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Dear Dave, My daughter is 14, and she was recently offered a steady weekend modeling job. Do you have any advice on how to handle the money she earns? Cynthia Dear Cynthia, In terms of investing some of the money she’ll make, a Roth IRA would be pretty cool. You would have to oversee it, of course, and you’d have to file a tax return, but starting something like this when she’s 14 would help set her up for some serious money later. I think the biggest thing, however, is to make sure you create lots of teachable moments for...

Dear Dave, I want to buy an inexpensive car, and I was wondering what you think about salvage titles. Eric Dear Eric, It’s not impossible to find a decent salvage car. But I’d take extra precautions to find out exactly why it was salvaged. If it’s a salvage car because it was wrecked, I’d take a look at what kind of wreck caused the damage. Lots of people know how to repair and rebuild cars, so it might end up in better condition than before if you find the right mechanic. On the other hand, I’d probably walk away if...

Dear Dave, I’m 27 and married, and we have two kids. I make $90,000 a year, but we have $80,000 in consumer debt—$48,000 of which is in car loans. The rest is credit card debt. My wife’s parents have offered to let us move in with them so we can get out of debt faster. Do you think this is a good idea? Kevin Dear Kevin, If I were in your situation, I would not move in with the in-laws. You’ve got an absurd amount of money wrapped up in those cars. I’d sell the stupid things, start living on...

Dear Dave, I’m a general contractor, and I was recently offered some business by a large corporation. I’d need new equipment to handle the job, and the purchase would use most of my cash flow. I’m wondering if the opportunity is worth the risk. Wayne Dear Wayne, I’m glad you realize that, on the surface, not all growth is good growth. The number-one thing that causes small businesses to fail is accounting and cash-flow problems. The second biggest thing is that they grow too quickly and fall in on themselves. Owners are sometimes scared to turn down anything, so they...

Dear Dave, My wife and I make $140,000 a year, and we’re working on our debt snowball. We’re almost out of debt, but we still have two small car payments and some credit card debt. She wants to get rid of the credit card debt but doesn’t mind us having car payments. Can you help me understand this? Kelly Dear Kelly, I’m not sure I understand her thinking either. The car payments and the credit card debt are the same thing. They’re both debt payments, and you’re being charged interest on both of them. The only difference is that one...

Dear Dave, What do you think about the practice of credit card churning? Ethan Dear Ethan, I think it's a pretty dumb idea. The concept is to run up the balance on one card as high as you can, then flip the balance from card to card in order to get perks like airline miles. But if you want to go through all the trouble and hassle over such a small amount of money, be my guest. I've met thousands of millionaires, and none of them have ever credited their success to credit card churning. Think about it: With all...

Dear Dave, My mother-in-law has a serious credit card problem. She can’t afford stuff, but she shops anyway, acquires more and more credit and thinks she’ll pay for it all later somehow. Her husband has bailed her out a few times, but he’s unwilling to do it anymore. My wife and I, and her sister, want to address this issue, but where do we start? Jonathan Dear Jonathan, First of all, you need to stay out of the discussion. This is something for her daughters to handle, and her husband needs to be part of it, too. He’s closer to...

Our Valentine's Day tradition continues There are quite a few things in life that are more foolish and desperate than using the Dave Ramsey pickup lines to woo someone—taking an interest-only mortgage, going within 50 feet of a payday loan store, and buying lotto tickets, just to name a few. But while all of these actions are avoidable, February 14 is not. And if it’s Valentine’s Day, it must be time for Dave Ramsey … pickup lines, that is. So without further ado, here they are: the sixth-annual list of Dave Ramsey pickup lines. If I had a dollar for...

Dear Dave,I’m looking at buying term life insurance. Currently, I’m in medical school doing my last year of residency and making $35,000 a year. Should I base the amount of insurance coverage on what I’m making now or what I’ll make when I’ve finished medical school? AmandaDear Amanda,In most cases, I advise basing the amount of life insurance coverage on the income you’re earning at the moment. After all, that’s the amount your family is used to living on, right? However, if you’re finishing up your medical degree this year, it’s a virtual certainty you’ll earn lots more in 2014....

Dear Dave, My fiancée has a small photography business, and she wants to form a partnership with a college student who is majoring in business. I think this is a bad plan, but I’m pretty sure she’s not going to listen to me. What do you think about the idea?BruceDear Bruce,A partnership is always a bad idea. There’s absolutely no upside for her, and if you feel there’s nothing you can do to keep her from making such a ridiculously bad mistake, then you guys are going to have issues in your marriage, too. It sounds like she’s looking for...

