You Can Still Escape the Debt Spiral Before It’s Too Late

This is the Ramsey Show, where America hangs out to have a conversation about life, specifically your money, your profession, and your relationships. 888-825-5225 is the phone number to jump in.
We'd love to hear from you, 888-825-5225. Joining me today is Dr.
John Deloney. I'm Ken Coleman.
We're excited to be together to help you out. Let's get it going with Michaela in Raleigh, North Carolina.
Michaela, how can we help today? Good afternoon. Thank you so much for

allowing me to receive your wisdom today. Oh boy.
Well, don't thank us too soon. We haven't even

dispensed of it yet, but I like how optimistic you are. What's going on? So I have both a money

and a relationship question all in one. In January, my father-in-law sadly passed away

and left behind my mother-in-law. They were married 52 years and he handled all of the finances.
So on his deathbed, my father-in-law asked my husband to take care of his mom and take care of the rental property, which is going to be basically her income going forward. All great.
We didn't realize until a couple months in that the property was left very poorly maintained. There were some back taxes on it.
We had to, there's been no insurance on the property. HOA is very high.
So after we looked at all the numbers, we realized this is never going to be a truly income producing property where she can actually receive income from it. And the only reason it has been lately is because it was not maintained well.
So it's been a point of contention because it makes sense to sell it and get her something else that's more income producing for her, but she doesn't understand all that. And she's very scared right now.
And my husband just wants to leave everything as is. And she thinks that we're kind of stealing her money right now, which is not the case.

We're just trying to back pay ourselves from all the expense we had to put into the rental property.

So my question is, because the death is still so recent, do we just leave everything alone for right now?

Or should we pursue selling it and buying something that would actually be income producing for her, for her to live off of?

And if so, at what time does that make sense to do that?

Well, do you guys have the actual authority to sell the house on her behalf?

We do. It's been changed over to our names.

How old is she?

She's 74.

Okay, and how recent was the passing?

It was in January, two months ago ago is anything on fire right now no i i would wait i would wait six months to a year if nothing's on fire okay because you're right every decision that you make relationally is going to be seen through a pair of glasses that are just covered in hurt right now hurt and fear okay and it's gonna i it can hop but tell me if i'm wrong it's gonna be a a series of think of it this way she has leaned on a pillar for her entire married life and that pillar's gone and the person she may love him, think he's a good man, but she wiped your husband's booty, right? That's in her mind. And so there's going to be a level of trust establishment made through a bunch of teeny tiny consistent showing up over the next six months, over the next year.
Very transparent. By the way, data is going to help, but it's not going to solve the fear problem right now.
Right now, it's just all. She lost a lung and a leg and two chambers of her heart, right? And so she's going to have to slowly realize that she can lean on him now.
My question is, let's go back. You said you guys are trying to get back what you put into it.
I'm paraphrasing what I heard. Explain what we're talking about.
Did you guys personally put money into this to try to fix this property up? Your money? We had to. When we got it, it was about to be put on auction because the taxes hadn't been paid on it in two years, and we didn't know that.
No, I understand you had to. I'm not questioning that.
I'm saying how much. I wanted to know if it was your money, so you answered that.
How much did you put into it? So we've put in about $3,400 for taxes. We've put in another almost $3,400 for an insurance policy.
We spent $800 on a home warranty. The HOA has been about $450 a month.
There was some extra HOA that we had to pay on that that was unpaid. We've had to fix two broken windows, change out the washing machine, and the HVAC unit needed some work as well, which amounted to about $1,500.
So it's... So I got you guys approaching what? 10 or 15,000 bucks.
I got you at around 12 grand. Is that roughly, is that about right? Definitely been over, it's definitely been over $10,000.
Okay. So the other question then with John, what John asked is right, I think he's right, and I agree with your partner on that, that to wait to sell the house, do you, is that $15,000? Let's just say it's $15,000.
Let's say $12,000 to $15,000 is what you guys personally put in. Do you need that right away? Are you guys okay not getting that away? Well, we're okay.
That was my question. My husband wants everything to be run by books, so I pull the money from the rental income, but then nothing's going to my mother-in-law, and she doesn't understand all the expense associated with it.
So that's where we're having a point of contention is like, how do we move forward with this on the money aspect of things? No, no, I get it. That's why I'm bringing us to this point.
And I think it comes back to John's advice.

Would you also put that in the same bucket?

Because right now, they do need to explain it to her.

Absolutely.

And you need to explain it to her as if she's a fourth grader.

So there's some responsibility on you all.

And by the way, that's not you, your husband.

There's the relationship.

You want to maintain the sweet daughter-in-law relationship.

So Hubs has got to step up, sit with mom, and I'll defer to John on the appropriate timeline, but it needs to be explained to her as though she's a fourth grader and say, Mom, this is all about you. We put our money into this so that you have this.
We have two options going forward. It's not going to generate enough income, and you've got to explain it to her and show it to her at the appropriate time.
That's right now. I think that's okay, too, but I didn't know what you were going to say on that.
That's math, right? Yeah. And as close to writing it down with a crayon as you can.
This is funny. I was on the phone with a 50-year-old earlier today who's entering into— Slow down.
Slow down. It's getting really old.
This is getting personal here. I don't know where you're going with this.
But here's the thing. This 50-year-old's heading in to buy a house.
It's not an age thing, but heading in to buy a house, and I gave that exact wisdom. I said, listen, don't feel ashamed to ask the mortgage company to explain this to you as though you're a high school student.
That's the exact language I used. And so a 74 year old, he may have said for the last 30 years, I got it.
I'm taking care of it. Sitting down and saying, okay, mom, let me just show you this.
There were two windows that had to be broke. I mean, it had to be fixed.
Here's the exact cost. This house was about to be taken.
Dad was sick and he didn't realize the taxes. We're not going to ever pin him as though he's a bad guy.
Because immediately then she's got to defend him. We're not going to get into that.
Hey, we had to pay these back taxes. They were $3,500.
And here's the receipt for it. And she might go, no, none of that's right.
Mom, it's right. It's right.
And if you think in that conversation she can get to, oh, well, then we just need to pull this out of this rental income. Great.
If you don't, and you've got 15 grand, then it's not going to burn a hole through your family. Pay the 15 grand and we'll figure this thing out in six months or a year when the smoke lifts on this deal.
Okay. Yeah.
Because what you're building towards, Michaela, if I heard you correct, is that you and your husband believe this thing needs to be sold. Correct? It's the best move for her.
That's what I heard. We do.
We've had a lot of difficulties working with the HOA company, and that's never going to go away. So I think if we could get a different property that's going to produce more income for her long term.
No, no, we get that. What we're saying is explain the math now.
Don't talk about selling the house six months to a year is what John is saying. But we're going to build to that.
We've got to build trust with her in explaining. And I would even show her receipts on the windows.
Absolutely. Just walk her through.
Go, Mom, we did this. We'll settle it later.
We just want to grieve with you. I like that approach.
But then when the time is right, you've got to cast vision the same way you did on this numbers thing. Thanks for the call.
So sorry for your loss. This is The Ramsey Show.
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Make sure to check it out, you guys. All right, let's go to Travis, who's joining us in Washington, D.C.
Travis, how can we help today? Hey, how you doing, guys? Thanks for taking my call. Sure.
what's going on? I have a question. Education and career call.
Basically, I was offered a job for about $150,000 total comp. I was also offered a full scholarship to a top 25 business school.
So my question is, should I quit my job to go to business school? What would be the reason for going to business school? What's on the other side of that? So I want to do a transition from account management to product management. And all the roles that I've seen and all the roles that I'm looking for are requiring that MBA.
Okay. And you're currently in account management making 150.
Did I understand that correct? Total comp, yes. Say that again? Total comp is $150.00.
Oh, your total comp. What does that include? Right.
So $114.00 is the base, and then the remainder would be your comp paid out over RSU. Okay.
All right. So how are we paying for business school? With a full scholarship.
Full scholarship. Are you going to be able to work and maintain your current job while you're going to business school, or is this an all-in, I'm absolutely quitting because I have to? Yeah, it's a full-time program, so I would have to quit.
How are you paying the bills? Well, fortunately, it's me and my wife, so she will continue working. So, I mean, we've talked

