The Ramsey Show - App - How to Handle Student Loans After Your College Closes (Hour 1)

Episode Date: September 5, 2019

Insurance, Debt, Budgeting   Tools to get you started: Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE   Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, 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, America. Open phones at 888-825-5225 that's 888-825-5225 kevin is going to start off this hour in colorado hi kevin welcome to the dave ramsey show well let me try again an honor to speak with you dave i appreciate it you too sir how can we help so i've got a question about a surrendering long-term care life insurance policy. It's a hybrid plan that we own.

My wife and I are 53 years of age. We're on baby step six. We are at about a million net worth. We own a home that's worth $450,000. It has $80,000 due on the mortgage. It's a 15-year note that we're paying off early. We also have two hybrid life insurance long-term care policies that we took out a few years ago, one for each of us in the event that we would need long-term care when we get to that age. We don't have kids to take care of us. So we were concerned about that. And we took out those plans in that light. So my question for you is, we thought that we could surrender these policies and get about $120,000 in cash. Good. That would enable us to pay off the house. Good. We could invest the rest. Good. But my main concern of it is we're going to realize about a $50,000 ordinary gain in surrendering the policy. You sure? That's my main concern of it is we're going to realize about a fifty thousand dollar ordinary gain and surrendering the policy you sure that's my major concern so i just wondered

what your thoughts are on this plan and what you would recommend are you sure am i sure yes the fifty thousand dollar gain yes i'm appalled well we these these plans were formed by a long-term or i'm sorry they were formed by a whole life policy they usually suck so bad you don't have any gain yeah i know and this one we've had him for a long time before we rolled him into this plan oh you had some other stuff rolled in oh right so we funded the front end load we fronted the front end premium to fund these yeah i don't know who your agent is but get away from him and never talk to him again. That's a horrible product.

Yes, get out of it. Get out, get out, get out, get out. Take the gain. Pay the taxes. Get out because you're going to come out a whole lot better off. Two problems. Number one, you don't need long-term care insurance until you're 60 years old. You're 53.

I wouldn't buy it. And I'd buy it when I was 60 if your net worth is not doubled by then, and it probably will have. But if you've got a $2 million net worth, you probably self-insure through long-term care. Nursing home runs about $50,000 a year. In-home care runs about $50,000 a year, either one, whichever one you choose. The average nursing home stay is 2.5 years so there you go that's about 150 000 you know okay maybe a 200 000 maybe a 300 000 risk but if you're sitting there with two million dollars if you typically 75 of the women outlive their husbands and so typically papa goes into the nursing home burns through 300 grand 200 grand whatever and if that's all they had, he leaves Mama broke and dies.

Okay? And that's what we don't want. That's why you do buy long-term care insurance. But if you're sitting on $2 million, of which a portion is a paid-for house, I understand, but a $2 million net worth, you can afford to take the hit, and you die, and Mama's still okay. You follow me? Right. Yes, I do. Financially speaking. net worth, you can afford to take the hit, and you die, and mama's still okay. You follow me?

Right. Yes, I do. Financially speaking. I mean, you know, so you don't want to leave her with too much, because you have sleep with one eye open. But, you know, Sharon has been planning our estate plan for years, based on the premise I'm going to die first. I don't know what she knows that I don't know. But anyway, yeah, so bad product, the hybrid product where you put investing mixed in with long-term care is a bad product. And you don't need it at 53.

You have less than a 1% chance of using a nursing home care or needing in-home care prior to age 60. And I just turned 59. When I turn 60, my net worth is high enough. I won't be buying it. I'll just cash flow in home care because I've got enough money to self-insure through the risk. But otherwise, next year at this time, when I turn 60, I would have been a candidate for buying long-term care insurance. But long-term care insurance usually doesn't cover but three or four years. But that covers about 90% of the nursing home stays in America anyway.

