I'm 15 And Want To Help My Parents With Their Debt

Summary

Podcast Summary: The Ramsey Show Highlights – "I'm 15 And Want To Help My Parents With Their Debt"

Episode Information:

• Title: I'm 15 And Want To Help My Parents With Their Debt
• Host: Ramsey Network
• Release Date: May 31, 2025
• Duration: Approximately 7 minutes and 38 seconds

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Introduction

In this episode of The Ramsey Show Highlights, a young listener named Brock reaches out with a heartfelt concern. At just 15 years old, Brock is contemplating how to responsibly manage his upcoming earnings from a summer job and ongoing high school employment. His primary goal is to assist his parents in alleviating their substantial credit card debt.

Brock’s Dilemma

Brock’s Situation: Brock plans to work through his sophomore year of high school and is eager to contribute financially to his family's well-being. He proposes investing his earnings in a custodial Roth IRA, reasoning that his age minimizes personal expenses, allowing for potential long-term investment growth. However, his parents are burdened with approximately $10,000 to $15,000 in credit card debt, sparking Brock's desire to help them reduce their financial strain.

Key Quote:

Brock: “[...] I want to put into a custodial Roth IRA. Because if you put in the money now, you don't really have any expenses when you're my age. But my parents are in a lot of credit card debt and I feel like I owe it to them to help them to pay it off.”
(00:06)

Expert Responses and Guidance

Rachel Cruze’s Perspective: Rachel Cruze acknowledges Brock’s commendable intent but advises against him diverting his funds to cover his parents' debt. She emphasizes that their credit card debt is not Brock’s responsibility at his age. Instead, she recommends focusing on his own financial future, such as saving for college or other personal goals.

Key Quote:

Rachel Cruze: “No, this credit card debt is not your problem. This is not your responsibility. You're a 15 year old.”
(02:50)

She further suggests that Brock consider other financial priorities, like saving for a car or his education, which are more immediate needs given his stage in life.

Dave Ramsey’s Insights: Dave Ramsey commends Brock for his financial awareness and strong work ethic. However, he advises Brock to prioritize his own financial stability over investing in a Roth IRA at this stage. Ramsey highlights the importance of saving for future expenses, such as college, to avoid potential student loan debt.

Key Quote:

Dave Ramsey: “I would invest in Brock and not into a custodial Roth, because the next, let's call it eight years of your life are going to get very expensive.”
(03:00)

Ramsey emphasizes the value of building a safety net that can support Brock’s education and future without incurring debt, allowing him to invest more effectively once he’s financially independent.

Parental Involvement and Financial Transparency

The conversation delves into the dynamics of financial transparency within families. Rachel Cruze discusses the benefits of parents being open about their financial situations with their children. She suggests that sharing details about expenses and debt teaches teenagers like Brock valuable lessons about money management and responsibility.

Key Quote:

Rachel Cruze: “...here’s the reality. But they start. They need to know that as teenagers, the reality of how much it is to [...] have a family.”
(07:01)

Conversely, she cautions against setting unrealistic financial benchmarks for children, which could lead to undue pressure or unhealthy comparisons as they grow older.

Key Quote:

Rachel Cruze: “I probably wouldn't do that until they're older. Maybe out of college or something.”
(06:05)

Encouraging Responsible Contributions

Dave Ramsey encourages Brock to contribute in ways that don’t compromise his financial future. He suggests that Brock could manage his personal expenses and perhaps save independently, thereby reducing the overall financial burden on his parents indirectly.

Key Quote:

Dave Ramsey: “...something that is in your control. So if there's something you want to do or buy, maybe just go, hey, I'm going to work for it and just pay for it myself.”
(05:00)

This approach allows Brock to feel empowered and responsible without taking on the weight of his family’s debts.

Conclusion and Takeaways

The episode highlights the importance of age-appropriate financial responsibilities. While Brock’s intentions are admirable, both Rachel Cruze and Dave Ramsey guide him towards prioritizing his own financial security and future education. They emphasize that while family support is valuable, it’s crucial for young individuals to focus on their personal growth and financial planning.

Final Thoughts:

• Prioritize Personal Financial Goals: At 15, focusing on saving for education and future expenses is more beneficial than investing in a custodial Roth IRA.
• Open Communication: Transparent discussions about family finances can empower teenagers with financial literacy.
• Responsible Contributions: Supporting family financially can be done in ways that do not compromise one’s own financial stability.

