The Ramsey Show - App - The Compounding Effects of Borrowing Money (Hour 1)

Episode Date: May 1, 2023

Jade Warshaw & Rachel Cruze answer your questions and discuss: "How do I start my first budget?" Why BNPL has a compounding effect of stupid, "Can I afford to buy a 'fun' car right now?" "We can barely make ends meet supporting our adult children" Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Join a Personality-led FPU class. Click here! Enter The Ramsey Cash Giveaway for a chance at $3,000! https://bit.ly/TRSgvwy Shop our bestsellers during the $10 Sale! https://bit.ly/TRS10Sale Enter The Ramsey Cash Giveaway for a chance at $3,000! https://bit.ly/TRSgvwy Shop our bestsellers during the $10 Sale! https://bit.ly/TRS10Sale Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Interested in advertising on The Ramsey Show? https://ter.li/s64ye3 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions Broadcasting from the Pods Moving and Storage Studio, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I am your host today, Ramsey Personality, Jade Warshaw, and I am joined by my co-host today, Ramsey Personality, host of the Rachel Cruz Show, Rachel Cruz. And today we're just taking calls about your life, your money, maybe there's something going on with your spouse, they don't want to get on board, maybe your kids are too expensive and they're acting up. Whatever the situation, give us a call today. The number is 888-825-5225. And let's just go straight to the phone lines. We got Brianna in Washington, D.C. What's going on, Brianna?

Hi, Jade. Hi, Rachel. How are you guys doing? Doing good. How are you? I'm doing well. I'm excited to be talking to you both today. Awesome. We're excited to talk to you. What's going on? So my question is just about tracking my expenses. I'm a freshly graduated college student who's about to start medical school in just a few months.

And for the first time, I will be kind of managing my own expenses. And so just, I guess, your advice on how to go about doing that the smart way. Yeah, that's a great question. Go ahead, Rachel. Well, I was going to just ask, are you going to be making an income while you're in medical school? Are you going to be working on the side, or how do you plan on having money? So I actually have money in my 529 plan. My parents were very generous.

Oh, yeah. So I have enough to kind of cover all of my school tuition as well as living expenses. Oh, that's amazing. That's so great. So you'll be living off of that money then, obviously, with all your expenses and everything. Yes, that's correct. Okay, that's great. So have you kind of looked at the amount and do you know exactly how much you're going to have each month? So not exactly just yet.

Our school is going to be giving us in the next few weeks their estimated cost breakdown. Okay. So once you kind of have all the facts, I would for sure start with a budget and really see what you can spend. And then more than that, breaking it down by paycheck in that way to see when you can spend it. Are you using anything for budgeting now? Or is it just like you're writing it on paper? No, I just discovered budgeting from listening to you guys. Okay, cool. Well, the budget that we created here at Ramsey Solutions, it's actually my favorite budget. It's the only budget I've ever used that's digital.

It's called EveryDollar and it does everything that you're talking about doing, which is you being able to list out your income and actually put in line items of all the things that you're going to need to spend. And my guess is for you, you can use it in a unique way because this money is coming out of your 529. So some of your purchases can go through here, but probably not everything that you're going to spend money on, correct? Yes, that's correct. Just your school purchases. So you can kind of budget it by the 529 money and then you could do a separate budget for like your personal money however you want to separate that but just make sure that the 529 money is only being spent on those educational expenses okay yeah and brianna i you know even

looking at it as you're starting to list out to prioritize that's another big thing about budgeting is to know hey what needs to be paid? Like what are needs versus wants, right? And even kind of having that discussion because I think our world can all merge so quickly that you think some of the things that we think are needs, you know, they really are just wants. And so you're going to want to be able to say, okay, here's the amount of money I have to spend that's for my personal use. And a lot of that's going to come from, yeah, your food. It's going to come from housing, gas in your car, transportation, utilities. Like there are the things

that we call your four walls that are absolute necessities. So making those a priority first and then anything under that, mark as a just, you know, take and say, okay, here's everything else I spend money on and then prioritize that.

