The Ramsey Show - App - I’m Afraid To Talk to My Family About Money (Hour 1)

Episode Date: January 22, 2024

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm Dave Ramsey, your host. Thank you for joining us. Dr. John Deloney, number one best-selling author and host of the Dr. John Deloney podcast on the Ramsey Networks is my co-host today. We're happy to talk to you about your life, your money, your relationships.

We're here to help you do life a little bit better. The phone number is 888-825-5225. Taylor starts this hour in Knoxville. Hi, Taylor, how are you? Hey, Dave. Hey, Dr. John. Thank you so much for taking my call. Sure, what's up? So, I need some help navigating money and family. My question is, is it wrong for my husband and I to lie about our accomplishments and pretend to be broke in order to financially and emotionally protect ourselves and I'm happy to give a little context

with that it's just cowardly yeah yeah yeah I own that. Yeah. Yeah. It is. How old are you guys? How long have y'all been married, Taylor? So we've been married a little over a year, together for five. I am 32, and my husband is 35. So who's the twerp that's going to have a hard time with you succeeding? It's my family, specifically my mom. So my husband and I have paid off over $100,000 in student loans over the last three years.

And your mom will feel entitled to some of your money if she hears you're winning? Correct. Okay. Correct. All right. Almost like I've talked about this before. Okay. Uh-huh.

Uh-huh. Okay. So she uses money to show love, but more as a means of control. And yeah, anytime one of her kids starts making money, she's got her hand out wanting some. And to clarify, she is financially well off and is not in need of any help. And she has actually stolen thousands of dollars from me in the past when I had my very first job when I was 16 years old. So we're pretty much saying mom's got issues. Yes.

Why do you continue to allow your mom to control you? You're 30. Yeah. I want to honor her as my mom. I don't think that's true. I don't think that's true. I think that sounds good. It's a good church answer. I think you're still trying to figure out what you did wrong when you were nine that your mom would steal from you. And you still think there's a way, there's a thing you haven't done yet that she'll finally, you'll finally do

it. You'll finally give her the amount of money. You'll finally do the thing and she'll go, I'm so proud of you and I love you. That's what I think you're chasing. And I think you wrap it up in words like honor thy father and mother. Honor thy father and mother does not mean, um, honor their misbehavior. Exactly. Yeah. Uh, in in all honesty i would love to just cut her off completely i don't think i'm ready to do that i think that's what makes it hard here's what you're giving her right now you've given her money in the past you've given her your um life in the past now you're giving her your integrity. Free rent in your head. Don't give her your integrity anymore.

Tell the truth. Yeah. And when she says, well, I want, no, we're on a budget. It's a muscle you're going to have to practice. You're going to have to, it's like going to the gym. You've just never done squats before. You're going to have to start light, but you're going to have to learn how to do squats. The first time you do it, your heart rate's going to go in your stomach. It's going to go into your throat.

The 80th time you do it, you're just going to be smiling, looking at a poor, pitiful lady who hasn't been able to control her own emotions. Yeah. Because that's actually what she is. She's kind of pitiful. You will never do a thing that makes her finally say. Because she doesn't have that tool in her kit. She can't do it.

She doesn't know how. So you're dealing with an incomplete person who's got major, major gaps. And you cannot have any expectation that she's going to be anything other than that. And you just smile and go, no. I mean, pretend like she had had a stroke. Okay. I mean, pretend like she had had a stroke, okay, and she was incapable of behaving. You would just look at her and smile and go, gosh,

that's a horrible malady you've got, but that still doesn't mean you get to come over here and throw rocks through my window. Yeah. You didn't hear any of that. You don't want to so bad why you just kept driving why can i okay i'm gonna i'm gonna cut to it you're scared you're gonna haunt your marriage yeah and at some point your husband if he hasn't already he's gonna ask why her over me why her over our future that we're trying to build together she's taking up a lot of space in your head so this may be you guys you may need to sit down talk to somebody and work this through

because this is a mother-daughter dysfunction that's pretty pretty serious and it's just it's just manifesting itself in the money but it's there, there's a lot of others, parts of this. And so, but the truth is you're not going to have peace hiding as a 30 year old hiding, like you're some kind of misbehaving teenager. You know, I can't tell my mom, I got good grades, you know, I'm like, come on, what? So because she does not have the capacity. She's a diminished capacity as if she's had a stroke. We'll just call it that, okay? And it affected her ability to be a good mom. And so you just treat her like that, and it's kind of sad, and it's kind of pitiful.

