From the Ramsey Network, it's The Ramsey Show. I'm Jade Borshaw. Next to me is Rachel Cruz, and we're your host for today. We'll be taking calls about your life, your money, your career, your relationships, really whatever it is that you want to talk about. As long as it has some connection to your money, we're here for you. It's a live show. If you want to get in, you can. The number is 828-825-5225, and we'll pick you up on the line. All right, Rachel, you ready to get into it? Let's do it. All right. Katie is in Austin, Texas. What's going on? Katie?

Hi.

Hi. How are you?

I'm great. How are you guys doing? Good.

How can we help?

So I was just calling to see if this was normal. My boyfriend has used the credit cards that are in my name, and two of them are in both of our names, but I don't use the credit cards. And I was wondering if that is a normal thing because he's saying it's normal and I don't have to worry about the transactions because he's taking care of the bill.

Yeah, I would have an issue with that. Well, first, the mistake that I see is that you have credit cards in both of your names. So I think that that is a mistake because either of you can spend on them, and If either of you decides that they're not going to pay the bill, so let's say you guys were to break up and he ran up a balance on it, you're both on the hook for it. If he doesn't pay it, it can affect you in a negative way. That's the first issue. Then the second issue is then if you have a credit card that's only in your name and he's insisting on spending money- Yeah, and it's him spending it.

There's no guarantee that he's going to pay for it, right? The bill. I mean, there's a chance he doesn't. Then it stuck with under your name, and you're completely liable for that. How has he gotten access, Katie, to your credit cards? Are you giving it to him, or is he- Yes.

It was an agreement to open the credit card because I needed to build my credit. I had no credit at all. That was the way that we were going to build the credit cards. I mean, the credit using the credit cards.

What'd you need credit for? What were you trying to accomplish? Just the history.

I had no history of any credit use at all.

Did he say that that was a good idea?

Yes. Okay.

It was his idea, I'm assuming.

Of course, because I don't have any knowledge in the finance area.

Totally. Katie, just so you know, so that you can be armed with some of that knowledge and education, the only reason you really need a credit score is to go into debt. And we really do believe the best way to win financially is not to have debt, is not to go into debt. The biggest piece of debt that people get into that they're like, No, I have to have a credit score for, is a home, right? So when you go and apply for a mortgage, they will pull your credit score, but you can do what's called manual underwriting. So you can actually get a mortgage without a credit score still. Now, places will pull your credit report, maybe if you're applying for a cell phone or maybe for work or something. But if you don't have a history, all you have to say is, Yeah, I've never borrowed money before, and debt's not a part of my life. So you actually can go through life. And this is a big piece of misinformation. A lot of people believe you have to have credit in order to do things, but you really don't. Now, you have to have it to go into debt.

But we, again, that finish line, that start to finish of building wealth, debt does not need to be part of the picture. So what Jade was saying earlier is exactly right. I would cut up all the credit cards, Katie. Any credit card in your name, I would cut up. And for you to keep everything separate, and you guys are already I'm really combining purchases and all of that, I would keep your income with your expenses, his income with his expenses. Very, very separate. And then later on the road, if you guys get married, then that's when you want to combine them. But until then, it's a very dangerous game that you guys are playing, not just on the credit score game side, but the fact that you have this other individual that legally you have no attachment to, right? I mean, from a legal perspective, there is no marriage. We take the calls, Katie, which, of course, we're calling show for money. We get all different kinds of calls, but we get the calls that are, Hey, my boyfriend broke up with me. I can't find him now. He blocked me, and he racked up $10,000 on my credit card.

He said he was going to pay it, and now what do I do? Then that, Katie, we would have to say to you, Well, you got to pay it because it's under your name. So it's just saying it's a big risk that's what you're taking. And I understand maybe his intention was good, trying to help, but it's not helping.

I mean, let's this big picture because, Katie, you're not the only person who has gotten that misinformation. The truth is, debt is a product. It is a product that institutions make money off of. It's not something that's required. It's not a law. It's not like your driver's license where you have to have it in order to drive a vehicle. But it is marketed that way. It's marketed as this thing that you can't live without, you can't do without. They'll even make it seem as though if you want a car, you need a loan. If you want a home, you need this. They make it seem that way, but that is not the truth. The truth is, like Rachel said, a lifestyle without debt is absolutely there. You do not need a credit score. And the only way that... The only reason it seems that way, it's because it's such a well-marketed product that they have fooled us into that. There's a lot of money that's made on it. A lot of people have locked their arms around making it seem as though this is the case. And it's truly, truly, truly not. The big areas where people, I don't know, Rachel, I say butt heads on us or, Okay, then how do I buy a car?

Okay, then how do I rent an apartment? Okay, then how do I buy a house? I feel like those are the top three areas. Rightfully so, you should be asking those questions. The truth is, we would say, if you're in a car loan right now, work to pay it off very, very quickly. And then your next car, make it a point that I'm going to save up and pay for cash, even if I get something a little less expensive. That's how you get out of the car loan debt. Then for somebody who says, Hey, I want to rent an apartment. The truth is, there are lots of apartment complexes that will say, We only go by credit score. That's true. There's also a lot that will go. If you bring in other proof of purchase, whether it's your cell phone bill, electric bill, maybe you lived with your parents and paid them rent, they will use that. So that is the truth. Same thing, rental cars. You can rent a car without having a credit card. Anything that tells you otherwise, Rachel and I are here to tell you and debunk that myth because it's not true.

And even the biggest one, Rachel, buying a house, we all know So many of us think you have to have a credit score to buy a house. That's the biggest thing. It's just not true. You can still do something called manual underwriting. In that, they look at people who do not have credit scores that have a zero credit score, and they go, Okay, we believe that a zero credit score is just as good as a high credit score, and we can look at your actual money, your actual transactions, and we can determine if you are in a good position to borrow money for a home. I hope you learned that, Katie, on this call, that it's not something that is necessary at all, not even- Or required, right?

Yeah. But again, it's understandable why someone would think that, because in our world today, it is just so, so normal. Yeah, Katie, if I were you, I would today cut up every credit card with my name on it, not even just because of the element of what we talked about living without debt. But I'm going to say yours has an extra caveat, too, because there's another person in your life using those credit cards under your name which adds on a whole other level of risk that you cannot control. Some people think, Well, I can control myself, and we have a level of responsibility of ourselves. So we can talk about that. But this is like an extra layer, Katie. It's just a lot of risk. I know everyone's in love all the time, and we're going to be together forever. Everyone believes in the relationship. But again, we get the calls on the other ends of reality of what happens. I just want you to be protected, Katie. That's what we want for you. We are here for you, and we want you to make these decisions in a really smart and wise way. Yeah.

At the end of the day, we're not putting other people's name. If you do choose to take out debt for the love of God, don't put someone else's name on it with you. That's really the moral of the story. Then, of course, don't go into debt, period, because you don't need it. This is The Ramsey Show. Self defense can be a complicated issue, but there's one solution that makes it a lot easier. A Berna Launcher. Berna's look like firearms, but they're not. They're non lethal self-defense tools. They shoot chemical irritant projectiles that stop a threat in its tracks without the fatal consequences of a gun. Berna launchers have been vetted by government agencies, police forces, and private security agencies worldwide, and no permits or background checks are required to buy or own one. Plus, Berna's are lightweight, easy to carry, and give you the power to protect yourself and your family. Family, even if you're not comfortable with traditional firearms. Not to mention, they have more than 15,000 five-star reviews. Right now, Ramsey fans can get 10% off an exclusive bundle, which includes a Berna pistol, CO₂ cartridges, and ammo. Other Berna products like safety alarms, defense sprays, and body armor are also 10% off for our listeners.