And that's the great thing about budgeting, Brianna, is like you get to make the budget how you want it. Like what are the things that are important to me that I want money set aside? And I think the key here is just to know that you're being intentional.

That's the biggest thing about budgeting. And some people get all freaked out and they're like, oh my gosh, a budget means you can't spend or you can't have any fun. But all it really is, is you just having a plan for your money to say, hey, here is the income for the month from my 529 from other places that I'm getting money from. And all together, here's the amount of money I have every month

to spend, and I'm going to just do it on purpose. And so it's just a great habit to be in. It's going to be rough the first few months, Brianna, so just give yourself some grace. We say 90 days, have the 90-day rule. So the first three months, it's going to be kind of wild because you're figuring it out and that's okay. But I think the key here, I think it's one of the biggest things people miss when it comes to managing money well and building wealth over the long term, being in a habit of just doing things on purpose with your money. It's the budget. It's the one mistake people make is that they don't live on a budget because you end up spending so much more than you realize. So by you, Brianna, creating this habit, not only are you going to just feel in control and feel like, okay, I have a plan. And obviously you're smart. You're

going to medical school. Jade and I, we didn't do that. So trust me, you're very smart, very intelligent. And there's going to be this level of power and peace that you have over this part of your life. Probably much like your studies, right? I mean, you were probably very disciplined in school to get to where you are. I tried. Yes, well, absolutely. And it's that same mindset, but applied to this area of your life. And the crazy thing is too, Brianna, as you start to be intentional about this, you'll realize, gosh, I want to be intentional about my relationships. Oh, heck yeah. I want to be intentional about all these other areas of my life. So that's the great thing too, is it kind of just like bleeds throughout all the other areas of your life. And it starts with that budget. So

if you hold on the line, Austin will pick up because we'll give you every dollar plus, which means that it attaches to your bank account. So you can drag and drop transactions because that's another big part about budgeting is tracking and knowing exactly where your money's going. That's right. So we'll give you a year of that for free, Brianna, because like Jade said, it's one of the best tools out there to help you with budgeting.

It is. I love, and Brianna, thanks for the call. That's such a good question. She's starting such a good habit now to start learning how to budget now, start going through that process. And I love the EveryDollar tool. I think it came out back in like 2015 or 16 and I couldn't wait. I was like, Oh, thank God.

No more like yellow pad, try to write everything down. But it's really easy to organize your money. I call it custom organization for your money. Cause that's really what it is. Think about if you go into your closet and everything's just like thrown around on the floor, you're looking for an outfit. You can't find it. You know, you're looking for a shoe. Your stuff gets all dinged up and you're not taking good care of it. But when you put everything in its place, you walk in and you're like, OK, I know where everything is. Everything's taken care of. I know that these belong here, that belongs there. And your money is the same way when you do your budget and you are. I always say a budget should be detailed. It should be realistic and it should be flexible. when it's detailed you go through like what you were saying and instead of putting like food right yeah you're like okay uh date

night um lunch at work um you know groceries and you're being detailed so you're really seeing where you're spending your money and then of course being realistic which i think for brianna is going to be really important yeah very important that's a great i love that word though because i think a lot of people go into budgeting and they're like okay we're going to be really important. Yeah, very important. That's a great, I love that word though, because I think a lot of people go into budgeting and they're like, okay, we're going to do this and we're going to spend $50 on food this month. And you're just like, oh my gosh, it's going to like, yeah, it's going to absolutely wreck everything else. So be realistic about your life. You got to be realistic. And then of course there's that flexibility aspect. The first 90 days, the first 60 days, it's tough. Especially if you haven't done a whole lot of research,

looking back on what you were spending, you're just kind of it's a shot in the dark. That's right. So that first month, it's like, oh, crap, I thought we were going to be able to spend, you know, $800 on groceries, it became 850. Well, you're gonna have to pull from some categories shifted around. And as long as it's your money and not credit cards, yes, you're still doing good. Yes, that's right. Love it. So that's how this works. Getting on a budget. If you're not on a budget, check out our EveryDollar budget. Like I said, it's the only budget that myself and Rachel use

because it works. And I'll tell you this, it's intuitive. I'm not a tech savvy person and I'm actually able to use it. And it's great with your spouse. It's mobile. They can look at it on their phone. You've got it on your phone.

