The Ramsey Show - App - The Millionaire's Roadmap to Building Wealth (Hour 1)

Episode Date: March 8, 2024

Live from the headquarters of Ramsey Solutions, this is The Ramsey Show. It's where we help you win in life, specifically with your money, in your work, and in your relationships. The phone number to jump in is 888-825-5225. 888-825-5225. I'm Ken Coleman, joined by the incomparable, the illustrious, the esteemed

number one best-selling author of Breaking Free from Broke. I had to look over my shoulder. I got so into the compliments. You know how to make a guy feel good. I do. He is my good friend as well. We were just talking about having a fabulous dinner together with some other friends the other night. And George and I have a lot of fun together. He is George Camel, of course.

And he's going to be your money expert today. I'll weigh in. And then let's talk about your income. Let's talk about making money. This is a show about making money, too. And I'm the work expert, they tell me. And Dave has said for decades, your income is your greatest wealth building tool. So you got any work questions that get you on the

path to making more money? I'm your guy today. George will weigh in on those as well. You ready to go, partner? I'm so ready. All right. Vanessa is going to start us off in Dallas, Texas. Vanessa, how can we help? Yes. My question is, what should I invest my $100 a month in to be a millionaire by 65? Oh, great question. How old are you? Well, I am 27. I'll be 28 in September this year. So that was my other question. Should I backtrack because the post that Dave Ramsey had said was at 25. I mean, I know I'm just a little bit behind on that. Yeah, not far behind at all. What do you got for her, George? You love your investment calculator. I've got my calculator out. You just cracked your knuckles. I'm pushing my

glasses up. I'm ready to go, Vanessa. Tell her, George. Okay, so let's talk about your financial picture. You're saying $100 a month because that was the example Dave used. At 25, starting at 25. Starting at 25 if you invest $100 a month. And so that post exists to tell people it's very much possible to become a millionaire, and it's simpler and easier than you think. It's just consistency plus time. It doesn't take a huge six-figure income. And so that's the point of the post.

I just want to make that clear. We're not telling people you should invest only $100 a month. So what's your financial status right now? Are you debt free? Do you have an emergency fund? So we are debt free. My husband and I, we are debt free. We also have savings, but we don't, we are both self-employed and so we don't have a retirement. And so that's kind of why I was like, well, you know, even if we did more than $100 a month, but the minimum $100 a month, we would have something in place if we both weren't able to work at 65. What's your household income?

I never really thought about a retirement. It's about 50. Total household income? Yeah, we don't make a whole. I'm primarily a stay-at-home wife, and I bake cakes on the side, so my husband primarily brings in the money. But we don't need a lot, because our home is paid for, and our vehicles are as well. Great.

Wow. What does he do? Yeah, he builds metal buildings and shops and barns like that. And he does it for himself? Him and a buddy. They do it together. Yes, sir. How long they've been doing it? He's been doing it about a year and a half, two years now. Do you ever hear him, do you guys talk about what he thinks the possibilities are going forward? You know, year two, year three, year four, the fact that it's just two of them building metal buildings yeah um not really

financially like how far they can go with it because he kind of just does it for for fun and to bring money in as well but we really don't have like we don't live a luxurious life to where we need a whole lot of money sure um i mean mean, you know, so I'm just worried about like a retirement thing. Yeah, no, don't be worried. He does have like a medical condition. So his thing is like last month he was out two weeks of work. So he does have to take off sometimes for procedures or things that come up. So that was my other idea.

You know, like what if he's not able to work at a certain age or something happens to me, you know. Do you have kids? What should we be investing our money in? We have a five-year-old, and we might have another one. Yeah, I get that. Well, George could speak to any, he kind of already has, but I would, the reason I'm asking that question is because, and now it's even more important knowing he's got this medical condition. And I love that you're able to be at home right now and bake cakes.

In fact, if you want to send a cake to George and I, we'd be okay with that. I'd love to. Yeah, that'd be fantastic. George is gluten-free. Do you make gluten-free cakes? I absolutely do. Fantastic. Okay, now George can partake.

