You Aren't Defined By Your Financial Mistakes

The Ramsey Show

This episode tackles mom guilt, contentment, and the real drivers of child success beyond material possessions or elite schools. Dave Ramsey emphasizes parenting, resilience, and gratitude over external achievements.

Key takeaways

• Success comes from character, not schools or cars

Transcript preview

brought to you by the every dollar app start budgeting for free today normal is broken common sense is weird so we're here to help you transform your life from the Ramsey network in the fair winds credit union studio this is the Ramsey show I'm Dave Ramsey Smart Money Happy Hour is my co-host today. The phone number is AAA-25-525. The call is free and some say the advice is worth exactly what you pay for it. Brenna is with us in Las Vegas. Hi Brenna, how are you? Hi, I'm good. Thank you so much for taking my call. Sure. What's up? I have a question for you. It's in regards to whether my husband and I should be working harder, looking at debt. and how to deal with contentment and mom guilt at not being able to give my kids everything that I think they deserve. To give some back story, we're on Baby Step 4-56, we have two emergency funds, we have no debt. My husband and I both work part-time, so we get to spend lots of time with our kids. We easily pay all of our bills. I feel like our budget is comfortable. We don't pinch pennies, but we're careful with our money. My son is In Las Vegas we have like the worst schools in the nation. So public schools is not a good option. The private school that all of our friends are sending their kids to that are associated with our church is like $13,000 a year for like kindergarten and that just seems like an outrageous amount of money to send on early education. So we're looking at homeschooling but I'm just worried that I'm not working hard enough or looking at other options in order to give my kids what they need but at the same time I feel like I'd work harder just to send my kids to somebody else to take care of. Wow you have a lot of guilt on a lot of different labels of guilt I mean it's all over the place it's I don't know if I can get tall of them. Well I mean it's just choices is what it comes down to. If you want to do the private school you're gonna work more right? and if not you're going to do the homeschool and you know and there's a trade-off there too by the way. Right. People who homeschool will tell you they there are two camps the ones that love it and the ones that viciously hate it and put their children in another school as fast as they possibly can. So all homeschooling is not for everyone. I think our children will probably be dead if they were homeschool. I probably would have killed them. If I told you your kids would end up just fine if they were homeschooled if they went to private school would you feel better about the choice if you just if you looked into the future they were great kids regardless which one would you choose? I mean personally I had my kids for a reason I love hanging out with them I think I want a homeschooling that's what my heart is leading towards what's wrong with that then what my husband and I are leaning towards so what must be true for you to homeschool financially? Oh I mean we could do it we could do it right now we could do right now financially? I mean we could do right now we could do right now we could do right now we could do right now So what's the question why would you not do that? I guess I just I just watch all of our friends and like my son's friends and like they're going to go to this like expensive private school and like I guess that's an example of just like I can't give my kids everything in the world that they want right like I know that's not feasible and that wouldn't even make good kids because you got to tell kids know in order to be good people and I but at the same time like I just worry like I know that at the same time I just worry like The answer though is this is we're trying we're not trying to raise great kids we're trying to raise kids that become great adults and so what methodology does that is the secret sauce for them to be successful adults someday is that particular shiny private school answer no is the secret sauce for them to be wonderful successful adults someday home school? answer no is the secret sauce for them to be wonderful successful adults someday home school for a hundred percent no sauce is you and your husband being good parents and guiding them through whatever educational process you use where they don't lose their dad-gum minds in the process of getting an education. But where we get where we get dislodged is where we think that if they don't have this car they're not going to be successful. If they don't wear these clothes they're not going to be successful. If they don't go to this school, they're not going to be successful. When those are not the pre-indicators of success, pre-indicates of success. earlier, they learned the word no, they're grateful, they're not entitled, they're kind and compassionate, they're people of strong integrity and strong work ethic, they know how to do hard things, because mom and dad taught them