Need some financial advice? Debt and income crisis? Pay off the house mortgage first? Check cashing? Taxes? Credit Cards? Check out what folks are asking Dave Ramsey.
You don’t fake poor
I’ve got a couple of friends who were advised by their financial planners not to open college savings accounts for their kids. Their planners told them this would count against their children’s ability to receive financial aid and assistance when it’s time for college. Apparently, these planners told them to put the money into their own retirement accounts. It’s my understanding, however, that both the child’s and the parent’s financial situations are looked into when determining financial aid. Can you please shed some light on this?
So, if a financial planner told you not to get a job because then you can apply for welfare, are you going to listen to that person? What kind of moron gives financial advice like this? You don’t tell people not to save money for something, just so they can pretend they’re poor!
Save whatever money you can, and send your kid to school. Why is that such a difficult concept to grasp? People need to stop looking for tricks and shortcuts, because there aren’t any that will be beneficial in the long run. I’m not going to pose as broke — fraudulently — to get financial aid for my kid. That’s ridiculous!
I hope I wasn’t unclear.
A course in day trading?
I was recently offered an opportunity to participate in a hands-on stock trading class. The problem is we don’t have the $6,500 registration fee just lying around. My husband and I are on Baby Step 4 of your plan, so what would you think about us borrowing that amount from our emergency fund? We would still have three months of expenses set aside after paying for the class.
I don’t know the exact course you’re talking about, but I do know something about the concept of buying and selling stocks, or day trading, if you want to call it that. I can tell you all the research shows 78 to 84 percent of day traders lose money. And one hundred percent think they won’t be the ones losing out. That includes people who take courses like the one you mentioned.
I have found no data points which show, on a consistent level across a broad population, that people who take a course like that become wealthy as a result. Buying and selling single stocks is an ultra-high-risk proposition. That’s why I don’t buy any single stocks. Now, I know some people who buy and sell single stocks as a very small percentage of their financial world. It’s almost like a hobby for them. A couple might actually make a little money from time to time, but it’s not the main focus of their investment strategy. To hear them, it’s like listening to fishing stories. They’re always talking about the one that got away.
I wouldn’t waste my money on the course, Camille — especially my emergency fund money. Your emergency fund is for, say it with me, emergencies only!
Honesty and togetherness
I’ve never hidden debt from my husband, but I do hide money from him on occasion. I don’t hide it for my personal use, but I have been setting money aside for emergencies without his knowledge. He’s not terrible with money, and he works very hard, but he always seems to find something to spend it on. We were never able to save much of anything before I started doing this, but recently I’ve begun to feel bad about doing it. Can you give me some advice?
I’m glad you seem to be re-thinking this strategy. I believe in saving up for emergencies and having an emergency fund of three to six months of expenses in place. But deception in any form is never a positive thing in a relationship — especially a marriage.
I know it won’t be easy, but you have to let him know what you’ve been doing. You also need to make sure you tell him in the right way. Even though your intentions may have been good — getting into better financial shape — you’ve deceived him by doing it the way you did.
Make some time for just the two of you. Sit down with him, and let him know what has happened and that you’re sorry for not being completely honest about it all. Explain that the reason you hid the money was that you didn’t want to speak up about how it was being handled in your marriage. Ask him to forgive you, and let him know you won’t do it again, but explain, too, how important it is that the two of you work together on saving more, spending less, and getting control of your finances.
Managing money in a marriage is a “we” thing. Decisions should always be made—here’s that word again—together. It means you each have a vote, and it also means you should stand up and vote “no” if he wants to spend money on something silly when you don’t have your financial house in order!