Our 21-year-old son is in college, and we've always warned him to stay away from credit cards. Despite our warnings, we recently learned he got a store-branded credit card. The good news is he has stayed under the credit limit. The bad news is he has never made any payments on the purchases he made, and now he owes about $3,800. He's a good student, and my husband and I want to look at this as a young person's one-time mistake. Do you think we should pay off the card for him just this once?

Melinda

Dear Melinda,

Believe me, I understand you wanting to help him out. It means you've got a good heart, and you love your son. No parent likes seeing their child in a bad situation.

There's a reality here, though, I hope you won't overlook. It's his debt, not yours. He knew what he was doing when he signed up for that credit card. He knew what it meant, what was expected, and he's the one who should make good on the repayment. There's nothing unfair about that.

Now, you're right. This is a typical young person's mistake. And like a lot of mistakes our kids make, it's one that's bad and wonderful at the same time. It's bad because if he had just listened to you and his dad, he would've avoided the whole mess. It's wonderful, though, because it gives you two the opportunity to provide him with a real world, teachable moment.

At this point, my advice is for both of you to give him a great big hug, and lovingly explain where he went wrong and why it was a bad idea. If you want, you can even go a step further, and help him find a part-time job if he doesn't have one right now, so he can pay off his debt and get out of this mess. It'll take some planning and discipline on his part, but leave the payments to him. Hopefully, by the time he finishes working his tail off – and scrimping and saving to pay this debt – he will have learned a lesson he'll remember for the rest of his life.

Dave

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I switched to a debit card so that the money I spend comes directly from my checking account. But I still have a problem some months with overspending and buying things I shouldn't. Do you think I should stop using my debit card?

Debbie

Dear Debbie,

When I made the decision to get intentional with my money, I just used cash. It's hard to spend it when you don't have any on you. It's a tough thing, I know, but you have to make a conscious decision to start living differently. You've got to get mad at the things that steal your money a dollar or two at a time enough to take action.

Try looking at your life as a whole, not a moment in time. All the moments you're living right now will have either a positive or negative effect on your future. I decided I wanted the greater, long-term good, so I gave up on the short-term stuff.

Debit cards are great tools. You can't spend money you don't have with them like you can with a credit card. But you've still got to budget very carefully for each month, and give a name and a job to every single penny of your income. Otherwise, you can still overspend.

Dave

Say no to extended warranties

Dear Dave,

Are home warranties a waste of money if you already have a fully funded emergency fund containing six months, or even more, of expenses set aside?

Jodie

Dear Jodie,

I don't do extended warranties, because they're not a good deal. In my mind, you're better off to self-insure against damage or things breaking down. That way, you can put what would have been profit and marketing dollars for the extended warranty company in your own pocket. I mean, think about it. If you buy something, but can't afford to fix it if something goes wrong, it's not really a smart move to buy it in the first place, is it?

I always recommend an emergency fund of three to six months of expenses to cover the unexpected things that life will throw at you. In most cases, this amount of cash – sitting in a good money market account with check writing privileges – will allow you easy access in the event of unexpected expenses or a financial emergency.

Dave

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My wife and I have always accepted the fact that we'd have a mountain of debt to pay off after the holidays. Having to deal with it all seemed more frustrating this year than ever before. Can you tell us how to make it through the next Thanksgiving and Christmas without having to pay off so much debt?

Brady

Dear Brady,

Giving is a wonderful thing if your intentions, and your finances, are in the right place. But generosity isn't meant to be stressful to you or your bank account. It's all too easy to try to justify overspending during the holiday season, because so many things you do are for family and friends. Still, you shouldn't let yourself become trapped by the shopping craze or overspending just because everyone else is doing it.

Give with the right intentions, and give with a financial plan in place ahead of time that doesn't include debt. Thanksgiving is always on the fourth Thursday of November, right? And Christmas always falls on Dec. 25. The holidays don't come as a surprise to anyone, so don't wait until November, then act shocked that it's all just around the corner. Jump on things right now, and start setting aside a little in your budget each month throughout the year for the holiday season.

