You Can’t Borrow Your Way to Peace

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From the Ramsey Network, this is the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships.

I'm George Camel, joined by my good pal, Dr.

John Deloney, and we're taking your calls at 888-825-5225.

You call us and we will share our opinion.

And it's worth whatever you paid for it.

And today that's $0.

So Chris is going to kick us off in Lima, Ohio.

What's going on, Chris?

Hey, gentlemen, good to talk to you.

So quick question, please.

Speaking with another financial advisor, I got some input.

And I want to know, why is it better in your point of view to pay off my mortgage early?

with extra principal payments when the projected interest savings by doing that is significantly less than the projected interest gain of investing those extra payments.

I wish we were all robots and math and is all that mattered, Chris.

I really do, because this would be a much easier answer.

And I don't think you're going to like my answer, and I don't think you're going to pay off your mortgage early.

But hey, can we just say let's walk through it?

All things told, if everything works out perfectly, you are correct.

And hopefully, that like

if you never have a job lost, you never have a divorce, everything works out great, and the markets continue to soar.

That's right.

Yes.

And everything is perfectly stable in the financial markets these days, and with everyone's all in on the same leadership.

So we're going to just go with that because everyone's pretty comfortable right now with everything, right?

So assuming all that works out right, you actually are correct.

The math works in your favor.

And that's where I, at least me personally, and I don't know George is too, we're playing a totally different game.

And so

The game is I want to be at a place where nobody, no government, no people, no bank, no mortgage company, nobody can take away me and my family's home.

Sure.

And so I'm solving for peace.

I'm not solving for maximum ROI on every penny in my life.

There is places where I try to solve for maximum ROI.

Having a house that nobody can take away from me, I personally believe there's a neurological connection to safety.

If your body knows they can take away your house, if you lose your job, if you lose anything for any reason in this world where you can get canceled overnight for something you post, if you go to the wrong cold play concert, your life is over, right?

Like whatever's happening, there's so many outside factors that can take your life away from you.

Your brain would be failing you if it let you sleep at night.

And so, as for me and my house, we opted out of that ROI game on that particular math problem and said, I want to solve for peace.

And so when I was paying my mortgage off, I paid probably a 3% sleep tax and it was worth every single penny.

Okay, that makes sense.

Can I have one more question?

Do you have time?

And I talked over to George.

George, what do you think?

No, yeah, I want to ask your question.

I want to hear your numbers to kind of get a lay of the land here.

Yeah, I can give my numbers.

My other question quickly was just

when I get to that point of the 15% investment and retirement, Does that include employer match or is that just my contribution?

That's regardless of employer match.

So you do 15% of your own money and whether the employer matches 0% or 10% doesn't change that you've invested 15% of your income.

Okay, perfect.

Can I ask you a question back, brother?

Yeah, yeah, sure.

Was that your question or was that your financial advisor's question?

Yeah, you caught me.

I want to do it the Ramsey way, and they're fighting me with numbers saying, well, you realize you're giving up all of this gained interest, right?

Their whole job is to get you to invest.

That's it.

That's their entire job.

They're not looking holistically at how you sleep at night, what's going on in your marriage.

And so that's where I think it's sort of a

question in a vacuum.

Well, it's not, it's, I don't think it's a vacuum.

It's they have a fiduciary responsibility to their firm to make as much money as possible.

And they probably have some sort of commission triggers on how much money they can get in the door.

So yes, they have a vested interest in telling you you're stupid.

Because what you're saying is, hey, I'm going to liquidate my portfolio with my advisor in order to pay off my mortgage, which means he just got a pay cut.

Think about that.

And I paid you guys nothing today, right?

As you said in the intro.

We get no kickback for telling you to pay off your mortgage or to invest.

So I want to tell you that we are unbiased in that regard, other than wanting you to be free.

I'm biased in this way.

I'll tell you where I have a bias.

I have a bias in looking around at our world and our culture, and everybody's insane.

And I will tell you that when I call George on a Saturday morning when I'm trying to work out a math problem, George gives me an answer, and he's he's not insane.

He's insane about other things.

Make no mistake.

But like,

there is a level of peace that I have a bias towards that I wish everyone in this culture would lean towards being people of peace, not people of, dude, how do we snap into a slim gym and maximize our, because that's making everybody insane.

And that's the world my children are inheriting.

And I'm sick of it, man.

And so I'm going to say right now, bro, get another financial advisor.

Go to ramseysolutions.com and you can click on Ramsey Trusted and find somebody who will say, Hey, I want to do not what's best for me at your expense, but I realize I'll make more money as a business, as a financial advisor over time if you stay with me and you'll stay with me if I do what's best for you and your family.

Okay,

that'd be my recommendation.

Can I hear your numbers, Chris?

Yeah, go ahead.

I have a loan balance of $183K.

Okay.

And if I paid, I was throwing out $700 extra a month, my savings and interest is about $71,000.

And if I were to invest that $700 a month, just assuming the interest rate is the same as my house, which is $4.25,

and I have no other investment, which I do, but assuming I'm starting at zero, the growth is $196,000.

But you're misunderstanding how interest is calculated on that mortgage.

It's essentially front-loaded.

And so if you go to see how much you're actually paying in interest this month, you will be baffled to go, oh my God, I didn't make that in my savings account.

Right.

Even with the same amount of money in there.

And so that's, it's not apples to apples, number one.

Number two, we're also assuming that you're not doing any investing while paying off your mortgage, which is something we've never said to do.

We've said it always, invest 15% before you put an extra dime on the mortgage, which means, how old are you, Chris?

32.

You're 32 years old.

So let's forecast this out.

What is your principal and interest on your mortgage today?

It is

$5,

I think it's like $550.

No, it's like $9.55.

Okay, so about $1,000 right now is what you would free up if you paid off your mortgage early, which then you have the ability to invest for the rest of your life.

That's the other part of your calculation that you're missing is if you pay your house off in three years or four years,

then you've got $1,000 a month month over month over month over month for time eternal.

So the real question is, here's the thing.

You're going to be a multi-millionaire just the way you've been talking.

Now, will you have $5 million or $5.5 million because you did or didn't pay off your mortgage early?

That's really what we're talking about here.

Sure.

So that's the optimization part.

But the fact that you've burned this many brain calories on it tells me it's just pay it off.

You know how many times I've thought about my mortgage interest rate of 0%?

None.

None at all.

It has freed up my brain space to focus on what really matters.

And that's the part that's hard to explain in a radio call.

Sure.

Is the brain space it frees up to not even think about monitoring one more account and arbitraging and making sure that my investments and savings are doing better than my mortgage savings are.

And you have to stay glued to the next thing that the president tweets out or that the markets are doing or that the what's the tariff in this, like you have to stay glued to that because

you have to make that spread.

Versus,

I don't know.

I don't have a mortgage.

I like to control the controllables and I like to control the known.

And I know what my interest rate is.

I know I can pay it off.

and that's something I can control.

I don't know what the markets are going to do, I don't know if I'll have a job forever to be able to pay the mortgage, and so that's why I decided to pay off mine early.

I hope you do the same, Chris.

We're not trying to beat you down, we're having a fun conversation, but we are rooting for you to solve for freedom, my friend.

I've been doing this show for over 30 years, and some of the saddest calls I have taken are from situations that are completely preventable.

Yeah, and what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible, are people that call in and their spouse has passed away suddenly and they don't have life insurance.

We actually took a question of a lady and she had three kids, pregnant, and husband didn't have life insurance.

And I'm like, I can't even imagine, or even if it was opposite, right?

If a mom passed away, there's a dad with kids and trying to figure out how am I going to afford child care?

How do I, how do I outsource some stuff that maybe she was doing?

Like, and it just takes the grief and the sadness of something like a sudden death to a whole new level.

Like when you have to think through how am I going to pay my bills

next week.

Yeah, in the middle of all that grief, like it's just, it is, it's terrible.

And so life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive.

Xander is the place that Winston and I actually get all of our life insurance.

And we keep re-upping it because I'm like, I just want it there.

Like there's something about that safety of knowing that you have money if something suddenly happens.

And it doesn't cost much because Xander shops among a gazillion different companies.

It doesn't cost much.

You just have to admit that someday you're not going to be here.

You got to say it out loud.

And you got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place.

The cost of stinking pizza.

There really is.

So that is one thing to do to say I love you to your family.

So we've used Xander for all of our family's needs for insurance for many years, including, of course, term life insurance.

To get a free quote, go to 800-356-4282.

That's 800-356-4282 or go to xander.com.

Diane is up next in Louisville, Kentucky.

What's going on, Diane?

How can we help today?

Hi, guys.

Thanks so much to the whole Rain Z team for everything you guys do.

My brother and I have a dispute.

Nice.

We'll settle it.

So I think he can do his Roth 401k

and a Roth IRA.

And he tells me he can only do a Roth IRA.

and I have all his numbers.

So he makes $100,000 a year.

He does $8,000 in his Roth IRA every year because he's over 50.

His birthday is tomorrow.

And he does $7,000 a year in his 401k, but he does have a Roth option.

Okay.

And what's the debate?

I think he needs to do the Roth 401k, but he's telling me he can't because he already does the $8,000 a year.

I think we've got to stop thinking.

You guys are like the little engine that could.

Like, I think I can't just, I mean, you could have Googled this and settled it.

You can do a Roth IRA and a Roth 401k.

And it says yes, but then in the verbiage, it said it just kept saying 401 and not Roth.

Okay, so there's a Roth is just a tax treatment on the account.

You're using after-tax dollars.

You're investing, and it's not taxed again when you withdraw as long as you're of retirement age.

And so you can max out a Roth IRA and you can max out a Roth 401k.

Oh my gosh, George, you're my favorite because that means I'm right.

That's what I was hoping for.

I was like, I hope Diane's on the right side of history.

I hope she doesn't hate you.

Give me a chance.

Is there something like that your parents did that was mean that I can settle?

I'm just kidding.

John needs a win.

I'm just kidding.

No, but I have to tell you, I'm on baby step seven.

And Chris, you got to pay off your mortgage, dude.

Yes, thanks.

She's referring back to a previous caller.

Exactly.

Good job.

I love it.

Way to go, Diane.

Yeah, you are correct on this one.

And it's a good, you know what?

It is very confusing.

And so I will give him that, that you're like, wait, Roth, there's a traditional Roth, and there's an IRA, but there's a 401k.

One is through the employee.

So it is a little bit messy.

But to be clear, you can invest in both.

Now, there are income limits for an IRA, but he can always do a backdoor Roth IRA if he doesn't qualify for that.

And so that's the only caveat.

to all of this.

But either way, you can do Roth all the way on every type of account.

And I love a Roth account because you're investing with after-tax dollars, which means Uncle Sam got his cut now.

He ain't taking it later.

And the meta here is listen to your sister.

That's really the underlying question.

All of us need to listen to our sister.

Why would you question your sister?

I don't know, especially when she's holding Google.

Especially when she's in baby step seven with a paid for home.

Like, oh, just do what she's doing.

What could go wrong?

I didn't think about that.

That's why.

Because you have your millionaire older sister like, hey, what you need to do.

And you have to be like, nu-uh, uh-uh.

I get that.

Yeah.

And actually, you know, what's cool is you could do all 15% in Baby Step 4 in a Roth 401k.

If you have good options through your employer, you could do it all right there and not touch the Roth IRA.

But it's, you know, you can always utilize that Roth IRA.

It's they're very similar tools in that regard.

Just one is connected through your employer and one is outside of your employer.

