The Ramsey Show - App - How to Clean Up Embarrassing and Stressful Bank Overdrafts (Hour 1)

Episode Date: June 18, 2018

The show about you

🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225, where we talk about real life, your life. We talk about how you can change the trajectory of your life. That makes us a fairly unusual talk show.

This is all about you. Yeah. And sometimes you're just downright entertaining. Open phones at 888-825-5225. Yeah. And sometimes you're just downright entertaining. Open phones at 888-825-5225. Laura's with us in Nashville to start off this hour. Hey, Laura, how are you? I'm blessed, Dave.

How are you? Better than I deserve. What's up in your world? Well, Dave, I just had a question. I've recently purchased your book, Total Money Makeover, but I'm having some issues with being overdrawn through my bank and checks returned over the last week and a half or so. And my question is basically, what's the best way to get out of this situation so that I can start working on my Total Money Makeover?

Okay. Do you know how to reconcile your checkbook or your checking account using your bank's website? No, sir. Okay. It's called balancing your checkbook is the thing. And what you're doing is you're not just checking your balance every day. You actually know that I've written or I have used the debit card or whatever, these many charges that have not yet hit the bank.

And if they were to hit the bank today, I would be in overdraft. And that keeps you from being in overdraft. And basically, obviously, you don't want to commit to more money than is in the account, and you've got to get the accounting part of that working. So what I do is contact your bank. Do you have online banking with them? Yes, sir. Okay.

Contact them, and they'll walk you through how to do that, because what you're doing is you're writing, obviously, writing checks or your debit card or whatever, authorizing some kind of withdrawal beyond what your balance is, right? Right. You know that, and it's very, very beyond what your balance is, right? Right. You know that. And it's very, very expensive. Yes, it is. What are they charging you per hit?

$33. Woo-hoo! Wow. Yeah, that'll add up fast. I mean, 10 of those is like some money, right? Right. How many hits have you had? It's probably over the last week, six or seven.

I was expecting, which that's my fault, I was expecting some money through my job that didn't come through. Yeah, you wrote checks on money that wasn't in the account. Right, and to pay some bills, and it ended up not going through because of a system change. So, yeah, it's my fault. Oh, it is. It is.

And the thing is, you've just got to never do that again the rest of your life. Right. It's just too expensive and too embarrassing and everything else. And so it just creates too big a mess. And so you've got to just know what your balance is without having to check it every single day. And you should be able to run that, you know, with your standard bank software. Most of them have it. And once you know what it is, then the trick, of course, is don't write against something you think is coming ever again.

It's got to be in there before you write against it. Does that make sense? Yes, sir. Okay, now, how do we get out of this mess? We get out of this mess by prioritizing the money that you do have. Did the system change? Did you end up getting the money out of it? No, they're switching payroll.

It was a payroll at the end. Yeah, yeah. And so they still haven't gotten you the money. Right, and they're switching paychecks. They're going to a totally different system. So it may be July before that's even available. Wow. Right, and they're switching paychecks. They're going to a totally different system. So it may be July before that's even available. Wow.

What about the rest of your pay? Well, the rest of my pay is bi-weekly. I bring home about between $1,250 and $1,300, and it's coming through normal. Okay, good. So we're going to use that. And then when the rest of that other thing comes in, maybe in July in a couple of weeks, hopefully you'll be able to use that to get completely squared around. So here's what we do.

We prioritize from most important to least important thing in your whole world. And so I'll help you with that. The first thing you buy with the money you have is food. Not eating out, just food. You feed your kids, you feed yourself, right? Whatever. Then the second thing you buy is lights and water. Was any of those two things what bounced?

No, sir. Okay, good. So lights and water and food. Now we live to fight another day, right? How about your rent or your mortgage payment? Actually, right now I'm living with my parents so i don't have oh that's wonderful okay that's wonderful that's helpful okay so basic necessities of survival are what we do first it's food shelter clothing transportation and utilities okay so you have a car payment

yes sir is it current yes sir good okay so what type of stuff bounced um just normal bills that i have that i was actually trying to start getting paid off um so like debts small finance loans okay yeah like uh finance loans things like that yes sir so this is more than anything this is embarrassing and stressful but it doesn't really affect your life today so what you do is just make a list of those things. I probably would say whatever the smallest one is, I'd just go ahead and get it cleaned up, the payment amount, not the balance. Okay, so list out these checks, these bounced items.

