The Ramsey Show - App - Have You Had To Pay “Stupid Tax”? (Hour 1)

Episode Date: February 23, 2024

МУЗЫКАЛЬНАЯ ЗАСТАВКА Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, joined by Jade Warshaw this hour. The number to call is 888-825-5225. We've got a great crowd in the lobby of Ramsey Solutions. Look, they're so happy to be here, Jane, and a good reminder that we're open to the public. You can watch the show on the glass.

If that's how you want to enjoy your day, is to watch a radio show through glass, then come join us. We've got baked goods, coffee, all kinds of things. Fun for the whole family. Love it. So give us a call, 888-825-5225. And Jay, we're going to kick off this hour with a brand new segment we are calling Change My Mind. Ooh, Change My Mind. I love it. It all started with a friendly voicemail from a listener who wanted to have a friendly debate. Okay. And so I thought you'd be the perfect person

to have a friendly debate with. Okay. And so if you want to join in and you have something you'd like us to change our mind about or change your mind about, you can email ask at ramsaysolutions.com, put change my mind in the subject line. And Brad, welcome to this brand new segment. You invented it, my friend. How are you doing? Great. Change my mind. New car versus used car. This is the debate. I'm going to put value here.

Hot debate. Okay. Make your case. My case is a new car. $2,000 a year is my case. And I'm not talking hoopties. I'm trying to do a nice regular car, not an upscale and not a hooptie. So we're talking Hondas and Chevys.

$2,000 a year is my goal to beat. And I did that with a brand new little Honda HRV. I bought it, sold it back to them, traded it in, and bought another one. And I beat $2,000 a year. I've bought several. I've listened to Dave for a couple years now, and we bought several used cars, two to three years old, low mileage, get you a good deal on it, and I've gone over $2,000 a year on all those vehicles.

What do you mean? Yeah, is this like maintenance? No, if you buy a car for $20,000 and it lasts 10 years and you throw it out, you pay $2,000 a year. Okay. That's the way I'm trying to do this. Got it. So I bought the $20,000 used Honda Pilot, drove it for 10 years, and it had some engine problems and dah, dah, dah, threw it out for a thousand dollars. I sold it, but that is $2,000 a year.

Okay. And I'm driving a 13 year old car. Okay. At the end of it. Now, my other scenario here that I did, I bought a brand new little Honda HRV, drove it for three years, traded it in, and I paid the same $2,000 a year. What did the HR-V cost you after taxes? After all the... around $25,000.

For a brand new HR-V? Oh, no, this is 18, 2018. Okay. I did that. Because you're saying the argument here is new car versus used car. Correct. So are you saying why shouldn't I buy a new car? This is your first time looking to buy a new car?

Nope. I've bought several new cars and several used cars. Wow. And I seem to win on the new cars help us see help us understand how you're winning because you're saying your yearly cost of ownership essentially correct is lower on the new car maintenance gas none of that just the initial cost and what it's worth when you get rid of it so you're not factoring you're not factoring in, you're paying cash, whether it's new or used is what you're saying. Oh, yeah, always cash.

Okay. So you buy it up front. It's a done deal. You sell it at the end. You complete the transaction. So then really what we're talking about is whether or not you have the net worth to care about the depreciation that's taking place on the new car. The depreciation is what the argument is okay dave always says the depreciation is in the first three years they have i don't agree with

that okay three to five well and uh let's let me give some people the facts because we're changing my mind and i happen to have it right here one minute one minute after you drive the car off the lot let's say we're talking about a 35 000 car one minute after you drive the car off the lot, let's say we're talking about a $35,000 car. One minute after you're losing somewhere between nine and 11%. So that's basically what $3,500 out the window right there in one minute. And then after one year, you're losing around 20%, maybe even more. And then after five years, you're down to about 60%. And then after that, you're 10% each consecutive year after that. So the idea for the people listening, because some people might not know it, the way we teach is, hey, if your net worth is a million bucks or more, you can buy a

new, you can buy a brand new car, whatever year you are in, you can buy that car brand new in cash. And it's fine because I don't care if you bought a $100,000 car. As long as everything with motors and wheels doesn't add up to more than half of your annual income. Because basically the argument is you're happy with burning that money in a pile and just seeing it go up in flames and it's not going to affect your net worth whatsoever. We look at cars like a vacation property. It's a toy.