But it doesn't mean I can't tell her the truth. Mom, you know, if it comes up, but you don't need to go in there and go, da-da-da-da-da-da-da-da-da-da, look what we did, because that's not going to do it either. But if it comes up you just go well you know hey we yeah we paid off some money but i don't tell i don't sit down with uh anybody and go look at what i did yeah how does that even come up in your house yeah really well uh when whenever me and my husband go which is less and less frequently now, if I need to go to the restroom or leave the room, they will corner my husband and straight up say,

how much money did you make this year? What are you making now? Hold on. But all you say is, I had a good year. I'm not going to give you those numbers. And you smile real big. Yeah. I'm going to tell you that.

It's none of your business. Yeah. Or when you come out of the bathroom, go, hey, Mom hey mom dad we don't talk about our private financial matters anymore we just don't we don't put those numbers out into the world those are private those are ours and if they can't honor that boundary then they're asking you well we don't want you here yeah right that that could be the exit that i'm looking for no it could be but that would be them running you off, not you yelling, I'm leaving until you learn to behave. That's not what we're telling you, okay?

Yeah, I don't want to talk about my sex life with you. I don't want to talk about the dollar amount we made last year. I don't want to talk about any number of things. That's for us. It's not for you. As I started having grandbabies, I have had way more information from my children about the arrival of children and how they got here than I wanted to know. I'm just telling you.

So I just assumed we went her direction and just said, you know, y'all just keep that to yourself. I really don't want to know some of this. I just want to see the baby when it comes. Thank you very much. I'm happy. I don't need to know about the practice. Nope. Thank you very much.

It's all good. Oh, my gosh. It's the same stuff. You're exactly right. Thank you very much. I'm happy. I don't need to know about the practice. Nope. Thank you very much. It's all good. Oh, my gosh. It's the same stuff. You're exactly right. I'm not going to tell you about that stuff. No. Papa Dave don't want to know. Nope.

Papa Dave don't want to know. I want to meet the baby. Just tell me what the name is and tell me what the sex is when it's appropriate to tell me. And then tell me when I can tell people that. And then I will. And don't tell me unless you want me to tell somebody unless you tell me not to tell them. I need America to know I had a great joke

that I didn't just use. You didn't use it. Hey, you guys, health insurance costs are only moving one way and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer and it's harder than ever to get anything approved through the bureaucracy.

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They'll also help meet spiritual needs. Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of health care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget. That's chministries.org slash budgets. Dr. John Deloney Ramsey, personality is my co-host today. Open phones at 888-825-5225. Today's question of the day is brought to you by Neighborly, your hub for home services.

When something in your home breaks, remember the Neighborly done right promise, which is it's not done until it's done right download the neighborly app today and schedule your appointment and you know you're going to get great service from a great company these are good people from neighborly's network of local home services all right today's question comes from flustered in florida Sounds like a Dear Abby column. What would your name be, Dave? Handsome in Nashville. Devilish Dave. Today's question comes from Flustered in Florida.

My wife and I have been married for nine months, and for the last three months we've been working the baby steps. We each came into the marriage with debt. Our total combined debt was close to 50,000 bucks, but I recently cashed in a whole life policy that was worth 22,000. We've used it to pay off all our credit cards and a small student loan that I had. Had no problem using this money this way, even though most of the credit card debt was hers. The way I feel is we're now one and so is our debt. However, she feels very guilty about taking this money it makes her feel

indebted to me i hate to make her feel like she needs to pay me back since i don't feel like this at all do you have any advice for this situation what do you think man uh well i mean yeah it's it's a discussion of a view of marriage you, you're not in debt to your spouse ever. You're all into your, you know, for richer, for poorer, in sickness and in health. I mean, if you get the flu and she makes you chicken soup, do you have to pay for it? In sickness and in health. You know, if she, if you're laying in the bed, you know, sweating through a fever because you got the flu and she's working and she's taking care of you and, you know, so forth. Do you have to write a check for that?