I am all for the gluten. Can you add extra gluten to cakes. I am all for the gluten. Can we add extra gluten? I am pro gluten. But the reason I'm bringing this up is because Vanessa, if you feel like we want to catch up or we want to put more than $200 a month, meaning 100 from him, 100 from you, you do know that you've got the option to go work and you'd have to change your lifestyle some, but it seems like you guys have a really frugal lifestyle, which gives you options. And so I just don't want you to have this fear hanging over your head because you guys can catch up and catch up quickly. Right, George? Yes. And so the first place I would go for you is a Roth IRA.

And that's going to use after-tax money. It's not connected to an employer. Anybody with earned income can contribute to that. And the maximum for 2024 is $7,000. And you can open one as well. So your husband can open one, you can open one. So that's 7,000 each. Now, when it comes to the amount you should invest, we recommend 15% when you're in baby step four. Now, because you guys have a paid for house that puts you in baby step seven, which means you can invest even more than 15%. So I would not recommend investing a hundred bucks in your shoes. You should be investing at least 7,500 bucks a year. Okay. And so when you open that Roth IRA and one of a smart investor pro can help you with this, you can reach out to one at ramsaysolutions.com and get connected. These are financial advisors, investing pros who can help set these up, help you understand what you're actually doing.

And this is an individual retirement arrangement. And all it is, it's a shell. Within that, you would then invest and buy mutual funds, which is just a basket of stocks, 90 to 200 companies that we're all rooting for to win and grow. And so that will help you create a 10% to 12% return is what we've been seeing in the market. And so I just did the calculation for you from 27 to 67. If you just put a hundred bucks in there, you could end up with 860 grand at 11% return. How does that make you feel, Vanessa? Good. Yeah. So you take 7,500, for example, and the numbers change drastically when you start to get into those numbers. Oh, this is what I get excited about. So 7,500 bucks, that's 625 a month, right? If you invest 625 a month from 27 to 67, that would grow it to $5.3 million.

Wow. With an 11% return. If you scale it down to 10%, 3.9. Vanessa. Let's go more conservative. That's still 2.9. Vanessa. So the key is get started, do this every year, and don't touch it. She's not worried anymore, George. And on top of that, Ken. I think Vanessa went, ah. I think Vanessa started going.

And Vanessa, guess how much of that was money you put in? Let's even say the 9%, it grows to 2.9 million. How much money do you think you put in out of that $2.9 million? Oh my gosh, I have no idea. $300,000. That's all you put in. $2.6 million was just growth, just compound interest. And so get started now.

We have a lot of options for self-employed people. So whoever's listening, they're going, I can't invest in retirement. Yes, you can. We have a whole blog called Five Investing Options for Self-Employed People. So whoever's listening, they're going, I can't invest in retirement. Yes, you can. We have a whole blog called Five Investing Options for Self-Employed People. Go check it out. The SEP IRA,

the Simple IRA, Individual Solo 401k. Tons of options out there for entrepreneurs. Vanessa, go on YouTube later this afternoon, this evening. Show this clip,

this segment to your husband and you guys have a fun dream session about what life is going to be like when you're in your 60s with all that money. Woo!

Game on. Oh, George, you're so good. This is The Ramsey Show. Welcome back to The Ramsey Show, America. Thrilled to have you. It is your show. It's about you and your life. And we're thrilled to be able to walk alongside of you.

I'm Ken Coleman. George Campbell joins me. We're Ramsey Personalities, and we are thrilled to be able to walk alongside of you. I'm Ken Coleman. George Campbell joins me. We're Ramsey Personalities, and we are your hosts today. And let's get to it, shall we? 888-825-5225. Keith is going to join us now in Cedar Rapids, Iowa. Keith, how can we help? Oh, yes.

