Dear Dave,

What’s your opinion on rewarding kids with money for getting good grades in school?

Joe

Dear Joe,

Honestly, I don’t have a strong opinion about it one way or the other. We didn’t pay our kids for good grades, but I can’t really think of a strong argument not to pay them for success in school. You could say you shouldn’t pay them because it’s something they’re expected to do anyway, and that’s somewhat valid. But you could also make the same point where chores around the house are concerned, too.

We paid our kids to do some chores, but really the point is not about the economic value. It’s the fact that you want your kids to associate work with money. I still meet people my age and older who haven’t made that connection. Work creates money, and that’s an important thing to teach your kids. Once they’ve created some money by working, then you want to use those moments to teach them to save, spend and give wisely.

You can do this around the subject of grades if you want. There’s probably a valid case to be made that getting an “A” takes a lot more work than getting a “C.” You’re certainly not obligated to pay them for work or grades, but if you don’t do some of this – and teach them the proper ways to handle the money they earn — you’ll miss out on a lot a fantastic teachable moments.

—Dave

Making grown-up choices

Dear Dave,

My husband and I are on Baby Step 2 of your plan. We’ve got our starter emergency fund of $1,000 in the bank, and we’re busy paying off credit cards and unpaid taxes from previous years. He thinks it’s okay to take trips and save up for other fun things while we’re doing this, but I disagree. I want to cut out all extra spending and pay off our debt as fast as possible. What’s your opinion?

Laura

Dear Laura,

It’s okay to do those things in the general philosophy of life. Unfortunately, that’s not what I teach when it comes to getting out of debt and gaining control of your finances. The reason people are successful following my plan is because I teach common sense combined with an unbridled, scorched-earth kind of intensity.

Let’s take a closer look at this. You have unpaid taxes, not to mention credit card debt hanging over your heads, and he’s talking about going on a trip and saving up for toys? I’m sorry, but that’s completely irresponsible. Remember when we were kids, and Mommy and Daddy wouldn’t let us go outside and play until we had cleaned up our mess? That’s the kind of thing I teach.

There’s a process here. There’s an idea and a concept behind what I teach, and when you plug into it, you’re going to start moving in a positive direction. In short, behaviors have to change, Laura. The more dramatically they change, the better results you get and the faster you fix things. But if you don’t plug into it — if he doesn’t plug into it — you guys are going to keep getting the same results you’ve been getting, which basically stink!

—Dave