Dear Dave:

I’m having a hard time affording $500-a-month car payments because I only make minimum wage at my job and work 35 hours a week. I owe $20,000 and it is worth $19,000. What can I do? — Rachel

Dear Rachel:

Sell the car! You went car crazy and bought a vehicle that was way out of your league. Right now, your entire financial world is wrapped up in paying for this thing. At this point all you need is enough to cover the hole you dug. Go to your local bank or credit union and try to get a very small loan from them—about $3,000. I hate debt, but you really don’t have a lot of options here. Then, if the car will sell for $19,000, get it sold and use $1,000 to cover the difference.

After that, take the remaining money and buy yourself a little beater. I’m talking about basic, ugly transportation. The next step is to pick up a part-time job on the side and work like crazy for a few months to get that loan paid back as quickly as possible. Don’t ever do this kind of thing again, Rachel! — Dave

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Dear Dave:

Why do you think debt consolidation is such a bad thing? — Tessa

Dear Tessa:

Debt consolidation is a bad thing because it makes you feel like you really did something to get out of debt and change your financial world when you didn’t. People come to me all the time saying stuff like, “Dave, I got a second mortgage. I paid off all my debt!” Well, no you didn’t pay off all your debt. You just moved it around.

That’s part of the catch when it comes to debt consolidation. If you get a lower payment and move things around a little bit, you feel like you actually accomplished something. The problem with that is you don’t do anything to address the real problem, which is you.

Interest rates aren’t your problem, and the number of payments isn’t your problem. Your problem is the person you look at in the mirror every morning, Tessa. Until you fix that person and get mad enough at your financial situation and the real cause of it, you’ll never make any progress toward getting control of your finances. — Dave

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Dear Dave:

My husband and I are debt-free. We pay for our children and grandchildren to visit during Christmas each year, but my mother thinks this is foolish spending. What do you think? — Linda

Dear Linda:

I’m sure your mom loves you guys a lot, but she’s wrong twice on this one. First, she should mind her own business. Second, you guys have worked hard and have been extremely smart and disciplined with your finances. For someone in your situation, bringing your family together for one of the most important days of the year isn’t foolish on any level.

When I was 22, I worked for a real estate guy who would treat family from all over the country to a week of skiing once a year. He and his wife would rent a nice chalet and spend that time having fun as a family. I sort of borrowed that idea a while back. Once a year we’ll take all our kids and their spouses on a nice vacation. We pay for everything, and it’s just one of our gifts to them because we love them.

So, I think your mom is completely wrong. There are three things you can do with money: spend, save and give. Trust me, giving is the most fun of all! — Dave