Me and my wife, we're having a lot of troubles just getting started on baby step one. We want to know the best advice. Can you tell us what is, in your opinion, the problem or problems that are keeping you from getting started? Well, her parents live with us. Her dad has dementia, Alzheimer's, and all that, so we care for them. It seems like every time we think we're getting ahead, something knocks us back down. And this is attacking Baby Step 1, just trying to get $1,000 in the bank. Yes. Yes.

Tell me, and again, this is a very tough situation that you're in, so our hearts go out to you. I've got some family. My brother-in-law is dealing with this, and it's devastating. So we want to tell you that we're sorry you're going through this, and this is a tough, tough journey. Let me give you a couple options. Is this an income issue, meaning we don't have enough and we're scraping by, so any kind of unexpected squall or a storm that pops up kind of kills the momentum? Or is it something more than income? Just no discipline?

What do you think it is? I think it's more discipline. Because me and my wife, we make decent money. What is decent? Between us two, we make about $130 a year. Oh, okay. And then last year we started doing it eBay and selling on eBay, and that brought us another $10,000 roughly.

Okay, so we can say you're in the $140 range. Yes. So, George, sounds like this is a budget issue. Yes. So far it's a lot of feelings, like, well, things things are coming at us and I just feel like we can't. And what happens when you don't do the budget is you lean on feelings instead of the facts. And the budget tells all. And so when you list out the actual take-home pay that ends up in your bank account, what does that amount to in a given month?

Let's see. I'm roughly $3,200 and my life's around the same okay 6400 comes in and you're saying we can't get a thousand together together out of the 6400 so where is that 6400 going that's kind of what we're trying to figure out also you know like those and there's a solution for all of this. We can solve this very easily with an every dollar budget. And I'm going to help you out with that. We're going to give you the premium version on us to get you started.

And it's really simple. On that smartphone app, you list out your income and beneath that, all of your expenses, what you plan to spend in a given month. To make this easier, I would pull up your bank statement and go, what happened in the last month? Okay, here's the average for the utility bills. Oh yeah, we have that subscription that comes out. We got to pay insurance. And so beyond the priorities, which is your four walls, food, utility, shelter, transportation, we'll add an insurance as a bonus. Everything beyond that, we would call non-necessities. Would you agree? Yes.

Non-essentials. That's the parts you need to cut out because I'm guessing if you looked at your budget, you probably think you're spending $500 on food. You're probably spending $1,200. Is that accurate? That's most people's problem is the food category is out of control. Yeah, that would be a big one. So I don't think there's much issue here you make 6400 bucks we just got to pay attention to where every one of those dollars is going and next paycheck you have a thousand dollar emergency fund i don't believe that there's these constant 1000 plus emergencies hitting you guys it's ankle biters and you're using the emergencies as an excuse as to why you're not going to follow through this plan and get on the budget.

Keith, what do you do for a living? Deliver beer. Oh, okay. When I say this phrase to you, I'm just curious what your reaction is. How do you feel about being reactive in life versus proactive? How does that hit you? I'm not. Do you think you're a reactive guy?

You think just by nature, or are you a proactive guy? I think more reactive. Yeah, and I agree. And by the way, there's no wrong or right here, and I'm not trying to label you. I'm trying to get you to a place of what's going on right now. If I was going to boil it down to one thing is you and your wife are reacting to your paycheck. You aren't being proactive.

You aren't saying, here's what we're going to do with this money. You're just kind of going, wee, and we're just one day at a time and one feeling at a time. And I think that if you could get that to go, wait a second, this is, and George has given you every dollar. By the way, if you use every dollar, this is proactive. You are going to plug in numbers and you're going to begin to be intentional. That's what's so genius about every dollar, the budget tool. It creates a framework where I can be proactive. You happen to your money.

Yeah. Instead of life just happening to you and it's just, well, we'll hope we have money at the end of the month. Yeah. And I'm going to submit to you that the rest of your life is going to improve too if you jump into this. I'm going to put a little extra, I think, motivation on this. Not only to have money at the end of the month and not feel like you're always just reacting, but I think the rest of your life is going to improve as well. I think that this is, that's what I hope you get, Keith. No shame, but maybe a mindset switch. Let's be proactive, intentional, not just let everything happen to us. Does that make sense? Yes, it does.

