“You Should Have Never Done This”

Summary

Summary of “You Should Have Never Done This” – The Ramsey Show Highlights

Episode Title: You Should Have Never Done This
Host: Ramsey Network
Release Date: January 15, 2025

Introduction

In the episode titled “You Should Have Never Done This,” hosted by the Ramsey Network, Dave Ramsey and co-host John delve into the complexities of lending money within family relationships. The episode addresses the potential pitfalls of financial entanglements among family members and offers practical advice on navigating such challenging situations.

Caller’s Dilemma: A Strained Family Relationship Over a Loan

The episode begins with a caller seeking guidance on managing a deteriorating relationship between her husband and his family over a significant unpaid loan.

Caller’s Story:

• Loan Details: The caller and her husband lent $100,000 to her father-in-law two years ago. This loan was facilitated through a verbal agreement without any formal documentation, evidenced only by a bank transfer labeled as “loan to xyz” (00:28).
• Business Proposal: Four months prior, coinciding with their move into a new home, the in-laws proposed starting a new business. They required the couple to use their $2 million-valued house as a loan guarantee. The husband declined both the business proposition and requested immediate repayment of the $100,000, leading to heightened tensions (01:18).
• Repayment Issues: Despite multiple offers on a secondary family home intended to secure the loan repayment, the father-in-law has consistently rejected offers that meet his asking price, leaving the debt unresolved (02:20).

Emotional Toll:

• The husband is grappling with guilt over denying his father’s requests, causing strain in his personal well-being and marital relationship (02:45).
• The mother-in-law has been vocalizing their financial prudence and caregiving towards their children, exacerbating the familial discord (02:50).

Expert Analysis: Dave Ramsey and John’s Insights

Dave Ramsey’s Perspective: Dave Ramsey emphasizes the lack of formal agreement as a critical misstep. He highlights the importance of having documented repayment terms to prevent such disputes.

• On Documentation: “00:58 … But they didn’t sign a note? They didn’t sign a contract with you to repay?”
• Advisory on Handling the Situation: Ramsey presents two primary options:
  1. Forgive the Loan: Admit the mistake of lending without proper documentation, communicate forgiveness to restore the relationship, and discontinue any business dealings. This approach is aimed at personal peace and maintaining familial ties.
     • Quote: “05:02 … If you were going to do the transaction, you should have had a lot more business minded about it.”
  2. Let It Go Silently: Choose not to address the debt publicly, allowing the relationship to mend organically without the pressure of repayment.
     • Quote: “05:54 … forget it and say, I’m going to pretend like this never happened.”

Ramsey also introduces the concept of “stupid tax,” referring to the $100,000 lost due to the poor decision, and suggests that ownership of the mistake is essential for moving forward.

John’s Contribution: John corroborates Ramsey’s advice, advocating for open communication and forgiveness to alleviate the emotional burden.

• On Ownership and Forgiveness: “07:18 … I like option one. … I should have done this, I did it, and you’re free from it.”
• Practical Example: John relates the situation to smaller loans, illustrating that forgiving large sums within a family is analogous to handling commonplace financial disagreements.

Key Insights:

• Impact of Loans on Relationships: Lending money to family alters the dynamics, often leading to strained relationships and mistrust.
• Importance of Documentation: Formal agreements are crucial in preventing misunderstandings and ensuring clear repayment terms.
• Emotional Well-being: Prioritizing mental and emotional health sometimes necessitates forgiving financial debts to preserve personal relationships.

Practical Takeaways

1. Avoid Lending to Family: As a general rule, it’s advisable not to loan money to family members to prevent financial and emotional complications.
2. Seek Documentation: If lending is unavoidable, ensure all agreements are documented legally to safeguard both parties.
3. Prioritize Relationships: Sometimes, relinquishing financial claims is essential for the greater good of maintaining healthy family relationships.
4. Self-Reflection: Acknowledge and learn from financial mistakes to make more informed decisions in the future.

