The Ramsey Show - Don’t Let Toxic Money Situations Keep You Trapped

Episode Date: January 8, 2025

💳 Share your thoughts and you could WIN a $500 Gift Card!  📱 Listen to the full episode for free in the Ramsey Network app. Jade Warshaw & Rachel Cruze answer your questions and discuss: "My boyfriend and I share credit cards," "How do I tell my dad he can't borrow from me?" "When is a 401(k) match too good to pass up?" "My husband spent our retirement behind my back," Housing Market Predictions for 2025 "We co-signed on a house and now we're stuck," Support Our Sponsors: 🌱 Get 10% off your first month of BetterHelp ◎ Get 10% off Byrna product bundles and more! 🏥 Learn more about Christian Healthcare Ministries 🏡 Get started today with Churchill Mortgage 🔒 Get 20% off when you join DeleteMe 🏦 Go to FAIRWINDS Credit Union for an exclusive account bundle! 🥗 Save 15% on your first Field of Greens order with code RAMSEY 💸 Learn more about opening a high-yield savings account with Laurel Road 💻 Visit NetSuite today to learn more 🗂️ Use promo code RAMSEY for 18% off at The Nokbox 💵 Learn more about Timothy Plan 🏛 Get started with YRefy or call 844-2-RAMSEY 🔐 Visit Zander Insurance for your free instant quote today! Next Steps 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! 📈 Are you on track with the Baby Steps? Get a Free Personalized Plan 💰Watch 90 Day Money Makeover. 💡 Access Ramsey’s Complete Guide to Investing for free 🎟️ See Dave and John LIVE in a city near you! 💵 Start your free budget today. Download the EveryDollar app! 🏘️ Free Tools & Resources to Reach Your Home Goals 💸 Start taking control of your money in 2025 at our free livestream Listen to more from Ramsey Network 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 💼 The Ken Coleman Show 📈 EntreLeadership Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

From the Ramsey Network, it's the Ramsey Show. I'm Jade Borsha, next to me is Rachel Cruz, and we're your hosts for today. We'll be taking calls about your life, your money, your career, your relationships, really whatever it is that you want to talk about as long as it has some connection to your money. We're here for you. It's a live show. So if you want to get in, you can. The number's 888-825-5225 and we'll pick you up on the line. All right, Rachel, you ready to get into it? Let's do it. All right. Katie is in Austin, Texas. What's going on, Katie? Hi. Hi. Hi, how are you?

I'm great, how are you guys doing? Good. How can we help? Yes. So I was just calling to see if this was normal. My boyfriend has used the credit cards that are in my name and two of them are in both of our names, but I don't use the credit cards that are in my name and two of them are in both of our names, but I don't use the credit cards. And I was wondering if that is a normal thing because

he's saying it's normal and I don't have to worry about the transactions because he's making he's taking care of the bill. Yeah, I would have an issue with that. Well, first, the mistake that I see is that you have credit cards in both of your names. So I think that that is a mistake because either of you can spend on them and if either of you decides that they're not gonna pay the bill.

So let's say you guys were to break up and he ran up a balance on it, you're both on the hook for it. And if he doesn't pay it, it can affect you in a negative way. So that's the first issue. Then the second issue is then if you have a credit card that's only in your name and he's insisting on spending money.

Yeah, and it's him spending it. There's no guarantee that he's going to pay for it, right? The bill. I mean, there's a chance he doesn't. And then it's stuck with under your name and you're completely liable for that. So how has he gotten access, Katie, to your credit cards? Are you giving it to him or is he?

Yes. So it was an agreement to open the credit card because I needed to build my credit. I had no credit at all. And so that was the way that we were going to build the credit cards. I mean, the credit using the credit cards. What did you need credit for? What were you trying to accomplish?

Just the history. I had no history of any credit use at all. And did he say that that was a good idea? Yes. Okay. It was his idea, I'm assuming. Of course, because I course because I don't you know, have any knowledge in the finance area. Totally. So Katie, just so

you know, so that you can be armed with some of that knowledge and education, the only reason you really need a credit score is to go into debt. And we really do believe the best way to win financially is not to have debt, is not to go into debt. And the biggest piece of debt that people get into that they're like, no, I have to have a credit score for is a home, right? So when you go and apply for a mortgage, they will pull your credit score,

but you can do what's called manual underwriting. So you can actually get a mortgage without a credit score still. Now, places will pull your credit report. Maybe if you're applying for a cell phone or maybe for work or something. But if you don't have a history, all you have to say is,

yeah, I've never borrowed money before and debt's not a part of my life. So you actually can go through life and this is a big piece of misinformation. A lot of people believe you have to have credit in order to do things, but you really don't. Now you have to have it to go into debt, but we, again, that finish line,

that start to finish of building wealth, debt does not need to be part of the picture. So what Jade was saying earlier is exactly right. I would cut up all the credit cards, Katie. Any credit card in your name, I would cut up. And for you to keep everything separate, and you guys are already kinda combining purchases and all of that, I would keep your income

with your expenses, his income with his expenses, very, very separate. And then later on the road, if you guys get married, then that's when you wanna combine them. But until then, it's a very dangerous game that you guys are playing, not just on the credit score game side, but the fact that you have this other individual that legally you have no attachment to, right?

I mean, from a legal perspective, there is no marriage. And we take the calls, Katie, I mean, which of course we're calling show for money. So we get all different kinds of calls, but we get the calls that are, hey, my boyfriend broke up with me, I can't find him now. He blocked me and he racked up $10,000 on my credit card. He said he was gonna pay it and now what do I do?

And then that Katie, we would have to say to you, well, you gotta pay it because it's under your name. So it's just saying it's a big risk. That's what you're taking. And I understand maybe his intention was good, trying to quote unquote help, but it's not helping. I mean, let's understand this kind of big picture because Katie, you're not the only person

who has gotten that misinformation the truth is debt is a product it is it is a product that that institutions make money off of it's not something that's required it's not a law it's not like your driver's license where you have to have it in order to drive a vehicle and but it is marketed that way right it's marketed as this thing that you can't live without you can't without. And they'll even make it seem as though if you want a car, you need a loan. If you want a home, you need this. They make it seem that way, but that is not the truth.

The truth is, like Rachel said, a lifestyle without debt is absolutely there. You do not need a credit score. And the only reason it seems that way is because it's such a well-marketed product that they have fooled us into that. And there's a lot of money that's made reason it seems that way it's because it's such a well-marketed product that they have fooled us into that. And so, and there's a lot of money that's made on it.

And so a lot of people have kind of locked their arms around making it seem as though this is the case and it's truly, truly, truly not. The big areas where people kind of, I don't know, Rachel, I would say butt heads on us are, okay, then how do I buy a car? Okay, then how do I rent an apartment? Okay, then how do I buy a house? I, then how do I rent an apartment? Okay, then how do I buy a house?

I feel like those are kind of the top three areas. And rightfully so, you should be asking those questions. And the truth is, we would say, if you're in a car loan right now, yeah, work to pay it off very, very quickly. And then your next car, make it a point that I'm gonna save up and pay for cash, even if I get something a little less expensive, right?

That's how you get out of the car loan debt. And then for somebody who says, hey, I wanna rent an apartment. The truth is there are lots of apartment complexes that will say you can't, we only go by credit score. That's true. There's also a lot that will go, and if you bring in other proof of purchase,

whether it's your cell phone bill, electric bill, maybe you lived with your parents and paid them rent, they will use that. So that is the truth. Same thing. Rental cars. You can rent a car without having a credit card. So anything that tells you otherwise, Rachel and I are here to tell you and kind of debunk that myth because it's not true.

