The White House Doesn’t Decide Your Future—You Do

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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.

Number one best-selling author Ramsey personality George Camille is my co-host today.

He's also the co-host of Smart Money Happy Hour and the host of the George Camill Show.

Be sure and check all of those things out on the Ramsey Network on YouTube and anywhere else fine shows are shown.

Up first is going to be Rebecca in Sarasota, Florida.

Hi Rebecca, how are you?

I'm good.

What's up?

My husband and I have been working on the baby steps.

We have We have a combined checking account,

but only funds that go in there are our mortgage.

I'm personally on one and three.

The thing that we are struggling with is my husband is not very good with money, so I'm very hesitant to

combine all of our money into one account.

Okay.

What do you mean he's not good with money?

He's just not very good with managing it.

He, in the past couple months, discovered that he had a gambling issue.

Okay, that sounds very serious.

So, yeah.

So I'm a little nervous.

What is the minority?

That's different than managing money.

A gambling issue is more like

a problem

or a recreational activity, which is it?

Well, I just recently discovered it.

It's been going on for a couple months.

So

I had a conversation, brought it to his attention.

I am under the impression that it stopped.

So I'm hoping that, you know, it's not.

What proof do you have that it stopped?

Not a whole lot.

Just

a gut feeling?

You guys are very, very disconnected from each other.

Yeah.

Yeah.

And so the way you solve this is

usually there is one nerd in the family and one free spirit in the family.

It's obvious you're the nerd and he's the free spirit.

Okay.

But that doesn't necessarily mean that someone is quote unquote bad at money just because they're not highly detailed.

But what they can do is keep their word.

And that would be that the two of you sit down together, go over a budget before the month begins, and agree on where every one of our dollars is going, which would not not include gambling, according to you, okay, and according to him.

And so we have agreed on where all of the dollars are going, and we are not going to do anything else with money that we have not agreed to.

He gets a vote.

Right, right.

Okay.

But once he's committed to this, then we are going to execute this plan that we both agreed to.

And so you don't come home and go, surprise,

you know, I lost $500 at Texas Holdham last night.

Right, right.

You don't get that option because you've made a commitment at the beginning of the month and we're very intertwined and

we have committed to each other and you had a vote.

If you want to put a budget for gambling in your budget, that's up to you all.

Okay.

But at least it's on the table.

We know what it's limited to, and it's part of our plan that we both agreed to.

Instead, you're trying to run around with a broom behind him and clean up.

Yes, yes.

And

that's exhausting for him and you.

Yes, yes, yes.

And one of the main problems right now is these separate accounts because the money flows in and then right back out to his personal account and then he goes and gambles.

Yeah, that's got to go away.

Yeah, yeah.

That's the part that I'm trying to figure out.

You didn't want them to go together, though.

You told me that.

Yeah, I did because I'm nervous that he's going to.

Okay, if he gave his word at the beginning of the month and every dollar was laid out for both incomes and it's all in one account and we've both

had our say

and we've come to agreement and this is where every dollar has a name, okay?

If he gave his word to that, would he break that?

I don't believe so.

I don't either.

I don't either.

I think he just kind of runs around and does whatever he wants right now because that's the system y'all set up.

It is.

And it frustrates you.

Yeah.

Yes.

But your system sucks.

Yeah.

Has he started Gamblers Anonymous?

I don't think he needs to.

I think he was just gambling.

Yeah, I don't.

You think he said that he discovered, quote, discovered he had a gambling problem issue.

He definitely didn't want to admit to it.

I literally had to show him how I figured it all out.

No, no, no.

Do you think he's an addict or you think he was just hiding it because he didn't want you to know about it?

Yeah, I think he was just hiding it.

He didn't want me to know about it.

I don't think that's a good idea.

If he's an addict, this is a whole different situation.

How much money is he spending, would you say,

per month on this?

Well, the last month I gathered like $14,000.

How much money do you guys make in a month?

Combined

10.

He gambled $14,000 in one month?

Yes.

Is he going into debt for this?

Yes.

When he can't pay bills, I have to pick up the slack.

Okay,

that's an amount that raises alarm bells.

Yeah, yeah.

This is not $500 on a sports betting app.

This has gone way past that.

Yeah, yeah, definitely.

Like, it adds up.

Like, that's for a whole month.

Do you know where exactly he's gambling?

Yes.

And where is it?

It's scratch-offs.

He spent $14,000 on scratch-offs in a month?

