You Can't Build Wealth While Buried In Payments

Brought to you by the Every Dollar app.

Start budgeting for free today.

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual, amazing relationships.

Rachel Cruz, number one best-selling author, host of the Rachel Cruz Show on the Ramsey Networks.

Ramsey personality and my daughter.

She's my co-host today.

Open phones at 888-825-5225.

Emily is in Missouri.

Hi, Emily.

How are you?

Hi, how are you?

Better than I deserve.

What's up?

Okay, well, here's my situation.

I started my job at 19 and I invested in the 401k that the company has, and I married my husband when I was in my late 30s.

And now I'm in my early 50s.

My mom wants to downsize, but

I want to buy her a house so she could free up the equity in her house and be able to retire because she's in her mid-70s.

And

I want to do it to where

I want to pull it out of my 401k and buy this.

But I also want to

not stir up problems with my current husband, you know, because he's financially selfish.

He likes to spend the money.

He doesn't, I asked if she can move in with him with us.

He said no.

I said, let's go find another house big enough for all of us.

He said no.

I said, then fine, I'm going to buy a house for her.

He said no.

And I really want to do this for her so she can

retire with her.

She could retire.

I don't want her to have to work for the rest of her life.

So I want to know how I can do this.

If I can pull money from my 401k, put it into her trust, and then buy the house through her trust so it's protected.

Because I would hate for something to happen to me and then him kick her out of a home that I purchased for her.

You know how dysfunctional this sounds?

It's so dysfunctional.

He has so many red flags.

And I can't do anything because I'm in love with his children because I don't have any children.

I'm in love with his children and his grandchildren.

So

that's where we're at.

All right.

Well,

I think what you're trying to accomplish is noble.

How you're trying to accomplish it is whacked.

Yeah, I know.

Okay.

So, number one, if you pull money out of your 401k and you're in your 50s, you're going to pay a 10% penalty plus your tax rate.

So, it's going to be like borrowing money at 35% interest.

No, that would be stupid.

We're not doing that.

Not borrowing money.

You wouldn't get a mortgage at 35% interest to buy your mom a house.

That's dumb.

Yeah.

Okay.

So you're not doing that.

That's that's okay.

Your husband's smart.

That's not being selfish.

It is possible that he doesn't want her to live with you because he doesn't like her.

Yeah.

Oh, that's true.

That's not necessarily being selfish.

It's just having good boundaries.

Yeah.

I mean, I like Winston Cruz, Rachel's husband, a lot, but I don't think he would let me live with them.

Yeah.

I would let his dad live with us for her.

Yeah.

No, I get it.

I mean,

that's okay.

That's not, it doesn't make your husband easy.

Selfish.

Right.

Right.

Yeah.

Right off the bat.

There's a possible other scenarios.

And the other thing you don't want to do is you don't want to

be deceptive

with your spouse.

That's not ever going to lead to.

a positive situation, right?

That's going to end up in, that's going to end up in ashes, particularly on a huge purchase.

Okay.

So her home is worth what?

She could probably sell it for, I don't know, $280,000, maybe $300,000.

And it's paid for?

No, it's not.

What does she owe?

She owes $80,000.

Okay, so she could get a couple of hundred grand to go do something with if she downsized.

Instead, you were wanting her to invest that to live on.

How old is your mom?

72.

Okay.

Is she still working?

Yes.

Okay.

And she's taking Social Security, probably.

Yes, not much, though.

My dad, they own businesses my entire life, and so he didn't think to pay in for her, but he made sure to pay in for himself.

Okay.

Man, Emily, I don't know.

I'm a little speechless.

I'm not going to lie.

It is.

Well, and I just were, I'm like, I'm just concerned for the health of

obviously your marriage, but just

just your enjoyment of life.

I'm like, you know, when you're in a situation that you feel, it sounds like you're staying in because of his kids and you love his kids, even though you could still have a relationship with them, even if this marriage, you know, didn't work.

I don't want that.

I don't want you to divorce him, but I do want to see that part of your life healed.

The proper answer.

Now, the way you presented it was he said no.

He said no.

He said no.

And that's not a proper answer.

He doesn't even want to mow her yard.

He'll go and mow his 90-year-old father's lawn, but he won't mow hers.

That's irrelevant to this discussion.

I might not want to mow her yard either.

She might bitch at me about it.

That's true.

You know, there may be legitimate reasons for that, too.

But aside from that,

it's possible that he's looking at and saying, okay, moving in, he may have not done a good job explaining why he said no, or you're not giving us that information, one of the two.

But he may have said, no, I don't want her to live with us.

I don't think that that's going to go well relationally.

She and I don't get along very well.

That's a good reason for a no.

No, I don't think you ought to buy her a house coming out of your 401k.

And by the way, Emily, I just told you that.

Okay.

I told you why, but I'd also told you no.

And so, you know, I could be painted with the same brush after this call.

So,

you know,

I'm going to go back to what Rachel said.

I'm going to go back to let's start solving this within the framework of

a positive relationship in a marriage.

A positive way to approach the relationship in the marriage.

Honey, this really means a lot to me.

I understand you don't want to live with us.

I understand that.

Okay.

That's fair.

Totally.

I understand you don't want me to take the money out of the 401k.

And Dave explained to me that it's a huge cost.

And so now I understand why you don't want to do that.

But this is very important to me.

And I do have some money here.

And,

you know, help me figure out a way to do this.

And instead of like, I'm going to hide this from him and I'm going to put it in a trust where he can't do something about it later.

And if you're going to do all that crap, you should be divorced.

Yeah, well, you're just, I mean, you're enemies at that point.

I mean, there's nothing about you're working together.

It's just, I don't know.

And my question would be, too, I mean, they may not even have the money.

to go to us.

Yeah.

I mean,

the only way you're able to is to cash out your four-wheeler.

It's a possibility too.

I mean,

Sharon Sharon may want to do something.

Winston may, you may want to do something, and Winston looks at you and says, no,

we don't have the money.

Yes.

Without cashing in a 401k, someone being selfish.

And no, I don't want Dave living with us.

And

that's okay.

I mean, these are good.

That's all fair.

That's a little bit of what

I'm trying to discern to help Emily because she's obviously the one that called

who wanted it.

But I feel like everything that was said,

I

think it's relating more to him of, like, yeah, there's something here.

Now, granted, we want to help

your parents.

I mean, there's a level of honoring them that is wonderful.

So, I want to get to the root of why their relationship is so terrible, right?

If Winston and mom had a terrible relationship, you know, there's something.

You're going to have a hard time talking to Winston and give him money then.

Yeah.

Right.

So,

I don't know.

Yeah.

I would not do your plan, Emily.

Don't say that much.

I didn't hear a way for you to do this.

I can't help you with this.

What I will tell you is: if I were in your shoes, I would work on working with your husband and finding a way to do it by him understanding this is very important to you.

This show is sponsored by BetterHelp.

All right, listen, these days it feels like there is so much advice related to mental health and wellness and what you should be eating and what you should be doing.

It is insanity.

There's so much noise, noise, noise everywhere, especially when we're scrolling.

And all this noise on the internet and on social media can lead to information overload.

So it can be a struggle to know what's real and what are some things you should actually try in your home.

Here's the truth.

Using trusted resources and talking to a live therapist can help you break through all this noise and get you to where you want to be in your personal life, in your relationships, and your mental and emotional health.

If you're thinking about starting therapy, contact my friends at BetterHelp.

BetterHelp is 100% online therapy, which means it's convenient and affordable.

And it's super easy to get started.

Just fill out a short online survey and you get matched with a licensed therapist.

and as the largest online therapy provider in the world better help can provide access to mental health professionals with a wide variety of expertise better help is rated 4.9 out of five stars based on over 1.7 million reviews in the app store they are for real so talk it out with better help visit betterhelp.com slash ramsey to get 10 off your first month that's better help h e l p.com slash ramsey

Hunter is in Michigan.

Hi, Hunter.

How are you?

I'm doing good.

How are you, Dave?

Better than I deserve.

What's up?

So I got some debt, and also I got specifically one that I have a question about.

When I was younger, I'm only 21 now, but when I turned 18, freshly 18, my mom kind of had me co-sign on a loan for her for a car.

Good.

And she left the car because she has terrible credit.

You didn't have any, you were 18.

Yeah, I know.

I didn't, I didn't have no credit, and I didn't know anything about finances at all back then.

But she had me co-sign on the loan, and then the car got repoed.

And now the loan is on my credit as well.

And I don't really know.

I don't know if I I should just pay it or if I should, or if there's any other way to kind of get out of it.

Wow, Hunter.

That's financial abuse by your parent.

I'm sorry.

It's completely immoral.

So do you have any information on how much the deficit amount is that they're trying to collect after the repo?

It's about $10,000 is how much is left, but

it's been like

a year or two since it got taken, so it's spend to collections by now.

So I don't really know what to do there because I know you are not going to be able to get it.

Your damage to your credit report is going to stay there.

The only thing we can do is limit the damage by settling your portion of the deficit.

Okay?

Yep.

And so what it amounts to is after you finish what I'm going to tell you to do, and it's going to take you a little bit of effort, but after you finish this, it will show that you have been repoed because you have and that you settled the deficit.

So it's like a bad debt that you settled.

Right.

Which is better than just a bad debt.

Like way better, okay,

as far as your credit bureau goes.

All right.

Not that worried about your credit.

I don't want you doing this kind of stuff again.

And hopefully you stay away from your mother when it comes to financial transactions.

Yeah, I've definitely learned my lesson.

Yeah.

So do you have any contact with the company that is trying to collect the deficit?

They've sent me some letters, but other than that, no.

Perfect.

Okay.

Pull that letter out.

It's got a phone number on it.

Call them.

Okay.

Will do.

Let me give you some real clear information.

All right.

Their job is a game.

Their job is to screw with you when you get on the phone.

Okay.

Your job is first, you give them no information except that phone number, which you could block if you need to later.

Okay?

Gotcha.

And then you tell them the truth.

Okay.

I was 18 years old.

My mother asked me to co-sign this.

I had no idea I was doing it, and your company let me to be taken advantage of.

I'm considering suing you.

Okay.

In other words, we're going to start with the offense instead of a defense.

But I think I'm not going to.

I think it would be cheaper if, as a 21-year-old who's broke and you can't get anything from me because I don't have anything, it might be cheaper for both of us if we just settled my portion of this.

You can chase her for whatever you want to chase her for, but I want to settle my portion of the $10,000.

I have $1,000 I'll give you for that.

Gotcha.

Okay.

You're probably going to be able to pull that off at about six conversations, putting up with abusive, moronic individuals on the other end of the phone.

And you'll probably be able to negotiate that for $2,000 or less.

My portion of this settled, remember this phrase, settled in full.

And I've A, got to have that in writing.

B,

you will not have electronic access to my personal checking account.

I will wire you the money or send you a prepaid $1,000 debit card.

Okay?

Okay.

Because if they have access to your checking account, they're scum.

They'll clean you out.

They lie.

The collections business is filthy.

All right?

So you and they lie, so you have to have it in writing.

An email is fine.

Okay.

Do not give them your social security number.

Do not give them their place of employment.

Do not give them anything that will make it easier for them to collect this debt.

And every time they start being abusive, say, okay, you have five seconds to stop that or you're going to get a dial tone.

You want to hear a click?

Stop that.

Click.

Okay.

And just hang up on them and call them back the next day.

Last moron I talked to over there started abuse.

Don't try that or I'll give you the click.

Instead, let's have a conversation.

And you just got to have this aggressive, abrasive approach.

You don't have to be mean or nasty or cuss them or yell at them, and it doesn't do any good.

They're going to try that with you

because they know if they can get you afraid or angry, you will be irrational and give them money.

So, their goal is to try to get your pulse rate up when they got you on the phone.