how to do hard things. Because there's a whole bunch of people in America don't know how to do hard things anymore, and if you can do hard things, you immediately stand out from the crowd. And so this is the, these are the indicators of future success with your children. It's not what school they went to. And then, and then, and then, and then you're out to what college they went to, which is the biggest joke on the planet. What college you go to has zero correlation with success. There's no piece of research that's ever shown that. And yet people still pay, you know, 25 X to go to a certain college because I went to that college and that, as if that is the secret sauce. It's really a trophy for the parent to say, look at my reputation. It's parent trophies. And for some of your friends, they're parading, they're parading the parent. private schools in front of you as a trophy for the parents not for themselves not for their kids right it's like some kids in travel sports the reason they're in travel sports is because dad has an issue dad never made it pro so his kid has to yeah so if you don't think he has an issue just watch how he treats the umpire you know I mean this is all there right it's all the same thing so yeah that's where it's where it comes down to is just overall rant or whatever there is it's a really cool question I love your question by the way is my reaction to it though is to major in the things that actually do cause success and discard the things that don't that other people count on. Okay and then that helps me with my contentment. into another bucket and say, okay, does buying a really nice car cause success? Absolutely not. But a whole bunch of people buy the car to appear successful, to appear that there's something they're not, to impress someone at a stoplight they'll never meet and they have a $1,200 car payment, right? And I've done that. I did that when I was 23. I bought a Jaguar for other people to look at. Not because I wanted a Jaguar, because I was a shallow little turd. And that's, you know, you know, you know, you know, you see what you see what I'm, you see what I'm That's the wrong measure of success. It'll lead you down the wrong path. Giving a 16-year-old a range rover doesn't mean you gave them everything. You just created a real expensive disaster that's waiting to happen. And it happens. I see people driving teenagers driving brand new SUVs because the parents said I want to give them everything. They deserve it. They've worked so hard. Well and the one I remember when Rachel saved up she saved up like $8,000 and we matched. 401 day for your first car. $16,000 beamer used beamer which you know back then was a really nice car. Yeah now it's a not a bad car and But you know and You know Twit around the corner buys the same BMW you brand new Ooh to flex 16 year old I guess I don't know if Flex or not five hundred and twenty three dollar car payment back then Oh man that was that was like be like having a $1,500 car payment now right? But it's total flex and I'm like and now where is that kid today Lost as a ball in tall weeks you know just can't she just lost she did that kid they hadn't got a chance Hey guys, it's Rachel Cruz. When it comes to life insurance, most people fall into one of two camps, the ones who make a plan to protect their family, and the ones who hope everything will just work out. But hope isn't a financial plan. When you get married or have kids, your money decisions aren't just about you anymore. Your income helps keep the lights on, pay the mortgage, and put food on the table. And if something happens to you, will your family have protection, or will your uncertainty. Well at Ramsey we recommend term life insurance that 10 to 12 times your income with a 15 to 20 year term for the years that your kids are at home and your mortgage is still being paid off. That's why Winston and I have our term life coverage through Zander insurance. They're an independent broker who works for you shopping all the top companies to find the most competitive prices on coverage you need. Get instant quotes online in just minutes at Zander.com or call 800. That's $1,56, 4282 to get your family protected with term life insurance. That's Xander.com or 800.3564282. contentment for children and adults and mom guilt and dealing with all that. So you don't have mom guilt or dad guilt. If you understand, or to the extent you understand, I guess, none of us do this perfectly, but to the extent you understand, what causes children to develop into successful adults. with the school they go to, very little. It's not anything to do with the possessions that they have. It's not even the number of hours that daddy is home, as if they're going to lose their ability to be nurtured because daddy works a job. You know, we've got this nurturing movement going on now. And so, Yes, we do want children to be safe, we want them to be protected, but you know, some of the best generations of adults have come from children who endured hardship. Not horrible things, they were not hungry, hopefully, they were not whatever, but they, you know, you think about your grandparents or for some of you, your great-grandparents