Buy My Kids Christmas Gifts Or Pay Off Debt?

Summary

The Ramsey Show Highlights: "Buy My Kids Christmas Gifts Or Pay Off Debt?"

Release Date: December 15, 2024
Host/Author: Ramsey Network
Duration: Approximately 9 minutes

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Introduction to Joshua's Financial Dilemma

In this episode of The Ramsey Show Highlights, Joshua, a 24-year-old medically retired military veteran, reaches out for advice as he faces a pressing financial dilemma. With Christmas approaching and three young children at home, Joshua is torn between using his limited funds to purchase gifts for his kids or continuing to pay off his existing debts.

Joshua's Situation:

• Military Retirement: Joshua was medically discharged due to a back injury sustained in the line of duty. While receiving a pension, he is currently not employed.
• Education Commitments: He is attending school full-time, pursuing a degree in Business Administration with a major in Project Management.
• Financial Hardship: Joshua contends with $1,800 in credit card debt and an additional $4,000 in collections. His household income is approximately $6,000 per month.

Notable Quote:

"[00:06] Joshua: ...with Christmas coming up, I have three young children and I'm wondering, should I kind of sacrifice their happiness Christmas morning to continue to, you know, pay off this debt...?"

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Assessing Joshua's Financial Health

Dave Ramsey, the show's host, begins by expressing surprise at Joshua's reported income, questioning the sustainability of his financial situation given his age and current circumstances.

Key Points Discussed:

• Income Verification: Dave challenges the credibility of Joshua's $6,000 monthly income, prompting Joshua to clarify his age and background.
• Employment Status: Joshua admits he is not currently employed, relying solely on his military pension while attending school full-time.
• Educational Impact: The conversation highlights the potential financial strain of balancing full-time education without concurrent employment, especially with dependents at home.

Notable Quote:

"[01:05] Dave Ramsey: Six thousand dollars a month. How old? Are you joking?"

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Dave Ramsey's Guidance on Employment and Debt Management

Dave Ramsey emphasizes the necessity for Joshua to seek employment despite his educational pursuits. He underscores the importance of generating income to manage existing debts and ensure financial stability, especially with Christmas expenses looming.

Advice Given:

• Prioritize Employment: Dave advises Joshua to secure a job immediately, suggesting alternatives like gig economy roles (e.g., Grubhub, Uber) to supplement income.
• Debt Repayment Strategy: He encourages Joshua to continue focusing on debt elimination, proposing that with disciplined effort, the $5,800 debt could be cleared by March.
• Financial Prioritization: Dave stresses that the immediate need to support his family and manage debts should take precedence over extended educational timelines without concurrent income.

Notable Quotes:

"[05:07] Dave Ramsey: You need money, you need to go get a job."

"[05:22] Dave Ramsey: The answer to your question is not only do your kids have Christmas, you keep working after Christmas and you only need $5,800 to be debt free. You can have that by March."

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Rachel Cruze's Perspective on Parenting and Budgeting

Rachel Cruze joins the discussion, offering a compassionate yet pragmatic viewpoint. She acknowledges Joshua's military service and the challenges faced by military families but reinforces the importance of financial responsibility and prioritizing work to secure the family's future.

Key Insights:

• Appreciation for Service: Rachel begins by expressing deep gratitude for Joshua's service and sacrifices.
• Financial Realities: She underscores the necessity of building wealth and managing responsibilities as a parent, especially in a consumer-driven society.
• Creative Budgeting for Christmas: Rachel suggests inexpensive and meaningful ways to celebrate Christmas, emphasizing experiences over material gifts. She highlights that young children are more interested in the joy of opening gifts rather than the cost or quantity of presents.

Notable Quotes:

"[03:27] Rachel Cruze: ...you have a wife and you have three kids... there's a reality of a world that is... you kind of have to do what you need to do."

"[07:13] Rachel Cruze: ...kids are so low maintenance... all the crap we buy... they're going to be thrown out by April anyway."

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Balancing Education, Employment, and Family Responsibilities

The conversation delves into the challenges Joshua faces in balancing full-time education, potential employment, and family responsibilities. Dave and Rachel collaboratively brainstorm ways Joshua can manage his time effectively to meet his financial obligations without compromising his role as a parent.

