Can We Justify a $400 Purchase after Becoming Debt Free

Summary

The Ramsey Show Highlights

Episode: Can We Justify a $400 Purchase after Becoming Debt Free
Date: May 8, 2026
Host: Ramsey Network (Dave Ramsey, Rachel Cruze, and guest caller Theresa)

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Episode Overview

This short episode centers on a live caller, Theresa, who has just completed “Baby Step 2” (becoming debt-free except for the mortgage) and is now on “Baby Step 3,” working on building her emergency fund. She poses a classic Ramsey Show dilemma: Can she justify spending $400 on a new flour mill kitchen appliance as a celebratory purchase, given her recent financial progress? The hosts and audience debate whether this expense is wise before the full emergency fund is in place, using the situation as a springboard to revisit core Ramsey principles regarding spending, self-restraint, and the importance of a strong financial framework.

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Key Discussion Points and Insights

1. Theresa’s Situation: The Decision to Splurge

• Theresa’s Background:
  • Debt-free after four years of dedicated effort ([03:24]).
  • On Baby Step 3, with about $1,800 so far toward her goal of a $20,000 emergency fund ([00:33],[00:47]).
  • Household income: $50,000 ([01:00]).
  • Wants to spend $400 on a flour mill (for homemade bread) as a reward/upgrade ([01:27]-[01:35]).

2. The $400 Flour Mill: Need or Want?

• Hosts’ Initial Reactions:

  • Dave Ramsey jokes he has one in the closet from his wife Sharon’s own baking phase.

    "I got a five-gallon bucket of that stuff in the closet from two years ago when Sharon had this fad." — Dave ([01:39])

  • Rachel Cruze is more sympathetic to celebrating milestones.
  • The studio audience is mixed but leans against the purchase ([04:55]-[05:01]).

• Humorous Side-Talk:

  • Banter about unused kitchen appliances—“whole grain pancakes and muffins galore for about 90 days” ([05:31]).
  • Playful debate over kitchen gadgets (Vitamix blenders, air fryers) ([08:35]-[08:56]).
  • “Seldom used kitchen appliances” is a box everyone eventually owns ([09:00]).

3. The Ramsey Framework and Value System

• Dave’s Core Principle:

  • Purchases in Baby Step 3 must pass through a strict filter—no non-emergency, luxury spending until the emergency fund is fully established.

    "What we always have to manage...is not the actual little issue of 400 bucks, but what it represents in our behavior, in our standards, and in who we are." — Dave ([02:40]) "If this isn’t an emergency, we can’t do it because we don’t yet have an emergency fund." — Dave ([02:48])

  • Emphasizes that sticking to the framework and delaying gratification is key to lasting financial change:

    "You’ve reset the way your brains work on money in a positive way, and this, this messes it up. I mean, this is falling off the wagon." — Dave ([04:03])

  • Even if mathematically doable, discipline is the goal:

    "It’s not $4,000. It’s 400. It’s not 400,000 either. It doesn’t matter." — Dave ([04:35])

  • Classic Ramsey advice:

    "You’ve lived like no one else so that later you can live like no one else and buy a bread maker. Buy a mill. It’s a mill. It’s a mill. You mill your own grain." — Dave ([05:57])

4. Rachel’s Counterview and Audience Reactions

• Rachel Cruze:

  • She empathizes with the urge to celebrate after years of hard work, suggesting a reasonable, cash-paid splurge could be justified:

    "We do say sometimes to families that have kind of been done in a debt free scream, like, well, what are you going to do now that you’re debt free? ... I could do a little splurge to like celebrate that we’re debt free." — Rachel ([07:57]-[08:06])

• Audience Pulse:

  • Mixed—some thumbs up, but more laughs and gentle ribbing; most side with Dave’s discipline ([05:00]-[05:04],[08:24]).

5. Memorable Moments & Quotes

• Dave, on the dangers of derailing:

  "This has fallen off the wagon, so, you know." ([04:03])

• Rachel, on emotional reward:

  "I like the hard work and the exhaustion of what they’ve gone through, which means I need a homemade bread machine." ([05:07])

• On aspirational minimalism:

  “This is a sign. You need to be a minimalist.” ([09:07])

• Final verdict:

  "If you’re calling us to break the tie between you and your husband. Rachel’s on your side and everybody else is on your husband." — Dave to Theresa ([07:41])

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Timestamps for Important Segments

• Theresa’s Backstory & Question: [00:10] – [01:35]
• Financial Details and Framework Discussion: [01:40] – [03:41]
• Hosts’ Advice & Audience Reaction: [03:41] – [06:30]
• Kitchen Gadget Comedy & Minimalism: [06:30] – [09:13]

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Summary Verdict

• Ramsey Approach is clear: Stick to the plan. Don’t buy luxury or non-essential items until your emergency fund is complete, no matter how great the temptation or how hard you’ve worked. Financial transformation is about discipline as much as math.
• Rachel’s Nuance: There’s room for small, cash-paid celebrations—but don’t let them get in the way of your broader goals.
• Caller Takeaway: For a true Ramsey follower, “not yet” is the answer—wait for the splurge until your emergency fund milestone is fully met. But for those looking to balance reward and discipline, a modest celebration can be considered, with full awareness of the risks.

