Teach Yourself To Say “No” Today so You Can Say “Yes” Tomorrow
2024-03-27 01:57:08
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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 actual, amazing relationships. Jake Walsh, our Ramsey personality and best-selling author, is my co-host today, as we take your calls about your life and your money. The phone number is 888-825-5225.. Jack starts this hour in Cincinnati. Hey, Jack, welcome to the Ramsey Show.
Hey, Dave, how are you this afternoon?
Better than I deserve. What's up?
So I've dug myself a hole, and I don't know what the right answer is. Well, actually, I probably do know what the right answer is, but I don't know how to get out of it.
Okay. What happened?
Well, to make a long story short, my wife and I got married two years ago after dating for about six years. We waited until all the kids were out of high school, and we could combine households a little more easily. After a big wedding, we started trying to pay stuff off, but the minute we got home from the honeymoon and when it became the business of a relationship, the relationship changed, and that's where the problem lies.
So in the process of paying stuff off, last July, we decided, because we weren't making any progress on the credit cards, we made a really wise decision to take a 401k loan for $50,000, payable in two years, to pay it off, but now the credit cards are coming back.
So I've got a list. if you want a list, but just not sure what to do with it.
So your core question is what?
How do I fix this and keep my marriage?
Oh, okay. Okay. Wow. All right. So you've got a total of how much debt?
120.
Okay. And 50 is a 401k now.
35 left. That's correct.
Oh, 35 of the 120.
. Okay.
35 of that, 401k is left.
Okay. Yeah. So 35 of your 120 is a 401k loan. What is the other 85,000??
Okay. So we've got a credit card with 11.8,, credit card with 7,200, credit card with 19.2,, credit card with 2,900, two cars at 31.8 and 22.4, my daughter's car at 2,900, which will be paid off very shortly, and a trailer for my losing business at 4,300..
Okay. All right. And what's your household income?
About 200.
Okay. What's the losing business? What's that mean?
So, to fund an early retirement, I have a woodworking business that I do on the side. It's taking up six to eight hours a night and every weekend. And in the last two years, we've lost about $10,000 a year.
Okay. So that sounds like an expensive hobby that's taking up a bunch of money and a bunch of time, both. That's kind of an easy decision, isn't it?
I need the eight hours to spend on my marriage. I need the $10,000 to spend on something else rather than a losing business. Close it and sell off the stuff. Why wouldn't you do that?
I could.
Yeah, you could.
You'd have eight hours to spend on your marriage. You said you're spending eight hours a night on this?
Yeah. I'm normally in my shop until between nine and 10 o'clock every night.
Yeah. That's good for marriage. Yeah.
Okay. And especially since you're not making any money. I mean, if you were making $10,000 a night or something, she'd probably be tolerant. But okay. So you have a $200,000 income.
You have cars coming at your ears, credit cards coming at your ears. Now the credit cards are growing back. So that tells us that you guys continue to spend more than you make.
If the credit cards are growing back, right?
Yeah. You took the HELOC out for the credit cards. Tell me what you're spending this money on. Is this just putting food on the table? Is this funding your business?
What's going on with these credit cards?
So three of those cards are funding the business. One of them goes away in a week because I made a big sale.
Did you cut them up yet?
They're put away. They're not cut up.
Okay. There's the problem.
Okay. No, there's a different problem. I disagree. The two of you have not sat down and said, with a written budget, that we're going to live on less than $200,000 a year.
Why?
To be honest, we have, but then something always comes in.
So you just didn't stick to it?
Pretty much.
So an example of something that comes in is what?
A $4,000 collection item from Verizon from four years ago that we didn't know was coming,
or a foreclosure for her and her ex-husband on a timeshare of all things that paid immediately because his credit doesn't need to be affected.
I'm sorry.
I know timeshare is your favorite word.
No, I don't understand why his credit matters to you.
Well, she was obligated to pay it in a divorce.
Oh, okay.
So she knew she had that and the Verizon bill was hers too?
Yes.
So she knew she had that. She just didn't know when they were going to drop. But she knew these were unpaid bills. if she's an adult.
I'm missing something here, Jack. Okay. I don't understand why this is ending your marriage, because the two of you can't get on the same page, or what's the problem?
So the stress of the bills is ways heavy. Okay. And we go out and we go to like a craft show on the weekend and we make a little bit of money, and all of a sudden we're all in and we're ready to go take this business into early retirement. But by Tuesday, when it rolls around and we're back out in the shop, it's, oh, holy cow, we got to work again.
So you just have a short term.
That's your side. hustle. Right. You have a $200,000 income and the two of you can't decide to live on that. That's what's confusing to me.
I think that your mindset is, there's some place in your brain where you think you can kind of windfall yourself out of this, whether it's, hey, we'll just take out the HELOC and that'll be our windfall to get out of this, even though it's not. Or, hey, we can go to these craft shows and maybe we can make enough money to get a windfall and get out of this. And I think what Dave is getting at is you guys haven't truly looked at your behavior together as a team. If you set a course and say, we're going to do this, no one else can make you feel like follow that course of action other than the people in the mirror. And that's what we're getting at is...
So, Jack, if you wanted to have some dramatic moves forward, okay? I can give you four things right now that if you go do them, by the end of the time you do those, which should be within two weeks, you're going to have a completely different scenario in your life. Sell both cars, sell the trailer, get out of the woodworking business, sit down with your spouse, and do a written, detailed budget where the two of you live on less than your day income. And you guys can clean this mess up in no time. But you're screwing around with craft shows, losing $10,000 a year and eight hours a night, and losing your butt, and you can't sit down and manage to make it through a $4,000 bill making 200K.
So you can do this, but you got two stinking expensive cars, you got a stinking expensive hobby that you wish was a business. And the two of you aren't working together. That's the answer, right? Those four things. Hang on, we're going to put you through Financial Peace University, see if we can help you too.
This is the Ramsey Show.
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Jade Walshall, Ramsey Personality, is my co-host today. Thank you for joining us, Jade, along with me and all the Ramsey Personalities, Ken Coleman, Rachel Cruz, George Camel. We're all going to be doing the Total Money Makeover Weekend here on the Ramsey campus, at the Ramsey Events Center. I'm jacked about this. This is, we've got three big events coming up.
This is the first one. It's May 10th and 11th. Gosh, just a little over 45 days away. It's going to be here. Tickets are selling like crazy.
You're not going to be here unless you get your ticket soon. So we're going to be talking about not only all the money habits and the baby steps and walking you out of debt, but how to deal with the relational parts of this, how to work on your income side of the equation. And you're going to leave this weekend with a full experience. We're going to have a ton of Q&A, a ton of interaction with all the Ramsey Personalities, pictures of the whole bit. But, most importantly, we're going to talk to you about how to take over control of every area of your life and cause this to happen.
I'm excited about this, Jade. It's going to be fun.
Me too. I'm excited. It's right here on our campus, which is really cool.
Yeah. May 10th and 11th. You can get your tickets at ramseysolutions.com. It's the Total Money Makeover Weekend. You're going to get fired up and wired up, baby.
Oh, and you can bring that friend or that spouse that thinks you're crazy. And by the time they leave, they will be as crazy as you. So there you go.
Show them to the Kool-Aid.
