The Ramsey Show - App - It's Time to Draw a Line in the Sand Over Money (Hour 3)

Episode Date: September 19, 2018

The show about you

Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in, we'll talk about your life, your money. It's a free call at 888-825-5225. That's 888-825-5225. Sarah starts off this hour in Seattle, Washington. Hi, Sarah, how are you? Hi, Dave, I'm fantastic. How are you doing? Better than I deserve. What's up?

So my husband and I are on baby step two. We knew that the fence in our yard needed to get replaced, so we saved up and we have the cash and are doing the work ourselves. One of the neighbors we approached and asked if they would help us financially with it, since it does border their property also. They came back and said they don't have the money, but they would like to make payments. After listening to you for so long, I know that when somebody says they make payments, they can't really afford it. I don't want to put that financial burden on them. So I thought maybe instead of asking them to pay for the fence to help them long term,

maybe we could put a condition that if they go through FPU, we would eat the cost of the entire fence. I don't know how to approach them with that. Well, you're not eating anything because you're building the fence anyway. Right, but the cost of the material. I know, but you're building the fence. I mean, it's not, you know, you didn't ask them before you did it. Right. You just said, we. I mean, it's not, you know, you didn't ask them before you did it. Right. You just said, we're going to build it.

Oh, by the way, since you're going to be able to utilize this and it's going to be of an advantage to you, would you chip in? They said, well, we can't. We're broke. Right. I would just say, okay, you can't. You're broke. No, I don't really want to get in payments with you. And I understand. And if you ever want to attach to it and use it in some way, you know, you can ship in at that point.

Okay. But I wouldn't know. I really wouldn't get into sending somebody to Financial Peace University over them, accepting the fact that you're putting a fence up. Okay. Even if I know we knew outside of that that they are not necessarily financially stable you don't have you you know you didn't go to them and then they broke a deal you you are putting up a fence and then you went to them okay so i mean you're not in a position leverage

wise to go in and start asking them to do things. Right. What I would do, if you want to buy it for them just as a gift, just because you're concerned about them, that's certainly okay. But, no, I wouldn't tie it to the fence deal. I would just say, don't worry about the fence. You obviously can't do it. If you ever want to tie to it someday and utilize it by fencing your yard using that portion, you know, or whatever, we'd appreciate you chipping in at that point. Obviously, that would be appropriate.

But for today, just don't worry about it. Hey, you know, we were kind of like in the same situation where we were paying payments on everything, too. And we went through this course, and we'd love to offer it to you as just a gift. If you want to go at it that way, that's a little classier than, since you can't pay for your half of the fence that I decided to put up, I'm going to make you go to Financial Peace University and I'm going to pay for it. That won't work. That's kind of how it sounds.

I know I'm being melodramatic, but it's a little bit how it sounds. So, yeah, just make it a gift, and if they don't want to go, that's fine. And if they don't want to chip in or can't chip in, that's fine. You're going to just build your fence. Hey, thanks for calling in. Quentin is with us in Phoenix. Hi, Quentin, how are you? Hi, Dave, I'm doing well. How are you? Better than I deserve. What's up? Okay, so I have about $20,000 in student loans left, and about $15,000 in consumer debt. I just discovered you maybe two months ago and kind of realized how dumb I'd been being and it really freaked me out.

My question is, so the student loan, I had originally taken it out as a private loan and then my dad covered all of the cost of it and I'm just paying it back to him at $800 a month. Do I treat that debt like any other debt? Yes. Including the debt snowball? Yes. Yes. You have a singular debt to your father of $20,000.

Is that correct? Correct. Okay. And then you have $15,000 in miscellaneous consumer debts, right? Yes. And before I learned about you, I actually consolidated it all into a personal loan because it was really freaking me out, and I don't know if that was actually the right choice to do. Oh, so there's only really two loans, 15 and 20?

Yep. Okay. Well, they're in the perfect order because your dad's going to be the more forgiving of the two in the event something really went sideways on you. And so I would just simply attack that $15,000, and then we're going to pay dad triple and quadruple until we get him paid. Okay. That make sense?

So should I be shoveling all of my income for debt? 100%. 100%. Everything you can squeeze out of your budget goes on that $15,000 debt until it's gone. What's your household income a year? I make about $66,000 and some change. Good for you. And are you single?

I am. Okay, cool. Cool. Well, I mean, how quick are we going to pay $35,000 making $66,000? I would say 18 months or less. Okay. And also in my current job, I'm a software engineer, and so that's actually kind of the low end of pay for that field.