Just go to berna. Com/dave to learn more. That's b-Y-Y-R-N-A. Com/dave. You're listening to The Ramsey Show. I'm Jade Warshott. Next to me, number one best selling author, Rachel Cruz. Hanging out with you all hour, taking calls about your life and money. I want to tell you about something super-duper important. If you're ready to get your finances in order once and for all, you know what I'm talking about. In 2025, this is your year for financial success. I want you to join us January 23rd for our free live stream. It's a take control of your money live stream. It's going to be myself, Dave Ramsey, Rachel Cruz, George Campbell. We're all going to join together. We're going to show you how to get control of your money. We're going to take questions from you, the audience. Myself and Dave, we're going to help you learn how to stop paycheck to paycheck living. We've all experienced it, and it's time to make the cycle stop. We're going to show you how to free up more breathing rooms so you can pay off debt fast, and finally, get ahead with your money. So But, Rachel Cruz, you and George are going to join us a little bit later for a Q&A.

You can ask whatever questions you have about your money. It's absolutely live, and so it's like real-time. So that will be very entertaining. And if you didn't know, when you sign up, we're going to be doing some giveaways throughout the evening. We're going to give away $4,000 to five different people, a total of $20,000, which is pretty amazing. So again, the event is free, but when you register for it, you can sign up to get that free cash. So that's nice. Sign for the free livestream by going to ramsey solutions. Com/livestream, or you can click the link in the description if you're listening on podcast or YouTube. Either way, you need to be there. Rachel, I really do believe that. I feel like in 2025, so many people are going to draw that line in the sand and finally say, This is the year that I do that thing with my money and I make lasting progress. Yeah, absolutely.

Well, and when you have an amount of time that is so compacted with everything you We're like, that's how we lay out these live streams. We're like, if someone is here for an hour and a half or however long it is, we're going to put as much as we can into it so that when you walk away, it's like, okay, I have a whole new set of tools. It might be overwhelming even, but it's worth it to sit down for an hour and a half and be there. That's right. And watch it and do something different.

We're not preaching at you. We're giving you step-by-step advice that you can't implement. So that's really good, Rachel, to highlight. Okay, let's get into those phone lines. Oscar, Des Moines, Iowa is on the line. What's up, Oscar?

Hey, How are you guys doing today?

Doing great. How can we help?

My question was regarding an issue I have with more important than my dad. My dad's always gotten into this habit of every so often asking to borrow money, which I'm not hurting for, so I don't mind. But it's gotten to the point where I dread taking his calls because it's not about checking up on me or checking up on the kids. I always feel like it's going to be, Hey, by the way, can I borrow X amount of dollars? My question is, how do I go about starting the conversation to where I tell him, Hey, enough's enough?

Yeah. How old is he, Oscar?

My dad is 60.

Sixty. Why is he needing the money? What's he using it for?

Honestly, I don't even ask at this point. I'm assuming bills. Ever since I was a kid, he was never great with money. I remember me and my sister were younger. We always had to help them translate to let their landlord know that we're going to be late on the bills. Oh, wow. And so it's been a never-ending cycle.

Okay. So you don't think there's probably much to his name, financially? And he's literally using it to stay afloat. Is he working?

Yeah, he has a full Same job.

How much does he make a year?

Honestly, I don't know 100 %, but I'd say somewhere around this $50,000, $60,000 range.

Okay.

Is it just him? Or is he married?

He's married. My mom still lives at home. My mom, she's had a lot of medical complications, so she doesn't really work. Every once in a while, she does get some under the table work through a restaurant that our family owns. But other than that, she really doesn't have a stable income.

Do you have a relationship with your dad aside from this money, or do you feel like this is the only contact you have? Do you know what I'm saying? He only comes around for money, or do you have a relationship established outside of Well, I mean, we have family gatherings, we get together.

We can be amicable, but he never comes over just to hang out. I mean, even when I was younger, it was more of a business casual relationship. I can tell you right now, if we're sitting in a car for an hour or two, the most we talk about is the weather.

Yeah. Do you have siblings?

Yes. I have an older sister and a younger brother.

Does he call them?

My little brother, he does not. He still lives at home, but he is of age to I do not live there. But he will call my sister if I tell him, Hey, I can't help you anymore, or I can't help you this week because I have bills to pay.

So then the sister calls. Have you and your sister talked about it?

Yeah, me and my sister talk about it all done. We're frustrated.

So you're both We both have our own families.

Okay. Yeah, for sure. One last question, because I'm just trying to put the pieces together. When he asks for money, how much? In a month, how much money would you give him? And then how quickly before he'd ask for money again?

The most he's asked in one sitting was like, 12 more bucks. Typically, I guess, the larger the amount, the bigger the gap between him asking for more. But I'd say roughly about once a month, maybe.

Okay. And sorry, I'm fascinated by what's going on, and I'm also trying to dig deeper. If you had to assess the situation, is your dad… Is there anything unhealthy we should know Do you think, do you sense any addiction, something where this money is going, where it shouldn't be going? Or do you truly think, Listen, this guy, he has no budget, and because of that, he's late on rent? Is it just that simple?

I know, like I said earlier, my dad's terrible with money. He's always been a guy who bought scratchers at the gas station, but it's never been, at least to my knowledge, so extensive that he would blow his whole paycheck on it. I know he's always He's always been struggling with payday loans here and there. The only reason I know this is a long time ago, I worked in a financial institution as a loan officer, and it was the same bank he worked at. They would always come to me and say, Hey, what's going on with your dad? It got to the point where it was stressing me out so much, I couldn't be there anymore. I didn't want to be part of his financial burden, and it was taking a toll on me. Yeah, absolutely. I was stressing over something that I genuinely didn't have any concern over because at that point, I didn't live in this house. Obviously, he's still my dad. I'm concerned about his well-being financially. Sure.

Where are you at, Oscar, financially? You and your family. Where are you guys? How are you guys?

I am right now on baby stuff number one, trying to work towards two. I have all my debts lined up, ready to go. Hopefully, by the end of this year, I will have all my consumer debt paid off. I don't have very much.

To say that you have an extra spare, $75,000 in a a year of savings account to help your dad when he needs $200 a month, that's nonexistent. You guys are paycheck to paycheck. You're starting to build a $1,000 emergency fund yourself. So my advice, Oscar, to you is this, and even more because of where you are financially, right? I mean, I think there can be a different discussion. And we talk to people on Baby Step 7. They've paid off their house. They've accumulated wealth. I'm like, Listen, my dad's in his 80s, and he's terrible with money. I got to help. And I'm going to help. And that's what they choose to do, right? A very conscious It's not being burdened upon them. They just decide that as part of what I'm going to do with my legacy and my money. You, Oscar, on the other hand, you guys are not in a financial position. You're trying to save a drowning person while you yourself are trying to keep your head above water. And it's causing that much more, I would say, probably, bitterness and strife, which is very understandable. This is always such a hard conversation because I think the parent-child relationship, especially as adults, is very difficult.

But what I would say, because this is the truth, is, and I'm going to butcher the quote, and I even hate it.

I wonder if it's the one I'm thinking of.

