Don't Settle for Living Paycheck to Paycheck

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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people

build wealth, do work that they love, and create actual amazing relationships.

I'm Dave Ramsey, your host.

Jade Washall, number one best-selling author, Ramsey personality, is my co-host today.

The phone number is 888-825-5225.

Tom is in New Jersey.

Hey, Tom, how are you?

Hey, Dave, how are you?

Better than I deserve.

What's up?

I can't believe this.

I'm a huge fan.

Unfortunately, I found your stuff a little too late.

And I have quite the financial mess.

Okay, tell me about it.

So I have four mortgages, a car loan, and one credit card.

And I started listening to your stuff.

I was working.

I was meeting my wife.

We were building an emergency fund.

And I have been trying to get rid of these rental properties for some time now.

And I've made some leaps and strides in the last few months.

And my question is pertaining to the remainder of our money, our savings.

My wife is still currently working, and she brings in $130,000.

I am not working.

I have been laid off for seven months.

I have been looking tirelessly for work.

I had unemployment and

that had ran out.

I recently have just signed up with Uber and I've been doing that, but compared to my previous income, it isn't too great.

What did you used to do?

$130,000.

Oh, wow.

You used to make $130,000 doing what?

Credit risk, commercial real estate.

Okay.

And why were you laid off?

$2 billion in default

billion dollars of debt assets were sold off to another asset management firm, and the position was eliminated.

And given the current interest rate environment, a lot of people are skittish to hire specifically for commercial real estate credit risk underwriting.

Wouldn't disagree with that.

But the skills that you use to do that are still usable in other things.

So

that nuanced job position is probably gone for a while.

I would agree with you on that.

But, um, but I mean, you, you've learned to do financial analysis and risk analysis, and that can be applied to a myriad of different things.

So, you need to broaden your search.

I'm closing in on one, uh, and I'm very optimistic, and it is a pay bump, but I'm not, you know, counting on it.

You know, it's not in my hands yet.

All right, so we got, we're working on your income, and so what, how can we best help you today?

Yeah, tell us about the four mortgages.

So, I have my primary

540 at 5.75, payment's 4,400.

I have a rental property with 453

at

6.5%.

Payment P ⁇ I is $2,956, not including insurance, not including taxes.

I have another one at $192.

P ⁇ I is $1,019.

And then I have another one with a business partner, which is at 11.5%.

And that is $184, which

yesterday I am hoping that we are closing.

Someone is purchasing at cash.

Okay, and what will you take from that?

$45,000.

Okay.

But you're out.

Heck with the cheese.

Let me out of the trap.

Okay.

I'm in.

And so the other two are up for sale.

So the other two are up for sale.

The one that's up for sale, I've dropped the price from $340,000 to $295,000.

My one question is, do I continue dropping the price until I get an offer?

Is that property number three?

No.

You just said, I said there's two left, and you said the one that's up for sale.

Why are they not both up for sale?

Everything is up for sale.

Okay.

Except your home.

Except my primary, which we're considering also putting up for sale.

Is your car up for sale?

The car is going up for sale.

Good.

Okay, good.

So we're cleaning this out.

All right.

I don't know.

I mean,

you've got to assess the real estate market there as to what's going on.

Okay.

Is the market simply slow or are you overpriced?

There was a significant depreciation in one of the properties, which is the one I had the specific question about, to use the remainder of our savings to get out of that property.

The question I want to know is, what is the stinking thing really worth?

What is the actual market value?

What is someone going to walk up and pay for this house today?

Not what have you got in it, not what do you wish would happen.

But if you were going to put this thing on the market and you were not standing in the forest, instead you were outside looking at the trees, what is it actually freaking worth?

$475,000.

All right.

And what have you got it on the market for?

I have it listed for $495,000.

Okay.

All right.

Well, if it's actually worth $475,000, that may be a bump high, but it's not enough high to keep somebody from coming in and giving you a market value offer.

So, how long has it been on the market for 475?

The problem

is,

so this is kind of a unique situation.

Someone has offered to purchase it and give me $20,000.

I'm two months behind on that payment and I owe the property taxes.

The conditions for them to come through with that are to be current with that mortgage and to be up to date on those property taxes.

And the $20,000?

I'm sorry.

They're going to take over your mortgage?

I'm sorry.

Can you repeat that?

You threw your phone out the window.

I'm sorry.

What happened?

They can't take over your mortgage, honey.

They service it.

No, they can't do that.

How does a real estate guy not know this?

That mortgage that you have has a due-on-sale clause.

You transfer title, they're going to call the loan.

I'm not going to be off the title.

I know, but if you transfer title in form, even though you didn't move, so you haven't really sold the house.

You just lease purchased it to someone.

No, thank you.

No, thank you.

I'll pass.

Don't do that.

That's a bad deal.

A, if any of the insurance or anything else, any of the tax notifications, anything gets transferred out of your name and the mortgage company notices that they're going to say you have transferred in form even though you haven't moved the title and they're still going to call the loan.

Read paragraph 17 of your fanny-made deed of trust, you'll see what I'm talking about.

How much are you?

How much is the total of the months that you are behind in the property taxes?

Because you were talking about dipping into your emergency fund to clear that

I'm behind $6,000.

They put a lender, a lender-forced insurance policy on it, which is more than the other

would be.

So

for the two months, I owe $1,000 in insurance, which they billed to a forced escrow account, and then $29.56 for June and July's payment.

You have two issues.

Number one, you've got to work on that issue.

Number two, we've got to get a buyer.

The buyer that you have is not a real buyer.

Run him off.

You're going to get in trouble here, man, because you're getting desperate.

Yeah.

What's in your emergency fund, real quick?

$12,500.

Yeah.

Okay.

So, and so the lesson, Tom, is this, okay?

The things that you were taught in academia, and I was taught in academia about risk analysis on real estate does not include the risk that debt represents.

And you are now experiencing the risk that debt represents wholesale.

I mean, right across your face.

You're getting slapped repeatedly with the risk that debt represents.

So you went into all these properties thinking there was no risk and the tenants were going to pay everything.

And the tenants were always going to be there.

And they were always going to pay, and they weren't going to tear up anything.

There wasn't going to be any repairs.

And you found out that the more debt there is, the more risk there is.

And you just took on a boatload of risk for no money.

One property sells you make $45,000.

The other one sells you get out barely.

You got no money.

And you traded all of that for risk.

So, no, I hope you can get out of these, and that's your goal.

And I hope you get this job, and that's your goal.

Thanks for calling.

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Rin is with us in Missouri.

Hi, Rin.

Welcome to the Ramsey Show.

Hi.

Hi, how can I help?

So I got a

bit of a problem that I'm trying to figure out how to navigate.

So I work in IT for a lot of different financial institutions and do a lot of security work for them and everything.

And one of the things that's directly tied to my employment is, unfortunately, my lovely credit score.

No, it's not.

Not not T.

It is if you're a president of a bank, but not not T.

They're not, they're not going to kill you for not having a credit score.

Okay.

They'll hurt you for having bad credit.

Right.

But not no credit.

Right.

And that's the problem I'm running into is that I've got credit.

I've had credit for...

you know, I've had good credit for quite a while, but I recently, with a lot of the contracts I've been doing, with all the work I've been doing I've actually been able to get a lot of stuff paid down and the unfortunate thing is one of my oldest accounts that I had was actually an auto loan and I paid it off here recently and so I'm like cool got the car paid off all great and I go and check my credit score and it dropped it below 700 yeah I'm like what the heck yeah well that's an

Right, but the problem is with the contract of my employment, it's actually because they put it in the form of, hey, if you can't manage your finances, then why do we give you access to other people's finances to manage the servers that handle it?

How often do they check it?

Every six months.

Okay, and how much debt do you have left to pay off?

Including mortgage and everything.

No, not around a.

Not including your mortgage, just your consumer debt.

Just curious.

Oh, consumer debt.

I've got about 22.

Okay, if you become debt-free

and your credit score drops below 700 and stays there, and they look at you and say, you're debt-free, so you can't manage money well, these are people too stupid to work for.

Seriously.

I agree with that.

Yeah.

So, I mean, they have to have you have to look at whoever's d using this and saying, listen, if you guys are so corporate and stupid that the only measure of financial wellness that you have is a FICO score, and I'm sitting here debt-free with a strong net worth and no payments, and you're calling me not responsible.

You're stupid.

I know that's right.

That's just dumb.

Yeah.

And that's what I've been trying to figure out: is like, how do I tell them?

Just what I get on the phone with the goober signing the contract and go, dude, if I am financially irresponsible, yes, fire me.

But I have no debt.

That is not financially irresponsible.

And that drives your credit score down.

Right.

And if you can't look at me and say debt-free is financially responsible, then

you're too dumb to hire me.

Honestly.

See, you've made the assumption that there's only one way to look at this by them.

And I'm saying when you get up in their grill, they're going to cave like a Walmart tent.

Yeah.

Yeah, they are.

And the one that doesn't, so what?

Move on.

I'm not going to pay interest to a bank and pay payments that I don't need to be paying so that this, to create an artificial wellness score that is not really a measure of wellness, but instead is a measure of how much I pay payments in order for some bureaucrat in corporate America who can't pull his head out of his butt to make a decision.

No, don't live your life that way, man.

The only unfortunate thing is I actually really do like the work that I do.

You're not saying you're going to, you're so freaking scared.

Yeah, you're making a set of assumptions.

You're making assumptions.

You're not going to lose these accounts, man.

When you go in and verbally accost them the way I'm describing and say, I am financially responsible.

I'm out of debt.

The reason my credit score went down is not because I didn't pay my bills, you dubers.

It's because I don't have any debt.

And you may not even have to accost them.

You might could just explain it to him the same way that you figured it out as a smart human being.

But don't worry about it.

It's probably the same way that they're going to figure it out.

Don't live with a glass half empty, man.

Go in there and sit down and talk to them.

And you're the same guy that calls up and goes, I can't rent an apartment without a FICO score.

But when you call 40 apartments, 38 of them will tell you they will rent it once you're in an apartment without a FICO score.

So that's mythology that someone dreamed up and made everybody believe.

So they keep borrowing money and staying in debt to the bank.

Your other option, Ren, is just keep paying payments the rest of your life because you're too scared to talk to your employer about what real financial wellness is.

Or your contract.

They're not even your employers.

Yeah, that's a good point.

Bad gum contracts.

That's a good point.

If you run it out the other way, as detailed as you've run it out the way it not working for you, that means that you don't pay off the car.

You never pay off your house.

So you get to pay a bunch of interest for no reason.

You know, $100,000 over the next 10 years to keep your FICO score working well.

That's just dumb butt.

No.

No.

And guys, this is the problem with the FICO score.

If you don't know, okay?