Because most people just don't live 10 years in a nursing home it's highly unusual so all of that to say you bought it too soon and you bought the wrong thing i'd get out of there while the getting's good even if you do pay some taxes so good question all right hector is with us in new york hi hector welcome to the to the Dave Ramsey Show. Hey, Dave. How are you doing? Better than I deserve. What's up? I just had a question. I have a car now.

I got a Honda 2018. I got about $29,000 on the car and also $44,000 in credit card debt. And I have an emergency fund, $7,000 in credit card debt. And I have an emergency fund, $7,000. And I didn't know where to, I know you say go with the smallest debt first, but it's a car, it's the smallest debt. So I don't know if I should sell the car or put the money into the car or put it into the credit card. So I don't know what to do.

What's your household income? My wife and I make about $100,000. So how long have you been overspending to get $44,000 in credit card debt? Lifetime. Okay. How old are you? I got my first credit card. How old are you?

I'm 37 now. How much? 37. 37? 37. 37, okay. So 10 years. So you've been overspending to the tune of about $5,000 a year, plus you bought a car you couldn't afford.

And your household income is $100, and you owe $29 on the Honda. What do you owe on the other car? Dad, I don't have a car. I just have a car. You have one car? Okay. Yes. All right.

All right. Well, the rule of thumb I use on vehicles is two things. One is, can I pay off all of my debts, not counting my house, within two years and keep the car? That is about $70,000. And can you do that in two years making $110,000? Yes, you could. That would be $35,000 a year for two years. You could do that and be debt-free within two years. The second rule of thumb I use is don't own things with wheels and motors all added together

that equal more than half your annual income because things with wheels and motors all go down in value. And if you've got too much of your world tied up and things going down, you're never going to have any money. Exactly. And so you're not there either. $29,000 is less than half your annual income. So the car is a keeper if you love the car and you're willing to fight you know for two years on beans and rice you and your wife

together on a budget not going out to eat not going on vacation stop the insanity and clean up your mess if you're willing to do all that then you can keep the car and work your way through it it does fit our guidelines but that's a call you'll make. Some people look at that and go, I ain't worth it. I'd rather get rid of the car and be out of that little center. Other people look at it and go, this is a great car. I always wanted this car, and we're going to plow right ahead and take an extra year of fighting and beans and rice, rice and beans, and scorched earth lifestyle in order to keep the car and get it all paid off.

But, dude, if you're going to screw around with this for the next five years and you're gonna keep doing what you've been doing number one i can't help you but number two yeah you should sell the car in that case because the car represents financial intellectual laziness that you just went and bought something that you didn't have the money for like you're in freaking congress or something and you know you just got to stop that kind of stuff. And if you've committed to stopping it and turning it around, then we can help you. It's what we do. Hey, thank you for the call.

Open phones at 888-825-5225. This is the Dave Ramsey Show. I got a call the other day, and I thought it was worth talking about again. It was from a wife looking for life insurance for her family. She asked why I only recommend term life insurance instead of cash value plans like whole life. I usually explain how you overpay for coverage, earn a horrible rate of interest, and don't get your cash value when you die. But this time, I just had her go straight to Zander.com and get a rate. And then we compared that rate to the whole life plan, and she immediately saw the huge

savings. She realized all the things she could do with that money like paying down debt, investing in a smarter way. That made it real for her. It makes no sense to buy or keep a cash value plan when there are smarter, less expensive ways to protect your family. That's why I suggest that everyone go to zander.com or call them at 800-356-4282 and get a free quote that's zander.com or 800-356-4282 Thank you for joining us, America. Chelsea is with us. Chelsea's in Washington.

