Highlights from the Dave Ramsey Show

QUESTION: Tanya in Canada is calling because her 11-year-old daughter broke a plasma TV at a birthday party. Should they pay for this TV? Dave tells Tanya what he'd do.

ANSWER: I think how this is resolved is depending on whether my kid goes on that property again. Your daughter won't know this kid by the time she's in college—I'll tell you that. It's not going to change her life much. I would do one of two things in our situation. I guess Sharon and I would have to pray about it and talk about it.

We would just write a check and pay for it and just not worry about it. That would be one thing and just not think anything more about it, but I probably would really monitor my kid being over there anymore because the next time she breaks something, it could be a Ming Dynasty vase or something. I just have no idea with these people what I'm going to be liable for next.

The other thing is if that kid's over there playing at your house and she breaks her arm, you know you've got to pay for everything. You've kind of got to think about how these people are acting regardless of how this goes down.

To be overly generous, we might just write a check and buy the TV. That would be one thing. The other possibility, if you don't want to go that route, would require that you just call them up and say, "Hey, guys, we'd like to have a cup of coffee and talk through this. We don't want to be turkeys or anything. We're just kind of wondering how we get the whole thing. The kids were misbehaving while in your house, and there are three kids involved. We're willing to do whatever. We're not worried about it, but we just wanted to talk it through with you face-to-face instead of just making a $900 decision over the telephone." Then just see how their spirits are and how they act and react. That's going to determine how much interaction we have going forward as well and how much interaction my daughter has with their kid going forward.

I might do that just to try to be able to figure out how I want my kid's involvement with them. Our kids have done a lot of stuff, and a lot of kids have done stuff in our house. I'm like you. I've never called anybody and asked them to pay for stuff that was broken in our house. You break your arm on somebody else's trampoline, it's because you broke your freaking arm. You don't turn around and sue them. We had a trampoline in the backyard, and those things are freaking dangerous. One of the neighborhood kids broke his arm, and the parents were very cool. This was many years ago, but they just said, "Hey, the idiot fell off a trampoline. We took him to the hospital and fixed his arm. Every kid does that." We couldn't pay them. They wouldn't let us. We had another case where a kid got hurt at the lake. It was a pretty bad thing, and we really did want to help that family. We weren't in any way liable. We just wanted to and were in a position to. That was almost kind of a quasi-generous thing rather than a liability thing.

The way I always look at this, and maybe I'm wrong, but to me the spirit of the way people approach things concerns me more than the money. You've got the money. You make $90,000. If you want to write the check, write the check. I don't care. It doesn't matter to me. If you're going to deal with it, deal with it in person though. Don't make a phone call or write a letter or something like that. They're just around the corner. Call them and have a cup of coffee with them and just sit down and go, "I just want to make sure we're all on the same page—how this happened. We're not trying to be turkeys. We'll give you the money. We just want to know where your head is on this." See if they start backpedaling a little bit, and then you kind of know who you're dealing with going forward.

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QUESTION: Cynthia in California says her daughter was offered a modeling job. They want to know what to do with the money she earns. Dave talks about how this is a golden opportunity to create teachable moments for giving, saving and spending.

ANSWER: She can do a Roth IRA, and that would be very cool.

The thing that I want to do more than anything is to create teachable moments for her out of this. There are three areas once you learn to work when you are a kid, and that's giving, saving and spending wisely.

We want her to be able to spend some of it and enjoy the fruits of her labor within reason. She might be saving up for her first car or enjoying a little bit of it on the weekends. But if she's my kid, she's going to be coached by me on that. Just like I teach them to brush their teeth, I teach them to handle money.

Then we will give some of it. We're Christians, so it would be obvious for us in that setting. The last category is saving and investing. Saving for the short term might be something like a car.

Long term might be the Roth IRA. If you work the numbers and show her what the Roth IRA could be, that could be phenomenal.

We actually helped our kids while they were working. We did their Roth IRAs for them, but you have to file a tax return to do that. But it sets them up for some serious money when you start doing it at 14 years old. I would do that, but let her learn about each one as you're doing it.

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QUESTION: Diane in Tennessee says her son is talented in juggling. He's done it for family and friends, and at kids' parties. She wants to know what direction to take him and possibly get him an agent. Dave tells why this should be a teaching tool rather than a long-term career goal.

ANSWER: There probably are a few people on the planet whose career at 50 years old is juggling, but not many. This is not his long-term career goal, so the purpose of him doing this is to learn about work ethic and running a small business, and to make some money for a 13-year-old. Let's keep it at that; he doesn't need an agent.

This is him learning to do his marketing. Encourage him to study some business aspects and marketing things. How can he spread his wings and build a Twitter account or Facebook account or get a little social media following? Maybe you could post some videos of him doing this on YouTube. Fun and funny stuff that people might pick up and retweet or send to their friends. Teach him to market a little bit.

Also, let him keep a profit-and-loss statement on his business. His income minus his expenses associated with the business equals his net profit. As he's doing this, we're teaching him not only to run a business, but we get to teach him how to work and give, save and wisely spend his money.

Work on his people skills if he is working kids' parties. Teach him how to talk to the moms and dads at the parties. Everybody there is a potential customer for him later. Have him learn how to work the room and expand, and then he walks away from this like I did when I cut grass–I was 12 years old, and I had 27 yards to cut.

A lot of stuff that I learned in the Tennessee summer heat pushing a lawnmower applies to me now that I've got 400 team members. That's the kind of thing to think about–the work ethic and the sticking to it. If he doesn't feel good and booked a party, he still needs to do it. If he wants to go on a trip with his friends, he can't if he booked a party that he needs to work. He can't just walk off from his commitments.

These are the things you learn when you are doing this kind of thing at 13 years old. It's very good as a mom to encourage him to do that. But since juggling is not something he's going to take into the next phases of his life, then you probably don't need an agent. That defeats the purpose of him learning the pieces of business.

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