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The episode is rich with humor, relatable stories of unused kitchen gadgets, and the classic push-pull between responsible diligence and rewarding hard work—a quintessential Ramsey Show moment that keeps personal finance real and pragmatic.

Transcript

[A]

If your private student loans are in default, you're not out of options. Go to yrefi.com Ramsey so my husband

[B]

and I are in baby step three, and I want to spend $400 on a new kitchen appliance. And my husband and I talked about it. He's listening right now. Hi, my love.

[C]

Hi, Theresa.

[B]

If it was a good idea or not.

[C]

Okay, how much do you guys have saved?

[B]

We have 1800 right now in our. In our savings account and we have the cash in our checking account to cover it just fine.

[C]

Okay, and what's the full. What's the goal for the three months emergency funds? Like 1800 to what?

[B]

I'm saying that we needed to write down a number for that. We only just finished baby step two. Probably around 20,000.

[A]

And what's your household income?

[B]

About 50,000.

[A]

50,000. Okay.

[B]

Yes. Hopefully that will be increasing soon.

[A]

But like, why and how much?

[B]

Changing jobs and changing career situations.

[A]

Okay.

[B]

Yeah.

[A]

So how much. How much do you think it'll change?

[B]

I don't know. We would have to start before we could predict that.

[A]

Okay. All right.

[C]

What's the appliance? I'm just curious.

[B]

It's a flour mill. Oh, so it like milled wheat into flour?

[A]

Yeah, I got one. I'll show you. Used.

[B]

Oh, I got.

[A]

I got a five gallon bucket of that stuff in the. In the closet from two years ago when Sharon had this fad.

[B]

I promise I'll use it.

[A]

Yeah, that's what she said.

[C]

I believe you will. I will.

[B]

I promise.

[A]

It's all. It's all healthy, too. It's all healthy. They don't let any of the little glutens in it. There's no little glutens and no low Covid. So. Yeah, it's all. It's all Covid and gluten free.

[C]

Oh, my gosh, Teresa, you should have called Sharon.

[A]

Called Sharon?

[B]

Put her on. Put her.

[C]

I know, I know. I'm going to represent her.

[A]

I'm serious. I'm going to go home and get the thing before she gets home and send it to you.

[C]

You should. That actually be a great.

[A]

That would be so funny. And Sharon wouldn't miss it because she hasn't. She wouldn't even. She would not. She wouldn't know it's gone.

[C]

That would be funny when you'd be

[A]

like eight months from now. She'll be going, hey, where's my little bread thing?

[C]

Give your address to Kelly.

[A]

Gave it to a lady in Washington.

[C]

I'll go. I'll sink it for you, Teresa.

[A]

So here's the thing. Here's the thing. The thing that we always have to manage when we're managing these decisions is not the actual little issue of 400 bucks, but what it represents in our behavior, in our standards, and in who we are. Okay? And so what Sharon and I would have said when we were at your place is we would have said, if this isn't an emergency, we can't do it because we don't yet have an emergency fund. And it's very odd that I actually own one of those things.

[C]

How long did it take y' all to get out of debt? Theresa, how long are we all doing baby step?

[B]

Two, four years.

[C]

I know.

[B]

See, Almost to the day, actually.

[C]

So much sacrifice.

[A]

I know, but it's just. The point is that you have to have your filter system that says, yes, you do. I'm going to make my decisions based on this set of. On this framework.

[C]

Yes.

[A]

And on this value system. And so, you know, you've been using the baby steps as your. As your framework for making the decisions. And it would say that this is not an emergency. Don't do it. Although mathematically, it's not that big a deal.

[C]

You guys could. And you're going to be fine.

[A]

You could do a lot of stuff.

[C]

Yeah, but you don't want it to derail you is what you're saying is.

[A]

I don't. I don't want to. I just don't. You've reset the way your brains work on money in a positive way, and this. This. This messes it up. I mean, this has fallen off the wagon, so, you know.

[C]

Wow. It's falling off the wagon.

[A]

Yeah, for sure.

[C]

They're not going into debt for it, though.

[A]

No, but I mean, they're. They're. They're not going to make the decision through that framework. I wouldn't do it. I would not buy it, because it's not an emergency. It's not an emergency.

[C]

It's not an emergency, but it's.

[A]

And you don't have your emergency fund, so you should not be buying luxury items that aren't an emergency for four.

[C]

It's not $4,000. It's 400.

[A]

It's not 400,000 either. It doesn't matter.

[C]

But I'm saying for four years of their lives, they've been sacrificing to get out of debt. Okay. And then we always say, when you

[A]

get out of debt, so we have a tie. Rachel says, buy it. What are you going to do? I say, don't. I've got One in the closet.

[C]

Oh, no, there's. Hold on. We have some audience who's a. Yes.