It's a luxury toy and it's going to go down in value, which unlike real estate, it will go down in value regardless of what people tell me that cars are an investment. They also rust. And so, Brad, in this scenario, what is your financial situation? Are you a net worth millionaire? Do the cars add up to more than half of your income? We're almost a net worth million, plus over $100,000 coming in every year, and we have no bills, no debt. Wonderful. You have paid for a house? Oh, yeah. Crushing it. Okay. So the argument here is over a few hundred bucks a year in cost of ownership. Wait, I'm sorry? Is the argument here over a few hundred bucks a year

of cost of ownership? Hey, the used one cost me two grand, the new one cost me $1,700. Yes. Okay. Sort of. Yeah, except yes. That's basically it. I looked around today. I could not find a car that was half its value in five years.

Well, you're also looking at a very specific time in the car market. It's been real weird for the past three years or so. And so it's a weird time to look at this and go, well, this is reality when this could all change and go back to normal. And so you're right. Cars have held their value more than they have over the last few decades because of this crazy time in the car market with supply and demand and the chip shortages and COVID and all of this stuff. And so we're starting to normalize, but everything is still so overpriced that it makes me just want to barf looking at prices of used cars or new cars. They're both terrible investments right now. I agree, and I am not a car guy.

I'm looking at 140 horsepower vehicle here. So, I get that, but I am trying to save some money because I would much rather go on vacation than spend it on a car. Love it. So, give us the example of the car you bought or you want to buy that's brand new. Let's do my HRV again. Okay. I again okay still 25 000 several years later okay and when did you buy this well i bought a couple of them i bought the first one i think it was 2018 ah okay but you bought it new in 2018 correct okay well i would look at the next five years and see how it pans out for you.

And again, this is, you know, it's a fun little debate, and you are not the problem, Brad. You are an almost net worth millionaire with a paid-for house, and if you want to spring the extra 200 bucks, it's not changing your world. But if you want to check out the blog we have on new cars versus used cars, we'll put that in the description. It's called Should I Buy a New or Used Car at RamseySolutions.com. More of the Ramsey Show coming right up. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped

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more today and join at chministries.org slash budget. That's chministries.org slash budget. Welcome back to The Ramsey Show. I'morge camel joined by jade warshaw the number to call is triple a 825-5225 don't be scared you can't dm you gotta call in it's the only way my gen z friends i know it's uncomfortable to call on a phone but they still do that you can't text in one day we'll get there that'll be like like our Patreon edition. That'll be fun. All right, Gabrielle is on the line in Detroit. Gabrielle, welcome to the show. Hi, thank you.

My question is, should I apply for my first credit card so I don't have to continue paying for everything in cash? No. Where is this coming from? So right now you're paying for everything with actual physical dollars? Cash, I mean, as in we'll get that and just money in my bank account. Like your own money. Okay. And so what is your fear with using your own money from your own bank account with a debit card?

I guess. I mean, I know that a credit card can help me build my credit. I do have other lines of credit open, just not a credit card. And also, I guess sometimes it's going to sound silly, but it's kind of hard to let go of some cash all at once. So the idea of paying it in increments by the due date is somewhat appealing. What if I told you that that's your body saying, don't make a stupid decision?

When you say letting go of a lot of money at once, what would be the purchase here? I don't have anything in particular, just my day-to-day transactions. So things like groceries, gas, maybe like a leisurely item here and there. So you'd rather lump it all into one giant mountain and then 30 days later, have that come out of your account if you're lucky. I guess not. That's even scarier to me because I've been there. I was that guy who opened the credit card to build the credit, who racked up a bunch of debt on there and the balance carried. So I'm telling you as a guy who did this, you don't want to do this. How old are you? I'm 24. Okay. Have you ever had a credit card?

