Wealth Is A Strategy, Not An Accident

**Dave Ramsey** (0:13)
I'm Dave Ramsey, and I'm here to help you transform your life. From the Ramsey Network and the FAIRWINDS Credit Union Studio, this is The Ramsey Show. I'm Dave Ramsey, Jade Warshaw, number one bestselling author. And my Ramsey personality is my cohost today. Chris is in Phoenix. Hey, Chris, how are you?
What's up?

**SPEAKER_3** (0:36)
Hey, so I'm in a deep situation, so this is kind of a serious thing with me and my family right now. So I have a mother, single mother. I have three other siblings. We are from Wisconsin, and my mom, she does pretty good financially. She's a doctor, but she wanted all of us to go to college.
With us going to college, she took out multiple Parent PLUS loans in order for us to go to school. She moved us out to Arizona. So she kind of took care of us, like paid for my rent for two years while I was in school, graduated. Now I'm in a good financial position. My mom is in Arizona and she want to purchase a $800,000 home. They won't let her purchase the home because of her debt to income ratio from the Parent PLUS loans that she took out for us, me and my siblings. I'm kind of the more financially responsible one. So she asked me if I could be a co-signer on her $800,000 mortgage. Keep in mind, I'm only 22 years old.
I have my own place, I have my own car. I don't really have much debt outside of the Parent PLUS loans that I'm helping my mom with. But she's kind of guilt tripping me and saying, hey, out of everything I did for you, this is the least that you can do for me. So it's kind of a fight with the family at $800,000 mortgage that I'm scared to co-sign because one, I don't know if I'm ever going to be able to get off of it.
And two, I don't. My mom is, she's pretty smart. Like she's not like bad. No, she's not.

**Jade Warshaw** (2:03)
Well, there's something really important here that can easily be missed, which is just because something turned out okay, doesn't mean there wasn't a mistake attached to it. Right? Like you guys ended up in college and you guys are okay, but there was still a mistake that she made in co-signing all those loans. Otherwise, she would be able to buy her house no problem, and there would be no debt-to-income ratio issue. You've got to go to her and say, here's the thing, Mom, I thank you for everything you've done for me, but co-signing is not a good thing.
The same way that you're having problems because you co-signed, if I co-sign for you, I'm signing up for the same set of problems. I'd rather do this and I'd rather you find a way to do this in a way that there's no mistake attached to it.

**Dave Ramsey** (2:48)
Agreed.

**SPEAKER_3** (2:49)
Got it.

**Dave Ramsey** (2:50)
But she's not going to accept that because she's already gone into travel agent for guilt trip modes.

**SPEAKER_3** (2:55)
Oh my goodness, yeah, it's been so bad.

**Dave Ramsey** (2:57)
So let me ask you, how much Parent PLUS loans did she take out in total? Do you have any idea?

**SPEAKER_3** (3:02)
For me, all four of my siblings, probably around $200,000.

**Dave Ramsey** (3:05)
Okay, and you said she's a doctor.

**SPEAKER_3** (3:08)
She's a doctor, yes.

**Dave Ramsey** (3:09)
What does she make?

**SPEAKER_3** (3:10)
She probably makes around that, I would say around $160,000.

**Dave Ramsey** (3:14)
Okay, all right. So I'm gonna gift her a total money makeover book from me and a year's subscription to the Every Dollar app and suggest that she decide starting today that she become financially responsible for the first time in her life because what she did was very irresponsible. It was stupid, okay? What she did was stupid. She was of good heart and she was intending good things and she was putting herself on the line for her children, which sounds like a good warrior princess single mom. I appreciate all of that. But then to turn around and ask a 22 year old to help you buy a million dollar house, you ought to be ashamed of yourself, lady. Right. That's ridiculous, okay? And as a dad of children that are grown, they're not children anymore, adults, generation two, that are responsible, I would never do that to people that I love.
And it's just wrong, okay? So no, you don't get to buy a house because instead, you chose Dr. Lady to go into debt to send your kids to school. I don't agree with your decision. I agree with your motives. Your motive was sweet and kind and noble, but your decision was stupid, and now you have to work your way out of stupid so you can buy a house. So for the next two years, you get to live on $60,000 and put $100,000 on $200,000 worth of student loans for two years and they go away. Boom! And then you have a life instead of screwing up your own kid's life that you set out to help originally.