Don’t Let Toxic Money Situations Keep You Trapped

Summary

Podcast Summary: The Ramsey Show – Episode: "Don’t Let Toxic Money Situations Keep You Trapped"

Release Date: January 8, 2025

Hosts: Jade Warshaw and Rachel Cruz

In this impactful episode of "The Ramsey Show," hosts Jade Warshaw and Rachel Cruz tackle a series of listener calls addressing complex financial dilemmas intertwined with personal relationships. The episode emphasizes the importance of maintaining financial independence, setting clear boundaries, and adhering to proven financial principles to avoid falling into toxic money situations.

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1. Navigating Co-Signed Credit Cards in Relationships

Caller: Katie from Austin, Texas
Timestamp: [00:45] – [08:47]

Katie reaches out with concerns about her boyfriend using credit cards that are co-signed in both of their names. She feels uneasy about the potential financial repercussions if the relationship were to dissolve.

Advice:
Jade Warshaw and Rachel Cruz strongly advise against having credit cards co-signed in both names. They highlight the shared liability and the risk that if one party fails to pay, the other is left responsible. The hosts recommend cutting up the shared credit cards and maintaining separate financial accounts to protect individual credit scores and financial stability.

Notable Quotes:

• Jade Warshaw [01:18]: “If you guys were to break up and he ran up a balance on it, you're both on the hook for it.”
• Jade Warshaw [04:58]: “Debt is a product that institutions make money off of... it's marketed that way.”

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2. Supporting a Financially Struggling Parent Without Compromising Your Finances

Caller: Oscar from Des Moines, Iowa
Timestamp: [12:29] – [19:48]

Oscar shares his struggle with his father frequently asking for financial assistance, which strains his own efforts to build financial stability. He’s currently on Baby Step One, aiming to establish an emergency fund and pay off consumer debt.

Advice:
The hosts empathize but caution Oscar against overextending his financial support to his father at this stage. They emphasize the importance of first securing his own financial foundation before offering assistance. Setting clear boundaries and encouraging his father to develop better financial habits without compromising his own goals is crucial.

Notable Quote:

• Rachel Cruz [17:13]: “You're trying to save a drowning person while you're trying to keep your head above water.”

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3. Balancing Car Payments and Saving for Housing as a Single Mom

Caller: Leah from Rochester, New York
Timestamp: [21:13] – [30:24]

Leah, a single mother with full custody and ongoing legal fees, seeks advice on whether to prioritize paying off her car or saving for a deposit on a new apartment, considering her limited income and upcoming family changes.

Advice:
Jade Warshaw and Rachel Cruz recommend that Leah prioritize building a robust emergency fund and saving for essential expenses like a reliable car and legal fees before considering investments. They advise maintaining these savings in a high-yield account to ensure financial security without incurring additional debt.

Notable Quotes:

• Jade Warshaw [27:02]: “If I were in your shoes, I think I'd be focused on stacking up some money for this car...”
• Rachel Cruz [28:00]: “I would have a savings grant goal... put it in a high-yield savings account.”

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4. Evaluating the Best Approach to a Generous 401(k) Match

Caller: John from North Dakota
Timestamp: [36:12] – [40:45]

John, a 30-year-old with a substantial income, contemplates taking full advantage of his company's 401(k) match while he is still working through Baby Step Two, which focuses on debt elimination and building savings.

Advice:
The hosts advise John to adhere strictly to the Baby Steps plan, prioritizing debt repayment over additional investments. They caution that diverting resources to maximize the 401(k) match can slow his debt elimination progress and increase financial risk, ultimately hindering his path to financial freedom.

Notable Quotes:

• Jade Warshaw [36:38]: “If you were to split your resource in that way, it's going to take you that much longer to pay off your debt.”

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5. Addressing Financial Crisis After Husband Depletes Retirement Savings

Caller: Beth from Nashville, Tennessee
Timestamp: [42:25] – [50:24]

Beth reveals that her husband has lost multiple jobs, spent their retirement savings, and accumulated significant credit card debt over the years. She’s seeking guidance on how to protect herself and manage their financial situation.

Advice:
Jade Warshaw and Rachel Cruz emphasize the importance of separating finances to protect her own financial well-being. They recommend that Beth establish her own checking account and consider seeking professional financial counseling to navigate the extensive debt and rebuild trust within her marriage.

Notable Quote:

• Rachel Cruz [49:19]: “If you have cosigned, there's really not much you can do from a legal perspective.”

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6. Deciding Between Paying Off a Car or Saving for an Apartment as a Newly Married Couple

Caller: Gigi from Los Angeles, California
Timestamp: [52:33] – [60:58]

Gigi, a recently married single mother, faces a dilemma between paying off her car loan and saving for a deposit on a new apartment for her expanding family. She seeks advice on balancing these financial priorities.

Advice:
The hosts advise Gigi to prioritize saving for essential housing needs to ensure stability for her family. They suggest continuing with the car payments to avoid additional debt while setting aside funds for the apartment deposit. Ensuring that her housing costs remain within a manageable portion of her income is crucial for long-term financial health.

Notable Quotes:

• Rachel Cruz [57:14]: “It's considered a four wall at that point. Your food, shelter, utilities, and transportation.”
• Jade Warshaw [58:03]: “If you put all this money towards it, you're going to be done in four months.”

---

7. Dealing with Loan Co-Signing and Strained Family Relationships

Caller: Jeff from Austin, Texas
Timestamp: [70:31] – [79:37]

Jeff shares his experience of co-signing a loan for his son-in-law, who has since accumulated significant debt through day trading, leading to financial strain and damaged relationships within the family.

Advice:
The hosts highlight the severe risks associated with co-signing loans, including the inability to remove oneself from financial responsibility. They urge listeners to avoid co-signing to protect their financial health and personal relationships, emphasizing that co-signing can lead to long-term financial and emotional consequences.

Notable Quotes:

• Jade Warshaw [79:10]: “You’re a fool to do it because it puts you in a situation that you have zero control over virtually.”
• Rachel Cruz [73:13]: “When you co sign, there's really not a legal way to get out of it.”

---

Conclusion

Throughout the episode, Jade Warshaw and Rachel Cruz provide invaluable advice on managing debt, protecting personal finances, and setting clear boundaries to prevent falling into toxic financial situations. Key takeaways include:

• Avoid Co-Signing Loans: The dangers of shared financial responsibility and the long-term risks involved.
• Prioritize Debt Elimination: Focus on paying off debt before making additional investments to ensure a stable financial foundation.
• Set Clear Financial Boundaries: Protect your financial health by maintaining separate accounts and understanding your limits in supporting others.
• Build Emergency Funds: Ensure you have adequate savings to handle unexpected expenses without incurring additional debt.

By sharing real-life scenarios and offering practical solutions, the hosts empower listeners to take control of their financial lives, aligning with Dave Ramsey’s proven principles of debt elimination and wealth building.

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Notable Advertisements Skipped:
Throughout the episode, several advertisements were presented, promoting various products and services such as self-defense tools, life insurance, online privacy protection, and financial services. These segments were omitted from the summary to focus on the content-driven parts of the podcast.

Transcript

[Jade Warshaw]

Foreign from the Ramsey Network, it's the Ramsey Show. I'm Jade Borsha. Next to me is Rachel Cruz, and we're your hosts for today. We'll be taking calls about your life, your money, your career, your relationships. Really, whatever it is that you want to talk about, as long as it has some connection to your money, we're here for you. It's a live show, so. So if you want to get in, you can. The numbers, triple 882-55-5225. And we'll pick you up on the line. All right, Rachel, you ready to get into it?

[Rachel Cruz]

Let's do it.

[Jade Warshaw]

All right. Katie is in Austin, Texas. What's going on? Katie?

[Caller]

Hi.

[Jade Warshaw]

Hi. How are you? I'm great.

[Caller]

How are you guys doing?

[Jade Warshaw]

Good.

[Rachel Cruz]

How can we help?

[Caller]

So I was just calling to see if this was normal. My boyfriend has use the credit cards.

[Jade Warshaw]

That are in my name and two.

[Caller]

Of them are in both of our names, but I don't use the credit cards. And I was wondering if that is a normal thing because he's saying it's normal and I don't have to worry about the transactions because he's making, he's taking care of the bill.

[Jade Warshaw]

Yeah, I, I would have an issue with that. Well, first, the mistake that I see is that you have credit cards in both of your names. So I think that that is a mistake because either of you can spend on them. And if either of you decides that they're not going to pay the bill. So let's say you guys were to break up and he ran up a balance on it, you're both on the hook for it. And if he doesn't pay it, it can affect you, you know, in a negative way. So that's the first issue. Then the second issue is then if you have a credit card that's only in your name and he's insisting on spending money.

[Rachel Cruz]

Yeah. And it's him spending it. There's no guarantee that he's. That he's going to pay for it.

[Jade Warshaw]

Right.

[Rachel Cruz]

The bill. I mean, there's a chance he doesn't, and then it's stuck with under your name and you're completely liable for that. So how has he gotten access, Katie, to your credit cards? Are you giving it to him or is he.

[Caller]

Yes. So we, it was an agreement to open the credit card because I needed to build my credit. I had no credit at all. And so that was the way that we were going to build the credit cards. I mean, the credit, using the credit cards.

[Jade Warshaw]

What'd you need credit for. What were you trying to accomplish? Just the history.

[Caller]

I had no history of any credit use at all.

[Jade Warshaw]

And did he say that that was a good idea? Yes. Okay.

[Rachel Cruz]

It was his idea, I'm assuming, of.

[Caller]

Course, because I had. I don't.

[Rachel Cruz]

Yeah.

[Caller]

You know, having knowledge in the finance area.