No. Wow. And you've survived to tell the tale. I just think it's interesting. Okay. Our screen says, I don't want to pay for everything in cash, which kind of feels a little bit like, it doesn't feel like it's as much of a credit card and building is it for building credit or is there something else behind this like are you I'm just trying to understand because this might sound simple but in my mind I'm thinking if I want to buy something I should use my money to buy it that's the whole purpose of working is so that you have money to purchase the things that you want and need and you feel purpose in doing that and so I there's part of me that kind of feels like credit cards take away that feeling of satisfaction I've worked my the money I've earned is good enough for me and I can use that money to make my purchases where does that bother you I, I'm trying to understand kind of your take on this.

Like I said, I guess just, you know, people always tell me that you should have a credit card to build your credit. I don't know if I should need that. Just my friends and family. Are your friends outstandingly wealthy that you look up to them and go, I want to be them when I grow up? Not exactly. There's one reason to not up to them and go, I want to be them when I grow up? Not exactly. There's one reason to not listen to them. There's a foundational difference here. And so where George and I are coming from is we're, I mean, you might be new to this show, but everyone here is kind of of the mind,

not kind of, we are of the mind that we don't need or rely on credit at all for our lives. Because like I said before, we have jobs, our jobs earn money, and we've learned to live on the money that we earn. And when we do that, we keep ourselves out of debt and we keep ourselves out of risk in general in life because we're just using and spending the money that we have. We're using that money to pay for our day-to-day needs. We're using that money to save up emergency funds so that we don't need to rely on credit cards. And so that's where George and I are approaching this. And it sounds like some of the people that you've been talking to have a different view

of life. And their view of life is your money is not enough. And so you have to get credit because they can give you the money you need to have the lifestyle you want. And the only way to get credit is if you can have debt. And so it's this ping pong between debt and building credit and more debt and building credit. And when you do your life like that, you're just constantly caught in that limbo. You're never debt free and you're never actually living on the money that you earn. And you're in this constant state of risk to play that game when you don't have to.

That's understandable. I appreciate your sharing that. You know, and I want to take it a step further and George can help me with this because I think, Gabrielle, what happens, it's truly, and I don't say this to be ugly to anybody, I truly think a lot of people don't know and don't have the education to understand you can buy cars without a credit score and you can buy cars without a credit score and you can get apartments without a credit score and you can buy homes without a credit score. That's not taught in our culture. I mean, we're really the only ones talking about it over here at Ramsey Solutions. It's become controversial over time just to pay cash for things. Because

when you pay cash for things, no one's really making any additional money off of you. So a lot of companies don't like that. They don't like that we say this. And I kind of want you to hear that. We're teaching you something that you can live and be self-sustainable and no one's constantly making money off you, right? They're not making money off you on interest and payments and late fees. That's really what this argument is about. You don't have to play that game.

So I hope you hear that with a clear, you know, what is it? Clear minds, clear hearts. Yes. Clear eyes, full hearts can't lose. Thank you, James. Texas forever. I'm curious. You said you wanted this to build credit.

Why do you feel like you need to build credit? I guess in case I ever needed to take another loan out in the future, because right now, like I said, I do have three other lines of credit open. What are those lines of credit? I have a mortgage, a car loan, and some student loans. Okay. And so your path is, let's get more lines of credit to get more lines of credit to get more debt to get more lines of credit. That seems to be the path. I guess that's what I thought I should be doing. Well, what I'm trying to do is unravel this to show you the insanity that America has fallen into. And so when you really look at what credit scores are for, it's a magic number that was given to us by the credit gods to get us into more debt. And so when you decide I'm done with debt,

I don't want a car loan anymore. I don't want the student loan anymore. You no longer have a need for credit. And even when it comes to buying a house, I bought a house with no credit score. And we teach people, save up and pay for a car you can afford in cash. And then you don't need credit because they don't check your credit score when you pay cash. Because let's just play this out down the line, Gabrielle. What happens if you do what you called in to do, which you just say, you know what? I don't want to use my own money anymore.