How much debt do you guys have? Probably roughly $50,000. Okay. What kind of debt is that? Car loan, my wife's car, personal loan, a couple credit cards that we know we need to get rid of. Okay. Well, one thing you can do that's proactive is just cutting the cards up. Cut them up today.

They haven't been serving you. They got you to this place of stress. You guys make amazing money. You're hardworking people. You're taking care of the parents. And I think you guys deserve a life with more margin and options than this. And so it might be time to sell the car.

If you can get some good money for it and downgrade to something in cash, that will free you up even sooner. What would you assume, Keith, your total debt payments are every month? If you take all that debt you just told George about, what would you say roughly the number is you're paying out? I need that Jeopardy music right now. Just give me a rough map.

I guess probably 1,500. Okay, two things I want to point out. Number one, remember my little speech about intentionality? One of the other intentionality things you need to do is be able to answer that question instantly. You don't know what you don't know. You don't even know and i'm not judging you but like you don't have a clue what you're paying out so that's that's we got some homework let's let's get on that and let's go oh my gosh i could give myself a 1500 raise yeah

you're telling us you're having a hard time saving up a thousand we just showed you where 1500 exists every single month and i got a sneaky suspicion it's more than 1500 given your jeopardy silence. Now, is your wife bought in on this? Oh, she is 100%. Yes. Okay. I would sit down with her tonight and you're going to open that every dollar budget. Again, we're going to give it to you. And I want you to go through all of the numbers, lay it all out. So you both have accountability and transparency into what's going on in our financial life. And at first it's going to be scary. You're going to probably throw up in your mouth a little bit, but the next day you're going to wake up going, I know exactly what we need to do. That's disgusting. I know, Ken. Did you have to take it there? That's what happens the first time you do the budget. You go, oh my gosh, I had no idea we had that much debt. I don't

know that you throw up in your mouth all the time. Well, I don't want to assume anything. Boy, I think you're really, like, that was dark. It got dark quick. I'm sorry, Keith. I was over here going, oh. That's how debt makes me feel, truly, Ken. I appreciate that. I'm having a little bit of fun.

I like that. I thought you went dark quick. As a guy who consistently tells people that you need a Tums, I thought you'd appreciate that. I do appreciate the acid reflux. And I guess you're right. That's what it is. It makes it all the way up to the mouth. That's even worse.

Oh, gosh. You took me there. It is a vivid image, George, and powerful. So let's talk about EveryDollar really quick. Yes, this is our free app. This is huge for folks. It's a totally free app. You can go download it, EveryDollar.com.

You can get a deal on the premium version, everydollar.com slash George. And that allows you to connect to your bank, track the transactions, and both you and your spouse can log into the same app on different phones and have that transparency and accountability. If you see the debt-free screens, they always say the budget is the key. It is freedom to spend. And those people aren't verping. Do you know what a verp is? I think I assume

right now. It's a little bit of a burp, a little bit of vomit. You gotta get rid of the verp. Every dollar will do it. This is The Ramsey Show. Alright folks, welcome back to The Ramsey Show. I'm Ken Coleman. George Campbell joins me. And boy oh boy, it's that time

of year. It's the spring starting to kind of say, we may be around the corner. I didn't see what all Punxsutawney said. Punxsutawney Phil. I think it's going to be a short winter. Is that right, Joe? Joe pays attention to these things. Thank you, Joe. He's got the Farmer's Almanac out at all times.

He has a pocket version. You have that pocket version of the Constitution. I think he can get one of those of the Farmer's Almanac. at all times he has a pocket version you know like you have that pocket version of the constitution i think you get one of those of the of the farmer's almanac i don't know folks i'm making all this up we have new people joining the show you need to understand george and i like to have a little bit of fun while we help you uh but speaking of helping you uh you know where i was going with this taxes taxes are around the corner you're always trying to talk about taxes. You know why? Because I hate taxes. That's true.