It was developed by an organization called Fair Isaac.

You can look it up on their website.

100% of the elements in the algorithm that create a FICO score are about your relationship with debt.

Have you taken out too much debt?

Have you taken out weird debt?

Have you not paid your debt on time?

Have you paid off debt?

The different types of debt.

Different kinds of debt that you have.

Is it a credit card debt problem?

Is it a car debt issue?

And so the only way you get a 700 to 800 credit score is you have paid hundreds of thousands of dollars over the scope of your life in interest to a bank.

It's the only way the math works in the algorithm for you to have a FICO score.

I can write you a check for $10 million.

I'm not going to.

But if I wrote you a check for $10 million and you put it in your bank account, your FICO score doesn't change one point.

If your boss walks in and says, I'm going to give you a $10 million a year raise, your FICO score does not change one point.

You get completely out of debt and build a million dollars in your 401k.

It does not change your FICO score one point, except it will go down because you got out of debt.

The FICO score is not not a measure of financial responsibility.

It is not, except as it relates to debt, it is not a measure of financial wellness.

It is not a way for you to keep score that you're doing well with your money.

It's a way banks judge if you want to play kissy face with them or not.

That's all it means.

When they look down and they see an 800, they go, yum, yum, yum, yum, yum, yum, yum, yum, yum, yum, yum.

Bring that one over here.

Sucker.

That's what banks see.

That's how they see it.

They see 800.

They go, sucker score.

800 sucker score.

That's what they see.

They see, you've been buying a lot of stuff on credit.

You like to pay interest.

Come over and give us some of your money.

Sucker.

That's what your FICO score means.

It's a sucker score.

That's it, man.

This is just nuts, y'all.

It is not a measure of net worth.

You go build a million-dollar net worth.

It does not affect your FICO score.

You know what my FICO score is?

Zero.

I don't have one.

It's indeterminable, which means I'm really off the grid.

I must be financially irresponsible.

I've got $600 million in paid-for real estate, but I must be financially irresponsible.

What a moronic thing.

You know, this bank wouldn't hire me that he's talking about to work on their software because I'm financially irresponsible by their measure.

Because the SACA score is too low.

It's indeterminable.

And you and Sam have the same problem.

Just sitting here, just a couple of us, a couple of losers sitting here answering.

A couple of broke, irresponsible losers.

This just pisses me off so bad because people walk around, and I run into people at parties, and they're just, they kind of know a little bit that Ramsey does stuff with money or whatever.

They don't know what, and they come over and they go, you know, I got an 800 FICO score.

And I'm supposed to be nice.

Or apparently impressed.

Yeah, yeah.

And I just go, yeah, I think it's perfect for you.

You know, I just keep walking, right?

Oh, my God, you sucker.

You just got screwed a lot and often.

So please, guys, don't worship at the altar of the Great FICO.

We bring you offerings of interest, Great FICO.

And you can give us anything we want on payments.

It's a sucker play, man.

It's how the banks have made their whole dadgum life.

Oh, it's a wonderful program if you're a banker.

If you're a person,

it's horrible.

Please don't worship at the altar of the great fat FICO.

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

There are new trainings every week this month, and they're all hosted by one of our Ramsey personalities.

Jade, you've done a couple of these, haven't you?

I did one today.

And I did one on Monday.

Oh, wow.

There you go.

So we're going to show you how to stick to a budget, even find $9,000 of margin using Every Dollar so you can get out of debt, build wealth, and there's a QA time that's live so you can answer ask questions that are probably a lot safer than you can on this show.

Ramseysolutions.com slash webinar.

I bet the Q ⁇ A was good.

Well, yeah, it was.

And let me just say, because I have to say this, we've done a lot of webinars in the past, and

these are totally different.

We're showing you completely new things.

So if you thought you've seen an Every Dollar webinar, you need to log on to these because they're completely different.

We're unveiling some things, Dave, is all I'm saying.

Yeah,

well, we've iterated on the app and it is doing things that it's never done.

Unbelievable.

I saw some of the presentations yesterday, some of the things that they're doing.

It's very, very interesting.

That's what I'm saying.

You got to walk.

They're walking you through the baby steps and showing you exactly in detail what the next thing is.

It's like if you had me or Dave in your pocket.

It's to that level.

So anyway.

Yeah.

Very cool.

Ramseysolutions.com slash webinar.

It's signed up.

It's completely free.

Tricia is in Rogers, Arkansas.

Hi, Tricia.

How are you?

Good.

How are you?

Better than I deserve.

What's up?

All right.

So in 2022, October of 2022, my husband of 22 years decided he was done being married and he left and he

divorced me.

In the process of all that, so his income was around $130 at the time.

Mine was around $45.

So I was very scared.

He had just bought me a brand new car in September.

So when he left in October, I took the car back to Nissan where it came from.

And I said, I'm going to, this payment's $5.96.

The math isn't mapping.

I'm going to have to have a cheaper payment somehow.

Well, so they refinanced it.

Basically, I sold it to them and they sold it back to me, used or something like that.

It lowered the payment by about 50 bucks.

I was just trying to figure out how to cut expenses everywhere.

Sold a house and

so I had to pay.

So this took up my whole, I'm a teacher at a private school.

This took up that whole school year for me.

At the end of it all,

at the sale of the house, I had to give the X around $28,000.

I had a substantially more, I think I had around $120,000 out of it, but I needed to pay.

I had $60,000 in master's degree student loans that I had to pay for.

And I had about $6,000 or $8,000, I think, from my undergraduate degree, which had included a $16,000 parent-plus loan on it.

So I paid those things off.

In the process of the expenses discovery and everything, I had forgotten that I was a co-signer on the youngest daughter's student loans because she was a senior in college at the time, so it was kind of out of sight, out of mind.

Well, she has since graduated and she's paying on her student loans.

I'm the co-signer.

So I can't like do anything.

I've got 38,000 in a money market savings.

I've got 3,000 in just an emergency fund.

We've had a lot lot of changes in education in Arkansas, so my

salary starting this coming school year will be $52.4.

And I have also taken on a second source of income that generates roughly for the 2023 year, it brought in around $12,000, which minus the 30% taxes out of that, whatever that would be.

And I'm on track to make about $14,000 with it this year.

But I'm wondering what I need.

You're not in a 30% tax bracket, but go ahead.

Oh, well, that's what when I paid taxes, that's what the IRS charged me.

They literally took 30% of that income.

Yeah.

Well, you need to file your taxes properly.

You'll get some of that.

It's not right there.

How can we help today?

So I need to know what to do.

So I had, so I spent my whole life raising kids, homeschooling them.

So I have basically no retirement.

I kind of started my own since all this happened.

And I found out this coming school year my school is going to start a retirement for us.

It's not a 401k.

I can't remember that the letters and numbers.

Does it do automatic?

Is it automatic or do you get a say in it?

I get a say in it.

They match 3%,

so we can opt in or not.

And so I've wondered if

I need to stop.

The bottom line is that you've had your heart broken and you've been drugged around behind a car for the last two years.

So you're just raw.

Right.

Okay.

Other than that, your math is okay.

Your math is going to be okay.

You're going to get there.

Okay.

You're very analytical.

And that's how I know you're going to get there.

You know all your numbers.

We don't have to ask you what they are.

You're just spitting them out, just left and right.

Even the ones in the past that don't matter anymore.

So here's what we're going to do: we're going to walk you right up what we call the baby steps.

Lots of 51-year-olds making $50,000 a year, $75,000 a year with your extra income coming in, have become millionaires by the time they were 65 or 70.

Lots of them.

As a matter of fact, the number three most likely career in our millionaire study, we studied 10,000 millionaires.

Number one was engineer.

Number two was accountant.

Number three was teacher.

And the reason is, is that you're very process driven.

And I'm going to give you the the process.

It's called the baby steps.

Baby step one is $1,000 in the bank.

You've done that.

Two is be debt-free everything but your house.

Now, how much debt do you have that's not a house?

Well, I don't have a house anymore.

We live in an apartment.

One of my daughters and I live in an apartment, but I have a car.

Okay, how much is the debt on the car?

It's $25,000.

The car is, I owe $25,000.

It's worth $21,000.

Okay.

And

it's a lot of car.

That's that stupid car that was bought right before the divorce, right?

Right, yes.

And you refinanced it, and so you got screwed twice on it.

Okay.

Now,

and you've got how much in a money market account?

$38,000 right now.

And how much debt do you have other than the car and living in the apartment?

None.

Okay, this is going to be very scary for you because you've built up walls trying to survive the last two years.

But if I woke up in your shoes, I would write a check today and pay off the car.

Now I'm debt-free and I have $13,000 left in my money market.

And how much was in the other account?

$6,000?

$3,000.

$3,000.

Okay, so now I've got $16,000 that I can earmark into a money market account as

an emergency fund, which is adequate for you to have as an emergency fund.

That's baby step three.

Then baby step four is start putting 15% of your income away.

If she puts 15% of $75,000 away from age 52 to age 65, what does she have?

65.

I have 70 in here.

Oh, you got 70,000?

480,000, but I did that at your current income.

You didn't do that with the extra income.

I did that 64.

At 64,000.

Okay.

So you'd have a half a million dollars

if you invest 15% of your income, and that's with no match, but you told us you get a match.

Right.

Okay, good.

3%.

Yeah.

So you're going to get that on top of that.

So you're going to have $600 or $800,000 if you invest 15%

of $64,000 and you never get a raise from age 52 to age 70.

Okay.

So you're okay.

You're going to be fine.

But you're going to have to continue to be very process-driven, math-driven, and let the facts talk to you.

And the facts have done a good job talking to you in the midst of all your pain and trauma.

You've remained fairly clear-headed.

Congratulations.

It's very difficult with what you've been through because you've been through hell.

Thank you.

And then another thing I'm going to do is I'm going to put Kiddo that has the student loan on a tight budget, make sure she gets a freaking job and she pays the bill.

She's got to be responsible.

She can't throw this back on you.

Right.

No, she's been doing great.

I know.

She gets to keep doing great.

And we're going to put her on

beans and rice, rice and beans,

no run around Italy.

Get the freaking student loan paid off, kiddo.

And then you can go have your life.

But mom's on this thing, and mom can't handle any more people dumping on her.

Had enough dump on you lately.

So you can fight through this.

You can do it.

Hang on.

We're going to put you in the Every Dollar app, the advanced version, as our gift, free, to help you work your way through this.

You can do this.

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

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

It just took a few minutes online.

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

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

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

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

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

That's why I recommend Fairwinds.

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

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Are you staying on track with your baby steps?

You can take a quick quiz to check your progress and receive a personalized plan just for you.

That's kind of all personalized means, right?

Simply head over to show notes, click the link titled, Are You on Track with the Baby Steps?