All right. You know, no, we took, we took on each other's burdens where our goal, once we walked down that aisle is to serve each other the rest of our lives to do everything we can to make the other one's person and life better. And that includes we took on each other's debt, we took on each other's income, we took on each other's assets, and we took on each other's crazy parents. Yeah, I don't think, flustered in Florida, I don't think you can make your wife feel anything. I don't think you have that kind of power.

Agreed. And my guess is she probably grew up in a home where anytime somebody had to do something for her, whether it was buy her a new pair of shoes or some jeans or get her to school on time, she was made to feel like she was a burden to them. And so now she's married somebody who loves her and is all in. And she doesn't have the, for lack of a better term, she doesn't have the script for that. She doesn't have the wiring for that. And so she's going to have to choose on her own to feel that discomfort and realize you're not holding this over her head. This isn't an ROI. In fact, Dave, I talked to somebody recently who's had a relationship struggle.

And he said the person that he was with was listing off all these things that they do versus, and I said, once you get into ROI comparison, your relationship's in trouble. Sometimes that's an important conversation to have because it's way out of whack, but man, once you start keeping tabs, that can be the death of a relationship, and she married someone that doesn't do that, and so she's going to have to learn how to not feel guilty

every time she needs some support, some love and some care. Well, this is just a philosophical view of a proper marriage relationship. And the philosophical theological view is I no longer own anything. We do own everything. And that's training that you can decide to do that. I tell couples all the time when you get married your pronouns change it's not mine and yours it's ours it's ours it's we're french we we you know and so everything's a week it's a pronoun is a plural now uh and i'm not talking about pronouns

out in the crazy world that's not what i'm talking about i'm talking about out of the abundance of your heart the mouth speaks and go we had some debt we paid off the debt which is how flustered feels but his wife didn't feel that way right and so uh i think we just talk about it out loud and go look the right way for us to view this both of us is that everything that's mine is yours and everything that's yours is mine there's not any years in mind it's ours and if we can get there and start using our intellect as an act of our will to practice that and practice thinking about it that way um then uh uh you know it changes everything i'll give an extreme example out there for those of you listening i mean

sharon my wife has not earned an one dollar of income other than consignment sale clothing since Denise was born, and Denise is 38. But we have had a really good income during those 38 years, you know, or 36 or whatever she is. But we have an income. The Ramseys have an income. I technically earned all of it technically uh except for the part where i get to go to work all the time because she's doing all this other work that's right but um you know that so it you can't really bifurcate all that and it work out any other way so we have an income and you know and sharon sharon will use that

it took a while but you know she was like hey you know you're Sharon will use that. It took a while, but, you know, she was like, hey, you know, you're making pretty good money. No, we are making pretty good money. We make enough for us to buy that car that you're going to drive. Right. You know, and you really got to kind of practice it. Yeah. Especially when there's a single income family or when one of you brought more assets to the table in his case they used his whole life policy to pay off her credit cards but it's not his and her anymore

once you get married it's ours here's another side i made this mistake um i bought a car with cash i don't know five years ago and we didn't take a note out on it. I just bought the car and went down to the courthouse, but I put it in just my name, and it never occurred to me. And my wife said, that makes me feel like you went and did a thing on your own. It never even, no, no, no, this is ours. All this is ours, right? And so even going back to the courthouse and changing the name, this is is john both of our names are on the title um which costs a little money it's yeah but it's but it's

an important it's an important thing very important yeah very important well done so it's something flustered you've been married a whole nine months um and so uh it's something you it's a muscle you guys can grow into and learn it's very possible you. You're going to be just fine, but it gives us a chance to get up on a soapbox and tell everybody how to do it. Corey's in Norfolk, Virginia. Hi, Corey. How are you? Hey, I'm doing good.

How are you guys? Better than we deserve. What's up? Good. Well, me and my wife, we're looking to move from Virginia to North Carolina. We have a toddler that is three years old, so we're looking to get to a lower crime city and somewhere with better schools. So we currently don't have any debt other than our mortgage. We owe about $240,000 on that. We can sell our home for around $450,000 here.