Great question.

Let's go to Greta up next in Phoenix.

Don't get a lot of Gretas.

What an awesome name.

What's going on?

Hi, you guys.

I'm so glad to be here.

I'm 51 years old.

I uprooted my life two years ago from Atlanta, Georgia to move to Phoenix to help my brother take care of our mother who has stage five kidney disease.

She doesn't want to.

No, don't be sorry.

She doesn't want to do what she's supposed to do.

She thinks she's going to get a transplant.

She doesn't want to work.

She's going to have to work.

She lives in an expensive part of Phoenix that

her SSI barely takes care of.

I had a job here, but I had to quit it because of, I kept getting

eye infections, but I'm constantly looking for work.

I'm a phlebotomist.

I'm in the healthcare field.

I just, I feel this is the worst mistake of my life moving here.

I should have stayed at home.

I want to do the seven baby steps, but I can't right now because I don't have a job, but I'm trying.

And she is not, she is not doing what she's supposed to do.

She's thinking that i'm going to be here to help her and i'm i can't i got to take care of myself i'm going to i can't

i'm so frustrated right now your frustration is right

your frustration is right

i applaud you for finally getting to the place where you're going to put your oxygen mask on first because you're going to be no good to your mom or yourself if you're not paying your own bills and you're not able to look yourself in the mirror, right?

You're right.

You are right.

You are right.

You are right.

And

the only thing I can tell you is

you don't have an easy path forward.

So I want you to take the path.

So you're going to have to choose your hard path.

I want you to take the path that's going to get you to where you want to be.

And because of your mom's health and her stubbornness, where she's going to need you to be in five years.

Or in three years.

I try to get her to listen to you guys.

She doesn't want to do things things that are going to better herself.

She wants to get into all this computer.

She's not computer literate, but she wants to do all this different

online marketing crap that she thinks is going to make her.

I think she's falling for a scam is what's happening.

She's hopeless and desperate, and she is turning any way she can to find a shortcut out of here.

And you're right.

She probably is going to get hurt doing it.

And John's also right.

You don't need to attach yourself to an anchor because you both are going to sink.

So, Greta, can I tell you, your anger's right, your frustration's right, your dismay and heartbreak is all that is right and exactly as it should be.

And so, this is me sitting across the table from you, looking you directly in the eyes and saying, Okay, given this hurt and given the reality that you've been experiencing for so long.

And by the way, this didn't just start happening.

Your mom's avoided reality your whole life, hasn't she?

Her whole life.

Okay, her zip code is in fantasy land.

That's right.

Yeah, she's tight waiting.

So, okay, so let me ask you.

Here's the only question that you can answer.

What are you going to do next?

I've been looking for work.

I interviewed with Lab Corp yesterday.

They turned me down because they decided to go with the internal candidate.

You know, everybody likes me.

They do.

They're not, you know, it's a waiting game.

I apply to jobs every day.

I apply every day.

Two and three companies every day.

What does a phlebotomist make?

Not much.

I told them I need to be making at least 20 an hour.

At least.

Okay, will you do me a favor?

This is going to feel insulting, but I don't mean it that way.

Will you look around your community and see

if you can make 20 bucks or 19 bucks an hour at Starbucks or at Arby's?

And I know you went and got trained for a thing but I wanted I want to see if there's other jobs you can get because right now you got a lot you have a math problem you got to solve on top of an identity problem on top of a really stubborn parent who's dying right in front of you

and so I want to tackle one of these things as we can and if you keep banging your head up against the wall people love you I like you and just talking to you for two seconds I like you

and I get my blood drawn all the time because I'm a nerd I would love to have you draw my like to hang out with you in the morning while you're poking holes in me.

I would love that.

But

if there's not a job available right now for you, then you have to have the courage to put your ego aside and go to option number two and three.

Okay.

Right.

Okay.

And I do live.

I live close to, I've applied at Circle Tay,

got turned down.

I've applied at Fry's, got turned down, but I'm going to walk up here to, you know, because I don't have transportation either.

She argues with me about her car.

I'm trying to get work, but I can walk to Taco Bell.

I'm going to go up here and see if they need any help because I can work together.

Hey, can I ask you, where is home for you?

It's not here.

Where's home for you?

Where do you got friends?

Atlanta, Georgia.

And I've missed it so bad.

I wish I had to move.

Okay.

Will you call some friends in Atlanta and see if there's work opportunities there for you?

Yeah.

Because there's going to come a day when your mom's housing is going to say she has to leave because she's not living in reality.

She's got bills.

And that might be when she...

I can't help her and then try to help myself at the same time.

You can't.

Your job right now is to break the cycle.

Your job is not to help your mom at this point.

Because you're not helping her.

You're just in service to her.

Yes.

Right?

And so the best way you can help her is that you're in a stable financial, emotional, and relational position two years from now when things get desperate for her, which they're going to because she refuses to listen to you.

And if you're surrounded by community and you got stable work and you got a place to live, then you're going to be in a position to help her when she's going to need you most, and she will.

It's been an honor to talk to you, my friend.

Let's be real.

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If anyone in your life depends on your income, you need life insurance.

Now, we only recommend term life insurance, and life insurance has one job and one job only.

It replaces your income if you were to pass away.

We never recommend whole life or permanent life insurance because it tries to do two jobs at once, insurance and investing, and it does a terrible job at both while being wildly expensive.

You only need life insurance while someone depends on you financially.

So if you're like most people, you need a policy worth 10 to 12 times your annual income for a term length of 15 to 20 years.

This will help you help your family to cover their finances and cover the bills if something were to happen to you.

And this should be a level policy, which means the premium stays the same price throughout the life of the policy.

So 50 bucks year, you know, month after month, year after year for that 15 to 20 years.

That's what you want to look for.

And if you want some more info and resources on this, use our free term life insurance guide.

Go to ramseysolutions.com/slash term life guide or click the link in the description if you're listening on YouTube or podcasts.

It'll be the best few minutes you spend today.

Diane is in Venice, Florida, up next.

How can we help, Diane?

Oh, yes.

Hi.

Okay, I have a question.

We are, my husband and I are,

we have, I'm 56 and he's 60 years old.

And we have approximately 39,000 in an IRA and approximately 45,000 in American funds.

It's through Vanguard.

Those are two things.

Is that non-retirement?

And then yeah, that's our retirement.

And then we have three

IRAs in Jackson, and they are $15,000 each.

We bought and sold

a house down here, and

we made $100,000.

So we've been having that sitting in a CD, earning 4% for the last year.

But that's our entire retirement.

You know what I mean?

Are you renting right now?

What's that?

Are you renting right now?

No, we own our home, which is worth around, probably around $300,000.

Okay, no mortgage.

No, no mortgage.

Wonderful.

So this is extra gravy on top.

You have an extra $100,000 to invest.

Where would I invest if I was in your shoes, knowing that you don't have a big nest egg to retire off of?

Right.

You guys are going to be working for a while longer, right?

Yes, yes.

I'll definitely be working for a while for sure.

Okay.

So if you...

Around $55,000 together a year.

How much?

Well, between $65,000.

Together, you make $65,000 a year?

Yeah.

Yeah.

Why is that?

That feels low for a couple in their 50s and 60s.

I know.

My husband has arthritis.

So

he was almost crippled, actually, at one point in his life.

He's got really bad autoimmune deficiency disease.

So

he's not able to earn a lot.

Yeah.

Well, the good news is you have a big pile of money, at least, to help kickstart this.

So what I would do personally in your shoes, following through these baby steps, you're in baby step seven.

So, you can invest as much as you want, and I would invest as much as you can.

And for me, that would mean maxing out all the retirement accounts I can first.

All those tax-advantaged accounts are going to be your friend.

And once you do that, you're going to have a bunch of money left over.

I would go ahead and put that in that, you know, non-retirement American funds Vanguard account.

And so, as you walk through our retirement or investing strategy, it's match beats Roth beats traditional.

So, take advantage of any match you guys can get through your employer, then go to any Roth options you have, then to traditional, and then beyond that, if you max all your retirement accounts out, just invest in that non-retirement brokerage account for the rest of it.

And over the long haul, your money should double about every seven years based on the track return of the stock market.

So if you guys worked another 10 years, 100K turns into 200K.

Now that's good.

That's not like do whatever we want in retirement kind of money.

And so you're going to need to find a way to increase that income and get that nest egg a little kickstart that it needs to get going.

But I'm wishing you guys the best, especially with his health and the income.

Jessica is in Fresno up next.

What's going on, Jessica?

Hi, good morning.

Thank you for taking my call.

Sure.

What's going on?

I am.

So I'm 39, my husband's 40, and we have quite a bit of debt, about 240,000 total.

I have 140,000 in student loans.

And

I'm just wondering, what is the best, we're in baby step two,

what is the best way to start moving below our means so that we can get to

a place of tackling all the debt?

I love this question.

It tells me you're ready, and you're going to love this answer.

The best way to live below your means is to live below your means.

And here's the tactical way to do that.

It's with a budget.

The budget is going to be your best friend when it comes to getting out of this mess because it will hold up a financial mirror every single day, every single week, every single month to show you: hey, 10 grand came in and 11 grand went out.

Let's stop that by setting up categories, getting some control of this, and going, hey, any extra money beyond our basic bills needs to go towards the debt, not to DoorDash.

Yeah, and I'm a spender, so and I'm a musician.

So a lot of the half of my income is very flexible, like

comes in, sometimes it's cash, you know, and so

coffee here, car coffee there, and you know, and I'm uh trying to buckle down and say, like, okay, coffee at home, and you know,

I'll eat at home.

And so, that's been something that's difficult, but I'm ready to do it.

Um, I'm worried about our cars because we, I, I have, I owe $15,000 on a BMW, and I sort of wish I would have gone for something cheaper and, you know, more affordable.

But I went with like a flashier car, and so it's not that much more, but I mean, it is 15,000.

what's the other hundred thousand in debt so you have a hundred forty in your student loans fifteen thousand in the car that means there's eighty five thousand left

yeah there's a um his truck is about forty

forty grand

and um

credit cards he has he has a three or four credit cards um

and

sounds like two spenders fell in love and got married yeah what's your household income it was me that went for that truck and I I regret regret it that I pushed him to get that truck.

I just wanted him to have something nice.

And

the household income

per year or...

Yes, per year.

Per year is about $110.

Whew.

You guys have a lot of car.

I mean, you are is that the the only two vehicles you own?

Anything else with wheels or motors in it?

That's it.

Okay.

I would highly consider selling that truck, which will just get a monkey off your back at least.

What's the truck worth?

We put,

it's probably worth a good,

it's a Sierra Denali.

It's a nice truck.

It is, it's just that it hurts because we put like 18 grand

down.

Jessica.

I don't care if you attached a pony to the back.

You're a quarter million dollars.

You can't consume debt.

You can't breathe, kid.

I know.

Sell the truck.

This is called sunk cost phallus.

Exactly.

Sell your BMW too because the maintenance on a used BMW is incredibly expensive versus the maintenance on a used Camry.

Sell your BMW.

And part of this is you having an ego tax.

You have walked around telling everybody you're a musician, that you're a songwriter, that you're this, you're that.

And you've tried to prove to the world, not through album sales, but through flashy things.

Now's the time to kill that part of your ego and choose safety and peace.

What was your degree?

I'm ready to kill it and go.

Good.

I have a master's in Chicano Studies.

I am

an adjunct faculty.

So

I'm teaching as well.

And not full-time.