EveryDollar, that's how it works. This is The Ramsey Show. This is The Ramsey Show. I am your host, Jade Warshaw, Ramsey personality. I'm joined to my right by Rachel Cruz. And I love hosting with Rachel. We just, man, we have a good time out here. We have a good time, Jade. And we're going to continue to have a good time until next week because you and I are going to be Financial Peace University coordinators starting next Monday. And we actually met some coordinators out in the lobby at the break.

So this is a this is an exciting time. We've never done this before. You've done this once, but as all personalities, we're all getting on board and doing it. Historic. Yes. And so we will be hosting you and i do the same class schedule different times that's right what time is yours mine is a 1 p.m eastern time one to two so kind of over your lunch break okay and yours is in the evening yes it's

8 p.m central 9 p.m eastern so late after the kids go to sleep that's right may 8th right both of us yeah we start monday so jade and I Are going to be Doing it the same schedule Different times So if you want to sign up For one of our classes And be in A Rachel Cruz Coordinated class

Or a Jade Warshaw Yes Coordinated class Depending on your schedule For the day Sign up I feel like we should Because it's us

We're coming out of the gate Together doing this So I feel like we should Beat all the guys When they do it later This summer percent so listen we need you and i have fun that is one thing about life we have fun right come join our financial peace university class because we're gonna have fun we're gonna talk about money we're talking about budgets and spending all the things yeah and help you get peace with your money so and can i just add this is so okay the last class that i did yes um the turnaround the

financial turnaround so we're doing this class right in five weeks yes you meet twice you know two times a week so i think mine is monday and wednesday it's just for an hour after that five weeks was over the app the the average family had a ten thousand dollar turnaround oh that's amazing ten thousand dollars of paying off debt, saving money, everything combined. Yes, all of it combined. And our class paid off like over a million. It was like 1.4 million. Oh my gosh.

Unbelievable. Now there's a lot of folks in the class, but I'm just telling you, this is- It works. It works. This is so important. Please get on board. So where do people need to go to sign up?

At financialpeaceuniversity.com or you can go to ramseysolutions.com. Just head over there and, or you can go on our web financial peace yes you can go on my link um on my instagram you can click it rachel same you got the same thing yep so it's everywhere and i think they might even put it on the screens here if we're lucky um but guys join us join us it's gonna be great get that financial turnaround guest okay i'm not gonna. I'm not going to start singing. You should. Disney songs.

But I am, guys, going to talk to you about something. Rachel. Okay. We're talking about budgeting. We're talking about spending money. We're talking about financial peace. And this article came through about Buy Now, Pay Later. And I have to tell you guys, Buy Now, Pay pay later is it's probably one of my number one most

hated forms of debt because it's so sneaky and by their own words they're like oh we're better than credit cards because you know we don't charge interest right away and it's for easy payments you know it's a whole thing and they've infiltrated so sneakily into everything. I mean, it's Amazon, it's food, it's gas, it's- Pizza delivery. Pizza delivery. It's everything. It's everywhere.

DoorDash. Any purchase, yeah. Any purchase you make, buy now, pay later. The debt option is there. It's crazy. And it's, you know, a lot of folks don't realize how bad it is. But I guarantee you, Rachel rachel if because people use it you know for quote little things i'm just going shopping i'm just going to buy some jeans

and they're happy to show that to the world right yeah but if i ask somebody hey show me all of your like show me all your buy now pay later accounts i bet you they would be embarrassed yeah i bet you they'd feel ashamed because they know this is not a good way to spend money. This is not, I'm not being a good manager of my money to do this. And, you know, this article says it's less psychologically painful to spend your money, to spend your future money than your present money. And that's kind of what we see with debt. We know that when folks use debt to buy, that they're spending more. And as a matter of fact, when it comes to buy now, pay later,