about how the finances will look. It'll be a lot less, of course, because I wouldn't have the income,

but the main trade-off that we're considering is the salary after business. Sure.
All right,

let's talk about the current situation first. Do you guys have any debt? No, no consumer debt.

And what's her income? You're going to go from combined income of what to what? Combined to 10 annual to about 98. Okay.
You've crunched these numbers, and you guys are not going to be struggling, just a little bit tighter. True or false? We will be struggling.
We'll be tighter. We do have our funds already that we have secured, and we also have some money that we have available in investments that we're willing to move around if necessary throughout the semester.
Okay, so a couple things here I'm hearing. We don't want you using the emergency fund just to pad the income.
Emergency fund is for emergencies only. And then I get nervous when I hear you talk about moving around investments.
What does that mean? Well, so what we did, we said we will be able to afford this change in income based on our expenses. Travis, let me recontextualize this.
When you call the Ramsey Show and say you're struggling, people, when they call us, they don't know how they're going to pay rent or they don't have food. Gotcha.
So when you say you're struggling, does that mean you don't know how you're going to pay your light bill and you may have to sell some stock to pay your light bill? Or are you saying we're not going to be able to go out to eat for two years while you knock out business school? Well, no, I didn't say that. No, he said they won't struggle.
He said it would be tight. Ah, okay.
Tighter. I thought he said he was going to struggle, too.
No, no. All right.
If I heard you right, Travis, you didn't say you guys will be struggling to make it paycheck to paycheck, correct? Correct. I don't foresee us going to be struggling based on what we've calculated, but it will be tight because we're cutting our income by half.
All right. Well, that's okay.
I mean, again, I calculated a move like this. It doesn't scare me.
I just don't want you touching retirement accounts. If these investments are non-retirement and it's supplemental, then that's the only scenario by which we would be okay with that.
But really, we want you to cut, cut, cut, and not be struggling where you go backwards financially. What do you think? What do you think? And let me change the way I just asked that.
Not what do you think and not what do you hope. When you have sat down with some people in your field or you've sat down with one of the executives at the company where you work and it's a rare thing because because mba programs especially executive mba programs but two-year laser focused mba programs are cash cows for universities yeah they used to be big time and it's it's leveled off for you to get a full scholarship to a top 20 mba program tells me you you've got some kind of special, you've got something going for you that is unique because they just don't hand those out.
I know some hotshot people making good money that went to MBA programs and they had to pay full freight. So something special has happened for you.
So when you sit down and talk to somebody on the other end of this thing, what do you think you're going to make?

What leverage is this going to give you besides just a job? Because I promise you in 10 years, I promise you in 10 years, we are going to be in a place culturally and economically where you have to have crossed this particular, you have to have checked this box to come work for us. Nobody's going to care.
but I do I do know

and I trust you

and I know this to be true

there are jobs

that still have

that this particular, you have to check this box to come work for us, nobody's going to care. But I do know, and I trust you, and I know this to be true, there are jobs that still have that, we won't even interview you unless you've checked this box.
So fair. What are you going to be making on the other end of this deal? You mean from just like a value add outside of salary? No, no.
Just what are you going to make? You make $125 now, $150 now. When you walk across the stage with an MBA from a top 20 program and you circle back to be a project manager at some of these firms that you're working at now, are they going to pay you $300? Are they going to pay you $450? What's the ceiling for you then? They want to be out the gate.
What I'm anticipating is when my first role out of an MBA program would be about the same salary I'm making now. But what I'm confident about is that my earning potential will be higher.
Right now I don't have that MBA or that math program. So the role in the math is shorter at my max.
Where does that confidence come from? The confidence for the... That your long-term potential is higher.
Because I've talked to a lot of students on the front end of grad school, man. They're like, no, no, no, when I get out, I'm going to make $140,000.
And then I say, just go look at the market. And they're like, oh, man, $75,000.
So what makes you confident? Well, in the first year out, Um, based off just the school stats and what I've, what I've seen, what I've researched from the entry, not the entry jobs, but the jobs that they have, um, uh, recruiting for, they're looking at around one 50 is the average. So it could be less, it could be more when I first get out.
So there's a chance that I would have less of a salary when I first get out of business school. Um, but I'm looking at three to five years afterwards, being able to earn the income potential to get a more senior role, which I'll be more qualified for, and also being able to transition industries a little bit.
So how long is the program? Two years. Okay.
Yeah, you know, look, I challenge the process naturally when I hear someone say, I have to have an MBA. But I think John addressed it correctly.
There are, in fact, I believe that you've done research and that some of the jobs that you want to be able to get into are requiring or certainly recommending that. So I'm not going to dispute it.
But I really, John just touched on something that I wanted to jump on. I'd like to see you get less information online and put in your head that this is going to pay off.
And I want you talking to people that are where you want to be five years from now. I'd really prefer that.
I wrote an entire book on that, The Proximity Principle, and I think having lunch or coffee

with some men or women that are where you want to be down the line and getting their

opinion, to me, far more important than what any business school puts on their website.

Because that's a marketing tool that a school is going to put on their website.

Here's a couple of things they can factor in, not always, but sometimes.