Do the quick quiz, and we'll help you

with a personalized plan.

Kiko is in Tacoma, Washington.

Hi, Kiko.

How are you?

Hi, Dave.

Good.

How are you doing?

Better than I deserve.

What's up?

Yeah, so I'm a 47-year-old single dad, twice divorced.

Both my marriages, I let my ex-wives handle my finances.

So I never really learned how to manage money myself or develop the necessary discipline.

And I'm just really embarrassed that I haven't given my kids the best example of how to respect and manage money.

Now I'm at a point in my life where I'm trying to rebuild, but I'm living check-to-check in debt.

I'm also an Army vet, so I struggle with not only childhood trauma, but ADHD, PTSD, anxiety, depression, which make it all hard to stay focused and consistent.

But I have been taking some steps, like seeking mental health counseling, going through Financial Peace University years ago through my former church.

And I recently met with a debt management counselor, but I'm still feeling stuck and unsure what my next move should be to finally get control and give my kids a stable future.

Are you disabled or are you able to work with your conditions?

I'm at 90%, so I'm able to work.

I'm an academic advisor and part-time college professor, but education doesn't really pay you a whole lot of time.

So with all of these different income sources, including your ex-military, thank you for your service.

What is your household income?

I take home about $4,000 a month in salary and $2,400 in

VA disability.

Okay.

She got $6,400 a month to work with.

Good.

Nice.

So where's the dream?

Is it debt?

Just keeping up with child support, rent.

I'm doing everything all by myself.

You're just disorganized.

Yeah.

You have no idea what's going on.

You just spend money till it's gone and then you worry.

Yeah, a lot of it is admittedly coping, trying to get through the season of, yeah.

Yeah, absolutely and that that would be normal i don't blame you for that but the good news is is you can identify that so that we can whip it

right because what you need to be is cold calculated and on the other side of this where this money thing is you're telling this money what to do instead of wondering where it went right you want to get control rather than be controlled absolutely yeah i believe you i don't blame you man i think i can smell that a mile away i've been there that's how i know it kind of knots up in your stomach and moves towards your throat definitely Definitely.

Yeah.

Yeah.

It ain't no fun, man.

So,

what we're going to do is, I want you to flip a switch because you've got this ability with your background, especially in the academic side.

You don't need your, the debt counselor person is going to put you in more debt or they're going to put you in some kind of a debt consolidation loan.

That's not what you need.

You need a system where Kiko takes control.

Absolutely.

We're going to flip a switch and pretend like I hired you for $100,000 $100,000 a year to manage this very simple set of finances.

$6,400 is coming in, and every one of those $6,400 needs a name

before it leaves.

Before the month gets here, before the money actually comes in, it needs to already be spent in the Every Dollar app,

already be allocated.

And so when you start telling your money what to do before the month begins, that forces organization and it removes anxiety and stress like you will not believe.

You're going to be amazed.

Even though you're still in debt and even though you're still fighting some stuff,

once you get on the other side of this and you're cracking the whip on it instead of it cracking the whip on you, you're suddenly going to get a sense of peace.

Now, you've got some hard work to do.

You got some calluses to earn, but you can do this.

And Jade, you've been showing people how to do this in these webinars.

It works.

Yeah.

Matter of fact, I'm going to give Kiko some homework.

This is your homework tonight.

We're going to set you up with 14 days free.

We're going to give you the first 14 days on us, but then after that, you got to pay for it.

So you have some skin in the game.

But tonight, I want you to download it and I want you to set up your first budget.

That's you, Kiko, putting the $6,400 that you make every month right at the top.

And then you're just going to go down and think of everything that you possibly spend money on in the month, including your debt.

Write it all out.

And then after that, I want you to go into the other part where it's going to give you your personalized plan.

So you can start to walk through and say, okay, what do I do first?

What do I I do with the margin that I found?

Margin is just extra.

What do I do with that extra money?

Which debt do I put it on?

How long is it?

It's going to tell you all that.

It's going to tell you what debt to put it on.

How long it's going to take you to get out of debt.

And then you're going to walk away with what's called hope.

Yeah.

It's the every dollar app.

It started out as a budgeting app.

Now it's become a financial management app because we've kept iterating it and to where it starts to tell you what to do step by step while you're laying out your plan.

And

our team's here to help you.

We're going to walk with you through this

And we're not charging you anything, okay?

This is all just to help you out.

You can do this.

You'll be amazed once you lay out and say, okay, here's the seven baby steps.

I need to first save $1,000.

Then I need to work off my debts, smallest to largest, pay minimum payments on everything but the little one, attack the little one.

And the way I'm going to find that money is I'm going to write it all down before the month begins in this app.

I'm going to tell the money what to do.

And then the app's going to give you suggestions on where you find more margin.

Exactly.

And that's the thing.

Like, if you call into the show, based on what you're telling us, we can maybe come up with a couple of things to tell you.

But the app is going to

go through everything.

On average, when people just fill out the stuff to start, they find about $9,560.

That's been our average

in the last 120 days using this new process.

In just a couple minutes.

It's pretty incredible.

Yeah.

It's

blowing my mind.

That's the average, which means you might have $6,000 or you might have $16,000.

I don't know.

But you can get a head start on this thing and get it turned around and get moving in the right direction.

And it's kind of like what we do here, but it's actually more sophisticated because we forget to ask.

That's what I'm saying.

And it'll go step by step and remind you, hey, this is what you do first.

This is what you do next.

And by the way, if there's something you don't understand, it'll teach it to you so that you do understand.

Yeah, it'll pop up and throw a video of Jade up there explaining it or George Camill or Dave Ramsey up there explaining it for you.

So the thing is stinking, yeah, it'll show you what to do exactly.

And

you don't need a debt manager person.

We'll be it for you, and it doesn't cost you a thing.

Okay, you go.

So you hang on, man.

We'll pick up and get you set up on that.

Katie is with us in Seattle.

Hi, Katie.

How are you?

I'm all right.

How are you?

Better than I deserve.

What's up?

Well, so I have kind of a complicated question, but basically.

I've been trying to manage our finances as a household.

I'm wife with a 14-year marriage with my husband, and my daughter is also 14.

That is my husband and our daughter.

And then we were blessed to finally have another child because we've been trying to for a long time.

What's your question for our run out of time, honey?

Sorry.

So he recently gambled a lot of money.

How much is that?

I don't know, honestly.

I just know that he won some money and didn't tell me about it until I started questioning why he all of a sudden had extra funds.

I mean, are we talking hundreds of thousands?

How much are we talking about?

Give us a ballpark.

So I know that he had been giving me $1,200 from his paycheck every week, and he's now confessed to me that he actually gets about $1,900.

So we need to change our system.

Okay.

He no longer gets to give you his paycheck.

It's direct deposited into our checking account, and we decide what we are going to do with our money.

And if that includes gambling, that is a mutual decision.

And obviously, it would be a small enough amount that it wouldn't affect the household.

Right.

If he can't go along with that, you have another problem.

Yeah.

It's a husband problem.

The hard part is you don't know the exact numbers because there hasn't been that transparency.

So the first step is let's add the transparency.

See how does he react to that.

Then you can know if your troubles go deeper than just that.

Yeah.

Are we dealing with a gambling problem or a budget and disorganization problem?

If you're dealing with a gambling problem, you can't fix that until you fix the gambling problem.

Or you may find that

sorry, you may find that you're dealing with a marriage problem if you say, hey, I want this level of transparency.

And he says, I don't want to give you that.

Do you see what we're saying?

Well, yeah, I do.

And I mean, this is not the first time.

And trust has been an issue in our relationships for various different things beside the gambling.

And

I feel like every time I bring it up, he gets a little better.

Yeah, but it doesn't stay there.

So we need to get to solving on this because because you're not going to live like this the rest of your life unless you're crazy.

And you're not crazy.

So you need to have all the account, all the money going to one account and we are in agreement on what we are doing with our money.

And then trust will be solid.

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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people

build wealth, do work that they love, or create actual, amazing relationships.

Jade Washall, number one best-selling author and Ramsey personality, is my co-host today.

Ashley is in Columbus, Ohio.

Hi, Ashley.

How are you?

Hi, I'm good.

How are you guys?

Better than I deserve.

What's up?

Well, we have a predicament.

We have a very high net worth, but right now our financial advisor is suggesting that we take a loan out on our vacation property, which is paid in full.

There's no mortgage there, to help supplement our income since our money is not liquid.

What what is your net worth, huh?

About 40 million.

Oh, my word.

And you don't have enough income coming in off of 40 million.

So it's a little tricky.

Thirty of that is invested in my husband's business, which is close to about about a billion-dollar business, but we can only touch that when we are allowed to touch it.

I'm sorry.

If it's your business, why are you not allowed to touch it?

So he's not on the board.

So the board makes the decision on who gets money when.

I thought it was your husband.

Wait a minute.

Who owns?

So

he's one of the owners in the business.

Who's the majority shareholder?

There's a handful of people who

own the chunk of it.

He's one of those people.

But he is not on the board of directors, so he doesn't get to make the decision on when redemptions can be made.

So,

wow.

Yeah.

So, well, that's $30 million, but you still got $10 million.

You don't have anything in that that's creating income.

Okay, so we've got four in retirement, $4 million in retirement.

He brings in about $400 a year, and he's 100% commissioned based on what he does.

So what do you need money for if you make $400 a year?

So, what we were hoping to do, and what we had been doing with the redeeming shares each year, then come to find out that we can't redeem every single year, was my husband's 56, and he's wanting to, after 26 years of service, he's ready to kind of back off and enjoy our vacation home.

And I homeschool our kids and

be a little more present after being very, very invested firsthand in what he does.

So, he was hoping to help to supplement our lifestyle with using some money from a HELOC.

How much would the HELOC?

Okay, let's just stop.

Let's just stop.

I'm sure.

There's no possible way that borrowing on your lake house is a good idea when you have $40 million.

There's no scenario by which I can get there.

And I'm really

disgusted at how pitiful your financial advisor is.

This is just asinine.

You make $400,000 a year.

You have $10 million.

It's not tied up in this company, and you guys can't figure out a way to get to some of that.

How old is he?

Could be six this year.

Yeah, yeah.

Okay.

And I've just recently taken over our finances as of April because I found out a lot of stuff was going on.

So, what do you mean?

Well, for instance, I just, we got married

15 years ago.

I trusted him completely.

He made great money.

I worked as well.

We had three children together.

I've been homeschooling them.

I haven't heard anything wrong yet.

What happened that was wrong?

So

he trusted that he would be able to redeem shares every year and didn't realize that he couldn't do that.

Then we spent money, assuming that we were going to be redeeming shares.

In excess of of 400 grand.