You following this?

It's a game, it's a game, and you're going to be cool like you're playing a hand of Texas hold them.

Okay,

just chill.

All right.

And if you feel your pulse rate going up, just hang up.

Do it another day.

Okay.

Take two breaths.

Don't drink two cups of coffee before you call them.

You know what I'm saying?

This is a real, you've got to play this all the way through.

You're 21 years old and you've been screwed.

And I'm trying to help you walk through this.

All right.

Hunter, do you have money?

Do you have anything safe?

I don't.

I just started a new job as a truck driver.

I just got my CDL.

I'm like within, I'm in my first week of being by myself as a truck driver.

Okay.

Good.

You'll have $1,000 pretty quick then.

Yep.

So you can offer him $1,000 by the end of the month.

What percentage of a cosign, though, is his...

Technically, it's what's called joint and servile.

He's technically liable for the whole thing.

Right.

That's what I was assuming.

But if they think they can still get some out of her, they'll take less from him.

You know, that's the point.

And besides that, I kind of want to turn him loose on her

for doing this.

Do you have relationship with her, Hunter?

Do you know where she is?

Yeah, I talk to her the whole time.

I just don't give give her money or anything like that anymore.

And there's no chance she's going to get this settled and get it off your ultra.

That's what I'm wondering, if like where she is in this process at all.

She's broken out of control and has been for a long time.

Yeah, she works at a fast food restaurant and she's behind on her rent and all sorts of stuff.

She don't have money at all.

Oh, man.

I'm so sorry, Hunter.

Yeah.

But

I'm asking you to do something that's over your pay grade, but I think you can do it.

I think you're sharp.

All right.

And listen, what you do, go back and listen to this episode and write this stuff down.

In writing, no information, be tough, hang up, no access to your checking account.

Okay, and that's the process you deal with.

So you're stonewalling.

You're building a wall around you, and then you're just throwing offers over the wall.

And until they pick one of them up, you just keep throwing offers.

Positive thing is that it's been in collections for, what, two years, he said.

So at this point.

and if they looked down and saw your age, they think they've got zero probability of collecting this.

Because statistically they do.

Yeah.

Statistically, the challenge is.

Well, and he has no money right now.

So the truth is, yeah, there is none.

No, but I don't want him starting to, I don't want them to be hassling the truck driving company and him lose his jobs because they sell out where he works.

Right.

And they'll do that.

It's illegal, but they do it all the time.

So, you know, you've got to just set up these walls.

And the reason I know these people are scum in this case is because they took the co-signature of an 18-year-old for his mother who was broke and didn't pay bills.

This is how you know this company is scum.

But it's probably, is it that company still, though?

Even if it isn't, they bought that paper and they know what they bought.

They know what it is.

They know exactly what they bought.

They know what kind of paper they got into.

And so, you know, not all collectors are scum.

All credit card collectors are, 100% of them.

And, you know, all subprime people misbehave and break federal law pretty regularly.

There's like a hometown collections company in your small town that's trying to collect medical bills or something.

They're probably okay.

Most of them don't violate the law every day.

But there's the Federal Fair Debt Collections Practices Act that gives clear understanding of what you're allowed to do and not allowed to do.

None of that has entered into this conversation yet.

But

he's walking into a haunted house and stuff's going to jump out around every corner.

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 rip-offs 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 smartest, 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.

This is exactly what my friend Jeff Zander and his team at Xander Insurance are all about.

They shop the term life companies to find you the best options.

And they've been around for over 95 years.

So you know they'll be there when you need them.

Xander is the real deal, and that's why they've handled all my personal insurance for over 25 years.

I trust them, and you can too.

Visit xander.com for instant online quotes or for a more personal touch.

Give them a call at 800-356-4282.

If you're tired of living paycheck to paycheck and feeling like you can't get ahead, join one of our free every dollar trainings.

There's new trainings every week this month, and they're all hosted by one of the Ramsey personalities, either George Camill, Jade Washaw or Rachel Cruz.

Rachel, when are you doing the next one?

I'll have to look at my schedule.

I'm only looking a day at a time right now.

It's back to school week, so my mind mind is mush.

Probably next week, though.

Yeah.

It's usually like once a week or every other week.

We all kind of switch off.

Yeah.

That's about right because there's three of you.

I could have made it up, but I'm being honest.

Yeah.

Well, that's okay.

It's going to be soon.

There it is.

One of you will be on there every time we do it.

So they show you how to stick to a budget and find an average of $9,560 of new money margin laying around to throw at this stuff.

There's just, it's kind of like cleaning out the corners.

There's stuff in there.

Well, and what's great about it is the digital coaching part.

When with the new Every Dollar, what you're signing up for and going through this process, they're able to see, I mean, via the digital world, which is amazing, it's like, oh, hey, here's this, this, this, this, like, and it'll list it out for you.

If you'll do those five things, you've got nothing to do with it.

I mean, yeah, it's up to 16 recommendations.

Like, it's incredible.

And then you get to adjust it and say, okay, if I take this recommendation,

how much am I willing to put, you know, how much am I really willing to do within it and all of it?

And it calculates it for you and shows you your progress.

I mean, it really is phenomenal.

They've done a great job.

There's 16 things you can do to ratchet your way through the babysitter.

I mean, seriously, yeah, it's incredible.

Now, ask us any question also during the live QA.

Sign up for free for the free every dollar training.

It's free.

Did I mention that?

At ramseysolutions.com/slash webinar.

Joy's in Pittsburgh.

Hey, Joy, what's up?

Hi, I'm doing good.

How about you?

Better than I deserve.

How can we help?

That's great.

I am calling because I'm a newlywed.

My husband and I were married in January.

However, unfortunately, recently we've been having some marital troubles.

He's currently in inpatient rehab.

I discovered his alcoholism back in June.

And so right now I don't know when he's coming home.

My biggest hope and my heart's desire is he gets his head on straight and he does everything he needs to do.

But I was curious to get your advice on how to change our philosophy for our marital finances when that time does come that he does come home.

I would normally take that perspective.

I know you often advocate that what's his is mine, what's mine is his issues.

No, you don't do it in this case.

Yeah, you don't do it in this case.

Yeah, that's what I anticipate.

No, in that

stages of recovery.

Not for a while.

Are you doing Al-Anon?

I am.

Yeah.

Good.

Okay.

And so you've got somebody in your corner talking to you about dealing with an addict in your home.

And so

what you've got to to do in the overall picture, and I'm not a coach, or I'm not a PhD in counseling like Dr.

John Deloney, but for 30 years, we've helped people with financial problems, and 100% of addicts have financial problems.

So, I've worked with a lot of it, okay?

A lot.

More than I've learned, more than I wanted to learn.

So, here's a couple things that people in that world say all the time.

As long as he is dealing with an addiction, he's a manipulative liar.

Yes, he is.

Okay.

And until we get the addiction in the rearview mirror or the bulk of it in the rearview mirror, depending on your view of addictions,

he can't be trusted.

And so he can't handle money.

I know.

He doesn't get to handle any of the money.

Okay.

But he does get the information.

He does get the dignity of speaking into it.

You go over it with him.

You show him what you're doing.

You say, this is what our money came in, and here's what we're doing with our money.

Here's the budget.

He can participate in that.

but he doesn't have access to the money.

Period.

Because

for his sake,

because if he has no money, it's going to be harder to buy alcohol.

Okay.

He doesn't get any money.

You're taking care of him.

But you have, you know, he can have, he can see what the balance is.

He can look at everything with you, help you make the decisions.

And then as trust is rebuilt,

then obviously he rebuilds in several areas of your lives.

He can be trusted over time, and trust is earned with time.

There's a direct correlation.

And so I came home from rehab and she doesn't trust me.

She shouldn't.

Okay.

It was six years ago I came home from rehab and I've been dry.

She should.

You see the difference?

And so, yeah,

he's been, you know, you get your 10-year coin, your five-year coin, whatever, then, yeah, hey, game on.

So,

we want to walk with him and help him, but also we want to cut off the supply.

And that means he just doesn't have access to money in the near term.

But he, again, does have the full dignity as a partner in your marriage of speaking into it, having an opinion.

None of that's invalid unless he's drunk.

His brain still works.

Okay?

and so

uh it just gets drunk sometimes so but uh but as if he's sober sitting at your kitchen table and y'all are looking at this and he has an opinion about what we ought to do with our money that's valid but as far I'm just talking about physical access to any funds you know take him off the checking account

okay it all goes into your name and you handle it until we get some comfort here.

All right.

And you can guys can establish some state.

You can talk about it with the the counselors.

You can talk about it with Al-Anon.

He can talk about it with his sponsor.

He can talk about it with his counselor.

He can talk about it with whatever follow-up he's got with rehab on when is appropriate to begin to

let him back in and rejoin in more of a

more of a healed marriage money situation.

Does that all sound fair?

Yeah, that completely makes sense to me.

Particularly right now, he's been in a pivot career-wise.

So it's even the last few months, I've been the only income.

So that's definitely where a lot of tension has been for us

in terms of that.

So it even did y'all date before you got married.

We were dating for a couple of years, but I'm pretty sure that he just

90% of the drinking was when I was asleep or didn't know about it.

So I

complete closet.

He's really good at hiding that.

Yeah, he's very closet guy.

So I'm pretty sure I don't know a sober version of my husband because

I don't know.

You know, How's he been doing?

How's he been doing in rehab?

It sounds like he's improved.

There was a bunch of drama a couple weeks ago with him trying to leave, but he ended up going back.

So I think now that he went back,

it sounds like he's more focused, but it's early to know.

You sound very solid.

You sound very solid and confident.

in how to process this and where the boundaries go.

You sound pretty strong.

Yeah, we're going to do, I've talked to them with the boundaries on, like, we'll do marriage counseling, but it's going to be when he gets 90 days, 100 days sober or whatever it is, because they have a really good family programming at the rehab we're at.

So

they've talked through the boundaries and empowered us a lot on that side.

Yeah.

Yeah.

Well, as strong as we are.

in our messaging with married couples, that you're one and you work together, you both have a say, all the things, there's always the asterisk of addiction, abuse.

You know, we always have an asterisk, and this is it, Troy.

This is the perfect example of it.

And so there is,

yeah, a higher responsibility for you to protect yourself in it, right?

And if

and if sadly, you know, it doesn't come to fruition and he doesn't choose a path of sobriety and you have to make a harder call, right?

you will have more of the means and ability to be able to do that too.

So there is this level of protecting your current state and then also the unknown of the future.

That's really, I mean, I'm assuming it's kind of left up to what he's choosing for his future, right?

It's going to impact

if you move forward or not, which is just so heartbreaking.

I'm really sorry you're in this.

And I pray for him and that healing.

And

I know there's some incredible facilities and we've talked to countless people who have overcome addiction and are sober and it's beautiful.

And they end up coming.

on the other side, even stronger.

And so that's my prayer for you guys.

Two family members with a 10-year coin.

Not immediate family, but yeah.

But

real proud of them.

They're heroes.

That's a hard run.

I was talking to an author that wrote a book about 12-step, and he said those 12-step meetings are more like church than church sometimes.

So it's powerful.

Hey, Joy,

speaking of that, speaking of that, Henry Cloud has a great book that will help y'all.

Look up this and order it on Amazon right now.

It's called Trust

by Henry Cloud.

How to Lose It, How to Reestablish It, and What are the Steps?

It's really, really good.

It's a a great book on trust.

Henry Cloud.

Mama, Papa, my cuer create a riding armantee, and the rope that I comprehend, I want to very queen, muy pronto, but

no tin que suffri por la moda cons precios vajos de la vuenta clás de Amazon.

Amazon, dastamenos sonriemas.

When you go through a job loss or job change and lose your employer-sponsored health insurance, there's no better time to try Christian health care ministries.

