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The Ramsey Show

Don’t Get Trapped in the Cycle of Debt!

26 Feb 2024

Transcription

Transcript generated automatically by AI and may contain errors.

Chapter 1: What is discussed at the start of this section?

29.36 - 49.003 Jade Warshaw

Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I am Jade Warshaw, one of your hosts for the day. Joined next to me is Dr. John Deloney. What up? Your other host for the day. That is his voice that you hear if you're listening on podcast.

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49.544 - 68.527 Jade Warshaw

And hey, if you're listening on podcast, try checking out the YouTube show because it's amazing. But if you want to talk to us, give us a call. The number is 888-825-5225. We will chop it up. We'll talk about your life, your money, and the good doctor is in so he can talk to you about all those things that involve relationships and mental wellness. Love it.

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68.828 - 71.511 Jade Warshaw

John, let's get to these phone lines right away, shall we?

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71.791 - 72.172 Dr. John Deloney

Let's do it.

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72.192 - 76.377 Jade Warshaw

Let's go to Brian in Los Angeles, California. Hey, what's going on, Brian?

77.217 - 96.396

Hey, how's it going, guys? Thank you for taking my call. So I got a quick question. I'm on baby step two. I have one credit card left with about $12,000 on it, and then I have a car loan with $49,000 left on it. My wife suggested we refinance the car loan when we're done with that other credit card to try to get the payments higher and paid off sooner.

97.076 - 102.942

But once we're done with that credit card, I believe we might be able to see double or even triple what the payment is.

102.962 - 103.603 Jade Warshaw

Right.

104.624 - 107.106

I was thinking of what would be the best option for that car loan.

Chapter 2: What options do I have for paying off my car loan?

245.748 - 252.216 Dr. John Deloney

Zipping on grape juice. Lay back. It would be not cool at all. At all. Not cool.

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253.637 - 254.779 Jade Warshaw

But it'd get you out of debt.

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254.799 - 270.157 Dr. John Deloney

There's no way you're going to do it. I know you're not going to. I know you've got a $7,000 car, $9,000 car, and you've got this nice suburban out there. You can fit everybody in it. You kind of feel like a little bit of a miniature baller. You're not going to sell it, but Jade and I are both telling you this would be a way to accelerate freedom in your house.

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271.178 - 272.86

Well, what if I'm upside down on it?

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273.221 - 274.002 Jade Warshaw

How upside down?

274.022 - 278.482

It's not worth it. About, I think it's like $7,000 or $10,000.

278.923 - 281.312 Dr. John Deloney

Sweet. Take one of those cars out of the driveway that's just sitting there.

281.714 - 283.5 Jade Warshaw

Yeah. You have options.

284.594 - 289.422

Yeah, I was thinking of doing that, sending one of the cars that we do have that paid off.

Chapter 3: How can I effectively manage my family's financial contributions?

733.494 - 744.789 Dr. John Deloney

Here's our values outside of this pot. How are we going to live those things out? And he is saying, I don't care what your values are. I'm going to go do what I want to do when I want to do it. That's not good.

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745.049 - 745.309 Jade Warshaw

Yeah.

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745.45 - 745.63 Dr. John Deloney

Right.

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746.411 - 759.19 Jade Warshaw

Yeah, I agree. I also think, though, like, where do they start? Because on the one hand, you say, I think he if he just contributed anything. But reading this, I have a feeling if he if he made $40,000 a year, she'd be like, no, that sucks.

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759.98 - 760.601 Dr. John Deloney

I bet not.

760.921 - 761.502 Jade Warshaw

You bet not?

761.522 - 782.214 Dr. John Deloney

Yeah, I bet if he did anything. I think there has to be a, this is one of those, I normally will say, you gotta stop the dance, right? You gotta turn the music on, turn the music off, turn the lights on. What I mean by that here is, this is a moment where you say, hey, starting next month, I'm pulling, I'm gonna open my own checking account. Oh, you think so?

