Dave Says

By Dave Ramsey
Author, The Total Money Makeover

CBN.com – Financial guru Dave Ramsey answers questions about wise financial decision-making.

The Time Share Trap

Dear Dave,

I was wondering why you think time shares are a bad idea? Also, what do you do if you’ve already signed up for the free trip and tour?

- Travis in Spokane, WA

Dear Travis,

Don’t buy it! You get no value for your dollar, and you’re also not building any equity in the thing. Equity implies that you could turn around, sell it and make money off the deal. The reason you can’t make any money off time shares is that there’s virtually no market for them. Nobody in their right mind wants to buy one.
Once you get stuck with a time share, it’s like being lost in a black hole. You never get to use it enough to justify the cost, plus you’ve got things like maintenance fees and the possibility of borrowing the money and paying interest on something you’ll hardly ever use. For what you’d shell out for a time share, you could go to Europe every summer for the rest of your life!

Time shares are a really bad deal, Travis.

- Dave

Kids & Money

Dear Dave,

My daughter is 18-years old, a senior in high school, and she got a credit card without my knowledge. She didn’t spend over her limit, but she’s never made the payments and with late fees is looking at a $2,000 bill. Should I help her out with this?

- Smitty

Dear Smitty,

I think this is horrible. I also think it’s wonderful, because by the time this kid finishes working her tail off to pay this debt she’ll hate credit cards and will have learned a lesson she’ll remember for the rest of her life.

I understand that a father wants to help his daughter, but it’s her debt - not yours. She’s the one who signed up for the ride, and she should be the one who makes good on the repayment. The fine print on the back of that application reads “if signed,” and if she’s got the card, then she signed and agreed she’d pay it back. It’s all legal.

Use this as a teaching experience, Smitty. Love her and show her how and where she went wrong. You can even help her find a job if she doesn’t have one right now so she can get out of this mess. But leave the payments to her. It’s HER responsibility.

- Dave

Marriage & Money

Dear Dave,

My husband and I have been through your Financial Peace University class. I’ve always been the numbers nerd, although he’s catching on and doing pretty well. But he has a Harley-Davidson he bought a few years ago before we got married, and he still owes $7,000 on it. My common sense says we need to sell it, but he doesn’t want to even though we haven’t been riding in over a year. What should I do?

- Gina in Greenville, SC

Dear Gina,

Well, it sounds like he’s making progress and we don’t want to ruin that. So here’s the question: if you win the Harley battle, do you lose relationship war? In other words, if you force him to give up the motorcycle, will it damage the marriage and the progress he’s made toward getting out of debt and learning how to handle money?
If I were you, Gina, I’d first sit down with him and tell him how proud I am for the way he’s trying to improve the financial situation in your home. Then, I’d suggest that the Harley is a stumbling block to your shared financial goals. Ask him what he’d be willing to do to get the motorcycle paid off more quickly. Would he pick up a part-time job, or maybe sacrifice something else he’s spending money on and get the Harley paid off in six months?

But let him know the motorcycle isn’t really the issue. The issue is that you guys need a plan to get this $7,000 debt out of your life. And who knows? Maybe when the debt is gone, you guys will feel good enough to saddle up and start riding again!

- Dave

* You can read all of Dave’s columns at www.davesays.org