I know, but I was an adjunct for years.

That's like $1,700 a semester or $3,000 if you're really lucky.

It doesn't pay anything.

But it sounds awesome.

It sounds awesome to say I'm a musician and I'm a professor.

Those two things don't have an economic reality with the world you're living, right?

Right.

Okay, let's sell the BMW and buy a Corolla and let's sell the truck and buy a 2010 F-150 and then let's tackle this debt.

With real money, not with fancy titles.

Like if I have, if I owe $15,000 on the BMW and I sell it for four.

You'll need the difference you're underwater on.

Sell them private party.

Get as much money as you can for them.

Any difference that

you need to make up for either needs to be saved up quickly or come from a personal loan from a credit union.

And somebody will buy that BMW for more than $4,000 unless you are just wickedly upside down, at which you're going to have to pay what we call a stupid tax.

You have to pay that $10,000 and it's sunk money.

You both are going to need to work three or four jobs for the next few years to clean this up, but it's definitely possible.

But, like John said, we got to put down our ego and just get to work.

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Roland is up next in Orange County, California.

What's going on, Roland?

Hey, how you guys doing?

Doing great.

What's up with you?

Not much.

I just been listening to your guys' podcast for the past couple of weeks, feeling a bit inspired and excited, actually.

I just wanted to see, yeah, I'm just trying to get out of a rut.

Just trying to see if you guys would be able to navigate me in the right

pathway.

In 2016, I used to be a small business owner.

I used to sell used cars.

And it was good for like the first year.

I wasn't much of a businessman.

I ended up walking away with almost about $30,000 or $28,000 in IRS debt.

And since then, it's obviously accumulated.

I'm no longer a businessman.

I was doing that for almost two to three years, and it didn't work out, unfortunately.

I'm actually just a straight nine-to-five guy.

I'm a truck driver

for a living now.

And I have that debt over me.

And it's pretty much stopped me from making the big leap of marrying my longtime girlfriend simply on the fact that I didn't want to pass that debt on to her until I personally took care of it.

So I just

wanted to,

I mean, no, until I take care of it, till I pay the debt off.

Number one, like, okay, we're going to talk about the debt.

Number one, if you're waiting on this to marry this person, that's just your ego talking.

Marry this person.

Or there's other fears that you're not sharing with us about why you're starting to put a ring on it.

I get wanting to be like, hey, I don't want her to have to take care of anything, but if she's been with you this long, she's picked you.

Go get married, dude.

Go get married this weekend.

And that's 100% straight up ego.

And the reason I'm starting there before we get to the math problem is you have to set your ego aside to work this plan and become free.

Ego is what gets all of us into this mess in the first place.

We start businesses.

We have no experience.

We buy cars we can't afford.

We don't start our life because we're afraid that people are going to find out what we actually owe.

It's just ego, ego, ego.

So, dude, set that aside.

Tell your girlfriend, I love you, and I love you to be with me.

And then her debt, your debt will become y'all's debt.

But, dude, let's get this thing knocked out.

Okay.

Do you have any other debt?

Yeah, I have about $7,000 in credit card debt and then a card note that

it's probably around $23,000.

And what do you make?

How much do you make in this 9 to 5?

I take home after taxes almost around 70.

Okay.

That's good.

We got a good income to work with.

In California, you're probably making $440,000 if you bring home $70,000, right?

Yeah.

Yeah, it's a lot of overtime.

Way to go.

Well, the good news is you can clean this up because you're making, what, $6,000 a month?

No, it's roughly like, what, it's about $1,500 a week.

So, yeah, like $5,600 around there.

Okay.

I was like, $1,500 a week is $6,000 a month, man.

I mean, my toddler, I think, could have crunched those numbers.

All right.

We're going to start with a shout out to math, Roland.

So, shout out to Math real quick.

Next piece of

business:

you have $30,000 in debt to the IRS.

That's going to go to the top of your debt payoff list.

So, the credit cards, you're going to make minimum payments.

The car loan, make minimum payments.

The IRS debt, you need to get off your back.

Have you been filing your taxes every year since?

Yeah, just normal.

And, you know, I do get, I do get some, like, I would have given like maybe $2,400, and they just take that.

So I don't get nothing back.

So my other question was,

do I put a little withholdings on?

Do I put me as a one dependent?

Or just...

Your withholdings aren't the problem here.

I mean, they're going to take it.

If you get a refund, they're just going to take it.

If you owe, they're going to take it.

It's going to add to your debt.

And if you play the withholding games, here's what you're essentially doing.

You're essentially saying, hey, government, I want to loan you some of my money interest-free.

And y'all do what you think is best with it.

Does that sound even remotely wise?

Nope.

No.

Let's not play that game.

But when your debtor is the one giving you the money or the creditor, that's a problem because they're just not going to give you the money because you owe them money.

And so you owe 30,000 total right now?

It's gone up.

So I don't know what that fee rate is.

Well, there's a bit of homework.

Yeah.

Let's figure out what's going on up to

like 34 grand now that it is.

Let's call it 34 grand.

What are your total expenses in a given month?

If you were just bare bones, here's what I need to survive.

We're not eating out.

We're not getting snacks at the gas station.

We are going to work.

We're going home, paying the bills.

What are those expenses add up to?

Well, we spend, we meal prep and stuff, so that saves us money during the week.

So we spend about almost $400 every weekend for food.

And then the mortgage is $16,000.

Actually,

I rent with

my, well, soon-to-be wife in my mom's house, but our mortgage is about $16,000.

I'm actually on the wheel.

You rent at your mom's house, but you have a mortgage?

Are you paying her mortgage?

Well, technically,

she puts in a little bit.

That house was given to me and my mother.

It was passed on.

But I had to take myself off the wheel because it can only be from

mother to daughter.

I'm the grandchild.

Okay, neither here nor there.

I apologize to the rabbit trail.

But can you keep your expenses below three grand?

Can you keep your total expenses below?

Okay.

That means there is three grand left over every month.

You tracking with me?

Yes, sir.

If you apply that three grand towards the debt, the 34 grand, how many months is it going to take you to become debt-free?

Say 11.

Okay.

So 11 months from now, you've paid the IRS off if nothing changes, if you don't get a raise.

Okay.

Now you can do basic math.

What has stopped you from doing that for the the last almost decade?

I was under the assumption that I could save up some money and then try to offer a lump sum payment to them because I heard that they do like some type of settlement.

And if you did the settlement and

it's the IRS, not Capital One.

You're not going to settle with these people.

It's the government.

So here's the deal.

That's the math problem.

Now you have to actually change your life in order to make that happen.

Every single month, $3,000 needs to go to the IRS.

Come hell or eye water.

Can you commit to that?

Yes, absolutely.

If there's no other options,

this is it.

I don't have a shortcut for you.

Don't run to some debt settlement company who's going to handle it.

Roland handles it.

Okay.

But listen.

It was always in the back of my mind that option.

Listen.

You're right.

Have you ever in your life saved up $30,000 just cash holding it?

Never done that.

Okay, then don't ever pretend like that's going to be your solution out of a problem.

You've never done that.

Okay.

Number two, have you ever solved a problem in your life by avoiding it?

No.

No.

Absolutely.

Okay, when we get off the phone with us, I want you to call the IRS and say,

I have an outstanding tax bill that I need to make right with you all.

Can I get a tax payoff plan?

And they will look at everything.

They will give you a financial enema and they will go spelunking to find out how much you make and how much you worth and all that.

And then they'll come up with a payment plan.

But at least these penalties will stop accruing every month, every year.

There's only one way through this, and that's to call and settle up.

And my hope is they say, okay, we're going to do this until you give us 28 grand, or they might say it's going to be 40.

Either way, you're going to finally have an answer, and you're going to know.

Right.

But avoiding this thing, it's not going away.

The only way out of marriage.

Yeah, the only way out of this is through it.

There's no shortcuts.

Right.

And so it's just you putting as much money away as possible, keep working that overtime.

Can you commit to this for a year of just real intense sacrifice?

Oh, absolutely.

One thing about me, I'm a good, disciplined person.

Except for your taxes.

Except for saving up to purchase anything major in your life.

Yeah, ever saving up.

But you've got an incredible work ethic.

You're not scared of work.

And that tells me that you have hope.

Right.

Okay.

Let me.

I'm going to give you one more thing.

The shame around money for men is especially acute.

It's powerful.

It makes us feel like losers, right?

Right, right.

Like, I don't make enough.

You even apologized

on the beginning of this call because, like, I was a business owner, now I'm just nine-to-five guy.

I want you to hold your head up high.

We've all made money mistakes, man, and none of us are where we would have dreamed of being.

Fine, let's deal with reality.

And as George said, you can't go around it.

You got to go right through it.

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From Ramsey Network, this is the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships.

I'm Ramsey personality George Campbell, joined by best-selling author Dr.

John Deloney, and we're taking your calls at 8-825-5225.

Jared is joining us from Mississippi.

What's going on, Jared?

Oh, man, just trying to stay busy.

I feel that.

What's your question today?

So my question is,

so I guess to make a long story short, I made some very bad decisions in purchasing some vehicles.

because I thought I was a millionaire and I'm not.

So I've got

two vehicles: one I owe $35,000 on, and one I owe right at $40,000.

I'm making a combined payment of, I mean, both payments together, I'm making probably over

$1,700 a month on these vehicles.

Goodness gracious.

Yeah, I know.

That's just like all of your money.

How much are you making?

I make

probably on the low end about $4,500 a month.

Are you commission-based?

Where's the regular income coming from?

I'm hourly.

And I bring in $31 an hour.

But is it a consistent 40 hours a week?

It's a guaranteed 45 hours a week.

Okay, good.

And so.

So you're making about $6,500, $70 gross a year?

Yeah, roughly.

I also have a small

auto glass business that I just opened up.

How much do you owe on that?

I haven't really had it open.

So far, I've only done

probably about three grand worth of work.

I know, but what did you borrow to even open that door?

I didn't have to borrow anything.

That was a good thing.

I'm a mechanic, so I already had all the tools.

Oh, great.

Okay, cool.

That's awesome.

So what other debt do you have outside of these two cars?

I've got some medical debt.

That doesn't add up to a lot.

I've probably got,

I don't know, probably five grand in medical debt, and then probably about five grand in credit card debt.

I guess the biggest question that I had was: I've been trying to get rid of these vehicles

because I make enough money to where I could buy a vehicle outright if I wasn't spending it on these vehicles every month.

Both vehicles have been listed

for probably about six months now, and I haven't been able to sell them.

Where are you listing these cars at?

They're just on Facebook Marketplace for now.

Okay.

How are you getting the value for them?

Are you looking at Kelly Blue Book?

Yeah.

I've got them both listed high.

I mean, I've got them.

I mean, they're listed for less than what I owe on them, but I still haven't gotten any bites on them.

Well, I mean, that's just

hashtag economics.

If you're listing them for more than they're worth, then they're not going to sell.

sell.

Ta-da.

So I guess my biggest question is, what?

The biggest question is, like, how can you price these cars so they'll get sold tomorrow?

Because every month you hang on to them, you're putting out $1,700 more dollars.

Right.

So every month you held for six months, you just lost $10,000.

That's exactly right.

Exactly.

Whereas you might have had to eat that $10,000 and gone to a local credit union, and if you've been making your payments, you could take out 10 grand, pay off the balance of these cars, get the new owners their titles, and you're now not

on the hook for depreciating assets to the tune of however many tens of thousands of dollars.

You just owe 10 grand to a local credit union.

