The Ramsey Show - App - I Want To Buy a $50,000 Car To Save Money (Hour 3)

Episode Date: January 26, 2022

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🎵 Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm Ramsey personality, George Campbell, and this is your show, America. Let's talk money. Give us a call at 888-825-5225. John kicks us off this hour in Vancouver, Canada. John, welcome to The Ramsey Show. Welcome. Hello, can you hear me? Sure. How can I help?

So I'm planning to buy an electric vehicle in the near future. Okay. Yeah, it'll be my first vehicle purchase. Wow. Cool. How old are you? Yeah, 25. 25, okay.

Have you been driving something else that is not yours? Yeah, my parents' cars, yeah. Okay, cool. All right, so what's your question? I'm just looking at, like, because we have a carbon tax in Canada, and it's, like, keeps going up every year, you know. That you pay on gas vehicles? If you own a gas vehicle, you have to pay an extra tax? Yeah. What is the tax? Do you know?

Right now, it's about 10 cents a liter. Okay. For carbon. So it keeps going up every year. And I'm trying to think about, you know, switching to an electric and buying one for myself and the potential savings and, yeah. All right. So are you, do you have any debt right now? No, no, I have no debt. I have about $50,000 in savings.

Wow. Good for you, man. And another $20,000 in a tax-free savings account, which is like a Roth IRA. And then I have another $20,000 in an RRSP, which is like a 401k. Good for you. Man, you've been crushing it. What do you do for a living? I work in warehousing. I operate a forklift and do a bunch of distribution and stuff.

What's your income? It is right now $60,000 a year. Okay. And have you researched these electric vehicles? Do you know which one you want? What the price point would be? Yes, I've looked at it. I've also looked at rebates and stuff for buying electric vehicles as well. Sure. Both federal and provincial. Okay. So what's the price of this car if you went onto the lot and bought it today without any of the rebates? Toyota RAV4 Prime, it's around $50,000. Oh boy. Yeah. Dude, that's almost your entire income tied up in a depreciating asset.

Were you listening to the last call? No, I'm just building my income. This is not like a few years in the future because it's at least a one-year waiting list for these electric vehicles. Okay, so you're going to keep driving your parents' car until you purchase a vehicle? Yes. And you're doing this to save money? Yes, yes. So we're going to spend $50,000 to save money?

In the long term, yes. But do you understand the difference? No, I understand. You could buy a $15,000 car, which means you would have to be paying $35,000 extra in carbon tax and gas and all of these things in order to make up for the fact that you bought a $50,000 electric car. No, I understand. I'm just looking at all these electric vehicles.

That's why I'm thinking long-term, not... I understand it's a digital term. If we're thinking long-term, we've got to realize that cars are a depreciating asset, whether they're gas or electric. No, I understand. I understand that. Well, I'm not trying to beat up on you. I just want to think through this critically with you. No, I know.

That's why I'm planning, like, looking at all the numbers, and I just wanted some advice from your end. Well, we also don't recommend you buy a new car unless you are a millionaire, because you can't take the hit on depreciation, making $60K a year, buying a $50,000 car that's going to depreciate every single month. Yeah. And so if I'm you, if you're going to make $60K, let's say a year from now you're still about $60,000. It's not going to go up to $200,000 in warehousing. So what I want you to do is take $30,000 or less and buy you a used electric car if that's something that you're still wanting. Okay. No, there's cheaper electric cars.

So I'm just looking at all the ones that have rebate options. But if you spend $50,000 and get a $5,000 rebate, you still spent $45,000. If you bought a $20,000 electric car with no rebate, you still saved $30,000. Do you see the math I'm doing here? Yeah, I know. I know. I don't want your judgment to get clouded by rebates and credits. Because truthfully, you want the newest shiny electric vehicle, right? I mean, who wants to drive a used one if you could drive a new one? I just don't think the used electric vehicles are that plentiful because there's already a waiting list for new electric vehicles in Canada or where I live in Vancouver, at least.

Well, they're out there. You might have to get there first. I mean, it's like a hot home market. You just might need to get there first and be willing to negotiate or pay full price or whatever they're asking. But I'm still, if I'm you, dude, you're just so young. You've got your whole life ahead of you. I don't want you spending all of this savings that you've worked so hard for to go into a depreciating asset. Okay. It's going to be a used car as soon as you drive it off the loan.