Should I be seeking out higher income for a less stable job, or should I just keep on trucking? The only stability in this world is your talent. You're only as stable as your ability to land. And so stable jobs are a fantasy. Because some doober is trying to make the payroll. So, I mean, I wouldn't go into some super high risk startup thing where they can't even pay their bills but this idea that that you know you've got this super stable

thing and so i'm going to accept half of what i'm worth no it's not worth that um dude you're you're in a great exploding field and so i would maximize my career regardless of whether you're in debt or not i would just say you know i want to make the most I can make as a software engineer without working in a toxic environment with a bunch of jerks, but I want to be doing something that matters, something that I'm excited about, something that goes along, and so forth. And, you know, that's the right way to go on that. So, good question. Thank you for joining us.

Open phones at 888-825-5225 rachel cruz joins us in a segment or so are at the bottom of the hour so if you have questions for her you can get in now number one best-selling author of a couple of different books the book she and i did together smart money smart kids where i was the smart money and she was the smart kid no just kidding. Well, it was a father-daughter kind of book, and it's kind of fun for you to teach your kids. It's a book on teaching you how to teach your kids about money. And then her latest number one bestseller, Love Your Life, Not Theirs, how to get out of the comparison trap that social media has drawn so many into.

We've always kind of kept up with the Joneses, but social media put the Joneses in your pocket, as Rachel says. So it's a bit of a problem. She'll be here answering your questions. And so for a couple segments, if you want to talk to Rachel, this is a good time. She's an unbelievably popular YouTube star these days. Rachel Cruz joining me at the bottom. The phone number here, 888-825-5225.

This is The Dave Ramsey Show. One question I get asked all the time is, do I need life insurance? Listen, the whole point of life insurance is to replace your income for someone who counts on you. So if you have a spouse or you have kids, yes, you need term life insurance. It's the only way to protect them until you're out of debt and have built up your wealth. You're only digging a deeper hole if you waste money on cash value plans since it robs you of the ability to make real progress. And that's why I send you to Zander Insurance, and I have for 20 years. That's where I get all my insurance, and they only offer the plans I recommend.

It is not expensive. It's not complicated. And Zander will be there as your guide every step of the way. Visit Zander.com or call 800-356-4282. You need to get this taken care of. I can give you the advice, and I can tell you where to go, but it's really up to you to take that important step to get your family protected. That's Zander.com or 800-356-4282. Angel's with us in New Orleans.

Hey, Angel, welcome to the Dave Ramsey Show. Hi, Dave, thank you. How can I help? How are you doing? Better than I deserve. What's up? My question is, my husband and I just recently received a settlement of an estate. Great.

Yes, and this is allowing us to pay off our bills and stuff. And one of the things I have is a car loan at 0%. And I question, should I go ahead and pay that off? Sure. Absolutely. I should do that? Absolutely. Okay.

You want to be out of debt forever and never do that again. I know. Okay. forever and never do that again. I know. It's been a trend, so to speak, and hopefully this will help us stay out. Yeah, just clear it. Clear it and then be on a budget and draw a line in the sand and say, no more do we borrow money.

So will the inheritance clear all of your debt except your home? All my home is already paid for. Oh, okay. Will it clear all of your debt? Yes. Perfect. Write a check, kiddo. Write the check. Yeah. So who passed away? My father, I'm sorry, my husband's mother. Okay, all right. And how much did she leave you guys? It was half of a house,

a home, $61,400. Oh, that's it? Okay. Yep. All right, cool. And that clears your debt. That's wonderful. Well, I think Mom would be pleased, if she's sitting in heaven smiling, that you're debt-free.

Yes, I think yes, because she always said she wanted to leave her children with something. Another quick question with that is that I have been with my job for going on 17 years. So I've paid into my retirement. But my husband has not been that long with a job that had retirement. So we're both 58. So his retirement, his input right now is not as much. Now, our employer does kick in some, but we're just concerned about we're getting older. He's not going to get the 20. He's probably not going to get the 20 years in maybe.

I mean, maybe not. If you're 58 and you work, say, 10 more years as an example, and both of you load up Roth IRAs, you're going to have a lot of money just doing that. Really? Yeah, if you just do that. And so the retirement you're paying into, is that a 401K you're talking about, or are you talking about you're paying into a pension plan? It's a retirement system through a school board. Okay.