So

I could go to a local credit union and get a loan to pay the difference for what I owe.

Yes.

Last time I tried to sell the cars to a dealership at one point.

And

they're going to offer you pennies.

Right.

You have to price it to where it's cheaper for somebody to buy it from you than it is from a dealer.

Right.

Have you tried some of these online sites to get bids on what they would take for it?

I did on, I can't remember which website that was, but I know that.

Try them all and just see what they offer you.

Because they might offer you what you would have listed it for, and you can be done with this today.

Right.

I know the last time I did it,

they

it was looking like I was going to be about $16,000 upside down

coming time for both of them.

Well here's the here's the deal.

If you hang on to these cars for another eight months, you will have paid $16,000 in payments.

Right.

And so you've got to start doing the math of what's worth it to get out of this payment and get freed up so that you can focus on knocking out the rest of your debts and getting an emergency fund in place.

Do you have anything in savings or anything anything else you can sell?

No,

I've sold almost every I used to have four-wheelers and a boat and all this.

And I mean, I've sold everything.

Where are you living right now?

I'm in a rental house right now.

You got roommates?

I'm married and I have one kid and another one that will be born tomorrow.

Wow.

Congrats.

That's awesome.

Well, is your wife, is she going to be going back to work or is she going to be staying home?

What's the plan?

She stays at home.

We're single.

I'm the only income for us.

What cars are these, dude?

What kind?

One is a 2021 F-150, Ford F-150, and then one is a 2023 Toyota RAF 4.

Okay, which one are you the most upside down on?

Probably the F-150.

The highest offer I've gotten on HIT was, I think, $25,000,

and I owe $40,000 to HIT.

So I guess

that thing's definitely worth more than $25,000.

Yeah.

Well,

that's what I think, but so far I haven't found anybody else to get it.

But I guess if you're in Mississippi and you're Jared, you just want to buy it new instead of off some dude named Jared off Facebook.

That's, yeah.

Man,

this is a tough situation you've got yourself in, and the best way out of it is fast because you've got a baby coming tomorrow.

That would put a fire under me to get rid of these cars.

Now, you're going to need different cars to drive, won't you?

Right, right.

Which I have, I mean, my parents and in-laws have both stated that they could help us get a vehicle, a cheap vehicle that would get us by, which I do own another truck.

I've got an old paid-off

86 model Dodge that I've had all my life.

And it's still running fine?

Oh, yeah.

So you can drive that.

Now Now we need something for your wife to drive.

Could she borrow an in-laws car or they get her something cheap?

Right.

We can get her something cheap if I can just get rid of the vehicles.

What do you owe on the rev for?

$35,000, I think, is my payoff.

So you're making $65,000 and you have cars that total $75,000.

Yes.

That's bad, man.

Ouch.

Yeah,

it's terrible.

But let's say this,

if you,

what do you owe on the Rev for?

I mean, I'm sorry, not what do you owe, but what do you think on Kelly Blue Book with real numbers, not your imaginary numbers?

It's been a while since I checked it.

I want to say it Kelly Blue Books right at 30 or 32.

Okay, so if you put it up today and sold it for 30,

that's five grand, and you sell that truck and you get 30 for that truck, then you're now you've cleared $60,000 worth of debt and you've traded $65,000 worth of debt for $15,000.

That's a trade I'll make every day of the week.

So, I guess, how what would be my best option of finding someone to be able to give me that?

A lot of work, a lot of hustle.

Check everywhere, make it a job.

Think about it this way: you're going to be making $40,000 on this transaction.

You'll write yourself $40,000.

Just get after it, man.

I've seen people do everything possible to get out of debt, selling stuff, starting side hustles, canceling subscriptions, giving up eating at restaurants, even turning off the air conditioner in the summer and sweating through it.

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Brody's in Denver, Colorado, up next.

How can we help today, Brody?

Thank you so much for taking my call.

My wife and I have a question for you guys about purchasing the home in the near future.

Love it.

We got married two years ago, and we paid off our student loans and recently moved to Colorado about a year ago.

We make $160,000 a year, and we have a $4,000 car loan that we're about to pay off next month.

And we have an emergency fund for six months and about $50,000 saved up right now.

The question is, based off your principles of only going 25% of our total income, we really can't afford much in Denver.

My work is in Denver.

I'm in sales, so I have to stay in this area.

So we're just trying to figure out what we should do.

Yeah, this is a math problem that is plaguing young professionals all over the country, especially in urban, like what I would call the cool cities, right?

Yep.

And I guess the challenge is, like, when we get asked this question, is, A, we, we,

we both experience this.

We live here.

And in other times, if we had our same salaries, we'd be living in very different houses.

And

I can't in good conscience, like, give you bad math, like, right?

Like a math problem that's going to put you and your family at risk.

Does that make sense?

Yeah, so we've been approved for homes that are, you know, in the 600s.

Oh, of course you have.

Yeah.

Yeah, right.

The bank will approve you for pretty much anything.

So you're happy.

Because look, your local, like,

your local bank, never mind.

I'll, I'll go down a rabbit hole here.

Like, most banks don't hold the risk.

They continue to sell loans and sell loans, which means they don't have any skin in the game.

And they keep passing that skin along to somebody else who bundles it all up and says, we'll hold all of this for a potential return.

And that's how you get big messes.

But yeah,

they are going to offer you the moon, right?

And it's frustrating when you say, hey, what's the way I can, how much can I safely own?

And then you call us and we're like, yeah, way less, way less than that.

George, what's the numbers?

I mean,

the numbers here are if you make 160, do you take home 10 grand a month?

Yes, about.

And then with commission, sometimes even more.

Great.

So let's call it 12K a month.

And so 25%, you're looking at three grand?

Yes.

Okay.

So now the math equation goes, okay, what can we get for three grand?

And if we can't get it, do we need to move further out?

Do we need to go look at a town home?

Do we need to pause for another two years and keep saving up the down payment?

And so that opens up the opportunities and the options instead of going, well, we can't afford now, so woe is me.

And the other piece here is

why are you hanging on to the car debt, but you have $50,000 in savings?

Yeah, that's something we've been discussing.

My company pays for my car, so I've been debating on paying it off in lump sum as we're trying to shop the market.

But we've decided that we're going to pay it off next month.

If they pay for your car, why are you in debt?

They give you a monthly stipend.

Okay.

So they gave you the monthly stipend, which covers the payments.

You're going, well, it's not hurting me.

Yes, as we're trying to time the market with, you know,

homes go quickly in Denver, especially in good school districts.

We're looking to buy.

What do you know that we don't know, Brody?

How are you timing the market?

What wizardry is this?

Well, we're just trying to find a home that is in a location we love and that's going to be able to build a family there, right?

So you know what the Fed's going to do with rates?

Don't gatekeep.

I'm not sure the Fed knows what they're going to do.

So if Brody knows.

You're talking about timing it like you want to have cash on hand the moment your realtor calls you and says, hey, we heard one's going up.

Is that what you're talking about?

Yeah.

But you're not in a place to be home shopping right now.

We still have a ways to go because, let me rephrase what started the call.

We moved to one of the most expensive areas of the nation and we can't afford a house right now.

Okay.

How old are you guys?

I'm 24 and my wife is 23.

Beautiful.

Here's the good news.

You guys have an incredible income and you're super young.

And there's no national law that I'm aware of yet that says you have to own a home before you're 25 or else you're a loser.

There is bad advice from father-in-laws.

But other than that, there's no...

You shouldn't be throwing away money on rent.

Pissing it away, young man.

No son-in-law of mine's going to.

So here's, you got to turn off the noise, turn off all the opinions, turn off the internet telling you that you need to arbitrage and get seven rentals by the time you're 30.

And instead, just focus on what's going to create peace for your house.

And that might mean just stacking up 50 grand for the next three years.

Okay.

To have 200 grand down.

Here's the other option, brother.

George and his wife started with a town home.

Me and my wife moved way the heck outside of town.

okay and both of us eventually moved to different places

but that's where that was the choice we had to make it was a math problem

yeah and George and his wife wanted to live closer to town they like things like running water and cell service my wife and I like the idea of just the just being opportunistic in case it all comes down right so we're out in the woods the word septic makes me want to throw open my mouth exactly so i will not i will not have anything to do with that but but like that's just that's not we're not giving you advice that we don't follow ourselves.

And both of us made different choices, but we both of us were faced, both me and George and our wives were faced with a math problem.

And I wish that my wife and I were making $160,000 at 24 years old.

That's incredible.

Yes.

And so the sky is the limit for you guys.

And once you're out of all this debt, you could stack away $60,000 a year, couldn't you?

$70,000 a year?

Yeah.

Yeah.

Think about that.

And that's how you beat the 25%

curve is a huge down payment.

Because if you walk in with $300,000,

you save up $75,000 a year for two more years on top of your $50,000.

That's $200,000 down.

And it might be on a quote-unquote starter home that isn't your quote-unquote forever home.

Two of my least favorite words.

Right.

And that, so we go, okay, we can afford a $400,000 house or $450,000, which means it's a townhome that's further out from the city, and we can afford that, get that paid off, and then we'll step it up later on.

And by the way, you'll be all of 26 when this happens.

Yeah, that's you know, we're not trying to rush things, we're just trying to build generational wealth.

Yes, we're not having pressure from other people.

You know, I think we just we're listening to Juras's principles, and we're trying to build a life for our grand, you know, our kids and grandkids, and love them differently.

So, one of my favorite quotes is from

uh uh is Warren Buffett when they said, What's one of your greatest strategies?

And he said, Time,

yeah, one of the reasons he got so wealthy is because he's lived so long.

And that money's had time to just grow and grow and grow.

So, yeah, dude,

if y'all put a note on a calendar that said by January of 27, we want to be in a home that we own and we're going to save like BA and ANAS to get there, dude, that's awesome.

And by the way, your marriage will be stronger because of it, too, because y'all have a joint goal early on in your marriage and that'll be amazing.

And if one of you loses your income, if the market does something crazy up or down, y'all will be ready to rock and roll because you'll have one of the most incredible assets a human can have, and that's cash in the bank ready to be deployed when a good deal comes along.

Where would you suggest we keep the cash in the bank?

Because that's another thing is I don't want it to just sit there and I have it in a high-yield savings account.

That's where me and George put our money.

If it's a goal that's less than four or five years out, I'm going to park it in a high-yield savings account.

Where my money is right now, you will have anxiety through the roof if you're watching that number go up and down, up and down, and you're hoping that by the time you close on that house, the market is on the upside.

you can use a lot of words to describe our current economic system but stable is not one of them

okay and then in the meantime should we be maxing out like rock iras that i think we can do both but still like having over 20 of a down payment we are waiting for the next year or so uh I mean, if you're in 3B, you could pause investing for two years and just go full throttle, saving up the down payment.

But right now, you have competing priorities.

I want to build wealth and also I want to be in a home.

And so you might need to go, hey, we're going to do up to the match.

And then beyond that, it's going to go to the down payment for just a year or two.

Or you go, hey, we're going to max out retirement accounts, but that means we're not going to get a house for an extra, you know, six to 12 months.

It's going to delay us.

Okay.

So I would sit down with your wife and make peace with whatever plan you choose and just stick with it and ride it out until the numbers make sense.

And I know it's conservative, but man, we get calls every day.

People bid off more they can chew.

There's foreclosures.

They want to sell because it's too stressful.

Life happens.

Someone lost a job.

Somebody has twins.

Like, it's just life, life is life is life, man.