Closing Quote:

Dave Ramsey: “I love the spirit of this question. [...] you can definitely go to school debt free.”
(05:34)

Brock’s proactive approach serves as an inspiring example for young listeners, demonstrating that financial responsibility and education are key to long-term success.

Transcript

[Dave Ramsey]

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[Brock]

So I'm 15 and I'm gonna get a job over the summer and probably through my sophomore year, high school. What I want to do with the money is I want to put into a custodial Roth ira. Because if you put in the money now, you don't really have any expenses when you're my age. But my parents are in a lot of credit card debt and I feel like I owe it to them to help them to pay it off. So my question is, what do I do with my money that I'm about to earn?

[Dave Ramsey]

Wow. Well, you are a very astute 15 year old man. You're talking about custodial Roth IRAs over.

[Rachel Cruze]

Here you say the word even. Custodial.

[Dave Ramsey]

What happened to video games, Rachel? That's what the kids used to. No, I'm proud of you, man. So are you. Have you dove into finances because you saw your parents struggle with it and you went, I never want that to happen to me?

[Brock]

Yeah, yeah, that's basically it. Yeah.

[Rachel Cruze]

They talk to you about it? Brock, how much of this is you observing them or them like being like, hey, as a family, like, this is where we're at and mom and dad are gonna get out of credit card debt because we're in it. Like, how open are they about their situation with you?

[Brock]

They're pretty open. I mean, when I look at it, they're always really complaining about their credit card debt. They do have a mortgage, but they, they say to me that their mortgage is pretty under control. Their credit card debts, the main issue. And they've always been pretty transparent. Part of it has been me. I've researched about the investing and all that stuff, but with the debt and their situation, yeah, they've been pretty open with us.

[Rachel Cruze]

Are they working their way out of debt? Are they like on a plan that they're, they're changing what they're doing or is it kind of just the same old thing and you are the one that's kind of changing?

[Brock]

They are doing the baby steps. I would not be listening to this show right now.

[Rachel Cruze]

Do they know you're calling in?

[Brock]

I told them about maybe want to call in. So, yeah.

[Dave Ramsey]

Wow. So how much credit card debt are they in? Do you know the exact number?

[Brock]

I don't know the exact number, but if I had to guess, it would be around 10 to 15,000.

[Rachel Cruze]

Okay, that's great. Well, I'll tell you, Brock, no, this is not. This credit card debt is not your problem. This is not your responsibility. You're a 15 year old. And, and your job, if you earn any extra money, in my opinion, goes to Brock. Um, your parents have created, you know, some credit card debt, but they can create a plan to get out. I do not think that is your responsibility by any means. Um, so I would just put it in the custodial Roth, IRA or the other two things I would kind of challenge you on a little bit is you live in, I don't know what part of New York or if you're in the city, but a car at some point is going to be great to have. And then for college or, or what are your plans after graduation?

[Brock]

Yeah, my plans after graduation are to go to college. I'm not 100 sure on a graduate degree yet.

[Rachel Cruze]

Okay.

[Brock]

But yes, my plan is to go to college.

[Rachel Cruze]

Okay.

[Dave Ramsey]

So personally, Brock, I would invest in Brock and not into a custodial Roth, because the next, let's call it eight years of your life are going to get very expensive. And, and what happens is you go, well, I have this money invested, but I have no money for college. I guess I'll take out 150,000 in student loan debt because my parents are broke. They can't help save. And so I don't want this to be a surprise. You're, you at this age, with your work ethic and your knowledge of finances, you can definitely go to school debt free. And if you get a bunch of scholarships and you have money left over, great. We have a big pile of money to start investing. But I don't think you need to start now. I would start building up for your foreseeable future. You're going to have plenty of time to build wealth.

[Rachel Cruze]

Yeah. So I think that's, you know, people, we have a chart. I think it's Blake and Jack and it shows if you start investing, I think It's. Is it 18?

[Dave Ramsey]

I think one just started a lot sooner.