I'm going to use credit cards. What happens is each month you have a revolving balance. And if you're lucky, you pay it off. If you're not month you have a revolving balance. And if you're lucky, you pay it off. If you're not, you keep some of it there. And so you end up now with a car note, a student loan, and then credit cards. And my question for you was, what does that get you? If you do that, what are you getting out of this deal besides debt? I guess the material item of whatever it was I purchased. Which was probably not a wise purchase. And here's what I found. When you use someone else's money, you look at it differently. When you use your own money, you start to go, oh crap,

that's money leaving my bank account right now. Well, that's science, George. Like that's actual, there's actual psychological studies on what happens when you use Well, that's science, George. There's actual psychological studies on what happens when you use credit card that's plastic versus credit card that's your debit card versus cold hard cash. Your body becomes more and more removed from the process, the more and more it's removed from being actual money in your hand. Even something like Apple Pay, even though it's your money. But their tagline is cashless made effortless. They want to make spending so effortless. And here's what I found, Gabrielle, now for 10 years living with a debit card.

When it hurts less, it costs more. You spend more. You're hoping you can make the payment. You're lucky to make the payment. I found when I use my debit card, I don't need hope or luck. I can actually pay attention to my money. And when I run out, I can't spend anymore. And to me, that is a great way to build wealth. And it adds really healthy guardrails. So that's why I'm

recommending all of this to you. And I unpack all of this in the credit cards chapter of my new book, Breaking Free from Broke. I'm telling you, you will want to take a shower after reading that chapter. I unpack the studies. I go through every objection that's in your mind. I'll show you how to live life outside of the credit card and credit score system. So hang on the line. Our team's going to pick up and we will gift you Breaking Free from Broke. You can choose audiobook, ebook, the hardcover copy, however you like to read. We want to make sure we get it into your ears or in your hands. Thank you so much for the call. Great question. Love your heart around this. And I hope we've convinced you to stay away from these gross companies. Because listen, Capital One's out here sponsoring the Taylor Swift tour.

We can't afford tickets to the Taylor Swift tour. Who is winning here? It's not us. It's the companies with the big buildings downtown. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Camel, joined by Jade Warshaw. We're going to have some fun here in this next segment. If you've listened to the show for a while, you know we've done some stupid tax segments. And if you don't know what a stupid tax is, you've probably paid one. This is a financial mistake with some zeros on the end. It's just one of those things.

If you're over 12, you've paid a stupid tax at some point in your life. Most have. And so we don't do these segments to shame people. We do it to kind of have a laugh and go, we're not alone. We can all grow from this. And it really, it's only stupid if you do it more than once. That's how you know.

And so we've got some folks we've scheduled on the show to call in and share theirs. And I have a whole list of stupid tax stories that were submitted from our listeners. So we're going to kick this off with Aaron in Dallas, Texas. Aaron, tell us about your stupid tax stories that were submitted from our listeners. So we're going to kick this off with Erin in Dallas, Texas. Erin, tell us about your stupid tax. Okay. Well, I was working downtown Dallas, and I decided I started making some real money,

and so I decided I needed this designer Prada handbag. And I'm not a flashy person, so I don't know why I decided I needed this handbag. But I bought it, $3,800. Ooh-wee! handbag and I'm not a flashy person so I don't know why I decided I needed this handbag but I bought it $3,800 and yes I it was a beautiful purse I bet it better be for $3,800 but I learned quickly that I didn't enjoy carrying it I was too paranoid to mess it up all the time I was worried it would get stolen I wouldn't take it to the restroom and like if I was out to eat I had to go to the bathroom I didn't like putting it on the floor, on the counter. And one time it was raining outside at work and I spent about a half hour covering it in those plastic grocery bags so it

wouldn't get wet. And I finally realized I didn't like it that so much. So I sold it a year later for $350. Oh! A year later? Yes. That thing depreciated by 90%? Were you just desperate, or is that the going rate for a one-year-old product bag? It was a buy-sell page, so I guess that was market speaking

