Chapter 1: What financial challenges are discussed at the beginning of the episode?
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Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union Studio, this is The Ramsey Show. I'm George Campbell, joined by my pal, Dr. John Deloney, and we're taking your calls at 888-825-5225. You jump in, we'll talk about your money and your life. Cassandra kicks us off in Toronto. What's going on, Cassandra?
Hello, gentlemen. How are you today? We are doing great. What ails you today? How can we help? Nothing ails me. I am a domestic abuse survivor, and the majority was financial abuse. How long ago was this? Six years. Wow. Yeah. It was the scariest, best thing I ever did for me and my three children.
To get out of that. To leave, get out of that mess.
Yeah, yeah, no, it was, yeah, thank you. You know, I started with nothing, and I built everything. And now it's kind of crazy to call in about this. I'm making about $8,000 a month.
Congratulations.
And thank you. Honestly, I work full-time, I go to school full-time, and I'm a single mom. So you just...
keep going you know you're like it's it you're at a place so if you haven't already take a moment and just go outside and um just like be proud of yourself because you couldn't have imagined this six years ago when you're scared to death and you're taking a leap into nothingness right and so yeah man it's you're a you're a lighthouse for other women trapped in similar situations so congratulations
Thank you very much. So my challenge right now is I want to give my kids the world. About two years ago, I realized that I wanted to change family patterns. Both of my parents are in their 60s, and they don't have anything, and there's so much debt. And so in the last two years, I paid off about $40,000 worth of debt. Very cool. Awesome. Thank you. And I'm trying now. The last thing is my car.
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Chapter 2: How can I set a realistic budget for Christmas gifts?
He's going to take all the cool stuff that's cool. But you taking your 15-year-old out, I mean, you're all three of them out and saying, I've been scratching and clawing, and I have this fantasy in my head that y'all will only like me if there's tons of presents.
I've got to be a better steward of this money this year, and so I want y'all to give me one or two things that y'all really, really want, and I'm going to try to make that happen. But Christmas is going to look different this year, and I'm almost going to guarantee you that they'll be like, Mom, we're good. We're good, Mom. And if they don't, if they're like, that's ridiculous, well, they're 13.
Good grief. They're supposed to say stuff like that. You get what I'm saying?
And they have no concept of what things cost. And so that's another piece of the puzzle. For better and for worse, they go, well, I want a PS5 and I want a $10 pair of shoes. They're like, okay, well, those aren't two things that go together. And so I would set a budget. And that becomes how much we can spend on Christmas. And so it doesn't matter what they want.
It's what you can actually afford that dictates what happens this Christmas. And the other thing I would encourage you to do is focus on something experiential versus something material. I saw a great video and the mom asked her daughter, hey, what did you get for Christmas last year? The daughter blanked. She couldn't think of one thing. And she said, where did we go on vacation last year?
She said Lake Tahoe. Immediately. And so you've got to think in terms of what are they going to remember? It's probably not a thing that's going to end up in a closet or at Goodwill six months from now or two years from now. And so be thoughtful, be creative, but don't think it has to be a certain dollar amount for it to matter.
And you free yourself when you take your kids out and you have this conversation with them. You're free. Because right now there's a cloud, there's a secret that you think they will only feel good... If you do X, Y, and Z, take them out and just paint them a picture. This year, I'm going to be different. And give them that opportunity. But in that conversation, you're going to free yourself.
And like George said, most kids, we're running up on a clock. So go have that hard conversation. Have it direct and free yourself.
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Chapter 3: What steps should I take if I'm house poor?
All right, I have $300 as an HOA a month, which is a lot, I think, but I have a car loan that's $500. I have about $40,000 in consumer debt, like credit cards and a loan that I consolidated. Okay. $40,000. So let's picture this world for Brie. Let's say that you got rid of all of the consumer debt, the car loan, the credit cards, all of that, the consolidation loan.
Do you think you could breathe easier, cover all your bills, and have some left over? You even saying that makes me feel better. Good. That's a world that's very much available to you. It's at your fingertips here if you just utilize this great income you have and start focusing on one thing instead of seven good things. Because investing for retirement is a great thing.
Paying off debt is a great thing. Owning a home is a great thing. You've chosen to do it all at once, which is why you feel overwhelmed. So let's just picture you pausing your 401k contributions. What percentage of your income are you currently contributing? I think I lowered it to six. It was 10. Okay. Well, that's $7,200 a year that could be going towards paying down that debt.
You see what I just did there?