How many did you say there were again? About six. Okay, just list them out from smallest to largest item size. And then let's just work through, get the little one knocked off, get the next little one. And so every time we do that, what do they total up to? Without the charges, they equal about, I would say, $800. Okay.

All right. So it's going to take a little while to get through them with your pay scale. All right. Good. So you just list them out smallest to largest like that. And the bank charges themselves you're probably not going to get out of. But you can go in and sit down and talk to your branch manager and try to talk them into waiving them. Because unless you've been a serial overdraft. If you're serial overdraft, they just love you because they stay open on you then.

Okay. But if it's a one-time thing and they're like, okay, they might cut you some slack and refund. The actual companies that are trying to charge you overdraft charges too for bounce checks some of them will wave them if you just call and cry you know call and cry a river and and i'd try that because that's going to help you get through these that much faster and get them squared around um and just try to talk them out of it in other words uh as much as you can but but just push through and list them smallest to largest or if one of them is really really super important uh it's not one of the them out of it in other words uh as much as you can but but just push through and list them smallest to largest or if one of them is really really super important uh it's not one of the items we

touched on but it's a big big deal of some kind then go ahead and move it and make it first i don't care but the good news is by the middle to the end of july you'll be current again right that's what you know if august one, Laura's in a different world. Is that right? Correct. Okay, and never again. And then jump on everydollar.com and download the budget and get yourself on a budget so you know where all this money's coming from and where it's all going to. Everydollar.com is our budgeting software that's free to use.

It's a free app for your phone, your iPhone, or your Android, or whatever. And you're completely taken care of there. Jump on there and start building out your budget. And then let's begin to work those baby steps. Once you're current and once you're out of overdraft, then you begin to work your baby steps and you lay out a game plan to work your way all the way through. And, you know, get yourself up into some emergency fund. You're debt-free.

You start building some wealth. You move out on your own. All those kinds of things. And that's where you're headed towards. And you'll be there shortly if you just be very, very intentional. The bad news is you're learning an expensive lesson. The good news is if you learned it, you'll never have to learn it again. I haven't bounced a check in 40 years.

But I had to learn that. I just don't write checks if there's no money. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major health care costs. Christian Health Care Ministries is the original health cost-sharing ministry. A Better Business Bureau-accredited organization, CHM members share to pay each other's medical bills. It's not insurance. It's Christians financially and spiritually

supporting each other. It's what Christian Healthcare Ministries has done for over 35 years. And our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Well, we have a big hit on our hands. It's called The Rachel Cruz Show. And you can watch it on YouTube at the Rachel Cruz YouTube site or go to rachelcruz.com and you can subscribe to the YouTube

video series that comes out once every two weeks or so. Really, right now, once every two weeks. And that's the rhythm that we're on putting these episodes out. It's basically a full-on TV show and it's packed with fun and with a lot of information as well.

Joining me for a segment here, my daughter and number one best-selling author, Rachel Cruz, and the host of the big YouTube sensation, The Rachel Cruz Show. That thing's working. It kind of is. It kind of is. I know. It's kind of a big deal.

Oh, it's been fun, though. You know, we did those test episodes before I went on maternity leave last summer, and when those were a hit, I was like, okay, let's try it. And so we've been good. I mean, it's been consistent and great views, great comments, and so it's good. It's a fun way to put out other types of content in more of the lifestyle genre while

still having those life-changing money conversations that you have on this show. Yeah, I was previewing the one, I guess it comes out this Monday? Today? Or or just came out today. Next Monday is today. Today it is next Monday. So I was previewing it last week, and I remembered you talking about overdraft fees when I was just talking to that young lady just then about overdraft fees.

