The Rachel Cruze Show - Born Bankrupt: What We Learned From Our Parents’ Money Struggles

Episode Date: February 15, 2021

My sister, Denise, and brother, Daniel, are on the show! We grew up as Ramsey kids, but our journey with money might be a little different than you expect. So, in this episode of The Rachel Cruze Show, you’ll learn: What we learned about money firsthand from Dave and Sharon Ramsey The difference between a credit card and a debit card How to deal with debt in marriage Resources: Zander Identity Theft  Minno Learn more about your ad choices. Visit megaphone.fm/adchoices

The financial part of your marriage is a stress point. Focus in on that and say, hey, let's work on this. Because not only are you going to win with money faster doing that, but you're going to have a healthier marriage overall. Hey, everyone, welcome to another episode of the Rachel Cruz Show. I'm so glad that you are here. This episode is really fun because I interview my siblings. That's right, Daniel Ramsey and Denise Whitamore,

on how we were raised when it comes to money. and talking about how we handle money with our current families as well. So it's a really fun conversation. I can't wait for you to hear that. I'm going to answer a question from Jen and my Facebook community, all about getting on the same page with her husband when it comes to money. I know this is a big topic that a lot of people talk about because marriage and money, it can be really difficult.

But first, let's dive into a topic that's pretty controversial. Credit cards versus debit cards. Yep, they look the same, but they have very different purposes. So check it out. Okay, on here we talk a lot about not having credit cards, but having a debit card. And there's a big difference between the two, but some people are like, oh, yeah, Rachel,

but if I just have a debit card, X, Y, and Z, or a debit card doesn't do X, Y, and Z that a credit card does. So let's just break it down. Let's compare the difference between a debit card and a credit card. All right, we'll go super basic first. a debit card is attached to your bank account. So when you swipe a debit card, you're using your money. It's coming out of your checking account, okay?

It's leaving. When you swipe a credit card, you basically are just using debts. That's all it is. So you're borrowing money from the bank for that purchase, and then you pay the bank back whenever your bill is due. So difference is using your money versus the bank's money. Now, your debit card will probably have a logo like Visa or MasterCard in the corner. So when you run your debit card and you click the debit option, you type in your pen,

do, do, do, I almost said my pin all out. I thought it really bad. Okay, you type in your pen and then it's done. So the transaction goes from the merchant to your bank and there it is. Now, the thing is, if you run it as a credit, you're not running it as a credit card, but it's not a credit card. It is a debit card. So when you run it as a credit, what happens is you sign your name.

And what ends up happening is it goes from your money. merchant to the credit card company. So again, Visa or MasterCard, they actually do the transaction of the purchase, and then it goes to your bank. So if something happens in the middle of all of that, Visa or MasterCard, whatever logo is at the bottom of your card, you have full protection of them. So actually, when I have my debit card, I always run it as a credit. I rarely type in my PIN number. I usually run it as a credit and you'll end up signing your name when you do that option, but it's the safest option. So I love that. Now, there are a lot of reason is why people are still holding on to their credit cards and they refuse to get them up.

But if you need it to lose weight, you don't keep a bunch of cookies and junk food in the house. Do you? No, you know, I need to eat healthy, so you're going to have healthy food in the house. Now, if you want to do better with your money, I would say get rid of the credit cards. When you just don't even have the options you use them, that's going to help you. That's the first big step. So here are the most common perceived benefits that I hear people use their credit card for, but we'll talk about the real truth. So one benefit is better fraud protection if you use a credit card versus a debit card. Well, the truth is, again, you get the exact same fraud protection.

