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The Ramsey Show

Making Good Financial Decisions Is Hard (but Worth It)

29 Nov 2023

Transcription

Transcript generated automatically by AI and may contain errors.

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

29.579 - 52.442 Rachel Cruz

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 amazing relationships. I am Ramsey Personality, Rachel Cruz, hosting this hour with my good friend and Ramsey Personality, Jade Warshaw. And we're answering your questions, life, money, relationships, career, anything and everything. Give us a call.

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52.982 - 58.708 Rachel Cruz

So first up in Gainesville, Florida, we have Cameron on the line. Hey, Cameron, welcome to the show.

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59.397 - 80.41

Howdy. Thank you. Um, so my question is my parents just sold their house in Texas and they can got a considerable amount of money for it. Um, and they're currently in the process of, um, basically planning for their future. And, uh, recently also purchased a house in Gainesville, Florida, which is part investment property. I'm living there at the same time. It's,

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80.71 - 100.992

kind of renting out rooms in addition to it. Um, and my father brought up to me, Hey, with all this extra money that we now have, you know, would you like us to pay off your house? And then that way you'll just pay us back instead of paying back the bank. And I've kind of heard before, you know, Dave talk about not going to take money from family members.

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101.012 - 104.676

And I kind of just want to hear y'all's perspective on it, the pros and the cons here.

105.736 - 127.391 Rachel Cruz

Yeah, I mean, I think if you look at the pro side, sometimes families in this situation, they do it with less interest and all this stuff. But I think, honestly, Cameron, there's just more cons in this because I think the math side sometimes can play into people. And they're like, oh, well, they're not going to charge me interest or whatever the deal is that's a better deal than the bank.

127.692 - 127.812

Right.

128.213 - 149.482 Rachel Cruz

But here's the truth. I'm like, it's a house. Number one, you're not talking about like, we're going to pay off a $5,000 car. It's your house. And so for now and in the next foreseeable five, 10 years. You're going to be having Christmases and family dinners, and you're going to want Cameron to go on a great trip. And they may be thinking, wow, why is he going on a trip?

149.582 - 171.099 Rachel Cruz

He needs to be paying us back. I mean, like, you know, like it starts to like it starts to play into the relationship in a pretty deep way where your parents end up being your bank. And again, all good intentions. Like I hear that because I think a lot of parents go into this and. And their heart in it is so good. But the way it just plays out, Cameron, like it just ends up getting messier.

Chapter 2: What are the pros and cons of taking a loan from family?

355.544 - 374.142 Rachel Cruz

It can work. And then there's like the disaster families. The disaster families are kind of easy to be like, my mom's saying I have to. You can paint a picture pretty quickly to be like, yeah, I probably wouldn't do that. I wouldn't do that deal. And then there's some families where it's like, you know, the parents are healthy. It's a good situation, all of it. But still, even with that.

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374.323 - 374.423 Jade Warshaw

Yeah.

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374.403 - 378.931 Rachel Cruz

Even with that, it just changes the relationship.

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379.412 - 396.579 Jade Warshaw

I would think, and I don't think it would even take anything like truly negative happening. I really think it's just the difference of we were used to this payment and it seems like you've been paying less and then just wanting to ask the question why. Even if they don't, which they have the right to because they're technically the bank in that scenario.

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396.96 - 415.942 Jade Warshaw

And even if they never do, like even if even if as the child or like the grown child, you never they never come to you and say, hey, we were wondering what happened. Just them even wondering it has the ability to affect the way they're viewing you like, hey, we're all going Black Friday shopping and they see you, you know, spending money. They might in their own head be like, interesting.

416.002 - 421.492 Jade Warshaw

She spent a thousand dollars here, but she didn't. And you just don't want people thinking of you through that lens at all times.

421.512 - 441.43 Rachel Cruz

That's right. That's right. It's just the human quality of it. And especially the parent to the child relationship. It just, again, sometimes well-intentioned. Yeah. And all of it. But we've seen it so often, so often go sideways. And people even talk like with friends and everything. And I'm like, it just... Just keep it all separate. It's like, I don't want to.

441.47 - 454.825 Jade Warshaw

I mean, think about how just as people think about how we are, if we've ever heard a friend or family member say, oh, I'm saving up for this or I'm doing this or I'm doing that. And then we after they've said that we view what they're doing with their money.

455.145 - 470.045 Jade Warshaw

So if they say, oh, we're saving up for, you know, a down payment on a house, then it makes sense when they say, oh, we're not going to go out to dinner or we're not going to. you start filtering it through what they said they're gonna do. And so if that changes, you're like, oh, I thought they said they were saving for a house. Like you just, you can't help it.

Chapter 3: How does debt impact family relationships?