Dear Dave, Recently, my husband had to quit his job due to an old back injury. We have $25,000 in debt, but I’ll be receiving a $38,000 inheritance in a couple of weeks. Should we use the money to pay off our debt, or hold on to it in case he needs surgery?KristenDear Kristen,Now is the time to keep the cash piled high. You’re in the middle of an emergency, and that means you push the pause button on your Total Money Makeover and stop paying extra on debt. Surgery is a possibility at this point, plus you may need...

Dear Dave, My daughter died. She was 32 years old and single, and she had lived with me for the last few years because she was recently disabled. I did not support her financially, and when she died she had no assets and no will. Is it my responsibility to pay the student loans and medical bills she left behind?JimDear Jim,I’m so sorry you’re experiencing this kind of grief. Losing a child is a heartbreaking experience, no matter their age.The short answer is this: If you didn’t sign for it, you’re not liable. If a friend were to move in...

Dear Dave, In your opinion, how do you know when a hobby officially becomes a business? Dan Dear Dan, This is a great question. But when it comes to something like this, my opinion doesn’t matter nearly as much as what the Internal Revenue Service says. According to the IRS, if you run a business for two years or more without making a profit, then it is not a business. You have to become profitable at some point. Otherwise, the IRS will declare your endeavor a hobby. Personally, I think that’s a pretty good marker. I mean, if you’re making...

Dear Dave, My wife and I are 70, and we have $950,000 in annuities in the market, plus $68,000 in our emergency fund. The only debt we have is our mortgage. I’m considering converting our stocks to a money market account to lower the risk. What do you think?HowardDear Howard,There are two sides to this. One is the asset allocation method, where as you grow older you move away from equities like mutual funds toward safer, more conservative investments like money markets, bonds and certificates of deposit. This is standard financial planning theory.I disagree with that theory, and here’s why....

Dear Dave, I’m trying to help my son and daughter-in-law by encouraging them to get out of debt and live on a budget. It hasn’t been a problem to give them money when they’ve asked in the past, but I’m afraid they’re still in a mess. How can I make sure I’m doing the right thing?MargaretDear Margaret,The first thing you need to do is sit down and have a serious, loving talk with them. If they’ve asked for money before, and it has become something of a trend, you have a right to know more about their circumstances. In addition,...

When Cherie and Brian Lowe of suburban Indianapolis threw a party last spring, 150 well-wishers came bearing casseroles. This was no birthday or anniversary bash. Mr. Lowe, a lawyer, and Ms. Lowe, a stay-at-home mom, both 36 years old, were celebrating an accomplishment: paying off $127,482.30 in debt, mainly student loans. Partygoers came from as far as 200 miles away. Some had never met the Lowes but followed their quest through a blog called Queen of Free. Guests won prizes such as personal-finance books, museum passes and homemade cleaning supplies. One friend sang "Sallie Mae Is Not My Lender" to...

Dear Dave, We’re debt-free except for our house, and that’s on a 15-year, fixed-rate mortgage. We also have an emergency fund in place. We’d like to give back this year, and do some Secret Santa things and a little extra giving. At what point should we start giving over and above what we tithe?JeremyDear Jeremy,My advice would be to wait until you finish Baby Step 3, which it sounds like you’ve done. That way, you’ve paid off all of your debt, except the house, plus you have a fully-funded emergency fund of three to six months of expenses.You mentioned tithing,...

Dear Dave, Our son is graduating from high school next spring. We’ve saved cash to pay for his first year of college, and we have enough in mutual funds to pay for another semester. When should we pull out the money to use for his education? Denise Dear Denise, I wouldn’t touch the money until right before you write the checks. However, I don’t want you to follow my advice just because I said so. My mutual funds have made a little more than 16 percent this year. If they stay at that pace, or if they make just 10...

Don’t you just love Christmas movies? Few things can get us in the Christmas spirit like a good film, whether it’s a cheesy love story, holiday musical or a comedy. There’s just something about this time of year that makes movie watching so fun. With that in mind, we thought we would take a look at some of the more memorable characters from Christmas movies and ask the question: What can they teach us about money and success? Oh, you don’t think you can learn anything from Buddy the Elf? Think again! Buddy the Elf (Elf) Famous Quote: “Smiling is...

Dear Dave, I’m in a very fortunate position when it comes to my finances. I’m 25, and I make $50,000 a year. I’m also completely debt-free. In your opinion, when is it appropriate to let someone you’re dating know about your financial situation? Anonymous Dear Anonymous, Wow, you are in a great position for someone so young. I’m not sure how you got there, but it certainly wasn’t by being dumb or immature. I think it’s only natural in a dating situation to reveal more about oneself as time passes and the relationship gets deeper and more serious. In my...