That's it. That's it. Here's the Kool-Aid. We're going to serve Kool-Aid that weekend. That's for sure.
Dave Ramsey's Investing Essentials, an event I've never done before. I'm looking forward to this. I'm going to be doing this with George Camel, a two-night virtual event, May 21 and 22.. I'm going to get my personal playbook out, how I buy real estate. Not some TikTok version.
I own several hundred million dollars worth of real estate. How do I do that? What do I do? What's the process I've used since the beginning? And how much of that has changed in this current real estate world?
Certainly how we look at basic investing. We're going to lay that in place. But also some of the detailed stuff that, frankly, when I'm running around with friends of mine that have a $50 or $100 million net worth, what are they doing?
Spoiler alert, it's not Bitcoin, okay? Spoiler alert, it's not gold. Spoiler alert, real investors have a different mindset. And I'm going to talk to you about how to build that mindset. And so you want to learn how to do the real stuff, not some get-rich-quick crap off of social media.
We're going to walk you through it, the 21st and the 22nd.
I'm excited for that.
That's going to be fun. I've never done this material before. I'm excited about it. Money and Marriage Getaway is October 24th and 26th. That's Rachel Cruz.
By the way, I left her out. She'll be at the Total Money Makeover weekend. I guess we'll bring my daughter, yeah. Anyway, so her and Deloney are doing this Money and Marriage Getaway 24th through the 26th of October. And they get into everything.
I mean, everything on the marriage stuff. Real questions from the floor that, well, there won't be children there.
I'm still thinking about the dancing that I saw at the prom this last year at the event.
It was pretty cool, pretty cool. So all of these tickets for these events at the Ramsey Event Center are at RamseySolutions.com slash events. We'd love to have you come visit with us. You can come in a little bit early. We do the show here every day, Monday through Friday, from one to four.
on the glass. The cookies homemade are free. The coffees homemade is free. The show, well, it's free. There you go.
But it might be worth what you paid for it. So be careful on that. Stacy is in Riverside, California. Hi, Stacy. How are you?
Hi, thank you, you guys. How are you guys?
Better than we deserve. What's up?
Okay. So I'm going to try to word this in the best way that I can. I guess I'm trying to figure out what I should be doing, obviously, like so many others today, for my best future. I am currently, I've been a single mom for the last five years. I was married for 24, always a stay-at-home mom, as well as a homeschooler.
So over the last five years, I was kind of given in my lap. I was trying to figure out how I could still homeschool my kids. They're two teens and work from home and, you know, make ends meet. So I homeschool my two teens. still.
I babysit three babies for the last five years. So I do in-home childcare as part of income. And then I also have an LLC at the homeschool learning center that I run on Fridays. And then I also teach homeschool classes. So I've got, you know, kind of several different pots going.
But I'm wondering, okay, so along with that, I also get alimony child support as part of my income. And of course, that will end. in a year. One of my kids, you know, will drop off for receiving child support. And then in two years, another child.
So I'm trying to figure out today, what would be the best scenario for me going forward, knowing that I am going to take a huge hit in income and have to obviously ramp up the self-employment side. I don't plan on doing childcare long-term. once these two families that I have kind of age out. I plan on being done and then try to do something a little more with the self-employed side. Or would it be better for me to start either taking classes now for a career or get a job now to have the benefits, the medical and all that.
You're amazing.
Kind of my mind is, my mind is swirling with all of this.
You have pulled, you have stitched together a quilt to make the life that you wanted to make in the middle of a divorce situation, where you have these two kids and you have this heavy desire to homeschool them. and you made it work. You pulled together from the left, the right, from the top, from the bottom, you scratched your claws, you made it work.
And so what I would point out maybe, and it might be true, it might not be true, you can correct me, is that all of these businesses had to do with homeschool because you had to make homeschool work. Yes. Not because it was your dream in life. It was because you're a freaking warrior and you were making stuff work.
You know what I mean? That doesn't make me cry, but yes. I think, as a mama bear, you do what you have to do.
Yeah, you did. You did. I'm proud of you. I, and I, and you got to play through on that. You're not done.
You've got a couple of years of that left, but, but your question is what happens at the end of that? And my opinion, looking in from the outside, just for five minutes, at how impressive you are is, I think when the last kid leaves, it's Stacey time. What's Stacey want to be? What's Stacey want to do? Because you, you've just, you, you've given up, you're an incredibly noble woman.
You've given up your life the last few years for the sake of these kids.
And I'm not sure the homeschool is what Stacey set out to do as a career if she didn't, if she wasn't kind of forced into it by the circumstances.
Exactly. In fact, I've told my kids, I'm like, this. Friday classes is for you guys. And, and by the way, I love the community.
I'm not saying you're mean. I wasn't saying any of that. It's not selfish for you to have some Stacey time now. It's the rhythm of life.
And, by the way, what would that be, Stacey? If you could start out on a path, what would that path be?
If you, if money and, if money and time were no object, what would Stacey be?
No, that's a great question. I, and this is going to sound interesting, but I love finance. I have part of my homeschool teaching. I've taught teenagers the, you know, personal finance way, the Ramsey way. And I love nutrition and health.
Those are just my passions. And I'm not sure, but I look at that, like, what should I be doing now? Should I be taking classes to pursue both of those? Should I be preparing myself for when it is me time? And what do I want to do?
And, and what is my next best step? And it is honestly, in all honesty, it's kind of fearful. I don't really know. I've always, just, you know, been that, you know, with that label of homeschool mama and stay-at-home wife, and then to be thrown into, and honestly, it's all God that has placed these other wonderful families in my life to allow me to watch their kids while I could still be home with my own, and even, you know, provide homeschool classes and all those things. But you're absolutely right.
Well, no one accused you of whining.
You're anything but a whiner. It's okay. You don't need to, you don't need to put any caveats in here.
Listen, we'll set you up with Ken Coleman's career assessment, because I feel like that's a great place for you to start to really see what your skill sets are and what you love to do. And then just take it from there, throw in paycheck to purpose, Christian. I think that's a great place for you to start.
Yeah, going through his materials and try to assess, okay, it's almost like you're 18 or you're 22 years old. You just came out of college and you can do anything you want to do. It's a whiteboard. What are we going to do? Ready, set, go.
You get to choose.
Yeah. I do think you're an entrepreneur at heart, though. I think, whatever you do, it's going to be your version, your self-employed version of it. Let me just say that. I could be wrong, but I think I'm right.
And if the financial thing is tickling you, one way to kind of put your feet in the water might be just lead a financial peace class at your church. You'll end up doing coaching as a coordinator. You can't keep from doing it. And then you may want to evolve into one of our coaches. I'm not sure, but that you can look at that, but it doesn't cost anything to lead a class.
And you can get on there and get your feet wet and go, okay, this is adult to adult, dealing with money, finances. It's not really scratching my itch. Okay. Or it is, and I want to go further. You can look at it either way.
So hang on, we'll send you out that assessment. I think you're going to really be helped by it. You're amazing.
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Jade Warshall, Ramsey, personality, bestselling. author, is my co-host today. Open phones at 888-825-5225.. Monica is in Grand Rapids, Michigan. Hey, Monica, what's up in your world?
Hello, I'm super happy to get to talk to you guys.
You too.