that's actually the value proposition that they're giving to the merchants. Because buy now, pay later, of course, takes a cut of everything that you buy. And the way that they're able to make good on that is they say, look, we know that if you use buy now, pay later, your customers are going to spend X percent more. And at this point, they know it's somewhere between 12 spend x percent more and at this point they know

it's somewhere between 12 to 15 percent more yeah because when you buy that pair of jeans like you were saying it's like oh i only have to pay 25 right now well then i'll buy some other stuff because i can bump up today and that's fine and then i'll worry about everything else later down the line so it does it increases so quickly yes your purchases and it's like you just feel okay spending more money and we know that it causes what they call debt stacking because each time you do it it's a different it's a whole different debt yes basically it's not like your credit card where it's like all in one statement they're separate and they're coming out of your account automatically yeah can you imagine how

stressful that is to have 10 you know eight of these things popping out of your account month to month and people wonder why they're broke now here's the thing i was reading and it said buy now pay later firms are not disclosing because a lot of people think there's no interest says they're not disclosing the costly hidden fees in the interest rates that can be incurred when someone falls behind on payments it's not the same as credit cards so it's not regulated the same and it says especially on longer buy now pay later options um they may have an interest rate ranging from 15 to 30 percent 30 percent 30 that's higher than a bad credit card you know what i'm saying yes and here's what really gets me rachel it says many people are getting hit with the double interest because like i said these buy now pay laters if you use a firm clarna afterpay they're all separate and they're getting they're coming out of their account

separately every month causing all this stress so folks say you know what i'm just gonna put it on my credit card and pay it off like that so now you've got double double interest well and what's hard is is it such a again the the credit card industry all of that like that's been around for so long it's become in a sense right so normal but what this is this feels like an exciting new tactic yeah for people where they're like oh oh that's easy i can do that it's got some glamour to it yes there's like that level of like newness to it and the amount of discernment that goes in sometimes is out the window because again it's not always on these high ticket price items like it's it's not like you're doing this for a three thousand dollar purchase you can you can but they're

getting you with these smaller purchases and again it's it's it's a mental game they know what they're doing yeah they know what they're doing and they're getting you to spend more the retailers love it because you're spending more at their stores. So it's just, it is so not worth playing the game, like you're saying, of balancing and juggling all of these things when life can just be simple. Life can be simple. It can be simple. You spend with what you have. It comes out of your checking account and it's done.

It's done. If you can't spend, if you don't have the $25 sitting in your account, your checking account to buy it or the $50 or the $75, you can't afford it. You've got to wait till you have the money. And I kind of, I like doing stuff like this, Rachel. I kind of added up all of the expenses when you go in here. So when you buy things using debt in this market, which is high on inflation right now, this is what you're really paying the cost of your item. Plus let's build an 8.4% for inflation because we know that's true.

Let's build in the 15% that we know is the unfelt spending cost when you're using buy now, pay later debt. And let's go ahead and add in that buy now, pay later interest or that credit card interest that's somewhere around another, I don't know, 22 to 30%.

All right. So now we're up there. We're between 50 and 60 percent. And if you're stupid enough to use it to buy food, Rachel, food, let's go ahead and add in that tip. 20 percent. Look at this. We're like up 60, 70 percent on one purchase.

On one purchase. How quickly it adds up. And people wonder why they're in debt. They wonder why they're broke. They wonder why they're going paycheck to paycheck. This is it. And let me just throw something else out there for the businesses.

Find some integrity and stop allowing this on your site. I have a buddy, he has a dance business and they sell a bunch of merchandise and sell a bunch of things on their site and he doesn't allow it. He's like, you're not allowed to use buy now, pay later on my site because I don't believe in it. And business leaders, if you're listening and you don't believe in this, don't offer it. Yeah. Don't let people go into debt on that. My husband's business is the same way. It's commission based and they they tried to say,

oh, you can do this in five easy payments. Heck no. Yep, yep. Stand up for yourself. Debt is not the way. It's just a headache, man. Just say no to buy now, pay later. And if you're having to do it to pay for your groceries and your food and all that, you guys, it's prioritizing your budget. That's where we're going back to budgeting.