One, they may give you the average salary of those people who got jobs. And they don't address the folks who didn't get jobs.
The other thing they may do is say, here's the average salary. What that doesn't paint is, I could right now put on a piece of paper, the average graduates from my PhD program make X.
But because I work not as a day-to-day therapist, but because I'm working where I work now and I've got two bestselling books under my belt, I would drag that average way out of whack. And so it would say, man, the average graduate makes this much money.
Holy smokes. I need to go do that.
And that would not be representative of what most people make. That's number one.
Here's number two. I heard a little inkling of this.
If you're bored at your job or you just done where you work before you take two years off. And by the way, I'm, I'm as pro higher ed as anybody in this building, right? I'm as pro go get a free MBA.
If you can get that, that's a great credential. But if you're just bored at your job, you're done with it.
If you're already pulling 125, 150, I think you've got the skills to go be a project manager somewhere right now. And so it's worth at least having one or two conversations with real people out in the field, my brother.
But yeah, all things considered, if y'all can float it for two years, go get that free credential from a top 20 school. This is the key.
You guys got to be all in on the sacrifice. And you said it was a sacrifice.
Be all in on it. No concerts, no restaurants.
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Well, Dave Ramsey and Dr. John Deloney, my co-hosts today, are going to be heading out on the road to several cities.
We've got Louisville on April 21, Durham April 23, Atlanta April 25, Phoenix May 5, Fort Worth May 7, Kansas City on May 9. It's the Money and Relationships Tour.
Dave and John are going to be out there taking your questions. A little bit different format, John.
Give us a little bit of a preview of this event. The best way I would suggest it, it's going to be stuff people haven't heard before principles will be the same but the the stories will be different the interactions will be different if you ever wonder man what do these guys talk about when the microphones are off and what uh our fearless leader james edits out of the show that will be live it will like i said i've said a few times with dave i don't usually get nervous on these big events i just think they're fun fun.
I'm kind of puckered up about this one. This one's going to be fun.
And we're going to throw it out to the audience. So we'll have the big screens in these beautiful theaters across the country.
And we'll have a number of topics that the audience can vote on in real time and say, we want to get your take on this. We want to get your take on what's happening here.
And in a very polished world where AI is just synthesizing everything and making everything clickbaity, this will be a way to interact with Dave, with me in a way that most people don't ever get the opportunity to do that. And it will all be live.
And I like having fun at Dave's expense sometimes on stage. And so we're going to have a blast.
Boy, that might be interesting. Yes.
He likes control. He does.
He signs my paychecks. It's going to be fun.
And you control so this is gonna be a great combination yeah i'm looking forward to by the way no matter how many times the audience asks please don't tell them what hair product i use i'd like to keep that uh that's a that's a secret i appreciate george on the other hand has his hair product tattooed on his chest so i'll share that it's true it's absolutely and dave doesn't need hair george is like my grandmother you get his hair done once every three months and just stays that way. That's exactly right.
He has that little helmet that comes over. Yeah.
Yeah. And Dave, his hair product is largely an Armor All product.
And so we won't talk about that. Oh, man.
We'll have a blast, dude. Hey, if you want to get your ticket, go to RamseySolutions.com slash tour.
That's RamseySolutions.com slash tour. If you're tuning in in via youtube or podcast the link to get the tickets to the money and relationship tour with dr john and dave uh are in the show notes which by the way so many other great things are in the show notes everything we mentioned here on the show uh are in the show notes james our producer likes to call him a treasure trove the show notes all right 888-825-525225.
Alexis is joining us now in Salt Lake City. Alexis, how can we help? Hi, thank you so much for taking my call, first of all.
I'm in not a bit of a pickle, a big pickle. In 2022, I had to go on short-term disability for some kidney illnesses and so on.
I was on that for three to six months and had to end up quitting. And in that time frame, my grandfather ended up getting a blood cancer.
Oh, no. So I ended up moving.
I know. So I ended up moving from California to Utah to help take care of him.
He did beat it. He's in remission.
Awesome.

So that's great.

And yeah, and then he actually got colon cancer, but he's in remission from that now too.

My goodness.

I know.

And in that time frame, my grandmother ended up getting sick, and I had to become her

full-time care kicker, and she went to hospice and unfortunately passed away.

Oh, my.

You have been through it, haven't you?

Sorry if I break down a little bit. No, you're okay.
You're okay. Hey, listen, that's tough stuff.
This is a lot all in a row. That's right.
Can I ask you a question to kind of circle out a little bit? Yes, for sure. Who told you that you were the one person who had to take all of this on by yourself? I didn't take it on all by myself.
My grandparents are basically my parents. My parents are not helpful.
They have their own problems with drugs and alcohol, so that's not been a helpful situation. My uncle, who I've lived with and have had a great relationship, has stepped in.
And that's my uncle. That's his father, who is my grandfather.
So they've helped out financially and so on. But I was the main person who moved here and was with them 24-7 and things like that.
How have you eaten and paid your bills since then? Credit cards. Okay.
How much have you racked up? I racked up about $42,000. $42,000? Yeah, $42,000.
Do you have any other debt? No, it's just in credit cards. Okay, and are you working right now? No, I'm not.
What about your kidney disease? What's the status of your health and your ability to work? Because if I understood you correctly, you stopped working because of the kidney issues, correct? Yes. So I'm in the midst of getting diagnosed with lupus, so they're trying to figure out that.
And I also have rheumatoid arthritis, and there's a couple other autoimmune disease that I'm trying to figure out. Are you able to work? Not at this current time, no.
I'm in the midst of going to doctor's appointments myself. So we've already got $43,000 in debt.
Doesn't sound like we have any kind of diagnosis or treatment plan in place right now. What do you anticipate, the timeline being that you get some type of diagnosis plus treatment, and any sense of when you might be able to go to work, and how are you going to stay alive financially? What do you know? So I'm hoping in the next six months I can get treatment for the diagnosis.
I have been diagnosed with rheumatoid arthritis. I have tested positive for lupus, but it's a symptom-based disease, so we're trying to limit, you know, what is and what's not.
Any sense from your doctors as to when you would be able to work? No, not really. The waiting time to get into specialists is pretty hard.
I've been on waiting list to get into neurologists and different rheumatologists, different GPs. So what's the plan as of right now to be able to fund your life? As of right now, what I'm looking at is trying different things.
I'm trying to see if I can do some part-time marketing. I'm also looking to see if I can do some part-time dog watching or dog sitting just to bring in some type of money.
I'm hoping in the next six months I can get a diagnosis and get some semblance of my life back. Well, the diagnosis, it's going to be a confirmation, but it won't be a magic wand.
No, I know i think part of i think an answer would help absolutely like not knowing not not being able to trust your own body is a terrifying proposition no question and so is it okay if ken and i love you in a way that we tell you the truth that probably nobody has is that okay okay um when it was about caring for you somewhere along the way you got the story that you're not worth caring about but when it came to caring for other people you packed up and moved across the country and you made it happen because that's who you are you're way way stronger and way tougher than you um than your body allows you to believe you are and the stories you've been told by people all around you your whole life. And so here's me and Ken telling you, or I won't speak for you, Ken.
Here's me telling you I love you. The greatest gift you could give as a caretaker for somebody else is to make sure you're okay.
And right now, your body is revolting for a number of different reasons, but I'm going to suggest that one of the main reasons is it knows you're not safe because it doesn't have groceries. It doesn't have a roof.
It doesn't have a friend that you can go laugh with or weep with. And so, this is going to sound counterintuitive, but not kind of hoping.
I would really love you to see for nobody else, but just Alexis, you to find two part-time jobs that you can do, even if it's uncomfortable, even if it's a little bit painful and begin to show your body. I can.
And that goes counter to everything. And I don't want to minimize your pain.
I know you're in a ton of pain. And like you said, that not knowing, there's no name to this dragon that keeps burning down how you feel every day.
Like, man, that is haunting. I get that.
And it may be that when you get these diagnostics, you can go file for SSI and go through that whole complex place. But I don't see a path forward, but you got to make some money.
I agree with you, John, wholeheartedly. Alexis, real quick here, what we've got to do is you've got to come up with a baseline of what I need to make to be able to just survive, take care of myself.
And then I know the 43, 000 or 44 seems insurmountable it's actually not it's not um don't file for bankruptcy don't sign up with one of these dumb credit things just get yourself above water by working the two jobs or whatever i couldn't agree more with you john and that means care about you as much as you care about you've got other people in your life you've got what takes, Alexis, but you've got to fight right now or this is going to get way worse. So fight.
You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies. And there's too little life insurance or none at all.
Grieving families are suddenly left behind scrambling to pay bills and trying to make ends meet. I also discovered that there are a lot of ripoffs in the life insurance world like that whole life crap posing as an investment opportunity.
What you need is level term life insurance usually 10 to 12 times your income which is the, most affordable way to protect your family. The key is finding an independent broker who represents a ton of companies and works for you, not for the insurance company.
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Visit Xander.com for instant online quotes, or for a more personal touch, give them a call at 800-356-4282. All right, folks, are you staying on track with the baby steps? If you'd like, you should take a quiz to check your progress and receive a personalized plan just for you.
All you got to do is head to the show notes, click on the link titled, Are You on Track with the Baby Step with baby steps complete the quiz this is a great tool just to see where you stand kind of shows you the mile markers if you will and it's really encouraging not discouraging but it'll create a customized plan as i said to kind of give you that momentum that you need to make it through so do check that out can i can i you and i were talking off air if you were watching the news right now and it feels like the world economy is melting down and people are playing roulette with your retirement funds and you're this and you're that you literally you can send a note to your congressman you can call you can write an email but you you can't participate in what's happening at that level. What you can do is look in the freaking mirror and say, as for me and my house, how are we doing? Right.
And if you don't know where you and your house are, this little tool, staying on track with the baby steps and receiving a plan, that's a thing you can channel all of this excess energy, anger, rage, celebration, whatever you're feeling right