I hate taxes. I always joke that if you could go back in time, you'd go to the Boston Tea Party. 100%. Just to throw some of that tea on board. I would have been, per capita, more boxes of tea thrown into the Boston Harbor than anybody else. Oh, what a time. I would have been that guy. Epic.

No question about it. I'm for a flat tax. That's not why I'm talking about it. But if I was president for a day, that would be my deal. Well, our goal is to help make taxes as painless as possible. Yeah. And we've got a tax tip for you today. And here it is.

You've got two choices for claiming tax deductions. And you've got to understand the difference because this can save you big bucks. You can either take the standard deduction or itemize your deductions. So both options can lower your tax bill, but which one is best? Well, it depends. So let's take a closer look. Taking the standard deduction, that's the easiest option. It's the thing most people do.

It's what makes the most sense for a lot of folks. It subtracts a set amount from your taxable income based on your filing status. So let's say you're single, you make $65,000. Standard deduction knocks off close to 14 grand. So you just pay taxes on 51,000 of your income instead of the full 65. So that's like an automatic tax freebie. Itemizing takes more work because you need to subtract all of your deductible expenses from taxable income one by one. So medical expenses, charitable gifts, state sales taxes, If that adds up to more than the standard deduction, it's worth it to itemize. And many find out it's not worth it. So if you want

more help making sense of income taxes, you want to file with confidence, be sure to go to ramseysolutions.com slash tax. We've got tons of resources there for you. We'll help you figure out if you should work with a pro, if you want to self-file using Ramsey Smart Tax, a lot of great options out there. Yeah, good stuff. Get it done. Good stuff, George. Great, great.

Hope that was inspirational. No. Okay. Nothing about paying taxes is inspiring. It has nothing to do with you. I thought you did a wonderful job. Thank you. But it's taxes, for heaven's sakes.

Get it done. Get it out of your life. All right, let's go to Kina now, who is joining us in the Tampa, Florida area. Kina, how can we help? Hello. So I am here because I need a little help with introductory tools and resources. I'm at around $75,000 to $80,000 in student loan debt,

and I need some help with next steps on how to be able to afford a home within a year as a single woman, sustain my lifestyle, and build my credit. Wow, you've got a very aggressive agenda. We want to get it done fast. Yeah, why a year to be a homeowner? I will honestly just say just the stage and age I am,

which is just one of my goals. How old are you? 35. By the way, I should point out that for men, the only place you can ask a woman's age is in a show like this. This show. The context matters i i have to kind of remind guys from time to time and i'm sure if we have a special dispensation here on the

show that i get to ask ladies how old they are and it's on the phone if we could see kina i would assume 25 max yeah well that's oh i appreciate that yeah look at you what boy you just that was i'm a charmer i got the riz as the as the kids say. All right, the reason I ask that, Kena, is because I understand you're feeling that pressure, but can we, for the sake of this conversation that George is going to guide you through, can we take that year off the table? Let's get that 12-month pressure cooker of getting a house. Can we take that off the table, Kena, just for the next few minutes? Sure thing.

Okay, good. All right, George. All right, let's address the three. You said, I want to afford a house, and you want to do that in a year. We said we're taking that off the table, George. Were you listening? We are, but here's what I want to talk to you about. There's a rhythm and an order to this, and the problem is a lot of people, while drowning in debt with no emergency savings, go, I got to get a house, I got to get a house, rent's expensive, renting is a sin, I'm just going to jump into a house. And that causes them to be house poor, where they barely can afford

the mortgage now. They got nothing down, no equity, and it creates a place where the house is a burden instead of a blessing. And that's the heart behind this. Okay. So once you're debt-free with an emergency fund, then save up for the down payment and set that goal of home ownership. That's the time and place. Next on the list, you said, I want to sustain my lifestyle. Tell me about this lifestyle. Okay, so just to be honest, I love to explore and travel, and I've given up some of those things as a sacrifice for me to meet some of my goals.