Conclusion

The episode “You Should Have Never Done This” serves as a poignant reminder of the delicate balance between financial decisions and personal relationships. Through the caller’s predicament and the expert advice from Dave Ramsey and John, listeners are encouraged to approach financial dealings with family members with caution, proper documentation, and an understanding of the potential emotional ramifications. Ultimately, preserving familial harmony may sometimes require making difficult financial choices, including the forgiveness of debts.

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Notable Quotes with Timestamps

• Dave Ramsey on Documentation:
  • “00:58 … But they didn’t sign a note? They didn’t sign a contract with you to repay?”
• Dave Ramsey on Ownership of Mistake:
  • “05:02 … If you were going to do the transaction, you should have had a lot more business minded about it.”
• John on Forgiveness:
  • “07:18 … I like option one. … I should have done this, I did it, and you’re free from it.”
• Dave Ramsey on Ratios:
  • “07:36 … it’s all about ratios here.”

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This episode underscores the intricate interplay between money and family, urging listeners to tread carefully and thoughtfully in financial matters involving loved ones. By sharing real-life scenarios and expert advice, The Ramsey Show Highlights provides valuable lessons on maintaining both financial stability and personal relationships.

Transcript

[Dave Ramsey]

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[Caller]

So my question is, how do my husband and I navigate the very strained relationship we now have with his family after multiple instances of disloyalty and dishonesty? So my father in law needs to repay a loan of $100,000 to us and hasn't done it yet. It's been two years now and four months ago, the in laws and my husband wanted to start a new business. They actually own a family business. And that was around the time when we moved into our new home. They sold a house and a couple of days later asked my husband to put our house up as their loan guarantee for their new business as it was worth around $2 million. And oh, my husband wouldn't be the business owner, but just an employee. So since then, the relationship, I assume.

[Dave Ramsey]

Your husband said no.

[Caller]

My husband went, he was so angry. He said not only no, but now pay us back $100,000 straight away. And now he's just keep dispensing himself from them, which I totally understand. But how do we navigate this situation? How do we get the hundred thousand dollars back? I have no idea.

[Dave Ramsey]

Wow. When the. Is there any documentation or legal contracts on the $100,000 or was this a handshake?

[Caller]

The bank. Oh, no. When we did the bank transfer, we. It literally showed up as loan to xyz.

[Dave Ramsey]

That doesn't matter. I mean, they didn't sign a note? They didn't sign a contract with you to repay?

[Caller]

No, it was just verbal.

[Dave Ramsey]

So it was a handshake and you wired him the money. Okay.

[Caller]

Yeah.

[Dave Ramsey]

All right. And was there any discussion at the time as to what the repayment terms would be?

[Caller]

Yes, at the time they said that as soon as they sell their house because they had a secondary house that they didn't use. As soon as they sell their house, they're going to pay us back. They.

[Dave Ramsey]

And they did. And then they did sell their house. Then they did sell their house.

[Caller]

No, no, they didn't. But they've had multiple offers. They just keep turning them down.

[Dave Ramsey]

Okay.

[Caller]

Offers that match their asking price.

[Dave Ramsey]

Okay. All right.

[Caller]

Yeah.

[Dave Ramsey]

Wow, you got yourself in a pickle, didn't you?

[Caller]

Yeah, I know, I know. And now my husband is feeling a bit guilty and he's. He keeps asking me if is he a good person because he told his dad now to repay everything back.

[Dave Ramsey]

And yes, yes, he's a good person. His dad is not.

[Caller]

Yeah, well, the mom's getting involved in telling everybody that we are money minded. And we are keeping our kids.

[Dave Ramsey]

I don't care what they told you, what they tell people. What they tell people doesn't matter. They don't really get a vote because they're the people that don't pay bills and, and propose absurd business things. They don't get a vote anymore. They lost their vote. What they tell people or what they think is irrelevant. Agreed.