now, walking around your house, walk around the neighborhood. And this is the pot talking to the kettle here, man.
Walking around just being exasperated literally helps nobody, helps nothing. And it just assures you that you're going to have a stroke or an aneurysm by clicking on something as simple as, all right, as for me and my house, how's our money right now? What's the honest truth? Where are we? And channeling into things you can actually do something about, you can actually control and getting off the social media train.
This is actually a thing, a Xanax for a family. And you know what? It's not a Xanax.
It's not a way to numb out. It's a recipe for what do you do next when it feels like everything's on fire around you, right? Go check this out.
Go in the show notes, click on the link. Are you on track with Baby Steps? And give yourself something to do with all this excess going on in our houses right now.
Well, speaking of what's going on right now, let's just go back to last week when we saw the volatility in the stock market or any time over the last few decades that you've listened or watched the show we have a lot of new people john that are coming all the time so for the newbies had you talked to us or called us last week and said what do i do with my 401k i'm watching it plummet because of the stock market we would have said what john nothing we would have said sit you can only get hurt if you try to get off the roller coaster in the middle of the ride ride the roller coaster enjoy it you're going to end up and then we came back monday and went down even further and when it came out tuesday it's all coming down and then as i look at it right this moment as i look at his rugged handsome face it's up 2400 points the biggest rally in five years so we had the what was it the biggest biggest fall off one of the top five all time and now here we go so just the point here is trust us we have a method door of madness and this is why you hold long term oh by the way and if you don't agree with us there's this guy named warren buffett who says the same thing so uh point made here don't ever let the headlines dictate your financial decisions but but i do want to acknowledge i'm feeling it i'm feeling the chaos and it was it was our mutual friend our manager that we share out here like it was like man uh i know a guy and he said you should just control. And I looked at him and was like, well played, dude.
He's just reading my own book back to me. You're right, I can't do anything about that.
I can make sure me and my family are on track. And that's what I can control right now.
So here we go. Here we go on the rollercoaster.
Today it's up. Whee! And tomorrow.
Who knows? Alright, let's go to Daniel who's waiting on us in new york daniel how can we help hey thank you so much for taking my call sure what's going on i have a lot of different areas of debt and honestly i'm a young young guy i'm 23 years old i'm graduating with a master's um i'm over a hundred thousand dollars in student debt I have a car that has $13,000 in debt, and I have about $8,000 in credit card debt. And I'm just trying to figure out the fastest way to get out of debt.
I'm on baby step two, and I think I could pull it off in less than five years, but I just wanted to hear your advice. Yeah.
Well, first of all, glad that you acknowledge the baby steps and that you're on baby step two. And that's the answer to the question.
The fastest way to get out of debt based on millions and millions and millions and millions and millions of dollars by a lot of people using the Ramsey plan, that's the best way to do it. So you're already in Baby Step 2.
What have you accomplished so far? What have you paid off so far? Or are you just now beginning Baby Step 2 with the first target being the $8,000? I'm going to start making about $75,000 come May. That's pre-tax.
So I figured that'd be like $60,000 after taxes, and I'd have no rent and very minimal cost of living. Okay, so my point is, you have not.
My question was, have you started already, or is this brand new? As soon as you start getting paid? Brand new. Okay, so we're going to start with the $8,000.
That's the smallest debt that you have, correct? Yes. Okay.
So your minimum payment on those credit cards, we're going to go minimum payments on everything else, but we're going to go above and beyond the minimum payment on the $8,000. So the CAR and the $100,000 student loan, we're just minimum payments on those.
But you're going to put every extra nickel that you have towards the $8,000. What do you anticipate the payoff of the $8 the 8 000 how long will it take you to pay off the credit cards i think in two months two or three months that's huge what's your combined payments on those credit cards minimum probably like two hundred dollars okay great so we take this so what you watch you're walking through this debt snowball so once you pay off the 8k, you're going to take that $200 and you're adding that to everything extra that you've been pouring in.
And so now we're going after the car. And so that's how you do it.
Every extra cent you've got above and beyond that car payment plus the $200 that you've been making in minimum payments, and you're going to knock that car out. And then the big boy is the only one left, and's going to take some time.
Let me ask you a question about that 100K. Did you consolidate it all into one big lump or is that 10 different loans, one at $900 and one at $62,000? Right now, there are five different loans.
Okay. So here's what we're going to do.
We're going to take all of those loans and we're going to look at them individually. And whatever is the smallest,

you're going to pay that one off first.

Would you recommend consolidating them?

Please God,

don't do that.

No,

no,

no.

What are your amounts?

Right now there's one that's like,

there's two that are 20,000,

one that's 50,000 and another one that's 30,000.

And then there's a really small one. What's the really small one? It's probably like $50,000 and another one that's $30,000, and then there's a really small one.

What's the really small one?

It's probably like $2,000.

Okay, so we're going to reverse what I – we're going to –

We're just going to put that one at the bottom.

We're going to amend what I said.

The very first debt you're going to pay off is the $2,000 small student loan.

Then we move to the $8,000.

And I guess I should ask the same question there.

I'm glad you did that, John.