Like a million over.

You spent the money before you had it.

Yeah.

Okay.

And how was that covered?

Well,

initially we were getting the redemptions, so

it was not, it was like, oh, yeah, well, we get the redemption at the end of the year.

So

and how much was you redeeming of your $30 million

instead?

About a million, million and a half a year.

We'd get the best.

And you were spending all of that.

And now his income.

On what?

His income.

Hang on.

Keep in mind, his income would drop down.

I know.

A million and a half a year on what?

Well, we have two homes.

We have staff

in those homes.

We have children.

We're very generous with still not gotten anywhere near close to a million and a half.

We have a lot of

horse farm that we pay for.

You have a horse farm that you pay for.

Oh.

Exwife.

Exwife.

Uh-huh.

Yeah.

Yeah.

There are some things.

So I've consolidated quite a bit of that.

None of this adds up to a million and a half dollars.

Well, we, you know, chartering yachts and flying private.

It all happened real fast.

Yeah.

Okay.

Now I'm getting there.

Yeah.

Okay.

All right.

Yeah.

So when I found out all of this, I said, I'm taking over.

All right.

Well, there's not a, I'm taking over.

It's the two of us need to be both using our brain about the actual money that we have to work work with.

And what of the 10 million can we access?

And

what percentage of this company does he own?

Do you know?

Oh, gosh.

I couldn't tell you that.

1%, 12%,

82%.

We know it's not 82%.

Well, of a billion percentage.

No, shares.

What percentage of the company?

What percentage of shares?

I don't know.

Now, that'd be a good thing to know because he needs to start taking some action because he has $30 million tied up in something he has absolutely no control over.

That is not okay.

That is where your problem is.

It is not a lake house home equity loan.

Good God.

Right.

The last thing you people need to do is

be going into debt to be renting a yacht.

Right.

You just cut your freaking lifestyle.

Just cut your lifestyle.

Live within your means.

We absolutely have.

Absolutely.

Then you don't need to be having this conversation about borrowing money on your lake house.

Okay.

Live within your means.

Now, then how do we adjust our means?

Well, one is we've got to have a discussion with these partners

about my $30 million, and I'm 56 years old, and I poured my life into this company, and how and when am I reasonably going to get access to that money?

So we've had that conversation.

I had that conversation, and it was told to me crystal clear, no questions asked.

We will never prioritize shareholder redemptions over the growth of the company.

That's not the way that we can.

We can divest.

We have an option to divest.

They can do it in four years.

The challenge with that is on the $200,000 that we invested in this company, it turned into $30 million.

So you kind of go, you don't want to completely divest?

Yeah, I do.

I completely want to divest.

Absolutely.

Because you are going to lose your butt.

You have no control.

And people are looking at you going, you have $30 million and you don't count.

Yeah.

Absolutely, I'm getting out of that deal.

Yeah.

Crystal clear, meaning they were arrogant, dropped their glasses down on the end of their nose and

man spoke you, girl.

I mean, come on.

Yep.

Bull crap.

I ain't putting up with that.

I'm going to pay some taxes and get free of these jerkwads.

No,

no way.

Redeem, redeem, redeem away.

That's what I'm doing.

No chance I'm putting up with that crap.

Because this story doesn't end well.

When someone keeps control of

75% of your net worth and you have a $40 million net worth, you have zero access to it.

Because, darling, you don't understand how business works.

We will never put

redemption of shares above the growth of the company.

Oh, you've got to be kidding me.

So I think we're going to handle that.

We're just going to redeem the dead gum shares.

I can fix that.

Oh, my God.

So, no, darling, and you may need a new financial advisor, too.

This one's an idiot.

Borrow on a lake house to solve this spending problem?

Yeah, I don't think so.

Okay, Rachel, the internet officially knows too much about all of us.

So much, George.

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Don't like that.

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well buying or selling your home is a big deal with all the clickbait headlines and conflicting data out there let me help you when there's drama going on you know how to fix it Facts are your friends.

Facts just put drama, just put it to sleep.

It's done.

So if you find out what's really going on, then all this, oh my God,

all this stuff that's happening in the real estate market, it just calms you right down.

Okay.

So here's the actual facts.

The median home price, which if you know anything about statistics, median is the number that's in the middle.

Average is not necessarily in the middle.

It's close, but they're close.

Close to the same thing.

But median is actually the far end and the other end and right in the middle.

The median home price in America

has gone up again this month

to $441,000.

That's the median.

So when you tell me you're in Kansas City and there are no homes under $800,000, I'm going to call you a liar.

Okay?

You haven't looked in the right neighborhood.

There are homes under $800,000 because the median in America and Kansas City would be pretty normal town, not above average, not below average, right there around the middle.

Nashville, Tennessee, same thing.

Louisville, Kentucky.

Same thing, right?

These are all going to hover.

That's going to be your house price median.

Now, I live in Williamson County, south of Nashville, which is the 11th wealthiest county

in America America and the wealthiest county in Tennessee.

The median house price in Williamson County is not $441.

So you're right.

It's probably approaching a million.

But it's, you know, it's crazy out here.

So it's just a land that I live in right here where this building is sitting.

Okay.

But

so I don't know where you live, but one county over, it's a lot less.

Okay.

True that.

Probably.

Listen, Maury County.

This is Murray.

Yeah, you go down one more county from here, and you get a whole different world.

Most of the people that work in this building live one county further south of here and not the 11th wealthiest county in the nation.

So anyway, $441,000.

And by the way, that's up from

$440,000 last month and $439 the month before.

It's averaged $1,000 a month is all.

So house prices are not declining.

They're increasing, but very slightly.

That's the mathematical facts.

15-year fixed rate, still under 6%.

So if you want to know more about this kind of stuff, go to ramseysolutions.com slash market.

Alex is in Utah.

Hey, Alex, welcome to the show.

How can I help?

I have a question about how I can help ease my wife's worries about not investing until after we're done paying debt off.

I think something that kind of adds to her stress is we just had our second kid two months ago, and we don't have wills or life insurance, which I think is causing some of that.

Well, there you go.

So you know two things to to fix it.

Go to mama bearlegalforms.com, get your will.

Go to Xander Insurance, get your life insurance.

You need to do that anyway, right now, today.

Now, how old are you guys?

So I'm 26 and she's 27.

Okay.

And how much, what's the timeline?

Because obviously you're saying, hey, I want to pay off debt and build up savings before I invest, which is what we would teach.

How long is it going to take you to do that before you start investing?

It's probably going to be a few years.

How much debt have you got, not counting your house?

So we don't own a house.

We have

roughly $96,000.

On what?

So we have $64,000 on a truck,

and then another $2,000 on a car that we're going to pay off here in the next few months.

And then $24,000 on student loans, and then $6,000 left on the birth expenses.

Oh, cool.

And your household income was what?

Did you tell me that already?

I didn't.

No, it's between $125,000 and $135,000 I'm self-employed.

Okay, cool.

What do you do?

Work in construction, just a foreman.

Okay.

Hired for help.

Good.

Hey, wow.

So I got great news.

Your wife is going to feel a whole lot better and you're not.

Yeah.

Vroom the vroom.

You're going to get a will.

You're going to get a life insurance policy.

And you're going to sell your truck.

Okay.

Because your truck is stupid.

So one thing with that is.

Oh, don't give me one thing with that.

You owe $65,000 on it, and your wife's afraid you're not going to get out of debt fast enough to start investing.

She doesn't believe you because you keep buying crap you can't afford.

That's fair.

The sucky thing is, is

because I bought it last year, it's worth maybe $37,000.

Well, no,

did you run a backhoe into it?

How's it worth $37?

I have 27,000 miles on it.

So what?

It didn't drop 30,000 bucks in value in one year.

That's what Kelly Bluebook said for

private sale.

You're kidding.

No.

What kind of truck is it?

Yeah, I was going to say, what is it?

It's a 24 Tacoma.

And you didn't roll any negative equity in it.

Nope.

I got to tell you, man,

I'm a huge Tacoma fan, a Toyota fan in general.

I don't own one, but I mean,

my perception is not only is that a quality vehicle, but it would hold its value a whole lot better than that.

I'm really shocked.

I think you must have looked that up wrong.

I cannot believe you cannot get $30,000 a year later for a Tacoma you paid 60 for.

Yeah, it's pretty rough.

I really, that's

wacky.

That's the

upside down.

Well, I mean, if you really are, I'm just saying, I don't believe you.

I think you looked it up wrong.

I really do.

I can't imagine.

Is there anything wrong with it?

Did you add something crazy to it?

Pop open your see if you can find it.

I'll see if I can find a deal.

That's good.

Okay, well, you're on track.

All right.

So here's the thing.

The reason

that she doesn't want to stop investing is because she's afraid we'll never restart.

Uh-huh.

Not because she doesn't, not because she thinks it's the wrong thing to do.

If you really believe that you could be completely debt-free in two years by being on beans and rice, rice and beans, and then take $125,000 income and invest that wisely for the rest of your life.

You'd be multi-millionaires mathematically, easily, easily.

That's the plan.

And yeah, that is the plan.

But that requires that you play all the way through, and nothing in your all's past indicates that to her.

So she's got to feel like, A, she has a vote on this budget.

B, you're willing to do whatever it takes to get there.

And we're going to get there there as fast as we possibly can

because it's urgent that we start investing because your most powerful wealth building tool is your income.

And right now, you're giving it all to Toyota.

Basically.

Yeah.

And so

she knows that.

And so

it's not that your wife won't go along with really stopping investing in order to get out of debt.

It's that she doesn't want to stop investing to never get out of debt.

Yes.

And that's like

I've continuously expressed to her, like, hey, we're done.

Like, I'm done buying new vehicles.

That was a stupid thing.

I started listening to you guys like two months after I bought it.

I'm like, no, that was a stupid tax I'm paying now.

Yeah, you are.

If that's the real numbers, I'm, God, I'm distressed because I just love that car.

I know.

But

I don't love it enough for you to keep it, but I love it.

So, all right.

Well, I think you guys keep talking through this.

But that's what you've got to become of a common mind that we are willing to

um

sacrifice in order to get there and we both believe it's really going to happen it's it's she's afraid it's not really going to happen that we're not going to play through at my house when i was your age i'm not accusing you of this alex but it was me um and sometimes this is true I would come in with a new scheme or a scam every week that we were going to do.

And if my latest one was, we're going to stop

all investing to get out of debt after the other schemes and scams only lasted three or four weeks or three or four months, my wife would roll her eyes at that time and go, oh, another one of those things you're not going to play through on.

Another one of your great ideas, Dave.

And,

you know, that was back 35 years ago.

Today, we're very, very much dialed in, very much aligned.

Did you find anything at all?

I'm just, yeah, he's not far off.