for you. Wow. Designer bag. Well, now I know where to get a designer bag for my wife. I'm going to go on one of those pages. Just a year old, honey. It's barely used. It's been covered in a Walmart sack for the last year because Erin was scared. Honestly, it's going for $500, the same bag, going for $500 on the same buy sell page now. And I still like it. So I kind of thought about buying it again. Oh my goodness. Now you're like, I feel better buying it for 500. Yes. Oh my goodness. So what purse do you you have now what's your go-to bag

i don't even carry a purse i just carry my wallet in my hand wow i know that's right which wallet is it is it fancy no you know brighton like the mall yeah yeah oh wow that is so funny do you know what that reminds me of erin that episode of friends where monica wants those boots so so bad and she finally gets them and and they hurt her feet. Her feet are, like, bleeding, and then she has to return them. Oh, gosh. Are you married, Darren? I was at the time, yes.

What did your spouse think about this? Was this a conversation, or was this just like, I'm doing this? Well, he was in the military, and he was deployed at the time, so I don't really remember asking. Oh. or was this just like, I'm doing this? Well, he was in the military and he was deployed at the time, so I don't really remember asking. Oh. Did this go on a credit card? No, I wrote a check for it.

That's good at least. Good old check. There's the silver lining. At least it wasn't $3,800 with 22% APR. Yes. Added payment. Oh, my goodness. Well, are you doing well now? I did learn a valuable lesson.

Sometimes it's just not worth it when you have something you're worried about messing up all the time yes that's a very good point when you buy that really nice luxury car and then you're parking it a mile away in the parking lot because you're scared someone's going to ding your door i'm like was this really worth it for this level of emotional paranoia and stress look i feel that way with kids like sometimes i see people with brand new cars and they have like two and three and four year olds. I'm like, these kids are destroying the inside of this car and sauce and just kick the back of the seat.

Oh yeah. Now that you've got to get a kick protector, I found out just to protect that Aaron, you know, stuff has a cost. And my friends, the minimalist, they talk about this stuff a lot of like,

it's not just a financial cost. It's the emotional cost, the mental cost, your time cost. And so thank you for being brave and sharing that with us that's good yes well it's good to talk to you guys i listen every day thank you well hopefully we can steer you away from buying four thousand dollar bags that will haunt you and again let me make it clear there's nothing wrong no people think we're anti four thousand dollar bags if you make a million bucks a year and you're paying cash and that's something you value,

you're not trying to just impress people you don't like. You think you got to make a million bucks a year to have a $4,000 bag? No, because I know Jade probably has sneakers that have more than my retirement account. That could be true, but not bags. Okay. Here's the thing. I don't know anything about sneakers. And then I'll see in the YouTube comments like, oh, Jade's got those Travis Scott friends

and family. I'm like, I don't know what they're saying. And then they're like, those thousand dollar sneakers and i'm like jade is walking on on pavement in the like why i couldn't wear those out i will say in the live like no one else so later you can live like no one else my thing is sneakers like everybody has their things i don't care about like bags or jewelry like some people like like diamond jewelry i like costume jewelry but i love sneakers and i'll pay cash for them um and yeah not no stupid tax on that that's fair well if i was in debt it would be stupid tax and i'd be like her like trying to cover them up and like walk without

creasing them and that although i do still try to walk without creasing them but still oh that would stress me out listen when i when you sit in a stool and it's like your feet want to like i have to sit like with my feet straight so they don't crease that's too much stress for me but you know what the guys are not they're not uh guilt free in this category a lot of guys you know if it's not the truck it's the sports it's the hobbies it's the golf it's well what's your thing george for me it was it was gear and. So from a music world and from a technology world, I could justify every single camera purchase. One time on a whim, I bought like every GoPro accessory money could buy along with the GoPro, the latest Hero 8 or whatever it was. I spent hundreds of dollars on this. I can count on zero fingers how many times I used my GoPro.

