Build a House for My Kids Since They Can't Afford One?

Summary

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The Ramsey Show Highlights

Episode: Build a House for My Kids Since They Can't Afford One?

Date: March 18, 2026

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Episode Overview

This episode centers around a caller seeking advice on whether to build an apartment on their property for their daughter and son-in-law, who are struggling financially after working in ministry. The exploration focuses on whether to finance the build using a HELOC, a car loan, or cash on hand. The Ramsey experts (primarily George Kamel and Jade Warshaw) evaluate the risks, rationale, and long-term consequences of this financial decision, emphasizing the principles of generosity, sustainability, and financial responsibility.

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Key Discussion Points & Insights

Caller’s Dilemma ([00:06–01:37])

• Situation: Caller wants to build a small apartment on their property for their daughter and son-in-law to live in and pay rent until they can buy their own home.
• Financing Choices:
  • HELOC: Considering a Home Equity Line of Credit (~$50,000).
  • Auto Loan: Considering a loan on a paid-off vehicle (~$40,000).
  • Cash: Has the cash available but is hesitant to use it to avoid being cash-poor.

"I do have the cash on hand, but I think a loan would probably be a better idea. Just curious if there's any pros or cons one way or the other." — Caller [00:06]

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Expert Reaction: Dangers of Debt ([00:40–02:24])

• Immediate Caution: Both hosts advise strongly against taking on extra debt for this purpose.
  • Auto loans ("title loans") are likened to payday lenders with extremely unfavorable terms.
  • HELOC puts the house itself at risk.

"Well, there's all cons." — Host [00:40]
"If it's a true title loan, I mean those are the, it's like a payday lender...the repayment terms are terrible." — Host [01:09]

• Perspective on Urgency: Hosts question why building the apartment is necessary at all instead of the couple simply renting a place.
  • Caller explains that both children recently left ministry and aren’t financially ready.
  • Previous family situations prompted the thought of adding a separate living space.

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Long-Term and Emotional Impact ([02:24–04:40])

• Sustainability of Ministry Careers:
  • Hosts highlight that, if the daughter and son-in-law continue in ministry, they will need to address how to earn enough for rent and living expenses. Building an apartment may be a temporary subsidy and does not address the root problem.
  • Importance of fostering independence, not extended dependence.

"It feels like we're just sort of temporarily subsidizing their lifestyle because they're not making good incomes." — Host [02:24]
"They need to figure out a way. Either it's bivocational... they have another job that actually pays the bills and they do ministry with their free time." — Host George [03:57]

• Alternatives and Encouragement:
  • If generosity is the goal, a one-time cash gift could be considered.
  • Most helpful approach is guiding the couple toward independence.

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Financial Risks and Responsible Boundaries ([04:40–05:41])

• Assessment of Affordability:
  • If the caller must risk their own home or car, or become cash poor, they "simply can't afford it."
  • Building an asset on the property should not justify going into debt with high personal risk.

"You're trying to do just a nice good thing in a bad way. And then you're trying to justify it by saying, well, I'm also building an asset for me on the side." — Host [05:01]
"If it hurts to part with that much cash because you'll be cash poor, then it's also a bad idea. So I think that's... It's a good gut check." — Host [05:27]

• Emotional Permission:
  • Not doing this doesn't make the caller a bad parent or un-supportive of ministry.
  • It is okay, even admirable, to set these boundaries.

"If you don't do this, it doesn't make you a bad person...It just makes you a person who is a financially responsible adult." — Host Jade Warshaw [05:41]

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Notable Quotes & Memorable Moments

• On Title Loans:

  "It's like a payday lender. It's like 25 to 300 interest. You could lose the car. I mean, the repayment terms are terrible, horrible and you gotta pay it back in 30 days." — Host [01:09]

• On Subsidizing Adult Children:

  "Otherwise now they need you. Now they're codependent instead of independent." — Host [03:57]

• Gut Check Lesson:

  "If I paid cash for this, would it give me some pause and anxiety? And then the truth is we just can't afford it right now." — Host [05:27]

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Timestamps for Important Segments

• 00:06–01:37: Caller outlines situation and financing options.
• 01:38–02:24: Hosts question necessity and urgency of the build.
• 02:24–04:40: Discussion of ministry income, independence vs. codependence, and alternatives.
• 04:40–05:41: Financial risks, emotional encouragement, and boundaries.

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Conclusion & Final Takeaways

The experts firmly counsel against taking on any debt (HELOC, auto loan) or draining cash reserves to fund this project. They stress the importance of financial boundaries, sustainable generosity, and helping loved ones toward self-sufficiency, not dependence. The emotional reassurance is clear: responsible stewardship sometimes means saying no, even to well-intended gifts.