I'm just trying to understand how you spent what you spent to begin with and why I can find them for $31,500 in that type of price range.

So I don't know what you did, but you did it.

If you owe $60,000 on it.

Unless you borrowed on a subprime loan and the balance is not really $60,000, but the total of payments is $60,000.

That's another possibility.

Maybe that's not the real payoff.

Make sure you got real payoff numbers.

Maybe that's the number that's the wrong one.

Fight through it, Alex.

Fight through it.

You're on your way.

Anna is in Albuquerque, New Mexico.

Hi, Anna.

Welcome to the Ramsey Show.

Hi, Dave.

Hi, Jade.

Thank you for having me.

Sure.

What's up?

So, my question is, while we're working through the baby steps, how do we handle family dynamics and not seem like the cheap family?

Hmm.

This sounds like expectations

from

extended family, yes?

Yes.

Like what?

They are familiar.

They are familiar with the Ramsey method.

They actually kind of introduced us to it, but they have since

they decided to kind of give up on it and they said to they're going to make memories with their money now instead.

And that's the one that's

they?

Who is they?

Sister brothers-in-law.

And so they've decided, hey, it was too much for us.

We're not doing it.

And they think you should be in that boat.

Whereas though, you've said, hey, no, we want to be intense.

We want to pay off our debt.

We're going to do that.

And they're kind of making you feel bad about it.

Yep.

Yeah.

Give me an example.

Yeah.

So,

for example,

they like to go to places where they play golf for fun that, you know, is that recreational place?

Top golf.

but huh i said top golf it's expensive yep

um and we're a family of six and so trying to to cover that um and i have tried suggesting alternative um

activities for us to do and they often kind of respond with and it's boring

well then you know okay i i i that's a great example i mean this is one of those times uh where you're just gonna have to announce put your foot down and say we're not going.

I mean, I can't tell you how many times when Sam and I were getting out of debt, that I would just say, hey, that's not a priority for us this month.

And I might suggest something different.

And maybe I don't.

If, you know, if everybody's going out.

We just can't do that this month.

Yeah, we're not able to go this month.

And like I said, you can suggest another option.

What if you guys all came over here and we did board games?

And if they say, no, that's not fun, then that's then their choice.

So the same way you can't get mad, the same way you don't want them to get mad when you make your choice, you then can't be offended when they make theirs, which is we don't want to do family board game.

We want to go to top golf.

Okay, have fun.

Yeah, I hope you have a great time.

I hope you have a great time.

Yeah.

And

we can't do it this month.

But thanks for asking.

Right.

You know,

let's pretend something was crazy, okay?

Someone called you up and said, Hey, I want you to charter a private jet and fly to London.

You would go,

I'm sorry.

That would be neat, but I'm not going to be able to do that.

And why?

Because it doesn't fit your financial picture.

Right.

Even though that person might be able to charter a private jet to London,

which, by the way, would be like $120,000.

Okay.

But,

you know, so it's not...

You know,

it's just something you can't afford to do is all it is.

I mean, oh, well, you know, toughies.

I mean, hey, we want you to, we're all buying new boats, and we want you to go get a new boat to match our boats.

Oh, that'd be sweet.

I wish I could, but I'm just not able to do that right now.

I hope you guys enjoy your boats.

In that moment, with the extreme examples that Dave is giving, you'd be able to see how absurd it is that someone else is trying to manage your money.

Yeah, and that they would be able to say what you can and can't afford.

You realize how absurd that is.

It's the same thing here.

It's just a smaller, it's just a different scale.

And you know, you can't afford to take your family of six to top golf because you've got more important priorities, but they don't get to decide that.

What's the repercussion?

Tell me, is it even real?

Let's decide: is this something that's just taking place in your mind or if it's really happening?

What happens when you say, hey, thanks for inviting us?

We're not going to go this month, but you guys have a good time.

What then takes place?

What do they do to retaliate?

So

they'll go ahead and do the event, which is fine.

And then I guess it does put it on us to maybe try to set up something else outside of that event, you know, at a different time.

See, and I don't think it does.

I think you kind of created something that's not even really there.

You just didn't go.

That's all it is.

Yeah.

You just didn't fly to London.

I think they're just getting tired of us saying, sorry, we can't devote.

Who gives a crap?

What they think.

They don't get a vote.

You know, Listen, people that love you are supposed to encourage you.

That's right, Dave.

Not send you on, not be travel agents for guilt trips.

You are way too worried about what other people think, kiddo.

Just smile and be happy and happy that they want to go to Top Golf.

Hope you enjoy it.

Top golf's fun, but it really won't change your life.

And can I just,

I'm creating something here, but can I just say these types of people are the same people that when when you do get out of debt, Anna, and your money is looking good and you do have margin, and maybe you want to do something beyond top golf and they can't afford it, these are the type of people who will be frustrated then at you for that as well.

Does that make sense?

You're not going to win with these folks.

Yeah,

when you have $2 million in your account and you guys are going to go away for an expensive weekend at the montage and you want to invite them,

they're going to be going, well,

wouldn't it be nice?

Yeah, that's right.

Wouldn't it be nice if we were like you?

Yeah, well, it would have been 10 years ago if you'd have had a dad gum half an ounce of maturity and learned to live on less than you make.

But, you know, just you just have to keep all that to yourself.

And it's just, you have to be sweet, be kind, and just know I can't go.

And quit reading into it because somehow you've done something wrong.

Even if they think you have, they don't get a vote.

Biggest superpower you can have with your money is not caring what people think.

That's the number.

If you can accomplish that mentally, you can go further faster.

Well, because that jade bleeds over past this type of discussion because it bleeds over into the, I'm not buying the crap I saw on Instagram to make people think I'm somebody.

You don't care.

I don't need to buy, I don't need to carry a purse.

I don't need to wear a shirt or shoes or drive a car or live in a house or go on a vacation for someone else to look at.

And I was that guy in my 20s.

I really, I bought a Jaguar.

I had had a Rolex.

I had

custom-made suits.

I wanted it when I was making a little money back then before I went broke.

And I really wanted other people to be impressed.

And one of the benefits of going broke is I lost all of that.

My need for you to be impressed with me is zero.

I hear that.

The only thing I want to do is just love you and help you.

And if you're not impressed, fine.

If you are impressed, that's fine too.

Life's good.

Go on and do your thing.

And I'm probably never going to see you again anyway.

So good luck with that.

And, you know, it's okay because, you know, I'm not going to spend a four.

Now, I've got a nice car.

I got a nice truck.

I got a nice boat, whatever.

But it's for me.

Yeah.

It ain't for you.

Yeah.

It's not for you to look at.

I don't care whether you know what I drive.

I think that is one of the benefits of when you do walk through the baby steps, as we teach.

More importantly, when you walk through the debt snowball, right?

Because you're sacrificing.

You have to not care what people are.

Yeah, because you're sacrificing.

And there's part of that, you can't hide that.

It shows.

And so you start getting used to it showing.

You start getting used to wearing the same clothes, you get used to

saying no to going out to dinner.

You get the Jaguar repo to show, yeah, that'll knock you out.

That's a problem, and so but ain't there no more.

The positive side of that is, yeah, you kind of burn out that part of you that cared about what other people think.

And when it's gone, that's a great place to be.

Yeah, your confidence comes from her.

It's kind of sweet when it's coming from her because she's kind of sweet.

Yeah, she's sweet.

But

just

it's not, it's not getting power.

The power comes from, I love you.

I want good things for you, but we're going to do our thing over here.

Over here, we're going to do our thing.

This is what we do over here.

And, you know, if you, if you're going to be mad about that, then you're just going to have to be mad about it.

I'm going to vote for who I'm going to vote for.

I'm going to travel where I want to travel.

I'm going to buy the car I want to travel.

I'm just not, my need for you to be okay with that is really, really low.

Yeah, it's different.

You know, when you're in debt, you are, your self-esteem is low, and you're trying to cover that up with buying things and going places and doing things.

It's a different motivation than when you're on the other side of it.

The list of things you want even changes because it's coming from a different place.

It's not coming from insecurity.

Good point.

Interesting.

So, Anna, honey, they don't get a vote.

Just smile at them.

Have fun at Top Golf, y'all.

See you next time we have dinner.

It's all good.

Sarah is in Los Angeles.

Hi, Sarah.

What's up?

Hey, how are you all?

Better than we deserve.

How can we help?

I doubt that.

I think you deserve it.

I just received $100,000 from my parents.

I'm married, so my husband and I just received this.

Wow.

And I know.

As a gift, or was it a did someone pass away?

It was

a gift.

Okay.

They also gifted my brother the same and his wife.

And so I just want to make sure I do the quote right thing with this money.

I'm looking at paying off both of our cars first.

We don't have any credit card debt.

We pay it off every month, but I'm actually going to stop using a credit card.

Wow.

I like you already.

Well, thank you.

I appreciate your guidance.

So I felt like the credit card was not optimizing my savings.

Like it just, I was spending more than,

yeah, it just does that for some reason.

Okay, so your only debt other than your home is your cars?

That's it.

Yeah.

And how much are they?

What's the debt on them?

So

$16,000 on one and $7,000 on another.

Okay.

Well, that's kind of a no-brainer.

Good.

Okay.

So 23 of the 100 is gone.

Okay.

Yep.

And then I was thinking about doing about $32,000 in an emergency fund.

That would be four months of my husband's income.

You don't have any money in an emergency fund today?

We have $3,000.

Okay.

Oh, that would put you at $35,000.

Okay, I got you.

I see what you did.

Very good.

So, and like that would be, I assume, and we have it just in like a high-yield savings.

Is that where you would keep it?

Because it's liquid?

More liquid?

You're doing really good.

I like it.

Like your plan so far a lot.

What's the next one?

Okay, good.

Good, good.

And then the car payments I was going to put towards my mortgage, the car payments that we would have had,

not sure what you think about that.

The main thing I would just do is I would do a budget, and I'd start putting 15% of your income towards retirement,

doing something towards kids' college out of your budget, and then out of your budget, which includes no car payments now, then I'm going to put some extra on the mortgage.

I don't know how much.

It may or may not equal to the old car payments.

Okay, I see.

Yeah.

Because I just want you to do a budget and find money in there to live.

And now you move from intensity to intentionality because you're in baby steps

four through six, which is 15% into retirement, kids' college savings, and then systematically pay off the house while enjoying our life.

Were you already investing?

It sounds like you were.

No, we're not.

Okay.

We have not invested yet.

So that was kind of my next step.