I thought I was going to be some kind of like action adventure hero, you know, going mountain biking with my GoPro. Yeah. I don't leave the house, Jade. I don't know what I was thinking. I could be like that with like kitchen equipment. Like you're like, Ooh, if I had a, the, the juicer that has the attachment that does this, I'll become one of those people that makes ginger shots. That's what it is. I'm an aspirational shopper. I'm like, if I get the Vitamix, I'll start to enjoy smoothies. Yeah. I will like kale more. Yeah. And if I buy the right equipment, I bought a Canon 7D because I thought I'm going to be this big videographer, photographer. It has been collecting dust.

And I have too much shame to sell it because I know for whatever I sell it for, it will be cents on the dollar for what I paid for it. And so I think there's a lot- Keep it on the old shelf. Yeah. And guys can do that all the time. So I'm going to share a few stupid tax stories submitted from our listeners. Okay.

Crystal said, I financed a Botox treatment with a six month no interest deal, quote unquote. The Botox wore off before I made my first payment. Oh. Oh, man. Her face unfroze just in time for her to go, oh, crap. That's right. I got to pay for this now. That's right. I got to pay for this now. That's nuts.

Amanda in Australia, I use the equity in my home to up my 30-year mortgage to buy a brand new Jeep Wrangler worth $50,000 while making $40,000 a year. That one takes your breath away a little bit. I kind of know about that. Wait, let me share mine then. Okay. Because we had a paid for Jeep Cherokee and we're like, yes, we finally paid it off. Most people would be excited to have their money back in their pocket.

We were like, paid off our car. Let's go finance a $35,000 Hummer and pay $435 a month for it. You were a Hummer family. We were a Hummer. Wouldn't take you for a Hummer family. Yeah. Wow. Those were hot for a while.

They were. Listen. You don't see them on the road now. They're coming out again. Really? hot for a while. They were. Listen, you don't see them on the road now. They're coming out again and mama wants one. Are they electric or something?

Do they make coffee? What's so special? They're not electric but they're less gas guzzly. That's comforting. I want to come back and do it the right way. Thank you for that.

All right. Pamela said, I got scammed out of 300 bucks on Facebook by a friend, quote unquote. It wasn't actually my friend.

Keep in mind, we are Baby Step 7, both finance majors, and yet we found a deal on a car too good to be true and immediately sent a deposit after a short conversation with said friend on Facebook Messenger. Oi. Uh-oh. I've been scammed before and it hurt. The Nigerian prince.

Well, it wasn't a prince, but it is funny. And here's what's funny is this went on TikTok and went viral. And everyone from nigeria was like i can't believe this guy is dog in nigeria and i was like this is just where he had me setting the shoes so i was on craigslist posting my some nike dunks i had yes and i thought i'm gonna be a dunks guy could not rock the dunks sold them on fate on craigslist this guy says hey these are a gift for my cousin in nigeria i, what a kind gift. He said, I'm going to pay you right now for shipping. I'll pay beyond what it costs.

Red flag number four. True that. And so I thought I got an email from PayPal with the confirmation of payment. And so I just went ahead and shipped them. Turns out that PayPal was not in fact. That was fake. It was not a real email from PayPal. The money never actually hit my PayPal account.

That's sophisticated. And I was just an 18 year old knucklehead. And so good news is six months later, I got a box back to my house that said, return to sender. Oh. Address not found. Oh. I was only out the cost to ship. There you go. So a small stupid tax. No weapon formed. That's right. Hey, we got more stupid tax stories coming up. Don't go anywhere. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. 888-825-5225 is the number to call if you want to jump in and talk about your life and your money.

We've been having fun sharing some stupid tax stories. And if you don't know what that is, it's just financial mistakes you've made with some zeros on the end. And we call it a stupid tax around here because it's kind of the price you pay to get an education the hard way. And we've all done it. If you're over 12, you probably have some stupid tax in your life. And so we've got some listener submitted stories and we've got Jenny on the line in Fayetteville, North Carolina, who is brave and willing to share her stupid tax story. What's going on, Jenny? Hey there, guys. How are you? We're doing well. Please share. I'm so excited about this.