No, I understand. I'm just thinking like from 10 years from now, because the industry is going to change to the point where they're going to only make electric vehicles in 2030, 2040 or something. Well, by then we'll all live on Mars and we won't even have to deal with cars anymore. I'm just saying I don't want you worrying about what's going to happen 10 years from now I want you to do what's right for you right now and what makes sense for your future and right now you're you're 25 years old you're making 60k you've done really well and I don't want to see that money disappear into this electric vehicle because you see the shiny lights of credits and rebates

you know what I mean it still doesn't make it a wise purchase no I understand I understand it's just I'm thinking you know this change is going to happen within my generation, within my lifetime. And when it does, we'll deal with it. But right now, you can afford $0.10 on a liter even if you didn't get an electric car. Yeah, it's just gas is getting up and up. It's like pretty crazy up here now. It's like around $5 US a gallon. What's your commutes like?

Where are you going? To work and back? Yeah, just to work and back. What's that commute? It's like about pretty short, like 30 to 50 kilometers. Okay. Something like that. It's pretty short, yeah.

It's not that big. You're good at math. You're a wise dude. And so do the math on this and go, all right, here's really what I'm spending on gas, realistically. Not how I feel about it, but do the math on I go this many kilometers. Here's the $0.10 per liter. Here's what that really amounts to in my given week. And you go, okay, it's about $30 a week for me to get around town in this non-electric vehicle.

And the truth is you can afford it. You're not really saving that much money in the long run. You're already doing great, saving for retirement, doing all these different things. And so I don't want you to justify the electric vehicle purchase because of the money savings. Because truthfully, it takes a long time to get a return on investment when buying that electric vehicle, especially if it's new.

Okay, I see. You're doing great, man. it's new. Okay, I see. You're doing great, man. Yeah. I love Canadians. They're so nice. John, you're an awesome dude. I'm so proud of you. You've done so well. I don't want you to move backwards by spending $50,000 on a car when you make $60,000. It's just not a wise move right now. Later on down the road, you're making $120,000. You're a millionaire.

Go ahead and buy you a $50,000 brand new electric vehicle and give me a call back. I might be 58 years old by then. Hopefully I'm still doing the show. We shall see. This is the Ramsey Show. Are you working the baby steps? One of the smartest and most impactful changes you can make is to ditch your cash value life insurance plan, if you have one, and replace it with a term life policy. Listen, the only thing a cash value policy is good for is overcharging you for the life insurance and then paying you a crappy rate of return on your overpayment. Stop wasting your money and really focus on getting out of debt and growing your savings. For over 20 years, I've trusted and used Zander Insurance to find the best rates on term life insurance from the top-rated companies. They keep the whole thing simple.

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And the best part, no instructor needed. If your teen has a tablet or a computer, they're all set to start learning how to budget, save, and invest, even how to write a resume and start their own business. Parents, get your kids off to a great financial start and go to ramseysolutions.com slash self-study to learn more about all of the different courses we have available for your middle or high schooler. Megan joins us in Fayetteville, Arkansas. Megan, welcome to The Ramsey Show. Welcome. I'm happy to be here. Great having you. How can I help? Me and my husband are 25 years old. We are newlyweds. How do I get my husband motivated with me to pay off our $22,000 debt?

That's a great question, and congrats. How long have you guys been married for now? In two months. It'll be a year. Wow. Okay, so we're coming up on a year, and you guys are not on the same page financially. What are the conversations like? Where's his mind at, and where's yours at? Well, I am all gung-ho for it. I am currently in a job that I'm very happy with, but I don't make very much money. And he is in transition to make a significant, drastic change in our wealth. What does that mean? Is he about to make a lot of money in a new job?

Yes. He's currently in training to get his CDL. We're making about $60,000, and now we're jumping up to $120,000. Awesome. Doubling the income, just like that. And so he's going, well, the debt's not a big deal. Where's his mindset around the Ramsey plan? Because clearly you want to do this plan and he doesn't. He is, oh, we have so much money now. What can I spend it on? New car, new everything. Lifestyle creep.