It's about the fish, right? Don't give a man a fish, teach him to fish. It's the idea that, Dad, I want to sit down and help lay out. And you could say, Oscar, I'm starting this process, too, dad. I'm starting to realize, Gosh, I have to get my finances in order. And here are some things that I've done, dad. I've realized, okay, here's my income. We've created a budget. My first goal is $1,000. You could tell him what you're doing and say, And if you want, dad, I would love to sit down, and this is if you want to, Oscar, but I would love to sit down and help you get on this plan as well. Love that. Because ultimately, this is just a few hundred bucks, right? I mean, again, he's not asking for $10,000 a month. So it's just these little pieces of discipline that may be hard for a 60-year-old to restart. But that's where I would start and say, I can't give you anymore. I don't have it. And that's the honest truth, Oscar. You don't. I don't have the money to help you. But I would love to sit down and walk you through what I'm doing, and let's see together if you can now get in a position where you're not short a couple of hundred bucks a month.

Good advice, Rachel. Yeah. Viola Davis said, Don't let yourself on fire to keep someone else warm. This is the Ramsey show. It's better.

Statistics show that half of Americans don't have enough life insurance, or they don't have any at all.

I don't understand this, John. Why don't people want to take care of their family? They think not going to die or something? Well, I used to be one of those guys. I didn't even think about it. One of my buddies said, Hey, the only reason to not have life insurance is if you hate your wife and kids.

I immediately went and got term life insurance.

That's a gut punch.

For decades, Dave, I've sat across people who've lost a spouse They've lost somebody important to them.

Me, too.

They don't know what to do next. Terrifying.

You're going to have a crisis here. You got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow. That's exactly right. These are the two options. It's saying, I love you to your family. Term life insurance. Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to zander. Com or call 800-356-4282. All right, you're listening to The Ramsey Show. I'm Jade Warshaw. Next to me is my good friend, Rachel Cruz, taking calls all hour long, your life and your money. If you have a call, you can call in our phone screen and we'll pick up. That number is 888-825-5225 in order to get involved. All right, Rachel, let's go to the phone lines. We've got Leah. She's in Rochester, New York. What's going on, Leah?

Hi, Thanks for taking my call. I'm a single mom of one child. I make like 35,000 annually. I have no debt, no credit cards. I have an apartment. The 2014 Chevy, it's about to die. It's paid off, though. I'm a residential cleaner. I work 20 hours, maybe a little more per week, part-time in school, long-term goals, med school. I'm in a co-parent It's a high conflict situation. I spent my last five grand on an attorney, and I'm going to be going back to court. Sorry. No, that's okay. Bottom line is I need to make more money while I'm going to school. I'm not really sure how. I have to get a used car because mine's breaking down. I'm not sure if I should invest some of the child support that I get for my daughter right now, in a Roth IRA. I'm not sure how much. I want to know with a little bit that I can say, what can I invest and what should I invest? I have no clue where to start.

Sure.

It sounds like everything that are saying are very important things. You are thinking about the right things. I think for Rachel and I, it's just narrowing it down to what's most important right now and giving you a step-by-step on what to focus on, first, second, third, fourth, that thing.

Leah, tell So what about your schooling. You're starting a new semester, I'm assuming. How are you paying for school?

I'm actually- Oh, go ahead. No, that's okay. So no, I do get… School is paid for right now through financial aid, but I am taking a semester off to take a break with court because it's going to be very stressful.

Okay, okay. Do you see, and do you know from where you are within the divorce? I don't know, this is a hard question to answer. Is there an in-date that you see? Do you think, Okay, yeah, we have a couple more of these, so it'll probably be in the summer, or do you think it could be a whole other year or two?

Well, no divorce, never got married.

But it depends. Okay. It's just custody. It depends.

I think this will be a forever. I think it'll always be going back, or at least for quite a few times. But I have full custody, so that's good.

How old's your child? She's seven. She's seven. Okay. So she's in school then during the day? Yeah. Okay. So child care and all of that is okay.

Yeah. Yeah.

And Leah, working 20- Yeah. She does have- So you're working 20 hours a week. Tell me about your monthly expenses. Do you feel like you're able to cover those, and you're basically at zero at the end of the month? Are you behind? Are you ahead? Do you have margin, where you are compared to your salary, what you make versus your expenses?

Yeah. I have a budget plan, honestly, To be honest, I haven't really paid attention to it. That's something that I've been lacking consistency and discipline with, so I know that, and that's something I need to change and I want to change.

You mentioned- I can Go ahead. No, you go ahead.

As far as saving, I'm not really saving that much. I would say I make around maybe 2,800 a month.

Is that including the child support?

Actually, no.

What does he send?

Technically, I get 44 a week or 44 a month.

Okay. Okay. From child support?

Yeah. I'm sorry. I'm supposed to be getting 44 a week. I apologize. But I am getting… I did just arrange a new plan with him.

Can you go back, Leah? Can you clarify for Rachel When you say $44 a week, are you saying $4,400 a week is what you're supposed to be getting from the dad?

$44 in child support.

$44 a week? A week, yes. Got you. You're only getting $44 a month right now?

No, I'm getting $170 in total. That's just for through the state. That's on paper. I did arrange something with dad in person, and we talked, and so I've been getting on top of the $44 weekly, $100. He just pays me himself weekly. So in total, let's just say around 560 a month in child support in total.

Five-six-d? Yeah. Okay. You mentioned earlier on about Roth IRAs and things like that. Right now, it doesn't seem like the time to do that. It seems like you've got bigger fish to fry. You've got an attorney fee that you're going to have to pay. You've got a car that doesn't have much more life in it. Did you say how much you have saved? You said you're able to put a little aside. What do you have in savings right now?

I have like $950. Okay. My lawyer, my attorney has paid off. Like I said, my car is paid off as well, but it's on its way out.

Okay. If I were in your shoes, I think I'd be focused on stacking up some money for this car because if this is your only mode of transportation, you're going to need to be ready for that. What do you think that's going to cost you? Have you looked around?

I have looked around. I'm not sure making 35 a year, what I should spend. I don't know, 15% of that, maybe a little more.

Well, we're not going into debt for it. You're only going to be able to buy what you can afford to save up and get. That's really what's going to inform this decision.

Okay, I see. Yeah. Okay.

Yeah. I don't want you… Let us clarify. At this point with anybody, not just you, anybody who calls in, we're never going to suggest debt, but specifically here, because your income, you can't afford to add any other risk or frustration or stress or anxiety to this equation. If you do debt, you're definitely adding that. The good news is you've got $950 saved. Your car hasn't busted yet, so you've got time to set some money aside. You've got time to do some shopping, figure out- Yeah, and Leah, I would probably take on...

Because you're making great money for 20 hours a week. If you're taking a semester off, I would just- I was thinking I'm taking on more clients. Yes, and I would, Leah. I mean, I would say this whole semester, I'm going to work more than probably I've ever worked because I think these goals are really big, right? To have some cash for a car. The first goal is to get $1,000 in the bank, which you basically have. And then the next goal will be payoff debt, but you don't have debt, which is amazing. And so then the next would be an emergency fund. But part of that is knowing if big life things are happening, like a car or fees for an attorney, right? Like all of these things that I would want a big fund And this could also be your emergency fund. You could have a savings goal, but to know that I need some cash in the bank ASAP. And so I would have enough in there for three months worth of expenses. I would have enough in there for a new car, and that could be a $7,000 car, Leah. It doesn't have to be a brand new, beautiful car.

Then think about when you sell yours, that adds to that. I would average out attorney's fees, what would make you feel good. And I would just have a big emergency fund. That would be my very first goal before investing or anything. Then once you have your feet under you saying, Okay, yes, I'm in good shape, transportation-wise. I have some cashier for an attorney, I have some cash in the bank for an emergency fund. Then we can start thinking about the future. But until then, Leah, I would just get some cash in the bank, and I would not invest it. I would just keep it in a high-yield savings account, again, with the goal to get three months' worth of an emergency fund, along with a car and attorney's fees, which is thousands of dollars. What I'm saying here is like- This is long term. This may take you a year to do, which is fine. And then there's plenty of time for investing and catching up with all of that. But I would do that. I think that would give you a lot of safety and security. And again, the beautiful thing about this is that you have the time.