782.234 - 800.331 Dr. John Deloney

And we're gonna split this thing up and we're gonna have a hard conversation about contribution and participation and what love looks like in our home. Because this is a recipe for not just a divorce. This is a recipe for an implosion. Somebody's going to do something dumb if they're not already doing something dumb.

800.351 - 803.318 Jade Warshaw

Okay, so that's step one. What's step two? Some sort of counseling, right?

Chapter 4: What are the best strategies for handling family loans?

1686.661 - 1691.871 Dr. John Deloney

You're going to change the terms, sit down and change the terms like adults. But you got to go first and say, I messed this up.

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1697.217 - 1709.551 Jade Warshaw

All right, all right. You're listening to The Ramsey Show. I'm Jade Warshaw. This is Dr. John Deloney. We're taking your calls, America, or wherever you want to call in from. Just know that the number is 888-825-5225.

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1709.731 - 1734.63 Jade Warshaw

John Deloney, I'm so excited because tomorrow morning, George Camel, fellow Ramsey personality, George Camel and I are going to be doing this really cool bonus hour that we're calling the Every Dollar Bonus Hour, where we're coming in at... nine in the morning. Yeah. 9am Tuesday, the 27th. And we are helping people live on YouTube with their budgeting questions.

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1734.99 - 1750.191 Jade Warshaw

Now you might be thinking, okay, Jade, what's the big deal? That's what the Ramsey show does. This one is different because A, we're going to have every dollar pulled up live. Like they're showing it on the screen right now. We're going to have every dollar pulled up. So when you ask the question, we can actually show you, you'll be able to see it

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1750.171 - 1766.871 Jade Warshaw

In real time, like, hey, Jade, you know, I have a problem with irregular income. What am I supposed to do? We'll actually be able to show you in the app every dollar how to do it. You can ask whatever question you want and we'll be able to actually let you see it, which I think is a big piece to learning. It's one thing to hear it. It's another thing to see it happening.

1767.292 - 1772.618 Jade Warshaw

And so I'm really excited because I think that's going to really help people get their budget and their money on track.

1772.598 - 1792.362 Dr. John Deloney

once we've all been to like work presentations where some guy gets up and starts talking you through like uh like a tech thing he's like when you're gonna want to click on the third box and by the time i'm snooze yeah i'm just falling out so yeah i've been able to watch you guys do this will be fantastic i kind of feel like you made it sound like it's the same thing though

1792.561 - 1802.897 Dr. John Deloney

No, I'm saying like, if I'm sitting here, you're like, okay, when you get to every dollar app, you're going to open it up. You're going to like, ah, you already lost me, but Hey, you guys are going to sit here and answer questions in real time. I'm going to show you now I'm in on that.

1803.197 - 1821.604 Jade Warshaw

And every dollar is really, it's just, it's intuitive. It's brightly colored. Like, I feel like there's things that are going to make you stay engaged. Plus it's your question. It won't just be us just talking about it. Like we're not going to just be yapping about budgets. It'll be because of your questions. So come join us tomorrow, Tuesday, February 27th at 9 a.m. Remember, it's on YouTube.

Chapter 5: How can we align our financial goals during challenging conversations?

3229.889 - 3239.399 Dr. John Deloney

You're both great people. It's just a matter of saying, okay, for this season, can we align our energy in this direction? That's not the direction we want to go forever, but just for right this second.

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3240.04 - 3248.168 Dr. John Deloney

And you said something really important that I think everybody needs to hear when you're heading into these hard conversations are the ones that you're kind of apprehensive about with your spouse and,

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3248.148 - 3274.746 Dr. John Deloney

start with hey what about this scares you and it could be i don't want our kids to get behind because if they get behind in school then this they're not going to algebra and then all of a sudden they're not going to get into the college okay we're going to be okay there or maybe it's something more um existential maybe it's bigger maybe it's more x or y or z but let's start with hey what's scaring you to death about this not here's the plan let's do the play you see what i'm saying

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3275.823 - 3278.249 Matt Damon

Yeah, I can come across the way you just said it.