Good. Okay, so you're saying mostly travel is what you mean by lifestyle? Yes. Okay. And again, there will be a time and place for that once we clean up the debt, because what are your payments add up to every month? About $600 is going out altogether. I'm in a process where I'll be in the near future trying to figure out if I want to consolidate my student loans or... What would be the purpose of consolidation? I don't know. I'm just being honest. Just throwing up here. Okay. You heard that. You heard that idea. I love your honesty. I love that.

Yeah. A lot of people think debt consolidation is somehow going to make the debt go away or go away faster. And the truth is a lot of times it doesn't. So there can be a place in time where student loan consolidation makes sense. But for most people, it just makes them feel like they did something instead of doing the hard thing, which is getting rid of the student loans and actually paying the principal down. So let's put that on the table as well for now. Last thing, you said, I want to build my credit. What was the purpose of building your credit? Again, I am very new to all of this.

So I'm just hearing that those are the steps that i need to take because i can have a savings however if your credit and everything does not match you won't get that far if your savings and credit don't match what does that mean okay so for an example i can save the money however when it's time this is again what i've been informed of when it's time to begin is again what I've been informed of, when it's time to begin the home buying process, if I don't have a certain credit score or if it's not in a certain area, then I won't be considered. So I do need to build my credit because only thing I typically have right now is my student loans and one credit card. Okay. So this is the same old message, George, we confront all the time.

You can't get a house if you don't have a good credit score, right? I've heard it. The problem is it's a bold-faced lie. And I know that because I bought a house without a credit score, Keen. I got a mortgage without a credit score. I didn't have debt. And six to 12 months later, my credit score disappeared into the abyss. I didn't have a credit history. And I worked with, you know, Churchill Mortgage. A lot of companies out there do this. Churchill Mortgage is the one that we've trusted for decades to help people buy a house without a credit score. And they can help you, too, once you get to that point.

I would also like to point something out, Kina, that George won't say because he's very humble. But George's life has gotten measurably better since that as well in the form of great, awesome life. Now a beautiful little baby girl. Oh, and by the way, he's the number one bestselling author, and he's making more money than he ever made before. All of that. So this idea of a credit score being the foundation of a better life is also garbage. Okay. And I'm going to send you a gift, Kina, to help explain this because it's hard to do in a quick radio call.

I wrote a book called Breaking Free from Broke, and there's a whole chapter on credit scores. There's a whole chapter on credit cards. And so my one ask is that you read it before you make any other financial decisions. Okay, I will. And I'm so glad. You're new to our crew, and so I want to welcome you to this tribe of weirdos who goes like, hey, what if we didn't have debt? What if we stopped playing this weird rat maze game of trying to get the cheese of a high credit score to get more debt, to get a high credit score to get more debt?

Hey, Keenan, we've only got about a minute, so I wanted to ask really quick for Georgia Knight. How much is your credit card debt? As of right now, about $3,500. Right. So that's the first one you attack. How quickly could you pay off that $3,500 if you got real intentional? Less than a month. Boom. What's your income? I would say about $65,000, but that would mean I'm going in my savings. How much do you have in savings as of right now i have about 14 500 in savings oh boy you know what's gone today that credit card payment okay truly that savings is a it's a false security blanket because you owe 83 000 to lenders and so i want you to have no payments

then restock the emergency fund so the seven baby steps are what we teach. $1,000 starter, then attack all the consumer debt. My book, Breaking Free from Broke, will walk you through it. Hang on the line. Skyler will make sure you get that book in the mail, the e-book, audio book, whatever you want. We'll send it to you. Thanks for the call, Kena. Man, Kena's going to be traveling in the not-too-distant future.

Her life's about to change. I love it. Great stuff. Thanks for the call, Kena. Welcome to the tribe in the not-too-distant future. I love it. Great stuff. Thanks for the call, Kena. Welcome to the tribe. Hey, don't move. We've got to take a couple commercials your way. And George and I are going to have fun in the break,

and then we'll be back before you know it. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. George Campbell joins me. It's such a great crowd in the lobby today. A fine-looking group of people. They're enthusiastic.