And to give you comfort, I didn't buy that townhome with my wife until I was 30 years old.

And so, again, there's no rush on this.

I know it feels like everything needs to happen now.

It's just not true.

It's just the pace of the internet and social media that's causing you to feel that way.

But, dude, I have the guy's the limit for you guys.

The world is your oyster.

I'm wishing you guys the most success and pay off the car loan today.

I don't care who's paying the bill.

That loan is your debt.

Welcome back to the Ramsey Show.

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Mark is up next in Naples, Italy.

Is that correct, Mark?

That's right, John.

Appreciate you guys taking my call.

Absolutely.

So I'll jump right into it.

So I'm in the military.

I've been serving for 19 years, and I'm kind of looking at the last four years of my career, looking at retirement.

And I've got a few questions regarding kind of finances moves and things like that um right now i think financially we're doing okay we're net worth of about 1.1 million amazing um we've got we've got about 250k in retirement funds about uh 50 60 yeah about 60k cash on hand uh 40k of which is invested in index funds but the big question i have is i've got about 693k of debt uh which is all mortgages from rental properties i own so similar to your previous caller um i was really trying to, in my earlier 30s, stack up a bunch of rental properties, which is good.

They've all appreciated over time, but I'm in this dilemma where I'm coming down from making approximately 10K a month, which is doing all right for our single family income, which has been awesome because we've allowed my wife to stay at home with the kids.

But we're going to take a cut when I finally retire.

And I guess I'm just trying to see where do you, I mean, I know I need to look at paying off this debt

as I pivot, but I'm just trying to see what I should do.

And I have the numbers broken down if you want to go deeper on those.

How many properties do you own?

So I have four properties right now, one of which is actually located in Germany, but I have three in the U.S., two in Virginia and one in Florida.

Okay.

And what's the total worth of these properties?

Yeah, so right in total, their estimated value is about 1.5 mil is what I'm coming up with.

And that's, I would say, a fairly conservative investment or estimate, excuse me.

Okay.

Is there any that are a real pain in the rear that you'd want to sell

i have one but they're all stabilized right now but the one it's it was i shouldn't have bought it but uh the other three are are really well stabilized and i'm making about 1650 in on those but i'm just recycling that money right back into those um those properties and i don't touch any of the money uh that comes in on those rental properties i just use it to you know make the minor upgrades and the repairs and and all of those things and and i'm not really making much money money about 400 if I've saved, because with that

rental income, I save 20% of that towards

capital expenditures,

things like that.

Yeah, but this is not a cash count.

You're just sort of staying afloat.

Exactly.

Okay, can I just throw something out there and give me your gut response?

Yeah.

Dude,

when you get out of the military, sell all this, take half a million dollars and buy a really nice place for you and your wife and your kids.

So, so I'm thinking exactly as you're recommending, John.

And I think what we're looking at doing is, and this is the pivot question, is do we sell one or two or all and then take a hiatus for one or two years?

We've talked about sailing the world, you know, hopping on a sailboat and then enjoying that and then coming back and then getting back into the workforce afterwards.

And that's what we're kind of thinking about as like a retirement.

That plan feels way more exciting than the current reality of being a long-distance landlord internationally.

And most of the time when somebody calls this show and they're like, we want to sell everything and get an RV, we're like, please don't do this.

Or we want to get a boat.

But

you're calling us from Naples, Italy, and you got to like, you're one that I would say, dude, get on a boat and go because you know what you're doing.

You know how to navigate international stuff.

You know the realities of that world.

And

you could cash flow it.

What does your income look like in retirement, quote unquote?

Yeah, it's a variable if you didn't have real estate.

Yeah, so it would be probably anywhere between 8

and 9,500.

So 8K and 9,500 roughly.

Like I said, it's variable because some of it depends on disability ratings, which I won't know until I get out of the military.

Okay, but when you say like we're taking a pay cut,

I mean, kind of, right?

Right.

You're going from 10 grand to 9,500.

You'll still make 8 to 10 grand even without re-entering the workforce is what you're saying.

Right, that's correct.

I think we can make that work, especially with a nice pile of money.

Are you guys going to have a primary home?

So we don't at this time, but if we did, we would probably make one of our rental properties our primary,

one in particular that we have our eyes on.

I like this plan.

I would just sell the other three, pay the one that you're going to stay in off, and then go live your dream.

Okay.

Man, that sounds super.

I mean, that gives you the most options possible.

And if you ever want to get back into real estate investing, you'll be able to do that.

You could stack up cash and go buy something with cash.

Right, right.

And that's kind of what I was thinking as well, is whatever's left over, hoard it, and then try to get back into another property.

Now we're talking.

I like this plan a lot.

You became a real estate investor by default, and I want you to do it out of choice this time if you do re-enter that.

Yeah, and here's the thing.

This is me being as honest as I can with you.

If you cash out this weekend, if you put all the houses up for sale this weekend, you sell them all within 30 days and you close out, the reality is you got pretty lucky.

Because if you had done this exact same thing in 2007, you would be sunk.

Right.

Right?

And so it's just saying, I got lucky.

We scratched a lottery ticket.

This happened to cash out.

This isn't

a recipe for the rest of our lives.

We're going to take that money, put it on a house, have no house payment for the rest of our life, take our base of $8,500 or $9,000 a month forever, and then build an amazing back half of your life, which as a taxpayer, I am happy to,

this sounds crazy, I'm happy for my taxes to go supporting somebody who's given a quarter of their life to serve the country that me and my family live in.

So thank you so, so much.

Thanks for your service, man.

Hope you guys get to live your dreams sailing around the world.

Bob is up next in Bentonville, Arkansas.

What's going on, Bob?

Hey, John, thanks for taking my call.

You got it, brother.

What's up?

No, not a whole lot.

I just need to know if I'm really being stupid by not trying to make any more money.

Almost anytime somebody says, hey, am I being stupid?

The answer is yes.

Yeah, but

I can't spend what I have, and I'm just stacking cash.

I don't have anything invested, but I don't need anything invested.

How much do you have?

Yeah, have I got a deal for you?

Hang on the line.

I'm going to give you my Venmo, and you can just send it this way, and I'll be a good steward of it, Bob.

Leave John and I in your will if we gave you good advice.

How about that?

Yeah.

I keep between $60,000 and $100,000 cash.

Okay.

And then it's like, oh,

you know, I gave my son a $68,000 sailboat, and my other son was getting divorced.

So I gave him

$34,000 to buy out his wife so he could keep the house.

You know, we're going to.

So what's your total net worth?

Oh, probably $700,000, $800,000.

Okay.

We own a house.

We have no debt.

We drive the

premium, you know, one of them is the flagship

of a brand, and the other one's a pristine 1990s,

you know.

Okay, you have some paid-for cars, paid-for house, you got $100,000 in the bank, and you're asking us if this is stupid?

Yeah.

I mean, but I don't invest anything.

Just like today, I stacked another 3,700 bucks in the trade.

Yeah, here's the thing.

Nothing's on fire here.

What you're up against is inflation because your buying power is going down every year.

So you need to at least beat inflation, which means keeping it safe is not the move.

Anything beyond your emergency fund, which I would store in a high-yield savings account online, making 3% or 4% at least to keep up with inflation, anything beyond that, I would be investing into the market, into an index fund, for example, in a non-retirement account at least, so that your money grows, like we've seen over decades, 10 to 12 percent.

And that will help you avoid feeling stupid later on down the road.

And you go, Wait, every seven years my money could have doubled, but instead I kept it in a safe and it was losing value every day because I kept cold, hard physical cash out of fear.

There's probably something there, John.

A little prepper in there going, Well, if it all goes down, I'll have my cash, which I know you connect with.

I connect with that.

And there's, there's some, there's some Walmart vibes in the air there in Bentonville.

So I get it.

It's just air this is just who we are pretty frugal I get it

but yes I guess if you want to ask George and I what we do we do have cash in high-elect savings accounts but we put our money in retirement funds

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Today's question comes from from Samantha in Iowa.

Samantha writes, I'm a stay-at-home mom who lives well within our means.

No debt and a very small mortgage, yet is very close to being paid off.

We are very conscious regarding how we spend money.

We love to do free and budget-friendly friendly trips, which allows us to meet our financial goals.

The problem is, most of our friends completely spoil their kids.

We are trying to teach our children the importance of saving but still having fun on a budget.

Unfortunately, their friends complained about how boring our house is during play dates because I'm not taking them to do something special.

Makes me sad for my kids.

How do I prevent my kids from being left out?

Ugh.

Find new friends.

Find other friends who can just get away from it.

Get these old punk kids out of your house.

I'm just kidding.

Kids are kids are kids.

So, George,

there's a balance here.

And here's what I'm never going to tell you to do.

Well, I'll just, to Samantha, I'm never going to tell you, you know what you should do.

You should buy a whole bunch of gadgets and spend money that is not within your family's value system and to borrow money so that elementary school kids will like you.

I'll never tell you to do that because that's madness.

Elementary school kids don't get a vote.

And I also understand I've been there when my son, when my kids are upset because every kid in their class has a smartphone,

but them, right?

Like I've been there when, how heartbreaking is as a parent when you're trying to hold the line and teach values and your kid comes home and says, hey, I'm the only one getting left out here.

That's it.

I hate that feeling.

I've been there.

And so I think the challenge here for you, Samantha, is how can we get creative?

I'm like you, man.

We're kind of boring parents when it comes to

like, I don't know, we don't go to the trampoline parks all the time.

And I don't know, whatever.

I've been to your house, John.

You're like, hey, the woods are right there.

Isn't that fun?

Well, so here's the thing.

I've seen kids come to our house and say, and again, we have acres out in the back and we are up next like a real live forest.

And so kids go to the woods and they're like, yeah.

Not every fan, if you're living in a suburb, you don't have that opportunity.

But it may be, hey, we're going to meet at the park and I'm going to bring Capri sons and the kids, and that just shows you that I'm 111 years old.

I'm going to bring drinks and the kids are going to go have bananas fun in a park.

Or we're going to meet at a local hiking place.

Or we can still go outside and do fun stuff but you are going to have to move past the point that you wish this was at your house like it is at your friends kids houses and it's not going to be at your house but it will be at a park it will be at a different place it will be on a hiking trail it will be at a public pool and Kids will have a blast.

They will have fun doing that, but they might get bored at your house if you have no things.

And that's fine, well, and good.

And yes, as George said, there is some truth to begin exploring other friendships for your kid that they can have some fun together.

And they don't have to keep up with, because likely what happens as the kid gets older, they're going to go, Well, mom, she's head to toe in Lululemon, and we don't have any of that stuff.

And you only, it's just I have to play Fortnite on a 20-inch screen.

Can we have a 60?

Like, okay, gotcha.

The comparisons will never end if this is the lifestyle you have to keep up with, or else your kids won't have friends.

And so, there might be a little bit of that.

I'm not saying that that's the case here.

But there's also the reality that they just might not come over to your house as much.

Yeah, that's fine, too.

Some parents call that a major win.

All right.

But here's my sneaking suspicion, Samantha, is that you're the one feeling this more than the kids are.

You are feeling like, man, all these other kids have Apple watches already.

All these other kids have fancy shoes.

They all have TVs in the rooms.

They all have, they all have, they all have.

And if that's the reality, if honestly, maybe one or two kids is mouthed off about your house, fine.

They're seven.

They don't get a vote.

But if you're the one going to bed at night thinking, gosh, I hate it that my kid is the only one, I want to applaud you and tell you in this current day and age, often when a parent says, my kid's the only one, I'll stop them right there and say, congratulations.