That's right, there's another option besides Cobra to take care of your family during that time.

Because if you didn't know, the cost of Cobra has gone up a lot in the past few years.

And CHM is an affordable, biblically based alternative to health insurance.

So do your own research.

CHM is a great option that's potentially a third of the price of COR.

It's a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981.

And the support you get from CHM goes beyond helping you pay for medical bills.

Members become part of a family that prays for them when they have a medical event.

Try getting that with Cobra.

So if you're going through a job loss, life change, or just want to explore other options to save on health care, CHM might be perfect for you.

CHM programs start as low as $98 a month.

So find out more at chministries.org slash budget.

That's chministries.org slash budget.

Today's question of the day is brought to you by YReFi.

If your private student loans are in default and you feel stuck, you're not out of options.

Why ReFi specializes in helping borrowers like you find real

solutions with low fixed-rate financing?

Go to YReFi.com/slash Ramsey.

That's the letter YREFY.com/slash Ramsey.

Not available in all states.

Today's question comes from Susie in Michigan.

My husband and I have recently become debt-free, including our house.

My siblings know this and have started coaching their toddlers to call us big money.

They encourage their children to say things like, hey, big money, we want to go to Disney so you can go and pay for.

So can you go and pay for us?

We thought it was a joke at first, but now it happens all the time.

We've told them that we prefer to be called aunt and uncle, but nothing changes.

For family gatherings, it's assumed that we will host the celebrations at our house with no offers to contribute i don't mind having people over but i feel like this behavior is disrespectful how do we approach this some of my siblings are very frugal fragile fragile thank you i was gonna say frugal uh emotionally wise and blow things out of proportion they're fragile oh i wish they were frugal i wish the other word was true but it's not yeah well

if you're fragile and you send your kids in to say stupid things to adults, you better be expect to have your little fragile broken.

Okay, we're probably going to have different approaches to this situation.

Yeah.

It's not the kids' fault, but I'm probably going to sit down with sis and go, hey, your kid's being a brat.

Stop it.

Seriously.

Yeah, it's going to probably be our

different approach.

Okay, Rachel, what's the nice version?

So I, yeah, I mean, I would sit down and say, hey, y'all, I know this is funny and, you know, you think it's cute and all of it, but also, I don't want this to become a pattern of who we are in their lives, and it has been.

And so we would love for them to stop calling us big money, asking for trips, all the things.

We just want to be aunt and uncle.

And, okay, that would be the conversation point with the kids.

And then the other things, family gatherings and stuff, I would, I would, I don't feel like there needs to be a conversation around that.

I think you just put up your own boundaries and say, sorry, we can't host this time, you know, and you just

say no some of the times.

And if not, say, okay, yes, we'll do this, but we need.

Need you to do this?

The snooze.

Yeah, I'm going to do that.

You need to bring dessert and you need to bring the meat.

I need, yeah.

I need to delegate some of the responsibilities.

And I don't know.

I think that's fine.

But the whole kid thing,

yeah.

I mean, I would.

I would not call, I would not call my niece and nephew brats to my in-laws or to my sister and

Bill, her husband.

I wouldn't be like, you're.

You wouldn't either.

You kind of act tough, but you would not

call your.

Yeah, I'm going to go.

You know, they need to stop that.

That's bratty.

I might at least say they're bratty.

That's being bratty.

And you're teaching them this, and you shouldn't.

Yeah, I'm going to call it out.

I mean, it's really ridiculous.

Yeah.

And it's really not funny.

Well, it's not.

And the truth is, Susie,

it's the parents are being butts.

It's passive-aggressive and a little jealous.

What picks me off is they're sending their kids to do their dirty work they want to make this point and they're too cowardly to do it themselves so they got their little brat kid doing it i'm serious that's the thing and that's just that's parents being wusses and these i it's the parents i'm like this is this is not fair yeah you know and i just it's just wrong so yeah i mean and so don't send your kids to do your dirty work you know do if you want to say something make it make a statement but you don't have to send your four-year-old in

it's just silly and it's not funny.

It's passive-aggressive.

All right.

Will's in Kentucky.

Hey, Will.

What's up?

Hey, you guys.

I appreciate you taking my call.

Sure.

How can I help?

So basically, I'm 22 years old, and I'm doing pretty decent for myself.

And a couple of my really good friends are starting to get out of college.

And I was wondering if it would be a good idea to allow them to move in to the next house I purchase with me without paying rent just to help them to save up for for a down payment?

Probably not.

Okay.

You know, I think it's okay.

You're a very nice guy.

I probably wouldn't do that.

I don't think it's going to end well for you or them.

The only way I would do it would be say something like, okay, here's how much the rent is, and for the first three months, you get free rent.

And I want you to put that towards your down payment, okay, or something like that.

But that's just you live here free, and there's no set

structure to it.

This could go on a really long time and it could turn the friendship sour.

Okay.

So my original thoughts were to just have a set limit and basically ask for help around the house and then like the set time frame of how long they could stay there.

So still, again, you don't think that's a good idea?

I would have some money in the process because I think it's good for them.

And I don't think it keeps them from getting a house.

Being a roommate is the cheapest way to live, even if you're paying for it.

Okay.

So

for them, it's still a bargain.

Yeah, it'd be a deal for them to still live in the house and pay, you know, a low rent versus getting their own apartment, right?

I mean, it would be cheaper to live with you, even if they paid rent.

But if you guys split the mortgage by four or something, that's probably going to end up being way cheaper than them going and getting a one-bedroom somewhere.

So you're kind of giving them a deal for the circumstance, if that makes sense.

Yeah, and if you want to, like I said, if you want to give them the first three months or something, I'd do that.

But I just think it sets a tone that you're probably not going to end this well.

Okay.

You know,

I bought an investment property.

My son moved into it

when he came out of college and was one of my tenants.

It was a

multiple bedrooms.

And so we moved some of his friends in with him that we knew.

They were family friends, good guys.

Matter of fact, a couple of them ended up coming to work here.

And we moved them all in.

But they all paid rent.

They all paid rent.

And we didn't charge them, overcharge them.

And we didn't, you know, it wasn't free, but they got a good deal.

But it was just good to keep the relationship lines really, really clear.

It doesn't get blurred.

And

you're a very generous guy, and I appreciate your heart on that.

I want you to keep that heart.

I don't want to destroy that.

That's not what's wrong with the picture.

What's wrong with the picture is I don't think,

I mean, my opinion is there's some

unforeseen, unintended consequences of straight-up free that maybe you're not seeing

that I think are going to go sideways on you.

That's what I'm that's why I'm bringing this up.

But I really want you to keep that heart of generosity, it's pretty incredible.

Brad's in Arkansas.

Hi, Brad.

How are you?

I'm all right.

How about you, Dave?

Better than I deserve.

What's up?

So I have a kind of unique question.

I have about $40,000 in unsecured and credit card and personal loans.

But

my dad passed away, and before my dad passed away, he gave, I'm an only child, he gave his

house to his older brother.

And his older brother wants me to now take over the house, but I have to

take the remaining debt and pay him off because he completely paid it off

from the mortgage company whenever my dad died but he now wants me to take that over

sounds like you're broke

yeah well you're taking over a house doesn't sound like a good idea

okay well like i said i didn't know if i took the the equity from the house because the house is just the house itself is probably half a million dollars but i don't even know he's going to give you a half a million dollar house?

Well, it was my dad's.

No, I'm saying

it's not anymore.

It's your brother.

Your dad's brother.

Your uncle owns the house.

Yes.

Okay, and he's going to give you a half a million dollar house.

Yes.

How much is owed on it?

How much is owed on it?

$90,000.

Okay.

Well, if you took it and put it on the market the next day and never moved into it, that's okay.

Well, that's the condition is I can't, I have to take you can't afford it.

You're broke.

He won't give it to me.

Would he give you this deal in 12 months if you got yourself in a position?

Potentially, but he's, I mean, he's very well off financially, but I think he's trying to expedite the deal because he removed

the

home insurance on the house because he said he doesn't really need to add to what he owes on it.

Okay, honey.

You don't need to take the house over right now.

You got $40,000 in debt and no money.

It's not a good deal for you today.

If you can do the deal later after you get yourself cleaned up, it'll be okay.

But

he's not really thinking about you.

He's thinking about himself.

With the lowest prices of any national grocery store, shoppers save big at Aldi.

Aldi believes in making shopping straightforward and stress-free.

Whether you're firing up the grill for a family dinner or hosting a backyard barbecue, Aldi is there to help.

They've got a great selection of fresh USDA, choice meats, and organic produce at prices that won't bust your budget.

And no messing around with apps, coupons, loyalty cards, or membership fees to get low prices on award-winning products every day.

So stop overpaying and start shopping at Aldi.

Find a store near you today at Aldi.us.

That's A-L-D-I.U.S.

Savings Based on Regional Analysis of Aldi versus Select Competitors.

Prices may vary by location, product availability, and the market.

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships.

Rachel Cruz, Ramsey personality, number one best-selling author, co-host of the Smart Money, Happy Hour, hit on the Ramsey Networks.

And my daughter, she's my co-host today.

Phone number here is 888-825-5225.

Michael is in Phoenix.

Hi, Michael.

Welcome to the Ramsey Show.

How are you doing today, sir?

Better than I deserve.

How can I help?

Wonderful.

I have a gentleman in my church.

About a year ago, he co-signed for a car for a friend of his girlfriend.

And I didn't know about it, but two weeks ago, he came to me because they

asked him because they were behind on their rent to take out a cash loan on the car at a cash one place.

And so he gave them that cash.

And

they're not paying on it.

And so

it's coming out of his account.

And so

just trying to figure out the best way.

I've helped him to break off contact with them because they were using him, obviously.

But I just don't know the best way to get him out and away from them with co-signing of the loan, whether to get it repoed or just let it go dormant.

I don't know how to break up that relationship.

um, how come he's not able to emotionally handle that?

He's special needs.

Oh.

So they're taking advantage of him.

Oh, my gosh.

Wow.

That's horrible.

Now, are they, did you say they are that he's in your church?

Did you say they are too?

No, they are not.

I didn't know about this.

He's been attending for almost a year.

I see.

But I didn't know about this till two weeks ago until they started to get, try and get cash from him.

Yeah.

Wow.

How does he know them?

What's the relationship with him?

He was, he, he met the guy like three years ago, and everything was fine.

I believe he's also a little bit autistic.

And so they were good friends.

But a year ago, the gentleman got married.

And when he did that,

the girlfriend asked

if he could co-sign for a car because I don't know the whole situation in there, but he did.

And so he co-signed for her car.

and uh and then for the friend's wife's car not his wife yes okay yes all right so oh man these guys are um

well i i so there's about six who is there anyone else the guy you're the guy you're trying to help is there anyone else in his life

um there's parents but i don't know he doesn't really he hasn't told them i told him to tell them yeah but he doesn't want to tell him to worry them yeah no he's ashamed um

that's no he's not worried about worrying him a bit.

Yeah, the yeah, somehow the biggest thing that you can do is to stop the bleeding, so to speak, and that's make sure this content and make him promise you to, that he won't do anything else with them without first talking to you.

He did, yeah.

Yeah, and then and then hold him to that.

I mean, you need to circle back on that periodically because he may not.

Well, we're actually, because they're trying to come after him, we actually are working on getting a police injunction so that they can't be around him.

Yeah, restraining him.

he's a very nice guy.

Yeah.

Exactly.

Because if they hang around him, it will happen again because he's a nice guy.

Yeah.

Wow.

Okay.

He just doesn't have the capacity to say no.

Yeah.

That's different.

That's different than being nice.

Right.

And so he's got a co-signature on this car.

And is the car being paid or do we know?

I spoke with

the girlfriend, and she said if I did not allow them to continue communicating with him and him to give them more money, they would quit paying on it.

