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The Ramsey Show

Don't Rob One Account To Pay Another! (Hour 3)

28 Jun 2023

Transcription

Transcript generated automatically by AI and may contain errors.

Chapter 1: How can I financially prepare for unpaid paternity leave?

29.427 - 51.121 Ken Coleman

Live from the headquarters of Ramsey Solutions, broadcasting from the pods, moving and storage studio, this is The Ramsey Show, where we help you win in your life, specifically your money, your work, and your relationships. I'm Ken Coleman. George Campbell joins me this hour. The phone number to jump in is 888-825-5225. George, take your money questions.

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51.642 - 72.981 Ken Coleman

I'll chime in, and then I'll take your work-related questions. Want to pivot? Want a promotion? You feel stuck? What do I do? How do I make more money? Should I launch the side hustle? All those questions, I'll take those, and George chimes in on those. So we are here for you. 888-825-5225. Let's go to Christopher in the city of brotherly love. That's Philadelphia, Pennsylvania.

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73.021 - 96.397 Ken Coleman

Christopher, how can we help? Hi, guys. Thanks so much for taking my call. You bet. What's up? So I'm in a little bit of a dilemma, really just torn. So my wife and I are expecting a baby in August, and it's our first, and we're super excited, super nervous. We're working the baby steps. We've paused the baby steps. My wife is going to be getting six weeks off of work.

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96.858 - 116.966 Ken Coleman

My company is offering 12 weeks unpaid leave. Um, when the baby's due, if she comes, uh, when she's due, we're going to have about seven, 8,000 saved on top of our starter emergency fund. And, um, I was planning to take three weeks off, but the closer and closer we get to the due date, I just, I really want to take more time and just enjoy this new experience.

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117.146 - 134.38 Ken Coleman

But I'm also torn because that means I'm out of work longer. So, um, I guess the question is, should I just stick to my three week plan, get back to work or would it be okay for me to, dip into that extra money so that I can afford to take more weeks off because we are planning to dump that extra money on debt.

136.745 - 143.379 George Campbell

Okay. And is she planning on taking just the six weeks and then going back to work, or is she going to take further unpaid time? What's her plan?

144.842 - 145.463 Ken Coleman

So...

Chapter 2: What changes are being proposed to credit card reward systems?

145.882 - 155.735 Ken Coleman

That is an option, but right now they're offering six weeks if she has a natural birth and eight weeks if she has a C-section. So it's probably going to stay within that six to eight for her.

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156.116 - 160.241 George Campbell

Okay. And are you thinking the same for you or are you wanting to take all 12 if you can?

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162.104 - 172.697 Ken Coleman

It's odd. I don't want to take more than her. I feel like... I almost feel wrong for that, but I feel okay with six weeks, but I also think three weeks isn't enough.

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173.118 - 176.885 George Campbell

And then what's your plan beyond that? Let's say you both go back to work after six weeks.

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178.789 - 183.718 Ken Coleman

We just get back to the baby steps and dump everything except for our $1,000 emergency fund back on debt.

184.079 - 188.427 George Campbell

Okay, and is it daycare? That's where my reservation is. What would the childcare situation be?

189.267 - 196.677 Ken Coleman

She'll be, her mom is going to be watching her for a significantly lower price than our local daycare. Got it.

196.797 - 209.393 George Campbell

Okay. That's kind of a big factor in all of this is what does the child care situation look like? And then the second piece is financially, what can you afford to do without setting yourself back financially? So you have some debt. How much debt do you have?

211.295 - 216.442 Ken Coleman

Currently about $75,000. It consists of student loans and car loans soon to be paid off.

Chapter 3: Should I use my HSA to pay off medical expenses or debt?

289.068 - 295.479 George Campbell

Right. Do you have to decide right now or can you go, hey, I'm gone for two weeks. I'm going to come back next week.

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295.6 - 305.763 Ken Coleman

It's pretty flexible. It's not like I have to give them a really long notice. My my district manager is all for me taking extra time and he, you know, I can let him know pretty last minute if I wanted to.

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306.103 - 319.933 George Campbell

Okay. Yeah. I might play it by ear. I'm going to take, you know, commit to the two or three weeks and beyond that say, I'm probably coming back to work, but we're going to have to play it by ear and see, you know, how mom and baby are doing and how I'm feeling about this and where we're at financially. And if we can take this hit.

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320.555 - 342.968 Ken Coleman

Yeah, I'm going to take a much more, I don't know what the adjective is here. I wouldn't go back financially at all for this. Not one penny. I wouldn't. Now, if mama and baby aren't healthy and there's a whole different situation, but if everything's okay, dude, get back to work after three weeks. I mean, three weeks is nice. I mean, baby doesn't even remember. You're fine.