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3279.131 - 3279.733 Dr. John Deloney

I know you can.

3279.773 - 3281.978 Matt Damon

I try to bite my tongue a little bit, you know what I mean?

Chapter 6: What fears should we address when discussing debt with a partner?

3281.998 - 3303.576 Dr. John Deloney

Yeah, totally. But here's the deal. By not biting your tongue, your wife is looking for some sort of strategic direction, and because you hem-haw around it because you don't want to come across as a guy who's an active military guy with, here's the plan, let's execute the plan. So you end up handing her no plan and that's when fear takes over sometimes.

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3303.596 - 3323.005 Dr. John Deloney

So let's sit down and co-create one together and start with, hey, what scares you to death about this? You say, we owe 60 something thousand dollars and I can't breathe. And I don't feel like I'm being a good husband or a good dad chasing this debt around. Now you go. What scares you to death? Here's our kids, someone else raising our children. All those things factor into it.

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3323.386 - 3332.221 Dr. John Deloney

And once we get the fears out of the way and on the table, everybody's got fears on the table, now we can start together co-creating a plan. And then we're just going to follow the plan and knock it out. You'll get there.

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Chapter 7: How can we co-create a financial plan together?

3332.281 - 3332.982 Dr. John Deloney

What do you think, Jade?

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3333.13 - 3349.853 Jade Warshaw

I love that. I think just remembering everything is short term. It's temporary. It's not going to be like this forever. And just always remembering that some people are just afraid of the unknown. I've never had to work this hard before. I don't know what it's going to feel like. I've never had to have two jobs. And that's fair and that's OK.

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3349.893 - 3361.378 Jade Warshaw

But I think together you guys will be able to work through that. This is The Ramsey Show. What's going on? This is The Ramsey Show. Thank you for listening.

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Chapter 8: What steps can we take to overcome overwhelming debt?

3361.458 - 3378.717 Jade Warshaw

I'm Jade Warshaw. He's Dr. John Deloney. Give us a call. The number is 888-825-5225. And we'll do our best to hook you up with the right advice for your situation. Let's go straight to the phone lines where we've got Chantel in Charlotte, North Carolina. What's going on, Chantel?

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3381.34 - 3413.055

Hey, I have Kind of two questions. I just recently cashed out my retirement from an old job. I paid off my car because I had a $700 a month car payment and I was just kind of really struggling like having to work overtime just to make my regular bills instead of working overtime to pay extra. Okay. So I took a pretty big hit. I had about $34,000 in that account.

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3413.976 - 3434.579

They took 20% of it, so I was able to cash out about $26,000. So I used that in combination with the money that I had in savings, and I paid off my car. So now I'm just questioning, how do I prepare this next year for tax time? I know there's going to be like a 10% fee.

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3435.54 - 3436.561 Dr. John Deloney

At minimum.

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3436.621 - 3460.884

Yeah. And also... And also, I'm questioning, do I turn around and sell this car and put that money towards my other debt? I do have another 05 Camry that I bought in cash just to run around for work because I drive a lot of miles, but it has 208,000 miles on it.

3460.964 - 3473.72 Jade Warshaw

So you would cash out your whole 401k to pay off a car, then turn around and sell the car? to pay off another debt? That's what we're talking about doing.

3475.003 - 3479.254

Yeah. So I'm torn between, do I keep the car? Um,

3480.213 - 3511.466 Dr. John Deloney

Whenever you're in the medical field and you find yourself going down a treatment and the treatment is making everything worse, even if you don't know what treatment to go to, the first thing you do is stop doing the thing that's hurting you. And right now you are spinning out. Okay. You're making some long-term decisions with a very short-sighted, um, with, with a very short-sighted lever.

3511.807 - 3517.573 Dr. John Deloney

Okay. So like, just take your hands off the wheel, put your, take your foot off the gas and just slow down for a second. Okay.

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