D AVE SAYS
Dear Dave,
My husband and I are having arguments about money where our children are concerned. They are both 16, and I think they should have part-time jobs and be learningthevalueofwork.He feels they’re only young once and wants them to enjoy being teenagers. He also gives them money anytime they ask. I want our kids to have fun growing up, too, but this is beginning to cause tension in our relationship. I’d love your advice.
Kaytee Dear Kaytee,
I understand your concern. I’m sure your husband has a good heart, but by doing this he’s acting like a friend instead of a parent. In the process, he’s allowing them to be nothing but takers and consumers. He’s setting them both up for lifetimes of helplessness and ridiculous expectations without realizing it.
But yes, kids should absolutely learn to work, make money and manage it wisely from an early age. My wife and I gave nice gifts to our kids from time to time, but they also worked and made money for themselves. And the nicer gifts we gave them were for special occasions. Even then we didn’t go crazy with things.
Still, the biggest problem you and your husband are experiencing is a communication breakdown. Your husband should stop being so impulsive, and grow a backbone where the kids are concerned. You’ve recognized this—and you’re right about it—so it’s up to you to take the first step in finding a solution. Try sitting down with him, just the two of you, and sincerely explaining your feelings. Let him know you love him and how generous he is. But let him know, too, you’re worried this is having a negative impact on your children and why. Talk it out, openly and honestly, and try to agree on some changes together. There’s a middle ground here, but it’s going to take some time and effort from both of you to reach it.
Most of all, it means you twowillhavetocommunicate with each other like mature, caring adults, and pull together for the sake of your kids. It might be difficult at first, but it’ll be worth it in the long run. For you and them. Thanks, Kaytee!
— Dave Dear Dave,
I’m a widow, and I retired recently. My husband took care of most of our finances. We never had any debt, but after my husband died and I started learning a little bit more about how money works, I’m concerned too much of it may be invested in CDs. The total nest egg is a little over $1.5 million, with $300,000 of that in CDs. There’s also a $317,000 annuity, a 403(b) and around $900,000 in IRA mutual funds. I want to learn even moreaboutfinancialmatters, so how do you think I should handle things going forward?
Naomi Dear Naomi,
Well, the CDs (Certificates of Deposit) give you stability, if nothing else. They’re generally considered a safe, low-risk investment, but they don’t really give you the best bang for your bucks. If you’ve had good luck with a variable annuity, that’s fine, too. It sounds like you’ve also beenveryfortunatewithyour mutual fund investing. So, with all this money in different areas, you’re definitely diversified.
In my mind, it’s just a matter now of wrapping your arms around it all and developing a deeper understanding of things going forward. I’d urge you to find an investment professional in your area with the heart of a teacher. I’m talking about someone who wants to help people, and is interested in morethanjustmakingmoney off fees or commissions.
It sounds like you understand the value of learning about this stuff, and I’m really impressed by that. It’s a smart and necessary thing. From here on out, every time you see an investment person—whoeveritmaybe— your goal should be to leave the room smarter, and with more financial understanding, than you had before.
Naomi, I’m truly sorry about your husband. But you two did an amazing job with your finances over the years. You’re worth well over $1.5 million,andyouhavenodebt. So, you’re basically set for life. Be wise, and be careful, Naomi. God bless you.
— Dave Dear Dave,
Theotherday,mywifeand I discovered a Thrift Savings Plan (TSP) we’d forgotten about for over 10 years from my time in the Army. There’s a little over $3,200 in there. We’re both in our thirties, and we’re trying to save up ourstarteremergencyfundin Baby Step 1 of your plan. We were wondering if we should withdraw the money and use it toward Baby Steps 1 and 2, or just leave it in there .
Todd Dear Todd,
The best thing to do is roll the money over into an IRA. Otherwise you’re going to be hit with a 10% penalty—plus your tax rate—and end up paying 30% to 40% of it to the government. That’s kind of like asking, “Would it be a good idea to borrow $3,200 at 30% interest to pay off debt?” Of course not! That would be a really dumb idea. And in a sense, that’s what you’d be doing by just taking the money out of the TSP.
It’s not a ton of money, but conceptually, I hate the idea ofgivingthegovernment30% to 40% of my money just to get my money out. So yeah, do some research, find a good investment professional near you—one with the heart of a teacher—and roll it into an IRA.
Congratulations to you and your wife for deciding to take control of your money. And thank you for your service to our country, Todd. I hope this helped.
— Dave Dave,
My husband is an entrepreneur. He has a very hard driving, energetic personality and way of doing things, while I’m more laid back and soft spoken. How can I support him best in terms of encouraging and communicating with him? I want him 1.5” X 4.8”
to know I care, that I want to help and that I’m proud of him.
Grace Grace,
I think you’ve already taken a good first step toward all of that by recognizing and identifying your personality styles. If he’s a hard-charging entrepreneur, there’s a good chance God sent you into his life to slow him down a little, and help him keep it between the ditches. That’s what my wife does for me, and I’m so thankful she does.
Once in a while, I’ll get so wrapped up in a project or opportunity that I can’t stop thinking about it or turn it loose—even after hours or on weekends. That’s when she knows to step in and say, “Honey, did you ever think about this possibility?” Sometimes she’s a little more straightforward, and I’ll hear something like, “You know, you really need to just slow down and chill.”
The fact that you two are wired a little differently, and that you can be thoughtful and calm when he’s all over the place, is one of the most valuable benefits you bring to your relationship. Once he understands this, he’ll begin to respect it more. And when it happens, you folks are going to win in your relationship and in business. It’s going to make such a positive impact on your lives, because you’ll be making steady progress that’s more predictable and reasonable, rather than things launching into the stratosphere and being followed by the inevitable crashes that are bound to happen from time to time.
As you grow to better understand the other’s thinking, and how each is necessary for success, a great thing will be created. Your quieter, thoughtful side, and his energy and passion to pull things forward, will become the key to you two reaching heights together that you never would’ve achieved apart from each other.
I love these discussions about family relationships and business. Great question, Grace!
— Dave