Strategies Discussed:

• Flexible Employment: Given that Joshua's classes are online, Dave suggests that he can adjust his schedule to accommodate an eight-hour workday alongside his studies.
• Maximizing Time: Both hosts emphasize the importance of time management, advocating for Joshua to work diligently during the available hours, including late nights post-childcare, to bridge the income gap.
• Minimalist Approach: Rachel encourages adopting a minimalist approach to holiday spending, focusing on creating lasting memories rather than accumulating material goods.

Notable Quotes:

"[04:44] Joshua: So I'm currently online. Fully online."

"[05:07] Dave Ramsey: ...do your stinking online at night while the babies are asleep."

"[08:37] Rachel Cruze: ...kids want you parents, they want you. So, like, go find an experience to do with them and that's going to create more memories."

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Concluding Encouragement and Actionable Steps

As the discussion wraps up, Dave Ramsey and Rachel Cruze offer Joshua both encouragement and a clear action plan. They reaffirm their support for his military background while firmly advising him to take immediate steps toward financial recovery.

Final Recommendations:

• Immediate Employment: Secure a stable job to ensure consistent income flow, enabling debt repayment and provision for family needs.
• Balanced Budgeting: Utilize tools like the EveryDollar app (as advertised at the episode's outset) to meticulously track and manage household finances.
• Long-Term Financial Goals: Focus on eliminating debt by March, after which Joshua can redirect funds toward savings and future financial stability.

Notable Quotes:

"[09:17] Rachel Cruze: ...Joshua, don't put that pressure. And parents out there this Christmas..."

"[09:26] Dave Ramsey: We are proud of your military service and we love you so much. We're going to tell you the truth."

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Closing Remarks

The episode concludes with a reaffirmation of the Ramsey Network's commitment to providing practical financial advice. Dave Ramsey and Rachel Cruze reiterate the importance of prioritizing financial responsibilities to ensure a secure and joyful family life. They encourage listeners facing similar dilemmas to seek guidance and take actionable steps toward financial peace.

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Key Takeaways:

• Prioritize Income Generation: Ensuring a stable income is paramount, especially when managing debts and supporting a family.
• Effective Budgeting: Utilizing budgeting tools and adopting disciplined financial habits can alleviate debt and create a foundation for future financial health.
• Meaningful Family Experiences: Focusing on creating memorable experiences over material possessions can foster deeper family bonds without financial strain.

Resources Mentioned:

• EveryDollar App: A budgeting tool recommended by Dave Ramsey to help manage finances effectively. (Advertised at [00:02])

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This episode of The Ramsey Show Highlights serves as a poignant reminder of the delicate balance between financial responsibilities and family well-being. Through compassionate yet straightforward advice, Dave Ramsey and Rachel Cruze empower individuals to navigate challenging financial landscapes while maintaining the joy and unity of family life.

Transcript

[Dave Ramsey]

Brought to you by the EveryDollar app. Start budgeting for free today.

[Joshua]

I recently retired from the military, medically retired from the military. And after I had gotten out, there was about a month of no household income whatsoever. And we kind of ran into some financial hardship. And with Christmas coming up, I have three young children and I'm wondering, should I kind of sacrifice their happiness Christmas morning to continue to, you know, pay off this debt of about eighteen hundred dollars in credit card debt and about four thousand dollars in collections right now and roughly bring in about six. About five and a half. Six thousand dollars a month.

[Dave Ramsey]

Six thousand dollars a month. How old? Are you joking?

[Joshua]

I'm 24.

[Dave Ramsey]

Thank you for your service. What happened that you were medically discharged? Are you okay?

[Joshua]

So I was injured in line of duty, my back was injured, and they decided that I could no longer serve how they needed me to.

[Dave Ramsey]

Are you. Are you okay to the. For other things, though? Are you able to. Are you back to work doing a job now?

[Joshua]

So. I'm currently not working. I'm drawing pension from military.

[Dave Ramsey]

Why are you not working?

[Joshua]

I'm currently going to school full time.

[Dave Ramsey]

Okay. Why?