I saw you standing in there in the studio. Yeah. I knew that I had read an article how much banks make that it's like their second credit card interest and late fees are their number one producer of income by far. Yeah. Their number one revenue producer by far for banks. But overdraft fees are number two. I know. They make billions and billions and billions of dollars on overdraft fees. And you were talking about it in this episode that came out today. Yeah, that's right.

I mean, this episode is a lot about things that you're spending money on that you don't almost realize it because it becomes a part of your life, everything from cell phone to insurance to overdraft. So kind of shaking people awake and being like, okay, this is not like, yeah, it's normal, but you are spending so much money just on that. And really with overdraft fees, it's difficult because it's people just not managing well what they have. And so things like getting on a budget and putting yourself on a plan and being responsible in that sense. Because a lot of people, very rarely is it that they're just purposefully doing it because they literally have no money and they're just trying to pay the bills.

Right. In that case, they usually go to debt and they take out a credit card. Overdraft fees, for the most part, it's just- Lazy. It is. It's just not paying attention, not knowing what's going on. It's just intellectual laziness. And a question I kept getting, which I thought was a great question, just to kind of clarify,

because we talk about a zero-based budget. You talk about that all the time. We talk about that on the show and how to do that. And some people think that means going down to zero in your checking account, that every dollar is going down. Yeah. Yes. So- No, we keep a pad in the checking that's right that's right so that this doesn't happen but some people i have said you know i've seen on social media or whatever and they've commented and said oh well i was at zero zero in my bank account because i put every dollar somewhere out of my checking account because i've been on a zero-based budget and then i overdraft

because something came up i was like no no no no that's not that's not what we meant the budget is zero-based not the checking exactly the checking account needs to keep at least 100 bucks in there something like that and later some people take their one thousand dollar baby step one and leave it in there and then just forget it's there right and balance to zero but they leave that thousand in there yep and a lot of people have done that over the years and and also what's interesting about overdraft fees these days is that it's almost all debit cards or online movement of some kind, PayPal or something else, because by far the average American's transaction in their checking account is not a written check anymore. No, no, no, no. It's almost antiquated now.

Yeah, absolutely. I mean, even last night for your Father's Day dinner. Happy late Father's day again to you we had dinner up at the house and we i i bought all the barbecue and all the food and said denise and daniel paid me back and usually that's a check that they write out but we've been mowed right i mean it's just there's there's other what venmo venmo we'll see there you go right there in my living room you don't know it you've been mowed in my living room please say you know what venmo is no. Oh, no. You don't know what Venmo is? You Venmo'd in my living room. Who knew? Please say you know what Venmo is. No, I really don't.

You seriously don't know what Venmo is? I seriously don't know what Venmo is, no. Oh, my gosh. So explain it to everybody. This is going to change your life. Because all these people that are not cool like me need to know now. No. I was going to say, everyone has it.

No, not everyone. No, everyone your age has it. Well, it's basically an app on your phone, and you connect your checking account to it. So if you're out to dinner and the restaurant only does one check, they won't do separate, then one person pays and you just really transfer your money from your checking account to that person's Venmo account. And then you can take your Venmo

money and put it in your checking. So it's basically a way to transfer money among people. So Denise and I. So yeah, all that to say it's replaced checks. And then there's other, you know, I think there's a My Cash app or something like that. So other places, there's other apps that do it. I can't believe I just interviewed you.

That's amazing. Hey, I learn something every time you're on here. So there you go. You are welcome. You are welcome. Thank you. Yeah, you're important information from the Rachel Crews show. So yeah, so over draft basis.

The other one that surprised me was the unnecessary subscriptions. I guess I don't personally, I must be a dinosaur. I don't subscribe to a bunch of stuff that I need to cancel. Have you heard of Hulu? Yeah, I've heard of that kind of subscription. I thought magazines coming in the mailbox. No, no. So a lot of things online now are subscriptions. And what ends up happening is you get Netflix, right?

You get your free trial. You put in all your information information and that free trial kicks in if you don't cancel it. Right. And so you look up and whether it's a workout app or it's, you know,

or Hulu or there's like boxes now that will like, different companies will send you a box a month with different stuff and you know, those kind of things.