Yes.

Okay.

Boychild's got a problem.

Yeah.

All right.

Yeah, we need to start talking about getting him in some counseling.

Okay.

Okay.

That's not cool when you make 10 grand.

Okay.

Right.

That's like over the top.

So he's got issues here.

It's a different system now than what I I gave you earlier.

I apologize.

At this point, it's cutting him off from access to the check.

This guy cannot be counted on.

I think you're dealing with an addict, honey.

Okay.

And so I think you're going to treat this like he was doing cocaine.

Okay.

We're going into counseling and we're going into gamblers anonymous and we're going to sit down with our pastor and we're going to see a marriage counselor and we're going to do all four of those things immediately and start working on how you get to the point that

anybody, it's an illogical thing,

which points to addiction, okay, to spend $14,000 when you make $10,000 on freaking scratch-offs, which is like the lowest probability of anything you can do.

I mean, the lottery is basically a tax on

poor people and people that can't do math.

Almost all the lottery tickets are bought in lower income zip codes and people that are struggling with math,

whether they're in lower income zip codes or not.

But your husband's struggling with math.

I mean, this is, he ain't even, he's not even going to win.

This is horrible.

So

scratch off.

But it's a sunk cost fallacy where he goes, well, now I got to grind my way out of this by getting the right scratch off.

And so you're going to have to manage the money on your own right now.

I didn't catch that.

And then you're going to have to baby.

I didn't caught that, George.

Good work.

I just had a weird sneaking suspicion.

Yeah, you caught that one.

I was about to drive by it.

Wow.

I'll put that on my resume.

Okay.

That's good.

That's how we start the day right there.

Oh, so sorry you're dealing with this.

Yeah, but you're going to have to treat this like it's very serious, honey, because it is.

Yeah, and you can't count on him to manage money because he can't do math.

He's struggling with math because of his addiction.

That's what this points to, anyway.

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So

the big beautiful bill

I thought that was a nickname.

They actually named the law that

which is trippy to say the least.

Beautiful?

It's just such a strange adjective for a piece of paper.

I think it's pretty cool.

I mean, it's kind of fun.

But so everybody's wanted to know, okay, is the world going to come to an an end because of it, or is the world honestly going to get better?

Well, as usual with Washington,

there's some things that are good and there's some things that are not good.

And you can just kind of go with that.

I don't think there's any bill that universally will help anyone and everyone.

Well, because that's not the government's job, by the way.

It's your job to help you quit waiting on the White House to fix your house, in other words.

But anyway, everybody's wanting to know all this.

So we kind of thought we'd spend a segment on it anyway.

I'm not going to spend the rest of my life on it, but I probably will because a lot of stuff's going to come up over the rest of my life.

But anyway, first thing is the 2017 tax cuts were made permanent.

They were scheduled to run out.

And that's huge because

the main thing that happened is 90-some-odd percent of Americans take the standard deduction, do not itemize.

And the 2017 raised the standard deduction super high,

and so it keeps you from having to pay federal income tax for a whole bunch of you at all, just because you get this huge standard deduction.

That's some real savings for most people.

And they increased it another $1,500 in 2025, not for 24, but for 25,

which when you file next year, you'll see that.

And it's going to continue to increase adjusted for inflation.

So

that's a nice thing there.

So it makes the income tax filings be fairly easy for most people.

And,

you know,

but you're not writing off interest.

You're not writing off charitable deductions with the exception of what I'm going to come to in a few minutes, that kind of stuff.

So no tax, he kept his,

a politician kept a campaign promise.

Note this.

It's fairly unusual.

It doesn't happen much.

So no taxes on tips.

And overtime.

He dreamed that up and everybody went bonkers.

And they actually did it.

Now, it's got limitations to it.

The bill adds a tax deduction of up to $25,000 for income from tips.

So you don't pay taxes on that.

And that's not dollar for dollar, but it will reduce your taxable income by that much.

Exactly.

Which is helpful.

That's still a few thousand bucks for most people that work on tips.

Yeah.

And it's only for three years, 25 through 28, and then it expires.

The deduction phases out if you make over $150,000 a year or $300,000 for couples.

Same thing for overtime.

It phases out out on that and is only for three years.

And the bill adds a tax deduction of up to $12,500, $25,000 for couples for qualified overtime wages.

So that's good.

That's good.

That's a move.

Trump accounts, babies born from the start of 25 to the end of 28 would receive a $1,000 Trump account deposit.