It's so key to know so that you're not falling back on these types of products. That is right. Guys, there's a way out of this and it's called paying cash. There's a reason that we say that is dumb. Cash is king. This is The Ramsey Show. You're listening to The Ramsey Show. I am your host, Ramsey personality, Jade Warshaw. And I am joined by my co-host today, host of The Rachel Cruz Show. I've got Rachel Cruz with me to my right. And guys, we're taking calls all afternoon about your life, what's going on in your financial situation.

Maybe you have questions about things you've read on the internet regarding finance or things you've seen on the news or just whatever's going on in your life. Give us a call. The number is 888-825-5225. And on this show, man, we're always talking about things that directly affect you and we're always filtering it through how we teach money here, which is a series of baby steps. You might hear us talk about baby step one

or baby step six. You might hear us talk about things like Financial Peace University. You might hear us use lingo like gazelle intensity or certain things and you're like, what the heck are they talking about? So here's the thing. If you're a new listener and you want to dive deeper into the Ramsey baby steps, we want you to go to ramseysolutions.com and click the get started button. Okay. And what's going to happen here is we're going to help you figure out your best next step for your financial

journey based on exactly where you're at today. You're going to get some education, some knowledge. We're going to put you on the right track. So remember, go to RamseySolutions.com and click get started. All right, let's go straight to the phone lines. We've got Mark on the line from Los Angeles, California. Hey, Mark, what's going on? I'm headed out your way this evening, Mark, to Los Angeles. Awesome. Awesome. Thanks for taking my phone call, Jade and Rachel. Appreciate it.

You're welcome. What's going on? It's a little bit cloudy out here today. Oh, yes. Well, I hope the weather holds up for me. Yes, I know. I don't think you'll get the sunshine this week, but appreciate it. Hey, thanks for taking my phone call.

I got a question for you. I'm looking to purchase a third vehicle, a fun vehicle, and it's approximately $55,000 and I'm debt free other than our house and I'd be paying cash for it. And I really want it. It's a pretty rare car, but I think the thing is in my heart, I'm a really good saver and I'm really good giver, but I don't really spend a whole lot of money. And so I'm just kind of torn on it. And in my mind, I'm a really good saver and I'm a really good giver, but I don't really spend a whole lot of money. And so I'm just kind of torn on it. And in my mind, I'm like, okay, this would be great. A lot of great family memories of my wife and three kids. You're already emotionally attached to it, I see.

I know. I know it is. Mark, how much do you make a year? It's usually around $225,000. This year is going to probably be around $350,000. $350,000. Very good. Good income. And so you said this is going to be your third vehicle?

It would be a third vehicle. Yeah. Really just fun. It's a toy. Yeah. How much do you already have tied up in your other two vehicles, value-wise? My wife's car is worth about $45,000, and my car is worth about $15,000, daily drivers. $15,000? I don't know.

Yeah, probably $60,000 I have total tied up in cars right now. Okay. Yeah, because kind of our rule of thumb, Mark, is that we don't want more than 50% of your take-home pay for the year, annual take-home pay, to be more to have motors and wheels. So you want at least half of that. But you make great money, so you're going to be under that. Just barely.

Yeah, just barely under that rule of thumb, if you will, because we just don't want so much tied in of your net worth being in you know things that have wheels and motors because those tend to go down in value so quickly so uh but i mean technically yeah you're you're in that space are you guys you guys have good other savings do you have an emergency fund and everything yeah i have um i have about 200 000 cash on hand okay very good Why so much cash on hand? Yeah.

You know, I had some investments, and we've done really well this year, and so we've had a lot of cash come in. And so I haven't invested it other than just small stuff like, you know, 3% to 5% interest in the market and stuff like that. But, you know,'ve got i have other other retirement funds already set up as well so we're in good shape it's just um you know it's one of those things i i'm like i said i'm such a saver and i'm such a giver just but like spending that kind of money it actually has me worried about it so i'm like well i'll just give a give you guys a

call because i love listening to your guys show and you guys have such great advice. And, you know, I just don't want to get something and have that buyer's remorse or, you know, everything's so inflated. Housing market, car market is so inflated. It is, but I think you're doing great. And I think that there's things that are part of, it's just part of financial life. And inflation is part of life. And I think that when you're in a situation like yours, where you've done really well with your money, you've been smart with your money, you've got to live life while life is here to live. You know what I'm saying? That's right. Absolutely. And, you know, I'm guessing the 55K, is it going to come out of this 200?