You get the exact same level of protection with your debit card as you do on your credit card. Visa even says this on their own website. So if your car is lost, stolen, or there's any kind of fraud, you will get that money back. Now, identity theft, it is on the rise, and thieves are after more than just your money. They're going to be after your social security number, medical files, tax statements, all of these are so valuable when someone wants to steal your identity. And many times, you won't even realize that your information has been compromised until it's too late. Seriously, it's not a matter of if. Usually, it's a matter of when your identity is stolen,

which stinks that this is the life we're living in, but it is true. So be sure to protect yourself with Zander ID theft solutions. They provide proactive monitoring and alerts, 24-7 customer service, and best of all, they're super affordable, starting at less than $7 dollars a month. If your identity is compromised, they'll do all the legwork for you to get everything back on track. It is so worth you guys. It is such a headache when that happens. To have a company, just take care of it, it's a dream. So just go to zander.com and click ID theft. Okay, the next perceived benefits that I hear about credit card use is, of course, the points in the cashback. But the truth is, studies show that you will spend more when you spend with a credit card. So all the

cash back you're getting, you probably could have saved or more without using that credit card. And they're giving you all this cashback and rewards because guess what? They are making so much money off of people who are not paying their bills and they're paying all this interest. So like all the free stuff that you're getting, it's because other people are not doing it, okay? And then if you're not paying your bill off every month, then you're paying interest that accumulates me. It's just, it's crazy. So again, I'm not going to play that game with a credit card company. No, I'll save my money, I'll be in control of it, and I'm not going to take advantage of other people not doing well with their money to get all the free stuff.

So I don't want to play the game. I'm out. Now, the bonus is that some debit cards now actually are going to offer rewards. Make sure to stay on budgets. But when it's a debit card, again, mentally you're in a totally different mind space versus a credit card. All right, some people talk about the benefit of having a credit card is all the travel perks that you get. But the truth is, trillions with a T, not a B or an M, a T, trillions of airlines. miles go unused every year. Not crazy? Especially last year when there was no travel going on. So you went and charged up your credit card thinking, I'm going to travel the world. And then it was

like, nope, pandemic. You're staying home. You're like, oh, man. Yeah, that's what happens. Life happens. So like I said before, credit card companies are not just giving you everything for free. They're doing it because they're making so much money off of you in the long run. All right, you guys, hopefully I cleared up some rumors and confusion around the difference between credit cards and debit cards. But again, just get rid of the credit card, okay? Have a debit card and then learn to take control of your money and create a life you love. Okay, so one thing I've realized is that being a parent is really hard today, especially when there are so many screens around. The other day, I was trying to find something for my girls to watch, and oh, every option was just,

I wasn't happy about it. I was like, I want you guys to know Jesus and know the Bible, and I wish what was on the screen was reflecting that. But that is what. why my family loves Minnow. It is a new streaming service created just for kids. It has over 2,000 handpicked shows rooted in a Christian perspective, and Minow really helps your child learn about Jesus, the Bible, and all the amazing things that God's created. So feel confident about the media choices you're making for your family and start watching Minnow today. Download the Minow app or visit go meno.com. That's G-O-M-I-N-N-O-com. And enter Rachel, check out to get your first month free.

I have my brother and sister here. Guys, welcome. Thanks, Rachel. How does it feel in here? You love it? It's good. Cozy? Good.

Comey. Yeah. Thank you. Well, we have Denise and Daniel. Okay, so say you don't have to do age, but like married, not married, kids, not, so people can kind of get a grasp of like, okay, yeah, because you're older. You're the oldest. I'm the oldest, and so, yeah, we're two and a half years difference.

And I'm married with three little. babies. Three babies, yes. Yeah, yeah. On the youngest, yeah, you're four years old than men. Yes. And Denise is six years older than men. So I was born a little bit after some of the drama, but learned all the hard lessons.

That's right. That's right. And married. Yeah, my wife, Allison. And a babe coming. And a baby on the way. Yeah. Later this summer.

So everyone on the show or most people that watch know kind of the Ramsey's story and the bankruptcy and that I was born the year that that happened. So you were like two and a half. I was born that year. Daniel came a little bit after. So when I was writing the book, Know Yourself, Know Your Money, and I was doing the manuscript

of the childhood classrooms, realizing that money's communicated in two ways. It's communicated verbally and emotionally, and it creates kind of these four classrooms. So I said in the book that I felt like we grew up in classroom number four, which is the stable money classroom or the secure money classroom,

and that is where it's verbally open and emotionally calm. So I'm just throw it out here because I said in the book, too, like siblings can have a different perspective. So do all think we grew up in that classroom or a different one? I would think we grew up in that one. Okay.