Hi, Chelsea. Welcome to the Dave Ramsey Show. Hi. Thank you for having me on.. Chelsea is with us. Chelsea's in Washington. Hi, Chelsea. Welcome to the Dave Ramsey Show. Hi. Thank you for having me on. Sure. How can I help? Well, I kind of want to get your opinion on to see if I'm doing this right. So I'm an Art Institute graduate, and they just closed all their campuses at the beginning of the year. So I've been, I've applied for financial aid

forgiveness on the grounds of, you know, them closing. And I did that about five months ago. And so they say it should take six months to two years. And we're currently in baby step two and we've got about um four thousand credit cards uh about twenty five hundred in uh family loans and then twenty thousand in a car and then thirty four thousand in my student loans and all of the 34 000 is art institute so everything except for one loan for three thousand dollars okay all right so you're working your debt snowball and the art institute money set to the side and you have a thirty thousand dollar reason to be an expert on diligence and details to get that forgiven because you are dealing with the federal government translation most of the people you're talking to don't give a rip and the rest of them don't have

two brain cells to rub together and this is who you're dealing with to try to get this to happen the truth is is that this should be a very easy thing to do the problem is it's not because you're dealing with the federal freaking government so but yes these loans will be forgiven if you follow through but you have got to make it your mission as if someone hired you for thirty thousand dollars to get this done yeah okay um and so another part of my question is i'm accruing $169 a month in interest. Should I currently pay that as my minimum payment? No.

We'll pay a thing on it. Okay. I'll just let that thing sit there because it's all going to go away when you finally get it driven through this bureaucratic morass that you have to go through. Great. My mother has a bunch of Parent PLUS loans through them as well. And I don't believe, even though I've told her to try and submit the paperwork, like they currently, you know, I've been telling her all about you and trying to convince them to take financial peace and stuff. And they don't have any debt with the exception of the student loans that they have from me, and they have no retirement.

So I'm kind of afraid, you know, what are they going to do in their 60s? And, you know, do you have any advice for what I should tell my mom to do? I would give her a really hard time about not taking care of business. Yeah. In a loving mother-to-daughter way, right? Right, yes. But, I mean, Mom, this is some serious crap here. You're going to have to get your stuff together.

A, you're broke. B, you haven't even filled out the paperwork to get all this forgiven. Come on now. Get with it. And you can coach. Once you've gotten it done, you can coach her through how to get it done because it's not an easy process. It should be.

But it is one of the few types of student loan forgiveness that actually does occur. When the company, when it was a for-profit and they go broke and you're not allowed to finish, as a result, the loans that were associated with them are forgiven by the government that is a standard program and it happens you know 100 of the time when you do all the paperwork and when you persevere through the you know the bureaucratic mess is what amounts to so yeah that that's what i would do is stay on that and then run your debt snowball on everything else but honey you got to treat this like it's a job not like it's automatic and not like it's easy and not like well i filled out the paperwork and i never followed up for 18 months bull you call them all the time you need to be on a first name basis with the woman who answers the phone over there you know this is a thirty thousand dollar thing and you're trying to motivate people that work at the dmv i mean this is tough right

here so you got to stay on it on it on it on it on it did i So you got to stay on it, on it, on it, on it, on it. Did I mention you got to be on it? That's how you do it. It's not going to happen unless you push through. Colleen is with us, Colleen, in Canada. Hey, Colleen, how are you? Hi, Dave. I'm good, thanks.

How are you? Better than I deserve. What's up? So my husband and I started following your plan about a year ago, and I've paid off over $50,000 in debt and have about $22,000 more to go. This past November, we purchased a house with my father-in-law, and we had an arrangement where we would pay the bulk of the mortgage. He would pay a small amount of the mortgage and the utilities and property taxes.

My father-in-law has pulmonary fibrosis and in December, about a month and a half after we moved into the house, he received a double lung transplant. So far, all the bills and everything financially has been going smoothly on both of our ends, but his recovery recently has not been smooth. And my husband and I are just trying to prepare for the worst. We're just wondering if we should put our baby steps on hold and go into some sort of stork mode almost, where we're just kind of piling up cash in the event that something happens to my father-in-law. So you bought a house with an ailing man that you can't afford when he dies? It will be tight to afford it when he dies, yes. That sounds kind of dumb.

