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CNN Live At Daybreak

Marriage and Money

Aired August 01, 2001 - 07:35   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL LIN, CNN ANCHOR: Folks in one Pennsylvania community have signed on the dotted line. They are agreeing to give up using their credit cards for 100 hours. It's part of a national effort to educate consumers about borrowing money and personal finance. And, oh, by the way, the name of the town giving up their cards: Cashtown, Pennsylvania.

COLLEEN MCEDWARDS, CNN ANCHOR: No.

LIN: Yes.

(CROSSTALK)

LIN: Can you believe that, 100 hours?

MCEDWARDS: No, I can't believe it.

LIN: All right. But that includes sleeping hours so that actually takes a lot of time out.

MCEDWARDS: But when you think of the facts, I mean Americans charged more than $1 trillion on credit cards last year. That was an all-time high. And one of the things we talk about on this show when we have Dave Ramsey on is whether or not families should be scaling back on those kinds of purchases.

LIN: That's right. In fact, here's Dave Ramsey right now from Nashville.

Dave, what do you think about using credit cards?

DAVE RAMSEY, FINANCIAL CONSULTANT: Oh, we think it's always a good idea to get rid of them.

(LAUGHTER)

LIN: Are you cutting

(CROSSTALK)

LIN: ... off already?

MCEDWARDS: Sheers.

RAMSEY: Cashtown ought to be the name of every town, as far as I'm concerned.

LIN: Isn't that funny?

All right. Well, we've got some e-mails here. You know we were talking about marriage and money...

RAMSEY: Right.

LIN: ... but it doesn't have to be marriage, it can be partnering as well, whenever you pool your love and your resources together.

We've got the first e-mail here from David Shin.

MCEDWARDS: Yes, that's right. He's got a question about prenuptial agreements. Touchy subject, I suppose. He says if I had to make a prenup, I want it to be a fair one such that -- such as that whenever -- whatever -- I'm sorry -- we made up until the marriage -- so whatever they earned up until the marriage -- would be each others own and then whatever we made from the start of the marriage until the possible end of the marriage would be split 50/50. Can you do that?

RAMSEY: Well, I guess you can. I take a very controversial stand and I get a lot of heat for my stance on prenups. And I'll tell you where it comes from. Fifty-two percent of the marriages in North America end in divorce. A lot of the reason for that is is that we don't have enough commitment in our culture anymore and I think prenup is planning the divorce. I think you're planting the seeds for divorce. If you love your money more than you love me, I don't want to marry you. I'd rather -- I want to marry someone that'll take a bullet for me. I want to -- I want to marry someone who's not that selfish.

MCEDWARDS: Dave, that doesn't sound like you.

RAMSEY: And I want -- and I want to be that for somebody. So, no, I don't believe in prenups at all so I wouldn't do it.

MCEDWARDS: But you're -- but you always say prepare for the future. And I know what you're saying, philosophically you're preparing for the end of the marriage, but you're the guy who always says get ready for the unexpected. What if that marriage fails, shouldn't you protect yourself?

RAMSEY: Well, shouldn't you protect yourself? Again, it's not philosophical. There's a reality when you plant those seeds in a spiritual, in an emotional thing like a marriage, and I -- you know, again, I'm playing marriage counselor, but I've done it for so many years as a -- as a financial counselor, we watch these families rip apart and what it is is they entered without a level of commitment.

LIN: Yes.

RAMSEY: Literally, you are saying you like your money more than that person.

MCEDWARDS: Well,...

RAMSEY: You're more concerned about your future with your money than you are your future with your spouse. You've got to give up everything to win in a culture that doesn't respect marriage anymore.

LIN: You're getting Colleen really heated here.

RAMSEY: I know it. It's bad.

MCEDWARDS: No, no, no, I'm not -- I'm not heated at all. I just think it's -- I'm surprised to hear you saying...

LIN: Yes.

MCEDWARDS: ... don't plan in this way or that -- well, not don't plan, but that...

RAMSEY: Yes, that's the point, don't plan.

MCEDWARDS: ... -- for you it's contrary.

RAMSEY: Don't plan your divorce.

LIN: Go with the flow.

RAMSEY: You're exactly right.

LIN: All right. Well, how about this, can you have it both ways, get married but keep everything completely separate? I mean all your checking accounts, file separate tax returns -- no?

RAMSEY: Why get married? What's the point? It's a join venture; it's not a marriage.

LIN: I don't know, George W. Bush brings Laura coffee in the morning. I think that's a pretty good reason.

RAMSEY: It's the way it ought to be right there, you ought to be serving your spouse like that.