Yeah. I mean, I feel like, especially, because mom and dad were so open, I mean, especially at that point, so it was still so new that they were like in the teaching mode. And so they all they wanted to do was like teach us because they were excited and like they didn't want us to screw up like they did. And so, yeah, it was calm, but like exciting calm, if that makes sense. Yeah, totally. So they made it fun.

Yes, yes. Do you think we grew up in that classroom? Yeah, for sure. I mean, it was never stressed. It was open, but we talked about, hey, we're not going to do something because it's not part of the plan. It was more of a reason of discipline than actually, like, us not, you know, being able to or us being stressed about it. Yeah, yeah. Yeah.

So one of those, again, part of that quadrant is the verbal communication. We just said that. So it's either for people closed or open. And we would say we are an open verbal family. Would you agree? Yes, we are. including some debates. Oh, we love family debates.

Yeah, we can get into it. We can get into it. But when it comes to money, like you guys said, we talked about it. So what are a couple of ways, or do you have any memories of talking about money, whether it's something you wanted to buy or anything like that? Yeah. I mean, when you first said that, all I thought about was Sundays. Like, Sunday was payday for us.

And so we'd get our little chore charts and go down and, like, figure out, okay, I did this chore, I didn't do this chore, and we got paid. And so, I mean, I'm sitting in the living room floor and, like, dividing out, like, giving, spending, saving. And so even on a young age, we were doing that. And so just having those real conversations with mom and dad about spending, like, okay, this is, I was saving up for a Barbie doll or whatever. And so being able to be able to go to the store and be able to purchase that or, yeah, or saving for my car. So, I mean, so yeah, we had those, like, real conversations. Yes, yes.

Yeah, it was good, open dialogue where we actually understood, I feel like they really taught us the value of it, of, like, earning it, and that it's not limitless. Like, their pocketbook, their ability to give us money or us to earn, like, it has to be earned. It can't just be found. Right. Yeah.

So one thing that I feel like parents struggle with, you probably feel like this with your kids. I'm like, how do we, how to raise kids that are not, entitled, that are not spoiled, that understand the value of a dollar, right? And like, doing commissions and all that, I think, is a great foundation to start with your kids. But as we grew older, a mom and dad became more and more successful. When you do what we teach over a long period of time, you're going to build wealth. When you're out of debt, you're investing, you're saving, you're giving. Mathematically, that's pretty much what occurs, that's what you do consistently.

So when we were, you know, probably in high school, I feel like I was still told no. even though mom and dad had the ability to give us things, and whether that's a nice purse or buying something cheap at Target. Like, it wasn't the price that made the difference. Like, I always look back like, man, they did that really well because I feel like we somewhat were not perfect by any means. But I feel like they did a great job balancing blessings in life, but yet putting that responsibility on us.

Does that make sense? Yeah. And do you have any thoughts around that? because people ask a lot how not to raise entitled, spoiled kids. How do you think Mom and Dad did that? Yeah. Considering y'all are not spoiled in a title, which they might be just a little bit. I'm the good one.

I'm just going to be. I mean, one thing that stands out to me is I remember, you know, we live very, we live very modestly, even when they could afford stuff. And I don't think I realize how successful, you know, our parents were and how good they were financially until I got older and saw them loosen the reins on themselves and saw them. starting to buy different cars and they moved houses and things like that. Like, I had no idea. And then asking the questions afterwards made me realize they were way more intentional and they weren't, they were living way below their means for a lot longer time than I realized. And so, so yeah.