[Joshua]

I want to. I've always kind of worked more labor type of jobs. Hard on your body.

[Dave Ramsey]

What are you. What are you studying?

[Joshua]

I'm going to school for business administration with a major in project management.

[Dave Ramsey]

Okay. And you're just. And you just started.

[Joshua]

Yes, I did just. I just started.

[Dave Ramsey]

Planning to not work for four years?

[Joshua]

Yes.

[Rachel Cruze]

Is your wife working?

[Joshua]

No, we have three young children.

[Dave Ramsey]

She's.

[Joshua]

Stay home, mom.

[Dave Ramsey]

Okay, hon. When I went through four years, I worked 40 to 60 hours a week while I was going to school.

[Joshua]

Absolutely.

[Dave Ramsey]

You need a job?

[Joshua]

Yes, I have been networking a little bit, trying to get an internship or an apprenticeship somewhere.

[Dave Ramsey]

I don't want you to get an internship or an apprenticeship. I want you to get a job.

[Joshua]

Okay.

[Dave Ramsey]

You need money.

[Joshua]

Yes.

[Dave Ramsey]

I'm aligned with you using your military benefits to get a degree. I'm not aligned with you not working for four years while you have three kids and you're calling me about them having no Christmas?

[Joshua]

Absolutely. No, no, no, of course. But I'm. I'm bringing in around $63,000 a year.

[Dave Ramsey]

I know, but you're calling me about not being able to buy your children Christmas and you're not working.

[Joshua]

Absolutely. That's. That's just because of the. Well, obviously, military doesn't pay very much. I just got our active duty and we hit a.

[Rachel Cruze]

So, Joshua, I think here's the hard thing.

[Dave Ramsey]

Go ahead.

[Rachel Cruze]

Well, if I can just be pretty frank with you, you know what, what you, you know, have done service for our country, like, incredibly grateful for you and all military families out there. I can't even imagine, like, what you all go through. So I. So appreciative. But now on this side, you know, you're 24, you have a wife and you have three kids, and there's a reality of a world that is, hey, I'm a grown up and we have responsibilities and we don't get a choice just to go do what we want. We kind of have to do what we need to do. And what you need to do. Right, is start having money. And so if I were you, Joshua, and I don't know how far you are into this, maybe one semester of school, but if it's too much of a load not to be working full time, and I. And maybe it's. You're driving Uber. But I'm just saying, even for a. Even for a year or two, this is where you want to go. But you guys are underwater financially. So to me, there's not a choice to go to school. Like, you know, are you.

[Dave Ramsey]

Are you, Are you.

[Rachel Cruze]

I would be. I would be finding a job.

[Dave Ramsey]

Well, you can go to school and job.

[Rachel Cruze]

Yeah. That's a lot though. But in 40 to 60 hours a.

[Dave Ramsey]

Week and graduated in four years.

[Rachel Cruze]

I know, but they have $4,000 in collections, so like, so go to work. Yeah.

[Dave Ramsey]

So here's the thing. When does classes let out? Dude?

[Joshua]

So I'm currently online. Fully online.

[Dave Ramsey]

Okay, good. So you control when you want to go to class.

[Joshua]

Yes.

[Dave Ramsey]

Oh, that makes it even better. So you can work like an eight hour day.

[Joshua]

Yeah, but we did just have a newborn. That's.

[Dave Ramsey]

Your wife is at home with three kids. That would be like her job.

[Joshua]

Absolutely.

[Dave Ramsey]

You need money, you need to go get a job, Joshua. Like right now, you need to be doing grubhub and Uber and something else by the end of the day. And you can buy your baby's Christmas. And by the way, the newborn don't even know it's Christmas, so it's a non issue here. Okay. You feed them and change their diaper, they're happy, puppy. All right, so let's move on.

[Rachel Cruze]

About five years old, they don't really know.

[Dave Ramsey]

Yeah, they don't have any idea what's going on here. But dude, you can't call me up and act like that. You can't fund Christmas. This is Thanksgiving. You got a whole freaking month. You can save up the money for Christmas by working during this month. That is the answer to your equation. Go get six part time jobs that equal eight to ten hours a day and do your stinking online at night while the babies are asleep. I wrote financial peace from 10pm to 3am that's when I wrote that book. Because I had babies I had to feed and I couldn't sit there and go, I'm now an author. I don't work anymore. I didn't have that as an option. The freaking electric bill guy didn't care if I was an author. He wanted like money or they cut off my electricity.