Yeah, we were trying to look out for him and have him in our house so we could take care of him. But you bought a house you couldn't afford. Right. And he doesn't have any assets. I assume that he's leaving you when he passes. He has a small retirement plan, I believe life insurance, but I don't think it'll be very much. And the money that he put, the down payment on our home of $130,000, the down payment. Which still didn't make it where you can afford it when he dies. Correct. Okay. So there's no amount of stork mode that you can go into,

because if you have a burn rate on your savings eventually the savings runs out right it would be more until we until we could figure out you know put the house on the market or the the area that he was supposed to live in is a finished basement apartment with a separate entrance so that could be rented out um there are things in you know that we could do in the short term but obviously not ideal in the long term. Well, you don't have his life insurance money and his retirement plan to hold on in the short term. Right. And either get the house sold or get the apartment rented, one of the two, very quickly.

Okay. No, you don't need to save up. But you do need to face the reality that you made a deal you shouldn't have made, and you're going to have to act very quickly and decisively when something happens to him. Okay. Very quickly. No sitting around going, oh, I wish. No, put the for sale sign in the yard.

Yeah, we've been coming up with an action plan for a couple different scenarios. You know, if he were to come home but need additional help, we did a couple different action plans we've been trying to put in place so we're prepared when the time comes, but yeah. Yeah, that's what you're going to have to do. plans we've been trying to put in place so we're prepared when the time comes but um yeah yeah that's that's what you're gonna have to do and uh it was a nice gesture and your your intent was very noble your execution was unwise um and you can have noble intent and unwise execution and still get yourself in a corner and that's where you are so you meant well and you're doing a kind

and a good thing to offer to take care of him and he meant well by helping with the down payment to try to get somebody to take care of him and you know you guys were talking this through you just bought too much house that's what it amounts to and you just did a good thing the wrong way and sometimes that you know it still didn't get you a pass i mean i i you, I was trying to help somebody when I fell off the building, and the law of gravity got me, you know, and that's the thing. You know, these laws still kick in, even if you were trying to be nice. And so that's what you're facing. So I'm sorry, kiddo, but nice.

I mean, what you're all doing is sweet. You're kind, good people, and that's a good thing. And I appreciate. I hope somebody when I'm old will take care of me, you know. So, I mean, that's good. And it's good that you're doing that. Good that people like you are out there. But, again, you need to just think further past these things.

Stephen Covey said in his old book, Seven Habits of Highly Effective People, one of the habits of highly effective people is they begin with the end in mind. And so you have to go through the, you have to run the scenario all the way out to when he dies. Oh, wait a minute, I can't afford this house. Oh, that means we can't afford this house because he's going to die someday.

We all are someday. So, and you just, that's why you don't do these kinds of deals. Thanks for the call. This is the Dave Ramsey Show. Thank you. Our question of the day from Blinds.com, the number one online retailer of custom window coverings. There you get free samples free shipping and with the new promos they run every month you'll save even more i just put up some blinds in a room i had that i built up a patio from blinds.com i used them last night and i was just telling some

friends these guys are the real deal blinds.com check these guys out tyler's in new jersey i'm one year into a two-year lease and still owe two thousand dollars the buyout price right now is about 15.5 and the kbb is about 12.5 the value i can't just ride the lease out then turn it in because i'm almost out of miles already and pay 25 cents a mile after that should i save the three to four thousand dollar pay off the lease turn in early by a cheap used car should i consider this car first in my debt snowball and try to pay cash when the lease ends in a year at least the car for i know anything about you obviously it's a terrible decision uh but feel but feel free to remind me on the air i think you got it i don't have to that's great uh

well you're gonna pay two to three thousand dollars in lease fees and own the car or you're gonna pay two to three thousand dollars to get out of it and you're not gonna own the car, or you're going to pay $2,000 to $3,000 to get out of it, and you're not going to own the car during that time. So you're giving up a year's worth of use for the car. What I would try to do is keep it up until about the time your miles are up, and at that point, get it sold. And let's see where you are. Maybe save the money to cover the difference at that point and get you a $1,000 car and get rid of it.