Which is the thing more is caught than taught, right? Like when you watch your parents have a boundary with money, whether they can or can't, is it necessary? Yeah. That automatically gives influence on your kids. Your kids are watching you. It's huge, so huge. Okay, what's the time, speaking of boundaries that mom and dad said no to you,

that you were like, man, I really want that. And they were like, nope. Like a teenage. We're not like, is there any time that I was like, man? Yeah, I do have a memory of going to Best Buy when I was a kid. And I'd saved up all this money to buy a Game Boy. And I remember I didn't calculate the tax. Like I knew how much it cost and I showed up with the right amount of money.

money and I didn't have the money for the tax because I just, you know, who knew? That was a good lesson in itself. And I remember going and purchasing it, but I couldn't afford a game because I had to pay the tax. So I bought this Game Boy without a game. I think I remember, I don't, I'm not sure exactly, but I think I remember my mom bailing me out and then me paying her back like, you know, when we got home or something like that. So like, it's not like they were hardcore on every little thing. Like, she felt bad for me and she recognize it, but it still stuck with me. I still learned the lesson, even though she, you know,

she helped me out a little bit. Yes, yes, that's good. That's good. The game boy. The game boy. Tetris. Oh, yeah. I remember that. Do you write, do you have any stories, Denise?

God, I know, it's something similar. I mean, just like being a girl, I mean, you like the fun shoes and the fun purses. And so just, I mean, at Christmas time and stuff, you know, yeah. Wanted to ask for something. And they're like, no. Like, you are a teenager. You don't need to be buying.

Or, like, asking for these types of things. Totally, totally. That's so good. Okay, so what is one thing that you will duplicate, replicates, if you will, that mom and dad did, that you loved? And then is there anything, if not, no big deal? Is there anything you would do different?

That's something we've already kind of started with our kids. And we have like the little junior chore charts. And so they're hanging up on the fridge. They love being able, okay, I made up my bed. I've got to run downstairs and put my check mark. So just starting that process early. And then also just teaching them to give at our early age. Because I think that's so important and such a firm foundation to start on.

I mean, I remember looking back and that was something that we started so early. And that's something that's been implanted in us that it hasn't even been a question now as adults. Like the first thing you do, tithes to the church. And so it doesn't, it's not that big of a deal. Yeah. Which is such a good point because when you change your money, habits to say, okay, I'm going to do something new like giving. Like maybe as an adult you never did give and you're like, I know, I want to start

that. It's kind of this new muscle you have to build. But when it's all you know, you don't have to learn anything new. It's just part of it. It's just part of life. That's great. The giving, I love that. Yeah, the giving is something that came front of mind for me was like, I remember at church,

you know, watching our dad put the check in the tithe, you know. And I remember one day he stopped doing it and being like, I was like, what the heck? And he's like, oh, I started doing it online. or I started mailing it. He said something like that. And I remember being like, oh, okay. But they involved us in their giving. They talked about it and they gave us opportunities.

I remember on Christmas time, us go into the grocery store at Kroger and watching people go in and handing them money as they went in, people that looked like they could use it and that we prayed over that process. And that was really life-changing. I think he would do difference. People always ask me this question a lot. And I always say, like the principles of what we learn, no. I mean, I'm still going to.

Yeah. Not that they did it perfectly. No, right. They did such a good job. You know what? Oh, I mean, I just thought about your book where you talked about mom stealing popcorn. Oh, yeah. Oh, yeah.

Yeah, not justifying being cheap in really crazy ways, but, yeah, okay. That is good. That is good, yes. Just being able to seriously. I spend your money. Or being at Cracker Barrel and taking all the jelly. putting it in your purse. You're like, maple syrup.

Or maple syrup? Oh, yeah. All of it. All of it. That's so funny. I know. I guess I think I would do the car thing. I love the matching in 16.

Yeah. Well, even college, I feel like they were a little bit, which is funny to say, it's kind of the opposite extreme of what you would think. They did not make us work in college. Sometimes summers.

They're like, you have to be productive and do something. But there's a level of skin in the game. I think I may want my kids to do with college. I don't know what that looks like, what capacity. Yeah. But I'm leaning that way right now for some reason. That's something I thought about.