If I have a little bit left, we do want to paint our house because it's crumbling and do a couple things to um help improve my side hustle which is our airbnb in the house um okay after that

um i don't i don't know yeah i don't know where to start for investing and also another piece is my husband is 20 years younger than me 22 years younger than me so i'm 54 he's 32.

i wonder if that factors in at all for

well i wouldn't i wouldn't uh pause investing to do the things that you're talking about with the home investing is something that it's kind of like you said it and forget it, and it's the new normal.

My guess is that once you pay these cars off, basically that money that you were paying in car payments, you're now going to feel that go away in your 15%, that and some in your 15% that you're investing every single month.

So turn that on immediately.

Once you park this money in the savings and your emergency fund, turn the investing on immediately because you'll be still got about 50 grand we got to decide what to do with.

Right.

And what was your plan with the other 50 grand?

I mean, I was going to get a new tooth because I had some of my teeth removed.

I got to get a new tooth.

Unfortunately, I live in a very expensive area.

It's going to be about eight grand.

Get your tooth.

Okay.

Get my tooth.

Yeah, you need to get your tooth.

Get my husband's life insurance because we have it on me, but we don't have it on him.

Okay, that's smart.

Get a will.

Pardon me?

Get a will.

Yes, good.

Yes, we have a will.

Good, good.

And it's, I'm like budgeting, like I said, I was using the credit card and I just noticed, yeah, we could pay it off, but I was kept stretching it every month.

So I want to stop doing the credit card.

I was trying to get air miles because my baby girl is flying or is going to college across the country.

So I want to be able to see her.

But I'm wondering.

Yeah, I think you just pay for your airline tickets.

Have you received the $100,000 yet?

Yes.

Okay.

Do you have the credit card?

Do you have a credit card?

I have the credit card, yeah.

Why don't you pull pull it out of your wallet right now and cut it up?

Okay.

I think that would be a great way for you to turn over a new leaf.

Why save for tomorrow what you can do today?

Yeah, that was my point.

Couldn't I just save money for airline tickets?

Yes.

Yeah, and actually have money for airline tickets.

So you need to get on the every dollar budget, and it'll walk you through all these baby steps as well as help you plan with your monthly spending that you and your husband can agree to.

So we'll give you 14 days of free premium version.

You need to try this new version of Every Dollar We just came out with.

You're going to love it.

It's going to hold your hand and walk you through all the things we were just talking about.

So now you're dead-free.

You have an emergency fund.

You're living on a written plan so that you're spending money wisely.

Oh, $8,000 for a tooth.

And so we have $42,000 approximately left.

$32,000, and yeah, no, no, no, no, no, no.

It's not quite that much.

But anyway, whatever we've got left, I still want you to, you and your husband sit down.

I would recommend that you plan to enjoy some of that.

I agree.

And that might be, it might be a small trip.

It might be a new couch.

We might need a new bed.

We haven't bought a mattress in 15 years.

It might be.

Oh, yeah, you said you wanted to paint the house.

If you want to paint the house,

if you want to upgrade a car a little bit.

But all of that is with cash.

We're not going back into debt if we just turn around and cleared the debt.

Right.

And so but so just take like a piece of, take a yellow pad, put $100,000 at the top, and you and your husband sit down and give every one of those dollars a name.

We know 16 and 7 went to car.

We know 8 went to tooth.

We know 32 went to finish up the emergency fund.

Okay, so you just keep working your way down until the money has already got a name.

Because if you don't do that, what we all do, if we keep it just kind of floating around in our brain, is we spend $100,000 four times.

Yes.

Yes.

And you end up worse off than if you hadn't gotten the thing.

And you also have this horrible taste on the back of your tongue called regret.

So, yeah, you just have a diligent plan.

And it's not going to go as far as your emotions wished it would.

It's not going to go as far.

100,000 isn't what it used to be.

Well, that's true.

It's just not.

But it's getting a lot done for you.

It's getting you out of debt.

It's getting you an emergency.

You're advancing right down these baby steps and getting yourself in a position to really build

some real wealth.

I know.

I'm slaying the baby steps.

It's so fun.

I'm so appreciative of my parents.

How do you restock your emergency fund?

Do you put a little bit every month?

You don't need to restock your fucking month.

You don't need to, but let's just pretend you did have an emergency fund and an emergency happened.

You spent $3,000 on a new AC.

You put it back as soon as possible.

It becomes

the 30-day challenge as quickly as you can.

And I'll tell you what else.

If you did end up using it, I'll be shocked.

Because once you get to the stage that you are now at and you've got enough income coming in and no payments going out, a lot of what used to be an emergency becomes a monthly budget item.

Like if you had a $3,000 hit and you got no payments in the world, you can just tighten up the budget real real tight one month and just do it and not even hit the emergency fund.

So what used to be an emergency, a flat tire, is no longer an emergency.

It's just a crap.

I got to take that out of this month's budget.

And you can actually cash flow through them.

Okay.

And what about for vacations?

Save up and pay for them.

Separate account for that?

Yeah.

A separate account?

We didn't have a separate account or a separate line item within an account.

Same thing as Christmas.

Yeah, I'll tell you what I do practically.

I looked it up, by the way.

Christmas is in December this year.

I'll tell you what I do practically.

I have a separate, even

banking institution for my emergency fund because I don't even like looking at it.

I don't touch it.

It's just over there.

And then any other normal savings for trips and things like that.

Can be in the other bank.

It can all be in one account, but just kind of keep a little spreadsheet on how much of that account is for trips, how much is for Christmas, so on, that kind of thing.

Just keep a breakdown on it.

It's called a sinking fund when you're working your every dollar budget.

It'll help you do that too.

I was sick and tired of being sick and tired, bankrupt with a toddler and a brand new baby at home.

Scared, doesn't even begin to cover it, but I got mad enough to change.

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

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

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

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

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people

build wealth,

do work that they love, and create actual amazing relationships.

Jade Watchaw,

number one best-selling author and Ramsey personality, is my co-host today, Open Phones at 888-825-5225.

Ron is with us in Honolulu.

Hi, Ron.

How are you?

Great.

How are you, Dave and Jade?

Better than we deserve, sir.

What's up in your world?

Hi, sir.

I'm a 49-year-old active duty Army officer.

I've got 26 years in, married with three teenage daughters.

Thank you for your service.

I was diagnosed.

Thank you.

I was diagnosed with cancer last month, and in the process of kind of getting our finances in order, I was able to sell my truck and make $20,000 profit.

I was trying to get some advice from you all on, with the current market where it stands, would be the best use of that money for investing either lump sum into the market or gradual overtime.

Wow.

What is

the prognosis of your cancer diagnosis?

We're still not sure yet.

We're obviously trusting God.

I had surgery last Thursday, and we should get the pathology back this week.

But we're hopeful it was a miracle was caught as early as it was.

So we're

optimistic.

So the optimism is obviously part of your faith, but it's also the fact that you caught it early.

Yes, sir.

Yes, sir.

All right.

Okay.

And do you guys have any debt?

now other than your home

no sir we we actually did Financial Peace University in 2010.

And

we live on base now in Hawaii.

So we don't own a home.

And we've been investing for quite a while.

Okay.

And so what is the size of your nest egg, sir?

With my wife and I's Roth IRAs,

we have about $750,000.

total invested between the two IRAs and my TSP.

Our emergency fund is just under $30,000.

Man, you've done part of our.

You've done such a good job.

Really good.

Such a good job.

All right.

And

any life insurance in place?

I have my SGLI and then I have policies on my wife and daughters through that.

On you.

That's 200K, right?

On you?

It's 500.

500.

Oh, okay.

Oh, officer.

Okay.

Yes, sir.

Okay.

Wow.

And you got a will in place?

Yes, sir.

We have a will.

Thankfully,

we've got a will,

all the things legally that we need in place for my wife and daughters.

Good.

So they'll be able to get the life insurance and all the everything else that we've got invested in.

Because my experience in these situations is just looking in from the outside, like I am now, that when you have checked all of those boxes and you've got everything tight, you got a tight situation,

Everything's up to date, ready to go.

You don't have to think about those things.

You can put all of your energy in fighting cancer, which is where it needs to go.

Yes, sir.

Okay, so we don't think about all this other stuff because you've done such a good job.

Your prep on life in general is so grown up, so adult, so well done.

I'm so proud of you.

Very, very well done.

So all of that to say, the $20,000, where it's invested or how it's invested, is not going to change your family's life.

All the other things things you've done is going to take care of your family,

whether you live or whether you die.

Okay?

And so

the rest of the picture we've just been discovering since you called in is and how wonderful a job you've done is what takes care of them.

$500,000, $750,000.

No debt, no house debt, living on base.

I mean, you guys have got, you have

a detailed, well-executed plan.

so she's fine they're fine whether we take the twenty thousand and burn it in the middle of the floor or not they're fine so uh that that's not to say we don't want to do something smart with it now having said all of that what would i do if i had an extra twenty grand laying around i'll tell you what i would do with it i did it this afternoon i'd dump it into an an S ⁇ P index fund and just throw it into the market.

It may be worth $15,000 a year from now, and it might be worth $25,000 a year from now.

And neither one of those numbers are going to to change my family's life.

And neither one of those family's numbers are going to change your family's life.

I don't know what the stock market's going to do, but it goes up more and it goes down.

And over time, it's gone up if you leave it alone.

So if you leave it alone five years, you have a 97% chance based on history that you're going to have more in there than you should put in.

So

and if you go to heaven and she's got a 97% chance if she leaves it alone five years, that it's going to be worth more, right?

And so I,

me, I'm just going to grab an SP 500 fund or sit down with your Smart Investor Pro, whoever's helping you with your investments, and pick a good growth stock mutual fund, and drop it in there and forget it.

And then who cares what the news says tomorrow?

Because if you read the news, it may go down tomorrow right after you do it.

But I don't even, that's not my motivation.

My motivation is: I'm putting it, I don't need the money, I'm going to leave it alone a long time.

And you're going to leave this loan a long time, right?

Oh, just

yeah.

So if you're investing it, which means you're going to leave it alone a long time, that's the definition of investing,

five years or longer,

and that's your mindset, three years or longer.

You're going to make some money that way.

And I would just lump summit.

But you've got to commit to yourself to not go, oh no, I turned on Fox News this morning and President Trump burped and the stock market went down because when he burped, the French burped three times and the Chinese burped five times.

And oh my God, and this is what happens.

And then the market goes back and forth.

The market market goes back and forth that's exactly what happens how long do you plan to live on base

there's still a lot of unknowns on whether or not i can continue to serve and whether or not i'll need to retire and move back to the mainland so i mean we're we're secure if whatever long however long we need to be here uh the the army's taking care of us to get treatment and stay here you might you might factor that into the investment of that money if you think that it's less than a a five-year play for you to be on base it might serve as some down payment going forward that's just one thing to think about yeah but it's probably you know a two or a three-year play anyway yeah

so yeah

cool i i'm just i ron i just got to tell you i'm so sorry that you're having to fight this and i'm so proud of you the job you've done as a as the dad as the husband to take care of your family.