[Rachel Cruz]

Totally. So, Katie, just so you know, so that you can be armed with some of that knowledge and education, the only reason you really need a credit score is to go into debt. And we really do believe the best way to win financially is not to have debt, is not to go into debt. And the biggest piece of debt that people get into, that they're like, no, I have to have a credit score for is a home. Right. So when you go and apply for a mortgage, they will pull your credit score, but you can do what's called manual underwriting. So you can actually get a mortgage without a credit score still. Now places will pull your credit report. You know, maybe if you're applying for a cell phone or maybe for work or something, but if you don't have a history, all you have to say is, yeah, I've never borrowed money before, and debt's not a part of my life. So you actually can go through life. And this is a big piece of misinformation. A lot of people believe you have to have credit in order to do things, but you really don't. Now you have to have it to go into debts. But we, you know, again, that finish line, that start to finish of building wealth, debt does not need to be part of the picture. So what Jade was saying earlier is exactly right. I would, I would cut up all the credit cards, Katie. Any credit card in your name, I would cut up. And, and for you to keep everything separate. And you guys are already kind of combining, you know, purchases and all of that. I would keep your income with your expenses, his income with his expenses very, very separate. And then later down the road, if you guys get married, then that's when you want to combine them. But until then, it's a very dangerous game that you guys are playing, not just on the credit score game side, but the fact that you have this other individual that legally you have no attachment to. Right. I mean, from the, from a, from a legal perspective, there is no marriage, nothing. And, and, and, and we take the calls, Katie. I mean, which, of course, we're a call in chauffeur of money. So we get all. We get all different kinds of calls, but we get the calls that are, hey, my boyfriend broke up with me. I can't find him now. He blocked me and he racked up $10,000 on my credit card. He said he was going to pay it and now what do I do? And then that, Katie, we would have to say to you, well, you got to pay it because it's under your name. So it's just a, it's a big risk. That's what you're taking. And I understand maybe his intention was good. Trying to quote help, but, but it's, but it's not helping.

[Jade Warshaw]

I mean, let's, let's understand this kind of big picture because, Katie, you're not the only person who has gotten that misinformation. The truth is, debt is a product. It is, it is a product that, that institutions make money off of. It's not something that's required. It's not a law. It's not like your driver's license where you have to have it in order to drive a vehicle. And, but it is marketed that way, right? It's marketed as this thing that you can't live without, you can't do without. And they'll even make it seem as though if you want a car, you need a loan, if you want a home, you need this. They make it seem that way, but that is not the truth. The truth is, like Rachel said, a lifestyle without debt is absolutely there. You do not need a credit score. And the only way that, the only reason it seems that way, it's because it's such a well marketed product that they have fooled us into that. And so, and there's a lot of money that's made on it. And so a lot of people have kind of locked their arms around making it seem as though this is the case. And it's truly, truly, truly not the big areas where people kind of, I don't know, Rachel, I would say, butt heads on us or, okay, then how do I buy a car? Okay, then how do I rent an apartment? Okay, then how do I buy a house? I feel like those are kind of the top three areas and rightfully so. You should be asking those questions. And the truth is, we would say if you're in a car loan right now, yeah. Work to pay it off very, very quickly. And then your next car, make it a point that I'm going to save up and pay for cash even if I get something a little less expensive. Right. That's how you get out of the car loan debt. And then for somebody who says, hey, I want to rent an apartment, the truth is there are lots of Apartment complexes that will say, you can't. We only go by credit score. That's true. There's also a lot that will go. And if you bring in other proof of purchase, whether it's your cell phone bill, electric bill, maybe you lived with your parents and paid them rent, they will use that. So that is the truth. Same thing. Rental cars. You can rent a car without having a credit card. So anything that tells you otherwise, Rachel and I are here to tell you and kind of debunk that myth, because it's not true. And even the big one, Rachel, buying a house.

[Rachel Cruz]

Yes.

[Jade Warshaw]

We all know so many of us think you have to have a credit score to buy a house. That's the biggest thing, and it's just not true. You can still do something called manual underwriting. And in that they look at people who do not have credit scores that have a zero credit score, and they go, okay, we believe that a zero credit score is just as good as a high credit score. Right.

[Rachel Cruz]

Right.

[Jade Warshaw]

And we can look at your actual money, your actual transactions, and we can determine if you are in a good position to borrow money for. For a home. And so I. I hope you learned that, Katie, call that it's not something that is necessary at all.

[Rachel Cruz]

Not required. Right.

[Jade Warshaw]

Yeah.

[Caller]

Yeah.

[Rachel Cruz]

But. But again, it's understandable why someone would think that. Because in our world today, it is just so, so normal. So. So, yeah, Katie, if. Yep. If I were you, I would today cut up every credit card with my name on it. Not even just because of the element of what we talked about, living without debt. But I'm going to say yours has an extra caveat, too, because there's another person in your life using those credit cards under your name, which adds on a whole other level of risk that you cannot control. Right. Some people think, well, I can control myself. Right. And we have a level of responsibility of ourselves. Like, so that's. We can talk about that. But this is like an extra layer, Katie, that you. It's just a lot of risk. And I know everyone's in love all the time, and it's. And we're going to be together forever. Everyone believes in the relationship, but again, we get the calls on the other end of reality of what happens. So I just want you to be protected, Katie. That's what we want for you. We are here for you, and we want you to make these decisions in a really smart and wise way.

[Jade Warshaw]

Yeah. So at the end of the day, we're not putting other people's name. If you do choose to take out debt. For the love of God, don't put someone else's name on it with you. That's really the moral of the story. And then of course, don't go into debt, period, because you don't need it. This is the Ramsey Show.

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[Jade Warshaw]

You're listening to the Ramsey show. I'm Jade Warshaw. Next to me, number one best selling author Rachel Cruz. Hanging out with you all hour taking questions, calls about your life and money. And I want to tell you about something super duper important. If you're ready to get your finances in order once and for all, you know what I'm talking about in 2025. This is your year for financial success. I want you to join us January 23rd for our free live stream. It's a take control of your money live stream. It's going to be myself, Dave Ramsey, Rachel Cruz, George Camel. We're all going to join together. We're going to show you how to get control of your money. We're going to take questions from you, the audience, myself and Dave. We're going to help you learn how to stop paycheck to paycheck living. I mean that's, we've all experienced it and it's time to make the cycle stop. We're going to show you how to free up more breathing room so you can pay off debt fast and finally get ahead with your money. So Rachel Cruz, you and George are going to join us a little bit later for a Q and a. You can ask whatever questions you have about your money. It's absolutely live and so it's like real time. So that will be very entertaining. And if you didn't know. When you sign up, we're going to be doing some giveaways throughout the evening. We're going to give away $4,000 to five different people, a total of $20,000, which is pretty amazing. So, again, the event is free, but when you register for it, you can sign up to get that, that free cash. So that's nice. Sign up for the free live stream by going to Ramsey Solutions.com/live stream. Or you can click the link in the description if you're listening on podcast or YouTube. Either way, you need to be there. This Rachel, I really do believe that. I feel like in 2025, so many people are going to draw that line in the sand and finally say, this is the year that I do that thing with my money and I make lasting progress. And so. Absolutely.

[Rachel Cruz]

Well, and when you have an amount of time, right, that is so compacted with everything you need, like, that's how we lay out these live streams. Or like, if someone is here for an hour and a half or however long it is, like, we're gonna put as much as we can into it so that when you walk away, it's like, okay, I have a whole new set of tools. It might be overwhelming even, but it's worth it to sit down for an hour and a half and be there.

[Jade Warshaw]

That's right.

[Rachel Cruz]

And watch it and do something different.

[Jade Warshaw]

Yeah, we're not preaching at you. We're giving you step by step advice that you can implement. So that's really good, Rachel, to highlight. Okay, let's get into those phone lines. Oscar, Des Moines, Iowa is on the line. What's up, Oscar?

[Caller]

Hey there. How you guys doing today?

[Jade Warshaw]

Doing great. How can we help?

[Caller]

So my question was regarding an issue I have with, more importantly, my dad. So my dad's always gotten into this habit of every so often asking to borrow money, which I'm not hurting for, so I don't mind. But it's gotten to the point where I dread taking his calls because it's not about checking up on me or checking up on the kids. I always feel like it's going to be, hey, by the way, can I borrow X amount of dollars? So my question is, how do I go about starting the conversation to where I tell him, hey, enough's enough.

[Rachel Cruz]

Yeah. How old is he, Oscar?

[Caller]

My dad is 60.

[Rachel Cruz]

60. And why is he needing the money? What's he using it for.

[Caller]

Honestly, I, I don't even ask at this point. I'm assuming bills. Ever since I was a kid, he was never great with money. I remember when me and my sister were younger, we always had to help them translate to let the landlord know that we're going to be late on the bills. And it's always been a never ending cycle.

[Rachel Cruz]

Okay, so you don't think there's probably much to his name financially and he's, he's literally using it to, to stay afloat. Is he working? Is he working?

[Caller]

Yeah, he has a full time job.

[Rachel Cruz]

How much does he make a year?

[Caller]

Honestly, I don't know, 100%, but I'd say somewhere around the 50, $60,000 range.

[Jade Warshaw]

Okay, and just him or is he married or.

[Caller]

He's married. My mom still lives at home. My mom, she's had a lot of medical complications, so she doesn't really work. Every once in a while she does get some like under the table work through a restaurant that our family owns, but other than that, she really doesn't have a stable income.

[Jade Warshaw]

Do you have a relationship with your dad aside from this money or do you feel like this is the only contact you have? Does he only. Do you know, do you know what I'm saying? He only comes around for money or do you have a relationship established outside of that?