So my stupid tax story starts at the beginning of COVID, March 2020. I'm self-employed, as is my husband. And this was before dave so we borrowed money at every chance we got our business banker loved us right 10 days after the everything started to happen um he sent us an email and said hey we want to offer you this great loan fifty thousand dollars unsecured low rate no payments we're yeah, that's awesome because we were really worried about the revenue stream over the next couple of months. We didn't really know what was going to happen. So we took out this loan that we didn't need, but just because we didn't have sufficient savings, we thought we should do it. We thought it was a good idea.

Like I said, this was before Dave. Well, fast forward a year, and we had taken financial peace by then, and we were deep in the heart of Baby Step 2, and that's when we really realized what did we do this for? It's ridiculous. So that $50,000 debt went in our Baby Step 2. We put it in the debt snowball. And I figure when it was all said and done, the interest had accrued over the year with no payments,

the payments that we did have to make, it probably cost us about $3,000. Yikes. So what did you do with the $50,000? And looking back now, out of it, we're baby step seven. We don't owe anybody anything, and I can't believe I ever thought that was smart. Well, in a moment of panic and fear, you tend to make some pretty stupid decisions. That is true. Absolutely. And, I think a lot of people did that. That's exactly what it was. I took that loan out of pure fear, and I was using debt as my emergency fund, but I will never do that again. Yikes. Lesson learned. So 50 grand shows up in your bank account. What do you do with that? Yep, they made me take the money. They didn't just give me a lot of credit to use it. Oh, yeah.

They wanted me to take it so they could get interest ASAP. Did you actually use it to cover the business or did it become sort of a lifestyle spending fund? Well, honestly, George, I didn't even really ever need it. I'm more in real estate and real estate was booming. That's right. My husband's in a different industry that really relies on large gatherings like festivals and weddings. We were really worried about his situation, but he's smart. He was able to pivot and figure it out, though. Wow. So we didn't even need it.

That's the carry on top. Yeah. We didn't need the money, but it cost us three grand to have it in our account. Are you still friends with the business banker? Yeah, we're still friends. Okay. Maybe just limit that relationship.

He's just not loaning you money anymore. Yeah. Send him a Christmas card once a year, but maybe don't answer his emails when it comes to loans thank you for sharing that story jenny that's a fun one hey you know what that reminds me of george uh kind of during the same time covid remember with student loans it was like biden's gonna forgive your student loans oh yeah get a refund on the payments that you made during covid yeah people were getting those advance refunds on the payments that they made

like people who had literally paid off their student loans got refunds on their payments and went back into debt thinking biden's gonna forgive x amount and i'll get that money back if you had paid your balance to zero and you made 20 000 on payments the student loan company would bring your balance back to 20k as if you went back into 20,000 of debt that's right they went good luck the government will take care of you oh that was a scary time yes a lot of bad decisions and a lot of people spent the money that they got back and then biden never forgave the student loans and then they were on the hook again to pay off the 20,000 or the 7,000 or whatever it is again that was a that was a big old stupid tax i know a lot of y'all

paid that i feel bad for you all right i'm going to share a listener's story here from vincent about his stupid tax my wife had this quote amazing idea of starting a hobby farm so we moved from the city to a rural area over five grand later i'm standing in the rain getting kicked in the face trying to milk a goat and i'm chasing foxes trying to eat the chickens oh man no milk and very few eggs and neither of us had the courage to do what had to be done for chicken meat if you know what I mean. Oh boy that was like the worst. Wow. The worst children's story ever right there. Yeah that's true a lot of people are like I'm gonna be a homesteader we're gonna move and live off the

fat of the land and then you realize how difficult it is. Yeah. To become from a city slicker to the farm boy. That's a big jump. To just up and start a farm. Remember when eggs were so expensive and people were trying to buy chickens? Well, John Deloney famously had some chickens and I think they started getting attacked by some coyotes.

And so he ended the chicken coop situation. Yeah. And eggs aren't that expensive now we've come back down to reality yeah but you what you said um about jenny is true and about so many of us when we get in the state of fear eggs are getting expensive you go to like these crazy extremes or like chicken coop for four thousand dollars take out a fifty thousand dollar loan it's like your brain just it's definitely a temporary moment of insanity. Yes.