We need more parents who aren't buying iPads for their two-year-olds and whose kids aren't playing single shooter, single-person shooter games or collective games all over the planet.

But like we need more kids without smartphones.

24-7, 365.

A new study just came out.

13-year-olds and younger that own smartphones have catastrophically different adverse mental health.

I just said it like a nerd.

Their mental health is worse than kids without them.

So we need more parents who say, my kid will be the only one.

Can't with a smartphone?

Bad.

Can't without smartphone.

That's the George way to say that.

Yeah.

So

all I have to say, Samantha,

I understand being sad for your kids and

do the next right thing for you and your family.

And it might mean changing how you do activity time.

It might mean you being being honest and saying, dude, there was two kids that complained at my house.

Forget those kids.

It might mean your kids are complaining that they don't have a phone and that's normal.

And I applaud that.

I get that.

Whatever happened to good old water balloon fights.

But here's a cheap way to have fun.

If you have kids over to your house and you have buckets of water balloons, I promise they will have fun.

They will have a blast.

You think playing Fortnite's fun?

Let's buckle up, buddy.

We're going to do it for real, right?

This is called Sam's Night.

And everybody everybody gets a bucket of balloons, and it costs 10 bucks, right?

So there is things you can do at your house.

It just takes some creativity.

I love it.

Thanks for the question.

Wyatt is in Tulsa up next.

What's going on, Wyatt?

Hey.

So

basically, my wife and I have about,

you know, let's say $40,000 in various consumer debts, credit card, car loans, a fence, you know, just different stuff.

And

what we were wondering, I know that

you guys are generally, you know, against like borrowing money.

Not generally, always.

But go ahead.

Okay, well, well, then you may have just answered the question.

But basically, we were wondering, would it be smart for us to take out a HELOC?

and essentially use it as kind of a debt consolidation thing because the payment on the HELOC is going to be like 20%

what we're currently paying on all these other various payments.

And the interest rate is going to be like seven and a quarter.

Yeah, because your house is tied to it.

You're trading an unsecured debt for secured debt, meaning your house is on the block.

And so this is a terrible idea.

It doesn't change any of the behavior.

It's not going to change the balance.

You'll just feel a little bit better because you have a lower interest rate and a slightly lower payment.

It's not going to make the payment 20% of what you're paying now.

Where'd you get that, math?

Well, I mean,

on the various, like, because right now we have two car payments, the credit card payments, it all comes out to about $1,150 a month.

The monthly payment on the

HELOC loan that we're looking at would be like $270

because it's long-term with a, let me remind you, variable interest rate on those HELOCs.

True.

And so this is not the solution to your problem.

What got you here is not going to get you out.

So what you're doing is just trading one debt for another, thinking, well, I'm very smart now.

The best thing to do is just debt snowball your way out of this mess.

Why don't you do that?

Can I say something, dude?

Listen,

this is going to sound ridiculous, but if you don't make your credit card payment, you know what you get?

A strongly worded letter.

A collector calling you saying, hey, this is not okay.

You need to pay.

If you don't make, if somebody gets sick or you get in a car wreck and you don't make your HELOC, they take your home, dude.

This is literally the dumbest thing you can do is put your family's house on the block.

So, like, I get it.

It feels all chaotic.

I want you to take that chaotic feeling and that sense of ah, and channel that into, I'm going to work 50 jobs so I can get this stupid stuff out of here.

What's the total debt

on the house?

On the balance of your debts, the consumer debts.

So,

the 40 that we owe in various things plus 126 on the house, so 166.

Okay, so forget the house right now.

If you're in baby step two, we're trying to knock out this 40K.

What's your household income?

About $115,000.

Go back to when you were 20 years old.

If you told Future Wyatt he's going to be making $115,000 and still be in debt, would you laugh in his face?

Yes.

Dude,

you remember when we were kids?

Like, if I just made $100,000, can you imagine?

I'd never...

Clean it up.

$40K in debt, you make $120,000.

Just knock it out in less than a a year.

You can do this.

4K a month, 10 months, it's gone.

No HELOC needed, no risk, just total debt freedom.

That's the answer, my friend.

Hey, what's up?

Dr.

John Deloney here.

The new dates have dropped for the Money and Marriage Getaway over Valentine's Day weekend in 2026.

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This weekend is happening on February 12th through the 14th, and early bird prices start at $749 per couple, but the prices will be going up soon.

Get your tickets today at ramseysolutions.com/slash events.

From the Ramsey Network, this is the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships.

I'm George Camill, joined by Dr.

John Deloney, and we're taking your calls at 888-825-5225.

five.

Kimberly is up in Dallas, Texas.

Kimberly, how can we help today?

Oh hi, thank you so much for taking my call.

I really appreciate it because this is this might one, it might make you cry and might give you a good math problem to hopefully solve.

Let it rip.

Okay,

a little background.

I'm married to a wonderful man and we have three children, ages 14, 5, and good to be a four-year-old in about six weeks.

Our middle child, Wyatt, who's five, who happens to be the same name as the last caller,

he was born at 25 weeks.

He had a stroke in my stomach and had to have an emergency C-section.

And he was in the hospital in the NIQ for eight and a half months.

Wow.

Yeah.

During that time, he suffered a bilateral brain bleed.

which caused his half of his brain to be malfunctioned.

with that result, he's nonverbal.

Uh the life-saving CPR caused um a blood clot to go down to his uh right leg, which self-help self-amputate his toes.

And all knee below is a muscle death, so nothing works below the knee.

Okay.

Um so it's been about five years and he survived the NICU, came home, wonderful baby, um

sweetest kid he'll ever meet.

Um

but our my husband and I I are just worried that we are not going to be financially able to take care of him, or our children won't be able to take care of him in Texas because

he requires so much like medical attention, doctor's appointments, everything.

So we want to know what can we do to put money aside for him so that he's well taken care of.

Because he doesn't qualify for we don't qualify for Medicaid because how much money we make.

Yeah.

What is

well, it doesn't even matter.

First off, thank you for sharing that.

And

that's a nightmare for a mom and a dad to go through, right?

Watching their most precious thing in the world, like struggle and have so much challenges.

And then there's a, to get home and then be faced with.

gajillions of dollars of medical bills plus the mathematical realities plus all the services plus plus plus plus um that's a lot man

thankfully we are not drowning in in medical bills okay do you guys have any debt

Yeah, we do.

We own a house right now.

We still owe $299,

$299,000 on our house.

We have two credit card bills, or two credit cards, but we pay them off every week because there's no balance on them.

And we still have a car payment, which is mine, which is the car we hold Wyatt in.

which we're hoping to actually turn into a handicap van, but we still owe $6,975

on that

and that's it.

Yeah.

Okay.

So as far as consumer debt goes, you have $7,000, the car loan, is it?

Yes.

Okay.

And what do you guys make?

Between the both of us, our annual income together is $250K.

Amazing.

Okay.

So as far as taking care of your family, if something were to happen to you two, right?

That's the question?

Like, or take care of, like, if we were to die, heaven forbid, we both have life insurance policies that are

two companies.

One, we work for Lockheed Martin and the other one we work for Dr.

Pepper's Apple here in Frisco.

How much life insurance do you have total?

Right now, it's about four times our salary each.

Is that through your employer?

Yes.

Yeah, you guys need more, and it needs to be outside of your employer.

So I would go to Xander's website right now and apply for life insurance through them.

And I would aim for 10 to 12 times your salaries.

You can go for 10 since you already have four times through your employers and that's going to really be the best thing you can do in case something were to happen to you to replace that income because right now you could not replace your income with four times

your salary it is it is astonishingly inexpensive for the value return on it okay like you're talking a couple thousand bucks a year gotcha okay and so if we do happen to live you know happy lives and we you know get older of course wyatt will probably be living with us.

Um, you know, our son, Chase, right now, he's 14, he's about to be a sophomore for a freshman in high school.

And we have Shelby, who is our little girl.

They will probably be the ones that will take care of Wyatt whenever he gets older.

Because, frankly, you know, retirement homes and special needs homes, there are like a dime a dozen here in Texas.

Yes.

And they're really expensive.

So that you're signing up the kids to be his caretakers?

We hope that he doesn't.

He's going to live with us up until, you know, I guess we're very, very old.

You're saying if something were to happen to you, too, that would be the plan.

Right.

That would be the plan, or

we would need to prepare them to, like, hey, please take care of Wyatt.

If you need to put him in a home, here are the funds that will help take care of him.

So

if you haven't already, y'all need to open a special needs trust.

Okay.

We haven't yet.

Because SSI and Medicaid will be means tested.

So if he inherits money directly, he might lose eligibility.

That trust protects all of that.

Okay.

And how much money can they, what's the maximum they can put in there?

You have to get, I don't know off the top of my head.

Okay, special needs trust.

Okay.

Yeah.

Yeah.

And then here's a common challenge of parents with special needs.

I spent my whole career working with students in 504 in the ADA world.

Okay.

Is going out 30 or 40 years.

on a potential problem and trying to solve it right now.

And usually it stems from feeling like I'm out of control on this particular issue.

I want to control every variable in my life and in my child's life from now until kingdom comes so that there's no more pain and hurt.

And what I would tell you is that's an exhausting,

a not fruitful path.

Do you get what I'm saying?

And I'm so scared because like, I don't, I'm afraid I'm going to be the one who goes first.

Everyone.

Okay, okay.

Hold on.

I'm going to stop there.

Stop.

Stop.

Stop.

Stop.

Stop.

That's an imaginary story.

Okay.

Okay.

It's an imaginary story because you have no idea.

And statistically, your husband is going to go several years before you,

just looking at the data.

Okay.

So all that to say is this.

All the women in my family die before like 15th cancer.

So I'm so scared.

Well, so here's the thing.

Let's get full-term life insurance policies on both of us to replace our incomes.

Okay.

George and I both have life insurance through Xander.

We're not telling you to do something we didn't do in our own house.

My wife is worth

worth way more not alive than I am alive.

Let me put it that way.

Okay?

And that's for my wife.

So that she is taken care of, my kids are taken care of.

Get with a Smart Vestor Pro, and you can go to ramseysolutions.com and check out Smart Vestors and sit down with somebody who will walk you through a special needs trust.

Okay.

Okay.

And there are aging and disability resource centers, ADRCs in Texas

of all shapes, forms, sizes, and

okay, how old are you right now?

33.

33.

Okay.

When you were 10, this thing called the iPhone didn't exist.

Right?

Yeah, right.

The internet didn't exist in the form as we know it.

Social media didn't exist.

AI for sure didn't exist.

So trying to imagine what resources and support is going to look like in 35 or 40 years in a particular support home is, like, I wouldn't even spend one second of time on that because who knows?

There may be robots that can't, like,

who knows?

So, all I have to say is, let's solve the challenges in the present.

And if you haven't yet, you and your husband go see a marriage counselor to talk about grief, talk about reality, and the things we need to talk about for our own marriage so that we can create a safe home.

Does having more money and less stress sound nice but feel impossible?

Well, in my brand new book, Breaking Free from Broke, I share my story of going from broke to millionaire and exactly how I did it.

You'll learn about the money traps and cultural lies out there designed to keep you brainwashed and stressed out, from credit card schemes to mortgage myths to investing traps.

So if you're not where you want to be financially, I can help you finally get ahead.

You can get Breaking Free from Broke today at ramseysolutions.com/slash store.