Yeah. I know they gave, yeah, during college, they helped us out. So we went and had to get a job. But I remember I took on a job during school, I think, for a year and a half. Although I had a little bit of money from our parents. Like, it was enough to get by. It was fun. It wasn't over the top by any means.

And just having extra money in my pocket gave me more pride. It gave me more ownership. And, yeah, I feel like I was way more intentional. Yeah, yeah. Because I think so all that. So as we close out, what is one piece of encouragement you could give parents that are on baby step two? They're working their way out of debt. They're sacrificing.

They're maybe working extra. They're saying no to their kids all the time because they just want to get out of debt. And it's that strenuous process. And it's hard when you have littles running around the house. And so that's what mom and dad did. So what's one, yeah, encouragement you can give those parents because I know for me growing up and knowing that my parents did something, sacrificed something for me, changed everything.

Like when I saw, oh, wow, they did that. And it's when you're a little bit older, but they did that. And then the lessons I learned because of the boundaries they set is probably what gives me a little bit of self-control today when it comes to my money. So that's always my encouragement to parents that you're not. harming your kids by telling them no by the sacrifice. So what would y'all say in your perspective? Like, what would you tell that family? Yeah. I mean, I would just say just be open and like talk about what's going on. And yeah, just share what's going. Yeah, have the conversation and share what's going on.

It's good. And explain why and be like, you know, we're doing this now. So later we can really enjoy going on to eat or really going on vacations. And we get to really celebrate when we get to do it. That's awesome. That's awesome. Yeah. I can think back to just memories of us whining a lot or complaining, like, not going out to lunch after church and stuff like that. And just begging for things. And looking back, I'm so glad we didn't because, like, although we missed out on, like, you know, great breadsticks or something like that at a restaurant. But although we missed out on that, you don't remember that. What you remember is what you learned.

And we learned the discipline and the value. and the intentionality. And it's not that we couldn't afford going out to eat so much as we already had a meal planned at home. Like we'd already bought the groceries for it and like sticking to it. So yeah. That's good. Awesome.

Well, thanks y'all. I hope you'll come back again sometime. Thanks for having. Yeah. Thank you. All right. I'm going to answer a question from someone in my Facebook community. And it's a question that I get a lot.

So this one was from Jen. She said, I'd really love to dig into money saving, budgeting, and paying off debt, but my husband is not on board. He says, we're doing fine, but we aren't. He brought a lot of debt over from his previous relationship. We can't even get approved for a mortgage. Do you have any tips to get him on board? Oh, I'm so sorry. This is a hard one.

It's so stressful. It's hard in marriage when you're not aligned on big subjects in life. And money is one of those subjects. you want to financially be a team. So I would say a couple of things, Jen. There's an emotional aspect that I want you guys to kind of tap into. And it's the idea that you have to be one in your marriage. You have to say, hey, we're still going to have our own passions,

our own tendencies, our own, you know, maybe goals of I want to do this thing or he wants to do this thing. And that's fine. You don't lose your identity when you get married. But you do become one. And you do say, hey, we are on the same team and we need to be doing things very, very similar on the same road so that we can win in the long term. It's really hard to win financially when you're running on two separate tracks and you're trying to get out of debt and he doesn't

care to and he goes into more debt and you're trying to dig out this hole. It's not going to work in a long term. And so to say, hey, we have to be a team. I would also say he needs to know your why. Why? Why do you want to do this? Why do you want to pay off debt? Why do you want to live on a budget? Why do you want to save? Why? Is it because you're stressed out? Is it because you're stressed out? Is it because you're scared? Is it because you feel like you work so hard and you just have no traction? And there's something you just tactically off and you're like frustrated about it. Is it because you want your kids to live a better life than you did? Like, what is it? Figure out that why. And that's when you want to bring that conversation to him