We would be looking to purchase there for $500,000 to $600,000. We'd be looking to roll probably $175,000 from our current home in. We also have $125,000 total in savings. So just trying to get an idea of, is this a smart move for us to go ahead and make, taking our emotions out of the situation, and how much would you put down if it is a good situation? I put down everything i had except for three to six months of expenses and i would put the payment or put the mortgage that you take out on a uh 15 year as long as the payment's no more than a fourth of your take-home pay then you can afford this okay and i think you can all right i think it i think it fits in your numbers i think you're just fine um you are moving to a less expensive real estate market and still moving up in house by the way and

blaming a little baby yeah i would much rather i i dave's on to something really important i think for the sake of your relationship with your kid i think it's important for you and your wife to say hey we want to move for a better because we have some goals for our life but during that stress of moving that stress of getting a driver's license it can be real easy to look at that kid and slowly start to resent that kid we're doing this for you no you're not you're doing it for y'all and the kid yeah one new schools're not. You're doing it for y'all. And the kid, yeah, went to new schools too, of course, but also it's for y'all. Yep, yep, yep, yep, yep, yep, yep. That's how that works.

Yeah, just, I mean, all of it's fine, but you did move up in-house in a cheaper real estate market. Point being, you didn't have to accomplish the school goal only. But that's okay. You can afford it, I think, Corey. So I'd probably go right ahead. I just watch my, I always try to think about how I, what I use to reason my way through that and was that reason process factual?

And that's why I'm challenging you just to help you with that in the future. This is The Ramsey Show. Dr. John Deloney, Ramsey personality, is my co-host today. Lee and Nicole are on the debt-free stage in the lobby of Ramsey Solutions. Hey, guys, how are you? Hi, great. How are you? Better than we deserve. Where do you all live?

We live in Greenville, South Carolina. Oh, I love it. What a great town. Beautiful. Welcome to Nashville. Thank you. How do y'all live? We live in Greenville, South Carolina. Oh, I love it. What a great town. Beautiful. Welcome to Nashville. Thank you. How much debt have you paid? We paid off $462,000. Whoa!

Yeah. How long did this take? Forever. 53 months. 53 months. And your range of income during that time? We started out at about $180,000 and then up to $305, to 305 wow what do y'all do for a living we're veterinarians oh very good both of you you on the practice no no but both of you making

a hundred and a half about 80 or thereabouts good for y'all student loans it was yeah those vet loans will get you man so bad so bad i took a call last week from a guy whose wife was wanting to go be a veterinarian he was trying to he was an accountant he was trying to figure out if it was worth it I was with you yeah yeah I said it was worth it's worth it but you got to really think it through 400 so you've been out of school five years I'm guessing uh four years almost nine years oh okay so what happened after uh you know at this it looks like about five years ago this thing blew up what's the story So it started in 2015. That's when we graduated vet school.

And each of us owed probably $170,000 or so. We were put on an income-based repayment plan. As you do. And at 6.5% interest, $170,000. We weren't even covering the interest. Not even close. 170,000 we weren't even covering the interest not even yeah and so between 2015 and 2019 our loans went from 170,000 to well over 200,000 each so each double and so it was early 2019 they didn't do a lot of math in vet school but even you knew that yeah too much yeah we we had

no plan to try to tackle this we had absolutely no idea what's so stressful for sure and thomas grinder um he's a vet he was our classmate he and i were working together and early 2019 he invited us to his church to attend fpu oh wow and nicole she was really excited about it um i was very hesitant i was like you, you know, we make what we make. What's this Dave guy going to tell us that we don't already know about money? Boy, was I wrong. So early 2019, we went through FPU. We actually missed week nine, the last one, because our son was born.

Oh, wow. And him coming into the world, it just kind of changed everything. That was the icing on the cake. We got to get rid of this debt. And we don't want him to have to go through what we did. Go through what we did. We want to be able to pay for his college one day. So he was born in early 2019.