You were just working 20 hours, and if you just doubled that, I mean, think about you would be bringing home without child support, close to $6,000 a month. That's excellent. You could do this.

That changes your whole... That changes everything for you.

And Leah, kudos to you and all the single parents out there, because that is one of the toughest positions to be in. When you have full-time custody- For sure. And you are the only one in charge. It is so much work, and it is so exhausting. From mom to mom, I just commend you and the single moms out there. You're doing an incredible job. The fact you don't even have debt, Leah, I'm like, You're doing great. So just keep up the work saving.

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Today's question comes from Erica in California. We are currently in Baby Step 2. My husband and I both grew up in homes where our parents never discussed money or taught us how to manage it. We have two kids who are in their early teens, and I want to teach them how to be smarter with money than we ever were. Being so new to this and still figuring it out ourselves, I'm not sure how to go about teaching them. When my son got his first job, we opened up a bank account for him, and he has a debit card. I have noticed he is purchasing things that I think are silly, but I don't want him to feel like I'm constantly nagging him for what he's doing with his own money. How do you teach him to budget when he doesn't necessarily have recurring bills every month? I'm overwhelmed with my own stuff and trying to teach him something I'm figuring out at the same time. Hmm, that's good. It's a great question.

I mean, part of me, and Rachel, I've I haven't heard you say this. I think with kids, they go so much more by what you do than what you say. I mean, of course, they're listening to what you say, but your actions are backing it up. If you're in baby step two right now, they're seeing in real-time what it looks like As long as you're open about it to the proper extent, they're seeing in real-time what it looks like to be on top of a budget, checking your budget, checking in with your spouse, making smart choices. They're seeing that more than anything And weirdly enough, I don't think we give enough credit to that because most of us, if you were to say, Give me a picture of what money was like when you were growing up, most of us could say, Oh, when I was growing up, my parents never talked about money, or When I was growing up, things were never tight. It just felt like we had what we need, or When I was growing... Most of us can look back and we have a very clear picture of the way money was presented to us.

And so knowing that as a parent, I think, I know for Sam and I, we're always very clear about, Oh, we're doing our budget for the month, or we talk about it. So knowing that when they look up, they're going to go, Oh, yeah, my parents, they always mentioned a budget, or they were always very mindful of what we were spending. That's right. They always said things like, Well, if you can save it up, you can get it. So There is a practical side to it, but there's also so much just in the intentionality of everyday language and how you're speaking about it with your spouse, I would say.

Yeah, I agree. And I would say, too, that when you are under the roof of your parents, and I think about growing up, I made money mistakes. I spent my money on stupid stuff that I know my parents thought, That is so dumb. And I was the kid that if I had money, I was going to spend it. I would go get silly puddy from an aisle. Just to spend. Just to buy something. I mean, I genuinely was just such a spender. And I remember one that sometimes making comments, but they did such a great job, Jade, of letting us make those mistakes. Because you realize it, even as an 11-year-old, you could do something and buy money buy something with money you've earned and then realize a few days later, Oh, that wasn't fun. I mean, you do. You experience these lessons. So where something may feel silly to you, maybe it is, maybe to him, it's not because he's 15, 14 years old and you're not. But I would say, let them experience these emotions themselves, because the more life experience they have around money themselves, even as teenagers, even if they don't have recurring bills, any of that is teachable moments.

So when they go off on their own, they're not experiencing experiencing those emotions for the first time at 18 years old. They've already experienced it at 11, 12, 13, 14. So again, I wouldn't be legalistic about it. I do think some parents, and I'm talking to some of you Ramsey fans out there who are very hardcore, and you're just like, no, and you're so legalistic, and then it drains your kids. So there's a lot of grace in this, a lot of life to give and take, and they're going to learn, you're going to make mistakes, you're not going to be consistent so much. I don't know. It's just a part of life. But I think the fact that it's present of what you're saying in conversation and in the household is the most important thing.

Yeah, that is so true. I heard someone say a long time ago, it wasn't that long ago, but whenever your kids hear something for the first time from you, the parent, you become the expert, right? That could be, I don't know, relational. That could be with money. But in your home is probably going to be the first time that your kids start hearing about money, thinking about money. And so you become the expert. And so you have to be very intentional about what you're putting out there towards them. It's just a good framework to think through when it comes to that. For sure. Very good. All right, let's go to John Fargo, North Dakota. What's going on, John?

Hey, Jay and Rachel. How are we doing today?

Doing good. How can we help?

Is there a point where a 401k match is too good to turn down in Baby Step 2? A little backstory. Right now, I'm about 30 years old. I make $190,000 a year and The company offers a 4 to 1 401k match up to 15% on their end. So I put in 4, they put in 15.

Okay. Yeah, listen, I love great benefits. I think that that's a wonderful thing. It's a wonderful cherry on top of whatever it is that you're doing and your salary and everything like that. I'll also say this, everyone thinks their situation is the exception to the baby steps. The truth is, it's not. For me, there is never a time where I would say, You know what? In baby step two, I'm going to invest as well. Because the truth is this is a proven method, and it's what works. What we find is that when you focus on more than one thing at a time, you go a lot slower. And when you have a slower place, it's harder to stay motivated over the long term. You've probably heard it said before, your biggest wealth building tool is your money. That's true. That's probably what you're thinking. You're like, Man, if I can... I've got this money at my disposal. I've got this match at my disposal. I've got to go quickly. But the truth is, if you were to split your resource in that way, it's going to take you that much longer to pay off your debt.

When it takes you that much longer, the chances of you becoming less motivated are very, very high. That's my first reason I wouldn't do it. The second reason I wouldn't do it is because if you're jumping around in the baby steps and you go, Okay, I'm going to invest instead, chances are you also have not saved up 3-6 months of expenses, which means if something were to happen, the first place you're going to go is wherever your money is, which is to your 401k or to credit in order to borrow. There is a reason that these baby steps are in the order that they're in. It's because it's going to serve you best regardless of what life throws your way. Does that make sense?

I think I think that makes sense. I mean, it slows us down by one month at the end of it, but at retirement age, that would go to about a million dollars.

So we're talking about- Wait, wait, John.

That doesn't make sense. Wait, wait, John, no. One month. One month is what you're saying, is what you would not- Yeah, $7,600 a month is where we're putting in, including our minimum payments. $7,600 you're putting in where? Towards debt?

Debt payments right now. That's about what I contribute yearly to 401k at 4%.

Hold on. You're saying you put $7,600 towards your debt every single month, and then you're saying that your contribution to the 401k would be what?

About $500 a month is in the raw, so about $6,000 for the year.

How much debt do you guys have, John?

About $80,000. It's a delay of one month.

Do you guys have any savings, any cash on hand?

We have a kid on the way, so we have about $10,000 in stork mode. Okay. A little higher than our max out-of-pocket.

Yeah, yeah. Okay. Well, delaying it one month is not going to... That's not going to completely Totally change your life at retirement. Like you said, a million dollars. Yeah. $7,600 from 30 to 60. Just that amount with compound interest is not going to equal a million dollars.

No, the company is matched and included into that. So then that comes out to about $35,000.

Okay, I'm not really- So you're saying, Oh, if you put in 6,000 for the year, they're going to times that by four?

Is Is that what you're saying? So it's going to be 2024?

Yeah. So you're saying max out completely for the year instead of the month?

Yes.