That's cash that you have sitting? Or is it separate even from that? Yes. No, it would. It would. It would come out of that. Yeah. And then I have about $200,000 in retirement and then I have about $600,000 equity in our house. Very good. That's great. And are you contributing 15% to your retirement currently? Yes. Yes. Very good. Yes, I've got saving that and then also have a pension system too that I'm on. Cool. Yeah.

Do it, Mark. Mark, it's a green light from us. That's fun. Yeah, you think so? Okay, cool. Yeah, because it's one of those things, you know, I always put family first and, you know. This is an experience for you though,

is what it sounds like, right? It's that and it's all ratios, Mark. I mean, if you called us and you were making, you know, seventy five thousand dollars, you wanted to spend fifty five thousand dollars and you still had credit card debt and student loans. I mean, it would be a different answer. It's all about where you're at and ratios of your life. And you're in a situation you've set yourself up so well. So kudos to you for doing, you know, the really hard work of that foundation of saying, hey, we're going to get out of debt and have an emergency fund, have some other savings on hand. We're going to be doing retirement. I mean, you've done it all so well. You make great money.

So it's all around ratios. And this is not, yeah, I mean, you're in that formula. You're in that line. So let me ask this, Mark, because we always, this is what Winston and I say sometimes if we go to buy something that's kind of bigger and we're like, oh my gosh. So say you bought this and you had no insurance, it burned to the ground, you never have it. There you go. Does it make you lose sleep at night? Besides the fact that you loved it and it's gone now, but just financially, does it absolutely put you in a panic? No, no, no. We're in good shape. i don't owe anything except for a house payment and so um we're we're in good shape and then there you go i think that's a great emotional

well the the answer from us is yes thank you so much for that call mark hey i love getting to say yes i know i think people think we say no all the time we're always like no no sacrifice get out of debt yes but when you've done it all it's like this is this is the live like no one else so later you can live and give like no one else and i love to say too that he's he's like i'm such i'm a saver and i'm a giver but the spending it's always hard and we get that a lot that people's shifting that so so actually enjoying your money enjoying the money that you've worked for enjoying the progress that you've made with the money you have like absolutely all of that is a reason to celebrate and to enjoy life and i love i want to highlight this because i think sometimes you know rachel it's intense what

we're teaching and preaching over here it's intense and i think sometimes people follow that intensity past baby step three and they don't take those moments to go okay like i paid off my debt i saved up this money like i can do a little something something for myself and sometimes people speed right through and they want to pay off their house before they do something like upgrade or buy a car and i'm like guys no chill out like just cool out for a second and enjoy all this hard work that you've done when it's within reason that's right we laid out the math for him there's there's method to the madness it's within reason. That's right. We laid out the math for him. There's method to the madness.

It's not just go spin, spin, spin. But man, you got to learn to enjoy some of this. You've done the work and you can give your money. You can save your money and you get to spend your money. That's a big part. Love it, Mark. I appreciate the call. Because like you said, Jade, it can be,

it's a psychological game almost that once you have sacrificed and saved and put things away and said no, no, no, saying yes to yourself can be difficult and it can be hard. So that's why I think looking at the math is so helpful because math doesn't have emotion. It doesn't care. But when you see it and you're like, okay, good, that's less than 50% of what we make a year is tied up in, you know, in motors and wheels and all the things. We're in a place that we can do that. Okay. This is smart.

This is wise. That's the math. And that's where logic really can come into play when your emotions are all over the place. I love that. Math doesn't have any emotions. I love that. And look, don't let the economy, don't let what's going on in the world when you've done well, don't let it, don't let it scare you into not being able to enjoy yourself.

Don't let it cripple you with fear. And that goes on each side. You know, whether you're trying to get your money in place while you're trying to do the right thing. It's always the right time to do the right thing. So don't let anything hold you back. Don't let anything scare you. This is life. Life is cyclical.