[Caller]

Well, I mean, if we have family gatherings, yeah, we get together, I can, we can be amicable. But he never comes over just to hang out. Yeah, I mean, even when I was younger, it was more of a business casual relationship. I can tell you right now, if we're sitting in a car for an hour or two, the most we talk about the weather.

[Rachel Cruz]

Yeah. Do you have siblings?

[Caller]

Yep. I have an older sister and a younger brother.

[Rachel Cruz]

Does he call them.

[Caller]

He. My little brother? He does not. He still lives at home, but he is of age to not live there. But he will call my sister if I tell him, hey, I can't help you anymore, so I can't help you this week.

[Rachel Cruz]

So then the sister calls. Have you and your sister talked about it?

[Caller]

Yeah, me and my sister talk about it. All done.

[Rachel Cruz]

Okay.

[Caller]

We're frustrated.

[Rachel Cruz]

So you're both okay. Okay. Yeah.

[Jade Warshaw]

One last question because I'm just trying to put the pieces together. When he asks for money, how much? Like in a month, how much money would you give him and then how quickly before he'd ask for money again?

[Caller]

The most he's asked in one sitting was like 1200 bucks. And typically when it's, I guess the Larger the amount, the bigger of a gap between him asking for more. But I'd say roughly about once a month maybe.

[Jade Warshaw]

Okay. And sorry, I'm, I'm, I'm fascinated by what's going on and I'm also trying to dig deeper. Do you, if you had to assess the situation, is your dad, like, is there anything unhealthy we should know about? Like, do you think, do you sense any like addiction, something where this money is going where it shouldn't be going? Or do you truly think, listen, this guy, he has no budget and because of that he's late on rent. Is it just that simple?

[Caller]

So I know, like I said earlier, my dad's terrible with money. He's always been a guy who bought scratchers at the gas station, but it's never been, at least to my knowledge, so extensive that he would blow his paycheck on it. I know he's always, he's always been struggling with payday loans here and there. And the only reason I know this is a long time ago I worked at a financial institution as a loan officer and it was the same bank he worked at and he would, they would always come to me and say, hey, what's going on with your dad? And it got to the point where it was stressing me out so much I couldn't be there anymore. I didn't want to be part of his financial burden and it was taking a toll on me.

[Rachel Cruz]

Yeah, absolutely.

[Caller]

I just, I was stressing over something that I genuinely didn't have any concern over because at that point I didn't live in this house. Obviously he's still my dad. I'm concerned about his well being financially.

[Rachel Cruz]

Sure. But where are you at, Oscar, financially? You and your family? Where are you guys? How are you guys?

[Caller]

So I am right now on baby step number one.

[Jade Warshaw]

Okay.

[Caller]

Trying to work towards you. Yeah, I have all my debts lined up, ready to go. Hopefully by the end of this year I will have all my consumer debt paid off.

[Rachel Cruz]

I much so to say that you, you have an extra spare $75,000 in a high yield savings account to help your dad when he needs $200 a month. That's non existent. Like you guys are paycheck to paycheck. You're starting to build a thousand dollar emergency fund yourself. So, so it's even so, so what my advice, Oscar, to you is this and even more because of where you are financially. Right. I mean, I think there can be a different discussion. And we talk to people on baby step seven. They've paid off their house, they've accumulated wealth. Like, listen, my dad's in his 80s and he's terrible with money and I gotta help and I'm gonna help and like. And that's what they choose to do, right? A very conscious decision. It's not being burdened upon them. They just decide that as part of what I'm going to do with my legacy and my money, you, Oscar, on the other hand, you, I mean, you guys are not in a financial position. You're trying to save a drowning person while you yourself are trying to keep your head above water. And it's, and it's, and it's causing that much more, I would say, probably bitterness and strife.

[Jade Warshaw]

Yes.

[Rachel Cruz]

Which is very understandable. So I mean, this is always such a hard conversation because I think the parent child relationship, especially as adults, yeah, it's very difficult. But I, you know what I would say, because it is, this is the truth is, and I'm going to butcher the quote and I even, I wonder.

[Jade Warshaw]

If it's what I'm thinking of.

[Rachel Cruz]

It's about the fish, right? Don't give a man a fish, teach him to fish.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

It's the idea that like, dad, I want to sit down and help lay out. And you could say, Oscar, I'm starting this process too, dad. Like, I'm starting to realize, gosh, I have to get my finances in order. And here's some things that I've done, dad, I've realized, okay, here's my income. We've created a budget. My first goal is a thousand dollars. Like you could tell him what you're doing and say, and if you want debt, I would love to sit down. And this is if you want to, Oscar, but I would love to sit down and help you get on this plan as well. Because ultimately this is just a few hundred bucks, right? I mean, again, he's not asking for $10,000 a month, so, so it's just these little pieces of discipline that may be hard for a 60 year old to restart. To restart. But that's where, that's where I would start and say, I can't give you any more. I don't have it. And that's the honest truth. Oscar, don't, I don't have the money to help you, but I would love to sit down and walk you through kind of what I'm doing and let's see together if you can now get in a position where this isn't, you're not short a couple hundred bucks a month.

[Jade Warshaw]

Good advice, Rachel. Yeah. Viola Davis said, don't light yourself on fire to keep someone else warm. This is the Ramsey show.

[Rachel Cruz]

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[Jade Warshaw]

All right. You're listening to the Ramsey Show. I'm Jade Warshaw. Next to me is my good friend Rachel Cruz. Taking calls all hour long. Your life and your money. If you have a call, you can call in. Our phone screener will pick up. That number is 3882-55225. In order to get involved. All right, Rachel, let's go to the phone lines. We've got Leah. She's in Rochester, New York. What's going on?

[Caller]

Leah, Hi, thanks for taking my call. So I am a single mom of one child. I make like 35,000 annually. I have no debt, no credit cards. I have an apartment. I have a 2014 Chevy. It's about to die. It's paid off though. I'm a residential cleaner. I work like 20 hours, maybe a little more per week part time in school, long term goals, med school. I'm in a co parenting. It's a high conflict situation. I spent my last five grand on an attorney and I'm going to be going back to court. Sorry and. No, that's okay. And I am. Bottom line is I need to make more money while I'm going to school. I'm not really sure how. I have to get a used car because mine's breaking down and I'm not sure if I should invest some of the child support that I get for my daughter right now like in a Roth ir. I'm not sure how much and I, I want to know if like what, what with a little bit that I can say, like what can I invest and what should I invest? And I, I have no clue where to start.

[Rachel Cruz]

Sure, sure.

[Caller]

Yeah.

[Jade Warshaw]

I mean it sounds like everything that you are saying are, are very important things and so you are thinking about the right things. I think for Rachel and I, it's just narrowing it down to what's most important right now and kind of giving you a step by step on what to focus on. First, second, third, fourth, that sort of thing.

[Rachel Cruz]

Yeah. Leah, tell me about your schooling. So you're. Did you. You're starting a new semester I'm assuming. How are you paying for actually. Oh, go ahead.

[Caller]

No, no, that's okay. So no, I do get. School is paid for right now through financial aid, but I am taking a semester off to take a break with, with court because it's going to be very stressful.

[Rachel Cruz]

Okay. Okay. Do you see and do you know from where you are within the divorce? Like I don't know. This is a hard question to answer. Is there, is there like a end date that you see, do you think? Okay, yeah, we have a couple more of these, so it'll probably be in the summer. Or do you think like it could be a whole other year or two?

[Caller]

Well, no divorce, never got married, but okay.

[Rachel Cruz]

It's just custody.

[Caller]

This. I think this will be a forever. I think it'll always be going back or at least for quite a few times, but, but I have full custody, so that's good.

[Rachel Cruz]

And how old's your child?

[Caller]

She's seven.

[Rachel Cruz]

She's seven. Okay, so she in school then during the day. Okay. So child care and all of that is okay?

[Caller]

Yeah, yeah.

[Rachel Cruz]

And Leah working 20. So you're working 20 hours a week. Are you able, tell me about like your monthly expenses. Do you feel like you're able to cover those? And you're basically at zero at the end of the month. Are you behind? Are you ahead? Do you have margin kind of where you are compared to your salary versus what you make versus your expenses?

[Caller]

Yeah, so I, I have a budget plan. Honestly, to be honest, I haven't, I haven't really paid attention to it, and that's something that I. That I've been lacking consistency and discipline with. So I know that. And that's something I need. I need to change, and I want to change.

[Jade Warshaw]

You mentioned I can go ahead. No, you go ahead.

[Caller]

So I. As far as, like, saving, I'm not. I'm not really saving that much. I would say, like, I make around maybe 28,000 or. Sorry, 20, 28, hundred a month.

[Jade Warshaw]

Is that including the child support?

[Caller]

Actually, no.

[Jade Warshaw]

So what do you get? What does he send?

[Caller]

Technically, I get 44 a week for. 44amonth.

[Rachel Cruz]

Okay.

[Jade Warshaw]

From child support and.

[Caller]

Yeah. Yep.

[Rachel Cruz]

Okay.

[Caller]

I'm sorry. I'm supposed to be getting 44 a week. I apologize, but. And I am getting. I did just, like, arrange a new plan with him.

[Jade Warshaw]

Can you go back, Leah, can you clarify for Rachel and I. When you say 44 a week, are you saying $4,400 a week is what you're supposed to be getting from the dad?

[Caller]

$44 in child support?

[Jade Warshaw]

$44 a week.

[Caller]

Yep.

[Jade Warshaw]

Got you. And you're only getting 44amonth right now?

[Caller]

No, I'm getting like 1 170. But in total, so. So that's just for. Through the state, like that. That's on paper. I did. I did arrange something with dad in person and we talked, and so I've been getting on top of the 44 weekly $100. He just pays me himself, like weekly. So in total, let's just say like around 560, right. A month in child support? In total.

