"Don't Act Like This Is Helping"

Summary

Episode Summary: "Don't Act Like This Is Helping"

Podcast: The Ramsey Show Highlights
Host: Dave Ramsey (with co-host Ken Coleman)
Date: November 17, 2025
Duration: ~8 minutes (00:02–07:00)

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Main Theme

This episode centers around the dangers of co-signing loans for loved ones, especially children, and why it’s a financially risky and often emotionally fraught decision. Dave Ramsey addresses a listener’s dilemma about whether to pay off her daughter's car loan (which she co-signed) or focus on her own debt first. The advice expands into a candid, cautionary lesson on the perils of debt, the marketing behind credit, personal anecdotes of financial regret, and practical steps for getting out of such situations.

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Key Discussion Points & Insights

1. Listener’s Situation: Co-signing a Car Loan

• Jessica from Illinois writes in: She has $20,000 in credit card debt and a cosigned $12,000 car loan for her 22-year-old daughter, who is making payments without help. Jessica wants to be rid of the cosigned debt for peace of mind and seeks advice on next steps with her debt repayment plan.

2. Dave’s Debt Repayment Strategy

• Clear Your Own Debt First:
  • “We’re going to pay off the car after you pay off your credit cards because the car is under control right now. It’s not in panic. So we’ll put it at the back of the debt snowball and clear your credit cards and then clear the car.” (01:00)
• Contingent Liability Risk:
  • Even if the daughter is paying, Jessica is legally responsible if anything goes wrong (job loss, accident, etc.).
  • “This is going to come back on you. It’s what we call a contingent liability, which means it’s a liability...they’re going to come after you really fast.” (01:27)
• After Paying Off:
  • Work out a repayment plan with the daughter since Jessica is paying the car note for her.

3. Why Co-signing Is a Trap

• Aggressive Debt Marketing:
  • Debt is more heavily marketed than almost any other product; the industry invests substantial resources in pushing debt to consumers, especially vulnerable ones.
  • “Let me just tell you the most aggressively marketed product in the United States today is debt.” (02:09)
• Banks’ Reluctance Signals Risk:
  • If lenders won’t approve a loan for someone, it’s because they assess a real risk of nonpayment.
  • “If those people, the sharks, will not loan her money — your sweet little daughter...it’s because she’s not gonna pay it back. So don’t act like that you’re doing somebody a favor by helping them buy something they can’t afford.” (04:08)
• Emotional Manipulation:
  • Banks and creditors exploit a parent's desire to help with offers that may seem generous but are actually self-serving.
  • “They’ve convinced you and brainwashed you of that so that you co-sign because she couldn’t get the car on her own.” (02:44)

4. Personal Anecdotes & ‘Stupid Tax’

• Dave’s Past Mistake:
  • Details how co-signing for a friend led to his personal financial loss in his 20s, culminating in bankruptcy.
  • “I have co-signed and I ended up paying it. And when I went bankrupt in my 20s, a friend of mine had co-signed for some stuff and he ended up paying it. I went back and paid him back even though the bankruptcy said I didn’t have to.” (01:45)
• ‘Stupid Tax’:
  • The monetary and emotional price paid for poor decisions like co-signing.
  • “You know what I wrote on the ‘for’ column on the check? Stupid tax. That’s good. I paid some stupid tax. Tax on your life when you’re stupid.” (05:40)

5. Biblical Principle Against Co-signing

• “As a matter of fact, it says it in the Bible. Proverbs 17:18 says, One lacking in sense cosigns for another…if you co sign for someone else, you’re stupid. That’s what it says because of what I just described.” (04:58)
• Dave clarifies he’s not attacking Jessica personally but calling out the act of co-signing as unwise.

6. Humorous Recap

• Co-host Ken Coleman injects levity with a playful misinterpretation of Dave’s message about underwear and credit cards.
• Ken: “So the moral of story is don’t do debt and don’t buy small underwear. Is that right?” (06:39)
• Dave (laughing): “I just said financing it. That’s all I said.” (06:56)

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Notable Quotes & Memorable Moments

• On Debt Marketing:

  • “Debt is sold as a product more aggressively. More sophistication, more money, more bandwidth is spent selling you folks debt because it’s so profitable than any other product.” (02:15)

• On The Reality of Co-signing:

  • “If they won’t loan her money, it’s because they can’t pay it. And they’re not even looking to them. They’re looking to you.” (05:12)

• Biblical Reference:

  • “Proverbs 17:18 says, One lacking in sense cosigns for another...if you co sign for someone else, you’re stupid.” (04:58)

• On Regret (‘Stupid Tax’):

  • “I still remember how stupid I felt when I wrote those checks. I knew this. I knew this guy’s a deadbeat. I knew the bank was right. But I’m so smart, I’m going to help him and then I get to pay the bill. And you know what I wrote on the ‘for’ column on the check? Stupid tax.” (05:40)

• Lighthearted Banter:

  • Ken: “So the moral of story is don’t do debt and don’t buy small underwear. Is that right?” (06:39)
  • Dave: “I just said financing it. That’s all I said.” (06:56)

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Important Timestamps

• Listener’s Question: 00:09
• Debt Snowball Advice: 00:51–01:32
• Co-signing Dangers Explained: 01:32–05:35
• Biblical Warning Against Co-signing: 04:58
• Stupid Tax Story: 05:40
• Humorous Recap/Banter: 06:39–06:58

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Takeaways

• Don’t put co-signed debts ahead of your own; use the debt snowball, then pay off the co-signed loan.
• Co-signing exposes you to serious liability — if the primary borrower defaults, you are on the hook.
• Debt is aggressively marketed, and if lenders won’t lend, that’s a sign you shouldn’t either.
• The act of co-signing is called “lacking sense” in the Bible; it’s a mistake even generous, well-meaning people make — but you can and should get out of it as soon as possible.