They've already quit paying on the ⁇ they did not make the first payment on the cash loan that they had said that they were going to pay off for him, and so that came out of his account.

And so he's struggling financially with his own.

He's got to shut his account.

He needs to shut his account down so nothing else can come out of it.

Okay.

Shut his account down.

You keep saying girlfriend.

Is it his wife?

It's the girlfriend of the friend.

Yeah, but the friend got married, I thought he said.

I'm sorry.

I'm not 100% sure.

I think it's his wife, but it might be his girlfriend.

I'm not sure.

There's a couple of con artists on the other side of this equation.

Yeah.

So we're putting a restraining order in place, and you're going to shut down his account.

The only other thing I think I might do is if you have an attorney in the church that will help,

pro bono,

I think I would go to both of these companies, the cash company and the car loan company, and say this guy is of diminished capacity and you had him sign something.

He's not legally bound to it and you need to release him or I'm going to make you the poster child of people who abuse special needs people and

let the attorney get him off of these two loans.

And then I don't care if the car gets repoed.

The cash is gone.

He's not going to be able to do anything about that.

And he needs to set up his account where they can't get into it anymore.

But the attorney needs to get in touch with both of them and say, listen, this guy goes to church with us.

He's diminished capacity.

He doesn't have the ability to sign this stuff.

He can't be held legally liable.

And if you guys don't let him loose, I'm going to make you wish I would let you loose.

That's the attorney's attorney's script, okay?

And

pretty simple because people that bottom feed on stuff like this,

they're generally pretty cowardly if someone knowledgeable comes at them.

Is he severely autistic, Michael?

No.

Okay.

I'm just wondering how easy it is to get.

He's functioning, but

emotionally,

sure, sure.

I just wonder how hard it is legally to get that.

It doesn't matter.

I'm not doing it.

I'm just threatening it.

Okay.

We're not going to go to court and have him

declared incompetent over a couple of little baby loans.

We're not bothering with that, but we are going to let these guys know that they are morally bankrupt, ethically bankrupt, and we're going to make them wish they hadn't done this if if they don't let this guy go.

So this is called a threat.

Right.

Yeah.

So worst case scenario,

just ignore it.

Just ignore it.

And if it screws up his credit, good.

He can't do it again.

Right.

Right.

So just don't make any payments on it.

Let it go.

Let it all.

Let it all implode.

And by the way, if the repo man ever gets in touch with you, tell them where the car is.

Tell them to go get it.

Right, exactly.

Right.

They'll give you the address.

I sure hope you don't go to 1234 Main Street.

That's where the car is.

I sure hope you don't go over there.

Right.

Okay.

Please don't go to this city.

Don't go to that city.

Yeah.

Right.

I don't think I know where it is, but the last time I saw it is over there.

I sure hope you don't find it.

Yeah, right.

Right.

It was there at 10 o'clock this morning.

Here's a picture.

How much is it all, Michael, total

with the

with both loans, with the with the cosine of the car and the amount of cash that they got?

Like, what did it all total?

There's still 16, just under 16,000 on the car.

Okay.

And then $2,000 in cash.

Now, the car has a value, though, so that's not going to be the deficit after the repo.

The bad news is this guy's got his credit dinged up.

The good news is he won't be able to do it again because his credit's dinged up.

Right.

So it's

he won't be able to co-sign.

Yeah, it'll work out to his favor, I hope.

And hopefully we can start to, you're, you're being

to be discipling him and helping him through this, number one, but also giving him some tools for discernment that are not readily available to him.

And if you can help him with that, it'll also help him to build boundaries.

Hey, you know, even all of us that are not special needs, we need those tools.

And sometimes we have to build those tools.

So that's not that unusual.

Hold on, folks, don't panic.

Buying a home in today's market doesn't have to be complicated, but it does take more than hope and a quick internet search.

To get the right home, one that will be a blessing and not a burden, you need a trusted mortgage partner who will listen and serve you, not push more debt.

You need the professionals at Church Hill Mortgage.

I've personally recommended Churchill for over 30 years, and they're the only mortgage company that's Ramsey trusted.

Churchill stands out because they operate the Ramsey way with transparency, integrity, and a commitment to doing what's right for the customer, not what's profitable for themselves.

Churchill aligns with Ramsey's values by focusing on education, responsible mortgage lending, and helping people make smart, long-term decisions that enable them to build lasting wealth.

Go to ChurchillMortgage.com today to begin a better mortgage experience.

ChurchillMortgage.com.

This is a paid advertisement.

NMLS ID 1591, NMLS Consumer Access.org, Equal Housing Lender.

Did you know that twice, that two-thirds of Americans die without a will?

Like seven out of ten.

When you die without a will, you're inviting the court, the lawyers, and the public into the most personal part of your life, and they're going to tell you what to do.

Well, they're going to tell your family what to do.

You'll be dead.

But you need a will.

Billionaire industrialist Howard Hughes, known as one of the richest men in the world, died in April of 1976.

His estate with no will wasn't settled until 1983.

600 people claimed rights to it.

22 legal cousins finally split up the fortune.

It destroyed the whole thing because he didn't have a will.

You need a will.

Even if you don't have billions.

Even if you don't have 2.5 billion, you need a will.

If you just have kids,

don't let the state tell you where your kids go.

You know, make sure you're named a guardian, you have a will, and you've set up, you know, all this.

So

we want to challenge you to create your will in August in less than five minutes.

You can find out if an online will works or if you need a full-on attorney to do it.

Ramseysolutions.com slash will quiz.

It's free.

Click the link in the show notes and we'll get you set up.

This is will month.

Use the promo code and you can get an online will and get 25% off by doing all this.

But go check out the will quiz real quick.

And you need one, by the way, if you're breathing and you're over 18.

Jeff's in Buffalo, New York.

Hi, Jeff.

How are you?

Great.

Thanks for having me on the show.

Sure.

How can we help?

So

my daughter's just graduated from college.

We took some loans

to get them through.

We've got about 180 left on our mortgage.

And I have three retirement accounts plus a brokerage account.

And the brokerage account has about $200,000 in it.

And my wife and I are talking about: should we just cash in the brokerage account, pay off the student loans, and take the rest of it and pay it against the mortgage?

How much student loan debt?

We don't have card.

Pardon me?

How much student loan debt is for?

It's about $125,000.

Between how many kids?

Just one?

Two?

Two.

Okay.

And these are like parents.

Are these parent-plus loans?

Oh, okay.

So you've got student loan debt with 200K in the bank?

Yeah, pay that off by nightfall.

For sure.

Are we?

Yeah, by the time you get off the phone, it should be paid.

Okay.

Right now.

Yeah, absolutely.

You and your wife are right.

I would do what you suggested instantaneously.

And then I would make sure.

Do you have any other accounts that are non-retirement?

No, we have the brokerage account and then we have our savings account.

The savings, how much is in the savings account?

Oh, the savings account is the 200.

No, the brokerage is 200.

How much is in the savings account?

The brokerage account is the 200.

The savings account, it's about $5,000 or $6,000.

Okay.

You need three to six months of expenses.

Do you have any loans other than the student loans, not counting your mortgage?

No, we have no credit card debt.

We have no car loans.

Okay.

All right.

So, Jeff, I'm walking through the system that we teach that we've taught for 30 years that works every time.

It's called the baby steps.

The first step is to be debt-free other than your home.

So, $125,000 in student loans, that leaves $75,000 in the brokerage account.

Okay.

Now you're debt-free.

That's baby step two.

Baby step three is a fully funded emergency fund, which represents three to six months of household expenses.

What's your household income, sir?

It's about $180,000.

Cool.

What do you think your monthly expenses, if you just had to write checks and stay open?

What would it take to stay open?

We're cash positive.

I have a budget, and we keep track of that every month.

What's it take a month?

I thought, yeah, how much does it take to pay mortgage?

What's it take to stay open each month?

What's your burn rate?

Oh, it's about five and a half.

It's actually $5,600.

Okay.

So three to six months of that would be $20,000, $25,000.

Yep.

Okay.

So with a $180,000 income, that's probably pretty cool.

So let's call, if we call your emergency fund $25,000, it's only got $5,000 in it.

You need to put $20,000 in it.

Now we've used another $20,000 of your $200,000.

So

we're down to $55,000 that you're going to throw at the mortgage.

Baby step three is putting 15 or 4 is putting 15% of your income into retirement if you're not start putting that in the budget.

Baby step number four is kids' college.

Oh, wait, we just finished that.

Baby step six is pay off the house as fast as you can, and that's the 55 going towards the 180.

And then whatever I can squeeze out of my budget going forward, because you're cash positive, instead of building up a brokerage account, I'm paying off the mortgage as fast as I can.

Okay.

That's how we execute this.

While funding 15% of your income into retirement.

So you are still investing while paying off the house.

Okay.

Yeah, that's the outline of what we do.

I'll send you a copy of the book, The Total Money Makeover, because you sound like you're open to actually doing it.

That's pretty cool.

So it'll show you how to do it.

That's very cool.

And the purpose of all that, Jeff, is what it does, it sets you up with no mortgage payment, making $180, no payments of any kind, your emergency funds covered, you're systematically investing.

There's nothing left to do then but become very wealthy and outrageously generous.

And we call all of that living like no one else so that later you can live and give like no one else.

You've done a really good job.

All we're doing is tweaking the flow of some of this cash and maximizing its potential.

That's all we did in the last few minutes.

So very cool.

Yeah.

Student loans are gone.

Boom.

$25,000 emergency fund.

Boom.

$55,000 on the house or

$25, but adding $20,000 to the emergency fund, $55,000 on the house.

So now the house is down to $100 and a quarter.

And here we go.

Game on, baby.

Game on.

And you'll knock that out.

You'll probably knock that out in a year, man.

And you walk through the backyard without your shoes on.

The grass feels different, man, when you got no mortgage.

Life changes.

It's so freaking weird.

Jeremy's in Atlanta.

Hi, Jeremy.

How are you?

Better than I deserve.

Good.

How can I help?

I've kind of accrued a lump sum of money over the years and savings, and I've kind of put it into high-yield savings, maybe bought a few CDs and stuff like that.

But

I don't have any retirement, but everything that I own is paid for.

Good.

And I don't really know what percentage to go.

You're great at avoiding debt.

You're great at saving.

You're lousy at investing.

Yes.

Scared, honestly.

That's fair.

That's fair.

Well, you know what's scared when you don't know how to do something is wisdom.

You know, you get behind a car and you're 12 years old and they start the car and it's

400 horsepower.

You should be scared.

Well, I know money in my bank account is good.

It kind of scares me.

Yeah.

Yeah.

How old are you, Jeremy?

Control.

I'm 38.

Okay.

All right.

So here's the thing.

There's two kinds of fear, and yours is a wise fear.

An unwise fear is I just have this general paranoia, and we call that false evidence appearing real.

But your fear is I don't know what this is, and it's powerful, and so it's scary.

That's a good fear.

So how do we overcome that?

We add knowledge to the equation.

So if I woke up in your shoes, how much have you gotten all these accounts, by the way?

As of right now, about $483,000.

Way Way to go, man.

Well done.

Way to go.

Most people are broke, and look at you.

That's so good.

Very, very broke.

Yeah.

It's going to be so easy for you, though.

All you've got to have is some knowledge.

So do you own a home?

Yes.

Okay.

The home did not come with an FDIC guarantee that it would not go down in value, did it?

No.

But you were very comfortable buying that.

You weren't scared investing in that piece of real estate.

And I'm making that.

I was at the point where where I knew it was going to be worth more.

Ah, historical data.

Walking around since.

You're old enough that you've seen houses go up in value and you could believe they're going to continue to.

Good analysis.

And that removed the fear.

So I'll give you an example.