Yeah, yeah. And you just end up, it's such a small hit usually. It's maybe 10 bucks a month, 12 bucks a month and so a lot of people just forget about it and it's like okay yeah no worries but those little things add up over time and if you have eight of those things going on and you're not actually using the service you're wasting a ton of money okay all right that that type of subscription yeah not magazine

subscriptions even though there's nothing wrong with magazines yeah we're seriously okay and you talked about i was with mike hardwick a few minutes ago at churchill mortgage And you talked about, I was with Mike Hardwick a few minutes ago at Churchill Mortgage, and you talked about the 30 to the 15-year mortgage refinance. Yes. So this is one that can save you, obviously, tens of thousands of dollars over the course of your mortgage. But that's a decision a lot of people make because it's normal. It's like a 30-year. Okay, yeah, it's a lower payment month.

Sounds more doable. We can get a better house. And they just go for it. And it's amazing when you refinance and you actually look, and if you hit the market right, usually the interest rate is lower on a 15-year. And sometimes, actually the story that we share on the show, which is not always common, but it happens that her payment was actually less than her 30-year because of the way it was all timed out in the market.

Well, her interest rate was so high. It was. It was 7%. I know, I know, I know. And it went down to, in her case, went down to a 2%. 2%, right. 5% difference. She did this before the market.

The market slipped back up to the 4s now. Right. But still, a 7 to a 4 would still be a dramatic drop. But it's one of those things that when people take out the mortgage, some people, they just don't pay attention to it at all. And it's like, oh yeah, we had that 30-year with the interest rate that it was, and they just keep on moving with life. And then, you know, 5, 6, 7 years goes by, and it's like, hey, if you look up and actually

call and check to see what the interest rate is, what your mortgage payment is, everything, it's amazing that you can save over the course of those three decades of having that 30-year. It saves so much money just by doing that. With the interest rates having creeped up into the low fours, Michael was telling me that refinances have slowed down. But there are still people that just haven't looked at it, like you're talking about. Right. You know, every one of these things are almost like about awareness, aren't they?

That's what it is. It's money you're overspending on that you don't realize it. Paying attention, though, is the antidote for every one of these things. And insurance, right? You get your insurance premiums, and some people don't even check insurance rates. And they just, for years, just keep that same rate. And it's like if you go and look, whether it's Zander or it's anywhere else, and you check your insurance rates, how much you can save if you just look and shop around. So it's a lot about that intentionality.

Well, those ELPs, the ELPs on the car and homeowners, the property and casualty ELPs, they save people an average of $700 a year on homeowners in car when they check it because they shop a bunch of different brokers, or they're a broker, and they shop a bunch of different insurance companies, not life insurance, but for car and homeowners, and they get you a better deal. That's right. Again, it's kind of like we just don't pay attention. Well, it gets withdrawn out of your checking account, right? Automatic.

Yeah, four times a year, every month, whatever it is, and you just don't think about it. It's just a part of life. So it's kind of shaking up that rhythm and re-looking at everything and how much you can save and taking that money and paying off debt, right? Or putting it in that emergency fund. Or even if you're going on vacation, using it wherever you are. Yeah, if you cut out unwanted subscriptions, you got refinanced,

you save $700 a year on your car and homeowners insurance. You stop overdrafting your checking account all because you paid attention. That's thousands and thousands of dollars you cover in this episode. Absolutely. Rachel Cruz, The Rachel Cruz Show on Facebook and YouTube. You can find her at RachelCruz.com or you can subscribe to the show on YouTube and be a subscriber and then anything she puts on YouTube will pop up and let you know by email. Thanks for stopping by.

Yeah, thanks for having me. This is The Dave Ramsey Show. For years, I refused to endorse any company that claimed to get people out of timeshares. I told my listeners it's a horrible product and that, unfortunately, they didn't have a lot of options. Then a few years ago, I sat down with Brandon Reed, the owner of Timeshare Exit Team. Brandon walked me through the Timeshare industry, and I learned that you can't sell them, and you can't even give them away. And then we talked about Timeshare Exit Team's process. Every ownership situation is different, which is why they have more solutions than any other

company. And that's when they earned my respect. Don't call any of the imposters out there, and there's a lot. The only timeshare exit company I stand behind is Timeshare Exit Team. They have exited thousands from their timeshare burden this year alone. Yes, you will write them a check, but they stand behind their guarantee. They will get you out, or they'll give you a full refund. Call 844-999-EXIT. Online at timeshareexitteam.com.