Is the $8,000 the total of credit cards, or is it just one credit card for $8,000? One credit card. Okay, great.
So that's the line. $2,000 student loan, $8,000 on the credit cards, then the $13,000 on the car, and then we've got a $20,000, a $20,000, a $30,000, and a $50,000.
Hey, how old are you, Daniel? 23. 23? What are you going to be doing making $75,000? Building skyscrapers.
Building what? Skyscrapers. Oh, geez.
Oh, see, I misunderstood that question. I was like, he's not going to be doing anything.
Oh, yeah, yeah. No living.
All right, here's my challenge to you. Do you have kids? No.
Are you married? No. Find two other jobs to do in addition to building skyscrapers and two or three other guys to live with to minimize any kind of living expenses and if you're living at home just sit down with your mom and dad and make a plan i'm gonna get out of here at 25 and i'm gonna have knocked out x y and z of all this stuff but uh to sit down with a plan otherwise you still going to be treated like you're a middle schooler but here's the deal you're you're in your early 20s you have no responsibilities i don't want you to have a life no comedy shows no going out to eat no coffee that you're buying you're using you're drinking that free swill on site you are every nickel and after two years i don't want you just to have paid off this one loan in the 8,000 bucks.
I want you to be through the car too. Just go berserker mode, dude.
You've got nothing holding you back. Okay.
And last thing, if you get online and you look at Instagram, they're going to tell you to take the highest interest rate. That's a recipe for disaster.
You're going to get $2,000 into this 50 grand, and you're just

going to quit. Just follow the plan, follow the plan, and work like you've never worked before,

my man. You've got this, Daniel.
You started off the call. How do I do it? Well, you're already

planning to do it, so now just walk those steps out. You'll get there faster than you possibly

imagine because of one fabulous word, momentum. Good hour, Dr.
John Deloney. I'm Ken Coleman.
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Alongside Dr. John Maloney, I'm Ken Coleman.
We're so excited that you've joined us. 888-825-5225 is the phone number.
888-825-5225. We'll kick it off with Tim in Orlando.
Tim, how can we help today? Good afternoon. Thank you for taking my call.
Sure. I just had a question.
I wanted some help on determining how do you figure out if you're a candidate for long-term health care? Hmm. Let me flip that on you.
What are you thinking when you're thinking about calling us on long-term health care?

What's your position?

What are you thinking?

What are the circumstances?

Well, my wife and I just retired this past June,

and we're not sure at what point are you comfortable with

or would we be comfortable with being self-sufficient as far as self-insuring.

That's the answer.

And then, oh, I'm sorry, I didn't hear you.

Yeah, that's it.

Thank you. with or would we be comfortable with being self-sufficient as far as self-insuring? That's the answer.

And then, oh, I'm sorry, I didn't hear you.

Yeah, that's it.

That is the factor.

So I was curious.

I didn't know if you were going to give me some kind of health situation or some health

history, but the bottom line is that if you can self-insure because of your investment

portfolio, your retirement position, then you wouldn't need it. It would be a general answer.
All right? So what's your situation? Explain it to us. Well, as far as health, we're both very healthy.
I am 60. My wife is 57.
And we live a pretty active life. And as far as financing and stuff, we probably have about $1.7 million in stocks and bonds and stuff like that.
Not including our house, which is probably valued at about $300,000. And, you know, we probably have about $2,000 in cash just in a local bank.
We are debt-free. We don't own, we don't owe anything on anything.
Yeah. John, I, in that situation, I mean, I don't think you have a huge, I mean, your net worth is going to continue to grow.
You said you're 60? Yes. And you have how much in retirement accounts? About 1.7 million.
Excuse me. I don't know what happened.
I just all of a sudden like got choked um so so the the federal government again it's take that that may just disqualify what i'm about to say but their estimation is about three and a quarter that the average american needs about 325 000 bucks after retirement okay and so um and i retirement, but to handle a crisis. Most people, about 80% of people won't live in a long-term care facility beyond five years, and about 20% will.
And so I'll tell you, my dad was a policeman. My mom was a teacher and then a professor, and they're not wealthy.
About 10 years ago, they're in their mid-70s now. About 10 years ago for Christmas, they bought the kids.
They got long-term care insurance for themselves. And that was one of the greatest gifts they've ever given us.
But they didn't have $1.7 million sitting in a retirement account. And at the time, they didn't have a paid for $300,000 house.
And so if push comes to shove, I love the idea that y'all are healthy. You go get checked up with doctors, all that presents that well.
For Ken and I, our whole life is, our whole job depends on everything was going just great and then the wheels fell off right and so i want to

always hold that that y'all doing everything right and life happens it happens to all of us and man you guys are in a pretty good position and assuming that we can get through the next few weeks months years decades with with the last 80 to 100 years being similar to the next 10 to 20 years, you can expect-ish that that 1.7 becomes 3.4 by the time you're 67. And then that 3.4 becomes 6.8 by the time you're 75-ish, 74-ish.
I agree, Tim. I think you can self-insure, but run the numbers on it.
And it comes down to your tolerance for risk. But based on the numbers you've given us and the amount of time you spend and all that, I think you guys would be fine.
I don't think it's a must for you. But I also would say in your financial position, you can afford it too.
Right. And that's like, for me, the thing I might, I'm just trying to project myself.
If I got $1.7 million in retirement accounts and a paid for house and I'm 60, I would probably let health insurance expire at 65 or 67, like whatever age you have that set to expire. But if you have an extra, off the top of my head, I'm making up a number and you may roll your eyes.
I don't know how much monthly long-term care insurance costs, whether it's $300 or $800. But if that's a payment you can stomach for the next decade and it's just going to let you have a little more peace in retirement, man, I'd throw that out the window.
You might spend that on fishing gear and coffee in retirement, right? That's right. Okay.
Yeah. And as far as like our health insurance, I'm a retired teacher.
so our health insurance, we pay about $350 maybe a month to cover my wife and I for the rest of our life. Amazing.
That's phenomenal. Hold on.
Can we double click on that? You're a teacher? What did your wife do? She was in property management. And so, yeah, I taught elementary, and she was in property management.
What's the most you guys ever made combined income? Probably around, oh, maybe about 170. Yeah, very good for you.
Congratulations, guys. Yeah, and I mean, we just got to the point where, you know, we doubled down on our house payment.
When we bought our last house, we did a very short mortgage, and we just doubled up on everything. That's awesome, man.
Congrats. So when you called us and started this call, which way were you leaning? Were you going to buy it, or were you leaning against not getting it? Well, we weren't really sure.
We had just started to check into it probably the last two weeks. We talked to one of our financial advisors, she gave us some options to go.
And I guess one of the questions that I wanted to ask you guys is, um, some of the people that we had talked to had recommended, uh, like a life insurance policy with the rider. And then some of them were like strictly life insurance.
And when we got thinking about it, some of the policies, um, basically like you didn't use them for long-term health care, you had no money at the end of the policy. You basically paid into it, but you have nothing.
Yeah, you're talking about whole life. You're talking about whole life.
Yes. Yeah, we're very anti that.
So run from that as fast as you can. Okay, and that's what I wanted to ask you, because one of the policies worked like you could either pay, you know, like a chunk of like $50,000 right up front.
No, no, no, no, no. Don't do that.
Don't do that. Don't do that.
Don't do that. No, you already know the answer to that.
You shot it in the foot as soon as you were telling us. You were like, oh, I get nothing out of it at the end.
Yeah, don't do that. So my last question for me is, did you run some numbers on the cost? Because I think John brought it up, and I think it's a fun exercise.
What would it cost you to get the long-term health care, emergency care service? I mean, insurance, excuse me. We have not run the numbers.
I mean, we just, like I said, we just started looking into it, and we've had a couple people quote us different numbers. One of them, you know, was about $5,000 a year.

And then, again, one of them said you could pay a lump sum of $50,000

and never pay again in the rest of your life.

But then they tried to tell us the advantage to that was if you never need to put a health care.

No, Tim, we keep going back.

Tim, stop talking about that.

We already told you.

I'm talking about long-term care insurance.

Look into it.