I own a mutual fund that started in 1934.

It has averaged almost 12% a year since 1934.

It's only had 22 down years.

And in the last 25 years, it's only had three down years.

I'm pretty comfortable with that, like you're pretty comfortable buying a house.

Follow me?

But you got to add that knowledge to your bucket.

So what I would tell you to do is sit down with

a Ramsey Smart Investor Pro and click on Ramseysolutions.com, sit down with them, and they have the heart of a teacher.

Tell them when you call them, I'm not ready to invest.

I want to learn because I'm scared.

And they will be gentle, kind, kind, and teach.

And they will teach you and teach you and teach you until you are ready to purchase, not when they're ready to sell.

And then you'll be able to do some long-term investing the same way you bought that house.

Switching banks can be a hassle and I totally get that.

But when Wince and I opened up our Fairwinds account, we were shocked by how quick and easy it was.

It just took a few minutes online.

We didn't have to block off an entire afternoon or track down paperwork.

And the next day, we got a personal call from a Fairwinds specialist just checking in.

I couldn't believe it when I answered my phone and I was talking to them.

I was like, Y'all are the nicest people.

Now, if you're working hard to save money, get out of debt, and build a future, you should have a bank that supports that, not fights it.

That's why I recommend Fairwinds.

They created the smart checking and savings bundle specifically for Ramsey fans.

Plus, they have a great app and you have access to over 33,000 fee-free ATMs and more than 5,000 shared credit union branches across the country.

So you can have access and withdraw your money just like you're used to, no matter where you live.

Don't settle for a bank that slows down your progress.

Make sure you choose one that helps build you up and helps you win with money.

Visit fairwinds.org/slash Ramsey and open your smart bundle today.

Fairwinds.org slash Ramsey.

Fairwinds.org slash Ramsey.

Fairwinds is federally insured by the NCUA.

Maddie is in Orange County, California.

Hi, Maddie.

How are you?

Hi, good.

Thank you for taking my call.

Sure, what's up?

So, my husband and I are in baby step two.

We have about $100,000 in debt.

And our question is, do we continue to pay off our minimum payments on all of our debts while we're trying to hack off our debt?

Or do we pause on our minimum payments and use all of that money to knock out one debt at a time?

No, you make minimum payments and pay minimum payments on everything but the little one and attack the little one with what you can find beyond that.

That does two things.

One is it keeps them from chasing you and hassling you for being in default.

And two is it keeps from destroying your credit.

Okay.

Yeah, just to stay current so you guys don't get behind on them.

If you just stopped paying them.

Yeah.

Which we're able to pay all of them right now.

We were just thinking, you know, if the thought process is, you know, that we don't need a credit score, then yeah, you don't, but you're going to get yourself into a bunch of late fees and maybe even some legal fees where they come after you.

Yeah.

What's all the debt in?

What are the different types of debt?

So we have $12,000 in student loans, $70,000 in car debt, which I just convinced my husband to sell the cars.

So

we're not there.

$20,000 in credit card debt, $10,000 in personal debt, and then $35,000 in medical debt.

Okay.

Good for you.

Well, you're attacking this.

And what's your household income?

My husband makes $120,000 a year.

Okay.

All right.

And

yeah, you get rid of the cars.

It's going to catapult you way forward in this

and get, you know, just get some inexpensive cars for the time being,

which don't fit in in Orange County.

I understand, whoopty-doopty.

But we're still going to do it anyway.

Was it just lifestyle creep, Maddie?

All the credit card debt and everything?

I'm sorry?

Was it pretty much lifestyle creep, would you say, all the credit card debt?

Or were you guys opening a business or what was causing all that?

No, it's it's just not wise spending.

And we actually had my husband had a lot of credit card debt before we got married.

And so motivated it's his.

Gotcha.

Gotcha.

And you're both on this now, and you're both attacking it.

And we're talking about this a lot.

And that's why you start asking questions like this.

Good, good.

That's a good sign.

I think you're on track.

But no, the answer to your question is: I would continue to pay minimum payments because of the late fees, the legal fees,

all the other stuff.

And yeah, I'm not worried about your credit.

I'm not trying to build credit.

But on the other hand, I'm not trying to destroy it either.

We'll let it be what it is and pay everything on time, be current, and then attack the smallest.

But getting, I mean, you've probably got, what, $1,200, $1,400 in car payments, right?

Yeah, we have $12,000 in car payments, and then we have a little over $1,400 in, I'm sorry, $1,200 in car payments and $1,400 in other minimum payments.

So half of your payments are car payments and 70% of your debt is.

So

you'd only have $30,000 left to hit.

Which is so great too, Maddie, because on the other end always, the math, you think you guys are going to have $3,000 a month freed up, right?

That's not going to banks and your student loan debt and everything.

It's going to be with you guys.

So that's always the encouraging other end of the formula.

Yeah, look at how fun this is going to be off the back once you do all this crap that you got to go through to clean up the mess.

But you're going to, yeah, Rachel's got a good point there.

Tanya's in Arkansas.

Hey, Tanya, welcome to the Ramsey Show.

Hello.

Hi.

Hi.

How can we help?

I have

a son who graduated high school this year and he's going to an expensive Christian college and he doesn't quite have enough money to cover it and I'm wondering if I should be generous and help him out until he can get a job and get settled or if I should say sorry bud you're on your own

how much is the how much is this college costing per semester or per year

let's see he He lacks about, I think it's about $7,000 per semester.

The college itself was like $50,000, and he's gotten enough scholarships and stuff to cover most of it, but there's just a little bit lacking.

Okay.

The number one thing that causes student loan debt is not

the fact that people want to get an education.

It's the fact that they select a college they can't afford.

While there's colleges all over the place he could have afforded.

Right.

And he has said that after this first semester, if

before getting a loan, that he would come back to our town.

How's he going to pay for it?

He's short.

Well,

I was going to help him.

No, no, no, no, no, no.

I mean, his plan is if after the first semester I have to get a loan, well, he's going to have to get a loan.

He's got short.

What's his plan?

Oh, come back here to Conway to go to a state school, which would be, it would be covered.

No, he's already gone to the other place for a semester and couldn't afford it.

How did he pay for that?

Oh, I am, I was going to help him with this first semester.

Oh, so he knows that.

You've already made that commitment.

And then going forward,

he's going to try to wet.

Okay, so 7,000.

So if he's $7,000 short, mom's going to cover it, but he's going to come home.

What?

Well, he has had, well, let me see.

He's gotten

a 529.

He had about, let me think how much he has.

He has 4,000 in it.

It's not very much.

And it doesn't completely cover the first semester.

And so he was just going to go ahead and just use that and then go forward with what he's got.

And I said, well, I'd like to help you.

I'll do this much on him.

Tonya, if you don't pay for the school, you don't get to go.

And he's short.

So unless you give him the money, he's going to take a loan.

And what he's about to pay for one semester at this school probably could be a good thing.

He could have gone through the whole thing in Arkansas.

Right.

Right.

So the best gift you can give him, Tanya, honestly, is sitting him down and laying out the facts of the situation and the reality of what she's living in and make a wiser choice.

Is he starting this fall, like coming up?

Yeah, yeah.

He's already set to go and pay for things this fall.

Yeah, cancel it.

Okay.

I mean, seriously.

It's stupid.

It is stupid because I'll be honest.

It is probably, I'm going to just say it.

It's probably a school that no one's ever really heard of.

It's going to do nothing for him in the job market, right?

Like it's there's nothing that is causing any any type of and I'm not against Christian schools, but the idea that somehow that all the holy people go there and they don't go to the others is hogwash.

Some of the people at Christian schools ain't real Christian, honey.

We all know that, okay.

And that may not even his motivation.

I mean, it's just, it is, it's there's no marketplace value for most of these degrees because the school doesn't carry any level of credibility because the majority of people don't even know where you could

get a degree at another college that no one's really ever heard of either, but it's an in-state, but it's an in-state school, and you take in-state tuition and he gets it paid for because he sounds smart.

If he's paying for this semester, he'd probably go all the way through Arkansas.

Yeah,

he should cancel.

So that's the gift you could give him,

Tanya, honestly, to lay this out for him.

So, let me let me ⁇

how do I say this gently?

Your job as mom is not to go along with someone's dream, which is actually a nightmare in the making.

Your job as mom is to be stronger than that and speak more directly into this with more wisdom and more force.

I would beg you to be stronger with him.

He is not equipped to make this decision, and we can tell because he's made a bad one.

And he is not, just because he's tall and taller than he was and his voice is deep and he has some hair on his back doesn't mean he makes good decisions.

Okay.

Just because he looks like a man doesn't mean he's ready to make this decision.

So he needs

his parents in his life to say, don't do this.

Shanya, please, please

be a voice.

Be a voice over.

Yes, I please do it.

You can do it.

Yes.

You can do it.

Yes.

I hope you do.

And that's what's so hard about student loan debt.

It's these 18-year-olds that have no idea.

He's going to a $50,000 a year school, right?

Do you know what I mean?

And there's no adult in his life.

It's a dumb idea.

This is a stupid idea.

Oh, man.

Tanya, you can do this.

This is how we have $1.7 trillion in student loan, ladies and gentlemen.

You give free money.

And not to Harvard.

You know what I mean?

18-year-olds.

Like a big school.

It's probably, I mean, it's doing nothing.

It's probably not to Harvard.

It's going to do nothing.

Who would go there now?

Well, I'm just saying a school that people actually actually have heard of.

It's like, wow, that's impressive.

Yale?

I don't know.

Brett's in Lincoln, Nebraska.

Hi, Brett.

How are you?

Good.

How are you doing today?

Better than I deserve.

What's up?

Well, thanks for taking my call.

First off,

my wife and I have a little over $100,000 in credit card debt.

Wow.

And I'm in sales and have a quite large commission that's coming in at the end of this month that will basically wipe out all that debt.

Praise God.

Wow.

Well, that's lucky.

I mean, you worked hard for it, I know, but

then you're panicked that you might do it again

right yeah

and so i hope you are how do we how do we yeah i my wife and i are both on the same page in that so obviously a change in our spending habits and lifestyle but i'm curious how we should be thinking about our behavior and our spending when it comes to not using a credit card and using more cash or a debit card and how we should approach that.

Light two candles tonight after dinner, get all the credit cards out and have a plastic surgery party.

A plasectomy.

Sounds good.

Chop every single one of them up and then close every one of the accounts when you pay them off.

That's step one.

Yeah, cut it off at the source.

Just be done.

Be done with it.

Do you guys know the why, why,

what caused the $100,000?

Is it purely lifestyle?

Is it that you guys just didn't have a budget?

Like, what was the, what, because getting to the root of it and understanding the motivation and what caused it in the first place is going to help going forwards.

That, if you can identify that.

Yeah, I think it's a combination of both, right?

Like we had a budget, but we didn't really stick to it necessarily and monitor it on a weekly basis.

And there were also some lifestyle-style choices and trying to keep up with the Joneses and just wanting nicer things above and beyond our paycheck.

Both of you, both of you can look at each other and say that in total.

Both of you are admitting this, right?

Yeah.

Okay.

Yep, absolutely.

Good, good.

How old are you guys?

37 and 39.

Perfect.

And what's your household income, including your normal checks that you get?

So it's variable depending upon the commissions every year.

Sure.

But I mean, what do you average?

What's your normal income?

My

annual paycheck is $125,000 myself.

My wife works part-time at our church and makes about $23,000.

Then how much do you usually get in these bonuses?

I know this is an unusually large one.

Yeah, I mean, it's variable

anywhere collectively between,

I'd say, like $300,000 to $600,000, depending upon the

I tried to do for a long time.

I was a little younger than you at the time when I I figured it out about me, was I'm an abundance person and I'm a really good salesperson.

You're obviously a really good salesperson.

And I'm an abundance person.