Sometimes. Well, we always say no one makes good decisions when they're panicked or drunk. That's right. And some people were both during the pandemic. Okay. Here's a fun one from Olivia. Buckle in.

My mom is paying stupid tax and has been for about 15 semesters of college. My brother's 26 is a full-time college student working towards a bachelor's. To be clear, he has no degree so far and has been attending college, quote, full-time since fall of 2015 after he graduated from high school in May of 2015. He has been academically dismissed from an out-of-state college and is now attending an in-state university where my mom pays for all of his bills and recently bought him a new truck after he totaled my mom's 20-year-old Corvette. Every semester, when it's time to pay tuition, she hands him her debit card and has never officially seen his grades. Oh boy. Every semester, he has a new

quote graduation expectation date that's typically six months to a year out. And when that time comes, he has another excuse about why he's not graduating and my mother continues to fund this lifestyle and never hold him accountable all while financially supporting him 110 don't be my mom people set goals and expectations with your kids require some aspect of responsibility and accountability and don't blindly pay for things without seeing the bill for yourself. Woo-wee. Ouch. It sounds like mom is happy to pay the stupid tax bill for her little boy. Yikes. Well. What is it?

Come on now. Now, Dave has a fun rule. He said, I will pay for college, but the requirement is you finish in four years. I like that. If you don't, it's on you. Yeah, you're on the hook for the rest. That's fair enough. I like that mentality.

I like it. It encourages you to go, I better finish in four years. Because homeboy's been going on many many years and he's just having a good time out there partying on mom's dime and now driving a brand new truck all thanks to mom being an enabler and having zero boundaries that stupid tax remains to be seen but it'll it'll come out in the wash trust and believe that bill must be paid eventually and if that means mom can't retire, that's going to be on her. We've seen that story, Jade, where parents are like,

I signed up for the Parent PLUS loan because I thought I was being a good parent by taking on the loan for my kid. And by the way, if you're taking on a Parent PLUS loan, it's because the student loan company, who is scummy as all get out, doesn't even trust your little kid to pay back the money. So they go, we don't trust you. You need to co-sign her. And the crazy thing is when parents who already have

their own student loans that they're paying back then turn around and take out Parent PLUS loans. Which have a higher interest rate. their loan plus their kids' loans on their back. And since they're older,

they have less time to pay it all off before they retire. So it's just, it's not good. And they go, well, I thought little Johnny was going to pay

and I just took it out in my name. But well, I thought little Johnny was going to pay, and I just took it out in my name. But, you know, he said he was going to pay, and all of a sudden Johnny goes, this ain't legally my debt. Yeah, it's on you, bro. It's on you, Mom and Dad. You signed up for this because we had a call the other day. This guy went $270,000 into student loan debt for a computer science degree and now is making $50,000 working cybersecurity.

Yikes. And I'm like, what made you think this was a good idea? That this was even going to ROI? That's a lot of poor decisions being made out there. And colleges are happy to take your money to raise the tuition because they know y'all are going to go out and take as many student loans as it takes. That's right.

Yeah. In the moment, it always sounds like a good idea because it's getting you what you want in the moment. Whether it's, I want to feel like I want this anxiety to go away i want to feel like i have money i want to feel like i'm getting the degree like whatever it is we want it in the moment and whatever solution presents us getting fastest we kind of get fixated on that instead of opening up our mind and going okay what else is possible here so a lot of stupid tax happening out there but hey learn from these stories i don't want you to i don't want you to create a stupid tax happening out there, but hey, learn from these stories.

I don't want you to create a stupid tax story. If it hasn't happened to you yet, there is hope that you can avoid this. Learn from us. Learn from us. So we're having fun here, sharing these stupid tax stories, and we've all done it. We're not here to judge. We just want to help everyone get better, including ourselves. That's right. Avoid these financial mistakes. That puts this hour of The Ramsey Show in the books. Thank you to my co-host, Jade Warshaw, all the folks in the booth keeping the show afloat, and you, America, will be back before you next time.