All right. Yeah, I mean, I think it would be great if both of you fully funded, now that you're debt-free and you put your emergency fund in place, you know, let's load up some Roth IRAs. I want you putting 15% of your income at baby step four into retirement. And since you're over 50, you can do $6,500 each or $13,000 total into Roth IRAs. If you do that every year for the next 7, 10 years, that's going to turn into some money in addition to the money you have coming in.

And so, yeah, I think it's going to be great that you have some stuff in his name and it's independent of the school board pension plan. So very good. Thanks for the call. Open phones at 888-825-5225. As I said, Rachel Cruz, number one bestselling author. My daughter joins me at the bottom of the hour. You've got questions for her.

Kelly's opening up some lines. You can get through and ask them. The phone number is 888-825-5225. Nicole is with us in Washington, D.C. Hi, Nicole. How are you? Hi. How are you? Hi.

How are you, Mr. Ramsey? Better than I deserve. What's up? My question is, I work for the federal government, and listening to your shows, I was putting all of my money in the TSP and the G Fund. Well, I just went back and canceled, stopped my contributions because I'm a baby step two. Good. And then I allocated 80% for the C fund, 10% for the S fund, and 10% for the I fund. You've been listening carefully.

Good job. Yes. But I got kind of confused because the representative asked me if when I start my contributions back up, do I want it like that? Yes. And she said the money that I just have sitting there, do I want to change that to the 80% in a tent? Yes. Okay.

Okay. Yes. The whole shebang. Okay. One more question is, I started my TSP late, and I only have like $73,000 in there. And I'm 48 years old. And I wanted to know, is it enough time for me to build my TSP for it to grow for me to retire? Because I only have $73,000, and I'm 48.

Sure. Sure. Okay. When you start putting 15% of your income aside for retirement, you're going to be okay. Let's just run the numbers for the fun of it. How old are you? You said you're 48. Okay.

I'm 48 years old. So let's say you worked, I'll just use round numbers. We're going to work you all the way out to 60 as an example. What's your household income? What do you make? I make $98,000. 98, okay okay all right and so i've been in a government for 31 years already i started when i was in high school okay so so 15 percent of 98 000 let's just put that in here 98 000 it should be should be 6 000 i think let me

see here that's not right it's not gonna be 6's not going to be $6,000. It's going to be $14,700, okay? And so if you start saving that, that's going to be $1,225 a month, and you've got 70. How much in there now? I have about $73,000. $73,000. All right. Put that in there. And the way we've got it allocated, let's put it in at 11%. And let's see what that turns out to be. I did something wrong. So $1,225. I've got to see if I can do it again.

I'm going to put it in the calculator one more time. All right, and $71,000. And $11,000. And $20,000, and 11,000, and 20,000, and at 68, you would have roughly $1.7 million. Okay, great. I think you're going to be okay. Okay, great. Now, since I'm in Baby Step 2, I have to get this debt paid off. So I'm thinking it might take two, two and a half years.

How much debt have you got? Well, I have like $71,000 in debt, and then I have like $119,000 left to pay on my home. Okay, but Baby Step 2 is all we're dealing with right now. Yes, $75,000. I think, are you single? Yes, I'm divorced. Okay, and so you want to pay $35,000 out of your $95,000 all for two years? I think you can do it faster than that.

You think I can? Well, think about it. $98,000 minus $35,000 ought to give you more than enough to live. I think you can tighten your budget down tighter than that don't you I can try okay well let's just say let's just say you did that you you know lived on 48 minus taxes which would be nothing right you're on beans and rice and you put 50,000 a year on this well you're done in a year and a half then okay great and I'm currently looking for a part-time job. Yeah, you got a plan, kiddo. You are doing it.

You're going to be a millionaire. I've been listening, Mr. Ramsey. Thank you so much. I really appreciate it. I believe in you. I'm proud of you. Well done. You got this.

This is how you do it, people. So here's the thing. You just get the calculator out. And you go to ChrisHogan360.com. Pull out that RIQ, the retire-inspired quotient. Put in the numbers. Put in the numbers. Dave, you might be calculating that wrong.

I didn't calculate it wrong. You might not agree with the assumptions I used. But I didn't calculate it wrong. You might not agree with the assumptions I used, but I didn't calculate it wrong. But if I'm half wrong and she doesn't have a million seven, she's still going to be a millionaire with her house paid for. What did you do today? That's what I did today. Shut up. This is the Dave Ramsey Show. It's time to take another look at your budget.