are great-grandparents that were children in the Great Depression. And how did they turn out? Well, that was my grandpa. And he turned into a, well, he was actually a young adult in the Great Depression. But, you know, so, you know, some people were devastated during that time, obviously, but the hard times did not keep the person from turning out. It turned out they learned how to do hard things. And so that's resilience. That's resilience. That's some grit. Create resilience and grit. And grit. And then you could, because you're going, no matter, because you're going, no matter. what car you give them in and private school you put them in and no matter how much of a bubble you put them in to where they're not, you know, they're not hungry and they're not in a crime situation where they're being a victim of crime or those kinds of things. If you put them in a perfect bubble and they don't learn how to deal with tough things when they come, then they're gonna have really, really hard time. They're gonna be an anxiety-filled adult because they don't know how to deal. with crap. You didn't give them the tools. You can give them a shovel when the manure comes. You know, and so, you know, but that's an interesting discussion. And Rachel and I wrote a lot about that in the book that we did together, Smart Money Smart Kids. One of the things that we've answered for parents a whole lot over the years is how do you raise children in this world that are not entitled. And it starts with, it's a three-step process. It starts with gratitude. And so you become great, teach a child, and with a little kid it sounds like manners. Thank you, mom, for dinner. That's gratitude, but it sounds like manners. Good manners. Thank you, dad, for, you know, the help with my homework. That's gratitude, right? And gratitude then shows you humility. Because in order to have gratitude, you, it has to be that it's not all about you because if I'm entitled to dinner then I can just be mad at mom and have a fit if I don't like the broccoli I don't like whatever right but see we're not allowed to do that at our house and our children are not allowed to do that you might not like the broccoli but you don't get to disrespect the mother that created it because I'll take you out and create another one looks just like you you're gonna wish you ate some broccoli when Dave's we're not going to disrespect the mom that that's not right? That's old school parenting, but that's how it works. And so you get to understand the world doesn't revolve around your little butt. Your little butt is just one more little butt, you know? And so it doesn't revolve around you. And so if it doesn't revolve around you, then you would be grateful. And then when you're grateful that sets you up for the ability to be content. But contentment does not exist in a bubble all by itself over here and just land on someone like a butterfly on your shoulder. Oh, oh, oh, now I'm now I'm peaceful. You become content because you realize it's not all about you and I say thank you Lord for the blessings in my life father thank you you you blessed me this is a prayer we say around the Ramses all the time you blessed us beyond our wildest imaginations our mind is blown by you father thank you for what you poured on to us that's gratitude but it comes from I didn't do this by myself obviously I know my heavenly father has poured out upon me something that I couldn't have done by myself and yet I worked hard but I couldn't have done it by myself and so then out of that you set yourself in a spiritual position to be content and when you can teach children that in this culture they have a superpower then they're totally good to not upgrade that car with a payment they go I'm good my car works it's fine yeah and they don't say stupid stuff like I work so hard I deserve you don't deserve anything shut up money to pay for it, that's when you deserve it. Until then, you're a whiner. Call the wambulance, right? I mean, wea, I work so hard. Oh, shut up. We all work hard. Wea. I don't meet anybody who says, you know, I don't work very hard and I deserve it. Nobody says that. Of course you work hard. Shut up. Now go make some dad-gun money, live on less than you make. Get yourself out of debt and save up and save up and pay. for something and then you can say I deserve it. But until then it's just a dangerous word. I don't deserve $1,200 car payments. That's just dumb but. You don't say that. Those are kids who grew up into adults but never actually became adults. Yeah, it's kind of the reverse. They're children that became. Stunted growth. They became grown children. That's frightening. That's kind of an oxymoron if you think about it. And you don't want your kid to marry that person. Let alone be them. to identify those people and stay away from them. Otherwise they will make your grandchildren and now you've got a real mess. Mm. Yeah, that's exactly right. Yeah, can you imagine? Entitled Grandchildren. Not in the Ramsey house. Doesn't, well I mean Dave's not putting up with that. Well I love my grandbabies. I mean grandbabies are I mean grandbabies are awesome if I don't know how great grandbabies are gonna be out of