And even the biggest one, Rachel, buying a house. Yes. We all know. So many of us think you have to have a credit score to buy a house. That's the biggest thing. And it's just not true. You can still do something called manual underwriting and in that they look at people who do not have credit scores They have a zero credit score and they go Okay we believe that a zero credit score is just as good as a High credit score right right and we can look at your actual money your actual transactions and we can determine if you are

In a good position to borrow money for a home. And so I hope you learned that Katie on this call that it's not something that is necessary at all. Not even. Or required, right? Okay. Yeah. But again, it's understandable why someone would think that

because in our world today, it is just so, so normal. So yeah, Katie, if I were you, I would today cut up every credit card with my name on it. Not even just because of the element of what we talked about living without debt, but I'm gonna say yours has an extra caveat too, because there's another person in your life using those credit cards under your name,

which adds on a whole other level of risk that you cannot control, right? Some people think, well, I can control myself, right? And we have a level of responsibility of ourselves. Like, so that's, we can talk about that. But this is like an extra layer, Katie, that you, it's just a lot of risk. And I know everyone's in love all the time

and we're gonna be together forever. Everyone believes in the relationship. But again, we get the calls on the other end of reality of what happens. So I just want you to be protected, Katie. That's what we want for you. We are here for you and we want you to make these decisions in a really smart and wise way.

Yeah. So at the end of the day, we're not putting other people's name. If you do choose to take out debt for the love of God, don't put someone else's name on it with you. That's really the moral of the story. And then of course, don't go into debt period because you don't need it. This is The Ramsey Show. Self-defense can be a complicated issue but there's one solution that makes it

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Next to me, number one bestselling author, Rachel Cruz, hanging out with you all hour taking calls about your life and money. And I want to tell you about something super duper important. If you're ready to get your finances in order once and for all, you know what I'm talking about in 2025. This is your year for financial success. I want you to join us January 23rd for our free live stream. It's a take control of your money live stream. It's gonna be myself, Dave Ramsey,

Rachel Cruz, George Campbell. We're all gonna join together. We're going to show you how to get control of your money. We're gonna take questions from you, the audience, myself and Dave, we're gonna help you learn how to stop control of your money. We're going to take questions from you, the audience, myself and Dave, we're going to help you learn how to stop paycheck to paycheck living. I mean, that's we've all experienced it, and it's time to make the cycle stop. We're going to show you how to free up more breathing room so you can pay off debt fast and finally get ahead with your money. So Rachel Cruz, you and George are going to join us a little

bit later for a Q&A. You can ask whatever questions you have about your money. It's absolutely live, and so it's like real time. So that will be very entertaining. And if you didn't know, when you sign up, we're gonna be doing some giveaways throughout the evening. We're going to give away $4,000 to five different people, a total of $20,000, which is pretty amazing.

So again, the event is free, but when you register for it, you can sign up to get that that free cash. So that's nice. Sign up for the free live stream by going to RamseySolutions.com slash live stream, or you can click the link in the description. If you're listening on podcast or YouTube, either way, you need to be there. This Rachel, I really do believe that I feel like in 2025, so many people are going to

draw that line in the sand and finally say, this is the year that I do that thing with my money and I make lasting progress. And so I'm- Yeah, absolutely. Well, and when you have an amount of time, right? That is so compacted with everything you need. Like that's how we lay out these live streams.

Or like if someone is here for an hour and a half or however long it is, like we're gonna put as much as we can into it so that when you walk away, it's like, okay, I have a whole new set of tools. It might be overwhelming even, but it's worth it to sit down for an hour and a half and be there. And watch it and do something different.

We're not preaching at you. We're giving you step-by-step advice that you can implement. So that's really good, Rachel, to highlight. Okay, let's get into those phone lines. Oscar Des Moines, Iowa is on the line. What's up, Oscar? that you can't implement. So that's really good, Rachel, to highlight. Okay, let's get into those phone lines. Oscar, Des Moines, Iowa is on the line. What's up, Oscar? Hey, how you guys doing today?

Doing great, how can we help? So my question was regarding an issue I have with more importantly, my dad. So my dad's always gotten into this habit of every so often asking to borrow money, which I'm not hurting for, so I don't mind. But it's gotten to the point where I dread taking his calls because it's not about checking them on me or checking up on the kids.

I always feel like it's going to be, Hey, by the way, can I borrow X amount of dollars? So my question is, how do I go about starting the conversation to where I tell them, hey, enough's enough. Yeah. How old is he, Oscar? My dad is 60. 60. And why is he needing the money? What's he using it for? Honestly, I don't even ask at this point. I'm assuming bills. Ever since I was a kid, he was never great with money. I remember when me and my sister were younger, we always had to help them translate, uh,

let their landlord know that we're going to be late on the bills. And those never ending cycle. Okay. So you don't think there's probably much to his name financially and he's, he's literally using it to stay afloat. Is he working? Is he working? Yeah. He has a full time job. How much does he make a year? Honestly, I don't know 100% but I'd say somewhere around 50-60 thousand dollar range. Okay, and just him or is he married or? He's married. My mom still lives at home. My mom, she's had a lot of medical complications, so she doesn't really work.

Every once in a while she does get some, like, under the table work through a restaurant that our family owns, but other than that, she really doesn't have a stable income. Do you have a relationship with your dad aside from this money, or do you feel like this is the only contact you have? Does he only, do you know what I'm saying?

He only comes around for money or do you have a relationship established outside of that? Well, I mean, if we have family gatherings, yeah, we get together. We can be amicable, but he never comes over just to hang out. Yeah. I mean, even when I was younger, it was more of a business casual relationship.

Sure. I can tell you right now, if we're sitting in a car for an hour or two, the most we talk about is one. Yeah can tell you right now, if we're sitting in a car for an hour or two, the most we talk about is the weather. Yeah. Do you have siblings? Yep, I have an older sister and a younger brother. Does he call them?

My little brother, he does not, he still lives at home, but he is of age to not live there. But he will call my sister if I tell him, hey, I can't help you anymore, or I can't help you this week so then the sister calls have you and your sister talked about it yeah me and my sister talk about it all done okay we're frustrated so you're both okay I was okay yeah one last question because I'm just trying to put the pieces together when he asks for money how much like in a month how much money would you give him?

And then how quickly before he'd ask for money again? Um, the most he's asked in one sitting was like 12 or bucks. Um, and typically when it's, I guess the larger the amount, the bigger of a gap between him asking for more, but I'd say roughly about once a month maybe. Okay, and sorry, I'm fascinated by what's going on and I'm also trying to dig deeper. If you had to assess the situation, is your dad, like is there anything unhealthy we should know about?

Like do you think, do you sense any like addiction, something where this money is going where it shouldn't be going? Or do you truly think, listen, this guy, he has no budget and because of that, he's late on rent. Is it just that simple? So I know, like I said earlier, my dad's terrible with money. He's always been a guy who bought scratches

at the gas station, but it's never been, at least to my knowledge, so extensive that he would blow his paycheck on it. I know he's always been struggling with payday loans here and there. And the only reason I know this is a long time ago I worked at a financial institution as a woman officer and it was the same bank you worked at. And they would always come to me and say, Hey, what's going on with with your dad and it got to the point where it was stressing me out so much I couldn't be there anymore I didn't want to be part of his financial burden and it was taking a toll on me yeah absolutely I just I was stressing over

something that I genuinely didn't have any concern over because at that point I didn't live in his house obviously he's still my dad I'm concerned about his well-being financially sure But where are you at Oscar financially? You and your family. Where are you guys? How are you guys? So I am right now on Bayeux Sub number one. Okay. I'm kind of working towards two. Yeah. I have all my debts lined up ready to go. Hopefully by the end of this year I will have all my consumer debt paid off. I don't have very much. So to say that you have an extra spare $75,000 in a high-yield savings account to help your dad when he needs $200 a month, that's non-existent. You guys are paycheck to paycheck.

You're starting to build a $1,000 emergency fund yourself. So my advice, Oscar, to you is this, and even more because of where you are financially, right? I mean, I think there can be a different discussion. And we talk to people on baby step seven, they've paid off their house, they've accumulated wealth. I'm like, listen, my dad's in his eighties and he's terrible with money. And I'm gonna help.

And that's what they choose to do, right? A very conscious decision. It's not being burdened upon them. They just decide that as part of what I'm gonna do with my legacy and my money. You Oscar on the other hand, I mean, you guys are not in a financial position. You're trying to save a drowning person

while you yourself are trying to keep your head above water. And it's causing that much more, I would say probably bitterness and strife, which is very understandable. So, I mean, this is always such a hard conversation because I think the parent-child relationship, especially as adults, is very difficult.

But what I would say, because this is the truth, is, and I'm gonna butcher the quote, and I even need to try it. I wonder if it's the one I'm thinking of. It's about the fish, right? Don't give a man a fish, teach him to fish. It's the idea that like, dad, I wanna sit down and help lay out.