I am 28 years old. I'm on baby step five, and I feel like I'm relatively on track with my retirement investing goals. Good. Right now, again, I'm at baby step five. So I'm trying to save up for prepaid expenses.
No kids, but my prepaid future expenses, a goal I have for myself. I'm trying to save up for a guest plan.
I'm sorry, baby step five is kids college. You don't have kids.
Yeah, yeah.
So you don't have a baby step five. You're on baby step six.
Yeah, I'm just trying to save up for a future expense. So, okay.
What are you saving up for?
I would love to start a guest lodge in the future. So I'm trying to save up for obviously a huge amount of money to be able to buy, like a land. I'd love to have, like some guest cabins, and it would be like a fishing lodge with horses that I would do guided horseback trails.
So it is obviously a very expensive target. And I guess my question there is-.
What's your home?
I can try that. Probably around 350 to 380..
What do you do for a living?
Senior demand planner.
You're at Shea again?
I'm a senior demand planner. So I work with like financial targets, and then I buy product to hit that amount of revenue planned for the year.
I see. Okay.
Can I ask a question? What's that business that you want, the lodge? What is that at its smallest scale? Because I feel like what you laid out was the big picture. What's the smallest achievable piece of that?
To start with.
I feel like right now, just like trying to look at land prices and the cost for like, very, very inexpensive guest cabins. Probably, at a minimum, I would be looking at like 750k plus. And that's like really just looking at like land.
Okay. Let me ask you, because I need to- There must be something in your background that leads to this that I haven't heard, because everything in your life is very buttoned up, and very tight, and very careful, including even what you do for a living. And then there's this idea that's way out there. So where did the idea- I mean, did you work at a place like this when you were a teenager?
Yep. I grew up riding horses. And then, in college, I moved out west just for like the summer. And like my junior year, I was a wrangler. You're a guide on horseback.
Yeah, you're working on a do-grant.
Yep, exactly.
Okay. So your experience has been as an adolescent working in these romantic situations. Do you have any experience on the business side of this equation?
No, I don't. I don't have any experience.
Well, what you do for a living, I would think you would have laid out a pro forma that says, I can rent these cabins and this horseback. And the ROI on the $700,000 or million dollar investment, where's the ROI on that?
I think, like the ROI is just like I would probably have my husband do the fishing. He would run like the fishing part of it. So he would take clients out.
Okay. What's your household income?
Like $160,000.
Okay. So in what world does a fishing guide and a lady riding horseback make $160,000??
No, I'm a senior demand planner. right now. I don't do anything like horses. So right now, I'm making about $90,000 and he makes $70,000..
No, honey, you misunderstood. You both quit your jobs and you're now running this thing that's in your dream. He's now a fishing guide and you're the lady running the lodge and leading the horsebacks, because this is what the dream you've laid out. I don't understand how you're making $160,000 doing that as a return on even wages equal to your current wages, much less a return on investment of a $750,000 investment or $800,000 investment. So that's what I want you to get to.
Okay. Because all I'm hearing right now is an adolescent dream. And that doesn't mean it's a bad dream. But it could become a real big nightmare if you don't put numbers to it like a grownup.
That's what I want you to do. Rather than just go, I'm going to save up and buy this. No, no, you're not.
That's why I asked what the smallest form of that is, because if there's a way to test when you get to the point to where you could buy some land in cash.
I'm going to study best practices of other lodge and dude ranch situations and go, okay, if a couple lives there and runs it, what can they expect to net on a 10 cabin arrangement, a horseback riding and fishing arrangement and the food services? And what's our cost of goods sold? And what can we expect to net? Can we make $160,000 plus a return on the $750,000 or $1 million investment? And you should be able to make both of those or this is not a grownup dream.
It's just a memory from your 16 year old self. That's not, that's going to turn into a nightmare. So I want you to think that through and put some numbers to it and go study some other lodges for best practices and try to learn their numbers.
And you need to know a lot more about this space from a business perspective before you talk about saving up $750 or $1 million and putting it into it. I'm not saying it can't be done. I've never run one. I don't know. But I'm having trouble visualizing a fishing guide and a lady running horseback making $200,000..
Might be. There might be a high-end arrangement, you know, some kind of luxury situation where, you know, you're bringing in people from Dubai or something. I don't know. But you've got to figure that part out, to continue down this track much further. Otherwise, you need to be doing straight up investing and thinking through how this dream is going to happen.
It could simply be we want a wonderful weekend retreat place as a part of our family portfolio. It might be that that scratches the same itch. I don't know. I'm not saying either one's wrong, but I am saying you need more detail.
And it's worth noting, whatever you decide, I still think it's way far in the future because, whatever you decide, you're going to have to pay cash for it.
There's that. There's that. I feel like we crushed her dreams a little bit.
No, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, We crushed her nightmare.
Yes, there you go, Dave.
Crushing nightmare killer. I will keep you from calling something a dream that's going to be a nightmare in a heartbeat, and I will kill it because I love you and I don't want that to happen to you. Yeah, that's right. I'm a nightmare. I'm death on nightmares.
Take it out back and shoot it.
Luke is in Detroit. Hi, Luke. How are you?
How are y'all doing? I'm doing pretty well.
Good. How can we help?
So I currently make a net of every month, about six grand. I put two grand towards a mutual fund and a maxed out Roth IRA, and then one grand into a high yield savings account of 4.6%. And my question is, am I going too aggressive with this, investing 50% of my income? Because I don't live off of much and I'm currently debt free.
So it depends on what baby step you're on. What baby step are you on?
So I haven't really done the baby steps yet. I do have an emergency fund of currently about 10 grand.
What do you do? And you make $72,000 a year, right?
Net, yes.
Net, okay. What do you do?
So I got out of the Marine Corps about two months ago, and I had some things happen to me in there. So I get $44,000 a year from the VA, and then I'm also a server. So I make about $24,000 to $25,000 a year from that as well.
So you're 25 years old?
No, $25,000 a year from the server job. I know.
I asked you if you're 25 years old or not.
I'm 23.
23.
. Okay, close. All right. So what I can do is to show you the game plan on how to handle this the best. It's called the Baby Steps.
Jade alluded to it. I'm going to give you a copy of the book, The Total Money Makeover. It's going to walk you straight through that. And you keep listening or watching, and we'll continue to teach you in this format. You're a good man.
Keep it up.
I've been doing this show for over 30 years, and some of the saddest calls I have taken are from situations that are completely preventable.
Yeah, and what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible. People that call in, and their spouse has passed away suddenly, and they don't have life insurance. When you have to think through, how am I going to pay my bills?
How am I going to eat next week?
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Jade Walshall, Ramsey Personality is my co-host today. Thank you for joining us. Guys, we appreciate you. The ratings and rankings and miscellaneous things on the show are the highest they've ever been. As a matter of fact, last week, while I wasn't here, they were the highest in 32 years.
I don't know how to take that exactly, but that is actually what occurred. Dr. John Deloney's show added 12 million people last week alone. Just his show. So the Ramsey network is blowing up.
overall. Our numbers on podcast and YouTube and radio on this show are crazy good. Thank you, guys. That just means you're telling people about us. Thank you.
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Yeah, we thank you. Daymar is with us. Daymar is in Missouri. Hey, Daymar, what's up in your world?