and say, hey, here's why I want to do this. And that usually leads to deeper conversations other than just money. And if there's hopefully some respects in the relationship, you guys are going to hear each other. And it may not just be the thing that just takes off and like, oh, yeah, we're going to automatically win, but he needs to know your urgency of your why. Number three, I would say that you're going to have different money tendencies, and that's okay. You may always be more of the nerd in the relationship or you're always going to be more passionate than he is. He might be more of a free spirit. Now, that's not to say an excuse, well, then you just do everything and he's just going to listen and not worry. No, no, he needs to

engage as well just because you're a free spirit. You don't get a pass. on this money stuff, you still have to engage the conversation. But for you two to come together and say, okay, you're probably going to be more passionate about it than he is. And that just gives you a level of empathy. But again, I want him on board. But if you go down the seven money tendencies in my new book and just pinpoint and say, okay, this is him, this is me, this is him, this is me.

It almost gives you this level of empathy to say this is where he's coming from. And I would want to know that, like kind of his story. So that's going to be number four, digging into that past relationship, to his past family experiences with how he grew up. Dig into his past when it comes to money to figure out why has he shaped and viewed money the way he does today? Because what you're really talking about is a value system, a principle that you guys are not agreeing on. So figuring out how he got there is going to help. And then, last but not least, it's pretty tactical. But I find that usually works more for men to get them on board is to show him. Hey, why don't you then, Jen,

do the budget and show him, hey, this is what I'm thinking. What do you think? Show him your debt snowball. Go ahead and do the debt snowball. Get all the debts on the table because it's not his debt or your debt. It's now your debt together. Y'all's debt. Make a debt snowball. List out all of the debts, smallest to largest, regardless of the interest rate, and show him, okay, if we really put X amount towards that smallest debt, we could have it paid off in two months. And then the next smallest debt, okay, we could have that paid off. And then show him a timeline and say, hey, if we really we sacrifice and we put this extra money here, we can have no payments. No payments in 18 months, 24 months, whatever it is for you all. But to do that and show him tactically, because I think sometimes

the idea of handling money well, whether it is budgeting or saving or getting out debt, it's all kind of theory up in your head and it's kind of emotional and it's all here. When you can bring it on paper to actually see it visually, that helps as well. And if all of those don't work, Jen, then honestly, I would go see some. someone pulling a third party, whether that's a good friend who has a great marriage when it comes to money, whether that's a marriage counselor or a therapist, I don't care, but bring someone in because I find so often that life's problems masquerade themselves as money problems. And at the end of the day, it may not just be a money problem. There may be a marriage breakdown there

and for you guys to resolve that and figure that out, because not only are you going to win with money faster doing that, but you're going to have a healthier marriage overall. You're going to force to communicate about things. You're going to be forced to probably look to see, hey, where have I gone wrong in this as well? All of it. It just kind of exposes us, but when you can have those deeper-level conversations, you just

have a richer marriage overall. And then the money stuff comes after, and it ends up usually being okay and you guys working on the same team. So I hope that helps Jim, but I know gosh, a lot of people struggle with this, you guys. We talk about it a lot on the show, but money fights and money problems, one of the leading causes of

divorce. So if the financial part of your marriage is always a stress point. Focus in on that and say, hey, let's work on this because it's not fun to live life when you're just stressed out and freaked out, right? You want to be able to enjoy it and enjoy it with the person you're married to as well. So thanks for asking, Jen. And you guys, you can ask any question you want on usually social media. So whether it's YouTube or Facebook or Instagram, we are out looking for those questions

and hopefully we'll answer them here on the show. All right, Jen, I hope that question helped you really get a grip to understand, okay, is how I can possibly get my husband on board, because it's really difficult, you guys. I mean, if you're on this money journey and you are married, you know that spouses, we are very different, opposites attract, and so getting on the same page is so, so crucial.

And I'll say thank you to my brother and sister for being on as well. And if you guys have not hit that subscribe button, make sure to do that, and if the spirit leads, you can leave a review. And as always, make sure to take control of your money and create a life you love. love. So if you guys enjoyed this podcast, we have more from the Ramsey Network, like the

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