579.47 - 583.495 Jade Warshaw

My go-to gift is that goal planner. I get several of them every year and give them out.

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583.515 - 594.068 Rachel Cruz

Yes. Oh, it's beautiful. They're so, so great. All right. Up next, we have Marcial from the Woodlands in Texas. Hey, welcome to the show.

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594.892 - 597.896

Hi, guys. Thanks for taking my call. It's such an honor being on the phone with you guys.

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598.096 - 600.119 Rachel Cruz

Absolutely. Thanks for calling. How can we help?

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601.28 - 622.148

Okay, so my wife and I have been listening to The Ramsey Show for the last six months. So we already read the books, and we are working on the baby steps. But our income is irregular. She's starting a career as a real estate agent. I'm self-employed. I'm an entrepreneur. I have a business. And we have some money saved up. We just have debt in CARS.

622.482 - 650.386

We have two cars, and one we owe $15,000, the other one we owe $13,000. We're getting rid of the $13,000 one, so we're just going to tackle the $15,000 one. My question is, since our income is so irregular, is it smart to set aside, instead of $1,000, just $5,000, and then throw the rest at the cars? And also, I have a small $4,000 student loan. So that's the question.

650.406 - 664.74

Is it smart to set aside instead of $1,000, $5,000 and then tackle with the rest of the money, the debt? And if we have a good month, then we throw extra on the debt? Or what do you guys think about that?

664.889 - 682.582 Jade Warshaw

Yeah. Okay. So with the irregular income, there's two ways that you could think of it. There's two ways I would think of it. Number one, if you're able to create a budget based on your worst month, like, right, you can look back in your self-employed job and go, okay, like what's, what's my worst month been over the course of the year?

682.642 - 699.448 Jade Warshaw

And your wife can look back and go, okay, what's my worst month been? And you can start to budget from there. And then, you know, okay, like everything else is gravy. If you can make that work, then I would just do the normal thousand dollar emergency fund as normal. Now, if you're like, no, we are really like, this thing is a crazy roller coaster.

Chapter 4: What should I consider before accepting financial help from family?

832.469 - 844.476

I didn't have $2,000 to pay for a car. So we bought that car and we are a little bit upside down in it. So we're just going to sell it and pay the difference because we got debt.

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844.456 - 868.776 Rachel Cruz

so yeah that's the plan for dark perfect well that's great yeah that that that sounds amazing and good for you guys i mean coming out of bankruptcy um out of that and then a year later that you guys are like hey we got to clean this stuff up because you know that is one that is one part of money that is so crucial and you talk about this a lot jade in your quick read that you know money's not a math problem is that you know

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868.756 - 887.847 Rachel Cruz

So often we just try to fix the math. Yeah. And we try to go after the interest rate. We try to go after this. But realizing, which again, Marcial, I feel like the light has come on for him and his wife where he's like, oh, we're the problem. Yeah. So we're going to have to do some things to change our behavior when it comes to money because that's really the crucial part of winning.

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888.228 - 906.237 Jade Warshaw

That's right. And I know that we talked earlier about Even those nitpicky things, like it's really easy to go, oh, that that doesn't matter much. I can do it like that or that's not going to be a big deal. But even with him saying, hey, should we put the five thousand dollars aside as, you know, our emergency fund? Even that you kind of really have to go in there and go, wait a second.

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906.577 - 916.313 Jade Warshaw

If I pile all this money together, there's really no differential between what's an emergency and what's a month to month expense. Yeah. And before you know it, you're going to be plowing through that, quote unquote, savings.

916.293 - 932.911 Jade Warshaw

And so even just making sure that when you say, OK, I'm going to follow this plan, that you follow it and you go, OK, this is my thousand dollar emergency fund that goes over there. And then if I have to have an extra cushion in my budget, there's, you know, a thousand dollars or whatever that needs to be in my budget.

932.992 - 941.541 Jade Warshaw

And it is for month to month expenses, not to go to the mall, like really making clarity around those categories in our mind and understanding that.

941.521 - 965.655 Rachel Cruz

so much of it like you said is is about how we're framing it in our mind this money is for this this money is for that and i stick to my word period yes so good yeah so money's not a math problem jade's quick read it's at ramsey solutions.com but she explains so much of this in depth and it's so good yeah all right up next we got laurie in nashville tennessee hey laurie welcome to the show hi how are you we're doing great how can we help

966.85 - 989.226

Yeah, so I have $9,000 in student debt. It's my only debt that I have. I have my car paid off and everything. Good for you. I was recently unemployed, but I just got a job, so I'm thinking more about how I can pay off that debt. I have money in index funds and ETFs.

Chapter 5: What are the best strategies for planning a vacation on a budget?