Hi, my name is Daymar. I was calling to ask if I should pause the baby steps temporarily to save an emergency fund because I'm going to be losing my job in the next few months. I'm currently on baby steps two. I went a little bit out of order, and I bought a house about a month ago and then found you guys, and so then I started the baby steps.
Pretty crummy timing, buying a house and losing your job. Kind of why we tell you not to do that, huh?
Definitely. So. I should have found you guys a month earlier.
So when does this all take place?
A couple months, you said?
Yes. Yep. So I closed on the house about a month ago, from last week, and then after that, I paid off my credit card, or I guess I put $1,000 in savings, paid off my credit card, closed that out, and then started paying on. I have a personal loan with about $21,000 left on it.
What do you make?
I make $88,000 a year.
What do you do?
I work in nuclear logistics in the Air Force.
You're in the Air Force, and you're going to lose your job. How does that happen?
Yep. So I'm going through a medical board process. I just found out I have an autoimmune disorder, and so just within the career field I work in, it's a disqualifier. It's not for certain I'll lose my job, but they're pretty sure, just because there's not really an option to cross-train me into something else with how short a time is left with my commitment.
So they discharge you?
They probably will be in the next couple of months.
Is that a medical discharge?
It will be, and so I think there should be some kind of compensation, but from what I understand, there's usually a two-to-three-month gap between when you get out of the military and when VA benefits start.
Yeah, that's true, at best, because they're not exactly known for efficiency.
Yes, sir.
Yeah.
All right. So what are you going to do with your life, man?
So I've had a business on the side that makes almost $500 a week on not very much time, just because I have the day job that I'd like to spend a lot of time doing, but in the meantime, until I get this debt paid off, I'm going to stick with having a real job that has stable income until I get this debt paid off.
Doing what?
And so I was thinking temporarily, get a job locally, trying to do something in logistics. I have one friend who works for a company back home in Wichita, Kansas, and so I was going to reach out and try to get in touch with them.
And what would that pay?
So starting pay for that is $75,000 a year.
What's your side business?
Opportunity for consultation. It's a consultation newsletter, and so...
So it goes with you, then?
Yeah, it does. So I can do that from absolutely anywhere.
And so that's why I'm not.
Well, to answer your initial question, should you pause, baby step two? Obviously, the answer is yes. You're going to pause and save up as much cash as you can. And I would continue to do what you are doing, which is look for opportunities, because it sounds like there's a 95% chance that you are going to be discharged. And even if you do receive some compensation, we know that there's a gap there.
So I would keep doing what you are doing and land something and be prepared for whatever that is, whether it takes you to Wichita or whether it's something in your area to replace the income that's going to be lost.
Exactly. That's all you can do. If you do what she said and you pause it for two months and then you lose your job, how much... or three months, how much money would be in the account?
I think I'd have like four or five months of expenses. I think I could save about $3,000 a month.
Okay. So you'd have like 10 grand.
Good.
Yep. Okay. So let's kind of work this through.
All right.
You got 10 grand in the bank. You paused your baby step two. You moved to Wichita, take a job making 75.. Two months later, your military disability kicks in for another two or three grand a month. Oh, and we have $500 a month, maybe going to a thousand on the newsletter on the side.
You're suddenly making now over $100,000 a year.
Yeah, this is a pretty good deal.
I do have a question, though. Should I, in that case, if I move, should I just sell the house?
Yes.
Okay.
You don't need a house in Missouri if you live in Wichita.
Definitely.
Yeah. And just get you something to rent and then you take all the money. If all that works and you don't use any of the 10 grand because you land the new job straight out of the old job, then the 10 grand acts like a signing bonus and you throw it at the 21 debt as soon as you get settled in Wichita.
Awesome.
Yeah. And this time you don't turn around and buy a house in Wichita until all your debt's clear. And then you've saved up an additional three to six months of expenses. And then you can start thinking about a down payment when you're settled and all that's in place.
Exactly. And so here's the deal. What people do is they save up the 10 grand and then they kind of coast along until the 10 grand's gone. No, you line up the other job. Boom.
As soon as you step out of the Air Force, you step straight into logistics. Boom. And then, two months later or three months later, the VA kicks in. Boom. And these dominoes start falling and you're making some dadgum money.
And this whole situation turns into a blessing.
Hey, are you going to get your money back on the sale of this house?
Um, I should get about exactly what I have into it. Um, I, I had made a few extra payments on, on the house already.
Don't do that anymore. Right now. you need a big old pile of cash. And I really want you to commit, uh, to lining these dominoes up so they don't miss each other. You know, if you push a domino and it misses the next one, it just lays there by itself, dude.
So when you step out of the Air Force, I want you the next day to be in Wichita working. Cause. you've already done the interview process and been hired. because they're not going to do this suddenly in the Air Force. They don't do anything suddenly.
Well, they don't do anything having to do with you guys. Suddenly they do concerning the enemy suddenly. But, um, but yeah, you know, you guys, he's, you're going to know, you're gonna see this coming a mile away. It's not going to be a shock to you. So you already are seeing it coming a mile away.
So just, you know, go ahead and start working the Wichita thing. And if the whole thing with Air Force doesn't happen, then you can stay there and you want to stay in fine.
Um, you know, it's just all, you've lost a little effort and you really haven't lost any ground on your get out of debt. Cause the money's all in the account. You're just going to turn and throw it at the debt when the smoke clears on this storm. And so you're okay, you're in good shape. But where people screw up is they don't deal with the obvious thing that's in front of them.
And then this stuff becomes a crisis when it shouldn't have.
That's true. Yeah, I think he's done well to think ahead and plan ahead for this, because if he hadn't done that, this could look very different.
Exactly. And if he doesn't continue to do that, that's right. It's going to be a mess. That's right. So yeah, you're going to be calling me back going, I'm further in debt because I didn't work for four months, because I didn't do what you told me to do.
No, don't get, get it, get after it.
This is the Ramsey show.
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 actual, amazing relationships. Jade Washall, Ramsey personality, bestselling author, is my co-host today. Open phones here at 888-825-5225.. George is with us in Newark, New Jersey.
Hey George, welcome to the Ramsey show. Hi George.
I am. Hi Dave. I'm sorry. It's Georgeette.
Oh, Georgeette. Okay. I thought they had misspelled it because it didn't have the et on there. Okay. Anyway, I'm sorry.
How can I help?
That's great. Thank you. Thank you for taking my call. I'm very excited to talk to you guys today. Uh, um, I have a question in regards to my daughter and her survivors benefit and 401k.
Unfortunately, my ex-husband passed away from COVID in 2022, leaving a $32,000, $32,000 in 401k. And she also gets a $1,200 per month survivors benefit, which I, uh, religiously deposit into a custodial bank account for her every month. And since last January, I have invested 32,000 of that into a two year CD with an annual interest rate of about 4.3% of, um, of all the money she has in the bank, uh, up to today, it's about 80,000.. And I estimate that by the time she's 18, it will be about $140,000.. I have three simple questions for you guys today.
You have the time, uh, as a fellow parent seeking guidance, how can I leverage this money, considering that, you know, she will go to college and she will also probably receive scholarship. She's a pretty smart girl. Next question is how do I steer her towards choosing an in-state college and avoid any form of the student loan pitfalls? And my third question is how do I introduce her to the Gramsci financial education? And at what age, um, as I would love for her to have this, she's 13 and, uh, you know, I want to have her have this resource available for her, so she can have financial knowledge, you know, before it's too late.
