Chapter 1: What is discussed at the start of this section?
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From the Ramsey Network and the Fairwinds Credit Union Studio, this is The Ramsey Show. Rachel Cruz, Ramsey personality, number one best-selling author, co-host of the Smart Money Happy Hour. My daughter is my co-host today. The phone number here is 888-825-5225. The call is free and some say the advice is worth exactly what you pay for it. Liz is with us in Charlotte, North Carolina.
Hey, Liz, what's up?
Hey, how are you?
Better than I deserve. How can I help?
I'm calling because about three years ago, I had discovered that my husband had amassed a pretty substantial amount of debt, just kind of a combination of bad decisions, bad luck, overspending. And I had kind of stupidly let him, you know, he was bringing in most of the money. I have let him take control. So, um, about three years ago, I started managing our finances and, um,
I've been able to kind of rein it in some and make some progress, but my, my job that the past two years have been pretty steady has slowed back down. And so every, for the last three months, we're about $2,700 short a month. I know. And I just, I don't really know what to do because I've put our, Household expenses to nothing.
I've gotten rid of the only two things I could still get rid of are our home security system, which is $25 a month, and then house cleaning for my mental health. But other than that, I've gotten rid of extras.
So how much debt is there?
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Chapter 2: How do I address my husband's hidden debt?
She's not at 90 anymore. She's at 60.
She's at 45, and your husband's 160.
Yeah, but the – so – But even at a $160,000 income, there should be more. Yeah, are you putting money in a 401k still?
He does. I don't.
Well, you manage the money now. So, yeah, we are putting money in his 401k. Okay. Yes. Okay. And what else is coming out of your checks other than taxes?
Health insurance. Mm-hmm. He has this debt where he... some debt consolidation company.
And that comes out of his check?
That comes directly out of his, well, it comes, it just auto-drafts out of our account.
Oh, that's a checking account. That's after $7,700 went in, and I'm still trying to find like $10,000 a month that's missing. And so far, the only place I've found it going is a 401k.
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Chapter 3: What financial options exist for my mother's retirement?
And you definitely have to know what's going on because we can't count on him. So that's thing one. Thing two, then, once you're doing that, then I want you to go find where all this money is going. Stop his 401k immediately. You don't go $2,700 in the hole while funding a 401k. That's not logical. That's borrowing money to put it in a 401k. No, I'm not doing that.
So stop his 401k in the morning or tonight or whatever. Stop yours. No saving money. No investing money.
And I'd be selling the cars at this point.
That's the next one. Sell the cars. These cars have got to go. They're crazy in this situation. But you've got to go find where all this money is going. Because when you add this up and look at the gross amount that you guys have been making and you're only getting $7,000 home, something's wrong. Or if you've got a huge tax refund, something's wrong. There's gaping holes in this.
Well, and I think a big part of his 160 is the bonus, which they use to pay off the credit card. So that's not in the paychecks either month either.
You've got to figure out where all this is going because it doesn't add up to $250,000. And that's what we've got to get to.
Okay, guys, let me ask you something. What would it take for you to switch your bank?
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Chapter 4: How can I navigate family business transitions?
Because if you're still earning next to nothing on your savings, you need to check out Fairwinds Credit Union. And I know what you're thinking. It might sound like a hassle. Moving your direct deposit, updating bills, getting a new debit card. Feels like a lot. But here's what most people don't realize. Staying where you are could be costing you hundreds of dollars every year.
Y'all, the average savings account pays less than half a percent. So let's say, for example, you've got $20,000 saved. You might earn around $70 a year. But with a Fairwinds high-yield savings account earning 3% APY or more, that same money could earn you over $600. And that's real money that you can use towards the baby steps. So don't let temporary comfort keep you stuck.
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Jay's in Oklahoma City. Hi, Jay. How are you? I'm doing well. I'm doing well. How are you all? Better than we deserve, sir. How can we help?
Yes, I'm just calling. I am 27 years old. I still currently live with my parents. I am $35,000 to $45,000 in debt. That's with credit cards, two vehicle loans, and personal loans. And I make roughly $3,200 to $3,500 a month. I work two jobs, and I'm going to school. And I'm just very overwhelmed, and I just feel like I'm financially behind in life.
Wow. So did you say you had two car debts?
Yes. Okay. They, it's a 2021 Hyundai Elantra and a 2018 Denali. The Elantra, I have about 11,000 left on it. The Denali, I have 21,000 left on it. Are you married? I am not.
Why do you have two cars?
The 2021 Hyundai Elantra is mine. The 2018 Denali is my father's. He is disabled, so he is on a fixed income, and he had no vehicle. He had one, but that broke down on him, and we both needed reliable cars. So that, I believe, looking back on it, was too much of a... burden to take on.
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Chapter 5: What financial advice is given for someone facing debt?
That's how smart it is. It's not just a little bit smart. It's like way smart.
Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits.
Chapter 6: How can life insurance and disability insurance protect my family?
You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes.
Yeah, and that's why you've always said that having term life insurance from Zander is essential because it protects your family if the worst happens.
Yeah, that's right. You need 10 to 12 times your income in coverage.
Chapter 7: What steps should I take if my parents want to transition a family business?
No gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long-term disability insurance.
Yeah, it's important to understand the difference between them. Life insurance steps in when you die. Disability insurance steps in while you're alive but can't work.
Chapter 8: How can I support my mother in her financial recovery?
So it replaces a large part of your income so the bills still get paid while you get back on your feet.
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Protect yourself, protect your income, protect your family. Ethan is in Atlanta. Hi, Ethan. How are you? Good. How are you? Better than I deserve. How can I help?
Hey, so I'm going over my mom's finances with her. She's 55 years old, has only $19,000 in retirement and a ton of consumer credit debt and a HELOC loan. And I built her a spreadsheet just to get everything out in front of her so that she could see what her finances look like. And I was trying to teach her the debt snowball method.
She's got about $200 that she could start throwing at consumer credit debt. But I was wondering if there's a quicker way that we could get her. I say we, my little brother and I, we're trying to get her positioned better financially before she kind of hits that retirement age.
That's very neat. And she's accepting your coaching. That's interesting.
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