LIN: All right.

RAMSEY: No, when you combine your assets -- we force couples in our counseling, ooh we're mean, we're dictatorial -- you know to combine their checking accounts even. Why, because when you can agree on your spending and you can agree on your future dreams, you've agreed on your dreams, you've agreed on your priorities, you've agreed on your passions, you've got a heavy level of communication in your marriage, you've even agreed on your fears. So when you -- we've taken people who have been married, 13, 17, 28 years who've had separate everything and bring it together and they take a good marriage and make it great or one that's on the rocks and bring it back from the edge and it's able to heal because we're forcing folks to become one. Remember the preacher said and now you are one,...

LIN: Right. RAMSEY: ... but then we go and we do everything separate. Don't do that, it's bad marriage stuff.

LIN: OK, well one thing I wouldn't want of my mate's is his credit card debt. There's a question here by Jennifer Meyer (ph) and she writes, I have credit cards and the balances are small. I haven't gotten my emergency fund built up yet to the 1,000 -- to the 1,000 but the $600 check will definitely do that.

RAMSEY: There you go.

LIN: Oh, she's talking about her tax refund.

(CROSSTALK)

MCEDWARDS: The tax return, yes.

(CROSSTALK)

LIN: OK. My credit cards are paid with the snowball effect right now and I was wondering what you think about paying off auto loans? So she's using her -- it sounds like she's using her tax rebate to pay off her credit cards but what about auto loans? She says she has two, so how to deal with it?

RAMSEY: Well, she's walking up -- well, she's walking up those baby steps that we talked about last week. A thousand dollars in the bank first, mini emergency fund, then work your debts off smallest to largest. Just pay minimums on everything, including the cars and attack the little one. And work right down that list on that debt snowball. The auto loans are on that list. They're the big ones at the bottom, usually, and so we're just going to attack everything above, $1,000 in the bank. We're going to attack the smallest debt, probably the credit card in this case, and work your way down to the auto loans. You'll get to them, just stay with it.

MCEDWARDS: So if your auto loans are, let's just say, smaller than your credit card debt, should you go for that credit card debt too...

RAMSEY: No.

MCEDWARDS: ... given that it may be at higher or probably is at higher interest?

RAMSEY: No, always go with the smallest debt...

MCEDWARDS: Go with the smallest.

RAMSEY: ... because we're trying to win some stuff. We're trying to actually -- you know go on a diet and lose weight. That will keep you on the diet. If you go on a diet and gain weight, you're like, oh, this cabbage thing ain't working, you know,...

MCEDWARDS: Yes.

RAMSEY: ... we've got to change it around. So, no,...

MCEDWARDS: Dave,...

RAMSEY: Yes.

MCEDWARDS: ... how do you suggest married couples save? I mean what sort of steps, what sort of, you know, disciplinary things you suggest for couples to sort of decide what their goals are and how they should actually save money and what they need to save it for?

RAMSEY: Well, we teach them to do a budget together and in that budgeting process they will begin to do things like saving and get out of debt together. And what typically happens is opposites attract. Usually there's a free spirit in the family and usually there's a nerd in the family. That's what we call them. I'm the nerd at my house. You might guess that. My wife is the free spirit.

Now the nerd is the one that likes everything organized, it has to be perfect and they're usually the one that likes to do the bills. You know they get a -- they love the checking account balancing. And we teach them to come together. Normally the nerd comes in with the budget from God and says this is the way we're going to live and everybody else laughs at them. And what we want you to do instead is have a budget committee meeting where the nerd and the free spirit sit down together and agree on the spending. And there's some rules for the budget committee meeting. The nerd has to shut up. Too many times the nerd uses this as an opportunity to preach at the free spirit and tell them what to do. The free spirit has to come to the meeting. Now that's a good thing.

LIN: Yes.

RAMSEY: Because a lot of free spirits don't want to deal with this stuff. Another rule for the nerd is is that this is a meeting. You have about a 17-minute window with free spirits. After that, they leave and go do something else. And so they've got to come together and learn to work together on this. Larry Burquet (ph) says if people just alike get married, one of you is unnecessary.

LIN: All right. And no sharp objects, no hostages and sex is not negotiable.

(LAUGHTER)

LIN: Family planning tips, too.

MCEDWARDS: That's quite a bit of advice this morning. Thanks very much, Dave Ramsey, appreciate it always.

LIN: Thanks, Dave.

MCEDWARDS: Expect you back next week, too, I think, don't we?

RAMSEY: Absolutely.

MCEDWARDS: See you then next Wednesday. LIN: Bye-bye. All right.

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