Okay. I see what you're saying. Well, then I would go ahead and just pay off the debt and put some cash in, and then I would do that and then go and do a Roth IRA and max it out at $7,000, and then you're probably going to end up even.

I think the whole conversation conversation of this is what you want right now as opposed to what's going to work best for you long term. You're going to do what you want to do because you're a grown man, and we can't stop you from doing that. But if you want to know how to work the baby steps, we just told you how to do it. This is The Ramsey Show. Remember the good old days of the internet before it was a privacy nightmare filled with spammers, scammers, hackers, and fraudsters? Simpler times. Now, I don't have a time machine, but I do have the next best thing. Delete me. Think of delete me as your online bodyguard, helping to protect you from the risks of online scams and data breaches. Here's how they do it. They scour the web to find and remove your data from these sketchy data broker websites. And this includes your name, your phone number, your email, your address, and more. And delete me will send you a detailed report of what they did and how much time they've saved you. And they've saved me 66 hours so far, which is more time I can spend trying to nail the wortel of the day on the first try.

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What's going on, Beth?

Hello? Hi. How are you? Hi. I'm okay. How about Thank you. Thank you for taking my call. Yeah.

How can we help?

Well, I'm hoping that you can because I'm at my wits end. I've been married for almost 30 years, and I'm 62 years old, and so is my spouse. After we had children, the division of labor, if you will, was I took care of everything but the finances. I took the household, the children, everything. He was paid the bills and has done that all of these years. Unfortunately, I've recently learned of some pretty catastrophic, devastating financial information that he's had three huge job losses. They were all well-paying jobs. He did invest in a 401k. I've never been sure about how much was in there. I think it might have been maybe 170,000. It's gone. Each time he's had a job loss, it's been a two or three-year gap in between because he refused to take anything other than an upper management position. I've learned he's spent retirement savings.

During those years to keep you guys going? All those years.

What did you think he... Can I just ask, when those time frames were happening, where did you think the money was coming from?

Well, I asked him, and to be frank, he's got a lot of major and management issues. I've always pressed to try to have a household budget. I was debt free before I met him. I had accumulated 30,000 in retirement myself, and anytime I would press it, I became fearful because he would get terribly angry.

But if you had to ask yourself, where did you think the money was coming from? Did you have something in your heart that you thought, Oh, gosh, we're probably on credit cards or we're probably on...

Yeah. In my heart, for sure. But he just kept saying, quote, Relax, quote, Everything's fine. Don't nitpick me. We're fine. He just kept saying, You wanting to do this budget and asking me these questions is showing you you don't trust me. Well, apparently, I had reason not to trust him.

Of course. Yeah, for sure. When did you find this out, Beth?

About two months ago.

Okay.

And there's no money in the retirement. And it's because, I just I want to clarify that he's been spending it throughout the years, or did he take a massive withdrawal and spend it in the last year?

He's been spending it throughout the years. Okay.

So he's just been dwindling it down, and now you guys are 62, and you don't have anything, retirement-wise?

Well, not only that, but he had accrued as the financial manager of our family, he had accrued about $80,000 in credit card debt. In 2016, we did a cash out to finance on the house to pay it off. He promised this would never happen again. Then in 2016, I became very ill. I wasn't expected to survive. I had no idea what's been going on since 2016 with our financial And now, praise the Lord, I'm recovered enough to work part-time, but that's all. And then all this time, his most recent job loss was three years ago, and I finally convinced him to sell cars. He's selling cars.

How many cars do you have?

No, he's selling cars at a car lot.

Oh, got you. Okay.

To make money. Yeah.

He wouldn't get a job before, but now all of a sudden, six months ago, he said, Okay, I'll sell cars.

So today, what is the financial snapshot? Is it still the $80,000 in credit card debt and that's it? Or give us a today picture of what's going on.

No, we paid that off with the cash out refinance Refinance back in 2016.

Okay, so then tell us- Then we now have $126,000 in debt, new debt, since the $80,000 was paid off.

And is that because of the mortgage, the refinance, or is this consumer debt?

Consumer debt.

Okay. Would it break that down for me? What does that consist of?

I've had to do a lot of digging here. I took some notes. There's a $77,000 in credit card debt.

Is that in his name or your name?

$30,000 is in mine, and $47,000 is in his.

Okay. Keep going.

And then he got his sister to cosign a heelock on the house for $50,000, and now that's all gone, too. In total, it's $127,000.

So real quick, let me ask, where did the 50,000 and the $77,000 of credit card, what did that go to? Was that just lifestyle because he's been out of work for three years and you had a health issue? Was it going to bills and keeping food on the table?

Yeah. Okay. Honestly, he was not a very good money manager, and every time I wanted to have a budget- No one was.

I want to call that out. Neither of you were good money managers. But also, before we move on, can Can you tell me about the house? Can you tell me what you owe on the house and what it's worth?

Yeah. See, I think I wrote that down. We paid 390,000 10 years ago. Now, I think on Zillow, it's between 850,000.

What do you owe on it still?

Oh, that's a good question. I thought I wrote that down here. I think we owe, because of the cash out refinance in the Helic, about 360.

Okay. The good news is you still got a ton of equity in it. You're no longer together. Are you no longer together? What's happening here? It sounds like somebody that you would no longer be in a relationship with unless you're doing deep work to fix this. So what's taking place with the relationship?

I've been trying to do the deep work for 30 years, and I've realized that it hasn't It changed.

Yeah, Beth said this would be a scenario which doesn't happen often. But you're a 62. He is lying to you. He is an angry person that you can't breach a subject with, which is not just money, Beth. This is an insight picture into the marriage, right? Instead So this is your entire life. And this is a time I would say I would have my own money. 100 %. I would get your own checking account, which we rarely say this. We're the show that's the opposite. But in a situation like this, this is when things come up that literally he's driving you guys with his pattern and behavior over 30 years with no flag for change, it's going to continue to go down this lane, and that's not going to be healthy for you. And so if I were you, Beth, I would talk to him and say, until Well, until trust can be built back and I see a new pattern, we're separating our finances because it's a symptom of how our marriage has been. And again, we don't have time to dive into that. But, Beth, if you will stay on the line, Kelly's going to pick I'd love to put you with a financial coach because there's so many things to untangle here, not just from the financial perspective, but also the relational perspective.

Beth and I want you to be protected. I do. This is really difficult, and I'm so sorry. I hate that we don't have the time on this show to dig into more. But if you hold on the line, Kelly will pick up. But I'm so glad that you called.

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Org/ramsey to learn more. It's easy to join no matter where you live. That's F-A-I-R-W-I-N-D-S. Org/ramsey. Hey, Dave Ramsey here. Dr. John Deloney and I are coming to a city near you on the money and Relationships Tour. You, the audience, will vote to choose the topics we talk about, things that impact your life, like investing in your future, money, stress in marriage, and more. We're coming to Louisville, Durham, Atlanta, Kansas City, Fortworth, and Phoenix in April and May, 2025. Tickets are at their lowest price right now. Grab yours at ramsey solutions. Com/tour. This is the Ramsey Show. We've got open phone lines, so if you have a hankering question about your life, your money, your career, your relationship, daycare, whatever it is that's on your mind. Give us a call. We can help you out with it. Maybe it's your budget. It could be any of those things. We'd like to help. We've got Gigi on the line from Los Angeles, California. Gigi, what's going on?

Hi. I just had a question about whether I should pay off my credit... I mean, not my credit card. Pay off my car or save money towards a deposit for an apartment. A little background story. I'm on baby step number two. I will have all of my credit cards paid off this month, so I've hunkered down with about $18,000 that I got paid off. I have a daughter. I recently moved back home with my mom. I am married. I'm going through the immigration process with my husband and my two step daughters. They can be here next week, next month, next year. There's no real big timeline, and there's no room for them at my mom's house, of course. I'm wondering, in this time, should I just save up money for a deposit for an apartment so I'm ready when that time is coming? Is there here, or should I just go ahead and continue to try to pay off my car?