When I put those two things together, what I fell prey to was I always just thought, well, if we need some money, I'll just go get some more money.

And if I, in other words, I thought I could out-earn my disorganization and stupidity and overspending.

And it found out I couldn't.

You can never make enough to beat that.

And that's where you are today.

You've discovered that.

I don't know if you fell prey to that exact emotion or not, but I always thought, I'll just go get some more money.

I can outearn my stupidity.

And

sometimes someone that's very good at what you, like you, is like I am, they fall prey to that.

So

you can't.

You have to build processes and systems into your life that causes both of you to be accountable.

And that starts with a basic budget.

Yeah.

I mean, I'm going to be honest with you, Brett.

I'm a little bit shell-shocked that I'm like, you guys went $100,000 in debt, making half a million dollars a year.

Like,

that's pretty, I mean, that's pretty

much it.

Like, that's a lot of spending.

That's a lot of spending.

And I like to spend.

But I'm like, oh, my gosh.

So, I mean, if I, yeah, if I were you guys,

man,

I mean, I would sit down and figure out how can we, I mean, I would drive such deep contentment and discipline so hard in this first year and make it swing the pendulum the other way.

Yes, make it a year goal and live on, God forbid, 200,000.

You know what I mean?

Like, seriously,

just to get to this idea of reality of like, okay, we are, we are good, right?

Like, we, we make great income.

And, and if we, you know, you choose 250 or whatever,

you're in Lincoln, Nebraska,

to know, but honestly, to know that you, your wife, your marriage, your family, your friends, your life is good.

Like, you don't need all this stuff.

And I know you feel that already, but there's something about actually living it out and making choices and being disciplined to know we have money in the bank, but we're still choosing to live so below our means to really get in this process and this pattern and this and actually live it out.

And then you guys can start kind of loosening the reins more and more.

But I mean, if that's what I would do if I were you guys.

And I'm a spender, but I would, I would spend it on bank.

Yeah, I would try to live on half the income and just be disciplined in that because you guys have been so far the other way.

Yeah.

I hope y'all took great vacations and stuff.

You know what I mean?

Like, I hope there's like

a tremendous gun collection.

Yeah, or tremendous purse collection.

I don't know.

But, uh, but good for you guys.

I mean, you're obviously you're an incredible worker.

I mean, that's yeah, that's a phenomenal income, which is so great.

And you guys can use that in such wisdom and discipline and contentment.

And here's the thing.

You will like yourself better and each other better when you do that.

Yes.

Yes.

Because you're more likable than some out-of-control spending freak.

It's going to feel really good.

Yeah.

It's going to, it's, and it's spiritual to discipline and it all.

Like it's overall, I think it's going to be really, really healthy for you guys.

So I'm excited for y'all, honestly, because it's, it's the kind of people like you, honestly, Brett, that you can bless your family.

You can do some really amazing things in life because you have the tools to do it.

And you're going to be able to be extremely generous.

And the blessings you're going to be able to give to people above and beyond is

incredible.

And then you think about your kids' kids and the legacy.

I mean, you guys are just set up to have a really rich, not in numbers-wise, but just fulfillment.

And money can be a tool to help create that.

But it is not the thing that's going to be the fulfilling factor.

And you guys know this because it doesn't buy happiness.

You're never going to find a level of satisfaction because you will keep spending and keep spending and spend beyond $500,000 a year.

Yeah, there's a piece underlying this that she's talking about.

Godliness with contentment is great gain,

scripture says.

And so it's that peace that,

and when you're overspending, it's kind of frenetic and kind of crazy and kind of wild.

And there's this adrenaline rush and this dopamine hit from hitting the submit button on the cart on Amazon and all that garbage.

And those people,

the people that do the marketing on that stuff understand that and take advantage of it.

And so your anxiety level in the house is going to drop when when you get control of this.

Your relationships are going to improve when you get control of this.

You're probably going to experience physically

feeling more peaceful when you get control of this.

So there's so much more to it than the simple arithmetic or the sickening sense of I'm out of control and overspending like some kind of freaking addict or something.

And so, yeah, you're really asking great questions.

You're in a great place.

And the phenomenal news is you get one shot here to clean it all up at once.

Wow.

Chop up those cards tonight.

Get a debit card.

You can go on the envelope system.

I still carry cash in my pocket.

I buy most things with cash, but I'm really old school.

I mean, I've got a redneck emergency fund in my wallet, a thousand, thousand bucks, right?

All the time.

Just because I might need it.

And I never do, but just because I might need it.

And

so, yeah, it just, there's a different feeling when you're using money that you have,

and it's a sense of power, a sense of control over it, telling your money what to do instead of wondering where it went.

We're going to sign you up for the Every Dollar Premium and get you involved in that and jump into one of these free webinars that the Ramsey personalities like Rachel are doing, showing you how to set that thing up and get it running.

It'll be valuable.

You and your wife sit there and do it together and lay out every dollar before the month begins where it's going to go, regardless of how big the commission check is.

Every dollar needs a name.

I don't care where it's going as long as you do it on purpose.

Actually, I do care where it's going, but do it on purpose.

And that'll get you there, and you'll see some real good movement in that.

Wow.

Big numbers.

Yeah,

I know.

Which I'm glad because they can get out of it, but also it magnifies.

It magnifies the absurdity.

Of what it is.

Yeah, that's a great example.

But, Brett, we're cheering you guys on.

Sign up for real.

I'm proud of you.

Get after it, dude.

I was sick and tired of being sick and tired, bankrupt with a toddler and a brand new baby at home, scared, doesn't even begin to cover it, but I got mad enough to change.

I started using God's and grandma's ways of handling money.

That journey became the total money makeover, a plan everyday people can use to take control of their money.

Millions have changed their lives following the plan in this book and found hope.

Start your makeover today at ramseysolutions.com/slash store.

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual, amazing relationships.

Rachel Cruz, number one best-selling author, Ramsey personality, host of the Rachel Cruz Show.

My daughter is my co-host today.

Owen is with us in Canada.

Hi, Owen.

How are you?

Better than I deserve.

How are you guys?

Just the same.

How can I help?

So I'm wondering

if I should sell my home

and rent for a little while and then save up some more just to make it a little more affordable on the month-to-month on my end.

Okay.

What's not affordable?

Well, after I started listening to you guys, I realized my mortgage payment is over 25% of my monthly take-home.

What percentage is it?

It's probably about like, well, 25% would be $850, and it's currently $1,250.

Okay.

All right.

And how much other debt do you have, huh?

None.

Okay.

What's your household income?

I clear $3,400 a month.

Mm-hmm.

Okay.

So.

And then my

expenses.

I don't know Canadian tax rates off the top of my head.

I'm guessing you make, what, $60,000 a year?

Yeah, that sounds right.

Yeah.

Okay.

All right.

And

you bring home $3,400, though.

Right.

Yeah, that's right.

That's like every...

Yeah, clear.

Yeah, and you don't have any other debt.

So I'm

the last, the reason I'm hedging around and fumbling is the last thing I sell is the house.

And I will sell the house if you can't afford it.

I would tell you to do that because it's not a blessing to you.

Yours is a little high, but it's borderline.

And do you hate the house?

I don't hate the house.

I just, when I heard you guys say that a house should be a blessing,

you know, not more

an inconvenience, it feels like an inconvenience from time to time.

Okay.

It feels like it owns you sometimes.

You don't own it.

Yeah.

Yeah.

Yeah.

What's the trajectory on your income?

Is it going up fast?

It goes up a little bit year by year.

Slow.

Okay.

Yeah, slow.

Yeah.

Is it just you, Owen?

Or are you married?

Kids?

Just me.

Just you.

Okay.

I'm okay if you want to hang out there.

And hang on to this thing and fight on through it.

It's not enough that

it's completely holding you back.

It's not enough that you're drowning in it.

It is enough that it's uncomfortable.

And it is more than I would sign you up for if we were talking from scratch.

But selling a home, moving, all of that is a very emotionally and financially expensive thing to do.

And so it's the last thing I tell people to do.

I'd tell them to sell their car real quick.

I'd tell them to sell other stuff so fast.

I'd tell them to take an extra job so fast, that kind of thing.

And if you picked up some side hustle to add to the equation, it probably would lighten this load a little bit.

Yeah, because it's a couple hundred bucks.

You know what I mean?

Six, $700 a month that ideally

you would have for margin in your budget.

But

yeah, I'm with you.

Rachel's in Sacramento.

Hi, Rachel.

Hello.

How can we help?

You know what?

I made a big mistake.

Oh, I bought my daughter a car.

Yes.

I've made many, but this is huge.

Last September, and it was contingent upon her getting getting herself together, her FICO high, all that good stuff, and then putting it in her name.

It's almost a year she hasn't done that.

She's getting fast-track tickets.

That's like a toll bridge thing.

And her insurance is not covered by anyone other than mom.

And I'm becoming inundated with this.

And I feel like I'm ready to do something drastic just to pay off the car and just give it to her.

How much is the car?

$27,000 approximately.

And is it in your name, Rachel?

Yes, ma'am.

It is.

Yes, ma'am.

And the loans in your name, everything.

Yes, ma'am.

Dummy me, yes.

So let me ask you.

The agreement was

that she was to

arrange to get the car paid off and put it into her name.

And she's been unable to do that because of her irresponsibility.

Is that what you told me?

Absolutely.

Pretty much.

And how long ago?

And that was a year ago.

Yes.

And things have gotten a little bit haywire now because these tickets have come.

Registration is going to be more than expected.

And, and, you know, I would just call her and have her.

She lives in your area, I assume.

Yes.

Yeah.

I think you need to sit down with her for a cup of coffee and say, honey, you know what?

I love you.

And I'm so sorry.

I thought I was doing something nice for you.

And this is a curse to you.

It has really messed up your life.

And I'm so sorry.

Hey, we're going to fix it.

We're going to sell that car.

Well, she has three children, my grands, so she's going to have transportation.

I don't care.

I know.

She does not need a $27,000 car, and she's irresponsible, and she didn't follow through on what she said.

Are you a multi-millionaire?

Absolutely not.

I'm going to start working for you guys and become one, though.

How about that?

That's another story.

Okay.

But

you don't have the money to throw around 20,000.

You don't have $27,000, do you?

No, but you know what?

This is the crux of the question.

I am 61.

I'm going to get my Social Security early next year, even though that may not be the smartest thing to do.

But I have a home.

So I was either going to get a HELOC or take the lump thumb from my employer.

Just be done with it.

Sweet girl, you made a mistake.

Undo the mistake.

Don't keep doing it.

I know.

What you did was not a blessing to your daughter.

To the grandchildren?

You didn't help your daughter.

You hurt your daughter.

You put her in a situation where she can't can't afford a car

well actually when i went to honey she can't afford the car

no she can't she can't afford the tickets and the registration you can't afford

you can't afford the car nobody can afford the car the car needs to go away it's not a blessing she's going to transport the children honey we might get a five thousand dollar car

because she's a single parent honey she can get a five thousand dollar car single parents do it all the time

so maybe but you're not blessing her.

You're not blessing those kids.

You're putting those kids' mom in a trap.

And she can't swim.

She's drowning because of you.

Stop it.

Stop it.

Quit rationalizing it.

It was a dumb butt idea.

Quit doing it.

Stop it.

Okay.

Love your daughter better.

Okay.

Sit down with her.

Say, I made a mistake, honey.

We're selling this car.

And we're going to figure out a way to get you a little $5,000 car to cart those little kids around.

And get yourself up on your feet, kiddo.

Because guess what?

That's what you did.

Right.

You did the same thing.

And nobody gave you a car you couldn't afford to drowned you in it.

You're like somebody swimming and you hand them an anchor.

How do I sell a car that's being financed?

You sell.

Okay, now we're getting somewhere.

