A North Carolina mom wrote in to “The Ramsey Show” recently, hoping for a plan to juggle debt, tuition and family expenses. Instead, she got a full-on reality check from personal finance expert Dave Ramsey and co-host Jade Warshaw, who wasted no time pointing out what they saw as a long line of bad decisions.
“You guys are, I’m guessing, in your 40s, maybe getting ready to be 50s. But you’re still renting. You’re still paying $1,275 a month for cars,” Warshaw said. “You would rather drive these cars than pay for your kids’ tuition, cause your cars are $1,275 and the tuition is $1,000.”
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Parents Prioritizing The Wrong Things
Amy, the caller, explained that she and her husband make about $125,000 a year and take home $5,100 a month. They rent a home from her parents for $700, have no savings or retirement, and are carrying $10,000 in consumer debt. On top of that, their oldest daughter is attending her dream college on a partial scholarship, leaving a $1,000 monthly tuition bill.
Their second daughter, a high school senior, wants to attend a private university, too. But Ramsey and Warshaw weren't having it.
“They can’t go to their dream schools. They can’t go to these private universities because you can’t afford them. And neither can they,” Warshaw said flatly. Ramsey added, “My dream car is a Bentley.”
They urged Amy to talk to her oldest daughter immediately and cut her off from financial support at the end of the school year. “I have a dream that you got a job,” Ramsey said sarcastically. “You’re going to get a job, kiddo, if you want to go to that school.”
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A Pattern Of Poor Choices
Warshaw was direct again, telling Amy that “this is just the most recent in a long line of bad choices.” Ramsey pointed out that the problem isn’t just tuition, but a lifestyle issue. The car payments, lack of savings, and general financial disorganization showed what they called a lack of decision-making clarity.
“You’re killing me here,” Ramsey said, responding to Amy’s mention of her daughter choosing a college because it’s in a pretty town or has a good football team. “You’re going to go $200,000 in debt because you want to go to your dream school?”
Ramsey went on to debunk the idea that expensive or prestigious colleges are necessary for success. “There is no data, zero pieces of research that say where you went to school caused you to be successful. None,” he said. “78% of the publicly traded company CEOs went to a state school.”
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He emphasized working through college, choosing useful majors and not overpaying for the “college experience.” “You’re $85,000 in debt for your college experience and you learned how to play beer pong. This is dumb, dumb, dumb,” he said.
Set Expectations Early
Warshaw added that one of the couple's biggest mistakes was not having early conversations with their kids about what they could afford. “You have to do your kids the service of talking about this early on,” she said. “Say it out loud when they’re 12 so they can start thinking about it,” Ramsey added.
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