So he's going, sweet, let's increase our lifestyle now that we have more money and we can continue to be broke. Yes. Man. Well, you're not alone in that problem. A lot of couples deal with this, especially early on in the marriage. And the sooner we can get you guys on the same page, the better it's going to be for your future. And so what I like to start with is the why.

Have you had a conversation with him about what our hopes and dreams are for the future? Instead of saying, hey, Dave Ramsey said we need to get out of debt, have you said, hey, what do you want our future to look like? What do you want to do? When do we want to retire? We talked a little bit about it, what we want in life and where we see our lifestyle being. So what do you think is wrong with your picture currently of your financial situation?

What are you feeling? Crushed. I feel crushed in my car payment, our house our student loans does he know that what we owe his parents oh yeah if i see my wife it changes me if she says hey honey i'm i'm feeling so stressed i have so much anxiety about all payments. I just really want to get rid of these payments and move on with our lives. Have you said that to him? Yeah, but usually the conversation goes with don't worry about it. I got it handled, but it's a we thing, not a I will handle it thing.

Oh, so he feels like he's the savior here? He's like, ah, don't worry about it. I'm about to make a lot of money. You're not going to feel a pinch here. Yeah. Oh, boy. Well, the second thing we can do is math. Numbers don't lie. I don't know if he's a numbers guy.

But show him on paper that the plan can work. Show him what you're paying in interest on these payments. And, hey, we're paying $1,000 in payments every month. Imagine if we had that back in our life and now we had $12,000 extra dollars a year to do what we wanted and to travel and to upgrade the car and do these house renovations. And once you do that on paper and go, and you know what? I think we can do this in like six months. This is not going to take a lot of time and it's going to make our lives so much better. Have you done that with him? He's actually been gone, so I haven't physically been able to do that.

Oh, he travels a lot because of his industry, driving around. Yes. Okay. Well, when he's back, I want you guys to have a real conversation and look him in the eyes. Hold his face if you need to and go, I know you're telling me not to worry about it. I'm worried about it. I want this debt gone. Here's the math.

Here's what this looks like. Have you guys gone through Financial Peace University together? I had the opportunity to do that, but my sister was going to pay for it, but the check got lost in the mail, and I never had the guts to tell her it never showed up. Oh, that's very sweet. Well, how about this? I will do you a favor, and I will gift it to you. I'm going to gift you a year subscription to Ramsey Plus. After we're done on the phone here, Jenna will pick up and get you connected to that.

And here's my only ask is that you sit down with him when he's home and you watch all of the Financial Peace University videos together and you actually pay attention. Put the phones away, no distractions, and you have a conversation after each video about how you're feeling about it and what you're excited about, what you're scared about. And when you do that, I want you to also do the EveryDollarPlus budget that comes with Ramsey Plus. And I want you to start doing this on paper. I'm guessing you guys aren't doing a monthly budget, at least he's not. No, it's kind of we wing it and then we'll check our bank accounts later and you start to out outspend your stupid yes just out earn it well that's another thing you guys got to start

doing and say hey here's my one requirement we've got to do a budget every month and we're going to track it and we're going to see how much we actually spend and that might change him too he might go oh my gosh i had no idea we were spending $850 on food for the two of us. This is insane. Yeah. So if you do all of those things, if you do all of those things and it doesn't work,

you might need to look into working with a marriage counselor if he's just totally unwilling to do any of this because that tells me this is beyond a financial thing. This is, I've got to figure it out. I have the answers. I'm going to save us. And that is not marriage. That's not a team mentality. No. And money fights and money problems are the number one cause of divorce in America today. And you guys are a bright, young, happy couple. And I want to keep

it that way. And part of that is getting on the same page financially. And so do the math. Start with the why. Explain to him how you're feeling. Ask him, hey, George gifted me Financial Peace University. My ask is that you would just sit with me and watch these videos. And if he's unwilling to do that, we've got deeper problems. Agreed? Yep, agreed. But we need to get rid of this debt, me and you and you i mean if he's not going to do it someone's got it right we got twenty two thousand dollars in debt what kind of debt is this uh this is student loans car payments loans he owns to his parents so it's heavy there's a lot is that affecting the personal relationship or his parents just cool with it sitting out there? Do they want this money back? They want it back because they now are taking care of his sister's kid.

