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  • Dave Says: Don't play the timeshare game

    Updated Feb 19, 2020

    Dear Dave, How do you feel about timeshares, and the free trips and dinners they offer as part of their sales pitches? Is it possible to win with these things? – Dan Dear Dan, In my opinion, timeshares are a complete waste of time and money. Lots of folks go into this kind of thing believing they'll play the game and win. They think they'll get a vacation weekend and other free stuff, then just say "no" when the time comes. The problem is, most people aren't as tough a sell a...

  • DAVE SAYS

    Updated Feb 12, 2020

    Dear Dave, I'm beginning to think we got in over our heads with our house. My wife and I make about $125,000 a year combined, but we've never been able to put anything aside for an emergency fund. Our mortgage payment is 35 percent of our take home pay each month. We have two young children, so we eat out a lot, but we have no debt other than our house. Do you think we should refinance our home? Jeff Dear Jeff, You two are making good money, and you're debt-free except for...

  • Dave Says: Don't let 'little kid' ruin your financial plans

    Updated Feb 5, 2020

    Dear Dave: We're debt-free except for our home, and we'll have our fully funded emergency fund of three to six months of expenses - we've agreed on six months' worth - saved up by the end of February. We're also setting aside a little each month to buy a newer car with cash later. We're about $5,000 from our car fund goal, but my husband is getting impatient. He wants us to go ahead a finance the remainder, since it's a relatively small amount. He has tried to justify this by...

  • Keep your wallet small and work it into your budget

    Updated Jan 29, 2020

    Dear Dave: I'm trying very hard to get out of debt. I have my beginner emergency fund in place, and I'm living on a monthly budget. Is it OK to include a little wallet cash in my budget at this point, just in case? - Andrew A: It's probably not going to throw you off too much in terms of getting out of debt if you budget $20 or so, just to have some cash in your wallet. I wouldn't recommend much more than that, though. The idea of having $50, $100, or $200 in walking around...

  • Dave Says: Stay away from debt consolidation companies

    Updated Jan 22, 2020

    Dear Dave, My wife and I made a resolution this year to pay off $20,000 in credit card debt we've accumulated. I want us to follow your plan, and live on a really tight budget. She wants us to use a debt consolidation company, like some of her friends have done. I'm really against her idea, but how can I change her mind? Dear Blake, I'm glad you two have made the decision to get out of debt, and gain control of your finances. When it comes to this sort of thing, it's wise to...

  • Dave Says: Making resolutions become reality

    Updated Jan 8, 2020

    Dear Dave, My wife and I have our budget ready for next month, and we'll be following your plan in 2020 to pay off debt and get our finances in order. Do you have any tips for setting and sticking to goals in general? Rick Dear Rick, That's a fantastic goal. Living on a monthly budget, and telling your money where to go instead of wondering where it went, is an important step toward gaining control of your finances. Combine that with getting out of debt, and you'll be in...

  • Dave Says: 'Why not just budget and save for holidays?'

    Updated Dec 18, 2019

    Dear Dave, I've never heard you talk about store layaway programs. With Christmas coming, I wanted to ask your opinion of using layaway for buying gifts. Meg Dear Meg, If you know me, you probably have a good idea what's coming next. I'm not a huge fan of layaway programs, because they're not the answer to a problem. I mean, Christmas comes at the same time every year. It's not like it snuck up on you. What's wrong with just saving up money for Christmas ahead of time? Here's...

  • Dave Says: Should I cash in savings bonds?

    Updated Dec 11, 2019

    Dear Dave, My wife and I are following your plan, and recently we found some old savings bonds that had been given to her by her grandfather when she was a kid. Do you think we should go ahead and cash these in before they reach their final maturity date in a few months? John Dear John, Absolutely! Every one of those savings bonds is accruing interest at the appropriate rate for the type of bond it is. The problem is every one of those rates stinks. I hate savings bonds. We're...