In the lobby of Ramsey Solutions, Mike and Jennifer are with us. Hey, guys. How are you? Good. How are you? Better than I deserve. Welcome. Where are you guys from?

St. Charles, Missouri. St. Louis area. Very cool. Welcome. Good to have you. And how much debt have you two paid off? We have paid off $120,000 in 36 months. Way to go.

And range of income during that three years? It began at $70,000 and ended up at $110,000. Wow, nice jump. What do you guys do for a living? I work in logistics for a manufacturing company. Oh, yeah. I'm a mom. I'm a grad student.

I coach college cheerleading, and I do marketing for a real estate friend. Wow, look at you. Very cool. What are you studying in your grad work? Masters of Arts in Teaching, so just to be a better math teacher. There we go. Continue to move up that. Yeah, very good. What kind of debt was the $120,000?

All student loans. All of it. Sally May got her eviction papers. Sally May and Fed Loans. Kick her out. Kick the old woman to the curb. Well done, you guys. I love it. That is fun.

So how long have you all been married? Five and a half years. Okay. So what happened two and a half years in, at the three-year-ago mark, something happened, and you guys went game on. Yes. Well, he did. It took me a little bit. So six months before that three

year mark, um, we were in the middle of financial peace university. It was the night where we had to sit down and list out all of our debts, um, and get them on paper and confront that. Um, and so we were sitting there and, you know, a lot of people, they have stuff they can sell, or, you sell or maybe it's a car or house and they can downsize or something. And we were staring at this knowing there's nothing we can do but pay it off. And I know just from our family histories, it's really important to Mike that we have a home. And we were in an apartment at the time. And, um, I remember he sat down, we were looking at this and he looked at me and he said, we're, we're not going to be able to buy a home and we're not going to have a home for the next 10 years. And it killed me because to be quite honest,

he was a fourth of that student loan and everything else was me. Um, and so I felt very guilty and, um, I knew I had to make it right. And so, um, I told him, I said, there's gotta be a better way. There's gotta be a way to get us a house and not like break ourselves. And so, um, we looked at each other and we're like, okay, game plan. What are we going to do? So we moved out of the apartment. We moved in with my parents. Yes, a bigger ouch for him. It was kind of fun for me, but we did six months there. We were going to do a year to save up. And then after six months, this one over here found a double wide for sale. So

we used what money we had saved, bought the double wide, moved in, and then because that was paid for, we didn't have rent or anything with that, we chucked everything at the debt. Everything. Everything that you want to spend on vacations and going out with friends and all of that.

And then while we were doing that, we ended up cash flowing a birth. So we had our daughter. And then we also bought a van with cash in that whole process. Wow. Yeah, it was a lot. It was game on for sure. Very, very cool. So how did you end up originally in Financial Peace University that started this story?

Just it was offered at your church or what? Through our church, yeah. They offered a lot of classes. That was one they pushed, especially for young people starting out to get the foundations they teach in that class. And luckily we signed up for it, and it was a game changer for us for sure. And what did you pay for the double wide? $15,000. $15,000 in cash.

And then we put $3,000 into it, just making it not look like an old, smelly, dinky double-wide. Okay. So either one of you live in a double-wide prior to that? Nope. Never at any time in your life? Oh, no. So this was like camping out for y'all? Yes.

Yeah, this was like a step in that direction i mean it's like wow if so your family and people are looking at you guys like you've lost your mind i think my mom cried because she was she was expecting us to be in the in the house for a year and then you know move into a home and crank out the debt after and when we said we bought a house in cash she got really nervous and said what part of town is this in and we're like well it it's on wheels so yeah it was it was a shock to everyone our friends family um but you know they're really supportive and they came they helped us paint and fix it up and that's good yeah okay so uh now you've gotten rid of the debt and now you're

saving for a house. Exactly. And I guess you'll sell the double-wide, I assume, and use that money as additional down payment, right? Exactly. We're hoping to use that to furnish the home. Because, I mean, moving from a double-wide to a big home, we don't have anything. Yeah. Perfect.