So they need the money to support an unexpected kid. And you know what that causes on the parent's side? Resentment. Towards him. And they see him spending like crazy, having the time of his life all the while they're owed all this money that he said he would pay back. Which makes Thanksgiving dinner really awkward. Yeah.

Right now you care more about this than he does and I need you guys to have an equal effort in this marriage and in your finances. And so Jenna's going to pick up, we'll get you connected with Ramsey Plus. Make sure that you dig into it together, because if you just do it on your own, we're back to where we started. In fact, you're worse off because now you're even more on fire to do this stuff and he's just going further and further away. Yep. So it's going to be a hard conversation. It may take multiple conversations,

but he's got to be willing to put in effort here. That is the key. So hold on. Jen is going to pick up. We will get you connected with Ramsey Plus. And know that you're not alone. Couples all over America are listening and they're going, oh my gosh, I remember doing that. But I'll tell you, when we have these debt-free screams on the stage, the number one thing that people say, this is what got us on the same page, it's going through Financial Peace University. And here's why. It gives you shared language, shared goals, shared vision around your money. When you do that, your entire marriage is going to improve, not just your money, every single part of your marriage. You're going to be holding hands on the debt-free stage, and he's going to be sitting there going, yeah, I was avoiding it, but we finally did it, and man, I'm so glad we did.

It was so worth it, and our marriage is better than ever. That is what I want for you. And that's what I want for every young couple in America. This is The Ramsey Show. Thank you. I'm George Campbell, Ramsey personality and host of the Fine Print Podcast. You are listening to The Ramsey Show. If you haven't checked out The Fine Print, it's where I talk about the hidden truths that are keeping people broke. Season 1 is out right now with 11 episodes. And if you're not where you want to be financially, you don't know what to do or where to turn, you're listening to headlines and social media

and you're broke friends for money advice, this is the podcast for you. Making the right choices doesn't have to be complicated. I jump in, I do the research for you. I break down money myths, trends, and traps that you need to know about so that you can make smarter decisions for your life and your money. You can check out the fine print

on the Ramsey Network or wherever you listen to podcasts. Ryan joins us in Pittsburgh. Ryan, welcome to the Ramsey Show. Hey, how are you doing? Oh man, this is great. I have a crew that listens to you guys on the radio. You got me pumped, man. It's great to hear from you. Thanks for calling in. How can I help you? Oh my god, you is great. I have a crew that listens to you guys on the radio. You got me pumped, man.

It's great to hear from you. Thanks for calling in. How can I help you? Oh, my God, you guys are such a legend. I can't believe this is the first time I ever got through. Wow, you are the first person to ever call me a legend, so I appreciate that. What's going on? Well, I kind of have a unique situation. I started building my own house when I was young,

and the goal was every three years to sell them so I didn't have to pay the capital gains and then eventually not have a mortgage or anything. But my wife's tired of moving around since we had kids, and so right now we owe like 150 000 on our house on your primary residence yeah i mean it's probably worth like 300 000 because i it's all material that i you know no labor or anything um or contractors i did did it all myself so it's probably worth $300,000. But the other issue is I have a job, too, that I make $50,000 on, and we have a couple rental properties that we own outright.

How many? We were one, two. Two properties. What are they worth total? Together, I mean, we're out in West Virginia. They're not worth much. I think I got them appraised at both for like $50,000, $55,000. Okay.

Each of them? No, no, together. Combined. Okay. All right. And, well, here's the issue. I got two issues. Do you think I should build another house and try to get all the equity?

Cause I think I could build one out of the, uh, house prices that I could sell this for. I could probably build it without a mortgage on the same, because we have so much land. I could build another house on the same property, subdivide them. Or do you think I should keep the mortgage?

And I have, I do have like 60 some thousand dollars in auto loan, um, where I could, I could take the rental property and, and pay those, pay those off or, or hunker down. And, and so like my wife's a traveling nurse, she could get a contract and pay all that off too. So what's your household income? Well, that's, that's the thing. Like I make 50 grand a year. My wife makes 60 grand a year, but that doesn't like really tell the true worth because again, the salary for the houses that we sell every three years, they, we make probably another like 40 grand a year on top of that, um, without reporting it as actual earned income. Interesting, because you're avoiding the capital gains by staying there for three years.