That means scouring every expense and making sure you're not leaving any money on the table. One of the biggest expenses is your mortgage payment. I recommend a quick Churchill checkup. In just five minutes, our friends at Churchill Mortgage can tell you if you could save some cash each month. They've helped thousands upon thousands of my listeners keep more cash in their pockets through a smarter mortgage. I want you to call Churchill for your checkup and see if you can lower your monthly payment, or better yet, see how you can pay off your house early. Think about it. What could you do with your money if you didn't have a mortgage?

Call Churchill at 888-LOAN-200, 888-LOAN-200, or visit ChurchillMortgage.com for your Churchill checkup. That's 888-LOAN-200 or ChurchillMortgage.com. This is a paid advertisement. NMLS ID 1591. NMLS ConsumerAccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. If you are looking for a fun and practical way to save money this summer, you need to check out The Rachel Cruz Show. It's a video series from Rachel Cruz, number one best-selling author, and my daughter, Rachel. And this YouTube show of hers is an absolute huge success. You just go to Rachel Cruz on YouTube, and you can subscribe to her YouTube channel. The show will automatically land in your email inbox when you're a subscriber.

It makes it real easy. They're also aired on Facebook Live as well. So they come out every other week. The next episode airing this coming Monday is all about debt and how to pay off debt quickly. I wonder where you learned how to do that. I know. It's a shock.

It's a new topic. A Ramsey teaching people to get out of debt. It's a revolution that I decided I'm going to start. Yeah, it's funny. You know, we've done this. This is like our 13th, 14th episode. And I look back and I was like, oh, we've talked about almost everything around money, but we've not done a whole episode focused on

debt and specifically how to get out of debt. We've talked about how to live without debt, but when you're in it, which a lot of my audience, just like yours, is, they're in it, which a lot of my audience, just like yours is, they're in it. And so, yeah,

it was fun. It was kind of like a back to the basics for us at Ramsey Solutions, our core message. But as YouTubers are watching, even at this very minute, you know, people are, are new to the message. And so being able to kind of lay that groundwork,

it was fun. It was a really fun episode. And we actually grabbed a couple, the young couple that paid off their house that was on last week. Oh, yeah. She was 29. He was 30. They had the two little girls.

Well, they were like Ken and Barbie, too. So they were perfect on camera. They're beautiful. I mean, ridiculous. They were very good looking, yes. But their story was just, it was awesome. And so that was fun. So we grabbed them from the lobby and took them back to my studio.

Yeah. Impromptu. Oh, neat. And interviewed them. So they'll be on it too. So you Dave Ramsey show listeners will recognize them. But yeah, but it's,

it's, it's fun to be able to deliver a message that I think is, it's so core to not only this place, but to, to me as well with, with our family and your story of going bankrupt and living my life without debt, being able to speak into that

for people. And I mean, it's the ultimate freedom, right? It's the ultimate financial freedom when you don't have payments. And so it's just that core message. So that's what the whole episode's on. So it's fun. Now, the last time you were here, we were talking about a launch of one of your YouTube shows.

You were heading to Orlando to do a money and marriage event with the great Les Parrott. And I was in Orlando the following weekend speaking at... That's right. I didn't even know that. Someone was like, your dad's coming back.

I was like, I don't know. I was right down there. And I ran into several people at the church. I spoke at First Baptist on Saturday night and two services on Sunday there. They're launching

Financial Peace University through the whole church. But a whole bunch of those folks I talked to were like, we were at Rachel's event. It was great. Oh, that's fun. So the event went well. Yeah, it was great. Orlando is fun.

I think we've said this. I've said this on the show before. And I told them from stage, I'm like, it's funny when you get to travel the country, different areas of the country have their own personalities. Different cities do. Yes. And so, you know, you go to a Des Moines and it's a different feel than when you go to Phoenix right I mean it's just they're just different and so Orlando was so funny because it's like in my book signing line and when

I got to meet people everyone was like oh my gosh we love this like they were so happy like so energetic so it's like it was a really fun event like they were wild and fun and it was yeah it was great and we talked about the fact that the next day you were taking your daughter amelia you and winston to disney for the first time and you guys you guys the guys down there the disney guys heard us on the radio and they took care of you you got spoiled they russ trevor amanda there's all these people i'm like they hooked us up really nice but disney it's the happiest place on earth, and I so believe it. You are such an ambassador.