Very cool. The stream's unfolding. Yes. I love it. I love it. Quickly. So, Mike, what do you tell people the key to being debt-free is? You guys did $120,000 in 36 months.

To me, the key is stop being complacent with normal, the daily or the monthly payments. Get angry about it. Use that as fuel to start putting money towards getting out of debt, doing all the things that you teach as far as budgeting, making sure that we're having our monthly meetings, we're talking about where we're at, what kind of tweaks we need to make to the budget, and just stop trying to keep up with other people. Take some time, live like no one else, and then later on you'll live like no one else.

No, both of you really did set aside what other people think. You said we just it's all about us hitting this goal and it's all temporary we're going to live like no one else so later we can live and give like no one else and so i mean you got pretty radical and did some stuff that was way outside your normal comfort zone what your your friends were doing in the neighborhood you grew up in or whatever i mean you're the way your parents looked at it and went, oh. But it's turned out. I mean, you did some stuff that was temporary. It wasn't forever.

It wasn't a decision we're going to live in a double-wide for 40 years. It's not a way of life. It was we're doing this because this gets us to our goal. When we were putting flooring down in the double-wide, the last board we flipped over, and he was like, let's write live like no one else so we can live like no one else. So we did and we put the last board in and we went and our goal was to try and crank through all of this by our five-year wedding anniversary, which was January. And so kind of one of our, I don't guess, thrills that we were able to do was on our five-year, we spent that in the Dominican, and that entire trip was less than what we were paying monthly

towards our loans at that point. So that was our big trip. That was just one month. Yeah, that was one month. Exactly. Yeah, when you don't have any payments, it changes everything. So how does this feel now that you're here? It's a huge burden lifted off you.

You feel like you've got a thousand pound bull there on your back every day when you're looking at your debt, looking at how you're going to make it through. And then as soon as your debt's gone, you're just, you're freed. You're able to live your life and you're able to plan for the future

and all the schools. We've been able to give back a lot to just our friends in need or i mean we ended up having a girlfriend and her two daughters come live in the double wide with us for temporarily just because we were able to and we wanted to help yeah i put you in a position to do that but what listening to your story the arc you're on it was a very tight turn you made here on everything. So this has transformed not only each of you individually, but the way you talk to each

other, the way you think as a couple has changed, hasn't it? Oh my goodness. I think, go ahead. I think you're going to say something. I mean, that was it's not uncommon, but that was probably our biggest fighting point. And so we still have, you know, little spurts here and there, but it's not as

significant. It's not as significant. It's not as intense. We've got peace with it, and we have a game plan of how we tackle the tough situations, and we know how to communicate with each other. We know the tools we use, and it just makes our life a whole lot easier. Well, and we grew up differently, too. He grew up providing for himself a lot,

and just everything he had he bought, and he worked really hard. And my thing was any time I accomplished something, I got got something or i bought something for myself as like a reward and so going through this process and kind of learning together how we wanted to approach money and rewards and accomplishments um that was that changed everything very cool well done you guys mike and jennifer from saint charles missouri,000 paid off in 36 months, making $70,000 to $110,000. Count it down. Let's hear a debt-free scream. Okay. Three, two, one.

We're debt-free! Great job, you guys. Very well done. Man, that is awesome. Very cool. This is the Dave Ramsey Show. I get asked all the time, when in the baby steps is the right time to buy life insurance? My answer is typically now.