Sit down with your wife, and decide together how much you can put aside each month for Thanksgiving and Christmas. Once you agree on an amount, make a list, check it twice and stick to it. It's easy to find something in the mall you just have to buy for someone. And that's where problems start. So, include amounts you're going to spend on each person, each charity, or each event. It's all just common sense. But it's up to you and your wife – together – to decide to live on a budget and give every single dollar a job.

You can do this, Brady. Make it happen!

Dave

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We've all our debts paid off, except for our home, and our fully funded emergency fund of six months of expenses is in place. In talking to people, it seems there are lots of different opinions as to what constitutes an emergency. What guidelines do you suggest when deciding whether to use our emergency fund?

Ingrid

Dear Ingrid,

There are three things to ask yourself when you're tempted to dip into your emergency fund. One, is it unexpected? Things like Christmas, birthdays and even certain bills come around at the same time every year. If you're not already budgeting for these things, it's time to start. Otherwise, you might use your emergency fund for something that's just the result of poor planning.

Number two, is it absolutely necessary? Most of us think we know the difference between needs and wants, but sometimes the line gets a little blurry. If your car goes completely kaput, and you need transportation, use your emergency fund to buy something affordable and reliable you can pay cash for. But don't dip into your emergency fund just to upgrade your good car for one with a million bells and whistles. That's a want, not a need.

And three, is it urgent? Sometimes, you have act like a grown-up. Every idea that pops into your mind isn't unexpected, necessary or urgent. You can live that way if you want, but the result will be a quickly depleted emergency fund. Then, what're you going to do when a real emergency comes along?

Practice the art of patience. Avoid impulse buys. Urgent things include stuff like a broken air conditioner in the middle of summer, a busted transmission or sudden, unexpected medical expenses. A big sale at Wal-Mart? No. Concert tickets? Definitely not. That great new pair of shoes you just saw in a store window? Give me a break!

Your emergency fund is about long-term security, not instant gratification. Don't use it on a whim. But don't be afraid to use it when you really need to!

Dave

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My wife and I have started teaching our 5-year-old son about money. Do you feel we should step in and fix things when he makes mistakes, or let him experience the consequences of his actions? It's so hard on my wife, especially, to see him disappointed when he makes a mistake and his plans don't work out.

Lane

Dear Lane,

I know this might sound mean to some folks, but sometimes a good financial disappointment when you're young is the best thing that can happen to you. They're hard to watch happen, or to experience, but often they'll teach life-long lessons. No decent parent wants to see their child sad or hurt, but reality is a pretty good teacher when it comes to learning how the world really works.

One of the jobs of a parent is to look for teachable moments with their kids. Of course, when it comes to teaching there's always a chance the student won't learn the lesson well enough the first time around. I'm not sure how you're doing things, but if I were in your shoes, I'd follow these steps. First, give him a chance to earn some money. In my book, that means work. No allowances! There's a lot of self-esteem and value to be found in accomplishing a given task successfully. Then, once you pay him for the work he does, you have another perfect chance for teachable moments, because you can help him learn about saving, spending and giving, and how to do all three wisely.

It's always hard on parents when they see their kids unhappy. I know we went through it with ours. As a parent and protector, you want to jump in and make everything OK. But the hard truth is that fixing or doing everything for them is the easy way out. And in the process of doing that, a child will begin to develop a sort of learned helplessness.

Sometimes, Lane, you need to love kids enough to not do things for them. Let them make some mistakes, experience the consequences and fix things themselves. And it's better for them to do all this while they're still under your guidance and protection.

Dave

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My husband and I bought a franchise recently, and we are opening our business in a couple of months. We've got $40,000 saved up, but my husband wants us to take a two-week vacation before we open for business. He feels that the business will completely consume us for the next two or three years, and he wants to go into things relaxed and refreshed. How do you feel about this idea?

Jill

Dear Jill,

I understand where your husband's coming from. A business is very time-consuming, and to make it a success you'll both have to eat, sleep and breathe it for a very long time.