That's ramsey solutions.com slash store.

Buying or selling your home is a big deal.

And with all the clickbait headlines and conflicting data out there, it's hard to know what's really happening in the housing market.

So we're here to make the latest trends easy to understand.

Median home prices stayed steady last month at about 441 grand.

The number of homes for sale hit 1 million for the second month in a row.

And buyers now have more options and negotiating power while sellers face more competition.

So the average 15-year fixed rate held steady at about 6% last month.

So if you're debt-free, you got a full emergency fund, a solid down payment, now could be a great time to buy or sell your home.

So if you want to learn more about housing market trends and get free tools to help you buy or sell with confidence, go to ramseysolutions.com slash market or click the link in the show notes if you're listening on podcast or watching on YouTube.

Tom is in Jacksonville, Florida.

Up next, how can we help today?

Hey, guys, first, I want to just thank you for changing my life by changing my behavior.

So, I have an income-driven repayment student loan.

It's my last bill that I have.

Sorry to hear that.

Oh, no, it's okay.

It's okay.

I was told while I was going through the courts that I had till July of 2026, no payments and no interest.

So during that time, I've been putting money away.

So my balance is 52K.

I have saved 32K.

I just got a notice this week that as of August 1st, the courts have allowed to start applying interest on student loans.

My question to you is,

do I apply to 32K

on the 52K, get a 0% interest student loan, I mean a credit card, pay it off in three months and be good?

Or do I make a monthly payment, wait till I think it's the spring of 2028, where I will then be paying 25 years

on the student loan, which will supposedly I'm to be forgiven the $34,000 balance.

Over that two-year period, I'll be paying $22,000 on the principal and $6,000 on interest, and I don't know what to do.

So you're telling me you've had this student loan for 22 years?

What a scam.

What a scam.

But you've believed the scam for over two decades, and you're like, well, I'm hanging on to see if the scam pays off.

That's essentially what you're asking us.

Maybe so.

I'm just

staying with.

What's that?

Are you married?

Yes, I am.

Okay.

If your wife 22 years ago said, hey, we have a big fight, I will forgive you 25 years from now.

How's your marriage doing for that 25 years while you wait?

Amen, brother.

I get the message.

You're sleeping on the kitchen.

So I'm just saying.

Can I throw another thing in there?

What in...

I mean, I don't care what side of the aisle you're on.

The cool thing now is it seems that everybody's mad.

And we haven't been this united in a long time.

That's how America started.

Was just united anger.

Anger, yes.

What?

Yeah, they're going to start dumping NVIDIA chips in the Boston Harbor here soon.

What in the world would give you the idea that anybody in any government office anywhere could be counted on for what they're going to do in the next three years?

Point taken,

I'm coming to you because this is a discussion my wife and I are having.

I do not want to pay another penny of interest, and I want to pay it off.

That's why I've been saving and putting money aside for when this came due.

My wife thinks it makes more sense to have the 34,000 forgiven.

I just, I want financial freedom as soon as possible.

Amen.

Even next time.

Okay, so here's the problem.

Y'all are measuring.

You are measuring something in gallons, and she is measuring something in yards.

Both are valid measures, but y'all are talking past each other.

What she wants is

she wants that $34,000 to stay there and she wants that forgiven.

And I get that.

I think that's not going to happen.

You want freedom right this second.

You're sick of this thing.

It's been around for two decades.

And so what happens is y'all are having the same conversation.

You're both talking about measurements, but y'all are using two different measurements to to try to solve the same problem.

And so I think about, I think saying,

I need this gone for the first time in 20-something years.

I need this out of our lives, period.

That's right.

Thanks to you two, 100K has been wiped out.

No, no, no, no.

Not thanks to us.

We just run our mouths on the radio, bro.

You did it.

I didn't know you existed until two minutes ago.

Yeah, you did this, dude.

Trust me, I listened to you and I'm following and I can't be more grateful.

Amazing.

Love to hear that.

I thank you for

giving me confirmation on my thoughts being where I need to go.

Can you take this and take it one step further for your wife?

Please tell me how to do that.

Please, God, help me.

Here, I want you to ask her,

I'm about to send $34,000.

Both of us, we're going to decide together.

We're going to send $34,000 and get this thing paid off forever.

Finally.

What about that scares you?

And let her speak not from a math problem and not from an intellect problem.

This feels dumb because they might in three years, whatever.

Let her speak from a, I'm nervous that we're going to take, there's, I found some security in having $34,000 in cash laying around, like in an account, and suddenly I'm going to feel exposed again.

And that's when you ask money.

That's when you could say, honey, we can solve that problem.

Like, we'll send this money, and then we will go all in on replenishing an emergency fund.

Because that's my guess as to

where she's concerned about.

I think you're dead on there.

Guys, I can't thank you.

And

it's not about the money.

It's about the behavior change.

And God bless all of you for what you do.

I appreciate that, Tom.

Can I ask you how much you guys make as a household?

I get a lot of overtime, so it varies, but around $220 for the two of us.

So you've been making good money for a long time?

No, and

that's the key on why I've been paying on this student loan for $22K.

We were living off of my wife's income for quite a long time.

And,

you know, I just came into

a good paying job in the last five years.

And I've been making up for my lost time and paying off everything.

I love it.

But the last five years, you guys have been making six figures a year?

Each of us, yes.

Okay, so think about this.

About a million dollars has flowed through your hands in five years, and we're arguing over a $50,000 loan.

Oh,

that is a good word right there.

That's crazy, isn't it?

You guys are too successful, too wealthy.

You should not be preoccupied with this debt that's been hanging around your necks for your whole marriage.

It's just not worth the brain calories anymore.

You make 220, go ahead and chuck the 31 at it, leave you a thousand bucks in savings, you'll knock out the rest within a few months and be done with it before the end of the year.

You'll have replenished your emergency fund by then.

By Christmas, you guys will be celebrating completely debt-free with an emergency fund, building wealth for the future instead of thinking about the past, hoping Uncle Sam decides to keep his word.

This time.

My final question to you, and hopefully you can trust me, even though you only met me two minutes ago.

Are you okay with me because my behavior has changed?

or no i wouldn't do what you're about to say no no no no i wouldn't but what are you gonna do tom he wants to open an int a no interest credit card for three months and try to pay it off that way

i i don't want to pay any interest to the government and i'll still have an eighteen thousand dollar balance i know i just chalk it up to a stupid tax and pay it and move on with your life you don't want to get out of the a bed with one crook and get in bed with another one

okay

that's what i would do in my house do not open a 0% card, Tom.

You told us your behavior changed.

You told us we changed your life.

And if you open up a 0% card, I will unfriend you on Facebook.

Hey, you're the guy that's like, no, I don't drink anymore at all.

It's cool.

I'm just going to pick up six kegs for my buddy.

And I'd be like, oh, that's not fair.

Okay.

I wouldn't do that.

I get it.

Just go, dude.

And by the way, this will inspire you to get this paid off in two months.

Like, you'll get rid of this last 18 so fast.

Dude, we're proud of you, man.

And then you're going to beat yourself up going, why didn't I do that 22 years ago?

This is insane.

We've been playing this game for far too long.

We have a life to live.

Good luck, my friend.

Hey guys, George Camill here with some exciting news for our Financial Peace University coordinators.

If you've ever led FPU or even just thought about it, you've got to join us for our coordinator rally happening on July 24th.

It's packed with insider updates, powerful stories, and encouragement from me, Jade Warshaw, and Dr.

John Deloney.

It's totally free, and when you register, you'll be entered to win our $3,000 giveaway.

So just head to fpu.com slash rally to save your spot today.

That's fpu.com slash rally.

Jacob is in Nashville up next.

What's going on, Jacob?

Hey, good afternoon, guys.

How's it going?

Good.

How are you?

If I was better, I wouldn't be calling y'all.

Fair, fair.

Thank you for the honesty.

What's up?

Hey, so I'm in Nashville.

I run a concrete company.

We do about $600,000 a year gross.

At the moment, I am about $60,000 in debt.

And my profit for my business is about 13%.

We average around that.

And

the reason I'm in debt is because of a check fraud situation.

We did a large job.

The check ended up bouncing after a deposit into our accounts.

And now we're kind of swimming,

swimming around with our heads cut off.

I don't have much working capital at all, and I'm not sure where to go from there.

Have you circled back with the person who shortchained you?

I have.

I've been completely blocked, and there's been no contact.

Tried the property is vacant.

There's nobody there.

I'm not sure where to go through.

I've tried contacting the authorities.

There's a large wait time on that.

So you've reported the fraudulent activity to your bank, right?

Yes, and the bank closed my account.

Okay.

And then is there any fraud reimbursement or protection services they offer?

We spent a good chunk of

what was there for the job because we have such low profit margins, that entire

job or that entire paycheck was essentially going towards the labor and materials.

So what kind of debt is the 60K that you're in?

$45,000 is the check fraud.

The $60,000 is from a business loan I took out, let's say, about a year and a half ago.

So, I'm sorry, I'm confused how the check fraud created the debt.

So, we didn't have much working capital to begin with.

We were between a few different commercial projects.

These commercial projects are a lot of times net 60, so we don't get paid for those

60 days.

Without the.

So were you using debt to float and then they didn't pay, so you were stuck with the debt?

Yes, sir.

Okay.

So who is the debt owed to right now?

The debt right now is owed to the bank.

Okay.

Oh, man.

Because my hope is that they can reverse the charge and pull the funds out of whoever cashed it.

Because if they cashed that check, they had to cash it into a bank account, right?

Unless they did.

So we know where they cashed it.

Have you contacted that bank?

I've tried.

It's not gone well.

Apparently, this is

I've never experienced a fraudulent check activity like this, and it's a little bit confusing to say the least.

It was one of those

this guy's out of state, and this works at a different property.

There wasn't enough verification.

We have them on contracts, but

besides that,

I'm in two different lawsuits right now, trying to pay off attorney fees and whatnot.

Oh, man.

It's a tough situation.

I'm only 23, so I haven't.

How much money are you making?

You said you told us the profit numbers.

My business makes okay money.

I'm paying myself basically minimum wage working 80 hours a week.

That feels like a problem.

How long have you been doing that for?

Quite a while.

Let's say I've been doing this about six years.

So you've been paying yourself minimum wage for six years, working 80 hours a week?

Right around minimum wage, yes, sir.

I don't know that you should be in business.

Right.

Could you go work for someone else and make double or triple today?

I don't.

I think my experience aligns well.

I don't think many people expect that from my age.

Doesn't matter.

Dude, I don't know what you're saying.

People need workers right now so bad.

If you applied for a job that was paying minimum wage with your skill set, you would say, kick rocks and pound sand.

I'm worth more than that, wouldn't you?

Right.

So why are you willing to take that from yourself?

I'm willing to sacrifice the early years of my life to build something that I can.

But, dude, it's been six years with no change, you told me.

Yeah, you're just burning yourself out.

You what?

I drive a 2000 Seventy Silverada.

It's got about 300,000 miles on it.

I don't understand what that has to do with anything.

Oh, nothing.

It's just the fact that I can't afford much personally.

That's why I'm telling you to go get a job in a similar field and you'll make double or triple.

And then

you'll start doing small jobs on the side, doing small concrete work.

I'm actually about to hire somebody to do that at my house out in the woods.

You'll do small jobs on Saturdays and Sundays, but you'll have income.

You need stable income right now, and I would clean up the debt and then hope that you can get reimbursed on the back end.

But right now, you can't even afford attorney fees.

