Dave Says

Dear Dave,

My sister and her husband are wonderful people, but they don’t know how to handle money and are in debt up to their eyeballs. On top of this, they just found out they’ll have to pay $30,000 in taxes this year.

I paid off my home and became debt-free almost two years ago, but some big medical bills have eaten into my savings. Should I take out a home equity loan for the amount of the taxes to help them?

—Toni

Dear Toni,

Absolutely not!

You just told me they will not behave when it comes to their money. Well, you don’t give money to people who won’t behave properly with money. It’s like giving a drunk a drink.

In this kind of situation you’d go borrow the money, they would still be broke, and you’d be back in debt with a mortgage hanging over your head again.

A quick fix is never the best way to try and help people in these kinds of situations. You have to help them learn to change their ways. Teach them to fish, because if you just give them a fish it will just stink!

Keep in mind that none of this makes your sister and her husband bad people. But you really shouldn’t endorse this kind of behavior or participate in the denial associated with it. You can love them as much as you want, Toni, but YOU can’t fix their problem. And handing them money definitely isn’t the solution.

If they’re willing, sit down with them and show them what you did to get out of debt and get control of your money. Start out by showing them how to do a budget and give every dollar a name on paper before the month begins.

And do it with a loving heart. Because we’ve all made mistakes with money.

— Dave

Dear Dave,

The closing date on our new house is very soon. The problem is that we still haven’t sold our current home, and we’re getting nervous. What can we do?

— Ruby

Dear Ruby,

I’d be nervous, too, if I were in your shoes. Never, ever buy a new home without making the deal contingent upon the sale of your current home.

You’ve turned yourself into a desperate seller because you made some bad decisions. You may have to pay some Stupid Tax to fix this thing, and that might mean losing some cash and making other tough choices.

If there’s any way to call off the deal honorably and without breaking your word to the other people involved, I’d do it. But if you’re locked in you might try negotiating a deal to delay the closing or flat out restructuring the contract to make it contingent on the sale of your current home.

If the other party isn’t agreeable to these ideas, then you need to drop the price on your current home and get it sold today.

— Dave

Dear Dave,

We make our 16-year-old daughter save $40 out of every paycheck she receives from her part-time job. She always fusses and complains about this. Do you think it’s wrong to force your kids to save money?

— Debbie

Dear Debbie,

What a mean mom. Making your child do smart things…

No, it’s not wrong. It’s for her own good. Here’s a news flash for you – teenagers are insane! They gripe and complain even when there’s no reason to gripe and complain. And most of the time their brains don’t work right because they have all those hormones racing through their bodies.

Sometimes, it’s our job as parents to be the only sanity in the room.

At 16, she hasn’t earned the right to do dumb things with her money. When she gets out on her own, then she can do all the stupid things she wants. But now is the time she should be learning how to handle money responsibly and according to your rules.

Being a parent is often a thankless job. But chances are when she matures a little and realizes how important saving money is, she’ll understand.

— Dave

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