See what the cost is. You and your wife sit down and talk about it.
Let me say this. This is not a retirement vehicle.
Yeah, not at all. This is you hedging risk.
You don't want a check back if you don't use this at the end. This is you putting this on the table just in case this happens.
Go to RamseySolutions.com and go to Ramsey Trusted page, and you can talk to our friends at Xander about long-term care insurance

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All right, let's go to Rebecca in Chattanooga. Rebecca, how can we help today? Hi, thank you so much for taking my call today.
So I am in Baby Steps 7, and thanks to your program, I'm a Baby Steps millionaire. Nice.
And I'm about to thank you. What's your net worth? Well, depending on the market, about $2 million.
Good for you. Depending on the market.
It was 1.1 yesterday, 2.1 today. I haven't looked in about six weeks.
Oh, well, let's back up big time today. Continue that trend.
It has a lot of ground to gain. That's right.
My buddy who's my SmartVestor Pro texted me and he said, hey, just don't look. And that's good for me.
No, I'm not looking. I've got eight to 13 more years of work.
Outstanding. Good for you.
The reason I'm calling today is that I'm about to purchase a new vehicle. Congrats.
I'm allowed to do as a millionaire. Yes, you are.
And I'm going to write a check for it. And, of course, now they're offering me a prepaid service package.
And I know how we feel about extended warranties, and I definitely would not get one of those. But then when they talked about this prepaid service package, I thought, of course, my antenna goes up, and I immediately think this is how they're going to try to make their money off of me.
But I just wanted to get your take on that. Your gut is right.
Pass. That's a hard pass.
I'd say, no, thanks, guys. And just talk to them about how much money you have in the bank bank and that you'll take care of your issues with the car when it arises.
Thank you guys very much. They will make you feel so dumb.
Like you're the dumbest person who ever lived. You're a multimillionaire, and they're going to make you feel like you're dumber than a box of hair.
And they're going to tell you. But you've got to get the oil changed anyway.
And you can just do it now, and you can do it for $9. Yeah, that's why I told her her to flex with your last caller and the prepaid life insurance i thought hmm that's probably a lot like a prepaid service plan listen here's the deal i have a i love these kinds of things and uh i i i think you take a really strong stance because john's right they're going to try to talk you into it but if you lead out with the flex know what? I've worked really hard to be a multi-millionaire, and I'm good, so I don't need the service plan.
I just take care of things as they come because I've got cash, but I do appreciate that your leaders want you to give me this option. Just call it all out.
Put it on the table. And that's my little pitch there is how I would do that.
by the way that they immediately go oh rebecca is not to be played played with here here's this here's a similar one um i bought a new car i think two years ago and the person said hey here's he handed me a piece of paper and it said hey here's the estimated repair costs over the next x number of years you want to buy one of these prepaid warranties and i i looked up and i said oh man my bad um if you're already telling me that this car that you're selling me new is going to be broken in two years i'm going to go ahead and walk and it's like no no hold on if you're telling me right now that the engine's going to fail and that you think this is going to happen like i need to know that now because i thought i've bought a new car from a reputable place. And dude, it ended immediately.
Well played, sir. Immediately.
It was just over. I like that.
There you go, Rebecca. You got some options there, but the answer is hard pass.
And for everyone listening, here's the honest truth for Rebecca. She's got eight years left.
She's a multimillionaire. She clearly knows what she's doing.
And if you, let's just be honest about the math. If you, every three months, went to the dealership and you prepaid, you gave them 2000 bucks and you got lifetime free oil changes and you're a suit and they, they amortize that out over eight years.
Like if you come here, it's going to pay for itself 10 times. A, the chance that you still have that car in eight years, that somebody in your life hasn't had something that you've got to hop up and move.
There's so many factors over the next eight years that it's just not worth playing the gamble, especially when you've got $2 million. Just say, man, I'm going to get my oil changed where I want, when I want, and I'm going to move on.
Thank you. Love it.
Let's go to Kristen, who is joining us in Phoenix. Kristen, how can we help? Hi.
Thank you so much for taking my call. So my current situation is I recently turned 30.
I lost my job four months ago. And right now I'm living with friends on EBT and have state insurance.
Oh, goodness. And I'm also in $42,000 a day.
And so I've been actively on the hunt for a job, but I just haven't had any luck. And so obviously it's just been like a really dark and heavy place to be because at 30, I literally lost everything and I have nothing going for me.
Not true. Not true.
Not true. I'll call that one out.
The other ones are true, but I'll call that one out. Okay.
Thank you. Well, in the meantime, I've kind of revisited this dream that I've had on my heart for seven years, which is to start a nonprofit.
And so I was like, well, the market's so bad, let me just maybe go after my dreams. And so as I've been looking for work, I've also been taking steps towards a nonprofit.
And I've just been getting green light after green light and after green light, which doesn't make sense because I always thought when I started this nonprofit, I would be stable and 100% out of debt. Well, this is kind of where I'm at right now.
My dilemma, which is why I'm calling you, is I have a chance to receive $5,000 from someone who believes in me. And I could take that $5,000 and it could cover my basic needs for about three months.
And so do I use that $5,000 to go into creation mode and pursue this dream, or do I stay in, like, survival mode and wait until I get added debt? How much is the debt? $42,000. Yeah, a couple things.
I understand that you're down. We have limited time here, so I'm going to do less emotional loving on you, and I'm going to do some financial loving on you if that's okay.

All right.

So, number one, I understand that you have not had the luck that you feel like you would have liked to have had getting a job, but there are plenty of jobs, plural, that you can go get, and it starts today when you hang up. I don't care if you're walking dogs, you are delivering pizzas, you are stocking shelves at a big box store.
This is at this point right now, this is not about the career or the passion, the dreams. This is fighting to survive.
And I don't know how you've been surviving. And so today we start fighting.
So it's two, three jobs, and we start getting some momentum while we're looking for some stability, and we keep working the fact. I'm going to give you a copy of my book, The Proximity Principle, and I want you to read it.
We'll give you whatever format you want. But you've got to start making progress.
So we work any job that we can take, three jobs,

and we begin to work the debt snowball.

We're also going to get you, let's see, let's do Total Money Makeover.

We'll give you that too as well.

Financial Peace University.

Financial Peace University.

We're going to load you up.

Christian, just give her everything she needs, all right?

You need momentum.

You need momentum.

Now here's the deal.

Okay.

I would not take the $5,000 because that $5,000, you just say, hold that. There's a day.
There's a day in the future where I'm going to be able to take this gift and put it towards the actual launch of the organization. This is not $5,000 to keep you afloat for three months.
That is horrible, horrible idea. And that's the Kristen, by the way, that