[Rachel Cruze]

Because if he's. And he's pulling the 6,000 from his.

[Dave Ramsey]

Pension, he's got a lot of money coming in.

[Rachel Cruze]

But. Yes. And that's, but is that, is that robbing from his retirement?

[Dave Ramsey]

No, no, no, no, no, no. This is. His military retirement is huge. Because he military disabled.

[Rachel Cruze]

Because he's disabled. Okay, okay.

[Dave Ramsey]

He's getting zoomed.

[Rachel Cruze]

I was thinking this is taking from their life when they want to retire.

[Dave Ramsey]

He's got a bazillion dollars coming in. No, it's just that he makes $72,000 a year sitting on his butt and they pay for him to go to school. And we, the taxpayers should. And we should. Yes, that's fine.

[Rachel Cruze]

Yes.

[Dave Ramsey]

But dude, that. The answer to your question is not only do your kids have Christmas, you keep working after Christmas and you only need $5,800 to be debt free. You can have that by March. So first let's go get the kids some Christmas and then let's get Joshua out of debt by March.

[Rachel Cruze]

And Joshua, can I just tell you too, as a mom with little kids, like, especially if they're a newborn, a two year old, I mean he's 24. So a two year old and a three year old, like I'm assuming they're all under six. I would think they don't know. Like go to the Target section and they just want to open up gifts. Like they don't really care what's in it. They just want to have the wrapping paper and the experience of opening gifts. So like go so cheap. Like go so cheap. That stuff is going to be thrown out by April anyway. It's all the crap we buy. So like. Yeah, so even that. And that's for all of them. I mean, that's for all of us.

[Dave Ramsey]

Well, I got to tell you, I mean Rachel, when she was little, we would spend all this stinking money on the kids Christmas and then dad gum, Uncle Mac would go to the Dollar store and come in with like a garbage bag full of toys that were garbage. And he was a bigger hit than we were and he spent like 20 bucks and we spent like 200.

[Rachel Cruze]

And let's just say too Matt was the fun uncle. That's right. And in this consumer driven world, and especially in this season, you're like, I want to. You know, I think his phrasing was. And this is not to pick on you, Joshua, because this is everyone to make my kids happy. It is just stuff like the most. Like, we are such a disconnected culture anyways. Like the amount of people that we are on devices and phones and TVs and screens. Like, your kids want you parents, they want you. So, like, go find an experience to do with them and that's going to create more memories.

[Dave Ramsey]

Not Joshua. So they want him to go to work.

[Rachel Cruze]

Do what?

[Dave Ramsey]

I said his kids want him to go to work. They don't want him. They want him to go to work.

[Rachel Cruze]

Well, he needs to go to work and he needs to be with them when he can.

[Dave Ramsey]

He can be with them a little bit later. Right now he needs to go to work right now. He needs some money. You call me up and tell me you can't buy your kids Christmas, I'll cry for about 30 seconds and until I find out you don't have a job. Okay. And then my crying's done.

[Rachel Cruze]

I know, but my point is last Thanksgiving, we took the kids to a school parking lot and they rode bikes around. We all rode bikes around for an hour. And they still talked about like. I'm like, that's what I'm saying is kids are so low maintenance. So Joshua, don't put that pressure. And parents out there this Christmas, like.

[Dave Ramsey]

And by the way, they already had the bikes, so it was built in. That was like a freebie. So there we go.

[Rachel Cruze]

Yeah, there you go.

[Dave Ramsey]

Wow.

[Rachel Cruze]

Joshua, you got this.

[Dave Ramsey]

You can do it.

[Rachel Cruze]

Go to work. You got this. Hey.

[Dave Ramsey]

We are proud of your military service and we love you so much. We're going to tell you the truth. Don't call her if you don't want that. This is the Ramsey Show. Create your free every dollar budget today. The simplest way to budget for your life.