I told Winston, I was like... If we don't get them as a dadgum advertiser on your show... I literally did the calculations to make how much money would it take to spend six months in this hotel and just live at Disney World. Oh, it would be awful. Oh, gross. I know. Winston wouldn't stay.

I asked Winston what his favorite part of the trip was. No, Winston... He said... Yeah, he said the hotel. He was like, it would be awful. Oh, gross. I know. Winston wouldn't stay. I asked Winston what his favorite part of the trip was. He said the hotel. He was like, oh, just give me my hotel. Winston stays six months at Disney. He has to give up

his man card. I'm just saying. That's just too much. It was fun. That was a really fun trip. That's too much Mickey. I can't handle it. So money and marriage events

continue with you and Les Parrott coming up next week at Houston, Texas.as yeah i'll be actually back to orlando i'm doing fincon so any of you fincon people out there i'll be keynoting there oh really yes i'm back to orlando won't go to disney world but back to orlando gonna do some work huh yeah okay that's good i'm glad i'm excited about that but fincon's cool it's like all these other you know uh all these financial Yeah. A lot of them young and just getting started.

Yeah. It's very cool. Really fun. So I feel honored. So I get to do a keynote there and then I'll leave from there to go to Houston. Hogan's going too, isn't he? Yeah. He'll speak later that week.

Both of you. Yeah. And then I'll go there to Houston. What day is that in FinCon? FinCon will be, oh gosh, Wednesday afternoon is when I speak. And then September the 27th is going to be the Thursday night. You'll be in Houston doing the event with the Money in Marriage event with Les Parrott. If you're in Houston, we'd love to have you come to that.

There's still a few tickets left. And then October the 4th, which is only two weeks after that. No, one week after that, the following Thursday, Anaheim, California, a Money in Marriage event. And then nine days later, we will all be in Kansas City, October the 13th, for the Smart Conference. Kansas City, there is a tiny number of tickets left to that. If you still want to come to the Kansas City event, the Smart Conference, the whole day long with all the Ramsey personalities, plus Henry Cloud, plus Meg Meeker, plus Les Parr les parrot it's going to be a great event and ken coleman will be speaking it's going to be incredible uh and so if you haven't got your tickets to that you can still get them at davramsey.com rachelcruz.com too uh for any of

these and then marriage and money november the 8th in phoenix and uh smart conference january the 12th in dallas this is r's schedule. And then Money in Marriage event. The big one in Nashville is going to be fun on Valentine's Day. Yes, that's right. February 14th. Yeah. So if you want to have a destination thing and you want to have a destination date weekend, a date night to remember, right?

Date night worth investing in. Worth investing in. There you go. Okay. You can invest in coming to Nashville and enjoy Nashville and use this as your excuse to do that. That's right. There you go. Okay. You can invest in coming to Nashville and enjoy Nashville and use this as your excuse to do that. That's right. There you go. So February the 14th, a money and marriage event.

So the upcoming video will drop on YouTube and Facebook this coming Monday for the Rachel Cruz show. Again, this particular one will be all about debt, of course, and how to pay it off. And so some very, very cool stuff happening there. Ben is with us. Ben's in Portland, Oregon. Hey, Ben, your question for Rachel. Hi, thanks so much for taking my call. Yeah, I'm planning on getting married next year.

And I also am planning on getting engaged here in the next few months. And I'm on baby step two paying off the bets the debt snowball good curious kind of on your uh the advice you give people on how to balance paying off debt and also paying for things and the wedding planning process like getting an engagement ring and also like planning for a honeymoon and that sort of thing as well okay yeah well with this um I would say continue on paying minimum payments. Pay as much as you can. Continue it.

I always say if you, now, my one caveat to this is pregnancy. When you're pregnant, I say definitely stop the debt snowball. Pay minimum payments. Save up for the pregnancy because that's a medical thing, right? You never know what's coming. But with weddings, I tend to say pay minimum payments. Continue on as you can. I mean, you're going to have to put some money away, of course, for this event. But sometimes weddings can get so expensive, they can totally bust the budget, they can just get out of

control. So still have the restraint to say, okay, let's just look at the numbers. And if we know we can put X amount, this is how much faster we could pay off the debt versus paying for the wedding. And so this is a balancing act for this next season. And especially if your engagement is like three years long, which I hope it's not, you don't want to just drag it out by any means. And so I would say, too, just to watch for that timeline. So what are you thinking of spending on the wedding? Roughly $25,000.