But hopefully, I'm almost out of miles already. Yeah, you probably just need to go ahead and sell it and cover the difference and get you a beater to drive. Just take the hit. Normally, in this situation, I'd tell you to drive it all the the way out but you'd have the miles to do that in your case you're going to go another two or three thousand dollars in the hole if you run 25 cents a mile up and you're going to make yourself a bigger mess so yeah let's go ahead and sell it now that's what i would do gabriel is in florida hey gabriel how are you hey i'm doing great dave how are you better than i deserve what up? Okay, so my wife and I are shopping around for a 30-year term rates for life insurance. Why?

Currently, well, because I know that's what you recommend. No, I don't. And, no, you, okay. I recommend 15- or 20-year level term. 15- or 20-year? Yeah. Okay. I wouldn't buy a 30.

Okay. Even though we don't have kids yet, but we're planning on in the future? Yeah. Well, your income will go up during that time, and you'll probably get different policies later on unless you become ill and uninsurable. And I wouldn't spend the extra money on a 30. Life insurance costs are continually going down. Like, here's an example okay i bought a policy when i was 40 there was a million dollar policy i bought a million dollar policy when i was

50 10 years older for less because rates were going down and i was still healthy okay so um that that's probably what's going to happen so i if i buy 20 year policies if i were you knowing that you're probably going to add to it because your income is going to go up over time, and or you're just going to replace it and get better policies later on. That was part of my question because I'm currently making around $85,000 a year now. Within the next three years, that should double. Should I do that 10 to 12 times my income now or my projected income?

No, I'd do what you have now. I mean, go ahead and buy about $800,000 now, and then if it doubles, go ahead and buy another million later when the kids are there, three years from now. But see, that's my point exactly. If you buy a 20-year now and three years from now you buy another 20-year, well, that's a 23-year effective coverage, right? Yeah.

And then you do it again, probably later on. And if one of them lapses, you look at where you are. Because all during this time, see, it costs less to raise a 15-year-old to 18 than it does a 1-year-old to 18. So as the kids age, your need for insurance is going down and so if you had a series of 20-year policies uh like three or four of them and some of them started expiring before the kids are actually out of the house no big deal you'll have money and you wouldn't have need your wife wouldn't have needed as much to raise a kid that's almost out of the house versus raising a kid from infancy. Okay, yeah, that's great news.

Yeah, I was under the impression that the older I got, the more expensive it would be to get life insurance. It generally is. It generally is. But generally also, term life rates have been going down because it's such a competitive market. People like Zander Insurance, where they shop these companies against each other and get the best deals, that competition in the market has caused these life insurance companies to reassess their statistical tables,

their actuarial tables that they use. And they were using death tables from the 50s to price the stuff. People are living a lot longer. So the more modern a death table, an actuarial table that they use, the cheaper the insurance is. And so the more often they update, and they're more willing to update

because they're having to compete with each other, head-to-head with these quote services like Xander. So I'd buy a 20. I wouldn't buy a 30 if it were me. You know, if you've got health issues, you might consider that, but in a normal situation, I wouldn't. Hey, thanks for the call, man.

Appreciate you listening. It's a good question. Jack is with us. Jack's in Georgia. Hi, Jack. How are you? Hey, I'm doing good, Dave. How are you?

Better than I deserve. What's up? Awesome. So I recently gained a $38,000 inheritance via the passing of a relative. And I was hoping you could help me allocate a budget for it based on my current situation. Okay. Do you have any debt? Yes, I have $22,000 in student loan debt.

But there's a caveat to that. My mom has graciously agreed to pay it off all for me up front and then let me pay her. So there would be no interest on that. No. I don't want you in debt to your mother. Okay. all for me up front and then let me pay her so there would be no interest on that no and then i don't want you in debt to your mother okay well that's what she's offered me and that's fine i think that's what we're going to be going with but i wouldn't do that though i think that's a bad idea because the borrower slave to the lender when you owe your mother money she suddenly starts tinkering in your life and thanksgiving dinner tastes different. There's interest on this that's unseen.

