Chapter 1: What is the story behind cosigning two cars for my mom?
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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 Camel, joined by Ramsey personality, Jade Warshaw. And we're taking your calls at 888-825-5225. Arlie's going to kick us off in New York City. What's going on, Arlie? Hello. Did I get that right? Is it Arlie?
Yes, it is Arlie.
Okay, great. What's happening?
So when I was around like 20 to 21 years old, I had a pretty good credit score of like 800. And then my mom kind of guilt tripped me into being a co-signer for one of her cars. And then the following year, there was a second car that I was unknowingly signed into when we refinanced The first car. And I think about two years after that, both cars have been repossessed.
And the first car was, there's a judgment on that car. And it's under my name. Oh, boy. And I guess. And there's also a personal loan that my mom kind of made me take out around the same time.
What do you mean made you? Yeah, what's that sound like? Are you against your will? No.
Well, she guilt-tripped me into doing all of that.
Yeah, but you're a grown person at 21 years old.
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Chapter 2: How did the repossession of the cars affect my finances?
Let's imagine that she's not going to help you solve any of this. And your name's on the debt, and so they don't care about where she is and if she's going to re-find her name. You just need to act like this is debt I took on and I got to clean the mess up.
And it's a learning experience. So I'd be looking to settle these for, you know, 50, 40 to 50 percent of the actual amount owed. That's what I'd start with. And so that would be your goal to save up that cash, because anytime you're going to settle a debt, you've got to have the cash in hand, ready, lump sum. Yep. And you want to get it all, all those stipulations in writing.
And you really want to laminate it and keep it forever because you never want these things to come back and bite you in the butt. How much is the personal loan? Is that another two or three thousand?
Yeah.
Yeah, $2,000. Okay. So $2,000 on the personal loan. How much do you and your husband earn every month? We, every month would be about $6,000, $7,000. Okay. And is he on board in the idea that we're going to clean up this mess? Or do you feel like it's kind of on you to do it on your own? I think personally, I don't want him to take on the burden because
Can I tell you this personally? I don't think you're going to be able to clean this mess up on your own.
No, I know, but I think he does listen to The Ramsey Show, so I do know that he'll be willing to settle this with me. If the tables were turned, would you be willing to help him? Of course. Okay, there you go. So as long as you know that you're not asking more of someone than you would want asked of yourself, then I think it's okay that you...
participate that you receive that if he's willing to do this with you which i think he should by the way the hardest part is going to be swallowing your pride and going you know what i know i feel guilty and shame about this but i'm going to bring him in because this is marriage yeah no he's actually helped me because um when we first got married we settled i think about 2 000 of credit card loans that my mom also racked up so okay has any of this been done fraudulently
She's not able to just like forge your signature. It sounds like you were there. You at least signed some documents on most of these loans.
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Chapter 3: What should I do about the debt from my mom's loans?
So I hate that that happened, but this is such a learning opportunity for you. No more debt, no more co-signing. You pay this off. Never again is really the line in the sand that you need to draw.
Have you frozen your credit with all three bureaus, Arlie?
No, I haven't.
You need to do that yesterday. And while you're at it, pull all three credit reports from the bureaus. You can go to annualcreditreport.com. Do it for free. Never pay for this. You need a full picture because who knows what else is out there before we can move forward and do this debt snowball and settle these debts.
Let's get a real full picture of what's going on and freeze your credit so nobody, you or your mom, can be opening up debt in your name ever again.
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Chapter 4: How can I improve my financial situation after marriage?
That's right. Wishing you the best. This is not a fun situation, but I... I'm very confident you guys can clean this up if you combine your finances together and attack this as a team.
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Barbara's in New York City up next. Barbara, welcome to The Ramsey Show.
Hi, thank you for taking my call.
Absolutely. How can Jade and I help today?
So my question is, how can I convince my husband to combine our finances?
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Chapter 5: What are the signs that it's time to replace your car?
Well, this is a bad idea.
Yeah. And, you know, here we're always telling people to get a cash car, a beater. And so they're thinking, OK, I'm doing a lot of repairs to this car. You know, is it too many repairs? Have I hit that point where I've just.
Is it in the shop more than I'm actually driving it? Exactly. That's a problem. Probably time to replace it. And then are the repairs around crucial safety items or is it like this would be nice to have or it's cosmetic or just it's an annoyance. Yeah. And then your personal budget matters, too. Do you have the money? Can you even afford a different car?
Right. You might not have a choice.
So I thought it would be fun to actually pull up Ask Ramsey Live. Our folks in the booth have it running back there. And let's use a real-life example because what's cool about Ask Ramsey is it will personalize the advice and ask you questions to dig in just like we would on the show. So let's try it out. Let's assume I have – this is a real car that I owned not too long ago, a 2009 Honda Civic.
And it's worth about $2,500, which hurts my heart. And there's a transmission repair needed for about $1,500. Wow. All right, so those are our numbers. The car's worth $2,500. Repair is $1,500. So they're going to input that, and it's going to be asking them some follow-up questions. Here it is. What's the estimated repair cost? It's $1,500. And it says, how does it compare to your car's value?