And you could say, Oscar, I'm starting this process too, dad. Like I'm starting to realize, gosh, I have to get my finances in order. And here's some things that I've done, dad. I've realized, okay, here's my income. We've created a budget. My first goal is a thousand dollars. Like you could tell him what you're doing and say,

and if you want dad, I would love to sit down. And this is if you want to, Oscar, but I would love to sit down and help you get on this plan as well. Because ultimately this is just a few hundred bucks. Right? I mean, again, he's not asking for $10,000 a month. So it's just these little pieces of discipline

that may be hard for a 60 year old to restart. But that's where I would start and say, I can't give you anymore. I don't have it. And that's the honest truth, Oscar, you don't. I don't have the money to help you, but I would love to sit down and walk you through kind of what I'm doing and let's see together if you can

now get in a position where this isn't, you're not short a couple hundred bucks a month. Good advice, Rachel. Yeah, Viola Davis said, don't let yourself on fire to keep someone else warm. This is the Ramsay show. It's better. Don't let yourself on fire to keep someone else warm. This is the Ramsey Show.

It's better. Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're not going to die or something? Well, I used to be one of those guys, I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance

is if you hate your wife and kids. And I immediately went and got term life insurance. That's a gut punch. For decades, Dave, I've sat across people who've lost a spouse, they've lost somebody important to them. Me too. And they don't know what to do next.

Terrifying. You're gonna have a crisis here. You know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up or she's concerned how she's going to eat tomorrow. That's exactly right. These are the two options. It's saying I love you to your family. Term life insurance. Jeff Zander and the team at Zander Insurance makes it easy

and affordable. I've used them personally for 25 years. They're the only people I trust. Go to zander.com or call 800-356-4282. All right, you're listening to The Ramsey Show. I'm Jade Warshaw. Next to me is my good friend, Rachel Cruz, taking calls all hour long, your life and your money. If you have a call, you can call in our phone screen or we'll pick up. That number is 888-825-5225 in order to get involved.

All right, Rachel, let's go to the phone lines. We've got Leah, she's in Rochester, New York. What's going on, Leah? Hi, thanks for taking my call. So, I'm a single mom of one child. I make like 35,000 annually. I have no debt, no credit cards. I have an apartment. I have a 2014 Chevy. It's about to die. It's paid off though. I'm a residential

cleaner. I work like 20 hours, maybe a little more per week, part time in school, long term goals, med school. I'm in a co-parenting, it's a high conflict situation. I'm spent my last five grand on an attorney and I'm going to be going back to court. Um, and no, that's okay. And I am bottom line is I need to make more money while I'm going to school. I'm not really sure how I have to get a, uh, a used car because mine's breaking down. And I'm not sure if I should invest some of the child support that I get for my

daughter right now, like in a Roth IRA. I'm not sure how much. And I want to know what, what, with a little bit that I can say, like, what can I invest and what should I invest in? I have no clue where to start. Sure, sure. Yeah. I mean, it sounds like everything that you are saying

are very important things. And so you are thinking about the right things. I think for Rachel and I, it's just narrowing it down to what's most important right now and kind of giving you a step-by-step on what to focus on for second, third, fourth, that sort of thing. Yeah. Leah, tell me about your schooling.

So you're starting a new semester, I'm assuming. How are you paying for school? I'm actually... Oh, go ahead. No, no, that's okay. So no, I do get... School is paid for right now through financial aid, but I am taking a semester off to take a break with court because it's going to be very stressful.

Okay, okay. Do you see and do you know from where you are within the divorce, like I don't know this is a hard question to answer. Is there, is there like a, an end date that you see? Do you think, okay, yeah, we have a couple more of these. So it'll probably be in the summer or do you think like it could be a whole other year or two? Well no divorce, never got married but okay it's just custody. I think this will be a forever, I think it'll always be going back or at least for quite a few times but I have full custody so that's good. How old's your child? She's seven. She's seven. Okay.

So she in school then during the day? Yeah. Okay. So childcare and all of that is okay. Yeah. Yeah. And Leah, working 20, so you're working 20 hours a week. Are you able, tell me about like your monthly expenses.

Do you feel like you're able to cover those and you're basically at zero at the end of the month? Are you behind? Are you ahead? Do you have margin kind of where you are compared to your salary first what you make versus your expenses? Yeah so I I have a budget plan honestly to be honest I haven't I haven't really paid attention to it and that's something that I that I've been lacking consistency and discipline with so I know that and that's something I need I need to change and I want to change You mentioned I can

Know you go ahead So I As far as like saving I'm not I'm not really saving that much I would say like I make around maybe 28,000 or sorry twenty twenty eight hundred a month. Is that including the child support? Actually, no. So what do you get? What does he send? Technically, I get forty four a week.

For forty four a month. Okay. From child support? And yeah. Yep. Okay. I'm sorry. I'm supposed to be getting 44 a week. I apologize. But I am getting I did just like arrange a new plan with him. Can you go back?

Leah, can you clarify for Rachel and I when you say 44 a week? Are you saying $4,400 a week is what you're supposed to be getting from the dad? $44 in child support. $44 a week? A week, yep. Got you. And you're only getting $44 a month right now? No, I'm getting like $170, but in total.

So that's just for through the state. That's on paper. I did arrange something with dad in person and we talked and so I've been getting on top of the 44 weekly, $100. He just pays me himself like weekly. So in total, let's just say like around 560, right? A month in child support in total. 560?

Yeah. Okay. Okay. And you mentioned, okay, you mentioned earlier on about Roth IRAs and things like that. Right now doesn't seem like the time to do that. It seems like you've got bigger fish to fry. You've got an attorney fees that you're gonna have to pay. You've got a car that doesn't have much more life in it. Did you say how much you have saved?

You said you're able to put a little aside. What do you have in savings right now? I have like $950. Okay, $950. Okay. So my lawyer, my attorney is paid off. And like I said, my car is paid off as well, but it's on its way out. Okay. attorney is paid off and and like I said my car is paid off as well but it's on its way out. Okay. If I were in your shoes I think I'd be focused on stacking

up some money for this car because if this is your only only mode of transportation you're gonna need to be ready for that. What do you think that's gonna cost you? Have you looked around? Oh, I have looked around. I'm not sure, like making 35 a year, like what I should spend. I don't know, like 15 percent of that, maybe a little more. Well, we're not going into debt for it. So you're only going to be able to buy what you can afford to save up and get. That's really what's going to inform this decision. Yeah. OK. Yeah.

I don't want you let us clarify at this point with anybody, not just you, anybody who calls them. We're never going to suggest debt, but specifically here, because your income, you know, you can't afford to add any other risk or frustration or stress or anxiety to this equation. And if you do debt, you're definitely adding that. The good news is you've got $950 saved. Your car hasn't busted yet. So you've got time to set some money aside. You've got some time to do some shopping, figure out. Yeah. And Leah, I would probably take on, cause you're making great money for 20 hours a week. I mean, that's, you know, and I, if you're taking a semester off,

um, I w I was just thinking of taking on more clients. Yes. And I would, Leah, I mean, I, I would say like this whole semester, like I'm going to, I'm going to work more than probably I've ever worked because I think these goals are really big, right? To have some cash for a car. The first goal is to get a thousand dollars in the bank, which you basically have. And then the next goal will be pay off debt, but you don't have debt, which is amazing. And so then the next would be an emergency fund.

But part of that is knowing if big life things are happening like a car or fees for an attorney, right? Like all of these things that I would want a big fund and this could be, this could also be your emergency fund, right? You could have a savings goal, but to know that I need some cash in the bank ASAP. And so I would have enough in there for, you know, three months worth of expenses. I would have enough in there for a new car. And that could be a $7,000 car, Leah, right?

I mean, it doesn't have to be a brand new beautiful car. And then think about when you sell yours, that adds to that. I would kind of average out attorney's fees, what would make you feel good, right? And I would just have a big emergency fund. That would be my very first goal before investing or anything.