3433.382 - 3455.697 Rachel Cruz

Here's the deal with a vacation. If you go back to a place you hate, it just takes away from the vacation. Maybe I'm girl mathing this. But when you go to a place that you love, I'm like, I would cut on food before I'd cut on hotel for me personally. Yeah. A nice hotel or nicer hotel. All day. Oh. All day. Look.

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3456.605 - 3464.555 Rachel Cruz

Rachel, look, I'm just... Listen, Jay and I have stayed in some really bad hotels in our days. Yeah. Don't do it.

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3464.675 - 3472.104 Jade Warshaw

I'm not risking finding a hair in my bed. I am not risking, you know, the way the sink looks when it's old and crust.

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Chapter 6: How can I communicate financial expectations with my spouse?

3472.124 - 3474.867 Jade Warshaw

Like, I just... Yep. It's not worth it. It's not a vacation.

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3474.887 - 3497.301 Rachel Cruz

And especially if you have the money. Yeah. Okay, so Brooke, here's the thing. I want my husband to recognize my hard work and show his appreciation by getting all of this. This is y'all's money together. True that. So, like, him deciding all of it I'm like, no, you get an exact say in it. And sure, I want him to appreciate you and your hard work regardless of vacations and hotel rooms.

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3497.321 - 3497.983 Rachel Cruz

That's really it.

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3498.844 - 3499.746 Jade Warshaw

That was kind of the weird.

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3499.906 - 3500.668 Rachel Cruz

I don't like that.

Chapter 7: What should I prioritize when facing financial struggles?

3500.688 - 3504.335 Rachel Cruz

It's like he gets to decide this and all of that.

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3504.355 - 3519.394 Jade Warshaw

I don't like that. That was the only weird part about this whole thing is I don't. I don't know that I view the vacation like when when Sam and I go on vacation, I'm not viewing it as this is your chance to appreciate me. Right. That's right. I'm thinking of like, OK, like this is our family's chance to get away. Yes.

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3519.735 - 3530.567 Jade Warshaw

And in my opinion, the whole point of staying in a hotel is to be somewhere a little more luxurious than where you are. Right. Right. Right. Don't get me wrong. Everybody's budget is different.

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3530.667 - 3531.047 Rachel Cruz

Yes.

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Chapter 8: How can I balance my financial goals with family obligations?

3531.127 - 3537.076 Jade Warshaw

Yes. I mean, once she said it's in the budget, I'm like, give me the green light. It's the green light.

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3537.316 - 3549.493 Rachel Cruz

All day. I know. Brooke, we're on your team. And I think your husband appreciating you or you wanting to feel more appreciated, whatever that looks like, is a conversation outside of the vacation conversation.

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3549.733 - 3567.343 Jade Warshaw

And you could try and find a way to relate to him. Like whatever he's into that he would be willing to spend money on, kind of try to find a way to parallel it. Like if he's into, I don't know, like golf. Just say, hey, like you wouldn't want me to go buy you a, I don't know, what is a nine iron? Like, I don't know, like try to find a way to relate it.

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3567.403 - 3579.407 Jade Warshaw

Be like, you don't want me to buy you a nine iron from Walmart. So don't, don't try to buy me a, you know, and just kind of relate it to something he understands and he sees the value in. Maybe that'll help. That's good. That's real good.

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3579.387 - 3601.332 Rachel Cruz

Oh, man. Yeah. You know something I know the value of, Jade? What? Our friend George Camel's new book. Georgie boy. He's got a book right now, you guys, on presale called Breaking Free from Broke. So make sure to check it out. He exposes some of the most common money myths. and excuses out there like investing traps and mortgage myths and credit card schemes, all of that.

3601.732 - 3622.472 Rachel Cruz

So make sure to RamseySolutions.com slash store and pre-order that book. It comes out in January and you get close to $100 of free items if you pre-order today. So make sure to check that out. And also Jade's quick read that is in the store as well, Money's Not a Math Problem. That's in there too. So check that out at RamseySolutions.com slash store.

3622.452 - 3632.344 Rachel Cruz

All right, up next we have Delaney in Washington, D.C. Hi, Delaney. Welcome to the show. Hi, guys. Thanks so much for taking my call. You're so welcome. How can we help?

3633.586 - 3651.227

So my husband and I are kind of going through a lot of transitions in life, and we have recently made some decisions that I'm not feeling so sure about anymore, so I thought I'd call in. Okay. So for some background, he's 30. I'm 23. We got married last year, and we now have a two-month-old baby girl who's

3651.747 - 3673.413

We live outside of D.C., actually in northern Virginia, and I was on maternity leave for a couple of months and then have now dropped my hours to part-time. And with our annual household income, we just can't afford rent anymore where we currently are. Our lease is up at the beginning of January. And they were going to increase our rent by quite a bit.

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