[Jade Warshaw]

560.

[Caller]

Yeah.

[Jade Warshaw]

Okay. Okay. And you mentioned, okay, you mentioned earlier on. About Roth IRAs and things like that. Right now doesn't seem like the time to do that. It seems like you've got bigger fish to fry. You've got an attorney fees that you're going to have to pay. You've got a car that doesn't have much more life in it. Did you. Did you say how much you have saved? You said you're able to put a little aside. What do you, what do you have in savings right now?

[Caller]

I have, like $950.

[Jade Warshaw]

Okay. 950. Okay.

[Caller]

So my lawyer, my attorney has paid off. And. And like I said, my car is paid off as well, but it's. It's on its way out.

[Jade Warshaw]

Mm. Okay. If I were in your shoes, I think I'd be focused on stacking up some money for this car, because if this is your only. Only mode of transportation, you're going to need to be Ready for that? What do you think that's going to cost you? Have you looked around?

[Caller]

I have looked around. I'm not sure, like making 35 a year. Like what I should spend, I don't know, like 15% of that, maybe a little more.

[Jade Warshaw]

Well, we're not going into debt for it, so you're only going to be able to buy what you can afford to save up and get. That's really what's going to inform us to say.

[Caller]

I see.

[Jade Warshaw]

Yeah.

[Caller]

Okay.

[Jade Warshaw]

Yeah. I don't want you. Let, let, let us clarify at this point with anybody, not just you, anybody who calls. And we're never going to suggest debt, but specifically here, because your income, you know, you can't afford to add any other risk or frustration or stress or anxiety to this equation. And if you do debt, you're definitely adding that. The good news is you've got 950 saved. Your car hasn't busted yet, so you've got time to set some money aside. You've got some time to do some shopping, figure out. Yeah.

[Rachel Cruz]

And Leah, I would probably take on. Because you're making great money for 20 hours a week. I mean, that's, you know, and I would. If you're taking a semester off, I.

[Caller]

Would, I would think I'm taking on more clients.

[Jade Warshaw]

Yes.

[Rachel Cruz]

And I would, Leah. I mean, I, I would say like this whole semester, like I'm gonna, I'm gonna work more than probably I've ever worked because I think these goals are really big, right? To have some cash for a car. The first goal is to get a thousand dollars in the bank, which you basically have. And then the next goal will be pay off debt, but you don't have debt, which is amazing. And so then the next would be an emergency fund. But part of that is knowing if big life things are happening, like a car or fees for an attorney. Right. Like all of these things that I would want a big fund. And this could be, this could also be your emergency fund. Right. You could have a savings grant goal. But to know that I need some cash in the bank asap, and so I would have enough in there for, you know, three months worth of expenses. I would have enough in there for a new car. And that could be a $7,000 car, Leah.

[Jade Warshaw]

Right.

[Rachel Cruz]

I mean, it doesn't have to be a brand new beautiful car. And then think about when you sell yours, you know, that adds to that. I would kind of average out attorney's fees. What would make you feel good? Right. And I would just have a Big emergency fund. That would be my very first goal before investing or anything. And then once you have your feet under saying, okay, yes, I have my car, I'm in good shape transportation wise. I have some cash here for an attorney. I have some cash in the bank for an emergency fund. Then we can start thinking about the future. But until then, Leah, I would, I would just get some cash in the bank and I would not invest it. I would just keep it in a high yield savings account, again with the goal to get three months worth of an emergency fund along with a car and attorney's fees, which is thousands of dollars. I mean, what I'm saying here is like, this is long term. You know, this may take you a year to do, which is fine. You're, you know, and then there's plenty of time for investing and catching up with all of that. But I would do that. I think that would give you a lot of safety and security. And again, the beautiful thing about this is that you have the time. Like you were just working 20 hours. And if you just doubled that, I mean, think about, you know, you would be bringing home, you know, close to, you know, without child support, close to $6,000 a month. Like you could.

[Jade Warshaw]

Excellent.

[Rachel Cruz]

You could, you could do this.

[Jade Warshaw]

That changes your whole. Yeah, that changes everything.

[Rachel Cruz]

And Leah, kudos to you and all the single parents out there because that is one of the toughest positions to be in. And when you have full time custody for sure and you are the only one in charge, and I mean, it's, it is so much work and it is so exhausting. So from mom to mom, I just commend you and the single moms out there. And so you're doing an incredible job. The fact you don't even have debt, Leah, I'm like, I know you're doing great, so just keep up the work. Saving.

[Jade Warshaw]

Oh, very, very good. This is the Ramsey Show.

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[Jade Warshaw]

This is the Ramsay Show. Happy New Year. Is it still, can we still say happy New Year? It's still January. I feel like you've been for a while.

[Rachel Cruz]

I feel like it's festive, makes everyone happy.

[Jade Warshaw]

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[Rachel Cruz]

Today's question comes from Erica in California. We are currently in baby step two. My husband and I both grew up in homes where our parents never discussed money or taught us how to manage it. We have two kids who are in their early teens and I want to teach them how to be smarter with money than we ever were. Being so new to this and still figuring it out ourselves, I'm not sure how to go about teaching them. When my son got his first job, we opened up a bank account for him and he has a debit card. I have noticed he is purchasing things that I think are silly, but I don't want to feel, I don't want him to feel like I'm constantly nagging him for what he's doing with his own money. How do you teach him to budget when he doesn't necessarily have recurring bills every month? I'm overwhelmed with my own stuff and trying to teach him something I'm figuring out at the same time.

[Jade Warshaw]

That's good.

[Rachel Cruz]

It's a great question.

[Jade Warshaw]

I mean, part of me and Rachel, I've, I've even heard you say this. I think with kids, they go so much more by what you do than what you say. I mean, of course they're listening to what you say, but your actions are backing it up. Yes. And so if you're in baby step two right now, they're seeing in real time what it looks like as long as you're open about it to the proper extent. They're seeing in real time what it looks like to be on top of a budget, checking your budget, checking in with your spouse, making smart choices. They're seeing that more than anything. And weirdly enough, I don't think we give enough credit to that because most of us, if you were to say, give me a picture of what money was like when you were growing up, most of us could say, oh, when I Was growing up, my parents never talked about money or when I was growing up, you know, it, things were never tight. It just felt like we had what we need. Or when I was grow most of us can look back and we have a very clear picture of the way money was presented to us. And so knowing that as a parent I think like I know for Sam and I we're always very clear about oh you know, we're doing our budget for the month or we talk about it. So knowing that when they look up they're going to go oh yeah, my parents, they always mentioned a budget or they were always very mindful of what we were spending. They always said things like well if you can save it up, you can get it. So there is a practical side to it but there's also so much just in the intentionality of everyday language and how you're speaking about it with your spouse.

[Rachel Cruz]

I would say yeah, I agree And I would say too that when you are under your, the roof of your parents, right. And I think about growing up, I made money mistakes like I spent, I spent my money on stupid stuff like that. I know my parents thought like that is so dumb and I was the kid that if I had money I was going to spend it. Like I would go get Silly Putty from like aisle from Target just to buy, just to buy something. I mean I genuinely was just such a spender and I remember Moen did sometimes making comments but they did such a great job Jade of letting us make those mistakes because I you realize that Even as an 11 year old you could do something and buy money, you know, buy something with money you've earned and then realize like a few days later oh, that wasn't fun.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

And I mean you do you experience these lessons so where something may feel silly to you, maybe it is, maybe to him it's not because he's you know, 15, 14 years old and you're not. But I would say let them experience these emotions themselves because the more life experience they have around money themselves, even as teenagers, even if they don't have recurring bills, any of that is teachable moments. So when they go off on their own, they're not experiencing those emotions for the first time at 18 years old. They've already experienced it at 11, 12, 13, 14. So again I wouldn't be legalistic about it. I, I do think some parents, and I'm talking to some of you Ramsey fans out there who are very hardcore and you're just like no. And you're so legalistic and then it drains your kids. Yeah. So there's a lot of grace in this. A lot of life to kind of give and take. And they're going to learn, you're gonna make mistakes, you're not gonna be consistent so much. They're not, I don't know, it's just a part of life, you know, But I think the fact that it's present of what you're saying in conversation and in the household is, is the most important thing.

[Jade Warshaw]

Yeah, that is so true. I heard someone say a long time ago, it wasn't that long ago, but when, whenever your kids hear something for the first time from you, the parent, you become the expert. Right. So that could be, I don't know, relation relational. That could be with money. But in your home is probably going to be the first time that your kids start hearing about money, thinking about money, and so you become the expert. And so you have to be very intentional about what you're putting out there towards them. It's just a good kind of framework to think through when it comes to that. But for sure, very, very good. All right, let's go to John Fargo, North Dakota. What's going on, John?

[Caller]

Hey, Jen, Rachel. How are we doing today?

[Jade Warshaw]

Doing good. How can we help?

[Caller]

So is there a point where a 401k match is too good to turn down in baby step two, little backstory right now, about 30 years old, make $190,000 a year and company offers a four to one 401k match up to 15 on their end. So I put in four, they put in 15.

