Chapter 1: What is the main topic discussed in this 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 in the Fairwinds Credit Union studio, this is the Ramsey Show. I'm Ken Coleman. Rachel Cruz joins me, and we're here for you. 888-825-5225. 888-825-5225 is the number to jump in, and we would love to coach you up today. We start off with Dan in Grand Rapids.
Dan, how can we help you today?
My wife and I are preparing to retire. As a matter of fact, her last day of work is tomorrow. Mine will be the beginning of February, so 40 years of effort towards this.
Dan, I've got to ask you this. We men have to unite because we don't do this well, and we've got Rachel here to help us on this. Before we dive in, what is the plan when she finishes the day tomorrow and she wraps it up and comes home? Do you have something planned?
Um, you know, we don't, it came on pretty quick. We both had this date in February picked and then her department dissolved and they said, you can either take a bio or you can transfer to another department. So this all happened for her in the last three weeks.
Okay. But presumably she's excited about this.
Oh, absolutely, yes.
Dan, listen, I don't want to spend too much time on this. Rachel's here to back me up. This is where you've got to step up. I mean, you've got to do something special. She comes home, maybe a little surprise. If you hate surprises, plan a little something, at least a nice dinner, a gift. A little retirement celebration. 40 years, babe. You're wrapping it up. We've got to celebrate her.
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Chapter 2: How can Dan celebrate his wife's retirement?
I asked it that way just simply for you to hear yourself say, his plan gives me a little bit of heartburn. Enough that the peps at AC is not working and you called us today.
right it did yeah i think i knew where you were going to take me but i just kind of wanted to hear it yeah and i appreciate that and we're happy to be here for you but you sir are the ultimate arbiter on this your body your heart your head and man you're just like man if i can put this edition on yeah i'm paying cash for it for my grandkids to be there yeah and i would run the numbers too because i am curious because he looks like the the rates go up and down like it really is very dependent upon what's going on don't run the rates at all i don't want you to be tempted
No, no, it's not a temptation, but it's that versus what, you know what I mean? Like that versus the taxes that you're going to pay on a hundred. Like, like what I'm saying is I think it ends up being closer to a wash than what you realize. I think that the guy, I think he's like nitpicking every little thing to say, I'm making this number up.
I haven't done the calculations, but to save 10 grand, whatever the thing is. And, and that's pennies to you guys. So I'm like, the peace of mind is worth that so much more.
Yeah. Just listening to you describe everything he told you versus your plan. Yours is simple. Boom. We're done. We're done.
And I guess some of the things you said kind of make sense. Do you have money elsewhere, Dan, where, to his point, do you have money sitting in a high-yield savings or something where you wouldn't necessarily have to pay taxes if you use that cash? We have about a $40,000 savings account. Okay. Yeah, yeah, yeah. And then 401K, I have a lump sum pension and a 403B. Okay. Gotcha. Gotcha. Nope.
That's great. Yeah. No, I would not go borrow on my house to do an addition when I freaking have the money for it. Yeah. That's the bottom line.
Trust your gut, Dan. There's a whole bunch of science on this that trusting the gut is not this mysterious thing. It's actually the brain sending physical signals to the body. And we feel it in our body. That's a real thing. It has the same validity as the logic. Listen to your heart. Listen to your body. You were right. Thanks for calling. Tell the financial advisor thanks and no thanks.
The holidays are supposed to be joyful, but they can also be expensive. Between gifts, travel, and about 1,000 limited time offers, your budget can start feeling anything but merry. And that's why I love this.
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Chapter 3: What should Dan consider when planning for retirement?
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Well, you know, some days we have a fabulous audience. Most days for the show, we have a fabulous audience comes to the lobby here at Ramsey Solutions. And we can see these fine people looking through the glass. We go out and say hi and all that kind of stuff. And today happens to be a birthday day. We've had a lot of birthdays. And so we had young Millie, who was 28.
And now we just met the fabulous Carol. who just turned 80 a couple days ago. And she's got the team out there. And notice the glasses. She's got a sash. What do you call that? A sash?
Chapter 4: What financial advice do Rachel and Ken give about HELOCs?
She's got a tiara. And she's got these fabulous glasses, James. She's hating this right now. By the way, Carol looked as though she was in shock, James. She's very embarrassed by all the attention. And so one of the party that she's with loaned me their glasses. So I wanted to say a special happy birthday to you, Carol. You look fabulous. You don't look a day over 50.
And we're very blessed that you're here.
And they're about to hit the town. You should meet them on Broadway.
Actually, I'm going to ask James if I can take the rest of the show off. You look like you're ready to play Benny and the Jets or something right now. Biddy and the Jets. So there you go. There you go. How about that? Very fun stuff. So happy birthday again. So fun. So fun when people spend their special day with us.
I know. We get anniversaries. We get honeymoons sometimes. Yeah, we do. That's always the craziest one. I'm like, I can't believe you're here on your honeymoon.
What are y'all doing here? The Ramsey Show question of the day is brought to you by WhyRefi. WhyRefi offers a different approach to paying off your defaulted private student loans with a low fixed rate for less stress. Go to WhyRefi.com slash Ramsey. That's the letter Y. R-E-F-Y dot com slash Ramsey. It may not be available in all states.
All right, today's question comes from Aiden in New Mexico. My wife is a contract business consultant and is also self-employed as an artist. When it comes to paperwork, she's very disorganized. It has gotten to the point where I have taken my tax documents to a tax preparer twice because I didn't want the IRS auditing me.