their parents but you know. But you know Papa Dave, Papa Dave, we don't do that, we don't do that's, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I Papa Dave's house is how we do things. There's rules. There's like you know this we say thank you Jesus and thank you Mimi. We were we are grateful at Papa Dave's house because we know where all good things come from Jesus and Mimi. That's right. Dave just lucky to be in the room. I'm just lucky to be around and get to observe this thing happened. You're a turtle on the fence post. But isn't that fun? I mean it's the I loved her question. I'm just The motive was great. And it was not an insincere question, but and it took me to a place I didn't think I would go to this quickly in today's show, but you know so many of the things that we chase that we call happiness or we call entitled or we call deserve Are the wrong things to get us to the destination we were trying to get there? It turns out the range rover won't take you there. Well it's hard because the character stuff that's visible. And as a parent and kid, you just want to see the visible thing. The nice car, the private school, look at what they have. She said it. Well, I look around at all my friends. Well, there's the problem. Stop looking around. Because you're going to, it'll lead you to that discontentment. Get off of Facebook and Instagram. Yeah. Get out of the carpool line. No one puts the crap in their life on Facebook or Instagram. They only put the highlight reel. It's like, oh, oh. Rachel used to do that thing. No one puts on there the you know the 1993 Honda hashtag blessed you know nobody does that they always put right the new thing on there the this garb you know the the thing i can't show shiny new car with a bow one my husband got me Alexis with a red bow you know whatever it doesn't get as many likes on Instagram yeah and that's what you're chasing no one puts look they don't put you know your child having a meltdown three years old on the cereal aisle and everyone who's ever had a kid had one that just lost their mind or at least once. It's like, they don't, you know, we ought to post that stuff. I'm willing to. I've got a three-year-old and a one-year-old. That's ever, that's a Tuesday in my house. Well, you shouldn't do that because then they'll have a digital tattoo the rest of their life. Oh, somebody will pull that up when they're running for Congress. If you're run a business, you're going to be in a job. If you run a business you already know this bad information leads to bad decisions and right now AI is everywhere. on the best data. That's why I recommend NetSuite. NetSuite is the number one AI Cloud ERP and more than 43,000 businesses run on it including us here at Ramsey Solutions. Their AI isn't bolted on, it's built in, and it connects everything that runs your business. Accounting, inventory, customer data, all in one place. Because when your numbers are connected, AI actually works like it's supposed to. NetSuite's AI helps flag cash flow problems, spot inventory issues, close your books faster, and cut down on manual reporting. If your revenue is at least seven figures, go to NetSuite.com for a free product tour. That's NetSuite.com slash Ramsey. Todd is with us Todd's in Topeka, Kansas. Hey Todd, how are you? Good, how are you? Good, how are you? Better than I deserve. What's up? Well, so we agree that debt is probably not a good thing. that have interest-free, like for trackers, cars, something like that. The manufacturer will have an interest-free program and you can make, like in my case, it would be on a tractor, and they have all sorts of different programs that kind of fit what would work for you. But I like the thought of using other people's money for free. Well I don't know the car manufacturing side of it I don't know the car manufacturing side of it I don't know the tractor side of it but I suspect it's similar okay in the car world the only way you get an interest-free loan on a brand new car zero interest is you pay sticker price which I don't know why anyone would pay sticker price because I'm gonna buy a new car for a lot less than a sticker. And so the difference in what I would pay for it and what you would pay for it if you took the interest-free sticker price loan is called interest. Yeah, you know, they got their money, they just didn't call it that, you know? And now I suspect John Deere or Caterpillar or whoever is probably doing the same thing on the tractor side with combines or combines or whatever, or whatever, or whatever, or whatever, or whatever, or whatever, or whatever, you know the set those are huge ticket items and I suspect they're there let me just tell you there's no instance that you can loan someone money for free unless you're making up what would have been the interest somewhere else someone's paying interest on the borrowed money somewhere and so it's built into something somewhere and calling it an interest-free loan, right? Because banks don't loan money, interest-free. And so organizations don't lend money interest-free. And if they do, it means they're making the equivalent of interest somewhere else, or they're going to go out of