Most 13 year olds. don't listen to their parents. Does yours?
She's a smart kid.
I didn't ask that. I asked if she was respectful and believed what her mom said.
Uh, I would hope so. I think so.
Do you think you have a good relationship with her and she trusts your wisdom?
I think so. Okay.
That's different than being crazy wild.
True.
Okay. Just trying to find out what we're dealing with. Jade.
So I have a question. So this $80,000 that you think is going to be up to $120,000 or more, when she's 18, does she have full control of it, or do you still? Or is she able to disperse that in any way?
Are you hearing me?
It's her. It's her.
It's going to be fully hers.
It's a custodial account. No, yes, yes, yes, yes. And when she turns 18, honey, it's hers. It's in her name and she gets control when she's 18.. That's how it works.
So then. Right.
But I'm, I am thinking that before she is 18, I could somehow transfer it into my name, where I can be the moderator of it instead of her. At 18, she'll probably make dumb decisions, you know?
That's why I was asking about what kind of kid she is. Okay. So, um, the, and whether she's listening to you or not, because the only way you transfer it to your name is called stealing.
Cause it's not your money. And if you just move it to your name and she decides to get a jack leg lawyer, she can sue you. So, I mean, yeah, I might do that if she's doing heroin, rather than let her kill herself with it. I'll take that chance. Good luck, find it.
And I'll just disappear with your money, kiddo. But, uh, but before I let you kill yourself with it, but I would do that, you know, but, but in general, just to make her behave. No.
Does she know about the money? Does she know how much it is? Have you guys had that conversation?
I mean, she knows that I am trying to, you know, stay for her so she can have a better future. But she doesn't know exactly how much it is. You know, she just has basic knowledge of mommy putting away some money for her.
I'm going to pose this question to Dave. Cause. out of all of us, you're the one that has the most experience with telling a child about a sum of money that will one day be theirs.
So what's the best way to, I mean, I can think about how I might frame that up and I think your questions are good.
Yeah. Early and often you got five years to train her.
Okay.
And part of that's exposure. And part of that is the reality. Cause, if you're 18, you think 80,000 bucks is a lot of money. if you've never seen 80,000 bucks. But if you've been having mom, tell you for the last five years that it's not that much, and if, and you can screw this up really easily.
So we have to be very careful and you've got to go to a state school. so you don't burn through this money and you know, and you're, and you can't go running off to, you know, decide, I'm going to take a gap year, because, because I'm rich, I'm rich. I'm so rich. You're not rich. It's 80 freaking grand.
It'd be gone in 20 minutes, three restaurant stops and it's over. Right. I mean, it's, it's crazy how fast that'll be gone. So start training her that this is what rich people do. They talk about money at the dinner table, not because they're obsessed with it, but because it's part of the rhythm of their life.
And so you sit down, you'd say, Hey, you know, here's how money works. Here's what's going on. You've got some money coming to you. I'm handling it for you. now.
It's going to be a responsibility. It's not going to be a lottery moment where parties on. It's not, we're going to have a, we're going to talk about how we use this, because this little bit of money, and it's not much, but this little bit of money that your daddy left you, if we can use that, right. If you and I can learn to do that together, honey, over the next five years, we can turn this into your having a really bright future with you, or you have are going to have the legal option of being a complete freaking fool, because it's going to be in your name and you can destroy this. And all.
you're going to have to show for it's regret, which is a really nasty tasting fruit. And you just talk to her like that all the time. I taught my kids that all their lives.
And then, when they came home from college, we actually had the discussion. when the last one came home from college and the other two were married, we sat down and said, okay, here's what the whole Ramsey estate looks like. They had no idea what our net worth was and no idea what my income was, because we didn't use it in any way. in front of them. I mean, when they had a decent life, but you know, they still had that moment.
I said, look, this is a responsibility. It is not a, a windfall. You need to feel the weight of managing this. It's God's money. It was passed to you through your dad and God has given you a blessing and you have a responsibility to handle his money in a way.
that is a continued blessing to you, not an immature child. And that's why we're starting to talk about it when you're 13 and when you're 14 and when you're 15.. And if you're going to, if you're doing something really severe by the time you're 18, like out of control, and you're going to hurt yourself with this money, you'll never find it. I'll hide it from you. And good luck fighting me, because I'm a mean mama.
You know, and that, that, these are the discussions we're going to have. That's what we had at the Ramsey house. And this is what responsibility looks like. Money is a, it is a blessing, but it's also a weight. It has a responsibility to it.
You need to feel that weight early and often and build that muscle over the next five years. Don't surprise her at 18 and have a party and go, well, look here, that'll be a bad plan. This is the Ramsey show.
Jade, wash. all Ramsey personality is my cohost. Thank you for joining us. America open phones at triple eight, eight to five, five, two to five. So, Jade, you know, we were talking with the last lady about the situation with her children, her child, having money coming in from a father who had passed away.
But in general, the idea that Rachel and I wrote about in the book, smart money, smart kids, which was a number one bestseller because you guys bought it. Thank you out there. The, in general, what we have figured out is the people who have high functioning adult children, especially in the area of money that occurs because of parents age appropriately engaging from three years old on, on the subjects that matter to that family. What are the things that family values? One of the things the Ramsey family valued was learning to handle money properly, which is so at every age, you need to be learning the age appropriate lessons of giving, saving, investing, spending, and work.
You need to learn to work age appropriately. We don't send three-year-olds to the salt mines. We might send a 13 year old there. No, I'm kidding. But the, uh, but we don't, you know, so, so age appropriately.
And then that gives you all of these natural rhythms, not single, not like Tuesday nights, mutual fun night or something like that. Instead, it's like the part of the rhythm of our life is we get to talk about this today in the mail, the, your mutual fund statement for your college came in and our kids had a college fund. and here's what your college fund is. And here's how you calculate share price times. number of shares equals the amount that's in the mutual fund.
So find out the balance on your mutual fund without looking at the statement even. And so they learned to do these basic things and they were told over and over and over and over. They have a college fund, college fund, college fund. So I was brainwashing them. They're going to college.
Right.
And you were suggesting, even on that last call or at the break that, you know, brainwasher teller, this is what this money's for. This is how we're doing it. This is what we're doing. The money is what we're doing. The money.
And just for five years have a weekly constant discussion at dinner that this is what we're doing.
You know, I think there's an inclination for parents sometimes to keep details, even if they're age appropriate details about money and amounts, and to keep that hidden for some reason. And I'm not really sure what that is, if they feel like it's it, maybe it's just an old school thing or, but I just remember even growing up in my household and a lot of my friends, it's like, we don't talk about exact numbers. We talk about, oh, there's some money for college or, oh, there's some money for your wedding. But it's like, I don't want to tell you how much it is and why is that?
Well, I think people are afraid that they're going, that the kid's going to go off.
Right.
And the kid is more likely to go off if they discover suddenly that they're rich. Yeah. Like, you're 18 years old, you didn't think you had anything, and you find out you got 500 grand.
Yeah. It's playtime, part time.
They cannot handle, their brain can't process that. But if the weight of that has been increasing from three to 18, then they are ready to go with it. And that changes everything. It's a big deal. And so it's kind of like, you know, rich people have money as a part of the rhythm of their discussion.