[Jade Warshaw]

Okay. Yeah. Listen, I, I love great benefits. I think that that's a wonderful thing. It's a wonderful cherry on top of whatever it is that you're doing and your salary and everything like that. I'll also say this. Everyone, everyone thinks their situation is the exception to the baby steps. And the truth is, it's not. I would, there's never, for me, there is never a time where I would say, you know what, in baby step two, I'm going to invest as well. Because the truth is this is a proven method and it's what works. What we find is that when you focus on more than one thing at a time, you go a lot slower. And when you have a slower pace, it's harder to stay motivated over the long term. Right. And so you've probably heard it said before, your biggest wealth building tool is your money. And that's true. And that's probably what you're thinking. You're like man, if I can, I've got this money at my disposal. I've got this match at my disposal. I've got to go quickly. But the truth is, if you were to split your, your, your resource in that way, it's going to take you that much longer to pay off your debt. And when it takes you that much longer, the chances of you becoming less motivated are very, very high. And so for that, that's my first reason I wouldn't do it. The second reason I wouldn't do it is because if you're jumping around in the baby steps and you go, okay, I'm going to invest instead, chances are you also have not saved up three to six months of expenses, which means if something were to happen, the first place you're going to go is wherever your money is, which is to your 401k or to credit in order to borrow. And so there is a reason that these baby steps are in the order that they're in. It's because it's going to serve you best regardless of what life throws your way. Does that make sense?

[Caller]

Yeah, I think that makes sense. I mean, it slowed us down by one month at the end of it, but at retirement age, that would grow to about $1 million.

[Jade Warshaw]

So we're talking about. Wait, that doesn't make sense. Wait, John.

[Rachel Cruz]

No. One month. One month is what you're saying, is what you would not.

[Caller]

Yeah, about $7,600 a month is what we're putting in, including our minimum payments.

[Rachel Cruz]

7,600. You're putting in where? Towards debt.

[Caller]

Into debt payments right now. And that's about what I contribute yearly to 401k at 4%.

[Jade Warshaw]

Hold on, hold on, hold on. You're saying you put 7, $600 towards your debt every single month, and then you're saying that your contribution to the.

[Caller]

401K would be what, about $500 a month is in the raw, so about $6,000.

[Rachel Cruz]

How much debt do you guys have, John?

[Caller]

About $80,000. So it's delay at one month.

[Rachel Cruz]

Do you guys have any, do you have any savings, any cash on hand?

[Caller]

We have a kid on the waist, so we have about $10,000 in stork mode.

[Rachel Cruz]

Okay.

[Caller]

A little higher than our max out of pocket.

[Rachel Cruz]

Yep, yep. Okay, well, delaying it one month is not gonna, that, that, that's not going to completely, you know, change your life at retirement. I don't. Like you said, a million dollars. Yeah, 76. $7,600 from 30 to 60. Just that amount with combat interest is not going to equal a million dollars.

[Caller]

No, the company is matched included into that, so then that comes out to about $35,000.

[Rachel Cruz]

Okay, I'm not. I'm not really.

[Jade Warshaw]

So you're saying, oh, if you put in 6,000 for the year, they're going to times that by 4, is that what you're saying? So it's going to be 24.

[Caller]

Yeah.

[Rachel Cruz]

So you're saying max out completely for the year instead of the month.

[Caller]

Yes.

[Rachel Cruz]

Okay, I see what you're saying. Well, then I would just. I would. I would go ahead and just pay off the debt and put some cash in, and then. And then I would do that and then go and do a Roth IRA and max it out at $7,000. And then you're probably gonna. You're gonna end up even.

[Jade Warshaw]

I think the whole conversation of this is what you want right now as opposed to what's going to work best for you long term. You're going to do what you want to do because you're a grown man and we can't stop you from doing that. But if you want to know how to work the baby steps, we just told you how to do it. This is the Ramsey Show.

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[Jade Warshaw]

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[Jade Warshaw]

From the Ramsey Network. Welcome to the Ramsey Show. I'm Jay Gorshaw. Next to me is my good buddy Rachel Cruz. We're your host for today, taking calls about your life and your money. Hope you're having a great new year. I hope it's off to an excellent start. And if you need any help with your money, your relationships, your career, you are in the right place. We're here to help and that's what we plan on doing, doing, taking some live calls from you guys. So let's get on with the first call. We've got Beth, who's local. Nashville, Tennessee. What's going on, Beth?

[Caller]

Hello.

[Jade Warshaw]

Hi, how are you?

[Rachel Cruz]

Hi.

[Caller]

Hi. I'm okay.

[Jade Warshaw]

How about you?

[Caller]

Thank you for taking my call.

[Jade Warshaw]

Yeah. How can we help?

[Caller]

Well, I'm hoping that you can because I'm kind of at my wit's end. I've been married for almost 30 years and after, and I'm 62 years old and so is my spouse. After we had children, sort of the division of labor, if you will, was I took care of everything but the finances. I took, you know, the household, the children, everything. And he was paid the bills and has done that all of these years. Unfortunately, I've recently learned of some pretty catastrophic, devastating financial information that, well, he's had three huge job losses. They were all well paying jobs. He did invest in the 401k. I'm not, I've never been sure about how much was in there. I think it might have been maybe 170,000. It's gone. Each time he's had a job loss, it's been a two or three year gap in between because he refused to take anything other than an upper management position. And I've learned he's spent retirement savings.

[Rachel Cruz]

During those years to keep you guys going.

[Jade Warshaw]

What did you think he can I just ask when those time frames were happening, where did you think the money was coming from?

[Caller]

Well, I asked him and to be frank, he's got a lot of major management issues. I've always pressed to try to have a household budget. I was debt free before I met him. I had accumulated 30,000 in retirement myself. And any time I would press it, I became fearful because he would get terribly angry.

[Jade Warshaw]

But if you had to ask yourself, where did you think the money was coming from? Did you have something in your heart that you thought, oh, gosh, we're probably on credit Cards or probably on.

[Caller]

Yeah, yeah, in my heart for sure. But he just kept saying, quote, relax, quote, everything's fine. Don't nitpick me, we're fine. And he just kept saying, you wanted to do this budget and asking me these questions is showing you don't trust me. Well, apparently I had reason not to trust him.

[Rachel Cruz]

Yeah, for sure. When did, when did you find this out, Beth?

[Caller]

About two months ago.

[Rachel Cruz]

Okay, and. And there's no money in the retirement. And is it. And it's because I just want to clarify that he's been spending it throughout the years or did he take a massive withdrawal and spend it in the last year?

[Caller]

He's been spending it throughout the years.

[Rachel Cruz]

Okay, so he's just been dwindling it down and now you guys are 62 and you don't have anything retirement.

[Caller]

Well, not only that, but he had accrued, as the financial manager of our family, he had accrued about $80,000 in credit card debt. And in 2016, we did a cash out refinance on the house to pay it off. He promised this would never happen again. And then in 2016, I became very ill. I wasn't expected to survive. I had no idea what's been going on since 2016 with our finances. And now I'm. Praise the Lord, I'm recovered enough to work part time, but that's all. And then all this time, his most recent job loss was three years ago, and I finally convinced him to sell cars. So he's selling cars.

[Jade Warshaw]

How many cars do you have?

[Caller]

No, he's selling cars at a car lot.

[Jade Warshaw]

Oh, oh, got you. Okay.

[Caller]

Yeah.

[Rachel Cruz]

To make money. Yeah.

[Caller]

He wouldn't get a job before, but now all of a sudden he. Six months ago, he said, okay, I'll sell cars.

[Jade Warshaw]

So today, today, what is the financial snapshot? Is it still the 80,000 in credit card debt and that's it, or give us a today picture of what's going on?

[Caller]

Yeah, we paid that off with the cash out refinance back in 2016.

[Jade Warshaw]

Okay, so then tell us then, we.

[Caller]

Now have $126,000 in debt, new debt, since the 80,000 was paid off.

[Rachel Cruz]

And is that because of the mortgage, the refinance, or is this consumer debt?

[Caller]

Consumer debt.

[Rachel Cruz]

Okay, would it break that down for me? What does that consist of?

[Caller]

I've had to do a lot of digging here. I took some notes. There's a $77,000 in credit card debt.

[Rachel Cruz]

Is that in his name or your name?

[Caller]

30,000 is in mine. And 70s. No. And 47,000 is his.

[Rachel Cruz]

Okay, okay, keep going.

[Caller]

And then he got his sister to co sign a HELOC on the house for 50,000. And now that's all gone too. So in total, it's 120, $127,000.

[Rachel Cruz]

And real quick, let me ask, where did the 50,000 and the $77,000 of credit card. What did that go to? Was that just lifestyle? Because he's been out of work for three years and you had a health issue. Like was it going to bills and keeping food on the table?

[Caller]

Yeah.

[Rachel Cruz]

Okay.

[Jade Warshaw]

Okay.

[Caller]

And can you honestly.

[Jade Warshaw]

He.

[Caller]

He was not a very good money manager. And every time I wanted to have.

[Jade Warshaw]

A budget, well, no one was. I want to call that out. Neither of you were good money managers. But I also, before we move on, can you tell me about the house? Can you tell me what you owe on the house and what it's worth?

[Caller]

Yeah, I think I wrote that down. We paid 390,000 ten years ago. Now I think on Zillow, it's between 800 and 850,000.

[Jade Warshaw]

And what do you owe on it still?

[Caller]

Oh, that's a good question. I wrote that down here. I think we owe, because of the cash out refinance in the HELOC, about 360.

[Jade Warshaw]

Okay. Okay. So the good news is you still got a ton of equity in it. You're no longer together. Are you no longer together? What's happening here? It sounds like somebody that you would no longer be in a relationship with unless you're doing deep work to fix this. So what's taking place with the relationship.

[Caller]

Trying to do the deep work for 30 years? And I've realized that it's, it's. It hasn't changed.

[Rachel Cruz]

Yeah, Beth. So this would be a scenario which doesn't happen often, but I. You're a 62. He is lying to you. He is an angry person that you can't breach a subject with, which is not just money. Beth. This is an insight picture into the marriage. Right. And so this is. This is your entire life. And this is a time I would say I would have my own money.

[Jade Warshaw]

100.