Life insurance is not part of the baby steps because it's needed when your family has debt and not enough savings to provide for their financial needs. That's when they're at the highest risk. And no matter where you are in your baby steps, it's a necessity, not a choice. This includes working husbands and wives, as well as stay-at-home parents. It's pretty expensive to replace those stay-at-home parent responsibilities. I only recommend term life insurance, since it's the most affordable way to get the right amount of coverage and not break your budget. Go to Zander.com or call 800-356-4282. These are the guys

I personally use. Term life insurance is inexpensive and your family needs this no matter where you are in your baby steps. That's Zander.com or call 800-356-4282. Zander.com. Jacob is in Mobile, Alabama. Welcome to the Dave Ramsey Show. Jacob, how can I help? Yes, I just have a question. My mother-in-law, for the past few, for the past year, has been trying to, she's been asking us for money for several things,

and she's what you would call a travel agent for guilt trips. And she likes to pull that card and stuff. And she hardly has a relationship with my wife, her daughter, and Harley ever wants to spend time with her. And she keeps asking us for money. And like I said, pulling the whole guilt trip thing. What should I do? How old are you guys? I am 22.

She is 20. How long have you been married? We'll celebrate our one-year anniversary this Sunday. Okay. All right. And what's your household income? $17,000 a year. Okay. All right. I'm going to send you a book called Boundaries as my gift from Dr. Henry Cloud, and it talks about how to set up relationship boundaries.

Now, I will warn you ahead of time that when someone doesn't respect your boundaries, like this lady with her daughter, okay, when you tell her no, when her daughter tells her no, she's not going to react well to that. Oh, I know that. Okay. So you guys have both got to just set your backbone and set your jaw, so to speak. Steal yourself, if you've ever heard that term in terms of like steel, like iron and steel. Like steal yourself against the storm. Brace yourself for the storm that will come, because this lady does not take no for an answer when it comes to taking things from other people.

Okay, so when her daughter, your wife, tells her, no, Mom, we love you, but we're unable to help you any further financially at this time, I'm so sorry. I'd like you, but we're unable to help you any further financially at this time. I'm so sorry. I'd like to, but I can't. I've got so many priorities here. I mean, we're just kids ourselves. We just got married. We don't have any room for that, and I'm so sorry.

But I love you so much, and I hope it works out for you, Mom. And when she tells her that, this lady's going to go ballistic. Okay? So as long as you're ready for that that's the proper answer no is a complete sentence sir yes sir and now now having said that if you wanted to get a little bit more sophisticated about your answer to her you can but i don't think it will matter and that is that as you guys are a little older and as you've been married a little longer and as you make more money you don't make enough money to give anybody money yeah except maybe tithing at your church while you're working on growing your career you guys are below the poverty level yeah and so we got to work on your career and get your all's incomes up, and you're not in a position to support another household.

I mean, you didn't call me up making $170,000 a year. You called me up making $17,000 a year. So the answer is absolutely no. You cannot help her because you're not strong enough financially to help her. You can't afford to give her ten dollars you don't have that kind of margin in your budget okay so um anyway we're going to set the boundary with her later on when you guys are making really good money when you are making 170 if you want to help her then the thing you got to do is you can't just give somebody money in

these situations you have to give them money only if they do things to better themselves, because otherwise you're giving a drunk a drink. Yes. You can't give an alcoholic $20 because what do they do? They go spend it on booze and they get drunk again, right? And so instead, if you love the alcoholic, you don't give them money and walk away. If you love them, you help maybe pay for their rehab or pay for their counseling or something. But that's real love.

The same thing's true with money. You pay for somebody to get a financial coach or go to Financial Peace University or give them a total money makeover book. And when you're doing those things, Mom, we might give you some money for bills and we'll pay the bills directly. But that's only much, much later. That's at least five years from today.

Yes, sir. For the next five years, you can't give this woman a dime. Yes, sir. You can give her a card that says, I love you. Happy Mother's Day. That's all she gets. And let me help you with this, too, okay? I've got a 26-year-old. My youngest is 26, and he just got married to 24.

The chances of them having to support me under any circumstances are zero. When a mother comes to a 20-year-old daughter married to a, what did you say, 23-year-old, making $17,000 and is asking for for money this woman is a special kind of breed okay that's like untenable that's just immoral as crap okay what kind of parent comes and sucks money out of a situation like that not one this is This is a parasite. Now, you don't need to be mean to her or anything like that, but I'm trying to tell you you're not crazy, you're not wrong, and you can gently, calmly, even though she's not going to be gentle or calm in her reaction, say no, and you need to, okay?

