My husband and I began your plan a few months ago. We love the process of living on a budget, and how it has helped us gain control of our finances. Our kids are 14 and 13 now. Do you think it’s a good idea to include teenagers in budget meetings and financial discussions?
A. This is a great question! As long as you’re not in an extreme situation, like you’re looking at foreclosure or bankruptcy, or you’re on the opposite end of the spectrum sitting on a pile of wealth, I think it’s a wonderful idea. Teaching kids about money with a standard, regular, monthly budget is one thing. But as a parent, you don’t want to put your kids into situations they aren’t emotionally equipped to handle.
As long as mom and dad are having a discussion and making decisions—not fighting—it’s good for kids to hear the give and take where handling money is concerned.
Parents who never let their kids handle money, and never teach them proper money management techniques, run a high risk of turning financially irresponsible adults loose in the world. And that’s no good for anyone.
But walking through a typical, normal budget will show them how much money is coming in and how much things cost. They’ll see on paper exactly how much groceries or the electric bill costs. Then, when it’s right there in front of their eyes, they’ll begin to realize why mom and dad always tell them not to waste food, and to turn off the lights when they leave a room!
Should I Buy a Vacation Home?
How do you feel about someone buying a vacation home, then renting it out when they’re not there?
A. As long as you’re debt-free and buying with cash, I’m cool with it. A vacation home is a really nice “extra” as you start building wealth. It’s still basically a very large, very expensive toy. Still, it could become something of a money maker for you if you play your cards right.
But here’s another side to vacation home rentals that most folks don’t consider. You might make some money, but there will almost always be several weeks during a year when it sits there empty. Chances are you won’t get rich renting it out, but if you’re talking about something that’s more of a plan to offset the annual costs of your toy, I don’t think you’ll be disappointed.
Be ready to deal with lots of spills on the carpet and damage from your guests, along with general maintenance and repairs. There’s always something that needs attention when you own a property. But if you can handle all that financially and emotionally, I think you’ll be fine.
Author: Dave Ramsey
David Lawrence Ramsey III is an American radio show host, author, and businessman. He takes your questions here each month.