You have just done a stellar, exemplary job.

It's amazing.

Thank you.

Thank you.

And we'll keep you in our prayers, brother.

You're going to be fine.

Oh, man.

Wow.

It's so weird

the

sense of I have my act together and how that factors into a wellness equation when you're fighting an illness or even a terminal illness.

I've got several friends right now that are facing different kinds of dramatic health issues.

And the way they are reacting

is based on two things, their faith walk, their spiritual walk, and

whether or not they know everybody's going to be okay because they got their act together.

They got their act together.

And if you got your act together and you know it, then you can just kind of put that to the side and work on what's important.

You know, it's pretty incredible.

Wow, another reason yet to do this stuff, boys and girls.

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 Daloney.

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.

John is with us in Canada.

Hey, John, welcome to the Ramsey Show.

Hi, Dave.

Hi, what's up?

I am in

a massive amount of debt, and I don't know what to do.

I just feel like it's a huge weight on my shoulders.

We owe over $400,000 between credit cards, credit lines, and a car loan.

And

our take-home pay after taxes is around $13,000 between my wife and I.

And our expenses is about $10,000.

This is after we stripped out everything.

So, how much on credit cards?

On credit cards and line of credits, around $350,000.

What's that a result of?

So

it's twofold.

So we faced a deposit on a house during COVID

and we were selling our house at a profit originally.

The buyers couldn't close on it.

So we ended up selling and taking a loss.

And to close on the other house without losing it, I had to take money out from our credit line to pay.

So that was about $150,000.

At the same time, I got really sick and

to the point where

I didn't think I was going to live.

And

so

when I got out of that,

something,

I guess, the switch flipped in my head saying, why am I being so frugal about money?

Because I used to follow the Dave Ramsey principles, very, very, very good.

And we were pre-2021, we were out of debt.

And so I started, because of this illness, I just started spending.

And so it went down this spiral.

And now I've learned being in

$400,000 of debt and mentally better.

It wasn't a good decision.

And so now I'm going to trust them.

We own a home.

It's worth

about $1 million.

We owe $850,000.

It's worth about a million now because it's down.

But a year ago, it was probably $1.2,000, $1.3.

Okay.

Why is it down?

Canadian market has taken a hit because of interest rates rates here.

Oh, okay.

Okay.

Yeah.

All right.

So

I guess my question is, when does it make sense to consider bankruptcy?

Because I'm doing my numbers here.

I'm paying we're paying this $3,000.

I'm trying to do Ubers and whatnot on nights that I can.

We're throwing everything at the debt.

But when I do the math, it's $36,000 of interest annually, and I'm only putting in $3,000 a month.

So to me, it's like this vicious cycle.

Are you well now?

Are you healthy?

I am.

I am better, but obviously this stress of debt is mentally

a burden and I'm connected to the right therapist.

Okay.

I don't know Canadian bankruptcy law at all.

In the U.S.

were you to file bankruptcy you would have the option of keeping the car and keeping the house by reaffirming the debt, which means you don't bankrupt on that debt.

You keep that debt and you keep the asset, which would absolutely be asinine, obviously, but if you're going to file bankruptcy.

So

again, I don't know Canadian law.

I have to assume that they have collateralized those loans somewhat like they do in the U.S., though.

If I woke up in your shoes and

again, subject to not knowing the laws there, and I would want to know that to know what was possible there or how that thing works.

But if you were in the U.S., it would be very simple for me to tell you because I do know the law there or here.

I'd sell my car and sell my house.

Yeah, my car, so we have a Tesla.

We owe $80,000 on it, but we bought it when that was at the top of the market.

And it's worth, based on AutoTrader, which is similar to Kelly Blue Book, about $40,000.

So it'd be underwater about $40,000.

I'd sell my car and I'd sell my house.

Okay.

Because you have huge car payments and you have huge house payments.

Yeah.

And you have a decent income.

And if you did that, you can clean up a portion of this debt,

over half of it.

And then you would just plow through the rest of it, get your life back, and then start rebuilding again.

Because the house doesn't have much equity in it.

It's not like it's some kind of big prize.

Right.

And other than it's probably a nice home.

But it's a serious burden.

The Tesla's a serious burden.

My guess there's I would just take the 40,000 that I'd be underwater and just add it to the debt snowball.

And is there anything in the house?

I mean, this is a lot of spending in a short period of time.

Anything in the house that you can sell and liquidate and get rid of?

We've been doing that.

Yeah, we've been putting everything and anything on Facebook Marketplace.

And it's been, I mean, we've been getting, you know, $50 to $100 to $200 here and there that we've been throwing on.

And we continue to do that.

But there's no big item you purchased in the spending spree.

Yeah, because you left out selling the Tesla.

That's why I'm saying is that you left out selling the motorcycle or the sea dew or the snowmobile.

Yeah, I mean, we have TVs, but I don't know how much those are worth.

That's not what I'm talking about.

What did you spend money on?

Yeah, it's really bad.

Just trips.

Okay.

Okay.

All right.

Yeah, we can't get those back.

Hard to repo that, but okay.

Yeah, I'm just going to fight my way through this, and

you're going to take some lumps here.

This is not going to be pleasant, but neither is bankruptcy, by the way, because you're turning in the Tesla and you're turning in the house if you file bankruptcy anyway

by U.S.

law.

But now I don't know, again, what Canadian law is, but I can't imagine a bankruptcy process

in a North American country like Canada that allows a bank to not get their secured position.

I would be shocked.

Thus, a mortgage or a loan on a Tesla.

They at least have a lien against the Tesla.

They have a lien of some kind against the house, and that lien is protected in bankruptcy in the United States.

And I suspect it works the same way somewhat there.

It's logical that it would.

But again, I do not claim to know the answer there.

I think you guys just went through a series of large bad decisions.

And now you're going to go through a series of hurtful good decisions to clean up the mess from the bad decisions.

So you got about two years minus a house and a Tesla to get your life back, and then you start fresh again.

That's what it sounds like to me.

I think you'll be free in about two years

because you make pretty good money, but you're consuming all of it still.

And you've justified that as like, this is our minimum baseline.

No, it's not.

Million-dollar house is not a minimum baseline.

Nope.

And neither's a Tesla, for God's sakes, not a minimum baseline.

So not even if you're George Campbell or Rachel Cruz.

So there you go.

Abby is in Jacksonville, Florida.

Hi, Abby.

How are you?

Hi, great.

I have a question.

My husband and I are currently debt-free, with the exception of our house.

We're wanting to buy a specific business.

And my question is, one, do we buy the business?

But more importantly, two, do we pay cash for the business?

You don't buy it unless you pay cash for it.

Okay.

Do you have the cash

yes how much we have about 220 in a high-yield savings account what do they want for the business

80 000.

what is it

uh it's an after-school enrichment program why do you want to buy it

I want to buy it because he loves what he does, so nothing would change with his job.

I'm a pediatric oncology nurse.

I've been doing it for 15 years, and

I'm just looking for something else, something where I can be home with my kids more

and just,

you know, run my own business with my own house.

What's the business profit, net profit?

Last year, $50,000.

Okay, and then how much for it?

$80,000.

Okay.

That's a good return.

That's a cheap price.

So I want you to investigate carefully what's going on.

Because if it truly made 50 grand, it's worth more than 80.

But get into it and figure out why they're selling it, what they're doing.

And if you've got 200,000 bucks in the bank and you want to pay cash and write an $80,000 check and start your next business and move on to the next thing, after,

yeah, I can't imagine the job you've had.

Ouch.

Rewarding, but also trauma-filled yeah that's right yeah wow i don't blame you this is the ramsey show

Hey, what's up?

Dr.

John Deloney here.

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Might not be in all states.

Okay.

Today's question comes from Shannon in California.

She says, my husband and I disagree, and we'd like for you to weigh in, Dave and Jade.

Our son is 15 and and recently got his first job.

My husband wants him to put the majority of his money into a Roth IRA and take advantage of all that compound growth.

While I don't hate this idea, I think it's better for my son to invest his money in something accessible for college or a home-down payment in the future.

Our son is open to both options.

Which would you choose for your child?

And if you prefer the savings option, where would you invest it?

Okay,

yeah, I tend tend to agree more with it.

Sounds like the wife, however, with a couple of changes.

So I'm going back to when I was 15 years old.

I was working at Kroger.

It's a grocery store.

If somebody said, Hey, Jade, you got to take all of this paycheck and invest it.

I would lose all motivation in that moment to keep working and bagging groceries at Kroger.

So there's part of this where you do want them to do the three things that we talk about with money.

You want them to give some, you want them to save some, and you want them to be able to spend some.

So I never heard you talk about him being able to spend any of this.

So that needs to be part of it as well as the giving component.

And then with the amount that he chooses to save, yeah, I'm with you, Shannon.

I would keep it liquid in just a savings account because, yeah, you're right.

College is coming up.

Maybe he's going to want to purchase his own car.

You didn't mention a car.

So there's just a lot coming up on the horizon that you're going to want your hands on that cash.

And it's less than a five-year play, which is why I wouldn't invest it.

It's college.

It's, you know, planning for whatever those costs are.

It's planning for him hanging out with his friends,

him having an emergency fund, all of that.

So, yeah, I'd keep it liquid in a savings account and don't be too much of a drill sergeant with this money.

Let him enjoy some of it.

Yeah.

So, mathematically, here's

where you're making a mistake.

Both of you think this matters.

This is 15 years old, he's not going to be making that much money.

I mean, what's he making?

100 bucks?

98%

of

what this kid needs to take from this is the lesson.

2% is the actual investment decision.

If he can learn to live with a plan, he can learn to work hard, make some money, put it to a plan.

spend it some of it wisely, be generous with some of it, and invest some of it, you have laid the groundwork for the young man to become a multimillionaire.

It's the lesson that matters.

The reason that you buy groceries at Kroger when you're 15 is not because there's money in it, because there's not any.

No, it's because you want to go with your friends.

You learn to work.

You learn work is where money comes from.

And the first time you get a check and they see how much tax has come out of it, you know how to vote after that.

I know that's right.

Golly.

You know, I mean, she,

and so on.

So you learn to work.

Work is good.

But you're not really teaching, you don't really, a teenager is really not working

because the result of the work is going to change their life.

No.

The

groove that drops into their brain

called work ethic,

the neuroscience of it that resides there for the rest of their life, that's what changes their life.

And so we're teaching them to work.

Whether you get an A

on your

term paper in the sixth grade or you get a B

matters not at all in the scope of your life.