And then once you have your feet under you saying, okay, yes, I have my car. I'm in good shape transportation wise. I have some cash here for an attorney. I have some cash in the bank for an emergency fund. Then we can start thinking about the future. But until then, Leah, I would just get some cash in the bank and I would not invest it. I would just keep it in a high-yield savings account. Again, with the goal to get three months worth of an emergency fund along with a car and attorney's fees, which is thousands of dollars. I mean, what I'm saying here is like,

this is long term. This may take you a year to do, which is fine. And then there's plenty of time for investing and catching up with all of that. But I would do that. I think that would give you a lot of safety and security. And again, the beautiful thing about this is that you have the time.

Like you were just working 20 hours and if you just doubled that, I mean, think about, you know, you would be bringing home, you know, close to, you know, without child support, close to $6,000 a month. Like you could, you could do this. That changes your whole, that changes everything for you. And Leah, kudos to you and all the single parents out there

because that is one of the toughest positions to be in. And when you have full-time custody, for sure. And you are the only one in charge. And I mean, it is so much work and it is so exhausting. So from mom to mom, I just commend you and the single moms out there. And so you're doing an incredible job.

The fact you don't even have debt, Leah, I'm like, you're doing great. So just keep up the work saving. Ooh, very, very good. This is the Ramsey Show. Taking care of your health doesn't have to cost a fortune. That's why Field of Greens is in my house. Field of Greens is made from fruits and veggies selected by doctors to support your heart, liver, kidneys and metabolism. And here's the best part, they're so confident your doctor will notice your improved

health. They offer a money back guarantee. No questions asked. Try today and get 15% off at fieldofgreens.com slash Ramsey promo code Ramsey field of greens.com slash Ramsey. This is the Ramsey show. Happy New Year. Is it still, can we still say Happy New Year? It's still January. I feel like you can say it for a while. For sure. I feel like it's festive. Makes everyone happy. Today's question of the day is brought to you by Yreify. Yreify refinances defaulted private student loans and builds a custom loan based on your ability to pay. You'll have a payment that you can afford with a low fixed interest rate that you couldn't

get anywhere else. So you can, this will help you stick to your budget and get work on the debt snowball. So go to yrefy.com today slash Ramsey. That's the letter yrefy.com slash Ramsey. And remember it may not be available in all states. Today's question comes from Erica in California. We are currently in baby step two. My husband and I both grew up in homes

where our parents never discussed money or taught us how to manage it. in California. We are currently in baby step two. My husband and I both grew up in homes where our parents never discussed money or taught us how to manage it. We have two kids who are in their early teens and I wanna teach them how to be smarter with money than we ever were. Being so new to this and still figuring out ourselves, I'm not sure how to go about teaching them.

When my son got his first job, we opened up a bank account for him and he has a debit card. I have noticed he is purchasing things that I think are silly, but I don't want him to feel like I'm constantly nagging him for what he's doing with his own money. How do you teach him to budget when he doesn't necessarily have recurring bills every month? I'm overwhelmed with my own stuff and trying to teach him something I'm figuring out at

the same time. That's good. It's a great question. I mean, part of me and Rachel, I've even heard you say this. I think with kids, they go so much more by what you do than what you say. I mean, of course they're listening to what you say, but your actions are backing it up. Yes. And so if you're in baby step two right now, they're seeing in real time what it looks

like as long as you're open about it to the proper extent, they're seeing in real time what it looks like to be on top of a budget, checking your budget, checking in with your spouse, making smart choices. They're seeing that more than anything. And weirdly enough, I don't think we give enough credit to that. Because most of us, if you were to say, give me a picture of what money was like when you were growing up. Most of us could say, oh, when I was growing up, my parents never talked about money.

Or when I was growing up, you know, things were never tight. It just felt like we had what we need. Or when I was growing up, most of us can look back and we have a very clear picture of the way money was presented to us. And so knowing that as a parent, I think like I know for Sam and I, we have a very clear picture of the way money was presented to us. And so knowing that as a parent, I think, like I know for Sam and I, we're always very clear about, oh, you know, we're doing our budget for the month or we talk about it.

So knowing that when they look up, they're gonna go, oh yeah, my parents, they always mentioned a budget or they were always very mindful of what we were spending. They always said things like, well, if you can save it up, you can get it. So there is a practical side to it, but there's also so much just in the intentionality of everyday language and how you're speaking about it

with your spouse, I would say. Yeah, I agree. And I would say too, that when you are under the roof of your parents, right? And I think about growing up, I made money mistakes. Like I spent my money on stupid stuff like that I know my parents thought like that is so dumb. And I was the kid that if I had money,

I was gonna spend it. Like I would go get silly putty from like a aisle. Just to spend. Just to buy something. I mean, I genuinely was just such a spender. And I remember my mom did sometimes making comments, but they did such a great job Jade of letting us make those mistakes.

Because you realize that even as an 11-year-old, you could do something and buy money, buy something with money you've earned, and then realize a few days later, oh, that wasn't fun. And you do, you experience these lessons. So where something may feel silly to you, maybe it is, maybe to him it's not,

because he's 15, 14 years old and you're not. But I would say let them experience these emotions themselves, because the more life experience they have around money themselves, even as teenagers, even if they don't have recurring bills, any of that is teachable moments. So when they go off on their own, they're not experiencing those emotions

for the first time at 18 years old, they've already experienced it at 11, 12, 13, 14. So again, I wouldn't be legalistic about it. I do think some parents, and I'm talking to some of you Ramsey fans out there, who are very hardcore and you're just like, no, and you're so legalistic and then it trades your kids. So there's a lot of grace in this,

a lot of life to kind of give and take and they're gonna learn, you're gonna make mistakes, you're not gonna be consistent so much. They're not, I don't know, it's just a part of life. You know? But I think the fact that it's present of what you're saying in conversation and in the household is the most important thing.

Yeah, that is so true. I heard someone say a long time ago, it wasn't that long ago, but whenever your kids hear something for the first time from you, the parent, you become the expert, right? So that could be, I become the expert, right? So that could be, I don't know, relational, that could be with money, but in your home

is probably going to be the first time that your kids start hearing about money, thinking about money. And so you become the expert. And so you have to be very intentional about what you're putting out there towards them. It's just a good kind of framework to think through when it comes to that, but. For sure. Very, very good. All right, let's go to John. Fargo, North Dakota.

What's going on, John? Hey, Jen and Rachel, how we're doing today? Doing good. How can we help? But, so is there a point where a 401k match is too good to turn down in baby step two? Little backstory right now is about 30 years old, make $190,000 a year and company offers a four to one 401k match up to 15% on their end. So I put in four, they put in 15.

Okay. Um, yeah, listen, I love great benefits. I think that that's a wonderful thing. It's a wonderful cherry on top of whatever it is that you're doing and your salary and everything like that. I'll also say this, everyone thinks their situation is the exception to the baby steps. And the truth is it's not. For me, there is never a time where I would say,

you know what, in baby step two, I'm gonna invest as well. Because the truth is this is a proven method and it's what works. What we find is that when you focus on more than one thing at a time, you go a lot slower and we have a slower pace. It's harder to stay motivated over the long term, right? And so you've probably heard it said before your biggest wealth building tool is

your money and that's true. And that's probably what you're thinking. You're like man, if I can, I've got this money at my disposal, I've got this match at my disposal, I've got to go quickly. But the truth is, if you were to split your, your, your resource in that way, it's going to take you that much longer to pay off your debt. And when it takes you that much longer, the chances of you becoming less motivated are very, very high. And so for that, that's my first reason I wouldn't do it. The second reason I wouldn't do it is because if you're jumping around in the baby steps and you go, okay, I'm gonna invest instead,

chances are you also have not saved up three to six months of expenses. Which means if something were to happen, the first place you're gonna go is wherever your money is, which is to your 401k or to credit in order to borrow. And so there is a reason that these baby steps are in the order that they're in. It's because it's going to serve you best

regardless of what life throws your way. Does that make sense? Yeah, I think that makes sense. I mean, it slows us down by one month at the end of it, but at retirement age, that would go to about a million dollars. So we're talking about, that doesn't make sense. One month.

One month is what you're saying is what you would not. $7,600 a month is what we're putting in, including our minimum payments. $7,600 you're putting in where? Towards debt? Debt payments right now. And that's about what I contribute yearly to 401k at 4%. Hold on, hold on, hold on. You're saying you put $7,600 towards your debt every single month. And then you're saying that your contribution to the 401k would be

what? About $500 a month is in the raw. So about $6,000. How much debt do you guys have, John? About $80,000. So it's just delay it one month. Do you guys have any savings, any cash on hand? We have a kid on the way, so we have about $10,000 in stork mode.