Yep.
Yes. We just created some margin for Brie. And remember, this is temporary. How old are you? I'm almost 60. Okay. So can we picture Bree on her 62nd birthday, completely debt-free, now maxing out retirement instead of having to ratchet it down?
Yeah, I could picture that.
That's the future I'm seeing as well. And so what this looks like is taking down your 401k, cutting your spending to the bone for 18 months max is what I'm thinking. Probably less because you have a great income, especially with those bonuses.
If you pretend those bonuses don't exist and anytime it comes in, you throw it right at the debt, the smallest debt in front of you, you're going to be debt-free really quickly. Agreed? Wow. Well, it sounds good coming from you.
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Chapter 4: What should I prioritize when managing my elderly parents' finances?
And here's what you're going to get. You're going to get a whole bunch of little wins. And if you have one big giant chunk at the end, like you have the big $40,000 cloud hanging over your head, here's what we're going to celebrate. Every time you get that first number from 40 and you get it to $39,999, that's a huge win. And then we're just going to try to get a two in front, $29,999.
And we're going to whittle that sucker down. The only question you need to ask yourself is this. You're going to be 62, okay? Do you want to be 62 and owe nobody anything? Or do you want to be 62, a little more fried than you are right now? That's the choice.
No, I want to be free. And, yeah, I work hard for my money, and I want to celebrate myself.
Never mind. You know what I mean? Celebrate yourself. Nope. Not with another shiny thing you can't afford. Celebrate yourself with peace and freedom, which I think are the two most elusive things in American households today.
Thank you, guys. I appreciate it. I really do.
Okay, hang on. We're going to hook you up.
We're going to hook you up.
We're going to take care of you. Here's what we're going to send you. Number one, we're going to send you the digital FPU product. I want you to watch all nine videos at your house. And if you've got kids still living with you, they have to watch it as a part of their rent, okay?
Yeah, yeah.
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Chapter 5: How can I set a realistic budget for holiday spending?
You're performing it without actually doing it. We're heading into the holiday season. If you've got to have that hard conversation, have it. Now is the time. If you realize, I can't even afford the Christmas presents I'm about to start buying, then have that reality.
Chapter 6: What should I do if I'm house poor and overwhelmed by debt?
Go right through the middle of the discomfort. Talk about it at Thanksgiving.
Yes. Not at Christmas in a blow-up argument. That's exactly right.
Chapter 7: How do I help my elderly parents with their financial management?
You set the boundary. You set the expectation. And that's really going to create the best life for you. Instead of being resentful, I'd rather you feel a little guilty. That's the best case scenario.
Chapter 8: Should I sell my home to help my child buy a house?
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Well, John, the old dog's got some new tricks. We've done something different on The Ramsey Show and started introducing video calls. So now we don't just get to hear from the audience. We get to see their beautiful faces. So if you want to be a part of that, you've got a question you'd like to submit and you want to be on video, we'd love that. Go to ramseysolutions.com slash ask.
Let us know your question. And in the subject line, just put video call so our team knows that you are willing and able to be on video. And the experience has been really cool so far. So we'd love more of those video calls. Go to ramsaysolutions.com slash ask subject video call. Looking forward to talking and seeing you guys. All right, let's go to Grace in Jacksonville, Florida up next.
Grace, how can we help today? Hi. I'm sorry. I'm really nervous to meet you guys. I am 19, and I want to know how to best prepare and invest in my future, even though I make a low income, while having debt and helping my mother pay bills. Wow, that's a lot to take on as a 19-year-old. What kind of debt are you in? It's just credit cards. Okay. How much? Um... $3,375. Okay. And what do you make?
I work two part-time jobs and a couple other things on the side, but I still only make about $28,000. $28,000. Okay. And are you in school? What's going on on the other side? I am in college. I'm almost done with my associates in arts degree, and then I want to go into communications.
Okay.
Great. Is that part of your undergrad? Yes. Okay. So it's a four-year situation? Two-year, and then I'm going into a two-year university for the bachelor's. Great. Okay. And are you cash-flowing that, or are you going into student loan debt? I don't have any student loans. It's all financial aid paid for, and I have Chapter 35 from my dad being in a military. Okay, great.
That's one of my goals for you. You're talking about how to invest in myself. It's to avoid student loan debt. It's a plague among young adults, and it's going to propel you forward if you can do this debt-free. Now, tell me about mom. What's going on with you helping mom with expenses? So my parents are divorced, and I live with my mom.
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