But here's the reality of your situation. Right now, you're basically unemployed. On top of that, you have just $40,000 with which to start a business. It's time to rev up your engines and get to work, not spend a bunch of money vacationing. Trust me, there'll be plenty of time to celebrate after you've won, maybe in even bigger and better ways, if you'll just delay gratification and put in the dedication and hard work now.

When it comes to opening a new business, a good rule of thumb is this: Everything's going to take twice as long to accomplish as you thought it would, and everything's going to be twice as expensive as you thought it'd be. I'm sure you're both smart people, but my guess is you're not exceptions to this rule when it comes to opening and running a small business.

Think about it, every single dollar connected with your business could mean the difference between survival and going under. Like I said, I kind of get your husband's thought process, but it would be a very unwise idea right now. You've got to look at the big picture. You're going to be heartbroken, and maybe in a real financial bind, if you have to close up shop in a few months because you ran out of money.

On the other hand, if you work hard now, stay smart and make this thing a success, you can take a vacation – and really celebrate – when the time is right!

Dave

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My best friend is having financial problems, and I'm worried about him. He's "between jobs" now and making less than $600 a month through a part-time job. He says he's holding out for his dream job, which is about 10 hours away, but even when he's working full time, he always asks to borrow money or says he's running low. He interviewed for his dream job several months ago, and I haven't got the heart to tell him he was probably passed over for the position. Is there anything I can do to help him?

Garrett

I assume that since you're good friends, he's willing to listen to what you have to say. There's absolutely nothing wrong with having a dream job. You just have to be practical and realistic at the same time.

This next part is more observation than insult, so I hope you'll understand. Your friend sounds to me like he might be a little impulsive and unrealistic. When it comes right down to it, maybe a touch immature, too. So, I think what we're talking about here is how to give your friend a gentle, well-intentioned nudge in a more realistic direction. He needs to open his eyes to some positive financial realities of life – like living on a written, monthly budget, and not making a habit of chasing rainbows and making excuses.

If he came to me for advice, the first thing I'd tell him is that the most employable people are ones who aren't broke. When you go into a job interview and you're broke, it's easy to come off as desperate and tense. That doesn't make for a very good interview.

The answer to that, when you're essentially unemployed, is to work any legitimate full-time job. At the very least, two, three or even four part-time jobs. Deliver pizzas, wait tables and mow yards. It's doesn't matter what you're doing, as long as you're generating a livable income for yourself. Smile and be professional at whatever you're doing, too. You never know when you might come face-to-face with your next real employer. But none of this will happen if you're working three or four hours a day, and spending most of your time at home in front of the television.

I hope this helps. I hope your friend will listen to you and understand you have his best interests at heart. But if he doesn't, all you can do is hope for the best and pray for him.

Best of luck, Garrett. You're a good friend.

Dave

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My mom and dad always told me to live within my means. As an adult, I've made some mistakes with money, including falling right back into debt after paying off everything. I'm tired of this roller coaster, and I want to get control of my finances for good. Can you give me some advice on where to start?

Melissa

Dear Melissa,

It's frustrating, isn't it? But making mistakes with money means just one thing. It means you're human. We've all done it. Think about this, though. We're approaching a traditional time of the year for changes. On top of that, you're smart enough to have realized what you've done in the past hasn't worked.

Believe it or not, I was once in the exact same spot you are now. When it happened to me, there were three pieces to the puzzle that helped me break the cycle. One was fear. Specifically, I was scared to death that I wouldn't be able to take care of my family, and that I'd retire broke. Now, don't misunderstand me. No one should live their lives in fear. But a healthy, reasonable level of fear can provide needed motivation.

Another was disgust. I realized what I was doing was stupid. I was tired of living that way, and I made a conscious, purposeful decision that things were going to be different.