Yeah, go on Kelly Blue Book, Rachel, okay, and put in all the information and see how much the car is worth.

You owe $27.

There's a good chance you're going to be underwater on this car.

So the value of the car, let's pretend it's at $24,000 that you can sell it for $24,000.

That means

you have $3,000 that you have to find.

So what you could do is go down, get a $8,000 loan from a credit union, give your daughter the $5,000 if you want to get her the $5,000 car, $3,000 for the difference and be done with it.

And you pay off the $8,000 for your mistake.

And then you pay off the $8,000 of that loan.

But here's the thing.

When you're trying to bless somebody and and you do it wrong, you don't bless them, you curse them.

And that's what you did.

You didn't mean to, honey, but it's what you did.

So you need to undo it.

What's up, guys?

George Camill here.

If you've been thinking about making a real difference in your community, this is your moment.

People are drowning in money stress right now, and you can be the one who who helps them by leading a Financial Peace University class.

It's totally free for you, and we hook you up with all the tools and support you need.

So, if you're ready to help people ditch debt, save money, and actually sleep at night, go to fpu.com/slash lead to learn more.

That's fpu.com/slash/lead.

Thanks for joining us, America.

Buying or selling real estate is a big deal in the middle of all the drama that we've got going on right now.

And when you're facing drama, Dr.

John Deloney has a good saying.

He says, facts are your friends.

Facts can help you pierce through all the hyperbole and the overstatement and the crazy stuff you see on TikTok and on Instagram.

Facts are good for you.

If you want to know what the latest facts are about the U.S.

housing market trends, we can help you do that.

Go to to ramseysolutions.com/slash market.

You'll be able to find there what the median house prices actually are and what they're trending up or down, regardless of what someone told you that their neighbor sold their house for.

Yeah, that's not good information.

How many houses are actually on the market?

What are the real interest rates today?

Yeah, we keep the website up to date and ramseysolutions.com slash market or click the link in the show notes.

Malik is with us us in Boston.

Hi, Malik.

How are you?

Hi, I'm doing well.

How are you guys?

Better than we deserve.

What's up?

Awesome.

Thanks for taking my call today.

So I make kind of a variable amount of money each month and trying to budget right now to kind of more aggressively pay off my student loans.

And

just wanted some advice on that.

What is the fluctuation usually?

Like what's a high

month, low month?

Yeah, so last year I made about $65,000 and that was anywhere between like $2,500 a month to like upwards of $9,000.

Okay.

Pretty good fluctuation.

What do you do for a living?

Yeah.

I'm an acupuncturist.

So I...

A lot of my income, I mean, essentially my entire income is based on the number of people I see in a given week or month.

And then I also do some side jobs as well

to supplement that.

Okay.

So what I would do,

because I'm on a, my income is up and down too throughout the year, depending on work and everything too, highly commission-based.

So what Winston and I do in our budget, we have it prioritized of what has to be paid and then what we just like and enjoy.

And so for you, you got to figure out, you know, food, shelter, utilities, transportation, your four walls have to be covered every single month, right?

We're not going to get behind on those things.

And what does it take to do that?

If it takes 2,100 to do that, the first 2,100 is gone before we even start talking.

Yep.

And then everything else after that, prioritize different categories.

So insurance would be one thing, you know, to make sure that that's paid.

But just go down the list.

And if you download our Every Dollar app, they give you a set number of categories.

It's like up to 20 of

different things that you probably spend money on throughout the month that you may even not realize.

And so we just prioritize that.

And then when the money comes in and we realize, okay, we have enough, you know, obviously to pay the essentials.

And then anything extra then starts dropping into these other categories.

And then what I would do too for you, as you're starting all of this, is to have a, we call it the Peaks and Valleys Fund.

So have a separate kind of savings account or savings line within your savings to put some extra money aside.

So when you do have a low month, you can pull from that to create somewhat of a consistent lifestyle, if that makes sense.

To even it out a little bit.

Yeah.

And then anything above and beyond that, because you do have debt, your expenses should be at a minimum.

So you're going to be throwing anything extra you have at this debt to get it paid off.

So a big month equals big debt payments.

A small month equals we lived and maybe paid some on the debt.

Right.

Okay.

Yeah.

That

essentially it was kind of like, okay, I figured out how much my basic life requires, and then

however much on top of that, I need to be able to like keep some in order, like in case I have a low month.

That's right, that's right.

Yeah.

Just figuring out how much of that to put towards.

Not as much as your emotions feel like.

It won't take much.

With what you're describing, if you had $1,000, $2,000 sitting over there, you'd even everything out.

Right, right, right.

It's not a lot of money.

So, yeah, all of that does that.

So if you've ever done like a time management thing where you said, okay, I have a to-do list and I'm going to force rank it from the most important thing to the least important thing.

And then I'm going to do the to-do list in the order of most important to least important.

If you've ever done that on like a yellow pad, this is the same concept, only you're just doing it with money.

Yeah.

Yeah.

I like that.

Okay.

Well, that's exactly how you get at it, man.

Congratulations.

Hey, thanks for calling in.

We appreciate you being with us.

Naomi's in New York.

Hi, Naomi.

What's up?

Hi.

Thank God we're doing well.

Good.

We've been away for the summer, and we took a job in a camp, my husband and I, and we had our basics taken care of, which was really nice.

And we managed to save up a good chunk.

Based on our job, we have $20,000 practically cash at this point.

And wondering where we need to be putting it towards.

Do you guys have debt?

We do.

Okay.

How much debt do you guys have?

About $50,000.

It's two cars and

a small personal loan that has no interest on it.

Okay.

How much is each car?

Do you owe on each car?

We have $15,000 and $27,000.

$15,000, $27,000.

Okay, and the loan is

$1,500,

like $4,000, Yeah.

Okay.

And how much do you guys make a year?

About $8K a month.

Okay.

Yeah.

Well, for sure, the $20 or the $50 is going to be thrown to pay off, or the $20 that you guys have saved.

You go to your smallest debt.

Yep.

So I'd throw it at the loan and then the $15,000 car.

And those will be paid off.

And then you guys just work to pay off the $27,000 car loan.

So

theoretically it makes sense to us but we have we we have it right now sitting like in a a high old savings um that we could easily access and wondering if we should leave any there for things that come up like kids i mean we have three little ones

we should be doing a budget that includes line items for things that come up with kids

so i'd leave a thousand dollars in there

and then throw everything else at the debt yeah but don't let kids surprises be called an emergency.

Kids equal surprises.

And so you need to have budget line items that include

suddenly they lost their tennis shoe.

Suddenly they forgot to pay, tell me about the field trip.

And it's always suddenly when they're seven.

And so, yeah, you just

anticipate that as a wise parent, and you have some of that budgeted in your monthly budget.

We don't have an emergency fund and call an unannounced field trip an emergency.

It's not.

It was just a bad communication from a seven-year-old.

Lost the paper on the way home thing.

Yeah.

So yeah, that's what we're going to do there.

But it sounds a lot like Naomi that you guys don't have many hardcore processes or systems.

And systematizing this stuff with a good budget, it sounds very nerdy, but it's also very powerful.

It will give you a sense of power over this money.

And when you're running loose and hanging by the thread,

you feel very, very vulnerable all the time.

When you're making every dollar behave using the every dollar budget,

you don't feel that way anymore.

You feel power again.

Even if you're trying to struggle through something, you're at least powerful because we know we got the lights paid.

We know the kids got food.

We know we're not going to get evicted

because we've got certain things we know.

So a lot of those things that are, when they're circling in your head with no system, they all equal some level of trust or stress and anxiety and you when you put them all down on paper and you go oh i got that then that's released and so your your stress level your goes way down as the chaos of disorganization goes down and um that's just not that's not just nerd speak it's actually the real thing it's really what happens yeah so instead of just randomly saving money and just not really knowing you know what to do with it everything has a plan yeah everything has a purpose everything has an execution on it, has it has a name associated with it.

So when you get money from your paycheck, it's kind of boring because you'd already spent it on paper.

You just have to dole it out according to the plan.

There's no emotion left to it.

There's no sense of, oh God, this is a problem.

If you already had that back when you did the budget, so you got it all out of the way now.

So you do the budget before the money comes in.

Every single month.

Let's get that $27,000 car paid off.

That thing's a boss.

You may even want to get rid of it.

Hey, George Camill here.

So you're thinking about buying or selling your home.

It's exciting, but there's a lot to think about, and all those decisions can feel overwhelming.

Well, here's the good news.

you don't have to tackle the process alone.

Ramsey's Real Estate Home Base is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence.

You'll find calculators, start-to-finish guides, a podcast, and even an in-depth video course hosted by yours truly, What's Not to Love?

So, if you're ready to take the next steps toward your home goals, go to ramseysolutions.com/slash real estate.

That's ramseysolutions.com/slash real estate.

Annie's in Los Angeles.

Hi, Annie.

How are you?

How are you?

Better than I deserve.

How can we help?

I appreciate you taking my call.

So here's my question.

I am currently actively actively on baby step two, quickly approaching and eagerly approaching baby step three.

However, I have a daughter who is eight years old.

When she gets, you know, money for Christmas, for birthdays, different events and things like that, we have placed all of that money into her little savers account.

Good.

Now, typically what I would do is I would put it into like a six or nine month CD and then potentially roll it over C D to C D.

Yeah,

that or a high yield.

I mean, how much is in it?

So she has accumulated just over $10,000.

Good, good for her.

Okay.

Yeah.

So what I currently know is that

you're doing better than

most adults out there.

Exactly.

So I just wanted to make sure that I'm doing the best for her money.

And I've heard a lot of things, and I don't necessarily want to take advice from people who are not well versed on like college funds and things like that.

If you were in my shoes, what would you do with that?

Would you keep it in the high yield or

CDs, high yield savings accounts, or would you look at alternative investment opportunities for her?

It depends on what you plan to use the money for.

And that will answer your question.

So I can tell you what we did.

We had a savings account in mutual funds for the kids' college that we were putting money into.

That was their kids' college fund, fund, and we were funding that.

The miscellaneous savings account, like you're talking about, we earmarked that for the kids to spend and to learn to spend wisely.

And we told the kids when they were eight and six and whatever that they need to put money in that account because that was their buy a car account.

And I'm not buying you a car.

You have to buy your own car.

I did, however, agree to match it.

We had 401 Dave.

You've got a lot of money in this account.

You may not want to match this one.

But,

you know, Rachel saved up, I think, $5,000 or $8,000, $8,000, and I matched it, and she got a little $16,000 beamer, a little used beamer.

And it was a cute little car, and it took her all the way through college, if I remember.

But she paid for half of it with her miscellaneous account.

So she threw babysitting money in there, dog-sitting money in there, whatever book sales she made at the back table selling Ramsey books at an event when she's 14 years old.

All of that went in there.

And anything she put in there was going to be doubled for her car.

So it was kind of her car fund.

And that's the way we brainwash the kids that that's what it's for.

If you're going to do that, a high-yield savings is fine.

If you're going to send her to college with it, if you're going to make her pay part of her college with this money, you may want to put it in a mutual fund in a 523 or 529.

529.

Okay.

Yeah, it just depends on what you know, what do you want the money to be for.

And here's the thing.

The money really doesn't matter.

It's a lot for an eight-year-old, but what matters is the lesson that the kid gets out of this.

What muscle are they building in the financial world?

Are they learning to save?

Are they learning to work and save to hit a goal like buying a car?

Are they learning to work and save to hit a goal like going to college?

And I'm going to pay part of it so I actually freaking go to class because I paid for it instead of championing in beer pong, right?

It changes the equation when you've got skin in the game and these things.

And the lesson is what's important, not the dollar amounts, because the dollar amounts aren't going to matter.

They're not enough to matter.