  • Dave Says: Landlords & duplexes

    Updated Dec 4, 2019

    Dear Dave: I'm 23, debt-free, and I've almost got my fully funded emergency fund in place. I was curious about your thoughts on saving up money to buy a duplex, living on one side, and renting out the other. It would be my first home purchase, and my first rental property. - Derrick Dear Derrick: Well, the good news is your renter would be right next door. You can keep an eye on things. The bad news? Your renter would be right next door. It would be a necessity to have very cl...

  • Dave Says: Setting aside money for a wedding

    Updated Nov 27, 2019

    Dear Dave, We recently started following your plan, and it has made a huge difference in our financial outlook and our marriage. When it comes to the Baby Steps, when do you recommend setting aside money for a wedding? We have a daughter, and we want to be able to do as much as possible for her when the time comes. Jim Dear Jim, That's a good question. There's not really a Baby Step specifically for weddings. In my mind, it should probably come after Baby Step 5-setting aside...

  • Don't use emotion to rationalize an upgrade

    Updated Nov 20, 2019

    Dear Dave, My husband will be finishing physician assistant school in December, just a few days before our first baby is due. We've got about $70,000 in student loan debt, and we're trying to get everything paid off. Both our cell phones are pretty old, and I'd like to get a new one that costs $350 so we can have really good pictures of the baby. My job is the only income we have right now, and I'm making $45,000 before taxes. Is this a silly thing to do in our situation?...

  • DAVE SAYS

    Updated Nov 13, 2019

    Q. I've gotten out of debt before following your plan, but I always seem to fall right back in. I find myself spending more than I mean to whenever I go out shopping or running errands. I'm tired of all this, and I want to stop busting my budget and get control of my money once and for all. Do you have any advice? A. Years ago, when I lost everything financially, there were two or three extremely strong emotions that spurred me toward change. Probably the biggest emotion was...

  • DAVE SAYS

    Updated Nov 6, 2019

    Dear Dave: Is it OK to give very young children an allowance? - Christie A: Teaching kids there's an emotional connection between work and money is one of the best things you can do as a parent. Once your kids are old enough to do a few simple chores around the house, they're old enough to earn a little money doing them. In my mind, there's absolutely nothing wrong with putting kids who are 3 or 4 on a basic commission system. If they do the jobs you assign them, they get...

  • DAVE SAYS

    Updated Oct 30, 2019

    Dear Dave, I'm 26 and single, and I have about $35,000 in credit card and student loan debt. I'm only making $20,000 a year right now, but I expect to be making almost $30,000 soon. Under the circumstances, can I get by with $500 in my emergency fund, or do I need to have $1,000 set aside like you recommend in Baby Step 1? I'm worried about keeping up with bills while saving money for my starter emergency fund. Thomas Dear Thomas, I know it will be tough, but a $1,000...

  • DAVE SAYS

    Updated Oct 23, 2019

    Dear Dave, What's the best way to talk to a parent, and tell them their career or financial choices aren't working out? My mom and dad divorced a few years ago, and now my mom is having money problems. She bought some rental properties after the divorce with the idea becoming a landlord and generating income that way. Since then, she has lost the properties to foreclosure and isn't making a lot of money in her new job. I'm worried about her, but I just graduated from college,...

  • Dave Says: Emergency funds should be kept within reach

    Updated Oct 16, 2019

    Dear Dave, My husband lost his job last week. The good news is we're completely debt-free, and we have a six-month emergency fund saved up. I work part-time, since we have young children, and I've been bringing home about $800 a month. Should we cut our budget down to bare bones now, or do you think we could continue living as usual for the time being since we have so much money saved? Jayme Dear Jayme, I'm sorry to hear about your husband losing his job. At the same time,...

  • Dave Says

    Updated Oct 16, 2019

    Dear Dave, I've heard lots of different theories and recommendations when it comes to paying off debt. Why do you advise paying off debts from smallest to largest? Marlee Dear Marlee, A lot of people wonder the same thing when I bring up the debt snowball. Some think paying off the debt with highest interest rate first is the best approach. This may seem to make sense mathematically, but I realized a long time ago debt is not a mathematics problem-it's a behavior problem. Personal finance is 80 percent behavior, and only 20...