Where are they now?

They're in Uganda.

Okay. You're saying they could come next week, next month, next year? You're not sure, is what you're saying? Yes. Okay. We're not sure. How much money would take to have a deposit for an apartment?

Deposits? Two bedroom apartments out here are, they're about 2,200. Okay. So I would say I need about 66.

Sixty-six? Okay. 6,600. How much is left on your car?

Sixteen thousand.

Sixteen thousand.

Is that your last debt?

Yes. Okay.

How much are you making? What do you bring home every month?

I bring home about 3,600, and I've been putting 1,500 a month on my debt. It looked like I would be due to pay it off in about maybe 9, 10 months.

Okay. Is your husband working while he's in Uganda? Does he have any money to speak of in this?

Yes, but his money is just taking care of him and the girls over there. We're not- Okay.

No extra, really. Okay. Yeah, there's part of this where this feels a little bit like, not a storm, but something that does need to be prepared for, because what you're saying is if they got here next month, I mean, how likely is that? How did you guys meet Gigi?

Sorry, I'm just, I'm curious.

Oh, no problem. We met through missions. I would be missionary.

Okay. So you were over there and you guys met, fell in love? Mm-hmm. Oh, that's so great. You're going to laugh at me, Gigi. The reason I'm asking is we've gotten calls on this show with people that have met online, and it's been like a scam thing, and we've had to follow up with them and help with all this. So for a split second, that came in my mind. I'm like, You have met him in person, right, Gigi?

Oh, my gosh. Isn't that That is funny.

I did have that thought, though, because that has happened twice on the show.

Okay. So he's a real guy.

I'm thankful that, yes. I know. I'm just asking how you met.

We've been married for three years.

We have a five-month-old daughter. It's beautiful. It's beautiful. Okay, it's great. We know it's real now. Okay. Really funny. Okay.

So yeah, I would make it because if they came, I mean, you guys could maybe last a few weeks at your mom's, but you're saying there's no room. There's no room. Yeah. No, no. Yeah. And how much is your car payment a month? How much are you paying on that?

360.

Okay. Because there's always this balance of paying off the car quickly because that frees up that car payment plus what you were paying on the debt, and it just snowballs into more money every month to put towards that apartment. So I would... I mean, yeah, that priority is tough.

But part of me feels like... Part of me feels like right now, you said you're putting $1,500 a month extra towards the debt. Part of me is like, okay, if you put a thousand aside, you can be done with this in six months and still have made some progress on the car if you wanted to. Or you could say, I'm going to stop one and do the other. I'm going to stop, I'm going to save up $6,000, and then I'm going to push play on the car, which is probably what I would do, because if what you say is true, it could literally be next month or in two weeks or turn around and be in a year, it's not going to matter. They're both going to be taken care of.

Because it's considered a four-wall at that point, your food, shelter, utilities, and transportation. And so when they come over, you guys have to have a place to live. That would be in a level of priority. You could go ahead and just save up, like you're saying, Jade, in six months, you'll have that. Set it And then, and if you had to, Gigi, you could be like, Godly, I'm so close to paying off my car. I can go grab out of that account a few thousand dollars, if you're that close. So it's still your money. But in that case, it would, in that case, could be considered one of your four walls.

I mean, if you put all this money towards it, you're going to be done in four months. If you put the whole 15,000 or 1,500 towards it, you're going to be done super fast. You could probably do either and be fine, but to Rachel's point, prioritizing the house first is probably it.

Yeah. And Gigi, are you good with all the fires and stuff going on right now? I was just seeing. I've been following on the news.

Yeah. It's crazy around here. I think a coworker of online. Their friends lost their house to a fire, but we're doing okay.

You're okay, and you're where you are. Okay, good.

We're a little bit outside of LA.

Okay.

We're okay. All right. Can I ask you one more question now? Sure. Yes. And I guess. We're saving for For this apartment in being that I make about 59,000 a year. Being that apartment are 2,200 maybe for a two bedroom, would it be... It's going to be maybe... It's going to be over half of what I make per month. But being that I'm debt-free at that time, would that be something that would be okay? Because I know it's usually no more than 30% of your income.

Well, I would include him working at that point. So you'll be having more money. So that significantly should go down, and you guys should make that a goal to go down. So it doesn't change whether you're debt-free or not. Housing, in general should be around a fourth of your take home pay. But I would add his job and his income in with that.

Okay.

And I don't know. I mean, you didn't mention this. It seems like you might be in an expensive area. If there's no purpose in you being, I'd look further out, especially if you guys have goals to pay off debt. I don't know if he has debt, but it could be worth it to- No, he doesn't have any debt.

From a lifestyle perspective, LA, it's just- Very expensive. Yeah, it's tough. From just the standard of living and what you're paying for things, you're in a very expensive area. Southern California is. To Jade's point, for your overall, and this could be maybe something you guys think about, especially if you're looking to buy a home, and this will be in a few years. This is more long term thinking, Gigi. But there is that conversation that people are having with a family and just saying, oh, my gosh, we can't live the level of life and have the margin and the freedom to do things we want where we are geographically. People are having those discussions to Jade's point. That may be something you guys talk about later once they get here and you guys get settled. But that's a reality for a lot of people.

Well, and that also raises the point of we talk all the time when it comes to mortgages. Yeah, the percentage shouldn't be any more than 25% of your take home pay. We We talk about that includes taxes, HOAs, like any fees, that thing. But the truth is it still applies with rent, too, because the overall principle still is in place, which is if it takes up more, especially more than 30%, you're really going to feel that. Even if you're only renting for the next three years or whatever it is, it still cuts so much into your day-to-day that you're going to feel it. And especially if you're trying to get out of debt, it's going to take a toll on your month-to-month expenses and what you can really accomplish.

Yes, for sure. And it does. And what's hard, too, is a lot of people, and based off of calls we've had recently, that they base it off of a two income. It's what we just did on that call. And the danger, even with that, sometimes, it's just always something to keep in mind is that they have a baby and you realize, Oh, I want to stay home. But where you live, it's a two income household to keep that standard of living. And so when you make decisions like that, it uproots and changes a lot, which is fine. But you have to be thinking about all of this.

That's really good, Rachel. Having that foresight to go, Okay, what season of life are we in? Are we in a season of life where we're still having children? Could there be the idea of one of us staying home? That is so smart. Really good. This is The Ramsey Show. Hey, guys, this is Jade Warshaw. Listen, I get it. The student loan situation is bananas, but it's time to make progress, not excuses. If your payment and interest rate have you treading water, refinancing could be the solution for you. Look, if I were in your shoes, I would contact Laurel Road today and get a free 30-minute consultation. You'll work with a student loan expert, and you'll go over your refinancing options. Hey, for refinancing to make sense, you've got to check certain boxes, like making a good income. And bottom line, Ramsey advice is that you only refinance if you can get a lower rate or a shorter term. Remember, the point is to pay off debt faster. Maybe you just need to keep rocking the debt snowball. But if refinancing does make sense for you, Laurel Road offers low competitive rates and interest rate discounts are available for stuff like auto pay.