You're going to be going into debt for that.

I guess I'll say this as nicely as I can, but brother, you're broke, man.

The check fraud just exposed how risky and broke you actually are.

Yeah, you had a fragile job.

But I can't blame the check fraud guy for all of your financial ruin that you've caused yourself.

I know you can.

I thought that was a big enough safety net for my company, but when we're dealing with larger jobs like this, it clearly wasn't.

Yeah.

And so here's the deal.

You learned a really awesome lesson at 23 years old.

And I'll tell you, this will be as valuable as a lottery ticket for you going down the road because you'll never do this again, right?

Absolutely, yeah.

Okay.

Now is when you have a choice and you can keep plowing ahead like you are, getting nowhere.

And we call that male ego.

And it causes a lot of damage to your finances, to your psyche, to your relationships.

Or you can swallow your pride, call somebody in this business because hopefully you have a reputation of being a real hard worker, getting crap done, and start working for somebody and start making a paycheck tomorrow.

And if it's as bad out there as my buddies in construction tell me it is, they are desperate for workers, like literally getting desperate.

If you show up and know what you're doing and you can operate a forklift or you can operate a front-end loader, you can lay, I mean, you can pour concrete, bro, you'll get gobbled up by a job tomorrow.

And then you start working jobs on the side and build up cash reserves.

And then at 27, you've got your mogul, right?

You got time to rebuild, man.

Get off the internet.

Get off.

You should be by 22.

It's nonsense.

It's not real.

It's a fantasy world, dude.

And take this as a lesson.

I will never leverage me, my company, or my family again.

Caleb's up next in Alaska.

What's going on, Caleb?

Hey, how's it going?

Good.

How can we help today?

So I have a motorcycle loan that I'm upside down on.

I owe $43,000 on it, and it's only worth about $30,000.

This is a nice bike.

What is this thing?

It's a 23 road glide, Harley.

Okay.

So you're upside down 13k on that?

Yep.

And so I can.

I tried applying for a loan to refinance it just to get that monthly payment down and the interest down on it.

And I wasn't able to get approved for that due to horrible past decisions.

So you got bad credit?

Yeah, I got bad credit.

What other debt do you have?

So I got about $40,000 on a Tacoma

and I have about $10,000 on credit cards.

What do you make?

I net $3,900 a week.

$3,900 a week.

That's good money.

So you're making like $11K a month?

$12,000 a month almost?

Yeah, just about.

Amazing.

Well, that's your ticket out of this thing.

That means you'll have almost the amount you're underwater on slip through your hands in the next month.

Yeah, I mean, I got.

So you don't need a loan.

You just need to buckle down, live on nothing, and put the rest toward trying to build up enough to get out of this underwater motorcycle.

And then what's the Tacoma worth?

You owe 40 on it.

That's worth 38.

Perfect.

That's private party value?

Yes.

So you're telling me if you saved up 15K, that would get you free and clear of these loans if you sold them?

Yes.

Yeah, about.

I mean, that feels like a solvable math problem when you're making $12K a month.

Yeah, it it sounds like two months.

If you save up $7,500 next month and the month after that, you've got enough to get out of these underwater cars.

Now you'll need a little bit of money to get something cheap for you to drive around for now.

Is there any other vehicle in your life you need to tell me about?

Yeah, so I do have another Tacoma, and that one's paid off.

Sweet.

Solved.

It's been paid off.

Done.

Solved.

It's your best phone call of your life.

Can you get your expenses down to $3,000 or less the next month?

What are your actual expenses add up to?

So they average about six thousand a month why

so i have an apartment or house that i'm living in right now i travel for work and that's uh 2400 a month can you rent it out can you get roommates

no

no i'm unable to um my fiancé and baby and i got two dogs there goodness gracious you got a lot going on man so it's gonna be four months instead of two still

You can clean this up, but we got to get control of this income, get your expenses down, and put the rest towards the savings account to get out of these underwater cars.

Welcome back to the Ramsey Show.

I'm George Campbell here with Dr.

John Deloney, our scripture of the day, Genesis 28, 15.

I am with you and will watch over you wherever you go, and I will bring you back to this land.

I will not leave you until I've done what I've promised you.

Ozzy Osborne, R.I.P., I'm about caring, I'm about people, and I'm about entertaining people.

I'm a family man, a husband, a father.

I've also been a lot of other things over the years, which we don't really want to talk about.

That's

awesome.

That's well played, Ozzy.

That's awesome.

And shout out today.

We lost another great one.

The great Hulk Hogan.

Hogan.

It's a good day.

Passed away today.

Man.

A lot of greats passed this week.

All right.

Let's get to the phones.

Katie awaits in Detroit.

What's going on, Katie?

Hi, guys.

Thank you for taking my call.

I am a 40-year-old single mother.

I was raised in the foster system.

I have

an 18-year-old and a 19-year-old.

One of them is currently on her way to

going to college.

And side note, both of them have been somewhat homeschooled.

We've been schooling online pretty much since COVID, not necessarily by choice, but we've done the best we could.

You know, and my son has been working, trying to figure out his thing.

But because I was in the foster system, I think, you know, a lot of family members, friends have really

come

by my side and helped me, supported me throughout the years as I worked and tried to, you know, to do the best I could to raise the kids.

And I've never completely, actually, I'm really terrible with money, to be honest with you.

I've lived in survival mode and

I want to be able to teach my children and

also

be able to

know what to do with the resources that I'm provided because I just feel like I have squandered a lot of it and

I really don't want to do that moving forward.

Katie, how old are you?

I'm 40.

40.

Will you say out loud, my name is Katie and today is day one?

My name is Katie and today is day one.

There you go.

If you can, this is up to you.

My hope and wish for you is that you never again say hi, my name is Katie and I was in in the foster system.

Because that's not the most important thing that defines you.

You have worked and scratched and clawed.

You have two teenagers who are heading into college.

Can we just stop and celebrate you for a second?

That's incredible.

You know what this is called?

It's called changing your family tree.

And your tree is short and it's wonky, but it's changed, right?

Definitely.

Okay.

So I don't want you to ever stick your hand out to say hi, my name is Katie and lead with what you think is this is the scariest thing about you so that nobody can weaponize it against you.

Okay, is that cool?

Yes, definitely.

All right, today's day one.

We're gonna throw our shoulders back.

We did a great, great job.

And high five to you for being 40 and saying, hey, I want to learn some new skills.

I'm tired of filling the blank, not being able to drive, not being able to get in shape,

not being able to handle my money.

Today that ends, and we have got you.

Is that cool?

Yes.

Party on.

We're going to knock that Eeyore spirit right out of you and give you some hope.

I'm so proud.

I think I'm prouder of you than you are of you.

Wow.

I want less pity party, more just party.

Yes, more just party.

Same.

So do I.

Let's get it.

I turned 40.

You guys are amazing.

Thank you so much.

Where are you at financially?

I don't care about the mistakes of the past.

What's today's reality?

How much do you make?

Well,

technically, I am not

working.

I don't have an income in terms of like paychecks.

How do you do this?

How do you cover the bills?

Income comes in paychecks.

Friends and family.

Yeah, friends and family have been supporting me.

Wait, lay it out for me.

Like, how many people

are giving you what and how are they doing that?

So over the years,

I've had, you know, my brother have come together and paid my rent, things like that, while I've been working.

And then about three years ago, three and a half years ago, the kid's dad moved out of state unexpectedly.

And I,

you know,

the man I was dating at the time actually generously offered to provide for us financially until I could like stabilize things a little bit and go back to work and things like that.

Well, it's been, you know, here we are four years later and it's been

a lot harder than any of us ever planned.

You're not in a relationship with this guy anymore?

No.

What's a lot harder?

What do you mean?

Well,

I think that the kids resented me.

Number one, they weren't in school.

So it was like COVID for four years on top of the fact that they hated me because dad left.

And

it was just a lot of changes.

And just

there's just been a lot of.

Okay, so here we are.

It's day one.

We're going to go get a job today.

You need that financially.

You need that dignity-wise.

And I don't care if it's a minimum wage job.

I don't care if it's at Home Depot, if it's at Arby's, if it's at Taco Bell, if it's at a local, I don't know what your trade is.

I don't know what you're like, if you're a nurse, I don't know what it is.

But for your sanity and for your dignity, I want you to go get a job, ASAP, any job.

It's not going to be your forever job, but it will be a job that you get up and have to shower for and go to, and they will pay you money.

It's a path toward independence instead of codependence.

And that's part of what's, it's a path to independence instead of codependence.

Because so far, everything's been codependent.

I need everyone else.

That was great for a season, but we got stuck there in a coma, and we need to snap out of that.

And that means bringing in your own income.

The kids are 18 to 19.

They're okay.

They don't need you day in and day out.

And so what were you doing before when you were working?

I did hair.

I bartended.

I served.

I did office work.

I cleaned houses.

I did a lot of things.

Awesome.

So you're not scared of hard work.

You're not scared of getting dirty.

You don't have any ego when it comes to that stuff, which is amazing.

So good.

T today, day one.

Do you have any current licenses to where you can jump back into any of those fields?

I I do.

I have my cosmetology license.

Sweet.

So I would go get a job doing that and then bartend on the side as well, nights and weekends and start to bring in enough income to cover all of your bills.

That's your A1 goal.

I want you to have a 90-day financial independence plan.

How can I get my living expenses low enough and my income up high enough that I don't rely on anybody else for money?

Okay.

That's really overwhelming.

Can we start like baby steps?

Maybe I start like

a baby step is get a job.

Get a job.

Then use that money to cover your bills.

With the end goal being I have enough to cover my bills and have some left over.

That's called margin.

That's breathing.

As of right now, my overhead is taken care of as K.

That's the problem.

That's the problem.

I know it's a problem.

So, but

do I have to say that?

Who is it being covered by right now?

My boyfriend.

So you do have a boyfriend.

Is he living with you?

No.

Okay.

And how much is he giving you a month?

There are a $5,000 credit card,

which I do a lot of things for.

his house and his family, and there aren't really,

it's a source of stress for for both of us.

Correct.

So what you're telling us is this situation isn't working.

And so therefore, let's not rely on this money.

So you're telling me they give you a credit card with a $5,000 limit?

And they pay the balance?

$500.

He gives me $500, and that's monthly, which he...

So he's not your boyfriend.

He is your boss.

Yeah, exactly.

He is your

$500 a week, and then he gives me

rent, and he pays all of my bills.

Okay, we are going to work in 90 days to get off of his system.

You know, this is unhealthy.

And I also know I can tell by your voice that you're hedging how bad this actually is, correct?

Yes.

Yes, this is a very bad situation.

You know.

No.

It's not healthy for anyone.

Like, he's got a great family.

And you have to make a 90-day plan to get off this thing.

I will earn enough money to make my own bills.

You're going to be homeless if he cuts you off tomorrow.

You understand that, right?

I know that.

Okay.

And he probably likes it that way.

He likes that level of control.

I know.

So the only okay, but stop living in the fear and go do the next thing

if he's abusive and if he's unsafe and you've got to go talk to somebody, okay?

So hang on the line.

We're going to hook you up with a thousand resources, okay?

We're going to hook up with hook you up with FPU, Financial Peace University.

We're going to hook you up with every dollar, the premium version, so you can start practicing and learning your own budget.

We're going to hook you up with one call with a financial coach and three months of BetterHelp so you can start seeing a licensed counselor from your house, from your computer or your cell phone.

We got you with resources.

You have to take the next first step, my sister.

We believe in you.