Yes, sir. Jacob, if you need more help, you call me anytime. I'm here for you, brother. Hold on. Laura's going to pick up. We'll get you a copy of Henry Cloud's book out, and you and your new wife read that. It'll help you. You've got a lot of work to do.

Carol is with us in Indianapolis. Hi, Carol. How are you? I'm great. Good. How can I help? God bless you. Better than I deserve.

Okay. You've got a phone problem of some kind. I can't hardly hear you. You're in a barrel. Did you put it on speaker or something? No, I did not. Hello? Hello?

Hello? Okay, are you speaking directly into your phone? Yes, I am. Okay, how can I help? Yes, I'm a 60-year-old. Thank you for my 50 years of college degree. Okay, I'm going to have to-old. I'm a high school student with a college degree. Okay, I'm going to have to put you on hold, honey. We're going to have to get you where your phone works.

All right, Krista's in Charleston, South Carolina. Hi, Krista. How are you? Hey, Dave. Thanks for taking my call. Sure. What's up? I was calling about my mom.

She's 62, and she had no plan for retirement. And about a year and a half ago, she received an inheritance that was unexpected. And we're trying to help her set herself up so this can be her retirement. And so we're trying to figure out the best way for her to put the money. Right now, she's got some of it in mutual funds,

but not all. And we're wondering if we should go all mutual funds or what? Because a normal person with like an IRA would have kind of a set monthly income so she needs an income well you can set up an income off of mutual funds okay you can set them up to pay what they earn or a set amount either one and you can sit down with a smart investor pro and figure that out how much did she inherit um? Well, she actually inherited $1.8 million. $1.8 million? Yes.

The proverbial rich uncle. Wow. Actually, no, not an uncle. It's a crazy story. Wow. It's actually her boss. She worked for a doctor, and he wasn't married or anything. Yeah.

So she, between buying, yeah. let's let's just stop a second does she own a home that's paid for yes okay good and she's gonna stay in the house yeah well actually we're kind of fast forward a year she's we moved town she bought a house okay she actually sold his she had to handle his estate, so she got all that done. But she gave away one of his houses to her sister, and she has her house now it's paid for. And we're looking at, she's got about probably $600 to $650 left that she wants to make last. If you put that in mutual funds, and we'll just use round numbers, okay? Let's say it made average what the market has made, which would be north of 11, and you pulled off 10, that'd be $60,000 a year.

With Social Security, I'm sure she can live on $60,000 a year if she'll learn to do a budget. Yeah. Which she better do. We're working on that with her to get one set. Yeah, you've got to do that. And then you need to sit down with the 600. You need an emergency fund of three to six months of expenses. And then I'm going to invest that in such a way that it creates an income.

So click on SmartVestor at DaveRamsey.com. Put in your information. It will drop down a list of the people in her town that are SmartVestor pros that we recommend. They don't work for me, but I recommend them. And they'll sit down with her and with the heart of a teacher and with you, if you want, and you guys can work out a good mix of mutual funds and set up a set income off of that for her to live on. Wow, what a story.

Hey, guys, this is James Childs, producer of The Dave Ramsey Show. I'm excited to announce that we're now carried on 600 radio stations across the country. To find one near you, head to DaveRamsey.com slash show. Folks, turnover is bad for business, and it's expensive. That's why I recommend ZipRecruiter. ZipRecruiter is a place where growing businesses connect to qualified candidates. They make it so easy. When you post your job with ZipRecruiter, they send it to over 100 of the web's leading job boards.

But they don't stop there. With their powerful matching technology, ZipRecruiter scans thousands of resumes to find people with the right experience and invite them to apply to your job. As applications come in, ZipRecruiter analyzes each one and spotlights the top candidates so you never miss a great match. It's so effective that 80% of employers who post on ZipRecruiter get a quality candidate through the site within the first day. With results like that, it's no wonder that ZipRecruiter is the highest rated hiring site in America. And right now, my listeners can try ZipRecruiter for free at ZipRecruiter.com slash Dave. That's ZipRecruiter.com slash Dave. ZipRecruiter, the smartest way to hire.