Ethical dilemma
Dear Dave,
I work an extra job part-time for a retail store chain while I’m getting out of debt. I like my job, except for having to pitch the store’s credit card to customers. Like you, I believe debt is a bad thing. Still, my bosses are putting more and more pressure on me to sell the cards. It’s been bothering me a lot lately, and I was wondering if you have any advice for my ethical dilemma?
Evette
Dear Evette,
If you’ve been in the business for very long, I guess you’ve discovered that most retail stores make more money on credit than the sale of merchandise. In my mind, you’ve got two types of integrity that are pulling at you. Your personal integrity wants you to do a good job for yourself and your employer, but it’s also telling you that credit cards are bad products. That makes you feel like you’ve signed up to sell something that you don’t believe in.
You wouldn’t want someone working for you who wouldn’t follow your instructions, and I wouldn’t want someone working for me who doesn’t believe in what they’ve been hired to do. For the sake of your own integrity, I would suggest that you find another part-time job. If you feel this strongly about the issue, sooner or later it will start to affect your performance and attitude—both at work and at home.
Hang on long enough to land another job before you quit. Then, be professional when you turn in your notice. Despite what lots of people say these days, there are plenty of part-time jobs out there!
Dave
Raising the rent
Dear Dave,
I have two small duplexes in Idaho that I rent for $400 a month, each on one-year leases. The rent is about $50 to $75 below similar units in the area. The tenants in all four places are great, so how do you know when—or if—you should raise the rent? If you raise the rent, how do you keep good relationships with your tenants?
Teresa
Dear Teresa,
My advice with rental properties is to raise the rent a little bit each year. You want to be fair and affordable for your tenants, but you don’t want them thinking the rate is locked in forever.
As a business owner, if you don’t have small, manageable increases on a regular basis, you’ll look up in four or five years and realize you’re losing money because your rent is way below market value. Then, if you implement a big rate hike out of nowhere, your tenants will have a fit. After that, you could be looking at empty properties.
When it comes time to renew the leases, try explaining to them that you’ve looked around in the market and other very comparable units are going for $450 or more, but that you appreciate them and what good tenants they are. Then, propose signing the new lease at $410 or $420. Don’t raise it to full market value.
In most cases, this kind of approach will keep both parties happy. As a landlord, you’ll be able to retain quality tenants and make more money. As a renter, you’ll have the comfort of knowing you rent isn’t going to suddenly jump sky-high. It’s a win-win!
Dave
Don’t insure cell phones
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?
Lisa
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!
Dave *Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.