I don't personally think that's going to become an issue. Well, then you go do it, but I'm telling you it's a bad idea. Don't do it. All right, Wendy is with us. Wendy's in Arizona. Hi, Wendy. How are you? Hi, Dave.

I'm great. How are you? Better than I deserve. What's up? Awesome. Thank you so much for taking my call. This is such an amazing opportunity. My husband and I have been doing your program for about a year, but actually my question

is for my grandma. She is 84 years old. She sold her home recently and moved into a retirement community, but decided she really hated it, so she moved back into a single family home. Oh, yeah. She didn't like being around people. I like it. I like her.

She wants to build a home now, and the debate is my mom is telling her to take out a full mortgage so that she has full access to all of her retirement money so she can travel and do whatever, and I kind of thought that maybe you would suggest paying cash for her house. So how much is she going to spend on her house? About $200,000. And what is her... She's building a $200,000 house and she's at 84. That's just awesome. Oh, yeah. I love it.

That's her. And what is the size of her nest egg? I don't have the exact amount, but I believe it's between $400,000 and $500,000. And then she does have income from retirement and Social Security coming in monthly. Does she live on that? Does she live on just the retirement and the Social Security? Yeah. No, she does take out some of the investments occasionally.

For the most part, her monthly living, yes, she would live off retirement and Social Security. Okay. I would not build the house unless I paid cash for it. But it does make me a little nervous that she only has $300,000 left after she has her pay for it. It's $400,000. Oh, I see. No, she's got $500,000. And if she builds a $200,000 house, that leaves her $100,000.

You're right. Or leaves her $300,000. I'm sorry. Right, right. It's a little bit of a small nest egg. But she is 84, so she's probably going to be okay. But you just have to be careful and watch what you're doing. But there's no way I would build a house to take out a mortgage. I either wouldn't build it or I would pay cash for it.

Those are the only two options. And your mother's wrong, just by the way. She means well, but she's just wrong. This is the Daveave ramsey show Thank you for joining us, America. Open phones at 888-825-5225. Personal finance is personal. It's relational. It has to do with people.

It is not pure math. Math is only part of the equation. It is art and science. It is the art of human beings and wisdom interspersed with mathematics. When you combine the two with wisdom, you get an accurate picture and you make wise decisions. When you make decisions on personal finance based only on relationships and completely ignore mathematics, you make a bad decision.

When you make decisions based only on mathematics and ignore the relational implications of your stupid moves, then you're getting ready to discover what stupid does. It leaves a mark. An example of that is when you want to cosign a loan for your friend. That's stupid. It says it in the Bible. Proverbs 17, 18.

Contemporary English version. It is stupid to cosign a loan for someone. That's what it says in the Bible. If you don't like that version, you could go to the New King king james it says one lacking in sense sign surety for another it's a nicer way of saying it's stupid you know why because lenders do nothing but lend money asking a banker to loan you money is like asking a dog if it's hungry of course they want to loan you money no doubt about it they want to loan you money and if those people whose whole reason for being the reason they think god put them on the planet is to make loans so that they can make their quota and their boss smiles

if they won't make little junior alone to buy a truck it's because little Junior's not going to pay the bill. And when you co-sign with little Junior, you're going to get bit, dummy. I know this because it happened to me. I was stupid, and I co-signed two loans, and I ended up paying them. One guy was stupid to co-sign the loan for me, and when I went bankrupt, he ended up paying it. I had to go back and pay him back because I didn't have any money and they went after him it's stupid and he's a good friend and it puts stress on our relationship really put stress on his wife she was was not happy. Don't blame her.

Because she's looking at both of us going, you two guys are stupid. And she was right. She was mad. Understand. Went back and paid her back. But she still has always looked at us and went, you two are stupid. You can't hang out together. When you're hanging out together, stupid stuff happens.