[Caller]

Yes.

[Dave Ramsey]

Other than it hurts your husband's feelings, but I mean that his dad's being a twerp to him, but yeah.

[John]

John, Are, are, are y'all of mean? Stacy, you live in a $2 million house. I'm assuming y'all have money.

[Caller]

Yes. Yes.

[John]

This is easy for me to say on this side of the, of the ocean, but you're probably not going to get that money back. And just your husband making laps around the living room every night, existentially wondering if he's a good person. Is he costing his relationship with his dad? Is yada? I don't know.

[Caller]

Yes, that's exactly what's happening.

[John]

I can imagine there. Here's the deal. He, your father in law needs to pay back the money. He's probably not going to. He probably can't. And y'all. Now Dave and I have been talking about this forever. Dave's for three decades before I even showed up. When you loan a family member money, you change the nature of your relationship together. Now you are invested in them accepting an offer on their house. Right? That, that's an, that's an, that's a transaction that should be between them. And they're any potential seller and what they want to do and what they want to keep two houses or not. But now you're invested in it. And you are now judging from afar their interactions. But it's because y'all loaned them money.

[Dave Ramsey]

Yeah, Right.

[John]

So now there's the whole thing's a mess. I can see a world where your husband sits down with his dad and says, dad, I got mad, I blew my top. What's reasonable for repayment? And there's also a thing where he says, dude, this is a gift. I'm writing it off. I'm moving on with my life.

[Dave Ramsey]

What's Charles net worth?

[Caller]

I think about 11 million.

[Dave Ramsey]

Okay, so one possibility is take a deep breath, call dad and say, dad, I shouldn't have loaned you this money without any documentation. I made a huge mistake. It's costing us our relationship. I'm not going to do any business with you because I can't really trust you on transactions. But we still do want to have dinner with you. We still want to interact with you. And we're going to forgive this loan. Forget it. Don't worry about it. Your life won't change one instant if you do that. Except you'll be free. Right now, you guys are burning $10 million worth of calories over 100 grand.

[Caller]

True. Yeah.

[Dave Ramsey]

You could let it go. For your sake, you could. That's one possibility. The second possibility is almost do that, but just let it go. But don't say anything and just forget it. Walk away. And then if it, if they do pay you, let that be just like a pleasant surprise. But don't even have a conversation with them about it. Just forget it and just walk away. But you guys are, it's destroying y'all. It's, you know, they're sitting over there smiling. You're sitting over here freaked out. But again, and if I'm in your shoes, I'm also going to own my part of this. And the only part of this I really would call you two out on is you should never have done this transaction. And if you were going to do the transaction, you should have had a lot more business minded about it. Handshake on 100 grand is ridiculous. And so you ask for it. So when I do something stupid and it costs me money, I call it stupid tax. So I think you paid 100 grand in stupid tax. It's just a matter of when, when you want to pay it, whether you want to tell them today or whether you want to just forget it and say, I'm going to pretend like this never happened. I'm not even going to bring it up in my mind again. We're not going to bring it up in our marriage again. We're not, we're not going to ever do business with these people in any scenario. But we can be kind to them. They're, they're blood family.

[John]

I, I, I like option one. I like the, there's, there's something about owning it and calling dad and mom and saying, I shouldn't have done this. I did it, and y'all are free from it and we'll be over for dinner on Sunday and move on with my life.

[Dave Ramsey]

And for you regular people, it would be like if you loaned them a.

[John]

Hundred bucks or a thousand bucks. Right, right, right.

[Dave Ramsey]

Or a thousand bucks. You, you people that don't have $11 million. So just, just kind of, you get this all it's all about ratios here. Okay?

[John]

So for some people, don't loan family members money, give it to them or say no, thank you.

[Dave Ramsey]

Yeah, period. Create your free every dollar budget today. The simplest way to budget for your life.