ve given up our rights of parenting and making quality decisions from here on out.”

No 18-year-old needs to be sitting around having money handed to him. Shove about a dozen job applications under his nose, or show him the business end of a lawnmower — something! This kid needs to be making money!

Once that happens, you can show him the lessons you’ve learned about budgeting, saving and handling money properly. Then, he can begin spending his own $30 on weekends!

— Dave

Dear Dave,

My wife and I are debt-free, and we just found out we’ll be having another baby. We have individual health insurance, but it doesn’t cover childbirth. What’s the best way to go about paying for this?

— Justin

Dear Justin,

Congratulations on the new baby AND on being debt-free!

Labor and delivery in most areas of the country can be done for the typical retail value of $6,000 to $7,000. And there are hospitals that will knock off about half the cost if you pre-pay for these services in the last trimester.

Since you’re debt-free, it’s going to be really easy for you guys to save up about $3,500 in the next six or seven months. Then go to the hospitals in your area, tell them you plan on paying with cash and that you’re trying to make up your minds about which hospital to use. Make sure they understand that one of the main considerations is which hospital will give you the best price!

Remember, in most ways hospitals are just another business. Plus, the birth of a child is one of the few times people actually WANT to go to a hospital. It’s a happy occasion and a joyous time for family and friends.

And it’s great PR for the hospital!

— Dave

Dear Dave,

My husband and I are in the process of getting a divorce, and he wants to take out a car loan. I don’t think he’d do anything illegal, but how can I protect myself — just in case?

— Jennifer

Dear Jennifer,

Don’t put your name on anything where this purchase is concerned. About the only way it could affect you at all is if you sign for the car.

Now keep in mind he could always sign your name fraudulently, or the judge could hold you liable in divorce court. But chances are neither of these things will happen.

No good judge would saddle you with debt he incurred on his own. If he’s the one buying the car, all the payments and other headaches should be his — not yours.

I’m really sorry you have to go through this, Jennifer.

— Dave

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