We had like $1,000 worth of cell phone debt, $29,000 between two vehicles. And the remaining $432,000 was our student loans. And so it was like late 2019. We started in on my half of the student loans. And we still didn't even really know if we could do it. It seemed like such a huge mountain. And then early 2020, COVID. Thanks, COVID. It helps us so much so you know we we got the the pause on the interest and that's when we just really

we were able to through everything and y'all were essential so you kept working like crazy people worked more than yeah yeah and you weren't part of the 99.9 percent of americans who just sat y'all exactly y'all looked at this as an opportunity it saved us probably 80 90 000 of interest you know what i bet it did yeah yeah over five this period of time that's right because you hit it exactly right inside yeah that's amazing we started the loans just before covid hit before y'all wow and then early this summer we actually decided to move to Greenville. We had been living in Georgia the entire time.

So we sold our house, took some of the equity from it, and paid off the rest of her loans right before the payment started back. Oh, perfect. So perfect timing. And then took new vet jobs there. Yeah, exactly. Are y'all working in the same practice? We actually are. Large animals? Small animals? Small. Small. And now y'all are 300 plus with no debt that's right we got to get a

house again so that's where we're headed we're in 3b now yeah but yeah way to go you guys that's a different house when you don't owe four hundred thousand dollars that's right it's gonna be better well you don't need a bedroom for sally may no that's pretty cool yeah way to go y'all thank you you gotta feel like i can do anything like you got a superpower it's a weight weight weight going for sure yeah all right hey could i could i ask you a hard question sure i want you to speak on behalf of everybody in this industry okay um and i say this industry that's not true in with this mindset millions of people go through FPU and they know I don't know what I'm doing yeah there's a whole bunch of people that make a lot

of money that think ain't nobody gonna tell me and they're real smart and they got a lot of fancy letters after their name and some huge framed diplomas on their walls and a huge student loan debt to go with a huge student loan debt and go with it. And a huge student loan debt, and they can't breathe, and they're arrogant at the same time. What finally got through to you? Because what you said, I hear that all the time from my medical doctor buddies, my nurse practitioner buddies. What's this Ramsey guy?

What's that, oh, okay, just live on less than you? Okay, man, that's a hard thing to get through that ego. Yeah, no, it was just going through the class it all made sense and and when i when i actually sat down and figured up the numbers and did the calculations it's like yeah this would work like all we've got to do is do it we have to set our mind to it and just do it just plow through and go yeah so once i actually ran the numbers, that's what flipped the mindset for me. It's so daunting looking at the big picture like that. And then if you kind of scale it back and do one step at a time, like the Baby Steps show, it's much more manageable.

How do you eat an elephant a bite at a time? Exactly. Way to go, y'all. Thank you. Thank you. So proud of you. Who was cheering you on, telling you you could do it? So Thomas, of course.

Thomas Griner. Yeah, that got us started. And then our good friends Marcy and Eric. They're watching, hey. And then my parents as well. All right. Very good. Anybody roll their eyes and say you're crazy?

A lot of them. Yeah, yeah. It came up quite a bit at work. And we just mentioned what we were doing. And some people were like, yeah, that's cool. Some people looked at us and we just mentioned, you know, what we were doing. And some people were like, you know, yeah, that's cool. Some people looked at us like we had six heads. It was like, what you're, you're throwing $10,000 a month out the window, you know,

when you could be buying a bass boat. And for going that many years of retirement savings, it's just, yeah. Yeah. Yeah. 53 months. I mean, you've been scratching for a while. This is real. Yeah. Yeah. Yeah. Yeah. 53 months. I mean, you've been scratching for a while. Yeah. Mm-hmm. This is real.

And do you have the junkiest car pulling into the parking lot? Well, not really because that was part of our debt, right? Oh, there you go. Yeah. So a stupid move is like six months before I graduated, I bought a brand new F-150. Of course. There you go. Well, that's required.

I had to have it. It's required. Yeah. I've still got that truck. It's 10 years old now, but it's paid for. Yeah for yeah well treat it right and you can give it to your child great job lee and nicole way to go y'all we've got the live and give box for you it has in it the baby steps millionaires book you'll be there in a minute if you're not already and uh of course the total

money makeover book as well and financial peace university which did it for you guys and uh you guys can um of course give that to somebody or go back through again whatever you need to do all of this is for you to enjoy or to give away the live and give box so congratulations very proud of y'all heroes thank you you kicked it You kicked it, man. That's a long run right there. It is. It's a big deal. All right, Lee and Nicole, a couple of veterinarians in Greenville, South Carolina, these days, paid off $462,000 in 53 months, making $180,000 up to $305,000.

Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah two one we're debt-free that's how it's done right there it is amazing that uh for a math nerd like me that when you crunch numbers and can see that you can do it how how math becomes hope. Yeah. Oh yeah. Yeah. Nobody thinks of math being hope, right? But when you go, wait a minute, I can do that. The first time I ever saw a hundred dollars a month invested from age 25 to age 65

at, you know, in a decent growth stock mutual fund becomes 1,176,000 dollars. The power of compound interest. I thought I could do $100, and I'm only 22. That's the first time I saw it. And I thought, I'm going to be a millionaire. This is really going to be me. Bing! Math gave me hope. It's amazing to me how many very, very smart people don't sit down and do that very thing.

Because like him, he just ran the numbers, and then he thought, he's a smart guy. He's like, oh, I've got a path now. I can do it. I can do it. I can see it. This is The Ramsey Show. Dr. John Deloney, Ramsey personality, is my co-host today. Alex is in Ann Arbor, Michigan. Hey, Alex, how are you?

How's it going, guys? How are you? Better than we deserve, sir. What's up? Hey, so I am 20 years old. A little back story about me. I am actually married. I know it's quite a young age with my beautiful high school sweetheart of five years.

My father and my grandfather unfortunately passed away just a couple months ago. They mainly helped me when it came to finances, even though they were still heavy plastic swipers. My mom kept my dad's debit card away quite frequently because of that reason. My wife and I are kind of just at a standstill right now. The way we're saving money, I just feel like isn't right. We make about $76,000, $78, 78 000 a year we both do patient transport at the university hospital um and uh we don't have much saved up um and we're just kind of we've got about 22 000 or 2200 in debt 22 000 including our cars um we just bought our first home with a condo um and we're just kind of seeing what would be the best way

and where we should start paying our debt off. Okay. It sounds like you've got the opportunity at a young age to really start a whole plan and implement every detail of that plan to get you to where you want to go. And right now all you're doing is just trying to make sure we keep the lights on, keep food on the table, and nobody picks up anything and repos it, right? Right, right, yeah, yeah.

Instead of a plan, you're kind of in survival. Did your granddad or dad leave you any money? No, they did not. This is all of our money when it comes to, with the money that we use for like down payments on our condo and for down payments on our vehicles and stuff has been 100% self-earned. We haven't received any money. We haven't loaned any money from family or anything. So I want you to internalize really deeply in your heart what dave just said you and your wife at a really young age are deciding to change everything about how y'all do marriage how you do money and what your kid when he reaches to be 20 when your daughter reaches the age of 20 what their life

will look like because of the decisions y'all make today yeah that's a big deal it's a huge deal what you're doing i'm proud of you yeah way to. Very, very good question. The way you're where your mind is, the way you framed the question is you're in a really good place. So what we do is we have a class called Financial Peace University that's nine weeks long and about 10 million people have been through the class now over the last 30 years. And so and it's of course, the class now uh okay over the last you know 30 years and so uh and it's of course the class has evolved and has gotten better over time and uh but but in its current form if you go through that it's everything you should have been taught about money uh before we let you out of school you know but nobody teaches it hardly so we're going to give that to you guys as a belated wedding gift.

Thank you. And I want you to go through the class with your wife. Both of you attend. Both of you go to the nine lessons. Both of you buy off on here's what we're going to do. You join hands. You get a very clear, high-definition picture of what the future looks like and what the price has to be paid to get to that future and when you do that you'll go do it and you're going to be in a

position to you know again like john said be you'll be very wealthy uh you haven't made any huge mistakes you haven't been thrashing around and I think that's the gift your granddad and your dad gave you. They didn't give you any real insight in where money comes from and how to, how to think big about it. Cause they didn't have any, uh, we know that cause they didn't leave you any, but the, uh, uh, but they did kind of keep you tempered to where you haven't gone crazy. Like a lot of the people in the public have gone. So you've not got way huge piles of debt. You know, you've got not gone, you know, some silly numbers in the numbers you gave me.