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342.948 - 366.498 Ken Coleman

I would not suffer going backwards at all financially for this. Three weeks is enough for the dad in this situation. That's a very nice benefit. That's just me. But I got three kids. So, you know, I mean, there's a point in time where they don't even want to talk to you. So at this point, I wouldn't go backwards financially, me personally. I would not do that.

366.518 - 378.139 Ken Coleman

I don't think it's going to be worth it. I really don't. Okay. Okay. But I know I'm a little bit more old school. George is a little bit more in touch with whatever. I'm hip with it.

378.72 - 398.12 George Campbell

But also, if it was unpaid, that's a different situation. So I'm in a very similar situation as you, Christopher, where I'm going to be having a baby first in August. So we're going to be right alongside each other having a good time. And I plan on taking two weeks off, but it's all very squishy here for the guys in a lot of companies as far as parental leave goes.

398.601 - 404.632 George Campbell

And so I'm going to go as long as I can, but we've got live events, we've got work to do, and so I'm going to go back to work as soon as I need to.

404.672 - 424.233 Ken Coleman

Did I understand this correctly? He gets three weeks paid. Is that right? It's unpaid. Unpaid. Three weeks is what we've already planned for. So he's already planning to take a dip in income. Oh, you're not going to like my answer at all. I wouldn't take any of the three weeks. I come from a world where when we had our babies, I worked every day.

Chapter 4: Why are credit cards considered risky even if used responsibly?

424.293 - 445.119 Ken Coleman

And they walked uphill both ways, Christopher. No, I'm dead serious. I wouldn't even do that. I wouldn't do that. You'll be fine. I wouldn't take three weeks of unpaid leave. The baby's fine. The mama's fine. I don't have memory from when I was three weeks old. I'm going to tell you something right now, and I'm not knocking you if you decide to do this.

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445.219 - 460.42 Ken Coleman

So I'm having some fun with this, but I'm deadly serious about I wouldn't take any time off if you didn't have it. Not in this situation because you're going to go backwards financially. Is it going to break you? No. So it's your call, and I'm not judging anybody.

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460.76 - 471.864 George Campbell

Well, and if you guys were in a different place financially, the answer might be different. If you had zero debt, huge emergency fund. But because of the situation, man, I want to get to safety when I'm bringing a baby into this world. I want to have some financial peace.

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472.024 - 473.828 Ken Coleman

You're not taking any time off. It's up to me.

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474.55 - 489.909 George Campbell

You'll be fine. Okay. You'll be fine. You'll survive it either way, but I'm excited for you, man. Very good. Appreciate the call. George, I got to tell you, I might- It changed it for you when it was unpaid. A hundred percent. That's three weeks of not getting that paycheck.

490.19 - 510.969 Ken Coleman

I feel like I could say this, and if this offends some people, they can get over it. I don't know why dudes need to be taking maternity leave. What is it called? Paternity? Yeah. For the dudes? No, stop it. Go to work. You had nothing to do with it, Ken. I had something to do with it, but I'm just saying I need to be at work. That's fair. I don't get it. I don't get it. We all survive just fine.

511.009 - 519.401 Ken Coleman

This is the softening of America. I don't get it. Go to work. Philadelphia cream cheese over here, Ken. Jeez. I'm going to hear it for that.

Chapter 5: What is the best way to balance student loans with vehicle needs?

519.721 - 551.88 Ken Coleman

This is the Ramsey Show. Welcome back, America. You have joined the conversation here on The Ramsey Show. I'm Ken Coleman, joined by George Camel. The phone number is 888-825-5225. All right, headline here. Money Talks News. This is the article headline. Could new legislation hurt your credit card rewards? A group of lawmakers and lobbyists are gearing up to battle over a proposal.

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551.86 - 571.688 Ken Coleman

That could change the way credit card transactions get processed and possibly up in the credit card reward system. I know that's going to kill you, George. You like those points. Love my miles, Ken. You like the miles. You know me. The Credit Card Competition Act was introduced last week by a bipartisan group of legislators. By the way, bipartisan means Dems and Republicans.

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571.969 - 592.878 Ken Coleman

Just making sure people understand. Just a little civics lesson. And they were led by Senator Dick Durbin out of Illinois. And this is the second time he has proposed this bill. Did not go anywhere the first time. And so what is it? The details of the bill are all about network access and credit card transactions.

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592.938 - 610.619 Ken Coleman

Basically, every time you use a credit card at a store or online, the bank that issued you the card charges the merchant a fee. And this is called an interchange or swipe fee. The amount of the fee is set by the card processor like Visa or MasterCard. The merchants have no say in the matter because Visa and MasterCard dominate the network.