[Rachel Cruz]

I would get your own checking account, which we rarely say this. We're the show. That's the opposite. But. But in a situation like this, this is when things come up that literally he's driving you guys with his pattern of behavior over 30 years with no flag for change is gonna continue to go down this lane, and that's not gonna be healthy for you. And so if I were you, Beth, I would I would talk to him and say until I, until trust can be built back. And I see a new pattern. We're separating our finances because it's a symptom of how our marriage has been. And, and again, we don't have time to dive into that. But I bet if you will stay on the line, Kelly's going to pick up and I'd love to put you with a financial coach because there's so many things to untangle here, not just from the financial perspective, but also the relational perspective. And Beth and I want you to be protected. I do. And I, and, and this is, this is really difficult. And I'm so sorry. And I hate that we don't have the time on the show to, to dig into more. But if you hold on the line, Kelly will pick up. But I'm so glad that you called.

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[Jade Warshaw]

This is the Ramsey Show. We've got open phone lines, so if you have a hankering question about your life, your money, your career, your relationship, daycare, whatever it is that's on your mind, give us a call. We can help you out with it. Maybe it's your budget. It could be any of those things. We'd like to help. We've got Gigi on the line, and from Los Angeles, California. Gigi, what's going on?

[Caller]

Hi, I just had a question about whether I should pay off my credit. I mean, not my credit card, pay off my car, or save money towards deposit for an apartment. So a little background story I'm on. Baby step number two. I will have all of my credit cards paid off this month. So I've hunkered down with about $18,000 that I got paid off. I have a daughter. I recently moved back home with my mom. I am married. I'm going through the immigration process with my husband and my two stepdaughters. So they can be here next week, next month, next year. There's no real big timeline and there's no room for them at my mom's house. Of course. So I'm wondering, in this time, should I just save up money for a deposit for an apartment? So I'm ready when that time is coming. Is there here or should I just go ahead and continue to try to pay off my car?

[Rachel Cruz]

And where are they now?

[Caller]

They're in Uganda.

[Rachel Cruz]

Oh, okay. Okay. And you don't. And you're saying they could come next week, next month, next year? You're not sure is what you're saying?

[Caller]

Yes.

[Rachel Cruz]

Okay.

[Caller]

We're not sure.

[Rachel Cruz]

How much money would it take to have a deposit for an apartment?

[Caller]

Deposits two bedroom apartments out here are. They're about 2,200.

[Rachel Cruz]

Okay.

[Caller]

So I would say I need about 66. 66,600.

[Rachel Cruz]

Yep. And how much is left on your car?

[Caller]

16,000.

[Rachel Cruz]

Is that your last mat?

[Caller]

Yes.

[Rachel Cruz]

Okay.

[Jade Warshaw]

How much are you making? What do you bring home every month?

[Caller]

I bring home about 3600 and I've been putting 1500amonth on my debt.

[Jade Warshaw]

Okay.

[Caller]

So I. It looks like I would be due to pay it off in about maybe nine, ten months.

[Jade Warshaw]

Okay. And is your. Is your husband working while he's in Uganda? Does he have any money to speak of in this?

[Caller]

Yes, but his money is just taking care of him and the girls over there. We're not.

[Jade Warshaw]

Okay. No extra. Really? Okay. Yeah. There's part of this where this feels a little bit like. Like a. Not a storm, but something that does need to be prepared for. Because what you're saying is if they got here next month, I mean, how likely.

[Rachel Cruz]

How did you guys meet? Gigi. Sorry, I'm just. I'm curious.

[Caller]

Oh, no problem. We met through missions. I would missionary.

[Rachel Cruz]

And so you were over there and you guys met, fell in love. Oh, that's so great. You're gonna laugh at me. Gigi. The reason I'm asking is we've gotten two calls on this show with people that have met online and it's been like a, it's been like a scam thing and we've had to follow up with them and like help with the, all of this. So for a split second that came in my mind, I'm like, you have met him in person, right? Gigi?

[Jade Warshaw]

Oh my gosh. Isn't that funny?

[Rachel Cruz]

I did have that thought though, because that is funny. That has happened twice on the show.

[Jade Warshaw]

Okay, so. So he's a real guy. You know, he's thankful.

[Rachel Cruz]

Yes, I know. Just, I'm just asking, just asking how you met.

[Caller]

We've been married for three years.

[Rachel Cruz]

Beautif five month old daughter. Okay. It's great.

[Jade Warshaw]

We know it's real now. Okay. Really funny.

[Rachel Cruz]

Okay, so yeah, I, yeah, I would make it because there is. If they came, I mean, you guys could maybe last a few weeks at your mom's. But you're saying like there's no room.

[Jade Warshaw]

There's no room.

[Rachel Cruz]

Yeah, yeah. So. And how much is your car payment a month? How much are you paying on that?

[Caller]

360.

[Rachel Cruz]

Okay. Because there's always like this balance of, you know, paying off the car quickly because that frees up that car payment plus what you were paying on the debt, and it kind of just snowballs into more money every month to put towards that apartment. So I would, I mean, yeah, the pride that, that priority is tough, but.

[Jade Warshaw]

Part of me feels like, part of me feels like right now you said you're putting fifteen hundred dollars a month extra towards the debt. Part of me is like, okay, if you put a thousand aside, you can be done with this in six months and still have made some progress on the car if you wanted to. Or you could say, I'm going to stop one and do the other. Like, I'm going to stop, I'm going to save up $6,000 and then I'm going to push play on the car, which is probably what I would do. Because if what you say is true, like, like it could literally be next month or in two weeks or turn around and be in a year. It's not going to matter. They're both going to be taken care.

[Rachel Cruz]

Of because it's considered a four wall at that point. Your food, shelter, utilities and transportation. And so when they Come over. You guys have to have a place to live. So that would be right in a, in a level of priority. So yeah. So you could go ahead and just save up like you're saying, Jade, in six months you'll have that, set it aside and then, and if you had to, Gigi, you know, you could be like godly, I, I'm so close to paying off my car, I can go grab out of that account a few thousand dollars. You know, if you're that close. Right. So it's, it's still your money. But it would in that case could be considered a four, one of your four walls.

[Jade Warshaw]

I mean if you put all this money towards it, you're going to be done in four months. If you put the whole 15,000 or 1500 towards it, you're going to be done super fast. So. Okay, you know it's, you could probably do either and be fine. But to Rachel's point, prioritizing the house first is probably it.

[Rachel Cruz]

Yeah. And Gigi, are you, are you good with all the fires and stuff going on right now? Let's just see. I've been following on the news.

[Caller]

Yeah, it's crazy around here. I think a co worker of mine, their friend lost their house to a fire. But we're doing okay.

[Rachel Cruz]

You're okay and you're where you are okay.

[Caller]

We're a little bit outside of la.

[Rachel Cruz]

Okay.

[Caller]

Okay.

[Rachel Cruz]

All right.

[Caller]

Can I ask you one more question?

Sure, yeah.

And I guess so we're saving for this apartment in being that I, I make about 59000 a year. So being that apartments are 22,200, maybe for a two bedroom, would it be. It's going to be. Maybe it's going to be over half of what I make per month. But being that I'm debt free at that time, would that be something that would be okay? Because I know it's usually no more than 30% of your income.

[Rachel Cruz]

Well that I would include him working at that point. So you'll be, you'll be having more money so that, that will significantly should go down and you guys should make that a goal to go down. So it, yeah, it doesn't change whether you're debt free or not. Housing in general should be around a fourth of your take home pay. But I would add his job and his income in with that.

[Caller]

Okay.

[Jade Warshaw]

Yeah. And I don't know, I mean you didn't mention this. You're in an, it seems like you might be in an expensive area if there's no purpose in you Being, you know, I'd look further out especially if you guys have goals to pay off debt. I don't know if he has debt but it could be worth it to.

[Rachel Cruz]

Well and from a, and from a lifestyle perspective, you know la it's just very expensive. Yeah. It's tough. You know from a. Yeah. Just the standard of living and the, and what you're paying for things. You're in a very expensive area. Southern California is so, so to Jade's point for your overall and this could be a, you know, maybe something you guys think about especially if you're looking to buy a home and this will be in a few years. This is more long term thinking Gigi. But there is that conversation that people are having with a family and just saying oh my gosh, like we can't live the level of life and have the margin and the freedom to do things we want where we are geographically. And so people are having those discussions to Jade's point. So that may be something you guys talk about later once they get here and you guys kind of get settled but that's, that's a reality for a lot of people.

[Jade Warshaw]

Well and that also raises the, the point of we talk all, all the time when it comes to mortgages. Yeah. Your, the percentage shouldn't be any more than 25 of your take home pay. And we talk about that includes taxes, HOAs, like any fees, that sort of thing. But the truth is it still applies with rent too because the overall principle still is in place which is if it takes up more, especially more than 30% you're really going to feel that even if you're only renting for the next three years or whatever it is, it still cuts so much into your day to day that you're going to feel it. And especially if you're trying to get out of debt, you're definitely, it's going to take a toll on your, your month to month expenses and what you can really accomplish. So.

[Rachel Cruz]

Yes, for sure. Yeah. And it does it. And what's hard too is a lot of people and based off of calls we've had recently, you know that they base it off of a 2 income. It's kind of what we just did on that call. And the danger even with that sometimes it's just always something to keep in mind is that you know they have a baby and you realize oh I want to stay home. But where you live it's a two person household, a two income household to, to keep that standard of living. And so when you make decisions like that it kind of uproots and changes a lot, which is fine, but. But you have to be thinking about all of, of this.