The third piece, and maybe the most important because it's connected to our spiritual walk, was contentment. We live in a society that's constantly having the idea that we'll be happier, or more successful, or more admired, if we'll only buy this or that product. We're constantly marketed to, and when we have this stuff in our faces day after day, we can become unsatisfied with just about every aspect of our lives. Don't let it drag you down. It's all just an illusion.

One of the things I did to combat this, was to start living on a strict, written, monthly budget. Also, I stopped going places where I was tempted to spend money. You shouldn't give a drunk a drink, right? So, don't put yourself in a bad situation when it comes to your behavior with money. If you go wandering through the mall without a specific plan, you'll lose every single time.

When you go to the store make a list of only the things you need. On top of that, take only enough cash with you to buy what you need. If you can walk in and back out without buying a bunch of stuff that wasn't on your list, it's a win. Every time you do this, it's another win and another step away from your old habits and in the right direction.

You can do this, Melissa. God bless you.

Dave

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My parents were in the real estate business and were building homes. Then, the economy went sideways and left them in a mess. Outside forces brought trouble to our house. We never went without food, shelter, or anything else, but the air changed in our home. I always thought money would solve the problem, so I vowed that one day I would become a millionaire. I doubt I even knew what that meant, but in my head, I thought it meant money would never be a problem.

Believe it or not, I'm a spender by nature. I've always enjoyed spending money. Of course, when I was young and immature, that idea of spending for fun led me into the trap of thinking if I got enough Stuff, I would be happy. I would've never admitted it out loud, but there was also the stupid idea deep down that if I got enough Stuff, I would be happy and safe, or if I got the right Stuff, people would be impressed.

With that driving force, I went about the business of earning piles of money so I could spend piles of money. But a funny thing happened. The Stuff became … unsatisfying. There was never completion or peace after a purchase, only the need to buy more.

Stuff just doesn't do it.

By the time I was 26, I was a millionaire making $250,000 a year. Not long after that, due to some really dumb business decisions, I went broke and lost everything. That was 30 years ago.

I also met God during this time, who did bring me peace and completion. I finally realized I was pouring Stuff down a spiritual hole, and Stuff is not designed to fill that hole. No matter how many cars I bought, or fancy dinners I ate, or cool places I traveled to, there was always something still missing.

During the following decades, we slowly began rebuilding wealth, this time while always giving. In the process, we discovered there's much more joy in giving than in Stuff. If you haven't experienced the joy of giving, there's no better time to start than during the holiday season. Who knows? It might just be the encouragement you need to become a giver all year long.

Merry Christmas, everyone!

The post It's not about the 'Stuff' – at Christmas or any time appeared first on WND.

I think my mother-in-law has a serious credit card problem. She can't afford stuff, but she shops anyway, chalks up more and more debt, acquires more credit cards, and thinks she'll pay for it all later somehow. Her ex-husband has bailed her out a few times, but he's unwilling to help anymore. My wife and I, and my wife's sister, want to address this issue, but we're all worried about her reaction, and we don't know where to start. Do you have any advice?

Randall

Dear Randall,

First, everyone involved should understand they're likely to receive an angry response from this lady if she's confronted over her actions. Sometimes people get ticked off when they hear the truth, especially when it's connected to their own misbehavior. It may even be a good idea for your wife and her sister to get some advice from a family counselor beforehand. Really, what we're talking about here is an intervention.

Also, you need to stay out of the discussion. This is something for her daughters to handle. Support your wife and her sister through it all, but if you're in there asking questions and probing around, you're liable to come off as the evil son-in-law. And you folks don't need to add any more problems to the mix.

They need to sit down with her in a quiet setting, one where there are no interruptions, no television and no one else. Start with the fact that they love her and care about her deeply. That's very important in a situation like this. But they also have to walk through what's really going on, and let her know they're tired of watching her destroy herself, and her finances, with her irresponsible behavior.

If she had a drinking problem, you'd want to try to make her see how alcohol was hurting her and the relationships she has with her family. In this case, she basically has a credit card addiction. And it's wreaking havoc on her financial well-being and people who care about her.

So, show as much love and understanding as possible. But someone needs to say something soon.

Dave

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