[A]

The audience is saying, don't buy it.

[C]

Oh, no. Oh, I got one.

[A]

Oh, I got one. Thumbs up. Got a bunch of thumbs down.

[C]

We got a lot of thumbs up.

[A]

Audience particip. Rachel, you're losing.

[C]

Shoot.

[A]

You're losing. You're so kind and gentle.

[C]

It's not that I'm kind and gentle. It's that I like the hard work and the exhaustion of what they've gone

[A]

through, which means I need. I need a homemade bread machine.

[C]

Listen, I'm taking.

[A]

That's what all this hard work was for.

[C]

Listen, I don't do it, but people

[A]

that do it, they don't. They put it in their closet.

[C]

They love it. You can see.

[A]

I know. I know someone personally.

[C]

Shoot.

[A]

I wish this was whole grain pancakes and muffins galore for about 90 days. Hadn't seen them since.

[C]

Oh, man.

[A]

We lost the enthusiasm on the latest health fad, man. Oh, yeah, Teresa, it's fun. That's fine. We're not making fun of you. We're making fun of me. Okay.

[C]

But it's not. It's not a need.

[A]

It's a once. So if your emergency fund was completed and you could put it in the budget. Yes. Your emergency fund isn't completed. I wouldn't do it. I also wouldn't upgrade your couch for $400. I wouldn't upgrade your anything else for $400. It's not an emergency. Until you get this done, we stay gazelle intense until we finish, baby step three. And that's what will get you to where you want to be. You've lived like no one else so that later you can live like no one else and buy a bread maker. Buy a mill. It's a mill. It's a mill. You mill your own grain.

[C]

Yeah. I don't even want to ask questions. I don't want to. I'm so not in.

[A]

You're gonna have to get your mom to get it out and show you.

[C]

I know. I will.

[A]

She might give it to you. You never know.

[C]

And I'd give it to Teresa.

[A]

You might need it. Well, you could get Teresa's address and just ship it on over there. Get it just in case, you know, That's. That's funny. And the. The grain, it's like a five gallon bucket of paint. It's a five gallon bucket, plastic bucket full of grain in the closet.

[C]

And the grain, it's not like.

[A]

It's like grain. It's like grain. Like you went out in the field and picked the grain.

[C]

Like the stem?

[A]

No, it's the seed.

[C]

It's the seed of the grain.

[A]

It's green. Yeah, it's real. I mean, it's. But it. And it's apparently pretty dormant because it's been sitting there a while.

[C]

Oh, man, it's so hard for us to.

[A]

You can't make this up.

[C]

It's hard when you're.

[A]

This is first world problems on steroids right here thing.

[C]

When it is. When people are very passionate about it and it's like they.

[A]

For a minute, for a minute they are.

[C]

They're there and then they're not. This is what they do, you know? I don't know.

[A]

We definitely got the fever for it

[C]

because I bet she does sourdough. I bet she makes sourdough with it. Right? Can you do that or is that. No, no, no, that's a feeder. Sourdough is a feeder. Yeah. Shoot. Okay, I'm going to stop. I'm terrible at this stuff.

[A]

Yeah. Oh, Teresa, it's fun. It's not going to kill you if you do it. But you, but, but if you're. If you're calling us to break the tie between you and your husband. Rachel's on your husband's side and no one else is. I mean, Rachel's on your side and everybody else is on your husband.

[C]

We do say sometimes to families that have kind of been done in a debt free scream, like, well, what are you going to do now that you're debt free? You know what I mean? Like, we do ask that.

[A]

Buy a, Buy them bread, milk.

[C]

Well, I'm just saying the idea of getting Past Baby Step 2 is an event. It is a thing. And so if there's something that is reasonable, you can pay cash for that. You're like, okay, yes, we're saving at the emergency on time, but in the checking account we have this. And I could do a little splurge to like celebrate that we're debt free. I don't know.

[A]

Yeah, you got, you know, you have a tie on the air and off the air you lose. Yeah. The audience. The audience is not with you.

[C]

I'm trying. Trying. Teresa.

[A]

Oh, Teresa. That's fun. I would have guessed wrong. I thought she was going to buy the, the 400 expensive blender. The Vitamix.

[C]

Oh, the Vitamix. I don't know if that's.

[A]

That's about 400 bucks.

[C]

I will say we got an air fryer. Okay, that's pretty life changing. It wasn't 400, but it was pretty great.

[A]

Okay. Well, there you go.

[C]

Wow.

[A]

I don't have one of those.

[C]

Kitchen. Yeah, the kitchen.

[A]

I remember when I was a kid and we moved and we had a box that said on the side of it, seldom used kitchen appliances.

[C]

James I bet y' all have a mill.

[A]

This is a sign. You need to be a minimalist.

[C]

James, do you have a mill?

[B]

Not yet, but it's probably going to happen soon.

[C]

Okay. Yeah, I feel it.

[A]

Why refi. Refinances? Defaulted private student loans for struggling borrowers. Learn [e-mail] Ramsey.