A little higher than our max out of pocket. Yep, yep. OK, well, delaying it one month is not going to that that that's not going to completely, you know, change your life at retirement. And like you said, a million dollars. Yeah. 76, 7600 dollars from 30 to 60. Just that amount with common interest is not going to equal a million dollars. just that amount with compound interest is not going to equal a million dollars no the company is matched and put it into that so that comes out to about thirty five thousand dollars okay I'm not following I'm not really so you're

saying oh if you put in six thousand for the year they're gonna times that by four is that what you're saying so it's gonna be twenty twenty four yeah you're saying. So it's going to be 2024. Yeah. So you're saying max out completely for the year instead of the month. Yeah. Okay. I see what you're saying. Well, then I would just, I would go ahead and just pay off the debt and put some cash in and then, and then I would do that and then go and do a Roth IRA and max it out at $7,000. And then you're probably gonna, you're gonna end up even.

I think the whole conversation of this is what you want right now, as opposed to what's gonna work best for you long-term. You're gonna do what you wanna do because you're a grown man and we can't stop you from doing that. But if you wanna know how to work the baby steps, we just told you how to do it.

This is the Ramsey Show. Remember the good old days of the internet before it was a privacy nightmare filled with spammers, scammers, hackers, and fraudsters? Simpler times. Now, I don't have a time machine, but I do have the next best thing, Delete Me. Think of Delete Me as your online bodyguard,

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buddy Rachel Cruz. We're your host for, taking calls about your life and your money. Hope you're having a great new year. I hope it's off to an excellent start. And if you need any help with your money, your relationships, your career, you are in the right place. We're here to help. And that's what we plan on doing,

taking some live calls from you guys. So let's get on with the first call. We've got Beth, who's local, Nashville, Tennessee. What's going on, Beth? Hello? Hi, how? Hello? Hi. How are you? Hi. Hi.

I'm okay. How about you? Thank you for taking my call. Yeah. How can we help? Well, I'm hoping that you can because I'm kind of at my wit's end. I've been married for almost 30 years and I'm 62 years old, and so is my spouse. After we had children, sort of the division of labor, if you will, was I took care of

everything but the finances. I took, you know, the household, the children, everything, and he was to pay the bills and has done that all of these years. Unfortunately, I've recently learned of some pretty catastrophic devastating financial information that he's had three huge job losses. They were all well paying jobs. He did invest in the 401k. I'm not, I've never been sure about how much was in there. I think it might've been maybe 170,000. It's gone. Each time he's had a job loss,

it's been a two or three year gap in between because he refused to take anything other than an upper management position. And I've learned he's spent retirement savings. What- During those years to keep you guys going. What did you think? Can I just ask when those timeframes were happening, where did you think the money was

coming from? Well, I asked him and to be frank, he's got a lot of major management issues. I've always pressed to try to have a household budget. I was debt-free before I met him. I had accumulated 30,000 in retirement myself. And any time I would press it, I became fearful because he would get terribly angry. But if you had to ask yourself,

where did you think the money was coming from? Did you have something in your heart that you thought, oh gosh, we're probably on credit cards or probably on Yeah, yeah in my heart for sure. But he just kept saying quote relaxed quote. Everything's fine Don't nitpick me We're fine. And he just kept saying you wanted to do this budget and asking me these questions is showing you don't trust me Apparently I had reason not to trust him. Of course. Yeah, for sure.

When did you find this out, Beth? About two months ago. Okay. And there's no money in the retirement and it's because, I just want to clarify that he's been spending it throughout the years or did he take a massive withdrawal and spend it in the last year? He's been spending it throughout the years. Okay so he's just been dwindling it down and now you guys are 62 and you don't have anything retiring. Well not only that but he had accrued as the financial manager of our family he had accrued about $80,000 in credit card debt.

And in 2016 we did a cash out refinance on the house to pay it off. He promised it would never, this would never happen again. And then in 2016 I became very ill. I wasn't expected to survive. I had no idea what's been going on since 2016 with our finances and now I'm, praise the Lord, I'm recovered enough to work part-time, but that's all. And then all this time, his most recent job loss was three years ago and I finally convinced him to sell cars. So he's selling cars. How many cars do you have?

No, he's selling cars at a car lot. Oh, oh, got you. Okay. Yeah. To make money. Yeah. He wouldn't get a job before, but now all of a sudden he six months ago, he said, okay, I'll sell cars.

So today, today, what is the financial snapshot? Is it still the 80,000 in credit card debt and that's it? Or give us a today picture of what's going on. Yeah, we paid that off with the cash out refinance back in 2016. Okay, so then tell us. Then we now have $126,000 in debt, new debt, since the 80,000 was paid off. And is that because of the mortgage, the refinance, or is this consumer debt? Consumer debt. Okay, would it break that down for me? What does that consist of? I've had to do a lot of

digging here. I took some notes. There's a $77,000 in credit card debt. Is that in his name or your name? $30,000 is in mine and $47,000 is in his. Okay, okay, keep going. And then he got his sister to co-sign a HELOC on the house for $50,000 and now that's all gone too. So in total it's $127,000. And real quick let me ask where did the $50,000 and the $77,000 of credit card, what did that go to? Is that just lifestyle because he's been out of work for three years and you had a health issue like was it going to bills and keeping food on the table?

being food on the table? Yeah. Okay. Okay. And can you- Honestly, he was not a very good money manager. And every time I wanted to have a budget- Well, no one was. I wanna call that out.

Neither of you were good money managers. But I also, before we move on, can you tell me about the house? Can you tell me what you owe on the house? And what it's worth? Yeah, I think I wrote that down. We paid $390,010 years ago. Now I think on Zillow it's between $850,000.

And what do you owe on it still? Oh, that's a good question. I wrote that down here. I think we owe because of the cash out refinancing and the HELOC about 360. Okay. Okay, so the good news is you still got a ton of equity in it.

You're no longer together. Are you no longer together? What's happening here? It sounds like somebody that you would no longer be in a relationship with unless you're doing deep work to fix this. So what's taking place with the relationship? Trying to do the deep work for 30 years

and I've realized that it hasn't changed. Yeah, Beth said this would be a scenario which doesn't happen often, but I, you're a 62. He is lying to you. He is an angry person that you can't breach a subject with, which is not just money, Beth. This is an insight picture into the marriage, right? And so this is, this is your entire life. And this is a time I would say I would have my own money.

100%. I would get your own checking count, which we rarely say this. We're the show that's the opposite. But in a situation like this, this is when things come up, that literally he's driving you guys with his pattern and behavior over 30 years with no flag for change,

it's gonna continue to go down this lane, and that's not gonna be healthy for you. And so if I were you, Beth, I would talk to him and say, until trust can be built back and I see a new pattern, we're separating our finances because it's a symptom of how our marriage has been. And, and again, we don't have time to dive into that, but I bet that if you will stay on the line, Kelly's going to pick up and I'd love to put you with a financial coach because there's so many things to untangle here, not just from the financial perspective,

but also the relational perspective. And Beth and I want you to be protected, I do. And this is really difficult and I'm so sorry, and I hate that we don't have the time on the show to dig into more, but if you hold on the line, Kelly will pick up, but I'm so glad that you called. People tell me about their experiences with big banks all the time. But I'm so glad that you called. People tell me about their experiences with big banks all the time.