There's ups, there's downs. That's the way the economy goes. Don't let that scare you. I'm proud of Mark. He gets to buy himself a new car. This is The Ramsey Show. Hey, you're listening to The Ramsey Show. I'm your host, Jade Warshaw, joined by Rachel Cruz. And we're taking calls today. Your life, your money, 888-825-5225 is the number to call. And Rachel, today's a fun day, man.

Do you know why? Why, Jade? Lots of fun here. Because we are giving away Dave's money while he's out. And we love giving away his money. It's always fun to do that. Does he know that we're giving away his money? It doesn't matter, Jade.

We're doing it. We're doing it we're doing it all month long you can enter to win the ramsey cash giveaway it's uh you can win up to five hundred dollars or a three thousand dollar grand prize for real three thousand dollars that's a lot of money all you got to do is go to ramseysolutions.com slash giveaway and make sure that you enter on a daily basis you can enter enter every single day guys, and you're going to increase those chances of winning when you do. There's no purchase necessary, except you do need to be 18 or older to win. So, you know, don't have your kids out here doing it. It's got to be the adults. And today just keeps getting better because,

and I love this, the $10 sale is back. Not only are we giving away money, but we're knocking down prices as low as 10 bucks. Man, Dave, he's going to feel this in his pocket a little bit. His pocket's probably itching right now. Right now, you can get all the books and tools that you need to learn how to start building wealth, find a career that you love, improve your mental health, and deepen deepen your relationships so we got own your past change your future baby steps millionaires total money makeover know yourself know your money redefining anxiety from purpose to paycheck man this is crazy ten dollars ten dollar holla that's what we used to call it there's so much good stuff in it honestly like a lot and it's great to buy stuff to give away to other people as well so that's that's always a lot of people will load

up on the sale because yeah there's so there's so many good deals and they can give away spread the love changing your life for the cost of a burger and fries that's it that's right that's something ramseysolutions.com is where you need to go. RamseySolutions.com. And it's time for our question of the day. This is our question of the day that's brought to you by Neighborly, your hub for home services. Neighborly.com is the place to find reliable help for your home from locally owned businesses like AirServe, Dryer and Vent Wizard, Precision Garage Door Service, Window genie, and more. For your expert help with just about anything that you need, you can visit neighborly.com. And today's question comes from Cassie in Oklahoma. My husband thinks that we should

continue to financially support his adult child through college. However, we can barely make ends meet ourselves each month we are normally behind on our bills and are in debt with six other minor children we're obligated to financially support any input would be appreciated oh man cassie yeah i mean this is tough because in college you know it still feels like they're still under your wing, right? In a sense, as a child. But once they leave home, there's that level of, gosh, what is my obligation as a parent? And I think it's easier said when they're 21 and they're fully an adult. But when they're in that transition of college, it can be a hard one.

And so for a lot of students, they have to figure it out. They have to get a job and say, I have to support myself. And this is life. And here's what i got to figure out what to do uh and others you know don't and their parents are there to be able to to help support them but if you guys cassie can't if you can barely make ends meet as is with six other children living in the home that has to be your priority taking care of your household first and making sure that everyone's okay. And if there is surplus and you guys still want to help your child who's in school, that's a gift and to be able to do that. But I wouldn't put financial strain to continue that. I would make sure that what you have currently you can support. Because here's the deal too, if you don't take care of your home and make sure that you know the bills are paid and you guys are current if you guys go under that means everyone else is going

under yep so just be careful with that you know and let me throw a little salt on this as well a little salt in the wound um i come from a family not of six kids but four kids and my parents told rachel they told us straight out yeah they were like we're not you're on your own matter of fact my parents when it came to college they were like we hope that you're very smart or very good at sports because they're like we we didn't you know they we didn't have college funds growing up and no shame in that you know we hope that you walk through the baby steps and are able to do what you feel you should do but But there is such a thing as working through college. And I did it.