What are these auto loans? Are these multiple cars or one? Yeah, so my wife owes $25,000. I know my boss is really mad because I didn't stay with the Ramsey plan like we always have. We did it all within the last six months. So far, nothing you've told me sounds like you listen to the show, but you do nothing we say. You've got a pile of debt, man. You're robbing Peter to pay Paul. Yeah, well, here's the deal. It all happened when I had kids. I got scared and nervous, and I wanted them to have, like, we were living like, like pretty, pretty low and I wanted something better for them. And I guess I wasn't prepared, but I mean, it is possible that we could get out of all of our debt and just have our mortgage with the equity.

Um, if we sell our rental properties. Dude, you need to simplify your life. I mean, if I'm you, I mean, what are these cars worth? Well, the one car is worth 25 grand and the other car, I think I would like 35 grand. Is it worth 35? 37, 37, 37 grand. So I have, like before i bought this car i had used cars and i would spend weekends on these 10 15 000 cars you're like putting in transmissions and this you're buying the wrong cars man you're spending 10 15 grand and you're still doing all this maintenance you've made some well interesting decisions i do i me and the crew we do block work, so it has to be a three-quarter ton vehicle to carry a cubit block. So I need something a little bit more than just…

I'm hearing a lot of reasons why you're special and you're unique and you need this and you need this, but you've got debt in every corner. Okay. And you're trying to outbuild your debt and say, well, if I just build another house, maybe we'll solve this problem. You're like, I mean, at some point, it's like a crazy person. Right. So if I'm you, I'm simplifying my life.

I'm going to, you clearly are a handy dude, very impressive young man. How old are you? 35. Dude, you're a rock star. If you can get a hang of this money stuff, you are going to absolutely crush it. But you can't keep going. I'm going to flip the next house and the next house. Because if you were so good at this, you would have all your debt paid off if this property game was such a lucrative business. But it's clearly not. So if I'm you,

I'm going to lean into my career, try to earn more money. If your wife's a travel nurse, they're making bank right now. And so I'm going to hunker down, sell the properties, and get rid of my car debt. And if you're not willing to sell the cars, pay them off really fast because you have $60,000 in auto loans or more. And it's over half of your income if you take out the property money, which is not guaranteed. And so you just have way too much tied up in motors right now. And I understand that you're sick of fixing transmissions, but you can find a reliable

used truck that you're not going to be putting constant work into, especially if you're a business. So if I'm you, I'm selling the properties. I'm getting rid of the car debt first before I touch the properties. We get rid of all the consumer debt. So if you want to speed this process up, you can sell those vehicles. You don't have to, but man, it's a big part of your world right now. Having that much in car payments tied up every month that you could be using to pay down your other debt. Right. I mean, so if I got rid of the rental properties, it would cover like 99% of the car debt, but like I'd still have a mortgage. Would that be okay?

Yeah, that's where I want you to be. That's baby step six. Where you're just focused on the mortgage, you're investing 15% of your household income. Do you have kids? Yeah, we have two kids. So you're saving for college after You're investing 15% of your household income. Do you have kids? Yeah, we have two kids. So you're saving for college after you're investing 15% into retirement accounts, not into crypto. Whatever your crew says is the hot investment right now, 401Ks, Roth IRAs, those kinds of things.

And then we're going to aggressively attack the house with everything else we have, every ounce of margin. And if you want to – I just don't think you should be going into debt to flip the house to try to make the money back to move it over here and it's just there's a there's a lot of moving parts here and i just want some simplicity for your life where you and your family can breathe easy and not have to continue this chaos okay um the last thing i was wondering uh was so like we did like three four years years down in Guatemala, um, did some volunteer work down there. And, uh, we, we bought property down there, uh, with hopes that that would be our retirement since it's so much cheaper. So I didn't invest in a 401k cause I invested in that property. Um, you think that would be because the healthcare is not bad. So you still have this property in Guatemala? Yeah.

I mean, you don't have to pay property tax or anything on it there. It's, it's super cheap. I think I paid like, like two grand for the property and I built a small house on it. And so there's no debt on this one. No, no. Man, you, uh, you've created just a web of, of wild times for you and your family. But you're not scared of work. But you just got to get focused, man.