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you take control of your finances and stay out of debt. And Fairwinds also has a great mobile app that's safe and secure so you can manage your transactions with peace of mind. Fairwinds has been helping people avoid big bank traps for 75 years. So go to fairwinds.org slash Ramsey to learn more. It's easy to join, no matter where you live. That's F-A-I-R-W-I-N-D-S dot org slash Ramsey. Hey, Dave Ramsey here. Dr. John Delaney and I are coming to a city near you on the Money and relationships tour. You, the audience, will vote to choose the topics we talk about. Things

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whatever it is that's on your mind, give us a call. We can help you out with it. Maybe it's your budget. It could be any of those things we'd like to help we've got Gigi on the line and from Los Angeles, California Gigi what's going on? Hi, um, I just had a question about whether I should Pay off my credit. I mean not my credit, pay off my car or save money towards a

deposit for an apartment. So a little background story. I'm on baby step number two. I will have all of my credit cards paid off this month. So I've hunkered down with about $18,000 that I got paid off. I have a daughter. I recently moved back home with my mom. I am married. I'm going through the immigration process with my husband and my two

stepdaughters. So they can be here next week, next month, next year. There's no real big timeline and there's no room for them at my mom's house, of course. So I'm wondering in this time, should I just save up money for a deposit for an apartment so I'm ready when that time is coming? Is there here or should I just go ahead and continue to try to pay off my car? And where are they now? They're in Uganda. Okay, okay. And you don't, and you're saying they could come next week, next month, next year, you're not sure is what you're saying? Yes. Okay. We're not sure. How much

money would it take to have a deposit for an apartment? Um, deposits, um, two bedroom apartments out here are, they're about 2200. So I would say I need about 66, 66. Okay. Yep. And how much is left on your car? 16,000. Is that your last debt? Yes. Okay. How much are you making? What do you bring home every month? I bring home about 3,600 and I've been putting 1,500 a month on my debt. So it looked like I would be due to pay it off in about maybe nine, 10 months. Okay.

And is your husband working while he's in Uganda? Does he have any money to speak of in this? Yes, but his money is just taking care of him and the girls over there. We're not a- Okay. No extra really. Okay. Yeah, there's part of this where this feels a little bit like, um, like a, not a

storm, but something that does need to be prepared for, because what you're saying is if they got here next month, I mean, how likely is that? How did you guys meet Gigi? Sorry, I'm just, I'm, I'm curious. Oh, no problem. Um, we met through missions. I would, uh, be missionary and, uh, so you were over there and you guys met, fell in love. Oh, that's so great.

You're gonna laugh at me, Gigi. The reason I'm asking is we've gotten two calls on this show with people that have met online. And it's been like a scam thing and we've had to follow up with them and like help with... Oh, so for a split second that came to my mind, I'm like, you have met him in person, right Gigi? Oh my gosh.

Isn't that funny? I did have that thought though, because person, right? Oh my gosh. I was funny. I did have that thought though. Cause that is funny. That has happened twice on the show. Okay. So he's a real guy. You know, he's real. Yes.

I know. Just, I'm just asking. Just asking how you met. We've been married for three years. Beautiful. It's beautiful. Five month old daughter. Okay.

That's great. We know it's real now. Okay. Really funny. Okay. So yeah, I would make it because there is, if they came, I mean, you guys could maybe last a few weeks at your mom's but you're saying like, there's no room. There's no room, yeah.

Yeah, so, and how much is your car payment a month? How much are you paying on that? 360. Okay. Cause there's always like this balance of, you know, paying off the car quickly. Cause that frees up that car payment, plus what you were paying on the debt.

And it kind of just snowballs into more money every month to put towards that apartment. So I would, I mean, yeah, the, that, that priority is tough. But part of me feels like, part of me feels like right now you said you're putting $1,500 a month extra towards the debt. Part of me is like, okay, if you put a thousand aside, you can be done with this in six months and still have made some progress on the car if you wanted to.

Or you could say, I'm going to stop one and do the other. Like I'm going to stop, I'm going to save up $6,000 and then I'm going to push play on the car, which is probably what I would do because if what you say is true, like it could literally be next month or in two weeks or turn around and be in a year, it's not gonna matter, they're both gonna be taken care of. Because it's considered a four wall at that point,

your food, shelter, utilities and transportation. And so when they come over, you guys have to have a place to live. So that would be right in a level of priority. So yeah, so you could go ahead and just save up like you're saying Jade, in six months, you guys have to have a place to live. So that would be right in a level of priority. So yeah, so you could go ahead and just save up like you're saying, Jade, in six months, you'll have that. Set it aside. And then, and if you had to, Gigi, you know,

you could be like, God, I'm so close to paying off my car. I can go grab out of that account a few thousand dollars, you know, if you're that close, right? So it's still your money, but it would, in that case, could be considered one of your four walls. I mean, if you put all this money, in that case, could be considered a four, one of your four walls. I mean, if you put all this money towards it, you're going to be done in four months.

If you put the whole 15,000 or 1500 towards it, you're going to be done super fast. So, you know, it's, you could probably do either and be fine, but to Rachel's point, prioritizing the house first is probably it. Yeah. And Gigi, are you good with all the fires and stuff going on right now? I was

just seeing, I've been following on the news. Yeah. It's crazy around here. I think a coworker of mine, their friends lost their house to a fire, but we're doing okay. You're okay and you're where you are. Okay. We're a little bit outside of LA limits, so we're okay. Can I ask you one more question now? Sure. Okay. We're a little bit outside of a LA. Okay. So we're okay. All right. Can I ask you one more question? Yeah. Yes. And I guess, so we're saving for this apartment and being that I make about a 59,000 a year.

So being that apartments are 20, 2,200 maybe for a two bedroom, would it be, it's gonna be maybe, it's gonna be over half of what I make per month, but being that I'm debt free at that time, would that be something that would be okay? Cause I know it's usually no more than 30% of your income. Well, that I would include him working at that point.

So you'll be having more money. So that will Significantly should go down and you guys should make that a goal to go down So yeah, it doesn't change whether you're debt-free or not housing in general should be around a fourth of your take-home pay But I would add his job and his income in with that Okay, and I don't know I mean you didn't mention this. You're in an it seems like you might be in an in an expensive area. If there's no purpose in you being, you know,

I'd look further out, especially if you guys have goals to pay off debt. I don't know if he has debt, but it could be worth it to. Well, and from a and from a lifestyle perspective, you know, LA, it's just very expensive. Yeah, it's tough. You know, from a yeah, just the standard of living and what you're paying for things, you're in a very expensive area, Southern California is. So to Jade's point, for your overall, and this could be maybe something you guys think about,

especially if you're looking to buy a home, and this will be in a few years, this is more long-term thinking, Gigi, but there is that conversation that people are having with a family and just saying, oh my gosh, we can't live the level of life and have the margin and the freedom to do things we want where we are geographically. And so people are having those discussions to Jade's point. So that may be something you guys talk about later once they get here and you guys kind of get settled.

But that's a reality for a lot of people. Well, and that also raises the point of we talk all the time when it comes to mortgages. Yeah, the percentage shouldn't be any more than 25% of your take home pay. And we talk about that includes taxes, HOAs, like any fees, that sort of thing. But the truth is it still applies with rent too. Because the overall principle still is in place, which is if it takes up more, especially more than 30%, you're really gonna feel that. Even if you're only renting for the next three years or whatever it is, it's still cut so much into your day to day that you're gonna feel it. And especially if you're trying to get out of debt,

you're definitely, it's gonna take a toll on your month to month expenses and what you can really accomplish. Yes, for sure. Yeah, and it does. And what's hard too is a lot of people, and based off of calls we've had recently, that they base base it off of a two-income and it's kind of what we just did on that call and the danger even with that sometimes it's

just always something to keep in mind is that you know they have a baby and you realize oh I want to stay home but where you live it's a two-person house income household to keep that standard of living and so when you make decisions like that it kind of uproots and changes a lot, which is fine. But you have to be thinking about all of this. That's really good, Rachel, having that foresight to go, okay, what season of life are we in? Are we in a season of life where we're still having children?

Could there be the idea of one of us staying home? That is so, so smart. Really good. Oh, this is the Ramsey Show. Hey guys, this is Jade Warsha. Listen, I get it. The student loan situation is bananas, but it's time to make progress, not excuses. So if your payment and interest rate have you treading water, refinancing could be the

solution for you. Look, if I were in your shoes, I would contact Laurel Road today and get a free 30 minute consultation. You'll work with a student loan expert and you'll go over your refinancing options. Hey, for refinancing to make sense, you've got to check certain boxes like making a good income. And bottom line, Ramsey's advice is that you only refinance if you can get a lower

rate or a shorter term. Remember, the point is to pay off debt faster. Maybe you just need to keep rocking the debt snowball. But if refinancing does make sense for you, Remember, the point is to pay off debt faster. Maybe you just need to keep rocking the debt snowball. But if refinancing does make sense for you, Laurel Road offers low competitive rates and interest rate discounts are available for stuff like auto pay. Listen, you can't mess around with student loans. If you want them gone, you got to go hard. So go to laurelroad.com slash Ramsey to find out more and schedule your free 30 minute

consultation. That's laurelroad.com slash Ramsey. Laurel Road is a brand of Key Bank National Association. Hey, George Campbell here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about and all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone.

