Dear Dave,
My husband and I have about $60,000 in credit card debt. He doesn't feel bad at all about it, but I'm determined to clean it up and start living right with our money. I'm starting to get tired of trying all by myself, though. What can I do to reach him?
Donna
Dear Donna,
The last thing you want to do is go around yelling "Dave said do this" and "Dave said do that." If you start hammering him over the head with that kind of stuff, he'll tune you out in a heartbeat.
Right now, let's just be patient and keep talking to him about the issue. He may need some time to think things through and realize how important this is to you. Try adding up all your payments to show him just how much of your money is going into other people's pockets every month. If you've got $60,000 in credit card debt, it's a lot!
You might also take all those payments and show him how much you guys could save and invest if those credit cards were gone. I'll bet there's lots of stuff you'd both like to do but can't afford because the credit shark is gobbling up all your cash. Your income is your best wealth-building tool, Donna. Without all those payments, you two could save and invest like mad, have some fun and retire a wealthy little old couple.
Right now you're both slaves to the credit card companies. But once he has a chance to process this information, I'm guessing you'll see some righteous anger out of the guy.
And hopefully he'll be motivated to join the fight!
Dave
Private school tuition: A debt or investment?
Dear Dave,
I'd like to send my kids to a private Christian school, and the tuition is $3,500 a year. They'll start school the same month we'll finally be out of debt. We'd have to pay this out over the course of the school year, so would you consider this to be an investment or more debt?
Ed
Dear Ed,
I don't borrow money, whether it's an investment or not. But lots of private schools have tuition plans where you don't have to borrow money, and you just make two or three payments during the academic year.
I don't know if I would really call that a debt, because you can always take the child out of the school if you see you can't make the payment. Just make sure you carefully look over any contract involved and know what you're getting into before you sign up for the ride.
You don't want to obligate yourself to money you don't have. Just save up, and have a place in your budget for tuition.
Dave
What about guaranteed riders?
Dear Dave,
Is getting a guaranteed rider on a term life insurance policy a good idea?
Chris
Dear Chris,
It used to be that I wouldn't buy anything but a guaranteed level term policy. But these days the marketplace is very competitive. If your company raises its rates, you can easily shop around and find another for the same price you were paying before or even less – providing that you're not seriously ill.
One of the best guarantees is the marketplace. It's a real dogfight out there today in terms of pricing on these kinds of policies, and the real winner is the consumer.
Dave