That's relationships and when the bible says the borrower is slave to the lender that is not optional that is a fact and what that means is when you borrow money from someone borrow money from your friend, you just changed the relationship with your friend from friendship to master-slave. When you borrow money from your mommy at no interest, because your mommy says that's mathematically smart, and deep down inside your mommy says that's mathematically smart. And deep down inside, your mommy has control issues.

Because she's still interfering in her grown kid's affairs. But we're trying to save on the interest, and we're mathematical geniuses. But we ignore the relational impact and the change in the relationship from mother to grown son to master slave. Thanksgiving dinner tastes different when you eat with your master. My wife's daddy is one of the sweetest, most saintly men I've ever met in my life. And he loaned us a little money when we went bankrupt to try to keep the lights on in the house, and it changed our relationship. He didn't ever say a negative thing.

He never one time, but I felt different, and I felt different every time I walked into his house, every time I walked into his presence until I got that loan paid. You can't keep that from happening. It's not optional. And to ignore the wisdom of that and say, oh, well, it's mathematics. I'm getting free interest, and everyone should get all the free interest they should get. Let's go deeply in debt and stay there forever because there's no interest.

That's just stupid. It's just dumb. And I'm not going to argue with you about it. If you don't think that's the way it is, then don't call the show. It's okay. I'm not going to have an argument with you about it. This is the way it is. Don't loan your children money for the down payment on their first home.

These are going to be the parents of your grandchildren, and you're going to change your relationship with them until they get that stupid butt second mortgage that mommy loaned them, daddy loaned them, paid back. Don't do that. If you want to help your grown children with money and you have some money, give it to them. I don't mind you giving them some money. As long as it's done in a healthy way and there's not strings attached, not control freaking, and all that kind of thing. Give it to them.

But don't loan people that you like money because you change the relationship. There's shame. there's control issues they look and go where'd y'all go on vacation why you still owe us money you went to disney world this is the kind of crap that happens and it's not even subtle in most families most families are just pretty abusive to each other. In others, it's just passive-aggressive. In others, it's just one little eye roll that chills the whole room and changes the entire dinner party. This is personal finance, boys and girls. It's also personal.

And if you don't accept that, you are being naive and unwise and you're going to cause problems in your life. So use some sense. The old joke is if you loan your brother-in-law $100 and he never speaks to you again, was it worth the money? Possibly. It depends on the brother-in-law. My case, I got good brother-in-laws, so I wouldn't worry about it.

But I'm blessed. But, I wouldn't worry about it but i'm blessed oh but i mean you know think about it it does how many times have you loaned somebody money just just a friend at work your roommate you gave him 50 bucks and they're gonna pay you back on payday well then something happens and then something happens and And then stuff happens. And all of a sudden, you've messed up your friendship. You were trying to help, but you didn't understand this principle. And the principle is that you're a slave when you borrow money. Even if your master is a nice, good master, they're still your master. Some masters are nicer than others. My father-in-law, very sweet man. He put nothing on me. No eye rolls, no condemnation,

no control, no nothing. He never one time said a negative thing. It was all in my head, all in my spirit, all in my busted all in my busted honor my integrity my brokenness from having gone broke and i'm still trying to take care of his daughter as her husband and i can't and he has to step in see all of that's mixed up in this horrible little gumbo down inside your spirit right bad stuff yall. And this is how life works. And again, that's all on me. It's 100% my fault. But all it was was I did not accept the truth of these principles.

The wisdom of these principles. And so don't loan your children money. Even if it's interest-free. Don't loan money to anyone. Unless you want to cause problems in the relationship. And only a fool cosigns. Don't be a fool. Bad stuff happens to fools. I've been a fool.

It leaves a mark. Don't do that. That puts this hour of the Dave Ramsey Show in the books. This is James Childs, producer of The Dave Ramsey Show. Did you know you can now listen to The Dave Ramsey Show on Pandora and Spotify? For all the ways to watch and listen, check out our show page at DaveRamsey.com slash show.