Listen, you can't mess around with student loans. If you want them gone, you got to go hard. So go to laurelroad. Com/ramsey to find out more and schedule your free 30-minute consultation. That's laurelroad. Com/ramsey. Laurel Road is a brand of Key Bank National Association. Hey, George Campbell here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about, and all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's Real Estate Homebase is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to finish guides, a podcast, and even an in-depth video course hosted by yours truly. What's not to love? So if you're ready to take the next steps toward your home goals, go to ramseysolutions. Com/realestate. That's ramseysolutions. Com/realestate. You're listening to the Ramsey Show. I'm Jade Warshott. Next to me is my buddy, Rachel Cruz, taking your calls this hour. Your life, your money, your New Year's resolutions, get in where you fit in. So, Rachel, there's a lot going on with the housing market.

We're seeing some trends. You've got some input on it, so I'm going to let you take this and drive it on home.

Yes. I would say good towards the consumer when it comes to mortgages. So we are seeing a trend that mortgage rates are going down, and they're expected to keep dropping in 2025. Five. So rates on a 30-year fixed rate mortgage fell to 6.12% in late of '24, and they keep decreasing. And they're not going to go back to 2-3% rates like they had pre-pandemic, which was beautiful. It's not coming any It's time soon, but again, we're continuing to see it drop, which we love. Housing prices, they're staying pretty steady. And again, they might level off, but with the low inventory, it's keeping that stable. And so they're not going to effectively drop drastically. So it's still this idea if you're on the sidelines and you're ready to buy a house, this whole idea of like, Oh, there's a bubble. It's going to pop. I'm going to get a great deal. It's probably not going to happen. They are pretty consistent. In the federal home loan mortgage Corporation even predicts modest price growth in 2025. So values will continue to rise. Inventory is slowing. So inventory grew 29.2 % in 2024 compared to the previous year.

Now, it is still below pre-pandemic levels, and more homes are on the market to give buyers more options. And sellers still have the upper hand in most areas as demand- It's like little by little, it's getting better.

Exactly.

Exactly. Buyer demand could rise. So if interest rates keep dropping, then obviously there's going to be more competition. People are going to get back into the market to buy. Foreclosures will stay low. Foreclosures declined 13% in '24, and this trend is expected to continue in 2025. Again, they're rare out there. If you can find a good one, that's great, but they're pretty rare still. Some of the takeaways for what we're seeing in the housing trending in 2025 is for buyers. If you're looking to buy with rates trending down and inventory improving, you might find more opportunities to get into the market, and you may have some more options when it comes to housing. But again, do not overspend. When you go to the mortgage company to get a mortgage, they're going to offer you way more than what you need. Always. So stay within your budget. If you are selling, this is still your market. Homes are priced fairly. If they are priced fairly, they're going to still sell pretty quickly. Again, for everyone, you can't wait for the perfect time for the housing market. It's the perfect time when it's the perfect time for you.

If you don't have debt, you have an emergency fund in place, and you have at least a 5% down payment, go ahead and get in. Because again, the housing values, the price of houses are not going down. You're not going to go get a deal next year. They are the same, if not modestly increasing. So the value of our homes, it is still going up.

Which truly is good news because these are investments for us, and we want them to be going up. Even if you're not in the housing market yet, that's a good sign for all of us. But, Rachel, you made a really good point because when you go into this, you've got to know your numbers, you've got to know what your parameters are because they will. Lenders will allow you to borrow sometimes up to 50%, maybe even more of what you're taking home. Just because they say you're approved, that is not your signal to go, All right, everything's all good.

A banker says, I can afford this. That's a red flag, people. You need to control that on your own ends. It is wild when we think about it, and I know we all remember because it was just a few years ago, when prices just skyrocketed up. Remember that? And there were some hot areas that were significantly overpriced, and they did come down. Even last year, it was this correction. Austin, Texas was one. We saw some markets do that. But I remember being on the show two years ago, and Dave and all of us were saying, there's not a big bubble, you guys, because some people were saying that. Yeah, it's just like this. It's going to be like '09. There's going to be foreclosures everywhere and all of this. And it's like, no, it's going to stay. And again, it may correct. It may go back down a little bit to correct, but it is going to be what it is. And it has stayed there, Jade. I mean, it is wild what homes cost now as a homeowner.

I'm not mad at it. I'm not. I mean, think about it, because this is the thing. If you're on the sidelines right now, you're definitely on feeling some type of way because you're like, Man, I wanted to get in on the market. But it's good news for all of us because it tells us that the market is still strong and that things are doing well. When you do get in, you're going to want your property to appreciate as well. That's right. Sam and I, South Florida was one of those hot areas. When we got our first house, it was around 400,000, and it doubled when we... I'm like, Thank you. It made me a baby steps millionaire. This is what want to happen. It's one of those things that when you're not in the housing market yet, it can feel so frustrating. But once you get in, you're like, Yes, I'm finally part of it, and you want to see it ticking up. That's right. Good things. So good. Did we tell them to go to the- Oh, no.

Yeah, you need to go to ramseysolutions. Com/realestate. We do have a US housing market trends. It's honestly right there on the front home screen. So if you are curious about what's going on in the real estate market and you want to see facts, then we pull these from reputable sources. This isn't just opinions out there. These are actually what's going on in the housing market. And it is something people are watching and want to know, Hey, what is going on? Because you do hear a lot of either doom and gloom or overhyped here. Just to get the reality of what's really going on in the housing market, make sure to go to ramsey solutions. Com/realestate. And for all of your real estate needs, if you are looking to buy and sell, use one of our Ramsey trusted real estate agents because they will help you in this area. It's a big deal, you guys. Your house is, for most people, the largest purchase you make. Oh, yeah. To your point, the largest investment when it comes to it appreciating and all that.

They help you do it the Ramsey way. Because when we were moving here, the way we do things the Ramsey way is not necessarily the way they do things out in the world. I remember making an offer on a house here, and I was like, It's got to be contingent. We've got to sell that house so that we have... We're You're not going to be one of those people who takes out a bridge loan. It's great to work with a Ramsey-trusted person because they know that. You don't have to explain all that to them. They get it. They're not going to take it a task on it. They don't think you're crazy. Exactly. It's so, so important to do things the Ramsey way. All right, let's get to a call. Nick and Diana, they're in Chicago, Illinois. What's going on? I love a couple now.

Hey, how are you doing?

Doing good.

Thanks for having us on your show.

You're welcome.

How can we help? My wife is a long-time listener, and I just became Started to listen to you guys, and I wanted to ask a couple of questions in regards to, I cosigned on a loan for my friend seven years ago now with a verbal agreement that in a few years, he's going to refinance and get me off.

And COVID hit, and he had a COVID Assist program where they stopped paying on the loan, but obviously, the interest rates were continuing to add up.

Yikes.

And then life happened. So he had surgery. So he went through a couple of rough times. I mean, the good thing is he's still paying on the loan. The only bad thing was the original loan was for 367, and now because of the COVID program, it went up to 376. So after I just got married with my wife, and we want to start our our life and buy our first home, and I reached out to him in regards to options of getting off the loan. Excuse me. And we tried to do a loan assumption, but his debt ratio was not where it needed to be because of the surgeries and everything. Then I approached him in regards to, Hey, let's refinance. Even though it's going to be at a higher rate, it's going to be on you only. It's not on me anymore. I did my part as a friend of helping you get this house, but the agreement was- And what did he say? No, obviously, he said no because of the rates not being low enough And so my question for you would be, obviously, we've been going back and forth with him about it, and I want to know what should be my next step.

I mean, The relationship can't be too good after all this, is it?

No. The relationship has definitely suffered.

We're about to go to a hard break, nick. But this is the hard thing about cosigning, nick, is there aren't other options. From a legal perspective, you signed a loan, and until your name is off of that loan, there's really not a legal way to go about this or anything. It is what it is.

