Dear Dave,

What’s the best way to respond to a sibling who continually makes poor choices with money and often asks to borrow money? I don’t want to be heartless, but they’re out of control asking for money any time they want. I’m currently on Baby Step 2 of your plan, and I’m six months away from being debt-free. Do you have any suggestions?


Dear Jen,

I think you should just tell them the truth. You’re trying to get out of debt, so you don’t have extra money sitting around. Let this sibling know that you’re working hard to change the way you handle your money. Let them know, too, that part of that is you’ve decided debt is dumb, so you don’t borrow or loan money anymore.

Make sure you do this with a kind spirit, Jen. You could even let them know you might consider giving them some money as a gift if you had any extra lying around and you knew they were in control financially. But you’re not really helping someone who’s incompetent with money when you give them cash or even loan them money.

You’ve got to look at the big picture in situations like this. You’re not helping someone if you participate in their misbehavior with them. Sometimes you have to love somebody enough to tell them the truth, and that can mean saying no and telling them to straighten up!


‘Reward’ programs a myth

Dear Dave,

I want to keep one of our credit cards open and use the bill-pay option for utilities and other monthly bills. I want to do this so we can continue earning rewards points, and the way I look at it, we’d just be re-routing the money and paying it off every month. My husband doesn’t like this idea and thinks we should get rid of them all. Am I just asking for trouble by wanting to keep the rewards card open?


Dear Cheryl,

Yes, you are. Life never works out exactly the way you think it will. You can make all the well-reasoned and best-intentioned plans you want, but sooner or later that snake is going to bite you.

The only thing I’d consider in a situation like this is a debit card that has a rewards system attached. Lots of debit card programs offer the same kinds of rewards programs offered by credit-card companies, with one big exception – you don’t have to go into debt!

You need to stop chasing these stupid brownie points. According to Consumer Reports, 78 percent of credit-card airline miles are never redeemed. Studies also show that people spend more when using credit cards as opposed to cash. That extra money you spent is money you could have been saving. So, where’s the reward? It’s a myth. It’s like trying to catch a unicorn.

Cut up the card and close the account, Cheryl. You don’t build wealth by using credit cards!


Note: Read our discussion guidelines before commenting.