business, agreed? Yes. There's no free lunch. Normally, not normally. this machine and the guy gave me the price. It was $89,000. And then I was reading something and I saw that Cabotah had interest-free programs. So I called the dealer and the guy, the salesman and asked him and he said yes. So and the price was still $89,000 and then he said there was all sorts of programs where if you'd like to put down a what you'd like to put down a what you'd like to to put down, whether it be a monthly, yearly payment, what have you. So that made me think. Well, what I want then is a discount for cash. I don't, now I don't like my 89,000 dollar price. If I'm in your shoes, that's the way I would go at this. I'm not going to borrow the money and the reason is they're going to make the money somewhere. And then number one. Number two, as I've studied wealthy people, I've never met a single millionaire that said you know the way I became millionaire was I parlaid all these nothing down zero percent interest things on my caboda and that's how I became a millionaire never have I met a millionaire that so they did that millionaires just don't play with this stuff but it's kind of a mind game that it's you know if you like math like you do and I do to get into it but George have you run into this with the tractor world at all not in the tractor world specifically but the 0 percent game is everywhere And number one you're right the sticker price is going to be higher and there's no negotiating So you're not gonna get any cash discount that's what you're trading off here Number two they're hoping and knowing most people won't pay it off in that 0% promotional period Which then triggers all of the interest So he might be the exception of the rule because he has the cash But it's still adding risk and he's still getting a risk and he's still getting a worse deal. money under any circumstances. So because I've not found that to be how people become successful financially. Yeah. And so you know I've got a caboda skidsteer at my farm. It's one of my favorite toys. We put a bushhog on the front of it and I go over there in bushhog and talk about therapy. That's a great hobby. It's kind of like pressure washing therapy. It's the same thing. And it's better than golf. I'm knocked down and cut up and chew up with that thing. And I never thought a thing about doing anything about doing anything. just a toy well that's the other part of this we're not talking about is this sort of slippery slope mentality of well I did the 0% over here why not do it on the furniture and on the appliance and on my personal car because I know I'm smart enough to pay it off I have the cash it's a lot of calories to burn to keep up with all of it and so but no I you know I want him to test it call us back it won't cause you to be wealthy or whatever, that's what the price was. Yeah. My next question is what do they cost used? Could you buy one slightly used at 70? I think Todd can probably afford this. He's just doing mental gymnastics. I think he can buy whatever he wants. But he doesn't want to part with his cash. No, he was okay with it until the dealer said you can get zero percent and then he started doing mental backflips. I like to hang on to it at that point. I kind of understand how you can't understand how you can get there, but no, I would not. I would not. I would not. I would not. I would not. I would not I've not met wealthy people that use this as a method of building wealth and so while it sounds like I'm using other people's money for free you're somewhere in there somebody's not it doesn't work if you do all right Susan's with us in Portland Oregon. Hi Susan how are you? Hi Dave thanks for taking my call. Sure what's up? I'm a 62 year old divorce a I have zero debt I don't own a home but my car is paid for and I'm living with my partner who does not charge me rent I have approximately 1.5 million in retirement funds and my question is what is a good amount that I could take out monthly and still have enough to live on because my biggest fear is running out of money and I live very frugally now I live on two thousand dollars a month and I just I think I need just I need just guidance in what's Let's just do some basic math, okay? What's your 1.5 million invested in? Traditional IRAs, Roth IRAs, and I mean what's the investment? Good mutual funds, growth stock mutual funds? Yes. Okay, so you think the portfolio is averaging what the market is averaged around 11%, 12%. Yes. Okay. And so if your 1.5 is going up by, let's just use some, let's pretend, if it's going up by... 12% a year and you pulled off 8% that means it would still go up by 4% a year does that make sense yes and so 8% of a million and a half is 120,000 dollars a year well ten thousand dollars a month yeah I could do that I think you're okay I said you spend two grand a month yeah I think you're okay I said you spend two grand a month yeah we're a ways away you could upgrade your life so and here's the idea here's the thing and we never touch the 1.5 and it grows by 4 a year you never even touch the principal much less run out of money yeah that's where I get hung up on because I see it as a finite amount and I it's not