If she learns the smart stuff, she becomes a millionaire off the smart stuff, not the $10,000.

Yeah, exactly.

And the savings part and contributing towards it is

an activity that she enjoys.

Yeah, there you go.

And, you know,

right now her focus, and if I was to tell her, hey, this is going to be for your first car,

you know, that wouldn't really have much impact to her at her state of where she is at eight.

No, but no, we told them real clearly, listen, it's very important.

And we would show them cars at eight years old and go, this is what this car costs.

Cause if you don't start saving, you're going to have a nice bike.

Yeah, but I hear what you're also saying, Annie, that, I mean, is there anything in the near future that maybe she wants to save up?

and pay for, right?

I mean,

and I do think that that's what, I mean, I have an eight-year-old, and that is one thing that we do: is, hey, what is something you want?

Caroline, literally right now, is saving for a mini trampoline because we're not buying a trampoline.

So she's going to buy a little mini exercise trampoline.

It's $40 on Amazon, and she's working to save for that.

So

she's in it.

So she's feeding June.

She's taking our dog out.

I mean, like, she's got her little chores and it's motivated her.

And so that, so I hear what you're saying, Annie, that yes, a car can feel, it feels so far for an eight-year-old.

But that conversation.

so awesome.

That conversation.

Information I learned on the radio.

Is uh,

yeah, but

the car conversation really, really amps up.

Um,

in about in about 20 more minutes for their.

Well, it's going to be quick, yeah.

But I mean, 11, 12, 13, 14, 15.

I mean, they're, yeah,

they're heading that way for sure.

For those of you out there listening, do put a limit on this.

I wasn't smart enough to do that.

Rachel saved $8,000.

Her little brother had a head start on this because

he had watched his two sisters do it, and he's a savings maniac.

And he about broke me with the doubling thing.

So you do need to put a limit on it.

And I had to have a conversation.

We're not buying a new Ferrari, okay?

So, you know, you didn't have that for me.

I know, but I'm saying I had to have a conversation.

We're not spending that on the money.

No, it was unfair.

She's 16 years older than that.

To a degree, because you started this plan all of a sudden at the same time.

So Denise got the short end of the stick.

So she.

Yeah, she started when she was seven.

It was rough for her.

No, it was.

No, she was older than that.

And then I had two years on her.

And then Daniel had four years.

So he had six years more of savings than Denise did.

The three of you were so abused.

So awesome.

Hey, hang on.

We're going to send you a copy of the first best-selling book Rachel Cruz ever did with her dad.

It's called Smart Money, Smart Kids.

And it's about teaching parents how to teach kids.

And so we'll send you a copy of that as our gift.

We appreciate you calling in.

Christopher's in Palm Springs.

We're going to do that right now.

Right now, do what?

Okay.

Yeah.

We got about 10 seconds.

No, we got about four minutes.

Christopher's in Palm Springs.

Hi, Christopher.

How are you?

Oh, we do.

Hi, David Rachel.

I am very excited to speak with you today.

I'm a teacher here in California and just wanted to get your thoughts on how much we should be spending, maybe monthly or yearly, on our classroom.

I have an unpopular

stance on that, and you're a great guy, and you're a wonderful teacher, and so you're not going to go with my stance.

I wouldn't spend a dime on it.

It's not your job.

It's my stance.

It's the school's job to furnish you the stuff to boot your classroom.

And the parents ought to get together and furnish whatever you want.

Do you have an Amazon wish list, Christopher, that goes out to the parents?

You know, I do not.

Are you in an underserved community?

Yes.

Okay.

So it won't matter.

The parents aren't going to be able able or probably willing to help so I mean you've got to be real careful with this because you're doing this out of your love for the kids and your love of teaching but you can break yourself with that budget can't you

definitely I found myself spending thousands a year on it

and really that's the school board's job is to furnish you the stuff to teach the kids and and you know and or what parents can come around and assist you on it.

And or contact a local church in the area and let them know you're in an underserved area and

see if one of the Sunday school classes or one of the small groups will adopt your classroom or something.

The Ramsey Family Foundation adopted the elementary school for four years that I went to when I was a kid.

And now it's in an underserved area.

And so we adopted it, and even our team goes over there and works and helps.

And then we put money into the classrooms and all that.

It was really fun because it's nostalgic for me because it's

where I went to the first grade and all that.

So it's kind of cool.

But, you know, maybe you can find somebody like that to help at some degree, maybe not the whole school, but somebody help your classroom.

And it's just, I think it's blatantly unfair for a teacher to have to pay for that.

No.

I just think it is.

And you guys have got such wonderful hearts, and you're so giving to those kids.

And thank you for that.

But be real careful with that.

It's a slippery slope.

It can continue.

You do not have a moral obligation at all to do that.

Our scripture today, 1 Corinthians 2, 9, it is written, What no eye has seen, what no ear has heard, and what no human mind has conceived, the things God has prepared for those who love him.

Warren Buffett said, Someone's sitting in the shade today because someone planted a tree a long time ago.

Adam's in Charleston, South Carolina.

Hi, Adam.

Welcome to the show.

Hey.

Hey, Dave.

How are you doing?

Thank you.

Sure.

How can we help?

Yeah.

So, first of all, appreciate you taking the call.

It means a lot.

So I'm calling today because I'm in a very tight financial spot currently.

I'm trying to navigate it the best I can.

Basically, where I'm at is I don't think I have an income problem.

I do okay.

I'm active duty Navy, so it is a fixed

yearly, but

72.

Okay.

Your wife works?

Just about.

No.

Okay.

How many kids you got?

No.

Two kids.

Okay.

Two little girls.

All right.

72,000, two little girls in Charleston, South Carolina.

Gotcha.

Yes, sir.

Yeah,

a part of that is I'm going through a divorce,

but

I'm trying to

basically budget for myself and budget for them and set them up for success.

So, like I said, it's kind of tight right now, but I'm trying to make it work.

A lot of that, I would say, about 4,000 of that is going

out the door immediately to her.

So, with what I'm left over, I work with,

and it pays the bills, it does what it needs to do.

For like child support, I don't know.

No, he's trying to support both households.

Correct.

That's not sustainable, bro.

Yeah, I mean, because you're probably only bringing home $5,500 a month, right?

You're not going to be able to do that long term.

Yeah.

Yeah.

This isn't

mathematically doable.

Yeah.

It's a sweet sentiment, but it's not going to work.

Right.

Okay, so your ex-wife

is going to be working.

That's the hope.

No.

No, it's not an option.

She's not going to be able to eat if she doesn't.

Right.

You don't make enough to support two households indefinitely.

Nor is that wise.

That's what divorce brings to your ex-wife's life, a new job.

Regardless of who asked for it or who caused it.

Right.

So you'll be paying child support, which is a percentage of your income according to South Carolina law.

And you will do that because you're a good dad.

And in addition to child support, you'll do some things here and there because you're a good dad and you love your daughters.

But you cannot support two households, sir.

That's not sustainable.

Is that the expectation, Adam?

What have you guys talked about?

Well,

yeah,

I'd say unfortunately, but not really.

Like, obviously, child support will never be an issue.

No problem doing that.

But being in when you're active duty, there is an instruction in place.

to protect service member and you know any immediate you know spouse um there is a set limit in place that you have to abide by, which again, no problem, but it is a percentage of what I make.

So, regardless of if she works or not, that's what has to be done.

That's fine.

But it's not 60% of what you make.

It's akin to child support.

Yeah, it's.

We work with the military for 30 years.

The military does not take 60% of a dad's pay for his kids when there's a divorce.

That's not true.

You've gotten some bad information.

Okay.

Yeah, how do I go about this, I guess?

If I'm being told, like, by the military as a whole, this is what, I mean, I guess how do I navigate that?

You're being told by the military that they're going to take 4,000 of your 5,000 and give it to your kids.

Yeah,

that's what I've been doing for the last eight months.

I understand you've been doing it, but you're saying someone at the military told you that.

Correct.

Okay, you need to go see your senior officer and have some discussions.

You've got to learn how to do it.

Is there a lawyers in place, Adam?

Like, where are you guys at in the divorce?

So there's no official

paperwork or anything yet.

It's just a separation period.

And we're getting to that point here in the next couple weeks.

Okay, because a lawyer would know all the divorce law and everything, too.

So they'll be able to...

So you can sit down with JAG and they can walk you through it too.

But I'm going to my senior officer and find out you need to learn about what's going on here because I've been working in the military for 35 years.

I've never heard this in my life.

Now they do require that you take care of your kids.

I don't have any problem with that.

But the child support numbers I've seen are more akin to what the state levies and what the state requires in most cases.

And, you know, and you've got to do other things to make sure that, you know, for instance, if you've got a security clearance that's based on your credit, you've got to keep your bills paid and those kinds of things.

That kind of stuff will come up in this situation.

But you may want to sit down at the JAG office.

You for sure want to sit down with your senior officer.

And I think you need to learn something about this because this,

I might be wrong.

Sometimes I gave out some wrong information last week on this show, but I don't think I'm wrong here.

So I just,

I'm not wrong about this.

I've never seen it.

And I've worked with military stuff for 30 years.

So, and we love the military.

Thank you for your service, by the way.

And, but no.

All right.

Jennifer's in in New Jersey.

Hey, Jennifer, what's up?

Hi.

Thank you for taking my call.

Sure.

How can we help?

I was wondering

about the baby steps.

We're trying to pay off some small debts, you know, $10,000 here, $20,000.

I think they add up to like $50,000 or $60,000 in various small car loans and personal loans.

But my husband and I have a disagreement.

I think we should just pay off our, work on paying off our mortgage for the next few months because I think that we can.

And that would open up

a small the amount of money to pay off.

It's like $69,000, and the monthly payment is $3,700.

So I feel like if we paid that off, we would have it would open up all this money to be able to pay off all these other little debts.

So $109,000, you're 100% debt-free house and everything.

$109,000?

Oh, yes.

Yes.

How much do you guys make a year?

So my husband makes $190,000, and I make $150,000.

Oh, nice.

So you should pay off all of this in a year.

Yes.

Yeah, you should pay off $100,000.

If you're making $250,000, $300,000,

you should pay off $109,000 in one year.

In which case, this argument doesn't matter.

I suppose it's...

It doesn't matter because you're not going to be doing it long enough that the math matters in your argument.

Do it in one year.

$8,000 a month.

Yeah.

Why can you not do that?

You make $300 and something thousand dollars.

I don't know.

I don't either.

I need to do the every dollar app.

Yeah.

I think it's pretty common.

Like, you just don't know where all your money goes.

But if I look at it and I go, okay, you make $300 and I don't know, what was it?

$15,000?

$320,000, okay?

And we take $109 from that, that only leaves you $200,000 to live on.

Yeah.

How in the world?

And you're in New Jersey, so you got a lot of taxes, but then that's still going to be,

you know, $120,000.

You ain't going on vacation that year.

Right.

And you're not going to eat out every night.

Right.

And there's not going to be $1,000 bottles of wine on the equation.

But yeah, you're actually going to get out of debt.

So yeah, you do need to get on the every dollar budget because $300 and something thousand minus $109 equals $200 and something thousand to live on.

Wah.

Go do it, right?

Seriously.

Bust it.

Bust it, girl.

And if you, the point too being, if you're going to do this in one year, you could do the mortgage first.

I don't care.

Because you're going to do the whole stinking thing in one year.

Okay.

And then the $3,500 a month being freed up, it only matters for about three months.

So it doesn't matter.

Because it changes the whole equation.

If you're going to drag this sucker out for four years, then we could talk about your equation.

Because it does kind of start to make sense then.

Not sure I would do it, but it starts to make sense.

It's a fun argument at at that point.

But for one year, nah, knock it out.

That puts this Hour of the Ramsey Show in the books.

We'll be back with you before you know it.

In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.