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Tone: Blunt, practical, sometimes humorous — classic Dave Ramsey style.
Conclusion:
Don’t ever co-sign. Pay off your own debts first. If you already did it, get out as fast as you can, and don’t repeat the mistake.

Transcript

[A]

If your private student loans are in default, you're not out of options. Go to yrefi.com Ramsey Today's question comes.

[B]

From Jessica in Illinois. Before getting serious about following the baby steps, I co signed a car loan for my 22 year old daughter. I have two credit card balances to tackle besides her car and I will be debt free. She owes 12,000 on the car and I have 20,000 in credit card debt. Do I finish paying my personal debt and move on to baby step three or do I include her car note in my debt snowball? She has not missed a payment and has not asked for help paying. But I just really want to be done with it so it's not hanging over both of our heads. That being said, I'm so I'm also nervous about only having my starter emergency fund and savings that want to move on to baby step three as soon as possible. Tell her Dave.

[A]

Well, we're going to pay off the car after you pay off your credit cards because the car is under control right now. It's not in panic. So we'll put it at the back of the debt snowball and clear your credit cards and then clear the car and then work something out with your daughter so that she repays you since you're paying off her car early. Okay? Because there's several problems with this that, that lay in the future if she gets laid off, gets in a car wreck, has a medical event, anything like that, this is going to come back on you. It's what we call a contingent liability, which means it's a liability and meaning they're going to come after you. And by the way, they're going to come after you really fast and they're going to skip over her because they never thought she was going to pay it in the first place. That's why they wanted a cosigner and so they're going to come straight at you if something goes wrong. And I mean I'm not predicting horrible things happening to your daughter but you know, life just says things happen and that's why we never co sign. So I have co signed and I ended up paying it. And when I went bankrupt in my 20s, a friend of mine had co signed for some stuff and he ended up paying it. I went back and paid him back even though the bankruptcy said I didn't have to. But I wasn't going to burn my buddy just because he was dumb enough to co sign and I was dumb enough to let him. But let me just tell you the most Aggressively marketed product in the United States today is debt. Debt is sold as a product more aggressively. More sophistication, more money, more bandwidth is spent selling you folks debt because it's so profitable than any other product. I mean, you think you've seen a Chevy Silverado run through a mud puddle on every football team program for the last 20 years, and you think Chevy spends money on that? It's nothing compared to what Visa, MasterCard, American Express, and your local bank spends to get you to co sign a car for your kid. Okay? They spend money convincing you, and they've convinced an entire culture generationally, that the only way to prosper, the only way to get what I need is to go to the bank. The only way my daughter gets a car, They've convinced you and brainwashed you of that so that you co sign because she couldn't get the car on her own. Now, if debt is so profit profitable that they will literally fire a teller if they don't get enough home equity loan applications in while you're making deposits. Victoria's Secret literally does not sell small underwear. It really sells credit cards. So much so that if you ask the ladies that work there, if they don't sell a certain number of credit cards per shift, they get fired. They make more money on credit than they do small underwear. Same at the car lot, same everywhere else. Okay? And so if this is the most aggressively marketed product, and if they want to sell debt more than they want to live, eat and breathe, and they won't loan your daughter money, something's really wrong because they really want to loan her money. And if those people, the sharks, will not loan her money. Your sweet little daughter, your sweet little grandson who wants his pickup. Your daughter, your. Your daughter who just went through a nasty divorce. If they won't loan her money, it's because she's not gonna pay it back. So don't act like that you're doing somebody a favor by helping them buy something they can't afford. That's what you do when you cosign. It's stupid. As a matter of fact, it says it in the Bible. Proverbs 17:18 says, One lacking in sense cosigns for another. And if you look up 1718 in the CEV, the contemporary English. Contemporary English version. This is not a joke. This is a fact. Look it up. It says if you co sign for someone else, you're stupid. That's what it says because of what I just described. And so poor Jessica. I'm not calling you stupid, but I'M calling you what you did. Stupid. Stupid. You were trying to help. You're sweet, you're trying to help your daughter, all that, but yeah. So what do we do with stupid? We get out of it as fast as we can because it's going to tackle you by the ankles later. If you're coming up from behind, look out, look over your shoulder. So, and folks, the next time you get ready to co sign for someone, just remember it's stupid. I mean, straight up biblically stupid. Don't do it if the most aggressively marketed product in the nation will not loan your friend, your daughter, your son, your grandson, whatever it is, whoever it is you're trying to quote, help by getting them a car payment. God help you. If they won't loan the money. It's cause they can't pay it. And they're not even looking to them. They're looking to you. And that's what this is for. So please. And I've done it. I'm not saying it's been decades ago, but I still remember how stupid I felt when I wrote those checks. I knew this, I knew this guy's a deadbeat. I knew he, I knew the bank was right. The bank wouldn't loan him money. But I'm so smart, I'm going to help him and then I get to pay the bill. And you know what I wrote on the 4 column on the check? Stupid tax. That's good. I paid some stupid tax. Tax on your life when you're stupid. And I paid plenty of stupid tax in my life. And some of y' all have to try not to do it, though. I'm trying to help you with this.

[B]

So the moral of story is don't do debt and don't buy small underwear. Is that right?

[A]

Ken? You're very precise. I'm listening.

[B]

I am locked in. I'm locked in, folks. Want to make sure you're catching the lesson.

[A]

I, I, that's not what he said. Not say small underwear was off the menu.

[B]

He did not.

[A]

I just said financing it. That's all I said.

[B]

Some guy in the audience got very excited out there.

[A]

Why refi Refinances? Defaulted private student loans for struggling borrowers. Learn more at yrefy. Com Ramsey.