Stay on the baby steps. It's a proven plan. 10 million people have done it. And as special as you think you are, this plan is going to work for you. If you just follow it and don't try to do Ryan's plan, which has caused all the chaos that we've discovered today. Man, simplify, simplify, simplify. That is financial peace. That's what I want for you and your family. This is The Ramsey

Show. Our scripture of the day, Deuteronomy 7.9. Know, therefore, that the Lord your God is God. He is the faithful God, keeping his covenant of love to a thousand generations of those who love him and keep his commandments. Brian Tracy said, the value of a promise is the cost to you of keeping your word. Our question of the day comes from Blinds.com. Find out for yourself why Blinds.com is the number one online retailer of custom window covering. You get free samples, free shipping, and with the new promos they run every month, you'll save even more. Use the promo code Ramsey to get the best deal.

Today's question comes from Angie in California. She said, My husband and I are selling one of our rental properties and will net $245,000. We also have $12,000 in our savings account. We owe $370,000 on our current mortgage and owe $33,000 on a 401k loan. I want to put the whole $245,000 to the principal of my house. That would save us over $181,000 in interest, and we could pay off our house in four years. Should we fund our emergency fund first or pay off the 401k loan first, even though we're just

paying ourselves back with interest? That's a great question, Angie. Appreciate it. Here's the thing. You're trying to do a lot of things at once here. You robbed yourself from this 401k loan. You want to pay off the house early because you're mad at the interest, but you're going into debt and you don't have a fully funded emergency fund. And so we just have to stay on the plan. So here's what the plan looks like. If we filter this down through the baby steps, you guys are now a baby step two because of this 401k loan. The good news back into your 401k so it can continue to grow and give you guys a great retirement. Now that leaves you with what? $212,000? That's some good money there. And so at that point, we need to fully fund your emergency fund because you're then out of baby step two into three. So if let's say, let's say that's $30,000 for you guys,

so we're going to add an additional $18,000 to fully fund the emergency fund, and then the rest of that you can apply towards the mortgage. So no, I would not apply $245,000 to the mortgage and still leave yourselves without an emergency fund and left with this 401k loan. Clean that up first. You can put almost $200 200 grand on the mortgage, which will bring it down to 170,

and then you're in baby step six, and you're going to attack this with a vengeance with all of the margin you have while investing 15% of your income into retirement. If you guys got kids, we've got to be investing something for college as well. So that's the plan. Don't try to short it.

It just doesn't work. The shortcuts will lead you to pain and misery and anxiety and confusion and all kinds of things. Follow the plan. It works every time. Good stuff there. Laurie joins us in Los Angeles, California. Laurie, welcome to The Ramsey Show. Hi, George. Thanks so much for taking my call. I really appreciate it. Absolutely. How can I help today? Great. You're the perfect person because my question is regarding, I have a son that's

going to be, you are, you really are, a son that's going to be going to college this August, right? So out of state. So we're concerned about like how we can help him in case there's any emergencies. We don't want to, financial emergencies, we don't want to open up a credit card program, which is what we did for our older son, just for like, because books are crazy expensive, right? Or if he has a medical emergency or it's just something else that comes up, but we don't know how to help him because we're not, we can't just, you know, give him money like quickly like that. So without opening up a credit card, what would you recommend that we do to help him stay out of trouble or, you know, give him a hand if he needs that.

Well, the first thing I think we need to take a step back. First of all, awesome job that you are not going to open a credit card for him like you did with your other son. That is the move. The credit card is the gateway drug into all kinds of other debt as he gets older. So I want him to stay away from debt. Is he able to cash flow the college experience? Yeah. So we have been saving, and we have about $20,000 a year for college, and we've got about two years saved for him. So we should be good there. Okay. That's good news. So as far as him having emergencies in college, I mean, his life is pretty cushy. Is he living on campus out of state? He's going to

be living on campus, yes. Okay. And is he on your health insurance still? Yes. Okay. So as far as financial emergencies, I mean, we've got health insurance, so there's a fear that's taken away there. We're going to be able to pay for any out-of-pocket medical costs. God forbid something happened, right? Yes. And then the other emergencies, like books, are not emergencies at all, right? We know that we need books every semester. And so that's going to be part of the budget that we use to cash flow the college experience and go, all right, books are going to be $600 this year. They're going to be $750. And guess what? Don't buy them from the campus bookstore. Go buy them used off some used book websites. Go find the digital version.