[Rachel Cruze]

Yes. So, but it's basically this age. So then people take that chart literally and like, okay, if I start investing literally $2,000 at 18, you know, all the way up, like, this is what I'll have. And so the chart is not a, it's not supposed to be a literal roadmap to do this because in this case, for instance, there's still college, like, there's still things that you want to put your money towards. But it just shows an example of this is what happens with compound interest. So that principle of compound interest, to George's point, Brock, can still apply to you at 15 as it will at 21 and by the time you cash out a Roth IRA at 59 and a half, you're going to be fine. Right. Like, I mean the difference would be, oh my gosh, I might have to go into debt for college and that's going to put me back a few years because I have to pay off this debt. So we would rather you cash flow your life moving forward. And then once you're out of college, Brock, working full time, working full time, you kind of have some stability. And if this money you're saving now wasn't used for college and, and after moving expenses and all the things, you could take a chunk of that money and invest it then, you know, at 21, 22 years old. But for now on I probably would just do a high yield savings account and be putting all your money in there.

[Brock]

That makes perfect sense. Thank you guys so much.

[Rachel Cruze]

Yeah, yeah, thanks Brock.

[Dave Ramsey]

I love the spirit of this question. And one thing Brock, you can do and I would do is limit the expenses you add on to the pile. And that is something that is in your control. So if there's something you want to do or buy, maybe just go, hey, I'm going to work for it and just pay for it myself. I know my parents are on this journey and that's your way of contributing in a sense. So instead of going, hey, I need 500 bucks for this trip or I need a hundred bucks to get clothes for school, man, if you're able and willing to work and you can cash flow at all, that's really going to help them speed up their own debt free journey. But I love your heart to help them and the fact that they're open and honest about where they're at financially.

[Rachel Cruze]

Yeah, I mean that's what I loved. I'm like, man, these parents are talking about it, I mean to the point that he's like woo, maybe I can help, you know, which is a great spirit to have. But yeah, at 15, I think you're, you're good.

[Dave Ramsey]

Yeah, we've talked about age appropriate money conversations and you talk about this a lot in your book Smart Money, Smart Kids about. Okay, what is the right time to introduce things to the kids and how do you, I mean I bet Even the last 10 years you've changed your mind about what is the right time for parents to talk to their kids and how much information do they share?

[Rachel Cruze]

Yes.

[Dave Ramsey]

What is your current thoughts on that?

[Rachel Cruze]

Yeah, the dollar amount. I mean I think at 15, Brock's example, I think Is great. I mean, I would be comfortable sharing, like, here's how much debt we have to a teenager. Because if you think about it, in just three years, two and a half years, he's going to be out on his own anyway. So it's like. Yeah. To bring them in because his parents are working a plan. So, yes, they're complaining about it, but yet they're doing something about it, which I think is key for him to see that example. And then. Yeah, I mean, some people, I hear households, which I kind of. I think I like, and I think we probably will start doing it with the girls as they get older, is to show exactly. Like, here's how much Internet is. Here's how much Netflix is Disney Plus. Here's all of our expenses added up per month. And that's how much our life costs. And it's not a burden on them. Right. You're not doing it to, like, shame them of, like, oh, my gosh, how much it costs to, like, have a family. But it's like, hey, here's the reality. But they start. They need to know that as teenagers, the reality of how much it is to. For a light bill. Right. So that some people debate with the income idea of how much. If you tell your kids, I'm wondering.

[Dave Ramsey]

About that, it feels a dicier.

[Rachel Cruze]

I probably wouldn't do that until they're older. Maybe out of college or something. I don't know.

[Dave Ramsey]

I just wonder if it creates an unhealthy bar that is set by the parents, whether they don't make a lot or they make a astounding amount.

[Rachel Cruze]

Yeah.

[Dave Ramsey]

For the kids to be like, okay, well, that's what I need to. If I can get there, I'm doing as well as my parents.

[Rachel Cruze]

Okay. You know, like a competitive thing. Almost.

[Dave Ramsey]

Almost competitive, but almost like a dude thing. Did I make it?

[Rachel Cruze]

I don't think I'd ever think.

[Dave Ramsey]

Let's say. Let's say you find out your dad makes $100,000. Well, now the bar is, if I can make $100,000, I'll be doing as well as dad. My dad, he'll be proud of me.

[Rachel Cruze]

Okay, man, you just went to a therapy session.

[Dave Ramsey]

I think that's why guys buy trucks. There it is. I think we've come full circle. Create your free every dollar budget today. The simplest way to budget for your life.