From all over, they're giving us the whoop. What do you call that? I guess this is like a spring break week for a lot of folks. Oh, is that right? Okay. No, I'm getting a lot of head nods. Just people hanging out on a Friday. There they go.

If you're watching on YouTube. Oh, look at you in the background on the jumbo truck. Oh, that's nice. I made a cameo there. Yeah. And we love when folks come. So I just want to say it's always great to meet folks during commercial breaks. We go out twice every hour.

Yeah. And so come see us. We'd love to see you. And honestly, we're all Enneagram threes and we need people looking at us. We need the affirmation and validation. Yeah. It's kind of when we have some days where there's not a lot of people in the lobby, it's kind of like...

Staring out into the abyss. Yeah, so we're unhealthy and performers and we need all that. Throws Ken into an existential crisis. Yeah, it does. Can't have that. I don't know what to do. It's a total mess. But no, come see us, ramsayconsolutions.com

and check out the schedule and we'd love to host you. All right, let's go to Albany, New York, where Sarah is. Sarah, how can we help? Hi, thanks for taking my call. Yeah, you bet. What's up? First, I have just an active senior this year, and I'm trying to do the budgeting app, and I'm not being very successful with trying to plan accordingly for his unexpected fees.

Activity? Are we talking sports, band? What are we saying? Yeah, I know this feeling. I've got three teens right now. So give us an example maybe over the last two months of stuff that's unexpected that popped up. So we need track sneakers and track cleats, which I don't know.

Spikes, I'm sorry. And we need baseball cleats and a new bat and probably apparel to go with both. All right, so I'm very familiar. I'm very familiar. And when did we find out that he was going to do track and baseball? Last night. Oh, okay. He just decided?

Tell me what that's like. So he is very indecisive. So he always played baseball for years, and his coach no longer is at the school that he's at. So then he decided he wasn't going to do baseball. He was going to do track. So that's where my mindset was, okay he wasn't going to do baseball he was going to do track so that's where my mindset was okay we're going to do track running shoes and these bikes and how long ago how long ago was this conversation that you just described um about the about i'm gonna i'm not gonna do baseball i'm gonna do track um that was probably about i would say two three weeks ago okay Here's where I'm going with all this.

Well, let me ask you another question. Did you talk to him several months ago, let's say before Christmas, when maybe football and basketball or whatever he was playing before ended, did you guys say, okay, what are you planning to do next semester as it relates to sports? Did that conversation happen? No, because I just assumed it would be baseball okay the coach actually just got dismissed like probably two weeks ago okay three weeks ago it all was about

the same time when he told me that he was going to do track instead of baseball when that coach had left i get it and life happens like that but where i'm going with this, and George, I know I'm on this thing, but this is sort of a money issue, but it's sort of not. This is as a parent, and I understand this. I'm not saying this from judgment. I'm saying I get it. And George knows all three of my kids. They're all very active in things.

We would sit down with our kids ahead of time and go, hey, are you playing spring sports for this very reason? Because there are some significant amounts of money. For instance, our oldest son was talking about wrestling, and he decided not to, and this is his senior year. And wrestling is a real big commitment because of the time traveling. The equipment's not expensive. And so you have to – this is not like, well, my son's activities are causing a budget issue.

I think this is communication and expectations. Yeah. Does he know how much all of this stuff costs? Yeah, he just thinks that I have and never ending. There's the new conversation. Oh, hello. Hey, son, I love you. Love that you want to do all this stuff.

We don't have this like endless pool of money sitting around. We have financial goals. We're trying to get out of debt. We're trying to do this. So we need to figure out a way to cover these expenses. That might mean he works part-time to help cover it. Hello. Is that in the picture?

No, and I'll be honest. He thinks that he, I'm going to use the word entitled, because he gets a benefit from his dad that passed. So he thinks that that money he is entitled to, so it doesn't matter what he asks for, but that's what that money is for. You know, the quickest way to become not entitled? Do you know? No. Okay, this is great. I've been dying to say this.