There are so many options out there, and half the time you don't even need the book. So make sure once you get in that class, talk to the professor and go, hey, listen, I don't really have the money to be paying for all these books. Do we really need it? Is this something where I can print it out? Can I work with another student? What are my options here? And see what they say.

So he needs to get creative, and I want him to fight for himself. It's really sweet that you're calling in on his behalf, but I want him to feel the pressure of, I'm a big boy now. I don't live with mom and dad anymore. I've got to figure this out versus you guys bailing him out. So have you guys had that conversation with him? Yeah, yes, we have. But after this call, definitely, I mean, we watched Barlow's future

and just kind of put the fear of God into him, kind of started. But thank you for that. And I know we're budgeting. We're doing the everyday dollar app and all that stuff too. But for sure, I think you kind of just put it in my head to in his account, his bank account, he just needs to have that money available for the books. That was my biggest fear. Yeah, he needs to have his own emergency fund. I want him to have to figure out, oh, gosh, okay, I need to be able to budget for this

every semester. Because truthfully, that's the stuff I wish I learned when I went to college. And instead, what we do to our kids is we baby them, we handhold them, and then they turn 21, 22, and they leave college and they go, oh my gosh, I have no idea how to do anything. How the heck do you pay for things? How do I budget? How do I file taxes? I know. And so that leads to my second hopefully quick question is that so we have the money, right?

So we don't want to take out a loan, but we want to know that he has skin in the game like we did with our oldest son. Unfortunately, this was before Dave, before we knew about Dave. So we paid for 80% of his tuition, and he paid for 20 with a loan. We paid off our portion already, but he's still paying for it. So now I feel bad that we're helping him pay for it because what's left because he's having a hard time. I don't want to make the same mistake with this one, but I want –

so when I told my older son that we want you to take out a loan so you have some skin in the game, he said, I get it, Mom. That will help me graduate faster. He graduated in three and a half years. So it worked. But I don't want to do that to this one because we have the money, but we want him to have some skin in the game too. What do you recommend? You know, if, can he work part-time while he's in school? Because we found that actually increases your GPA and creates more discipline. So I think you make it a, you make it a requirement and say,

hey, you know, this much of what you make, or you're going to have to cover this much extra by working over the summer or part-time while you're in school so that you've got skin in the game. Because I do think that's important. If mom and dad are just cash-flowing his life, he's not going to feel the need to even graduate in four years. He's going to become a six-year graduate because he's having such a great time on your dime. Yep, exactly. So nothing wrong with putting him to work and going, hey, you're going to cash flow $5,000. Make it reasonable.

He's not going to make $40,000 while he's in college, but make it something reasonable and tell him debt is not an option. It's off the table, and you're going to have to get creative. You need to apply for scholarships and grants and FAFSA and do whatever it takes. It doesn't have to be his own money he earned from work, but he's got to cash flow this thing and get creative. Okay. And that's really going to make him a better adult, don't you think? Absolutely, and that's what we're trying to do. So he's number two, and we don't want to make a mistake

that we did with the first guy because we're helping him get out of it because we feel bad after we learned what Dave's, you know, rules of engagement were, so now we know better. Yeah. Well, there's nothing wrong with the kids learning that lesson. And I'm glad you learned the lesson of saying, hey, we don't want it to be this way. I mean, you're changing your family tree by saying never again are we going to have a kid that graduates with all this debt. And he's going, mom, dad, I thought you were helping me, not putting me into debt, putting me in chains when I graduate and get a job. So you guys are doing amazing. I'm proud of you. Thank you for watching the Bar of Future documentary

and making those changes and wanting to see your kid grow up into a successful adult. That's the goal. Yes. Thanks so much for the call, Laurie. Appreciate it. That puts this hour of The Ramsey Show in the books. Our thanks to Ben running the board today,

Jenna on the phones, Kelly, our associate producer, Zach and Nathan running the YouTube side and the video stuff, and you, America. Appreciate you listening on this day where I'm flying solo. Appreciate the support. Thank you guys so much. Spend wisely, save intentionally, give generously. This is The Ramsey Show.

This is James Childs, a producer of The Ramsey Show. You can listen to all our shows with the Ramsey Network app on your smartphone. Browse by topic or even send clips to your friends. Download the Ramsey Network app in your favorite app store today.