John checked at the start of the phone call. I want to give it to John really quick here to kind

of give you kind of a pep talk. But right now, that's what you need to do.
Now, John, I'll tell

you about what you need to feel. What you need to do is don't even think about this nonprofit right

now. Exactly.
Listen, you've backed yourself into a corner. The way you phrased it is,

do I just keep surviving or do I go follow my passion and dreams? That's a false dichotomy. Okay? We're not just going to hunker down and look at the floor and walk around and it's not that or sunshine and rainbows.
Nonprofits are really, really tough. Okay? Yeah.
So here's what we're going to do. Like what Ken said, we're going to go get a bunch of tiny wins and we're going to make $13 an hour, $11 an hour, and we're going to keep showing up.
And then four months later, you're going to stand six inches taller. You've got this, Kristen.
You got this. And don't ever say again that you don't have anything to contribute.
Not true. Hey, technology has changed a lot in the last 30 years.
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Let's go to Jack in Sacramento, California. Jack, how can we help you? Hey guys, thanks for taking my call.
I really appreciate it. So I was wondering if I should get a consolidation loan for my father.
Um,

he's,

he has about 50,000 in debt. It's probably about $35,000 in credit cards, about $10,000 in a personal loan, and probably $5,000 on a car.
He's making the minimum payments on all of his stuff, and he's just barely it by and um so jack number one if your dad called us and asked us if he should do a consolidation loan we would say no so we would definitely tell you not to get involved in any kind of consolidation loan or helping your own father out on his loans this is a no no no no no with exc points. And I want to say, man, you're a good son.
What's happened to bring you to this point? Well, I'm kind of almost worrying about myself because he's getting older. He's about to turn 65.
And I'm worried that when he gets to the point where he can't work anymore, he's going to just barely be able to cover his own payments, and I'm going to have to start paying for where he lives and all that type of stuff. I get that, Ori.
That's a legitimate concern, a legitimate you looking into the crystal ball if things are going to continue as they have been in the past. right? A trope that gets thrown around is the best prediction of future behavior is past behavior, right? You see this slow-moving train coming right at you, right? Yep.
So let me ask you this. Has your dad ever listened to you? Well, I mean, I'm a pretty new listener.
No, no, no dad has your dad ever listened to you yeah i would say yeah he he thinks i i think he definitely respects my opinion okay so if you sat down and said dad i love you here's what i see coming in your life you've got to get a job or you got to get a second job like we've got to make some changes here what would he say to you i mean that would definitely be be tough just you know him being an older older guy it is but hey if we're playing big boy money if you're ready to put fifty thousand dollars down or you're ready to co-sign on a loan with a guy that has a like a history of not paying stuff back like then you're ready to do big boy stuff.

What stops you from having that,

what I would call a more honest,

because here's what you know,

and I know this,

but you especially know this.

You're going to get this consolidation loan.

You're going to co-sign your life away to it.

And he's going to continue.

Nothing will have changed in his life.

Yeah.

Except for how much he would have to pay. At least that's what I think.
the amount of money he's gonna have to pay is still gonna be there well yeah uh so i have kind of talked to him about it um about all this all this stuff and we've we've talked with each other about how we could try and figure it out and you know he knows he needs to make a life lifestyle change he's definitely living above his means yeah let, let's pause there. Hold on.
No, no, no, no, no. I'm jumping in here because you're still trying to talk us into this, and that's not going to happen.
And I get what you're trying to do. I think John's right.
You've got a great heart. But you called and said, what should we do here? You just said dad's living above his means.
So he's clearly spending more than he's bringing in. What income is he bringing in? And in what form? How much? So he's a real estate agent.
He probably makes about $40,000 a year. And he took his Social Security early, which ended up backfiring a little bit because then after he took that, he made too much income to where now they're basically taking those social security payments back.
They're not paying him. What's his total debt burden again? $50,000.
Okay. So a real estate agent, and he's been doing it long enough to know how to sell houses, true or true all right so dad needs urgency and i'll leave it to my colleague here uh as to what you can and can do when it comes to that and i don't think it's much but i do agree with john that you've got to have an honest conversation with dad but um it it's in the form of truth serum to say $50,000 in debt, Dad,

in the grand scheme of things is not a lot for somebody who can sell some houses

and knock that out pretty quick.

But there's something going on with him for a lack of urgency,

the fact that he's being irresponsible.

Again, not your problems to fix.

But I think this has got to be a real honest but very respectful conversation.

And if he will listen to you, you can show him our plan and plan and say hey i've just started listening to these ramsey folks and here's the debt snowball and uh i'll help you with the budget i'll lean in every way i can pop but you got to make these changes or else i'm going to get stuck with this and i don't want to get stuck with this here's what we're going going to give you, Jack. I'm going to hook you up with two, two different codes so that you can watch all nine of the, the financial peace university lessons digitally.
And you can send him one. He can watch it on his own.
Okay. I'm going to send you that, but here's something important that I want you to hear me say, what you are trying to do is respectable and loving.
You've got ulterior motives. Like we all do do you don't want to get stuck with this down the road right but you also you've been watching your dad hurt for a while fair fair okay this will end with the destruction of your relationship with your father yeah and here's why when you co-sign on a loan with dad, it's the same thing I tell parents to not co-sign on student loans.
If you can't afford it, you can't afford it. But what you end up doing is you put a transaction between two people that should be ride or die together, a father and a son.
And there's going to come a moment when he doesn't come through in a certain month and he can't make that payment and you're going to get the bill. And here's what's going to happen.
You're going to get enraged as you should. And then you're going to begin to resent him.
And that's not his fault. You signed the loan.
And so the greatest gift you can give him is a son who's always in his corner. And by putting a bank between the two of you, you're setting up your relationship for failure.
So saying, dad, I love you. I just ran into these guys.
This thing's amazing. Because here's what your dad needs to do.
If he's only making 40 grand as a real estate agent, he's got to go to Walmart and start throwing boxes. He has got to go sit in a drive-through from 8 PM until 2 AM serving like coffee or takeout or whatever.
He's got to go make some more money. And by the way, he can do that doing quote unquote less sophisticated tasks, whatever crap that is.
He can go make more than 40,000 bucks, but he's just got to get on the horn. Yeah, he does not have to sell a lot of houses to pay off this $50,000 in debt.
And the 40 grand, he's barely doing anything at all. So this is a tough situation.
He may have to sell a car or two. He may have to sell a house and move down to a condo.
He's got to make some grown up dad decisions. But dude, I want to honor your heart, man.
And I know you see this thing coming and you're already doing the math being like, dude, I'm going to have to pay for this. But I get it.
It's tough, tough, tough. I want to get to our Ramsey Show question of the day, which is brought to you by Why Refi.
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Today's question comes from Madison in Kansas.

Madison writes, I'm married.

I love my husband, but we have made bad decisions over the last 20 years.

We're looking at $125,000 in debt, not including our mortgage.

Together, we earn $150,000 a year. He's not interested in looking at our financial situation, but at least he let me handle our finances.
Oh my gosh. Yeah, I don't want to talk about it, but I'll let you carry this anchor around all by yourself.
Is it possible to become debt-free without your spouse being on board? Like, here we go. I feel like a gazelle with an anchor.
Well, that's clothed in a financial question, but John, I'll keep it with you because that is a marriage question. Tough one there.
Mathematically, theoretically, I guess, if he just quits spending money, so that's just me being honest. If he truly does let her do the finance.
If he stops spending one penny and you took full control, theoretically, mathematically, yes, it'll burn your marriage to the ground. I think this is a situation, Madison, where you set your husband, y'all sit down for dinner, you sit down for breakfast somewhere, you sit down for lunch somewhere, not when you're fighting about money, not when it's time to do a budget and you say, I am scared to death.
People give me a hard time on air, I mean, on the internets about saying this line I'm about to say, but I think it applies here. Husband, I can't breathe.
I don't feel safe in this house when it comes to our money.

And I can't keep carrying all this by myself. Will you look at this with me? And if he looks at you and says, nope, don't care, then Madison, you got bigger issues in your marriage because it's not

about money. It's about your husband saying, I don't care how safe you feel or not.
It's on you. All right, business owners, last call.
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Terrence is up in Atlanta.

Terrence, how can we help today?

