Intro
In this episode of “The Ramsey Show”, Dave Ramsey addresses various financial and relationship issues faced by callers. From addictive spending habits to generational money problems, Dave provides practical advice and solutions to help individuals and couples overcome their challenges.
Main Takeaways
Addressing Addictive Spending Habits
- Ariana’s husband spends over $1000 a month on phone games and $14,000 on phone games last year.
- J. Washall suspects that phone games are not the only thing Ariana’s husband overspends on.
- Many games and apps are designed to be addictive and create a dopamine hit to keep users coming back.
- Slot machines are also designed to be addictive.
- Ariana’s husband is exhibiting addictive behavior with his spending on his car and phone.
- This is not just a money problem, but an addiction problem that needs to be addressed.
- It’s important to seek help and find ways to communicate with the addicted person to make them understand the impact of their behavior.
- Seek help from someone that the addict will listen to, such as a counselor or therapist.
- Attend marriage counseling to learn how to communicate with the addict effectively.
- Treat the situation with urgency and understand that the addiction is the problem, not the car payment.
Financial Planning for Parenthood
- When planning to have a baby, pause the current baby step and save as much money as possible.
- The couple has no debt, an $8,500 cash emergency fund, and $7,000 in the bank.
- The $7,000 is earmarked for a down payment on a house, a birthing fund, and a Roth IRA.
- It’s best to wait until the wife is pregnant to pause the baby step.
Dealing with Company Stock Loan
- Dustin received company stock on loan and is unsure whether to pay off the loan or have the stock taken back.
- He has been paying about $600 a year in interest on the $30,000 loan.
- The stock has grown from $0.66 to $2.20 per share, but it is privately held and restricted, so it has no value except for cash it creates.
- Dustin has no control over the stock’s value or decision-making power in the company as a minority shareholder.
- He cannot sell the stock except back to the company, and there is no public exchange for it.
- Privately held stock cannot be sold publicly, and there is no flexibility with it.
- Company buyouts are required if a non-employee holds privately held stock.
- The value of privately held stock is not controllable and can be affected by company growth.
The Impact of Excessive Holiday Spending
- Americans are expected to spend $12.2 billion on Halloween, with $4.1 billion on costumes and $700 million on pet costumes.
- Generosity should be prioritized over excessive spending on costumes and pets.
- Prioritizing generosity over excessive spending on costumes and pets is important.
- It’s okay to celebrate holidays and spend money on pets, but not at the expense of important priorities.
- The wealthiest nation in the world should prioritize helping those in need.
- Putting holiday spending on credit cards is not a wise financial decision.
- Record spending of $12.2 billion on Halloween this year, despite the sluggish economy.
- It’s important to think through our actions and spending habits, and not have it both ways.
- Taking care of responsibilities and having a party can coexist, but it’s important to be mindful of our spending.
- It’s important to prioritize and be mindful of spending during the holiday season.
Financial Advice for Various Situations
- Beware of high-cost life insurance policies that double as savings or investment strategies.
- A six-month emergency fund is sufficient for most entrepreneurs, and worrying about worst-case scenarios is normal.
- Having extra funds in an emergency fund can be reallocated towards investments or paying off a mortgage.
- Having a large emergency fund does not necessarily make you wealthy or financially stable.
- It’s important to regularly assess and adjust your emergency fund to align with your current financial situation.
- High-yield savings accounts may not always keep up with inflation, making it important to consider other investment options.
- Following the baby steps and investing in paying off a mortgage can be a smart financial strategy.
- When considering a car lease, it’s important to take into account your overall financial situation, including savings and investments.
- Car leases are the most expensive way to operate a vehicle, with an average interest rate of 14.2%.
- It’s advised to never invest in a brand new vehicle unless you have a net worth exceeding a million dollars.
- New vehicles lose value faster, making it a bad investment for those without a high net worth.
- Buying a one or two-year-old used car and paying cash for it is a better option for most people.
Personal Stories and Lessons
- A young boy wanted to earn money to go to Astros games and buy a jersey.
- He hand-wrote letters offering to mow lawns for $40 and started his own business.
- His mother took the money he earned and eventually sold his lawnmower for $500 to pay bills.
- The boy was devastated and called his mother a monster for stealing from him.
- The mother defended herself by saying that’s how they were raised to pitch in and not question bills.
- The mother’s behavior is a generational issue and she thinks it’s right.
- She needs to apply herself and earn more money instead of taking from her 13-year-old son.
- Stealing from family is a character flaw and cowardly.
- Having a grown-up conversation with her son about finances is a better solution than stealing from him.
- Taking her to coffee and helping her get on a budget and become financially responsible can be a solution.
Career and Education Advice
- Going back to school and taking out student loans may not be a wise decision to increase income.
- Generalized degrees like communications do not automatically qualify for higher paying jobs.
