Wednesday, 06 March 2013 14:21

Teen Auto Insurance and Parental Finances

Written by  Dave Ramsey
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Q.  I’m divorced and have a teenager who will be driving soon. What would be the best way to set up insurance for the child?

 

A.  I suppose a break-up does change the dynamic somewhat, but with my kids I simply left the car in my name and paid the extra insurance cost for a little while. For me, still being in control of the car as a dad outweighed the additional money I was paying in premiums. Having a minor child running around in the world with his or her name on a car title is not a good plan.

 

Then, when they turned 18, I put each of their cars into their names. This, of course, was dependent on them behaving and acting responsibly. They were legally liable at that age, too. I’m sure the insurance costs went up, but at that point the financial risk and liability factors were on them, not me.

 

In this kind of situation, especially because there’s more of a potential for disagreements, I think I’d do it that way. Just put it in your name for now, especially if you’re putting money toward the purchase of a vehicle.

 

Q.  My mother-in-law has a serious credit card problem. She can’t afford stuff, but she shops anyway, acquires more and more credit and thinks she’ll pay for it all later somehow. Her husband has bailed her out a few times, but he’s unwilling to do it anymore. My wife and I, and her sister, want to address this issue, but where do we start?

 

A.  First of all, you need to stay out of the discussion. This is something for her daughters to handle, and her husband needs to be part of it, too. He’s closer to this and feels the effects more than anyone else in the family.

 

They need to sit down with her in a closed setting, where there are no interruptions, no television and no one else. Start with the fact that they love her and care about her deeply. This part is really important. But they also have to walk through what’s going on, and let her know they’re tired of watching her destroy herself and her marriage with this immature and irresponsible behavior.

 

Everyone involved should understand going in that they’re likely to receive a volatile, angry reaction from this lady. Sometimes people get ticked off when they hear the truth, especially when it’s connected to their own misbehavior. It may even be a good idea for your wife, her sister and your father-in-law to get some advice from a family counselor beforehand. What we’re really talking about here is an intervention.

 

If she were a drunk, you’d want to try and make her see how alcohol was hurting her and the relationships she has with her family. Basically, she has a credit card addiction, and it’s wreaking havoc on her marriage and their financial well-being. Show as much love and understanding as possible, but someone has to say something and draw a line in the sand. Otherwise, this behavior will eat everyone alive!

 

Last modified on Wednesday, 06 March 2013 14:26
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