Okay. And where will that come from? A lot of it actually will come from her parents who are giving us about that amount, and there's probably going to be a little bit more with side things, but probably a big part of the wedding will be able to come from her parents. So mainly you've got a ring and a honeymoon to cover, you're saying? Exactly. Gotcha. Okay. So what are you planning to spend on the ring?

About $1,500 total. What's your income? saying. Exactly. Gotcha. So what are you planning to spend on the ring? About $1,500 total. What's your income? I make about $50,000 to $60,000 a year. That's good. What do you plan on spending on the honeymoon? I don't know, maybe $2,000, $3,000. That's good.

That fits. And how quickly do you think you'll get married? We have a date set for August 10th of next year. Oh, beautiful, Ben. You got this, man. You can do that. You can do five grand by then. You got this.

Yeah, you're fine. And you'll be able to continue getting out of debt. You can do all of that. Just run your budget out. I think you got this. Congratulations. Rachel Cruz joins me this half hour. This is the Dave Ramsey Show. Our scripture of the day, Psalm 37, 23-24.

The Lord makes firm the steps of the one who delights in him. Though he may stumble, he will not fall. The Lord upholds him with his hand. John Quincy Adams said, Try and fail, but don't fail to try. Ooh, good line. Try and fail, but don't fail to try.

Rachel Cruz joins me this half hour. The new latest in the video series on YouTube of The Rachel Cruz Show comes out this coming Monday, September the 24th. The following Thursday on September the 27th, she and Les Parrott will be doing an event in Houston called Marriage and Money. It is a fun, funny event, but it is also informative.

You're going to go away having laughed a lot, but also gotten a real serious couple of subjects addressed. Money and marriage and how they're intertwined. October the 4th in Anaheim, California, they'll be doing the same conference, the money and marriage event, and then there'll be one November the 8th in Phoenix, Arizona. Rachel, what's the biggest thing that you think people take away from Les' section in the Money in Marriage event? His whole hour, basically, is all on communication and how there's different styles of communication. Even the way we do conflict is different.

And so I think it's one of those where you're sitting there with your spouse and it's like someone's reading your journal, right? Like as he explains these types and you're like, then one of the themes he uses which i love i've kind of stolen and use it a lot of my stuff too because it's so true is empathy he talks a lot about empathy and when you have empathy with your spouse when you can say okay i'm going to put myself in your position truly and understand he talks about that that there's this perfect room. If you could build this room in your home, you could call it the perfect room. And you walk in and both of you are honest, you're vulnerable, and you can empathize with each other.

You will have the most meaningful conversations of your entire marriage. And so it's just a big, powerful word that can be thrown around sometimes. But it's something that i've taken away even for me and winston i'm like i need to have more empathy here like it's just good he's good i mean he's been doing this for like 30 years so you're just listening to him he's one of the top minds and thought leaders in the whole marriage space i mean he's brilliant he's so smart you don't get that kind of humor unless you're really smart either oh yeah great humor is a sign of intelligence so you don't see it very often. Very well done.

Both of you are funny, and both of you are very informative. So, again, Houston, Texas, September the 27th, Money and Marriage. You can get your tickets at rachelcruz.com. You can find out about the Rachel Cruz show, of course, on her YouTube channel. And you can subscribe to that, or you can watch it on Facebook. It'll air

every other week, a new episode. Sarah is in Pensacola. Welcome the dave ramsey show sarah hi thank you very much it's such a pleasure to speak with you both you too how can we help um well we um we are in an what i feel like is an astronomical amount of debt and i've been listening to you for a couple of years and gone through the you know I'm familiar with the steps and I just don't know where to begin with where we are our biggest issue right now is our vehicle situation um we are living you know hand to mouth check to check um my significant other recently financed a new vehicle what does significant other mean well my boyfriend we've been together for 11 years we have so he bought he bought a car in his name on debt yes okay all right go ahead i'm sorry um and the vehicle that i drive and take the kids to school

with is you know it's we kind of tend to use a vehicle until the tires fall off, and they're about to. So we're kind of in a situation where I don't know if we should keep throwing more money into this beer wagon or if we should maybe get something a little bit better that's going to be a better situation for us. And also, if it would be worth our while to try to trade in this other vehicle or something i'm just i'm not sure what to do because the payments are are killing us i mean we really truly can't afford it so he bought a car he can't afford yes absolutely okay well i mean when you're not married legally, it's your roommate you're arguing with from a legal standpoint. You do not have technical liability, obviously, on this debt, but it is affecting you indirectly because you're tied together.