My brothers and sisters did it. And I did have some scholarships, but I had a job. I was working these hours and I came out just fine. You know, I did not come out going like, man, if only my parents, you know. And so give your kids some credit. Like kick them out of the nest and see if they fly. You know, I think sometimes in today's culture,

people do hang on a little bit too long and there's that failure to launch there. So very, very good. Very good. Let's go to the phone lines. We got Lana in Harrisburg. PA, what's going on, Lana? Hey, I hope you guys are doing great. I just have a question.

I am a full time student and a-time worker at the same time, and I am trying to pay off my debt as well as try to move out, but the problem is I have no credit history. So, how can I do all that plus charter fees at the same time? How much debt do you have? So I have $6,000 in school debt at this moment and $5,000 in medical debt. Okay. And that's all the debt? No cars? No nothing like that? No.

The car that I... Go ahead. Well, I was going to ask, are you still in school? You are still in school, yes. Yeah. So the school that I'm actually doing right now is completely paid for through my work so I don't have to pay any single dime which is a blessing okay that's great and how old are you 23 23 and when are you done with the schooling I graduate in October of this year in October okay

so yeah here here in a few months and you're looking to move out. Are you with your parents? Yeah, I live with my mom in a house and I pay her rent. Okay. Okay. And you're looking to move. That's great. Now I would say a couple of thoughts. Right now you're in school, but once you move out, what do you expect that your income is going to be? So I already asked them during the interview process of what my income would be like a rate. And they said it would be up to 18 to $19. So right now I make 1550. So that would bring it up to four and a half, $5 or less. And you're going to, you plan on working 40 hours? Yep. I'm still going to be working the 40 hours. Okay. So what I would do is I would be, while you're paying your mom rent, I would keep a very good record of that. Make sure it's like, you know, you're writing your check or you can see that transfer because when it does come time

to move out, if you don't have credit, which I don't recommend getting involved in credit in any way, shape or form, they are going to want to see that you have been paying and all of that goes to help you. So make sure you're keeping good record of what you're paying your mom. And then from then on, it's just about creating that plan. We're going to pay off this debt as quickly as possible. It's great that you're not incurring any more student debt or anything like that. So we're just working to pay off this debt and we're getting on a budget. And once you can kind of see on paper, okay, these are my expenses. This is what it's going to look like for me. Start looking in your area and just doing your research to find out what is it going to cost to, I mean, what's it cost in Harrisburg, Pennsylvania for a, you know, one bedroom

apartment. So I kind of live a little bit south of Harrisburg, like an hour and a half. Okay. So right now I'm looking at a roughly $600 to $800, depending on if I go through an agency or if I go through privately. Are you, how much are you paying your mom in rent? So right now I am paying her $450.

So it is lower, but I do help out with the groceries. So it kind of evens out. Okay, yeah, yeah, that's great. Yeah, and so, and I think, just so you know, we've even done research and Anthony O'Neill, who used to be a branch of personality here, he did a whole video on calling apartments to rent to see how many actually asked them for a credit score. And it was only like three out of like 25 or something crazy.

So you can still rent an apartment without a credit score. They may want first month's rent, last month's rent and a security deposit upfront, especially if you don't have a history of credit, they're gonna wanna know that, hey, she actually has the money to be able to do this. So I would have all that ready. But yeah, I think it's a great step.

And even if you have debt, it's still okay to move out and get your own place and start launching that. Just know you're going to be losing a little bit. It's not going to be as cheap as mom, but I think that that's okay. I think if you're in a position that you want to start living on your own, Lana, I think that's a great step. Great, great step. I'm proud of you, Lana, making strides.

Love it. Well, that does it for this hour of you, Lana, making strides. Love it. Well, that does it for this hour of this show. Be sure to join us next time. And remember, when it comes to changing your life and your money, you can tell me that you won't do it, but please do not tell me that you can't. With God, all things are possible. Hey, it's Rachel Cruz.

If you love the show and want a deeper dive on your money journey, we have a weekly newsletter that gives you trending and helpful articles and tips on following the Ramsey way. Just go to ramsesolutions.com today to sign up for our newsletter. Again, that's ramsesolutions.com to sign up for our weekly newsletter.