There's some trouble there. There's some problems there, but there's nothing, nothing bad, nothing super bad. So if you'll address the stuff that's there that we teach you and go do this, you're going to be in a really, really good position. Hang on. Austin will pick up and we'll get you signed up and get you guys to the stuff that's there that we teach you and go do this, you're going to be in a really, really good position. Hang on. Austin will pick up, and we'll get you signed up and get you guys to go through that at 20 years old. God almighty, I wish I'd gone through that at 20.

Oh, dude, don't even get me started. It'd be awesome. Natalie is in Logan, Utah. Hey, Natalie, welcome to The Ramsey Show. Oh, my gosh. Hi, you guys. This is so exciting to talk to you. My heart is racing, which seems to be in my living room.

But I'm so excited to talk to you guys today. Well, we're excited to talk to you. How can we help? Okay, so I am a mom. I have two little boys. I've got a three-year-old and a five-month-old. And so ever since our three-year-old was born, we've put a small amount of money to the side for his future. And so what I'm wondering is I recently found out about 529

plans. So I'm trying to figure out, we've already had some money saved up. And so it's like, what's the best way to invest that for our children? Should we invest it in stocks? Should we put it in CDs? Or I guess, what do you think about 529 accounts? That's really what I'm wondering here. Well, 529 is used for education. It grows tax-free, which is wonderful. And we always recommend you put that in good mutual funds that you control. 529, in other words, what we're suggesting is mutual funds, and the way it's treated for taxes is dictated by 529. And just like IRA is not a real investment,

IRA is how an investment is treated for taxes. And so that's what you're looking for here. So if you're saving for a kid's college, 529 is the way to go. And you can learn about them. They're really easy to learn about. Just go to, you know, go to RamseySolutions.com, click on SmartVestor Pro. You can sit down with some of the folks that we endorse around the country for helping people with the heart of a teacher with their investments,

and they can help you get that started. How much have you been putting aside for these kids? So both of my boys get $40 a month, so it's $80 a month that we put away for them. Okay, all right, not bad at all, good. And so yeah, they can sit down with you and help you put that together, and you know, that's going to turn into some money. I mean, it's going to end up with some money there. An ESA is the 529's cousin uh educational savings account same thing by mutual fund and qualified as an esa uh the maximum on it is two thousand dollars per year which would be 166 dollars and 67 cents per child per month and if you did that from zero to 18 you'd have about 125 125 000 give or take in there in that 529

uh you would have only put in uh about let's see 2000 times 18 you would put in about 36 000 so you got about 90 000 growth that's tax-free and so that that from a for fully funding a baby at two thousand dollars a year 166 67 a month that sets you up and that today would send you to a an in-state school for your undergrad that would take care of it what is uh what's the max on a 529 it depends on the state 10 000 a year usually you can put more in it than you should. Or sometimes you can load it up, like three or four years, put $10,000 in, and then quit. Set it and forget it. It'll grow. It'll grow up to be enough then, and you don't have to keep adding to it every month the whole 18 years.

And I've heard recently that there was adjustment made the last couple of years that if you end up putting enough money in the 529, your kid goes to college, that they can roll that into an IRA at some point? You can move it to a Roth IRA, but the limitations on it are pretty severe. So I really wouldn't. I mean, think that way. Yeah. I would more likely move it to another family member to go to school. Okay. More than likely. It's going to be a better use of the money, but because the formula they're using, what you can move and how long you have to wait to move it and all that you know they there's a good idea and then they mucked it up with too many rules but the but either way it's still a great place to save money for a kid for college if you're if they're not going to go to college it's not a great place because it has to be used for education for

someone or that ninety thousand dollars in growth will be penalized. And so you're not going to, the fact that it grew tax-free, all that wonderful idea is gone if you don't use it for that. So you got to make sure that that's what we roll up for. But here's the thing. I have never met someone. Oh, by the way, if you, if the kid gets a scholarship, you can take that much out of the 529 and pay no taxes on it at all. So if your kid gets a $2,000 scholarship, you can take $2,000 out of the 529, put it in your pocket.

That's always been the argument. What if my kid gets a soccer scholarship or is a genius? You can, you know, if you get a scholarship, you can take it out. But here's the thing. I've been doing this 30 years. I have yet to run into a single person call me up and say, Dave, you told me to save up for my kids college and i hate it i hate you i screwed up everything i hate you this is the ramsey show I'll see you next time.