You could try to see what a judge would say about it. I mean, to try to force a refi, but I don't know that they could do that.

Yeah, I'm not sure.

This is why we say not to do this. This is the Ramsey Show. Hey, guys, what's up? It's Jade. Look, let's be real. With everything that's been going on, staying on track with your money gets tough. Between bills, trying to pay off debt, saving money, honestly, it's a lot. And I've been there. That's why I'm excited to tell you that Dave Ramsey and I are hosting a free livestream on January 23rd to help you take control of your money in 2025. Plus, Rachel Cruz and George Campbell are also going to join us for a live Q&A where you can finally get your money questions answered on the spot. And check this out. You could win $4,000 in cash. It's a giveaway. Imagine what you could do with all that money. All you've got to do to enter the giveaway is to sign up for the livestream. That's it. So go to ramsey solutions. Com/livestream and sign up today. You are listening to The Ramsey Show. Hey, thanks for hanging out with us. If you like this show, we're happy that you're here, honestly, and we want to make sure that you're sharing it with your friends.

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Amazing. It's nice. Jade, I'm going to wrap back to the call we just sent Ed because it was a quick call, but I think a big subject. And obviously, nick and Diana, there were a couple, and they called in and talking about how he had cosigned for a friend on a home. That was $367,000 And then with the pandemic happening and all these other plans you could get on where you didn't have to pay, and all of this stuff happened. And now he owes 376,000 dollars. So nothing was paid down. It was going up. And on top of that, nick got married and was like, I want off this loan. Because when you cosign, and everyone needs to hear this, this is a lesson. When you cosign, it basically is you taking on this person's debt. It shows up like your debt.

They're like the parents- As if it were just you. Yes.

So that is car loans, you guys. That is mortgages. That is parent plus loans. We talked about that in the break. If you're a parent and you do a parent plus loan, that is debt that's looking like it's going on your report. It is a really big deal. People do this out of the goodness of their heart because their friend or family member can't get the loans. They need someone to cosign. And that's where people get in trouble. And the hard thing about when you cosign, I mean, there's not a lot of ways to get out of it unless the person who is the main name on the loan says, I will refinance to take you off, which nick in the last call tried and asked the friend to do that, but the friend won't because now interest rates, right? He probably got a 2.5% interest rate, and now interest rates are 6%. So the friend's like, There's no way I'm going to refinance right now. And it messes up a relationship, and it messes up your own financial life. Yeah. So again, we were saying before the break that there's, again, the answer to those questions, if you have cosign, there's really not much you can do from a legal perspective.

You may be able to get a judge to force it, to force a refinance. But I don't hear that of that happening a lot.

Do you, Jay? I don't. I mean, we had somebody call in a couple of weeks ago. It was a boyfriend-girlfriend, signed together on the vehicle that she would drive. They're no longer together, and he's like, She's not paying the bill. What do I do? The only thing I could advise them is find out how much is and keep that to the side because you might be ending up on the hook for this. That is the danger, Rachel, that we talk about all the time, whether it be with housing, whether it be... I mean, this is the price of a house. Because of it, to not be able to do what you want to do next, you've really got to think long term. Because the truth is, with the call that you just talked about, the guy, he's not a bad guy.

The friend.

Yeah, the friend is not a bad guy. He was making payments. Something happened with his health. Life happens. There's no way we can have the foresight to understand what will happen with the housing market, what will happen with interest rates, what will happen with your health, will the relationship sustain? You don't know. You don't know. You just don't know. This is so sad. I was telling Rachel during the break, with my husband and I, we experience this because it's always out of the goodness of somebody's heart, always. With student loans, my mother-in-law signed student loans for, obviously, her son, which you would think, Oh, duh, of course, she would do that. But the truth is now it was on her credit as well, and that's part of her debt to income ratio. When she was ready to buy a house, then we were affecting her because that wasn't something that was in our debt snowball yet. You can see how it's not that somebody's the villain or doing something bad. It's just when you cosign. I mean, it's why the Bible says that. I mean, really in simple terms, it says it's stupid to cosign.

Yes, you're a fool. You're a fool to do it because it puts you in a situation that you have zero control roll over virtually.

That's right. Yeah. So I didn't want to go past that call too quickly because it's a big one. I know for nick and Dan, this is their reality. But also, the answer is really, there's really not much you can do in that case.

All he can do was save up to try to pay cash and lower that debt to income ratio for his own loan, for his own home loan. That's truly all he can do.

Control what you can control. But at that point, it is there. Yeah. Yeah.

So tough, Rachel.

So sorry, you guys. That's not fun. Yeah.

All right. Learn from their mistakes from my mistakes, and Rachel, you have some in there, too, I'm sure. Last week. Jeff, we've got Jeff in Austin, Texas. What's going on, Jeff? Good to have you on the show.

Well, I'm pleased to be on the call. I've been listening to Dave and you ladies for probably 20 years.

Oh, wow. Before us then, Jeff, before we were co-hosts. That's great. Thanks for calling in.

Yeah, listening and been a student and followed Dave's principles pretty well. I'm pretty happy today. I got I had a lot of peace and content and a lot of blessings in my life. That leads me to the call today. A little backstory. I'm retired about two years ago. I've done well in the market. I've been in business for 30 years. The situation I have is on behalf of my daughter. My daughter has been married for two years, and the beautiful family. They have two little babies. My son-in-law now, very bright, intelligent young man, and daughter's very strong-willed and independent, is some of the principles that are laid out, they haven't followed to it, the combining finances, et cetera, is one of them, which I was always very vocal. I taught my daughter baby steps, and so she's been a disciple. She's getting there. She's got an IRA, she's got her emergency fund. She follows a very strict budget. But them not having joint finances, we just found out this week. My son-in-law came to confession to all of us and had been day trading. Essentially, was financing some of this through credit cards He stacked up about $60,000 in debt and lost all of his savings.

Man. Day trading. That number doesn't scare me so much because I'm confident that they can work your way through their debt. The part that I'm struggling with as a father and a grandfather is I'm trying to stay in my lane to give my daughter as much support as I can. She's never asked anything from me since she's graduated from college. She does well at her job. In fact, she starts back to work from maternity leave this coming Monday.

Oh, wow. So new baby.

Yeah, born in October. Beautiful little girl. The challenge is for for her and for me is all of this was hidden. She had no idea until she stumbled across some information looking at her credit score. That did a drop, and found out that her card he had used and stacked and maxed that out, and that's how she found out.

Got it.

So it's a huge trust in the way.

So he used her card without her knowing it?

The best way I could put it, their family is very close as far as the They don't do anything other than take care of the kids and activities or great parents. And unbeknownst to her, yeah, he used her card, and they do that. They might use each other's cards at times, but then he maxed it out, and when her credit score dropped by 20 It's when she started digging.

You said he came clean to the whole family. So that was after she had gone to him and said, Hey, what is this? And obviously, after they talked, then he felt the need to say that to the whole family. Family. Is that what you're saying?

Yes. So he confessed to her, and then the day after, called me. Because, again, we're very close. I mean, we talk consistently. I talk to my daughter or text almost every day, or we FaceTime with the babies.

So this is Man, this is really difficult. For them, it's going to take a lot of, I think, professional counseling because this is lying. I mean, he absolutely lied and did a level of gambling. It's what day trading can end up being. For you, I think being a dad there, not overstepping your rounds. This is their issues to work out within their marriage. If they reach out for help, I think from an emotional standpoint, you can be there, but this is theirs to take care of.

Don't meddle too deeply, or it's actually going to make it worse, I think. They need to figure this out between themselves as a couple. So sorry. This is the Ramsey Show.