What matters is what did you learn during the discipline of not waiting to the last night to write the term paper, of putting, you know, doing the academic rigors, of putting the paper together properly to footnote it properly so that you learn not to plagiarize and you learn how to, you know, but the actual difference in the A and the B doesn't matter.

What matters is did you do the work to get there?

Because honestly, no one has ever gotten hired or fired based on whether they got an A versus a B

in the sixth grade.

True that.

Ever.

But some parents act like it.

Some of your parents lose your freaking minds on this stuff.

So don't major in minors, major in majors.

So the money from this 15-year-old doesn't matter.

What matters is he's learned to work, he's learned to give, he's learned to save and invest, and you can put it in a Roth if you want to.

You put it in college if you want to.

I tend to agree with Jade.

Let him put it towards college and make sure we get through college debt-free.

That's a better investment than a Roth.

If you pay cash.

for your education, whatever form of education he chooses to engage in, and he puts some skin in the game on that.

I think that's

much more valuable than the actual 12%, 14%, whatever it is you're going to get on your mutual funds and your Roth IRA.

Now, having said all of that, once he's doing all of that, if you guys have some extra money and you want to file a tax return on the money that he earns, and you pay the taxes,

if there's any taxes due, there probably won't be,

and then you file and open an IRA.

Yeah, I did that.

on the kids, but it didn't cost the kids anything.

I just had some extra money.

And so Rachel Cruz made $1,233 babysitting and walking dogs and whatever else she did, working at Lululemon or whatever it was she did.

And we filed a $1,233 tax return, put $1,233 in Roth IRA when she's 14 or 15 years old.

Okay, and did that at 16, did that at 17.

But that wasn't her money.

That's just because she had some earned money that gave me an opportunity to put some money in her name.

Now that was fun.

And the result of that when she was 25,

that was worth doing.

But it's not like the 15-year-old became wealthy based on their income income and investment strategy.

They don't, they don't make enough.

There's not enough money involved here for that to matter.

What really matters is the lesson and building those muscles.

That's very cool stuff.

Shane is in Detroit.

Hi, Shane.

How are you?

Uh-oh, got a bad connection.

Try one more time.

I'm doing well.

How are you?

Better than I deserve.

What's up?

So I'm recently homeless.

My car just got repossessed, which was my house.

And

I've got like 300 saved up.

I was wondering, what would you do to

just get yourself back up on your feet?

Shame.

How'd you end up living in your car?

I was in Fossca.

I don't really have family or friends.

So

I was with Mike's Fiancé, and then we broke up.

Okay.

How old are you?

23.

I turned 24 in August.

You're what?

23.

23?

23.

Okay.

What are you working at all?

No.

My job went under.

They lost their contracts.

And I've been applying.

I have about 200 job applications out.

Not really sure why nothing's calling.

But again, I have no car, so I don't have a way to get to these job applications either.

Where are you right now?

I'm couchlisting at the moment.

Right now I'm in a buddy's house for the next few few days.

And then I'm going to be headed north

to be staying with another buddy's house for a couple days.

And then from there, I'm not sure.

Okay.

All right.

So

the first thing I need you to do is I need you to get plugged into a strong community that can help you walk through this time.

So I want you to find a good local church in the area that you're going to land in, whether it's this buddy's house or the next buddy's house.

And you you need to define how long you're able to surf their couch.

Okay?

So that you're not overstaying your welcome, but you're also taking full advantage of their generosity, not in a manipulative way, but you're able to use that.

So I want you to plug into a good church and let the pastor know at that church that you've aged out of foster care and what you're facing.

Okay.

And if you'll hang on, we'll hook you up with a church in that area where you're going to be.

And then, you know, yes, we have to to get a position of some kind.

And it's probably not about filling out applications.

It's probably about connecting to a human to actually get a new job, start earning some income,

get a $1,000 beater car, earn some more income, get a one-bedroom apartment, earn some more income, and then begin to work on your career.

We've got to get sustainable first.

Hang on, our team will pick up and we'll guide you, son.

Our scripture of the day, remember the Lord your God, for it is he who gives you the ability to produce wealth, and so confirms his covenant, which he swore to your ancestors, as it is today.

Deuteronomy 8.18.

Earl Wilson said Benjamin Franklin may have discovered electricity, but it was the man who invented the meter who made the money.

Oh, that's pretty good.

If you're feeling stuck and overwhelmed with your money, you don't have to stay there.

The Total Money Makeover is the crash course that helps you learn the Ramsey Plan, how to beat debt, build wealth, and take control.

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Carlos is in Melbourne, Florida.

Hey, Carlos, how are you?

I'm doing good, Dave.

How are you doing today?

Better than I deserve.

What's up?

Hey, I am calling in.

My wife and I are expecting our first daughter to be born born any day now.

Wonderful.

Yes, very exciting.

And we have about $6,000 in a savings account that we've been stowing away and are planning on using that for the cost of birth and any unexpected things that may come along with that.

We're hoping.

How much is insurance covering?

We're going to find that out.

We should have met our deductible

through all of the prenatal screens and things of that nature.

So as we move forward, we're ballparking based on her coworkers.

We're on her insurance.

And what some of her coworkers who have recently had kids have said to expect around

$5,000, maybe some more.

I know it'll be different with each situation, but that's kind of what we're ballparking, where we'll be able to spend the $5,000 and then still have a little bit of money saved afterwards, if all goes well.

The reason I'm calling is because

I have 17,000 in my 401k and I know that we're able to withdraw from that 401k penalty free.

It'll still go on taxes as taxable income.

I've done the research and it won't change our tax bracket if I do take the $5,000 out of the 401k.

Nope.

No.

No.

Absolutely not.

Not even as a

piece of mind.

No.

Okay, so my wife was right again.

No.

Yeah, she was right again.

Yeah.

What's your household income?

We take home about $7,000 a month.

Okay.

Just rebuild, just rebuild your emergency fund as fast as you can

if you have to use some of this money for

if the insurance doesn't cover it, if the coworker version of the estimate was right.

I don't like that methodology for discovering how much you're going to earn or how much you're going to owe.

I think I would just rather talk to the health insurance company and find out what my deductible is and what my copay is and what my max out-of-pocket is and see how far up the ladder you are on that.

Because you might get actual information, real information, and find out it's $3,000 and then this whole discussion was for nothing.

Okay, got it.

Yeah, we don't you don't use co-workers who are broke broke people as my guideline for much of anything.

Okay, got it.

And you feel that maybe if it is less, whatever the case may be, everything will be all right.

I don't need to take it.

Let's pretend it's $8,000.

Okay.

You take the $6,000 out and you pay it towards the $8,000, and you cover the other two out of your $7,000 a month income.

First, finding out what your deductible or out-of-pocket max is, sometimes it's the same number, sometimes it's different.

But knowing that,

I mean, and prepping for that, that's what's going to give you ultimate peace of mind.

Yeah.

Congratulations on the new baby, by the way.

And the great news about that is, it makes you get very serious, some people, most people, about getting your crap together.

Yeah, it does.

I mean, you really start, you start saving, you start getting out of debt, you start living on a budget, you start being like grown-ups and stuff because a shocking thing that I'm responsible for this

helpless little small person will wake your butt up, man.

It's pretty amazing.

I love it.

Jessica is in Santa Barbara, California.

Hi, Jessica.

How are you?

I'm doing great.

Thank you.

And I'm so happy to be able to talk to you.

You too.

So the situation is we just listed our home for the sale.

We listed it for $2.4 million.

We had an offer come in within an hour of it being listed for $1.8 million.

That's kind of useless.

I know, right?

Well, so here's the story.

We have a $216,000 mortgage, a $45,000 HELOC, $50,000 solar system,

so $311,000 against the house.

And then...

Why are you selling the house?

We're selling the house.

My husband is 73.

I'm 61.

And it's like money is always an issue.

Always just arguing about it, fighting about it.

I have a 17-year-old and a 20-year-old.

They're always hearing my husband say, I can't afford to be able to do that.

Why does that cause the sale of the house?

Because

we can't really afford.

We're living off of his disability income.

Which is going to move to a cheaper area.

That's what I think we need to do.

Yeah, we need to.

I mean, is that why you're selling the house?

We're selling the house because

So we've been living between British Columbia and Santa Barbara, using the house in Santa Barbara as a rental to supplement the other house and the children's education.

So it's just kind of this

mess.

Like it's working, but it's stressful and it's really tight financially.

What's your income?

What are you guys living on every month?

We're living on his disability, which is $4,000, and Social Security, which is $1,800.

And then...

whatever I can get from the Airbnb, which is averaging about $6,000 to $8,000, but it's just dried up.

And do you have a nest egg?

Do you have a retirement?

So

why did you list it at 2.4?

Did somebody tell you it's actually worth that or you were just hoping?

Yeah.

Yeah.

No, well, they said it's worth it.

It's listed on Zillow as like 2.4.

I don't care what Zillow said.

Why do you think it's worth 2.4?

Do you really think it's worth that?

I didn't necessarily.

My husband is a realtor.

He did.

I mean, he's retired.

And another, the person he co-listed with, feels it's worth it.

It's an expensive area.

Okay, but so if it's worth 2.4, then 1.8 is

an insult.

Right.

So we counter it at 2.399.

Okay.

Just to let them know that we think they're smoking crack.

How long has it been on the market?

One day.

Like literally five hours.

Got you.

Okay.

I missed it.

Okay.

So I'll give you a quick nope.

If I'm the seller and I'm not desperate and I'm not freaked out and I haven't overpriced the house, if the house is actually worth this, which I can't tell from this conversation if you have any clue, to be honest with you, I'm not sure any of you people have a clue in this conversation.

Your husband, a former real estate agent who doesn't do anything, you running an Airbnb half-butt and running back and forth between B.C.

and Santa Barbara.

Oh, my God, what a run.

And you got a co-listing agent who maybe sold one house last year.

So I'm not sure anybody anybody in this whole pile knows what you're doing in terms of pricing houses.

But if you're accurate on your 2.4, then I'm going to counter that at a ridiculous 3.99999 just to let that 2.3999, just to let them know that their 1.8 is ridiculous.

But it may give you an opportunity to get to the bottom of what the house is actually going to appraise for.

In its current condition, regardless of the story, regardless of the history, regardless of your wishes.

Nothing works there.

What's the house really worth?

If it's worth 1.8, take their offer and you're done.

And you move on.

And use this as a time to get some cleanliness back to this chaos that you just described because it sounded very disjointed to us on this end.

It didn't sound good at all.

It sounded kind of scary.

So, and if you think a million dollars in your pocket is going to solve that, no, that million dollars would be gone in about 32 minutes.

It's not going to solve it.

That puts us hour of the Ramsey show in the books.

We'll be back with you before you know it.

In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the prince of peace, Christ Jesus.