It's to take the entitlement No. Okay. This is great. I've been dying to say this. It's to take the entitlement away. Okay. How do you do that? Really simple conversation. Hard conversation. This money that you got from your father, I'm in charge of this money. I get to decide where it's best spent and I am not a sporting goods store. This money does not represent a sporting goods store. George, am I being too harsh? No, but guess what? He's going to have some big feelings.

Well, that's fine, but that's, again, the way to break entitlement is to remove the entitlement. So there's an actual physical entitlement, okay? So we talk about entitlements in government languages. By the way, for all you conservatives out there, you're going to love the next 30 seconds. But the bottom line is that when we talk about an entitlement, it is a benefit. That's how it's used in that language. So it's a noun as that. Is everybody following with me in the lobby so that I know I'm making sense?

So entitlement in the form of a benefit is a noun. But then when it gets into an expectation of the noun, it becomes an attitude. Are you still following me out in the lobby so I know I'm making this? So what's happened is it's become an attitude issue. So in order to get rid of the attitude of entitlement, what do we have to do? have to remove the noun the object that's the lesson so okay i get what you're saying completely i guess i'm trying to think so he is also a senior um so that's a hard that's a hard thing to adjust now because i'm not going to take any of that away from him so i'll'll figure that out, which is fine. But I'm thinking of like long-term for things that would be unexpected like that. So would you just do it as, because it wouldn't fall into your emergency fund section.

No. You either have to move it from a different budget category or you create a miscellaneous line item for this kind of catch-all junk drawer of, we know something's going to come up, so let's put 100 bucks away or 50 bucks away every month to cover this stuff and then i would also go hey buddy you're now in charge of finding used a used baseball bat from facebook marketplace and you're going to go meet up and i'll give you the 10 bucks and so he needs to have some skin in the game instead of just deciding mom is an unlimited piggy bank and she's going to do all the work for me. Yeah.

Or he chooses, hey, son, you get to do one sport. And here's the budget we have for this. And you need to make this work. That level of critical thinking will cause him to make different decisions. Right. He's got to go get a part-time job. And I think he needs a part-time job. Yeah.

Okay. You want some nice track shoes? That will get rid of the entitlement. When he starts to use his own money, it changes entitlement it really does and it gives him freedom and independence i tried to do that i get it but listen sarah we're not we're not um trying to pour guilt on you we're just trying to be your friends and say i have to say things to my kids that they don't like all the time. Feels like all the time these days. I got three teenagers.

Feels like it's just, I'm one constant irritant. I felt that way about you. I'm sorry. For a lot of reasons. For a lot of reasons. And I'm trying to encourage you. I don't want you to be discouraged. Was this a decent amount of money that he inherited?

Yeah. I think it's for his future. And he gets it when he becomes an adult, or what's the plan? I did get some of his money. I did invest it. I put it in his CD for him for later in life. And he's going to be real thankful. Yeah.

Because right now he could blow that money as a senior on who knows what. And so I think you're doing the right thing before he's an adult. And the only thing he's truly entitled to as your son is food, shelter, and transportation utilities, the basics to survive. Insurance. You're doing all of that for him. Put a bow on the kitchen sink and say, here you go, son. Here's the gift. And that will cause him to look differently at this versus, well, I want to do the third sport, and mom, I need another hundred bucks for this.

And so just tell him, hey, son, I'm okay covering covering it he's one of five from my ex-husband and like we were together when we had the other so there wasn't really a financial burden on myself to say so now that he's the only one that went to high school without his dad i do i feel like I gave him that reign to feel that entitlement because I would never take that. It's okay, Sarah. Sarah, you're a good mom. You're a good mom. You've done great. But go ahead and start making these changes on his entitlement thinking around money. It's been a good hour. Thank you all for calling. Thank you, George, for hanging out with me. This is The Ramsey Show.