And because, you know, you're dating a broke guy, you know, and so you have to convince the guy, your roommate, your broke guy boyfriend, that he needs to sell his car. Yeah, I mean, he bought a car he can't afford. It's strangling you. I don't even know what the numbers are, but you've described it four different times. You need to sell it, don't you? Yeah, I think so. The justification is that it's for the business because he's self-employed.

That's absolute BS. He needs something reliable. That's absolute BS. And the reason I know it's BS is he can't for the business because he self-employed the contract. That's absolute BS. He needs something reliable. That's absolute BS. And the reason I know it's BS is he can't pay the payments, so the business isn't making money because of the car. So that's just crap. Isn't it? I would tend to agree with you, sir.

All right. Well, you guys are going to have to deal with that part of it. As far as your car goes, I mean, when you're ready to trade, you need to save up and pay cash for it, and you've got to decide how to do that. Rachel, one of the things we run into, thank you for calling, Sarah. We appreciate it. One of the things you run into is it's very difficult to do budgets and money together when you're not married because you've got this this weird thing this weird dynamic of it's not really yours it's like you know it's like you're telling your

roommate how they should eat right well what i was thinking for her and sarah if you're still listening it's and it almost sounds like you don't even know where you are financially because you said i don't even know where to begin i don't even know where to begin. I don't even know where to start. And so there needs to be a clear separation financially because again, legally, you don't owe anything on that car and the other debts that you may be paying for that are technically his. And so it may be old school to say it, but when you're not married, your finances are separate. And I tell that to engage couples, dating couples, until you are legally married, that's when the combination happens because of the tax benefits, et cetera, et cetera. And you become one emotionally. So running on those two separate lanes is going to be important for you guys and to factor out, okay, here's the income,

here are my debts, here are his debts. And then that kind of starts to pave the way for logic versus all the emotion of seeing the numbers of what is in your name, what do you owe, what does he owe, and then you can begin the conversation because it feels like she didn't even know what was going on because it felt so overwhelming. Exactly. Sarah's with us in Grand Rapids. Hi, Sarah. Your question.

Hi, Dave. How are you? Great. How can we help? I am a 21-year-old single mom, and I'm living with my parents. And I know you disapprove of living with parents. But they gave me about a six-month window to move out. I have $7,500 in debt. Do I pay them like a rent because they're also my daycare?

Do I pay them any type of money to live there for the next six months until I can get my feet on the ground? So let me clarify. I do not disapprove of you living with your parents. I disapprove of you staying with your parents past your welcome. Okay. But you obviously have gone through a divorce or something and have come back there as a safety net, but you're not planning on camping out there until you're 40. No. No.

Okay. I don't disapprove of that at all. I'm glad your parents were there for you and able to help you in your hour of need, and I'm glad you have a date certain that you're planning on getting out. In that case, I would not pay rent. I would take this wonderful gift and use it to get yourself more solid so when you are able to move out you do that without debt and you have a solid foundation for you and your child rachel yeah that's right i was going to say

when i suggest parents need to start charging their kids rent is when i want the parents to make the kids uncomfortable because the kids have been there too long and you just moved in it sounded like and you said you're moving out in six months there's a plan in place there's progress happening there's not a pattern of misbehavior. I mean, you sound like you have it together with what you're doing. So, yeah, I would say I would not feel the need to pay rent, just like Dad just said. It is a gift, so take that gift.

But when I talk to parents and they say, oh, my 22-year-old's been living with us and continues to stay, and it's going to be another four years until they want to move out, and it's like, okay, no, you need to start making it uncomfortable. They don't work much. They sit in the basement and play video games. That's right. Enabling bad behavior is when you want to stop it and make it uncomfortable for them. But if they're that safety

net, I think that's great. I mean, my sister, Denise, moved back in with you guys a few months after college graduation. So yeah, there's transitions in life and if that's the safety net, take it and say thank you. Be grateful. But it's not a way of life, and it's not an enabling. It's not a toxic environment. And that's what we're after.

So you're doing great. Absolutely. I'm glad they were there for you. That puts this hour of the Dave Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey guys, this is James Childs, producer of The Dave Ramsey Show.

I'm excited to announce that we're now carried on 600 radio stations across the country. To find one near you, head to DaveRamsey.com slash show.