Ramsey's Real Estate Home Base is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to finish guides, a podcast, and even an in-depth video course hosted by yours truly. What's not to love? So if you're ready to take the next steps

toward your home goals, go to ramsysolutions.com slash real estate. That's ramsysolutions.com slash real estate. That's ramsysolutions.com slash real estate. You're listening to the Ramsey Show. I'm Jade Warshaw. Next to me is my buddy, Rachel Cruz, taking your calls this hour. Your life, your money, your New Year's resolutions.

Get in where you fit in. So Rachel, there's a lot going on with the housing market. We're seeing some trends. You've got some input on it. So I'm gonna let you take this and drive it on home Yes, there's um, yeah been I I would say good towards the consumer when it comes to mortgages So we are seeing a trend that mortgage rates are going down And they're expected to keep dropping in 2025. So rates on a 30-year fixed rate mortgage fell to

6.12 percent in late of 24 and they keep decreasing. And they're not going to go back to, you know, two to 3% rates like they had pre-pandemic, which was beautiful. It's not coming anytime soon. But again, we're continuing to see it drop, which we love. Housing prices, they're staying pretty steady. And again, they might level off, but with the low inventory, it's kind of keeping that stable. And so they're not going to expectedly like drop drastically.

So it's still this idea if you're on the sidelines and you're ready to buy a house, this whole idea of like, oh, there's a bubble, it's gonna pop, I'm gonna get a great deal. It's probably not gonna happen. They are pretty consistent. And the Federal Home Loan Mortgage Corporation even predicts modest price growth in 2025.

So values will continue to rise. Inventory is slowing. So inventory grew 29.2% in 2024 compared to the previous year. Now it is still below average or pre-pandemic levels and more homes are on the market to give buyers more options and sellers still have the upper hand in most areas as demand. Little by little it's getting better. Exactly, exactly.

Buyer demands could rise. So if interest rates keep dropping, then obviously there's gonna be more competition. People are gonna get back into the market to buy. Foreclosures will stay low. Foreclosures declined 13% in 2024. And this trend is expected to continue in 2025. Again, they're rare out there.

If you can find a good one, that's great, but they're pretty rare still. So some of the takeaways for what we're seeing in the housing trending in 2025 is for buyers. If you're looking to buy with rates trending down and inventory improving, you might find more opportunities to get into the market and you may have some more options when it comes to housing. But again, do not overspend. When you go to the mortgage company and to get a mortgage, they're going to offer you way more than what you need. So stay within your budget.

If you are selling, this is still your market and homes are priced fairly. If they are priced fairly, they're gonna still sell pretty quickly. And again, for everyone, you can't wait for the perfect time for the housing market. It's the perfect time when it's the perfect time for you. So if you don't have debt, you have an emergency fund in place, and you know, you have at least a 5% down payment, go ahead and get in. Because again, the housing values, the price of houses are not going down. You're not gonna go get a deal next year. They are the same, if not modestly increasing.

So the value of our homes are still, it is still going up. Which truly is good news because these are investments for us and we want them to be going up. Even if you're not in the housing market yet, that's a good sign for all of us. But Rachel, you made a really good point because when you go into this, up even if you're not in the housing market yet. That's a good sign for all of us. But Rachel, you made a really good point because when you go into this, you've got to know

your numbers, you've got to know what your parameters are because they will like lenders will allow you to borrow sometimes up to 50%. Yes, maybe even more of what you're taking home. And so just because they say you're approved, that is not your signal to go. All right. Everything a banker says, like I can afford this. That's a red flag. People need they say you're approved, that is not your signal to go, all right, everything's all good. A banker says, like, I can afford this. That's a red flag, people. You need to control that on your own end. You know, and it is wild when we think about it because, I mean, and I know we all remember

because it was just a few years ago when prices just skyrocketed up. Remember that? Yeah. And there were some hot areas that were significantly overpriced and they did kind of come down. And, you know, even last year was kind of this like, you know, correction. Austin, Texas was one, like we saw some markets do that. But I remember being on the show, you know, two years ago and Dave and all of us were saying, there's not a big bubble, you guys, because some people were saying that.

Yeah, it's just like this. It's going to be like, oh, nine, there's going to be foreclosures everywhere and all of this. And it's like, no, it is going to, it's just like this. It's gonna be like 09, there's gonna be foreclosures everywhere and all of this and it's like, no, it is gonna stay. And again, it may correct, it may kind of go back down a little bit to correct, but it is gonna be what it is. And it has stayed there, Jade. I mean, it is wild. I'm not mad at it. What homes cost now as a homeowner. I'm not. I mean, think about it, because this is the thing, like, if you're on the sidelines right now, you're definitely on on on feeling some type of way because you're like, man, I wanted to get in on the market. Yes. But it's it's good news for all of us because it tells us that like the market is still strong and that things are doing well. And when you do get in, you're going to want your property to

appreciate as well. That's right. That's right. I mean, Sam and I, South Florida was one of those hot areas. And when we got our first house was around 400,000 and it doubled when we, I'm like, thank you. It made me a baby steps millionaire. Like this is what we want to happen. And so it's one of those things that when you're not in the housing market yet, it can feel so frustrating. But once you get in, you're like, yes, like I'm finally part of it

and you want to see it ticking up. And so, that's right. Yeah. Good things. So, did we tell them to go to the oh no. Yeah, you need to go to Ramsey solutions dot com slash real estate and we do have a US housing trend market trends. It's honestly right there on the on the front home screen. So if you are curious about what's going on in the real

estate market and you wanna see facts, so we pull these from reputable sources. This isn't just opinions out there. These are actually what's going on in the housing market. And it is something people are watching and want to know, hey, what is going on? Because you do hear a lot of either doom and gloom or overhyped here.

I mean, so just to get the reality of what's really going on in the housing market, make sure to go to ramsysolutions.com slash real estate and for all of your real estate needs, if you are looking to buy and sell, use one of our Ramsey Trusted real estate agents because yeah, they will help you in this area. And it's a big deal, you guys.

Your house is, for most people, the largest purchase you make. And to your point, the largest investment when it comes to appreciating and all of that. And they help you do it the Ramsey way because you know when we were moving here you know the way we do things Ramsey way is not necessarily the way they do things out in the world and so it's like I remember making an offer on a house here and I was like it's got to be contingent like we've got to sell that house so that we haven't like yes it can't we're not going

to be one of those people who takes out a bridge loan like and it's great to work with a Ramsey trusted person because they know that you don't have to explain all that to them. They get it. They're not going to, they don't think they're crazy. They're taking the task on it. Exactly. So it's so, so important to do things the Ramsey way.

Okay. Let's get to a call. Uh, Nick and Diana, they're in Chicago, Illinois. What's going on? I love a couple now. Hey, how you doing? Doing good. Thanks for having me on your show.

You're welcome., how you doing? Doing good. Thanks for having me on your show. You're welcome, how can we help? My wife is a long time listener and I just became a, started to listen to you guys and I wanted to ask a couple of questions in regards to, I co-signed on a loan for my friend seven years ago now. And with a verbal agreement that in a few years he's gonna refinance and get me off.

And you know, COVID hit and he had a COVID assist program where they stopped paying on the loan, but obviously the interest rates were continuing to add up. Yikes. And then life happened. So he had surgery. So he went through a couple of rough times. Unfortunately, I mean, the good thing is he's still paying on the loan. The only bad thing was the original loan was for 367 and now because of the COVID program, it went up to 376.

So after I just got married with my wife and we wanna start our life and buy our first home. And I reached out to him in regards to options of getting off the loan, excuse me. And we tried to do a loan assumption but his debt ratio was not where it needed to be because of, you know, the surgeries and everything. So and then I approached them in regards to, hey, you know, let's refinance, even though it's going to be at a higher rate. It's going to be on you only. It's not on me anymore.