Not because they're obsessed with money or greedy people. It's because they see the importance of children understanding, not feeling weight, but understanding, feeling the appropriate amount of weight, understanding the cost of their decisions. So when you buy Celebration Barbie and all your money's gone, you realize at seven, you might have bought, should have sort of kind of had a Party Barbie instead of Celebration, right? And so we're going to buy the cheaper version or whatever. it is, right?
You're going to learn these purchase decisions have consequences and let them experience some negative consequences under your wing as they go along. And that's the kind of stuff we talk about in Smart Money, Smart Kids. So in other words, it's like, if you grow up on a farm, farm, parents don't really have to talk to their children about where babies come from.
Yeah, they see it happen in real life.
They know exactly the whole process, start to finish, of where babies come from and how babies are fed, and so on. You don't have to discuss that with a farm kid. It's just part of their life. And a rich kid, you don't have to discuss how money works. That comes from work and that you need to save some, you need to give some, you need to spend some.
Rich kids. just, they grow up. It's just kind of like being on the farm. You don't have one single, we're going to have the sex talk. No, instead, it's like life right there in front of you, darling.
This is how it works.
That's a good point. I would definitely not diminish the impact of what you see and hear on a regular basis. as a kid. I mean, I think about something as small as, you know, when you finally get to college and you've got a little bit of your own money and you go to the grocery store for the first time, first thing you do is buy what your mom always bought. You buy the same brands, you buy the same thing until one day you realize, I guess I don't have to do that.
But by that time you're already in a rhythm. Yeah, yeah.
Because you're, you know, Rachel says all the time, more is caught than taught.
That's right.
So they're watching what you're doing, and that's how, this is how you train up kids, because I'm often asked by people when they become Baby Steps millionaires, how do I, how, you know, I did all this, I got my house paid off. Now I don't want to screw up my grown kids. I don't, by leaving them a bunch of money, I think I'm going to make them suffer. Well, you know, you could do that, or you could just leave them a bunch of money if they're capable of handling it, because you train them to be capable of handling it. There's no, money is not evil.
It's the love of money is the root of all evil. The Bible doesn't say money is the root of all evil. And so you're not damning your kids to hell by leaving them money, but you will screw up their lives if they have no character and the ability to handle money, you will magnify that by leaving them money. So you've got to build out, over a period of time, a gradual process. This is where babies come from.
This is where money comes from. This is how this works as part of our life. And you brush your teeth and you do your homework and you're on time and you say, yes, sir. And no, sir. And thank you.
And thank you. And please, which means you know how to be grateful, because grateful people are highly attractive and you just, this is raising kids. Yeah.
Listen, I have to tell my, my five-year-old almost going to be six. Every time I go to the store, you know, he likes to scan the thing before I pay for it. And I tell him when I pay for something, I was like, do you know how I have this money? It's because every day when I go to work, I go to work to earn this money. Papa goes to work to earn this money.
Even things as simple as that, teaching them. It's not just an endless supply that comes out of the, of the plastic, right? Yeah. There's, there's effort that's put forth to get that. And it's not unlimited.
So very, you can start that very, very young.
Yeah. It's even fun with the grandkids, because the grandkids call our house Mimi's house. Oh, Dave has nothing to do with it. I've had to explain to him, Papa Dave's house,
Mimi gets to live here. They don't like that.
Well, my favorite story is the one you tell about Daniel. We're doing pretty good.
Yeah. We were in a car, we bought a decent car and Daniel was like five or six years old. He leans back. We're doing pretty good. And I'm like, we aren't doing anything.
You are a broke child. I have money. You have nothing. We aren't doing anything. Yeah.
That was a, that was one of those daily money lessons, you know, don't be confused. Don't feel entitled. Right. All right. Akeem is with us in St.
Louis. Hi, Akeem. Welcome to the Ramsey show.
Hey, how you guys doing?
Great. How can we help?
Uh, just, I'm going to be on the show, um, but get straight to it. Okay. This Saturday I'm scheduled to meet with a person from bank of America to talk about investing with their, I guess their Merrill Lynch side. And long story short, it's, I'm at a place. I'm already investing with my 401k.
I'm a mailman. So I got a TSP. I'm doing a 5% match there. I know you say do 15%. So I'm looking to start a Roth IRA.
And for my research from social media, YouTube, all of that, do I need a financial advisor?
You don't need someone to do money for you. You need someone to teach you and guide you so that you do money for you better. And bank of America is not on the list. They suck. Cancel that appointment.
If you want to get somebody to sit down in your corner with the heart of a teacher, just click on a smart Vestor at Ramsey solutions, and it'll be a real investment advisor, not a bank of America person gag. And they'll sit down with you with the heart of a teacher. Cause what your job is, Akeem, is to learn what they teach you. So I still have a smart Vestor pro. that's in my life and Sharon's life.
Um, obviously I teach this stuff for a living, but he occasionally brings me an idea that I haven't heard of before. I learned something from him and I go, Oh, I could do that. But he doesn't go and do stuff without me knowing it, because he's smart and I'm dumb. We never do that one. This is the Ramsey show.
Jane Walsh, our Ramsey personality, is my co-host today. Open phones at triple, eight, eight to five, five, two, two, five. John's with us in Dallas. Hey, John, how are you?
I'm doing wonderful. How are you guys?
Better than we deserve. What's up?
Thanks for taking my call. So, uh, I guess a little bit of background. My wife and I are in our early thirties. We have a young, growing family. And in the last year, we've been doing a lot of things.
Purchased her, um, family home, uh, for my mother-in-law. Uh, some things kind of changed in our lives recently and decided we needed to move on and spend some more time with her. We are currently, I'm going to say, in between step six and seven. So home has paid off. Um, we've been basically banking everything else.
We're in a position where, if the home is paid off, you're in seven.
Yes. Well, so the reason I say it that way. We know we're going to have to do some pretty serious renovations to the house to make it work for us long-term. it's, it's on, you know, a decent amount of land. It's on a good school district.
We see our family growing there, but there's going to be significant. You know, changes that need to be made to support our family long-term. And I'm wondering, is a heel lock the right way to do that? Um, you know, I kind of went into the renovation process with the mindset of, we do a little bit at a time and, and just kind of pick away, you know, room by room and, and talking to the, um, general contractor, the changes that we're going to have to make, that's not really possible to do it that way. So it's kind of an all or nothing kind of thing, I think in their minds.
And it's, you know, they're not paying the bill.
That's true. Yep.
If they won't pay the bill, they get an opinion on that. Um, I mean, I understand that they have a structural concern or the approach to the construction, but, but, you know, they're not taking into consideration your family. So, so what is your household income?
Uh, last year, low two hundreds.
Okay. And so what's this, uh, project, if we looked at the, uh, looked at it in total going to cost?
The, the current budget is right now about 150 to 250.
. And some of that, they're not going to determine until you get inside, inside the walls and inside the attic and the structural things.
We're not going to not, we're not going to start a project when we don't know, within a hundred thousand dollars, what it's going to cost.
Okay.
You don't have a contractor. You got. a guy wants some money. No, I mean, we're going to have this dialed in, in detail. as to what we're going to get into here.