[Jade Warshaw]

That's really good, Rachel. Having that foresight to go, okay, what season of life are we in? Are we in a season of life where we're still having children? Could there be the idea of one of us staying home? That is so, so smart. Really good. Oh, this is the Ramsay show. Hey, what's up, guys? It's Jade Warshaw, and I'm just gonna cut to the chase. If anyone knows about paying off student loans, it's me. Okay? My husband and I had $460,000 of debt and 280,000 of it was student loans. So I know the pressure that you feel when you have that debt weighing you down. But I also know there's a way out because we did it and you can too. Getting out of student loan debt starts with taking control of the situation. And Laurel Road can help. Laurel Road offers a free 30 minute consultation with a student loan expert to go over your repayment options and help make a plan based on your specific situation to get your student loans paid off fast. Okay, truth be told, refinancing is not the move for everyone. And my advice is that you should only consider it if you can get a lower rate or a shorter term. But if refinancing is your next move, I think it should be with Laurel Road. They offer low competitive rates and terms that could help you pay less over the lifetime of your loan. Plus, they offer interest rate incentives like an auto pay discount. So go to LaurelRoad.com Ramsey to find out more and schedule your free 30 minute consultation. That's LaurelRoad.com Ramsey. Laurel Road is a brand of Key Bank National Association.

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[Jade Warshaw]

You're listening to the Ramsey Show. I'm Jade Warshaw. Next to me is my buddy Rachel Cruz. Taking your calls this hour. Your life, your money, your New Year's resolutions. Get in where you fit in. So Rachel, there's a lot going on with the housing market. We're seeing some trends. You've got some input on it. So I'm going to let you take this and drive it on home.

[Rachel Cruz]

Yes, there's yeah, been I would say good towards the consumer when it comes to mortgages. So we are seeing a trend that mortgage rates are going down and they're expected to keep dropping in 2025. So rates on a 30 year fixed rate mortgage fell to 6.12% in late of 24 and they keep decreasing and they're not going to go back to, you know, 2 to 3% rates like they had pre pandemic, which was beautiful. Yeah, it's not coming anytime soon. But again, we're continuing to see it drop, which we love. Housing prices, they're staying pretty steady and again they might level off but with the low inventory it's kind of keeping that stable. And so they're not going to expectedly like drop drastically. So it's still this idea if you're on the sidelines and you're ready to buy a house, this whole idea of like, oh, there's a bubble, it's going to pop, I'm going to get a great deal. It's probably not going to happen. They are pretty consistent in the Federal Home Loan Mortgage Corporation even predicts modest price growth in 2025. So values will continue to rise. Inventory is slowing. So inventory grew 29.2% in 2024 compared to the previous year. Now they it is still below average or pre pandemic levels and more homes are on the market to give buyers more options. And sellers still have the upper hand in most areas as demand little by little getting better. Exactly, exactly. Buyer demand could rise. So if interest rates keep dropping, then obviously there's going to be more competition. People are going to get back into the market to buy. Foreclosures will stay low. Foreclosures declined 13% in 24 and this trend is expected to continue in 2025.

[Jade Warshaw]

Mm.

[Rachel Cruz]

Again, they're rare out there. If you can find a good one, that's great. But they're pretty rare still. So yeah, some of the takeaways for what we're seeing in the housing trending in 2025 is for buyers, if you're looking to buy with rates trending down and Inventory improving, you might find more opportunities, okay, to, to, to get into the market and you may have some more options when it comes to housing. But again, do not overspend when you go to the mortgage company and to get a mortgage, they're going to offer you way more than what you need. So stay within your budget. If you are selling, this is still your market and homes are priced fairly. If they are priced fairly, they're going to still sell pretty quickly. And again, for everyone. You can't wait for the perfect time for the housing market. It's the perfect time when it's the perfect time for you. So if you don't have debt, you have an emergency fund in place and you know you have, you have at least a 5% down payment, go ahead and get in because again, these, the, the, the housing values, the price of houses are not going down. You're not going to go get a deal next year. They are the same, not modestly increasing. So the value of our homes are still, it is still going up, which.

[Jade Warshaw]

Truly is good news because these are investments for us and we want, we want them to be going up. Even if you're not in the housing market yet, that's a good sign for all of us. But Rachel, you made a really good point because when you go into this, you've got to know your numbers, you've got to know what your parameters are, because they will, like lenders will allow you to borrow sometimes up to 50%.

[Rachel Cruz]

Yes.

[Jade Warshaw]

Maybe even less more of what you're taking home. And so just because they say you're approved, that is not your signal to go, all right, everything's all good.

[Rachel Cruz]

A banker says, like, I can afford this. Yeah, that's a red flag, people. You need to control that on your own ends. You know, and it is wild when we think about it, because, I mean, and, and I know we all remember because it was just a few years ago when, when prices just skyrocketed up. Remember that? And, and there were some hot areas that were significantly overpriced and they did kind of come down. And you know, even last year was kind of this like, you know, correction. Austin, Texas was one. Like, we saw some markets do that. But I, but I remember being on the show, you know, two years ago and, and Dave and all of us were saying, there's not a big bubble, you guys, because some people were saying that, yeah, that it's just like, it's going to be like, oh, nine, there's me, foreclosures everywhere. And all of this and it's like, no, it is going to, it's going to stay. And again, it may correct. It may kind of go back down a little bit to correct. But it is going to be what it is. And it has stayed there, Jade. I mean, it is wild. I don't know how that is now. As a homeowner.

[Jade Warshaw]

I'm not. I mean, think about it because this is the thing. Like on, if you're on the sidelines right now, you're definitely on, on, on feeling some type of way because you're like, man, I wanted to get in on the market.

[Rachel Cruz]

Yes.

[Jade Warshaw]

But it's, it's good news for all of us because it tells us that like the market is still strong and that things are doing well and when you do get in, you're gonna want your property to appreciate.

[Rachel Cruz]

That's right. That's right.

[Jade Warshaw]

I mean, Sam and I, South Florida was one of those hot areas and when we got our, our first house was around 400, 000 and it doubled when we, I'm like, thank you. It made me a baby steps millionaire. Like, this is what we want to happen. And so it's one of those things that when you're not in the housing market yet, it can feel so frustrating. But once you get in, you're like, yes, like I'm finally part of it. And you want to see it ticking up. And so.

[Rachel Cruz]

That's right.

[Jade Warshaw]

Yeah. Good things.

[Rachel Cruz]

So good.

[Jade Warshaw]

Did we tell them to go to the.

[Rachel Cruz]

Oh, no. Yeah, you go to Ramsey Solutions.com realestate and we do have a US housing trend. Market trends. It's, it's honestly right there on the, on the front home screen. So if you're curious about what's going on in the real estate market and you want to see facts and we pull these from reputable sources. This isn't just opinions out there. These are actually what's going on in the housing market. And it is something people are watching and want to know. Hey, what, what is going on? Because you do hear a lot of either doom and gloom or overhyped here. I mean, so just to get the reality of what's really going on in the housing market, make sure to go to ramseysolutions.com real estate. And for all of your real estate needs, if you are looking to buy and sell, use one of our Ramsey trusted real estate agents. Because yeah, they, they will help you in this area. And it's a big deal, you guys. Your house is for most people the largest purchase you make.

[Jade Warshaw]

Oh yeah.

[Rachel Cruz]

And to your point, the largest investment when it comes to it appreciating and all of that. So.

[Jade Warshaw]

And they help you do it the Ramsay way because, you know, when we were moving here, you know, the way we do things Ramsay way is not necessarily the way they do things out in the world. And so it's like, I remember making an offer on a house here, and I was like, it's got to be contingent. Like, we've got to sell that house so that we have, like, yes, it can't. We're not going to be one of those people who takes out a bridge loan. Like, and it's great to work with a Ramsey trusted person because they know that you don't have to explain all that to them. They get it. They're not going to. They don't think they're taking the task on it. Exactly. So it's so, so important to do things the Ramsey way. Okay, let's get to a call. Nick and Diana. They're in Chicago, Illinois. What's going on? I love a couple now.

[Caller]

Hey, how you doing?

[Jade Warshaw]

Doing good for having on your show. You're welcome.

[Caller]

My wife is a longtime listener and I just became started to listen to you guys and I wanted to ask a couple of questions in regards to. I co signed on a loan for my friend seven years ago now. And with the verbal agreement that in a few years he's going to refinance and get me off. And, you know, Covid hit and he had Covid assist program where they stopped paying on the loan. But obviously the interest rates were continued to add up.

[Jade Warshaw]

Yikes.

[Caller]

And then life happened. So he had surgery. So he went through a couple of rough times, unfortunately. I mean, the good thing is he's still paying on the loan. The only bad thing was the original loan was for 367 and now because of the COVID program, it went up to 376. So after I just got married with my wife and we want to start our life and buy our first home, and I reached out to him in regards to options of getting off the loan. Excuse me. And we tried to do a loan assumption, but his debt ratio was not where he needed to be because of, you know, the surgeries and everything.

So.

And then I, I approached them in regards to, hey, you know, let's refinance. Even though it's going to be at a higher rate, it's. It's going to be on you, only it's not on me anymore. I did my part as a friend of helping you get this house. But what he said was no. Obviously he said no because of the rates not being low enough. And he. So my question for you would be, obviously we've been going back and forth with him about it and I want to know what would should be my next step.

[Jade Warshaw]

I mean, the relationship can't be too good after all this is it.

[Caller]

So.

No. So the relationship has definitely suffered.

[Rachel Cruz]

And yeah, we're about to go to a hard. A hard break, Nick. But yeah, I mean, this is the hard thing about co signing Nick is there's not. There aren't other options. I'm like, there's. From a legal perspective, you signed a loan.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

And until your name is off of that loan, there's really not like a legal way to go about this or anything. I mean, it kind of is what it is.

[Jade Warshaw]

And so you could try to see what a judge would say about it. I mean, to try to force. Force a refi. But I don't know that they could do that.