How you doing, sir?

I have a $1,200 car note.

Oh, my goodness.

Where's my Tums at?

What is it?

It's a G-tune Kia Stinger. A what? Did you say a Kia? Stinger.
Stinger. A Stinger.
Yeah, the twin turbo, the sports car Kia. Wow.
I've not heard of this model. Terrence, how much did that set you back? It was around like $60,000.
I had another car to add on to it. No, you didn't.
Did you roll negative equity into it? Yes. And I needed something reliable because I traveled back and forth to Tennessee to see my kids.
Bro, you did not need a stinger. Rel reliable would have been a $10,000 camera.
You bought a stinger, dude.

Yeah.

Yes.

Yes, I bought a stinger.

It was a bad decision.

We love you.

We're just having fun with you.

I know it was a bad decision.

If I'm listening to the show, I knew it was a bad decision.

So how can we help?

Well, I have that, and I also have $2,000 a month child support.

I was trying to figure out how can I get rid of the stinger. So the first of every month you open your eyes and you're already $3,200 down.
Yes. I make $10,000 a month, $125,000 a year without overtime.
Is that the only debt you have is the car? Yes. I paid off.
I started listening to Dave Ramsey a couple of years ago. Then last October, I paid off all my credit cards.
Okay. So how much? Let's walk through this.
Okay, go ahead. I do have one credit card that I would use only to go on the Sky Club and get a rental card.
And that was another question that I had to ask y'all about that, too. What do you do about when you need a rental card? Do I just use my debit card? Yeah, that's what John and I do.
That's what I use. That's what John and I do is we use a debit card.
You don't need the credit cards. Cut the credit card out because it's going to remove the temptation.
But let's dive into this car real quick, okay? Because we've got negative equity. So you owe a total of how much i owe like 57 000 so 57 000 and what is the stinger worth if you sold it private seller today probably 30 000 30 000 oh boy that's a bath that hurts that is a bath right there the, because the thing was, I don't mind paying for it, but by the time I get around the paying bills and I see that $1,200 note, I'm like, whoo.
No, I get that. Listen, I have indigestion, and it's not even my payment.
I've got hemorrhoids now. Our bodies are falling apart on your behalf, Terrence.
Oh, boy. I can explain the first one.
I can't explain the second one. I can't either.
I don't know how that works. Just my insides want out.
Okay, so let's walk you through this here, John. So, see, the $57K also involves the negative equity, correct? I think I'm done with the negative equity part.
All right, so we owe $57K. I think I'm owned it.
Yes. I had the car for two years now.
How much? So, you have $2,000 a month in child support. You bring home $10,000 after tax.
No, that's before taxes. All right.
So what's your actual bring home? My salary is pending. What's your bring home? I bring home like $5,200 after taxes and child support.
Oh, after. Okay, child support.
$52.

After child support. $5,200 after child support.
Oh, okay, good. All right, so what I'm trying to get at is how much, John, I want to get to quickly, how much could you, if you just pay the bills, just your basic bills and your child support and this car payment, how much money left over do you have that we could put towards saving to get a a i'm thinking about a ten thousand dollar car something that's dependable maybe seventy five hundred if i find myself a higher mile honda or toyota uh that'll get you back and forth to tennessee how much money could you put away each month right now i could probably put away probably $1,400 a month.
Okay. Because like after,

because after each check,

I'm, now i could probably pull away probably fourteen hundred dollars a month okay because like after because after each check i'm i'm i'm rolling around thirteen hundred after everything okay so i what i'd like to see him do john is i'd like to see him save as much money let's get a five six seven thousand dollar car and let's sell this stinger and now we're we're you know we're now working on thirty thousand uh no no twenty seven thousand roughly is what we're working on or here's here's the other side of that if you take that twelve hundred dollar a month payment you take that thirteen hundred dollars extra and you go through your budget with a magnifying glass and you stop going out for a season and let's say you can scrounge up three thousand bucks that includes this twelve hundred dollars you can pay this thing off okay that's what i'm doing completely became a cheapo what i became a cheatskate okay so chicken salad sandwiches like sandwiches. Like I really just tried to, I really cut back just to figure out was it me or was it just a lifestyle or anything? And everybody been looking at me crazy like, hey, you want to go? I'm like, nope.
Good. Good, good, good.
Can't go nowhere when I got this to pay. A principle that we live by here is things with wheels should not cost more than 50% of your income.
So you're right there on the bubble here. So if you want to just to suck it up for 20 months and throw $3,000 a month at this, you could.
Or like Ken said, you're going to suck it up for 10 months, throw $3,000 a month, and get that 30 down to where it's just bottoming out, and then you're going to try it on the market yeah but that's another option i i gave you what i would do i like what john's saying i'm doing what ken would do i i would get rid of this thing out of my life yeah i want to get rid of it man because um before i got this finger i was driving a 2012 buick lacrosse which i didn't have no problem driving that's that's that's that's a car of a ladies' man. Listen, Terrence, I think very few guys could pull off a Buick lacrosse

like you would. lacrosse which i didn't have no problem driving that's that's that's that's a car man listen

terrence i i think very few guys could pull off a buick lacrosse like you could i just got a sense you got enough swag car we'll get you another one i got hit in a half-speed chase and they told me like i love that tell me that you weren't being chased no no no i was sitting in traffic and He got hit by a pole.

Oh, man.

What's a decent Buick lacrosse going to set you back?

Probably not. being chased no no no i was sitting in traffic and got hit by a police officer what's a decent buick lacrosse gonna set you back probably not well i bought that one in 2018 for 10 grand when i went to looking after the wreck they went up to like 16 000 yeah they're pretty yeah i listen i'm gonna challenge you to get something dependable.
A car maker that's very dependable, you know the ones, they're going to run forever. I'd take my chances on that.
I'd do less cash right now because you've got to get out of this deal. Here's the words we use, Terrence.
This isn't an accusation. This is us having some fun.
But you're going you're going to pay about thirty thousand dollars in stupid tax okay and if you if you just know that every time you send that check it's just i'm paying stupid tax write it in the little uh thing on the bottom of the check stupid tax or when you're making online payment just put stupid tax and by the time this 10 months is up and you've thrown three thousand dollars a month and you haven't been on a date you haven't been to a restaurant you haven't seen a concert you're gonna be you will never do this again never i want the ones that learn real fast well you were kind of with us last time and then you bought money again are we done done i'm done good that's amazing i'm done because i got a i got a daughter about to go to college, so I want to have the money. I have the nest egg.
I did the baby steps, so I cut the credit cards off. I love it.
Well, this is super intense. You've got to be super intense to do that $3,000 a month.
You can do it. You've got overtime options is what you let that slip out.
You let that slip out. So I'd be getting overtime.
I'd be working weekends.

And to John's point, if we can sock

$3,000 at a minimum away towards

this,

the $27,000, get yourself another Buick,

my man. And people are going to watch you work

like crazy over the next

10 months to a year, and they're going to think

you're going to roll in there with a G3 or a

G-Wagon. Listen,

you're going to roll in with a Buick. Let them know I'm opting out of the game and I solve for peace, not

for a cool, shiny, depreciating asset.

But I mean, he likes it.

He likes that lacrosse.

I think he can find himself a nice lacrosse.

Dude, a guy who is in on a Buick lacrosse, that's marriage material right there.

There it is. We'll see you next time.