- Connectivity to the subject and knowledge base is more important than having a degree.
- Actively researching and getting certifications online is more valuable for career growth.
- A degree in communication or journalism may not lead to high-paying jobs immediately.
- Freelance work may be a better route for career growth in writing and marketing.
- Working with people who are better than you and analyzing their work can increase your skill set.
- Collaborating with others in a writers’ group or coffee group can improve your writing skills and lead to better results.
- Knowledge is the currency that gets you in the door, keeps you in the door and moves you up the ladder.
- Reading nonfiction books, particularly in your area of expertise, is important for personal growth and success.
- You need to learn something new all the time, every day, every week, every year to get better.
Family and Relationship Dynamics
- Co-signing for a loan is a bad idea, especially if you’re not making a lot of money and have debt.
- Parents may try to control their children’s financial decisions, causing them to feel like a child instead of a grown-up.
- It’s important to break free from controlling parents and become financially independent.
- Buying a house should be a decision made by the individual, not by someone else pushing their agenda.
- When paying off larger balances, it’s important to stay motivated and find ways to keep morale high.
- Having smaller credit cards is more helpful for paying off debt because they get paid off faster.
- Parents misbehaving with money can have negative consequences for their children.
- Buying a house can be a burden and not a solution for financial problems.
- Helping someone do something stupid is not your fault, but identifying it is important.
- Emotional obligations to help family members can be toxic, but living with them can increase the obligation.
- Proximity to a situation can change the level of obligation.
Summary
Addressing Addictive Spending Habits
In this episode, Dave Ramsey tackles the issue of addictive spending habits, focusing on Ariana’s husband’s excessive spending on phone games and his 91 Volkswagen. Dave emphasizes that addictive behavior should be treated as an addiction problem rather than just a money problem. Seeking help from a counselor or therapist and attending marriage counseling can aid in effective communication and addressing the root cause of the addiction.
Financial Planning for Parenthood
Dave advises couples planning to have a baby to pause their current baby step and save as much money as possible. He suggests waiting until the wife is pregnant to pause the baby step and prioritize saving for a down payment on a house, a birthing fund, and a Roth IRA. By following this approach, couples can ensure financial stability during the transition to parenthood.
Dealing with Company Stock Loan
Dustin’s dilemma regarding whether to pay off a loan or have the stock taken back is addressed by Dave. He explains the limitations of privately held stock and the lack of control and flexibility associated with it. Dave suggests considering other investment options and getting rid of the stock, as it is not a wise financial decision due to its restricted nature.
The Impact of Excessive Holiday Spending
Dave highlights the staggering amount of money Americans spend on Halloween costumes and urges listeners to prioritize generosity over excessive spending. He emphasizes the importance of not putting holiday spending on credit cards and being mindful of our actions and spending habits during the holiday season. Dave encourages listeners to focus on helping those in need rather than indulging in excessive spending.
Financial Advice for Various Situations
Dave provides valuable financial advice on topics such as high-cost life insurance policies, emergency fund management, and car leasing. He emphasizes the importance of regularly assessing and adjusting emergency funds, considering alternative investment options to combat inflation, and avoiding car leases unless in a financially stable position. Dave’s advice aims to guide individuals towards long-term financial stability and smart financial decision-making.
Personal Stories and Lessons
Through a heartwarming and thought-provoking personal story, Dave sheds light on the importance of teaching children about financial responsibility. The story highlights the impact of a mother taking money earned by her young son and the need for open and honest conversations about finances within families. Dave suggests having a grown-up conversation, offering guidance, and helping family members become financially responsible rather than resorting to stealing.
Career and Education Advice
Dave provides valuable career and education advice, emphasizing the importance of continuous learning, gaining practical knowledge, and actively researching and obtaining certifications online. He encourages individuals to focus on building their knowledge base and skill set rather than solely relying on generalized degrees. Dave advises aspiring writers and marketers to collaborate with others, analyze their work, and actively participate in writers’ or coffee groups to enhance their skills and improve their results.
Family and Relationship Dynamics
Dave addresses the challenges faced in family and relationship dynamics, such as controlling parents, co-signing for loans, and financial obligations. He emphasizes the importance of breaking free from controlling parents and becoming financially independent. Dave advises individuals to make their own decisions when it comes to buying a house and to stay motivated while paying off larger balances. He also highlights the toxic nature of emotional obligations and the need to identify and address them.
Conclusion
In this episode of “The Ramsey Show”, Dave Ramsey provides valuable insights and advice on various financial and relationship topics. From addressing addictive spending habits to offering guidance on financial planning for parenthood, Dave’s expertise and practical approach help individuals and couples navigate their financial challenges. By prioritizing financial stability, making wise investment decisions, and fostering open communication, listeners can work towards a better financial future.