[Rachel Cruz]

Yeah. I'm not sure this is why we.

[Jade Warshaw]

Say not to do this.

[Caller]

Yeah.

[Jade Warshaw]

This is our amazing show. Hey, guys. What's up? It's Jade. Look, let's be real. With everything that's been going on, staying on track with your money gets tough between bills, trying to pay off debt, saving money. Honestly, it's a lot and I've been there. That's why I'm excited to tell you that Dave Ramsey and I are hosting a free live stream on Jay January 23rd to help you take control of your money in 2025. Plus, Rachel Cruz and George Camel are also going to join us for a live Q A where you can finally get your money. Questions answered on the spot. And check this out. You could win $4,000 in cash. It's a giveaway. Imagine what you could do with all that money. All you've got to do to enter the giveaway is to sign up for the live stream. That's it. So go to Ramsey Solutions.com livestream and sign up. Today you are listening to the Ramsey Show. Hey, thanks for hanging out with us. If you like this show, we're happy that you're here, honestly. And we want to make sure that you're sharing it with your friends. So if you haven't already, whether it's this show, the Ramsey show, or any show on the Ramsey network, making making sure that you're liking it, subscribing it, sharing it with your friends is really, really important to us because we care about what you think and we care about that so much that we do a annual Ramsey show listener survey. And it's just where we find out, you know, from you guys. So that survey is now live. We want to know your favorite parts of the show. We want to know what you like, what you don't like, what you want to hear more about. Whatever it is we want to hear from you. I just beg of you, be kind. Like, don't comment about, like my hair or, I don't know, something weird. Our clothes, unless they're kids clothes. You can comment about kins, but there are two simple ways that you can participate. You can either text. Text the word survey to 33789 or you can visit ramseysolutions.com survey or if you're listening on podcasts or YouTube, you can click the link in the description and do it like that. But sign up today and you could win a 500 gift card.

[Rachel Cruz]

Amazing.

[Jade Warshaw]

Okay, Nice.

[Rachel Cruz]

Jade. I want to wrap back to the call we just sent. Yes, because it was a quick. A quick call, but I think a big subject. And obviously Nick and Diana, there were a couple and they called in and talking about how they had. How he had co signed for a friend on a home. Yeah, that was $367,000. And then with the pandemic happening and all these other plans you could get on where you didn't have to pay and you know, all of this stuff happens. And now he owes $376,000. So nothing was paid down. It was going up. And on top of that, you know, Nick got married and was like, I kind of. I want off this loan. Because when you co sign, and everyone needs to hear this, this is a lesson. When you co sign, it basically is you taking on this person's debt. It shows up like your debt. I mean, they're like the parents.

[Jade Warshaw]

If it were just you. Yes.

[Rachel Cruz]

So that is car loans, you guys, that is mortgages. That is parent plus loans. We talked about that in the break. If you're a parent and you do a parent plus loan, that is debt that's looking like it's going on your, you know, report. Like this is. It is a really big deal. And people do this out of, you know, the goodness of their heart because their friend or family member can't get the loans. They need someone to co sign. And. And that's where people get in trouble. And the hard thing about when you co sign is, I mean, there's not a lot of ways to get out of it unless the person who is the main. The main Name on the loan says, I will refinance to take you off. Which Nick in the last call tried and asked the friend to do that, but the friend won't because now interest rates, right? He probably got a 2.5% interest rate and now interest rates are 6%. So the friend's like, there's no way I'm going to, I'm going to refinance right now. And yeah, and it messes up a relationship and it messes up your own financial life. So again, we were saying before the break that there's again, I mean, the answer to those questions. If you have cosign, there's really not much you can do from a legal perspective. You may be able to get a judge to force it, but to force a refinance. But I don't hear that happening a lot, do you, Jade?

[Jade Warshaw]

I don't. I mean, we had somebody call in a couple of weeks, weeks ago. It was a boyfriend, girlfriend signed together on the vehicle that she would drive. They're no longer together and he's like, she's not paying the bill, like, what do I do? And the only thing I could advise him is, you know, find out, you know, how much is owed and kind of keep that to the side because you might be ending up on the hook for this. That's, that is the danger, Rachel, that we talk about all the time, whether it be with housing, whether it be, I mean this, this is the price of a house. And so because of it, to not be able to do what you want to do next, you've really got to think long term. Because the truth is, you know, with the call that you just talked about, the guy, he's not, he's not a bad guy.

[Rachel Cruz]

The friend.

[Jade Warshaw]

Yeah, the friend is not a bad guy. He was making payments, he. Something health happened with this health, like life happens. And you. There's no way we can have the foresight to understand what will happen with the housing market. What will happen with interest rates, what will happen with your health? Will the, the relationship sustain your career?

[Rachel Cruz]

Yeah, exactly.

[Jade Warshaw]

You just don't know. And this is so sad. I was telling Rachel, the break, you know, with my husband and I, we experienced this because it's always out of the goodness of somebody's heart, always. And you know, with student loans, you know, my mother in law signed student loans for obviously her son, which you would think, oh, duh, of course you would do that. But the truth is now it was on her credit as well. And that's part of her debt to Income ratio. And when she was ready to buy a house then we were affecting her because we still had. That wasn't something that was in our debt. Snowball yet. So you can see how it's not that somebody's the villain or doing something bad. It's just when you co sign. I mean it's why the Bible says that it's. I mean really, in simple terms, it says it's stupid to cosign.

[Rachel Cruz]

Yes. You're a fool.

[Jade Warshaw]

You're a fool to do it because it puts you in a situation that you have zero control over virtually.

[Rachel Cruz]

That's right. Yeah. So I didn't want to go past that call too quickly because it's a big one. I know for Nick and Dan this is their reality. But. But also, I mean the answer is really. I mean there's really not much, not much you can do.

[Jade Warshaw]

And all you can do is save up to try to pay cash and lower that debt to income ratio. For his own loan. That's for his own home loan. That's truly all he can do.

[Rachel Cruz]

Control what you can control. But at that point it is there. Yep.

[Jade Warshaw]

Yeah. Oh, so tough. Rachel.

[Rachel Cruz]

So sorry you guys. That's. That's not fun.

[Jade Warshaw]

Yeah. All right. Learn from their mistakes and from my mistakes. And Rachel, you have some in there too, I'm sure. Last week Jeff, we've got Jeff and Austin Texas. What's going on? Jeff, good to have you on the show.

[Caller]

Well, I'm pleasure to be on the call. I've been listening to Dave and you ladies for probably 20 years.

[Rachel Cruz]

Oh wow. Before us then Jeff, before we were. That's great. Thanks for calling in.

[Caller]

Yep. Listening and has been a. Been a student and followed Davis principles pretty well. So you know, I'm pretty happy today. I've got a lot of peace and contentment, a lot of blessings in my. For my life and that kind of leads me to the call today. So a little backstory. So I live, I'm retired about two years ago and I've done well in the market. I was in business for 30 years and situation I have is on behalf of my daughter. So my daughter has been married for two years and it's a beautiful family, two little babies and my son in law, very bright, intelligent young man. My daughter's very strong willed and independent is some of the principles that are laid out. You know they haven't followed to it. The combining, you know, finances, etc. Is one of them which I was always very vocal. I kind of taught my daughter baby steps and so she's been a disciple. She's getting there. She's got her, she's got an ira, she's got her emergency fund. She follows a very strict budget. But them not having joint finances. We just found out this week, my son in law came to confession to all of us and hadn't been day trading and essentially was financing some of this through credit cards. And he stacked up about $60,000 in debt and lost all of his savings, man, day trading. And so that number doesn't scare me so much because I'm confident that they can work their way through the debt. The part that I'm struggling with as a father and a grandfather is I'm trying to stay in my lane to give my daughter as much support as I can. She's never asked anything from me. Since she's graduated from college. She does well at her job. In fact, she starts back to work from maternity leave this coming Monday.

[Rachel Cruz]

Wow. So new baby.

[Caller]

Yeah, born in October. Beautiful little girl. So the challenge is for her and for me is all of this was hidden. She had no idea until she stumbled across some information, looking at her credit score that it had dropped and found out that one of the. Her card he had used and stacked and maxed that out and that's how she found out and got it. So it's a truck.

[Jade Warshaw]

So he used her card without her knowing it.

[Caller]

So they, they are very, the best way I can put it, their family's very close as far as the kids, they don't do anything other than take care of the kids and activities or great parents and unbeknownst to her, yeah, he used her card and they do that. They might use each other's cards at times, but then he maxed it out. And when her credit score dropped by 20 points.

[Jade Warshaw]

Well, you said, you said he came clean to the whole family. So that was after her. That was after she had gone to him and said, hey, this is, what is this? And I. Obviously after they talked then he felt the need to kind of say that to the whole family. Is that what you're saying?

[Caller]

Yes. So he can, he confessed to her and then the day after called me because again, we're very close. I mean, we talk consistently. I talk to my daughter or text almost every day or we FaceTime.

[Jade Warshaw]

Yeah.

[Rachel Cruz]

So Jeff. Yeah, so this is, man, this is really difficult. And yeah, so for them it's going to take a lot of, I think professional counseling because this is, this is lying. I mean he absolutely lied and did a level of gambling is kind of what day trading can end up being. So for you, I think being a dad there, not overstepping your bounds. This is their issue to work out within their marriage. And if they reach out for help, I think from an emotional standpoint, you're. You can be there, but this is theirs to take care of.

[Jade Warshaw]

Yeah. Don't medal too deeply or it's actually going to make it worse. I think they need to figure this out between themselves as a couple.

[Rachel Cruz]

So. Sorry.

[Jade Warshaw]

This is the Ramsey show.