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Transcript

[A]

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[B]

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[A]

I'm considering building an apartment on my property for my daughter and son in law to live in until they can purchase a home. They'll pay rent while they're living there and my two options I think that are good for me is a heloc or I can do an auto loan on a vehicle that's paid off. Probably looking at about 50,000 on the HELOC and can probably get about 40 on the car. I do have the cash on hand, but I think a loan would probably be a better idea. Just curious if there's any pros or cons one way or the other.

[C]

Well, there's all cons.

[A]

Okay, all of them.

[B]

Why would it be a good idea to do the title loan or the heloc?

[A]

Well, because if I used cash on hand, I'd not have any cash on hand anymore and I've got a ton of equity in my home and I, I owe nothing. Any, the only thing I owe on is my home as far as, you know, in debt with anything. I don't know, maybe it's not a good idea. That's what I'm curious.

[B]

Well those, if it's a true title loan, I mean those are the, it's like a payday lender. It's like 25 to 300 interest. You could lose the car. I mean the repayment terms are terrible, horrible and you gotta pay it back in 30 days. Unless you're talking about like you're talking about taking a loan out against your car that's paid for.

[A]

Well, this is through the bank and it's basically your car's collateral though. Yeah, the car is collateral. I'd rather lose a car than a house though. So I'm just.

[B]

Why lose.

[C]

What's, what's so urgent about this? Why can't they just get a normal apartment? Why do you have to build an apartment for them to live in? Tell us more.

[A]

Yeah, well, both of them work ministry and they're coming out of that and so they're not financially set to do that. The apartment would be an asset to my current situation. I had considered doing it before because about two years ago my father became ill all of a sudden, had to come live with us. We just bought an RV and let him live in the RV for a time. And so it just kind of put on the radar. Maybe we should have something like that available.

[B]

But what's the long term plan for them? It feels like we're just sort of temporarily subsidizing their lifestyle because they're not making good incomes.

[A]

Yeah.

[B]

So if they're going to be in ministry long term, they got to figure out how to put food on the table and cover rent.

[A]

No, I agree with you on that. And so I, I'm just wondering if I could help with that. I mean.

[C]

Well, here's the thing. I just don't think you can afford it.

[B]

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[C]

or I just don't think you can afford it. I, I'm always the last call. The lady wanted to be like wildly generous. So we love generosity here. Hear me say that. But if you have to put your home up and your vehicle up for collateral and you're still paying off a mortgage yourself, you simply can't afford to do so. I, you're, you're, you know, cutting off your nose to spite your face at that point. It's, it's, it's putting you in a horrible situation and it's putting them in a bad situation because if this goes south in any way, you are going, you have a lot on the line that you can lose.

[A]

Sure.

[B]

Yeah, there's just too much risk here. If you want to bless them with like a one time gift, you can do that. You can write them a check and maybe that covers a certain, you know, number of months of rent for them. But again, I would try to help them actually become independent long term because otherwise now they need you. Now they're codependent instead of independent. And ministry's tough because you don't make a lot of money. It's, it's why we call it ministry. But they need to figure out a way. Either it's bivocational, which is a lot of people in ministry. It's what they do. They have another job that actually pays the bills and they do ministry with their free time. And so I think Helping them craft a plan is so much more helpful than anything you could do financially for them at this point.

[A]

Okay, well, that's. That's helpful insight. It certainly gives me a perspective to mull over and think about. And that was my objective and calling to find out, you know, am I missing something? Is there red flags that I'm just not seeing? So I appreciate your input with all that.

[B]

Absolutely. You're trying to do it just a nice good thing in a bad way. And then you're trying to justify it by saying, well, I'm also building an asset for me on the side. And so I think that's sort of clouding the judgment here because you're looking at it as an investment. But if you have to go into debt for it and put your car or home at risk, which is what's happening with either of these loans, it's a bad idea. And if it hurts to part with that much cash because you'll be cash poor, then it's also a bad idea. So I think that's. It's a good gut check to say, if I paid cash for this, would it give me some pause and anxiety? And then the truth is we just can't afford it right now. Not that you never can do something super generous.

[C]

Yeah, it's something to aspire to, possibly.

[A]

Yeah.

[C]

You know, and I think that's. Hopefully you'll think long and hard about that, but please hear George and I say we would not do this. And by the way, if you don't do this, it doesn't make you a bad person. It doesn't make you a person who doesn't support ministry. It just makes you a person who is a financially responsible adult.

[B]

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