We were this range. Let me tell you what that'll turn into. 350 is what that'll turn into, because this guy's making this crap up as he goes. No, thank you. No.
So anyway, all right, let's just pretend it's a $200,000 tight, detailed budget that we know is accurate, as opposed to what you're dealing with now. And let's use that. You make 200.. Okay. Then what I'm going to do is I'm going to break the project down into chunks as small as I possibly can, which is what you were trying to do room by room.
You may not be able to approach it room by room. You may have to have another angle on it. You may have to say, okay, the first chunk is 75,000 bucks because we got to do this whole whatever. Right. And then the next chunk is 10 and the next chunk is 30, and the next chunk is whatever and just break it out in chunks.
And then you save up into a chunk at a time. And, you know, if the first one is a big one, you hold off until you save that much money making 200K. Yep.
Okay.
I'm not going in debt to do it. Why would you need to? You make plenty of money and you're going to be there anyway. So you can do this over time.
What are they talking about? What's, is there? a, is there a danger? Like, is there a...
I think convenience.
I think it's a convenient thing. I think there's some load-bearing walls that, you know, really to do it. I think it's going to be the first big chunk. They're going to do all that together. And then I think there are some separate smaller chunks they can break it into.
I mean, I tell the guy you're either getting paid or you're not. So you're either getting paid a little or nothing at all.
What's his house worth? Not counting the land.
So that's a harder question. Probably 250 maybe.
The house is worth 250 and you're going to pay 250 to repair it?
That's the, yep.
Wow.
And that goes back to the emotional element of it being a childhood home. And it's on a decent amount of land and would be hard to replicate for that price elsewhere too.
I'm hearing it's a bad idea.
If you don't have a good architect and you guys don't really spend a bunch of time thinking this through, you're going to build.
Overbuild?
No, you're going to build a horrible property because you're trying to take something that was not designed to be a $400,000 property and turn it into that.
And so it's going to feel like what we call a country house, where you just add rooms and move walls around. And every time some other kid's born, we add another room to it or something. And that's country built is what we used to call it anyway. It doesn't mean that if you build a house in the country, you're doing it wrong. That's not the point.
If you're doing it this way, it's wrong. I'm afraid this is such a massive renovation ratio-wise, that...
What you're trying to pull off is very hard to do. Let me say it that way. It's very hard to end up with a great end product. that is a reasonable thing when you spend as much on it as it's worth. It's almost easy.
It's from a tactical standpoint, not a financial standpoint. It's easier to push it down and build something else, a lot easier than try to take this uh clay pot that's already been through the kill and reshape it. Right? That's what we're... It's very difficult to do what you're doing.
Minor, you know, if you told me you're going to spend $50,000 or $60,000 on a $250,000 house, you can do that. You can do a lot of stuff for that. That's a different thing. But you're talking about basically rebuilding this whole house and you could really end up with a piece of crap.
I feel like there's a way that he could do that and still salvage parts of it and use that for the rebuild.
You really need to think.
. You need an architect to lay this out, so that when you're done, you don't build something that looks like a pretzel. You know, it doesn't look like old man, old lady in a shoe or something. Because that's what this kind of stuff... It evolves into a grotesque thing that all because of the emotion of it being a childhood home, and then you made a bad decision.
So what you're.
. It can be done, and I'm not telling you not to do it, John. I'm saying you got to really back up from this. You got to have a good, solid, detailed, accurate budget that you're going to hold everybody accountable to. We've got to break it into parts that we can cash flow, and we really need a good floor plan, engineering plan, wiring and plumbing plan that we end up with.
that looks like somebody thought it through instead of like, well, we need an extra bedroom. You know, that's just, man, it's a mess. So you really... What you're trying to do is very hard to do for somebody who's never done it before and not end up with a mess. Yeah, it's very hard to do.
Be very careful, sir. Get every T crossed, every I dotted, everything thought through before you raise a hammer toward a wall and everything dialed in. If you don't, you're going to end up in a financial mess with a bad product and something that takes years and years and years to accomplish and shouldn't. Then, when you're done, you don't have a good thing. Yeah, it's very scary, very scary.
I mean, it honestly is a lot easier to build a house from the dirt, a whole lot easier and end up with a great product than it is to do even a 40% or 20% rehab, much less a 100% rehab.
Yeah, that's.
. It's just got to feel tough, because he's already paid it off. He's paid it off and then he's like demolishing the thing.
Yeah, but I mean, a lot of people do tear downs just to get the lot. That's true, that's true. And obviously, we're not going to get to tear this one down because it's childhood home.
Yeah.
But, and all the emotion, he brought that up three times. So obviously, we're not bulldozing it. But wow, tough, tough, tough, tough. You can do it, but you really need to lean in on the details. You need to be project manager extraordinaire.
This is The Ramsey Show.
Listen, tickets for the Live Like No One Else cruise are selling fast. This is the ultimate debt-free vacation and I can't wait to celebrate with all the folks who've worked their butts off and changed their family trees. We will be sailing through the blue waters of the Caribbean with the Ramsey personalities and other special guests. A bunch of cabin options are already sold out. So hurry and reserve yours with a $600 deposit today at ramseysolutions.com slash events.
Jade Walsh, our Ramsey personality, is my co-host today. Thanks for joining us. So, George, and you are doing a budgeting live stream on YouTube on the 11th, huh?
That's right. You're right. I'm excited about this. We do these as an extension, kind of as The Ramsey Show, where we can have callers and people call in and ask questions about it. This one's going to be on the 11th of April and we're really just answering those top questions that people have about budgeting, which is, Jade, how do I even get started doing a budget for the first time?
How can I budget and still enjoy my life? And also people want to know how they deal with changes that come up throughout the month, because obviously a budget is a living, breathing organism and also how couples can budget together, married couples specifically. And those are kind of four pain points that we want to talk about, because those are the things that you've told us. that are issues for you. So, stay tuned for more details on that live stream.
But just know, we want to hear from you. If you have budgeting questions that you want us to answer, you can always email us your questions at ask at ramseysolutions.com. So, again, join that live stream. It's going to be on YouTube for 11, and you can kind of set your reminder so that you don't forget about it.
Today's question of the day comes from Jacqueline in Ohio.
Yes. She says, how do I tell myself that saying no does not mean that I'm failing as a mom? I just started reading Jade's new book and it's really unpacking some deep ingrained thought patterns from my childhood. I grew up the oldest child of four, raised by a single mom. We had financial, housing, and food instability.
I was constantly aware that we were not okay, despite my mom doing everything she could to protect us from knowing that. Now, as a divorced mom, I've got a decent job, own a home, and provide for my daughter, but it is a struggle to make ends meet. I often find myself telling my daughter, I'm sorry, but we don't have money for that. This makes me feel like I'm failing as a parent, because I can't provide for what I want for a want in the moment. How can I retain?
How can I restrain? Retrain my brain to see that saying the word no does not mean admitting failure. That's really, really good. I think she's talking about in the book, Money's Not a Math Problem. I talk about how, sometimes, what we experience as a kid feels very different, obviously, as a child, than as an adult.
The thing that I've had to learn, Jacqueline, is a couple of things. Number one, your child is not you. You experienced something and you filtered it through the lens of whatever your reality was in that moment. Sometimes we can project that onto our kids, but your child is in a much more stable position than you were. You have to remember that.