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610.639 - 618.308 Ken Coleman

So often the merchants pass the fees on to customers and that in turn leads to inflated prices.

Chapter 6: Is it worth taking out student loans for a high-paying career?

618.769 - 636.65 Ken Coleman

Now, if this is passed, George, it would require the nation's biggest card issuing banks to offer a second smaller network the opportunity to compete for transactions. There we go. The idea here is, is that by bringing competition in, Visa and MasterCard would have to start lowering their prices in order to get business.

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637.071 - 656.898 Ken Coleman

Merchants benefit, and then, theoretically, and I stress the word theoretically, they could pass along the savings to others, or to as many unsuspecting buyers that are out there, George, just keep that nifty little fee tucked down there towards the bottom of the receipt. So... How could it affect credit card rewards?

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657.579 - 680.629 Ken Coleman

One estimate predicts that this would save merchants about $11 billion annually. Wow. And so the hotly debated consequence would involve the rewards if retailers are able to select which processor they want. The rationale says they're likely to go for the cheaper option, and that could set off a chain reaction, hurting Visa and MasterCard's profits.

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680.649 - 681.149 George Campbell

Oh, boo-hoo.

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681.349 - 689.576 Ken Coleman

I know. I get it. But then they start slashing the points programs. So there you go.

689.616 - 694.02 George Campbell

Because that's partially how credit card companies give you all the rewards when you swipe.

694.401 - 702.928 Ken Coleman

Fat profits means they give some rewards. But if you eat into their profits, they're going to go, sorry, George, your miles program, cut in half.

702.908 - 712.607 George Campbell

I mean, just economically speaking, saving merchants $11 billion, what would that do for the economy? What would that do for prices that you all are complaining are so inflated?

713.528 - 714.911 Ken Coleman

Well, let's think about small businesses.

Chapter 7: How can side hustles help with financial stability?

758.059 - 781.92 George Campbell

American Express, 2.3% to 3.5%. There you go. And then you wonder why businesses have little signs that say, we do not accept American Express. Right. Because they're getting screwed every time you use that card, and they've got to dish out 3.5%. That's $3.50 for every $100 they're losing. Yeah. Which adds up, as you can see here, $11 billion annually is what merchants would get back. Yeah.

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781.9 - 801.663 Ken Coleman

I am a fan of this bill. Okay, I'm not going to go that far because I don't have the bill in front of me, and who knows what's in this bill. But I like that competition will be created because competition always serves the customer. Agreed. When you have monopolies or a couple of big dogs kind of strangling the competition. Yeah, Visa and MasterCard have been running the show for too long.

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801.683 - 811.957 Ken Coleman

They set the bar, and I like competition. I also like... Giving small businesses more money back, that's good for all of us consumers. Well, think about that. I like this.

0

812.138 - 819.809 George Campbell

If prices come down by 2%, guess what that means? You'll have 2% more in your budget to go get your own rewards.

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819.849 - 824.155 Ken Coleman

We hope. Not all companies pass that saving back on to us, the customer.

824.315 - 824.796 George Campbell

I hope so.

824.996 - 839.859 Ken Coleman

On the surface, I like the bill, and I love hearing you say that you support the bill. That's what America's waiting for. I love when you get involved in consumer politics. This is all about your pocketbook. Pocketbook politics. How about that? Pocketbook politics.

839.879 - 843.465 George Campbell

You just gave someone who's much smarter than me a great book idea. I might have.

843.925 - 848.132 Ken Coleman

All right, let's go to Brandon in Minneapolis, Minnesota. Brandon, how can we help?

Chapter 8: What should I consider before pursuing an MBA?

882.56 - 890.069 Matt Damon

But could I take money out of my HSA? Because I really want to start contributing 15% to my 401k.

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892.172 - 900.301 George Campbell

I think this is a bad plan, man. Do not rob yourself. Because this is a non-medical purpose.

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902.364 - 909.793 Matt Damon

Well, but I'm just saying like from all the bills that I paid out of my pocket so far, I'd be just reimbursing myself.

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911.034 - 912.516 George Campbell

From the money you contributed to it?

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914.2 - 917.269 Matt Damon

No, no, no, from all the medical expenses that I've paid out.

917.289 - 922.345 George Campbell

Oh, I see. So you'd say, I'm going to actually submit the medical expenses and get reimbursed for this.

923.769 - 924.712 Matt Damon

Correct.

924.732 - 927.4 George Campbell

Versus leaving the money in there. It's invested right now?

928.493 - 936.285 Matt Damon

No. No, I haven't gone that far yet. I just started the whole HSA plan for my first time last year.

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