Dear Dave: I just bought a new smartphone, and the company I’m with offers insurance for the device. Do you think it would be wise or foolish to do this?
Dear Lisa: The purpose of insurance is to transfer a risk that you can’t afford to take. When it comes to things like cars or houses, I absolutely recommend that people have insurance. Most folks couldn’t just write a check for another car if the one they drive were totaled. It’s the same with a house. If your home is destroyed, the insurance takes care of things instead of putting you in the position of having to pull tens or hundreds of thousands of dollars out of your own pocket for a new home—also something most people can’t do.
No, I don’t insure inexpensive things like smartphones. And if a smartphone is an expensive item to you, then you probably shouldn’t have that phone. I mean, there’s nothing wrong with having a cell phone if you can afford it. But if you tear up a phone or it breaks down and you can’t afford to replace it out of your own pocket, then you’ve got too much phone!
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Dear Dave: What is your opinion of churches encouraging members to do e-giving with credit cards and debit cards?
Dear Melissa: I’m against debt, so I’m not particularly fond of churches asking people to use a debt vehicle to pay their tithes. I realize that few businesses and organizations distinguish between debit cards and credit cards when accepting payment. However, this practice bothers me a lot when it comes to churches. The Bible mentions debt several times in Scripture, and every time it does, it’s always in a negative light. It’s not a salvation issue or anything like that, but the Bible basically says debt is a foolish thing.
Now, I think e-giving in itself is fine. But if I were the pastor or on the leadership board, and we had an e-giving process, I would strongly encourage people to use debit cards and not credit cards. There’s nothing wrong with a draft or an ACH kind of thing. A lot of people do that and like the ability to give online.
But I don’t want a giving situation to your church turn into debt to you. And it does just that when it’s a credit card!
Dave’s latest project, EveryDollar, provides a free online budget tool. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.