Envelope stuffing for extra cash?

Dear Dave,

My wife is a stay-at-home mom, but she wants to make some extra money to help our family's financial situation. She's seen some ads in the local paper for companies needing people to stuff envelopes, and the pay is so great that it seems too good to be true. Do you think she should try this?

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Matt

Dear Matt,

If something sounds too good to be true, then it probably is too good to be true. The envelope stuffing business is a scam, so please don't send one of these companies $50 to learn more about this wonderful career.

Think about it, Matt. We live in a mechanized business world. Do you really believe a legitimate company is going to pay someone good money to sit and lick envelopes? Think about the inefficiency of that, compared to outsourcing the job to a mailing company with machinery that can fold, stuff, seal and stamp a few thousand envelopes in just minutes.

If she wants to work from home, she should center her idea on something she loves or already knows lots about. Take a hobby or a former career and turn that into a small business in your living room.

Dave

Should I give an older car to my child?

Dear Dave,

I've got an old car, a 1992 Chevy, that's been sitting in the garage ever since I got a company car to drive in my job. It's still a really good vehicle, it's paid for, and I've got a 14-year old son who's crazy about cars. I was wondering if you think I should save it for him to drive when he gets his driver's license or just sell it.

Frank

Dear Frank,

The car is paid for, it's just sitting there and it's already lost most of its value. I think it'd be a really cool car for a kid when he starts driving.

Now, if your family is in a financial crisis and you're having trouble paying the bills, sell the car. But if everything is OK and you've got an emergency fund in place and a little investing going on, then keeping a paid-for Chevy in the garage for your son is a pretty neat idea.

Dave

Harley before emergency fund?

Dear Dave,

My wife and I have been scrimping and saving for three or four years now, and we have part of our emergency fund in place and are just a year away from becoming debt-free, except for our house. The problem is that we really want a Harley-Davidson. Is it OK to go ahead and buy one, or should we wait until we get everything paid off?

Chris

Dear Chris,

You should live like no one else, so later you can live like no one else.

I would never recommend you buy toys while still in debt. Once you have everything paid for except the house, move on to Baby Step Three, which is a fully funded emergency fund – three to six months of expenses. Only then do you save up for toys.

Don't get me wrong. I'm not against toys or having fun. But it would be highly irresponsible if you were to get laid off from work and have debt, no savings and a Harley!

Dave

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