But also, there's nothing wrong with saying no, and there's certainly nothing wrong with saying no for children, but I do think that, and I talk about this in the book, there is a way, especially if it's things that they feel they need in a moment or something that's important, I do think there's a way to say no that doesn't steal hope and doesn't steal the feeling that there could be a future. I talk about it in the book all the time. I grew up hearing the phrase, we ain't got no money. We can't do that. I ain't going to buy that.
We can't afford that. I heard that all the time, and it just made everything feel impossible. But I talk about in the book, if you can do a vocab rehab on that and say things like, that's not a priority for us to spend money on right now, then there's the idea that, maybe in the future it could. Or if we say something like, hey, I don't have the money to spend on that right now, but we can find a way for you to save for it in the future, and giving them a plan. I think about Jeremiah 29 and 11..
People want plans for hope and a future. So if you can gear your responses towards that, I think that's something that's really powerful, not only for you, but for the children, especially as they get older in your household.
If the parent is not freaked out when they say no, the kid is not going to be freaked out when they hear no, except that they didn't get what they wanted. But you don't have to instill fear with no. In other words, let's just change this to something else, okay?
Yeah.
Papa Dave will not allow you to eat a huge bowl of candy and then throw up in my bed.
Okay, right?
No, but I'm not freaked out about it. Yeah. It's just, no, you're not going to, you can have a little bit of candy. No. Or you can have some candy if you clean your plate, or whatever rule Papa Dave wants to come up with in the moment.
And so this is talking about grandkids. And so, you know, with kids, it's the same thing. It's no, it's a complete sentence. I love you. I care about you.
And you're not doing that right now. And that's actually enough. I think. so. As long as there's not like, oh God, I feel so bad coming out in the tone.
Yeah. You know, like, but a parent who never says no is not a parent. They're running anarchy, because of course, you say no. No, you can't play in the street.
But don't you feel like there's a difference between.
No, you can't jump off the 10 story building. No. Of course we say no.
But don't you feel like there's a difference between requests that are like, uh.
Yeah, there is.
Those sorts of requests. It's like, yeah, you can't eat a whole bowl of candy.
My point is your tonality.
Yeah.
You know, there's no sense of entitlement or no sense of I'm a bad parent when I say no. Because it's not good for you.
For your own good. 100%.
And, by the way, buying everything you ever wanted is not good for you.
Yeah. Yeah.
It's that's called spoiling a child. If you were raised in the 60s, that's what we call it. You were spoiled. You're a spoiled kid. They never heard.
no. They got everything they wanted. We spoiled, ruined. You know, when you have spoiled milk, it smells spoiled kid. You don't want a spoiled kid.
That's a kid who never hears. no. So, of course, kids need to hear. no. It's not, you know, it's good for them.
And they get. they get. As Delaney would tell us, Dr. Delaney would tell us, they get a sense of safety when there are, when there are boundaries and fences.
That's true. But I also.
Anarchy doesn't give you any sense of safety.
That's true. But I think in a case where, if you're talking about money's tight, there might be things that. Yeah. Right.
You can just say no, not now. Yeah. Right now, it's not our priority, just like you said. Yes. But what you're doing when you're changing the vocab rehab is super important.
with the overlay of, I'm also going to change my tone. Yes. My body language.
Right. Because you make it a big deal.
Because you are saying I feel horrible with your body and with your tone.
They catch that.
And with your verbiage. And so change your verbiage and everything, because it's all just I'm going to. you're going to have to learn to hear no in your life, kiddo. Unless you're in Congress, you have to hear no, you know, and even congressmen have to hear no from each other. So they don't hear no from anything else.
But oh, my gosh, you know, but the point is that the kid needs to learn to accept that. now, on a money thing. No, not now.
Yeah, I love that.
Maybe we can figure out a way to do it later. But right now, we're not doing that.
Yeah, because I think you have an opportunity to teach them that, whatever your currents, for me, the opportunities, you can teach them something about money, which is your current situation, does not have to be the long term situation.
You know, for instance, if you say, OK, that toy is one of the items you're going to buy from your commissions, from doing chores. And you don't have enough right now.
Right. So you're going to have to wait.
So you're going to wait until you save up more money.
Exactly.
That's no, not now. But that's not. I feel like I'm a horrible parent because the kid, because they're going to have a meltdown anyway.
Exactly.
Because they didn't get what they wanted, because their children. meltdown goes with the territory, drama goes with the territory. But how the parent feels is that that's the part you can control.
That's right. Yeah. Because she says, how can I say no with? does that mean that I'm admitting failure? And I'm like, no, there's no failure in saying no.
As a matter of fact, that's my whole soliloquy. here is just as a matter of fact, you are a failure if you never say no.
Yeah. And you have to say no to yourself, too. Yeah. It's just part of human existence.
There's always something you can't buy, no matter who you are. Yeah. I mean, even Bill Gates, or something he can't buy.
But even in personal self-talk as adults, when you get on a budget, there is something to that where you can't spend money on everything that you want to. So you're telling yourself no. Not now. On a constant basis. But like exactly when you can reframe that and you put the control back in your seat and you say, I'm choosing not to spend money on that, or I'd rather put my money towards this than that.
It puts you in a position of power where you're controlling it, as opposed to my budget. doesn't let me do anything. That's not a fun place to be.
Mom and daddy, they blame everything on the budget. Don't blame it on the budget.
That's right.
Don't blame it on what your mother said. Don't blame it on what your father said. Don't blame it on the budget. How about just no?
And with a little explanation. No. A little something to the side. I mean, no, not now. Or no, we'll figure out a way to do it later.
Or no, it's not that important right now.
It's not a big deal. And if you want to make a big deal out of it, you can do that. But the answer is still going to be no. Because it's a complete sentence. This is the Ramsey Show.
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 actual, amazing relationships. Jade Walshall, Ramsey Personality, is my co-host today. I'm your host, Dave Ramsey. We're here to talk about your life and your money. The phone number is 888-825-5225..
Sanjog is in Seattle to start this hour. Hey, what's up?
Hey, Dave. Thank you so much for taking my call. So my wife and I, we're first-generation Americans. And we did Financial Peace University about 14 years ago when I was still in the military. And we had a very low income.
We had about $50,000 in debt back then, which we've since paid off. And we got all the way to Baby Step 7.. We wrapped it all up, had a paid-off house. But we needed to move closer to work. So we ended up getting another house and another mortgage, but turned our old house into a rental property.
So we've built our net worth significantly over the last 10, 14, 15 years. But we've lived, obviously, very, very frugally. And I want to buy myself a new car. Well, technically, we've always purchased used cars. And I'm open to getting another used car as well.
But I'm trying to figure out a budget for that car. I don't know how much to spend, because we've never spent a lot of money on toys like that.
So what's your income?
A little over $300,000 take-home every year.
Okay. And this mortgage that you have, what's the mortgage on it?
The mortgage outstanding is about $1.
5 million.
And what's your net worth?
About $2.
5 million.
Good for you. Well done. Congratulations.
All right. And so the car you're going to purchase, you're obviously paying cash for it, right?
That is correct. We have about $140,000 in cash. Obviously, that includes our... That's also our emergency fund included in there. So I'm just trying to figure out how much of that we can actually spend on the car.
How much of that is your emergency fund?
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