I did my part as a friend of helping you get this house. But what he said was, no, obviously he said no because of the rates not being low enough. And he, so my question for you would be, obviously we've been going back and forth with him about it and I want to know what would should be my next step. I mean the relationship can't be too good after all this is it?

So no so the relationship has definitely suffered and yeah we're about to go to a hard a hard break Nick but yeah I mean this is the hard thing about co-signing Nick is there's not there aren't other options. I'm like, there's, from a legal perspective, you signed a loan. And until your name is off of that loan, there's really not like a legal way to go about this or anything.

I mean, it kind of is what it is. And so- You could try to see what a judge would say about it. I mean, to try to force a refi, but I don't know that they could do that. Yeah, I'm not sure. This is why we say not to do this. Yeah, this is the Ramsey Show.

Hey guys, what's up? It's Jade. Look, let's be real with everything that's been going on staying on track with your money gets tough between bills trying to pay off debt saving money. Honestly, it's a lot and I've been there. That's why I'm excited to tell you that Dave Ramsey and I are hosting a free live stream on January 23rd to help you take control of your money in 2025.

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you can click the link in the description and do it like that, but sign up today and you could win a $500 gift card. Amazing. That's nice. Jade, I'm gonna wrap back to the call we just sent, because it was a quick call, but I think a big subject. And obviously Nick and Diana, there were a couple

and they called in and talking about how they had, how he had co-signed for a friend on a home. Yeah. That was $367,000. And then with the pandemic happening and all these other plans you could get on where you didn't have to pay and all of this stuff happened. And now he owes $376,000.

So nothing was paid down. It was going up. And on top of that, Nick got married and was like, I want off this loan because when you co-sign, and everyone needs to hear this, this is a lesson. When you co-sign, it basically is you taking on this person's debt. It shows up like your debt.

I mean, they're like the parent. As if it were just you. Yes, so that is car loans, you guys. That is mortgages That is parent plus loans. We talked about that in the break If you're a parent and you do a parent plus loan that is debt that's looking like it's going on your you know report Like it this is it is a really big deal and people do this out of you know The goodness of their heart because their friend or family member can't get the loans. They need someone to co-sign and

And that's where people get in trouble. And the hard thing about when you co-sign, is I mean, there's not a lot of ways to get out of it unless the person who is the main name on the loan says, I will refinance to take you off, which Nick in the last call tried and asked the friend to do that, but the friend won't because now interest rates, right?

He probably got a 2.5% interest rate and now interest rates are 6%. So the friend's like, there's no way, I'm gonna refinance right now. And yeah, and it messes up a relationship and it messes up your own financial life. So again, we were saying before the break that there's again, I mean, answer to those questions if you have cosign

There's really not much You can do from a legal perspective You may be able to get a judge to force it but you know force the refinance But I don't hear that of that happening a lot. Do you Jay? I don't I mean we had somebody call in a couple of weeks ago was a boyfriend girlfriend Signed together on the vehicle that she would drive. They're no longer together and he's like she's not paying the bill Like what do I do? And the only thing I could advise them is,

find out how much is owed and kind of keep that to the side because you might be ending up on the hook for this. That is the danger, Rachel, that we talk about all the time, whether it be with housing, whether it be, I mean, this is the price of a house. And so because of it, to not be able to do what you wanna do next, you've really gotta think long-term

because the truth is, with the call that you just talked about, the guy, he's not a bad guy. The friend. Yeah. The friend is not a bad guy. He was making payments. Something happened with his health, like life happens.

And there's no way we can have the foresight to understand what will happen with the housing market, what will happen with interest rates, what will happen with your health, will the relationship sustain? You don't know. Your career, yeah, exactly. You just don't know.

And this is so sad. I was telling Rachel during the break, you know, with my husband and I, we experienced this because it's always out of the goodness of somebody's heart, always. And you know, with student loans, you know, my mother-in-law signed student loans for obviously her son, which you would think, oh duh, of course she would do that.

But the truth is now it was on her credit as well. And that's part of her debt to income ratio. And when she was ready to buy a house, then we were affecting her because we still had, that wasn't something that was in our debt snowball yet. So you can see how it's not that somebody's the villain or doing something bad. It's just when you co-sign, I mean, it's why the Bible says that it's, I mean, really in simple terms, it says it's stupid to co-sign.

Yes, you're a fool. Yeah, you're a fool to do it because it puts you in a situation that you have zero control over virtually. That's right. Yeah. So I didn't want to go past that call too quickly because it's a big one. I know for Nick and Dan, this is their reality, but, but also, I mean, the answer is really, I mean, there's really not much, not much you can do. All he can do is save up to try to pay cash and lower that debt to income

ratio for his own loan. That for his own home loan. That's truly all he can do. Control what you can control. But at that point it is there. Yeah. Oh, so tough, Rachel. So sorry, you guys. That's not fun. Yeah. All right. Learn from their mistakes and from my mistakes.

And Rachel, you have some in there too, I'm sure. Oh, yeah. Last week. Jeff, we've got Jeff in Austin, Texas. What's going on, Jeff? Good to have you on the show. Well, I'm pleasured to be on the call. I've been listening to Dave and you ladies for probably 20 years.

Oh, wow. Before us then, Jeff, before we were co-hosts. Oh, yeah. So that's great. Thanks for calling in. Yep. Listening and I've been a student and followed Dave's principles pretty well. So, you know, I'm pretty happy today. I've got a lot of peace and contentment, a lot of blessings in my life, and that kind of leads me to the call today. Um, so a little backstory. So I, you know, I live, uh, I'm retired, um, about two years ago. And, um, I mean, I've done well in the market. I've been in business for 30 years.

And, um, situation I have is on behalf of my daughter. So my daughter has been married for two years and I had a beautiful family,, two little babies and my son-in-law, very bright, intelligent young man, my daughter is very strong-willed and independent, is some of the principles that are laid out, you know, they haven't followed to it the combining, you know, finances, etc. is one of them, which I was always very vocal. I kind of taught my daughter baby steps. Um, and so she's been a disciple.

She's getting there. She's got her, she's got an IRA. She's got her emergency fund. Um, she follows a very strict budget, but then not having joined finances, we just found out this week. Um, my son-in-law came to confession to all of us and had the day trading and essentially was financing some of this through credit cards and he stacked up about $60,000 in debt and lost all of the savings day trading.

And so day trading. And so that number doesn't scare me so much because I, I, I'm confident that they can work their way through the debt. The part that I'm struggling with as a father and a grandfather is I'm trying to stay in my lane to give my daughter as much support as I can. Um, she's never asked anything from me since she's graduated from college. She's, she, she does well at her job. Uh, in fact, she starts back to work from attorney leave this coming Monday. Oh, wow. So new baby.

Yeah. Born in October, beautiful little girl. So the challenge is for her and for me is all of this was hidden. She had no idea until she stumbled across some information looking at her credit score that did a drop and found out that one of the her card he had used and stacked and maxed that out and that's how she found out. And got it. So it's a truck. So he used her card without her knowing it. So they they are very the best way I can put it, their family is very close as far as the kids. They don't do anything other than take care of the kids and activities are great parents.

And I'm denounced to her. Yeah, he used her card and they do that. They might use each other's cards at times, but then he maxed it out and when her credit score dropped by 20 points. Well, you said he you said he came clean to the whole family. So that was after her that was after she had gone to him and said, Hey, this is what is this? And obviously, after they talked, then he felt the need to kind of say that to the whole family. Is that what you're saying? Yes. So he can he confess to her and then the day after

called me because again, we're very close. I mean, we talk consistently. I talked to my daughter or text almost every day. Are we FaceTime? Yeah. So Jeff, yeah. So this is, man, this is really difficult. And yeah, so for them, it's going to take a lot of, I think, professional counseling because this is, this is lying. I mean, he absolutely lied and did a level of gambling is kind of what day trading can end up being. So for you, I think being a dad there, not overstepping your bounds, this is their issues to work out within their marriage. And if they reach out for help, I think from an emotional standpoint, you're you can be there, but this is theirs to take care of. Don't meddle too deeply or it's actually going to make it

worse. I think they need to figure this out between themselves as a couple. So sorry. This is the Ramsey Show.