Well, the value is currently $2,500. So the goal here is Ask Ramsey will kind of help us make a recommendation on what we should do next based on our situation. And it does an incredible job. Our team has been walking us through this. I am so impressed with how on-brand it is.
It's the advice you would get right here on the show, but you don't have to call in and hope that you can get through the phone line. So this is something you guys can jump on ramseysolutions.com and do for yourself right now. So here's what it says.
If it's $1,500, gets your car running reliably for another year or two, and there aren't any other big repairs coming, fixing it is likely the best move. I couldn't have said it better myself.
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Chapter 6: How can Ask Ramsey help with real-life financial decisions?
You can go back and reference it and continue the conversation. So here's my challenge to you guys. I know you've got questions. So jump onto ramseysolutions.com. Try it out for yourself. Give Ask Ramsey a test spin. It's right there on the homepage. Go to RamseySolutions.com. You'll see a big open kind of search bar there as you scroll. And that is Ask Ramsey. You'll see our faces next to it.
Or click the link in the description if you're listening on podcast or YouTube to check it out. Again, that's RamseySolutions.com. The tool is Ask Ramsey. We are very excited to see how it helps so many people that we can't get to. The inbox is full for The Ramsey Show. True that.
simply don't have the time to get to so think about this it's like google but a thousand times more powerful because it's not giving you a bunch of random answers that you don't have to sort through it exactly so check it out it's great lori is in memphis tennessee up next what's going on lori
Hey, thanks for taking my call today. Sure. My husband and I have always been on the same page financially. We've been very blessed, and we are debt-free. We have $2.8 million invested. Woo! We take out just a minimal each year to live on, but we do have some fun. You know, we like to travel.
We've purchased a new car with cash, different things like that, but we have a little bit of a hard time letting go, and...
just living you know afraid of what might come around the corner how long is that going to last us um we retired early at 55 i'm 58 he was 60 so we do have a ways to go you know with health care concerns and everything coming up sure um you guys could go another 35 plus years yes so it's wise to be thinking about that and you said you have 2.8 in your nest egg how much are you pulling off it every every year
Every year together, we're pulling out $79,500.
Okay, let me give you the numbers on that. That's 2.8% of your portfolio you're pulling out every year. Yes. And if you talk to any financial advisor in America, they would tell you that you would never run out of money if you were taking out 4% or even 5%.
You know, with health care costs the way they are today... Even with health care costs. Our insurance down and... It's just difficult for us to let go.
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Chapter 7: What should I consider before gifting my house to my child?
And it's kind of like, all right, our life didn't change. We're not broke.
I know. We've always paid cash for cars. Our home is paid for. We put our daughter through college. She's graduating with a four-year degree and her master's degree this May. Amazing. And she's going to be debt-free from college. So we've done the right things. It's just at this point, we're still young to be retired.
And, you know, we're just afraid of taking that next step and kind of letting go a little bit. I mean, even to the point of, you know, we thought about putting in a swimming pool, for example, and that's $70,000. And we said, we can do without the swimming pool. I think what George says is a really good exercise.
When you feel fear about something, you've got to decide, is this something I can solve? Like usually the ones that are kind of like vague and kind of ambiguous, oh, if I spend this money on the pool, I'm going to ruin everything. Well, what's that mean? Drill that down and try to make it a more realistic fear so that you can actually solve for it. What are you afraid is going to happen?
And one of the things you mentioned is health care. Are you afraid that a $70,000 pool is going to keep you from having health care in your later years? Well, then you have to ask yourself, is that actually true? And when you say, no, it's not, because I ran the math, it's not true. Now we're talking about true versus false. It's not even a thing of fear anymore. Is that even true?
Can I give you something that's true? If you made 17% on $2.8 million, that's $476,000. Oh, I know. That's multiple swimming pools, and that's not even touching the principle. And so, again, looking at the facts and going, we're going to be okay.
The pool thing comes into play because when you resell your house, can you get the money back out?
Who cares about resale?
You're not even thinking about reselling your house because you're thinking about putting in a pool.
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Chapter 8: How can I adjust my spending mindset after saving for a long time?
What are we going to do? You got this. Gloria is in Albuquerque up next. What's going on, Gloria? Hello. What's going on?
Thank you for taking my call. So my question is, we are on baby step six, and my husband and I are both teachers. Our son is 28. He's been married for five years. This last year, he has stopped working to do full-time Christian recordings. He's a musician. He's a Christian recording artist. It is not paying him at the time. He's trying to build up an album. He has about 47,000 monthly listeners.
Great. And so, yeah, we're excited.
47,000? Is that like Spotify listeners?
Yes.
So you probably made $4 this month from Spotify. That's exciting.
Absolutely.
Love it.
Absolutely. He's also the music minister at church. That does pay him well. about $600 monthly. His wife is a teacher also, and so right now she is providing financially. We're hoping that this ministry helps him provide financially. But they are living in our rental. The rental has not been making any profit. They pretty much just pay the taxes, maintenance. And so
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