I beg her every year to get her stuff together and to file on time, but it never happens, which leads to arguments. How do I get her to understand the seriousness of the situation?
oof that's tough well it's taxes i'm like it's back to taxes yeah but you got to do it yeah and that's what i was going to say like so this is a relationship issue but in this situation it's not you coming to the to the table with a hey let me tell you about these baby steps let me tell you about this ramsey plan i'd like to get us on a budget like this is the federal government This is the law.
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Chapter 5: What steps can I take to improve my credit history?
And I got it with an attorney and we got my credit wiped. But what it left me with was zero credit history and horrible credit score. Not even a secure credit card will touch me now. I have a significant other.
We're not married, but we have gone to plenty of financial advisors, and we have been told both that our best option is to get married because, again, I can't get even a credit card in my name. I'm an authorized user on only one card, and I can't be an authorized user on a lot of other credit cards.
I'm just stuck.
Chapter 6: Why is marriage suggested as a solution to credit issues?
No, you're not, actually. This is going to be a great call for you because you're not stuck. But quick question here, and Rachel's going to give you some amazing guidance here, I promise you. But why are financial advisors telling you that the best thing to do is to get married? Because that feels like a financial reason, not a good reason to get married. So I want to dig into that first.
What are we trying to accomplish here?
Yes. They always say, sign if I can't. And I don't have a car in my name. I can't get a car of my own. We share my partner's car. We moved up here to South Carolina from Southwest Florida, away from my grandmother, and to live up here near my father. And I work from home, which isn't a big deal, but our biggest issue right now is we have one car.
Okay. All right. Slow down. Slow down. I'm stuck. So you're not stuck. This is the theme of this call. All right.
Chapter 7: How can I buy a car without a credit score?
I'm just going to ask a quick question here. Rachel, I'll get out of your way, but I want to ask a question here. What do you do for a living and how much do you make? And I have a quick followup. So give me the real quick stats. What do you do and how much do you make?
I'm currently a debt collector for Advance America, and I'm currently making about, after commission, $18 to $19 an hour, $40 a week.
All right. So if you could save up money for, let's say you could save up $10,000. I don't care how long it takes you. Could you buy a car without a credit card? Could you buy a car with $10,000 cash? Yes or no?
Yeah, most definitely. I mean, there's plenty of good vehicles for that price.
So I'm challenging some of your thinking here. Rachel's going to guide you here, but I want to challenge this idea that you're stuck because you have no credit score and that you have to get married in order to have a car. You have a job and you can go buy a $5,000 car, a $7,500 car. I just want to make sure you catch that.
Definitely. Most definitely. All right.
I want to get out of the way, Rachel, because I know you got some questions, but my goodness.
I mean, the paradigm shift that you have to have, Jessica, is a pretty big one because everything you've been talking about so far on this call has to do with how do I live my life around having a great credit score? And actually, you called the Ramsey Show and we're the opposite. We actually... don't care about the credit score because primarily you use a credit score to go into more debt.
And you're finding that out. When you're trying to go get a car loan, they won't give it to you because you have a bad credit score. You try to go deeper into debt with a credit card, they won't give you a credit card because of that. So living debt-free, this is actually a gift, Jessica. You don't even have the option. Most people listening right now could go apply for a credit card.
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Chapter 8: What strategies can help me manage my debt effectively?
You don't have the option. So see that as a blessing because I don't want an option for you, even if you had a great credit score. So how do we live life debt-free? Well, number one, starting out, your biggest need is what you're saying is a car. I almost think your biggest need is maybe a new job. As a debt collector, that can't be a very fun job. So I wouldn't tend to even talk about that.
Yeah, you're limited there.
I think you can do some really great work, Jessica, and I think you can work overtime. Do you have kids? Yes. I do not. So Jessica, I would make a priority right now to say here, making a very detailed budget, knowing exactly what you need in life for food, shelter, utilities, transportation. And that's about it. Like, I mean, we're just going on the basics here.
Everything else is going to go to save up for a car and maybe $5,000 is your goal, whatever it may be. Because you don't, do you have, do you have any consumer debt in your name? No. And you're fighting this whole $186,000, right? We successfully sued the creditor and it got wiped 100%. How much do you have in savings? Do you have any savings? Currently, no. We just used our savings to move and
you know, get out of Southwest Florida because the jobs there weren't any good. And we're currently trying, I'm trying to get back into college. I have one semester left to get my associates. But again, my mother messing with my identity has affected my tax forms to getting grants and loans. Oh,
You don't need a loan. Listen, Jessica, you don't need a loan to get one more semester paid for. And I think your remaining semester of your associate's degree is secondary to what Rachel is saying, which is let's get some money saved, let's get on a budget, and let's buy a car.
Because, Jessica, we have people call the show all the time, and they're trying to get out of debt. And so when we talk about getting out of debt, for instance, we say you cut everything and you work extra. And we have people –
very nor i mean in a very uh normal rhythm on this show that are making an extra um thousand twelve hundred dollars above their income on side hustles so let's just make it a goal for you and especially since you don't have kids be like hey evenings i'm working like whether you're waiting tables i mean you are doing something and let's just go crazy let's say you earn an extra uh let's go two grand a month
I know that sounds crazy, Jessica, but seriously, what if you worked your butt off, earned an extra $2,000? That means sitting right now where we are in the calendar, by July, August, you could have a car. Depending on how much that one semester cost you, between now and December after you have a car, another couple of months of working extra, you could have saved $6,000, $8,000 in
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