Where is that going?

It goes into, it's managed by the Treasury, and there are no tax advantages like there would be with a 529 plan or a Roth IRA.

So the best part is the free $1,000.

It's just $1,000.

You get $1,000 and that, you know, it'll have compound growth.

I'm not sure how they're investing it.

I'm not sure how much control you'll have.

Like none.

But it does have restrictions and

you have to withdraw it at a certain time and all that kind of stuff.

But it can be used for

college, home buying, starting a business.

It's $1,000, one time, it's useless.

Yes.

So I was excited at first.

And they're handling it.

Because I thought this could replace Social Security.

It's a lot of political BS.

But it's not enough.

Student loan overhaul.

I'm not going to get into that.

Don't take student loans, okay?

Auto updates.

Those who buy American-made new vehicles can deduct up to $10,000 a year in interest on the auto loans.

And that deduction phases out if you make more than $100K or $200 from couples.

The bill ends a $7,500 tax credits for the EVs.

We knew that was coming.

We knew Elon was pissed.

Everybody's seen that.

That one seemed vengeful.

Yeah, that was like...

just dropped a bad breakup.

But I'll tell you what ended up happening was like north of town here, there's several million square feet.

General Motors was building a battery plant

for EVs, and they shut the construction down in the middle of it.

Because it's really going to hurt the demand when you reduce the.

They

took their foot off the battery.

Took the wind out of the sails there.

Took their foot off the battery.

Oh, there we go.

No gas here, Dave.

Oh, man.

Bill-ins tax credits for rooftop solar, geothermal heat pumps, and other energy-efficient home devices at the end of 2025.

If you're going to do any of that and want the federal tax credit for that, you do it by the end of this year installed and paid.

Can't just be contracted for.

Has to actually be done by the end of the year.

Medicaid reduction, the bill creates a tax deduction of $6,000 for seniors for three years, 25 to 28.

The deduction decreases if you make more than $75,000 or $150,000 for couples.

Currently, no proof of work is required to receive Medicaid.

The bill requires by the end of 26,

most adults who do not have children younger than 14 to document 80 hours of work to get Medicaid.

That's per month.

Volunteering or training.

Twenty week, don't worry, guys.

Or something.

Yeah.

So that's about a part-time job right there.

Yeah.

20 hours a week.

Well, I mean, you actually have to be doing something to get this welfare.

For able-bodied adults.

Exactly.

Salt deduction, S-A-L-T, that is, this bill raises the current cap on the state and local taxes that people in high-tax tax states have to write off on their federal returns from to $40,000 from $10,000 that you can write off if you live in one of those income tax states.

Charity deduction bill lets you write off up to $1,000, whoopee,

of your donations, $2,000 for couples starting in 26,

even if you take the standard deduction.

That's new.

But it's a whole thousand dollars.

Whoopee.

No big deal.

Tax credit

for children, $2,000.

It raises it to 2,200 and adjusts for inflation after that.

So that continues as part of the 2017 bill.

HSA, more people are eligible, and money can be used for more expenses like gym memberships.

That's a cool one.

That's neat.

I'm a big fan of the health savings accounts.

$529 can be used for more expenses like tutoring or dual enrollment fees, workforce training after high school.

This is great for the trades.

Yeah, you can.

Micro will love this.

The trades will be kicking up.

That's good.

And so basically, a bunch of little tiny stuff.

There's no big, beautiful thing in here.

Yeah.

It's a bunch of nickel and dime stuff.

I mean, tips, I think the big one's no taxes on tips and overtime.

But

if you're not going to take out a car loan,

you're not going to take out a student loan.

Why not give the benefit to anyone who buys an American-made car, whether they use debt or not?

Something, yeah.

Why only let the people who took out debt benefit from this?

That's an odd one.

Yeah, that's

helpful.

Thank you to the banking

banking lobbyists.

There you go.

Involved there.

We'll make sure we're in debt.

Spending like you're in Congress, it raises the debt ceiling by $5 trillion, which estimates are that will probably last about the time that Trump is in office.

And then they'll have a bump into the ceiling again.

That debt ceiling, they just keep raising it.

How high can this roof go?

That's the question.

Start collapsing.

Maybe if you were going to buy solar,

or maybe if you were going to buy an EV,

or maybe, and the EVs go away, I think that was September 30th.

You can still do the EV thing up to September 30th.

But really, there's not anything in here that's going to change your life.

I don't see any

someone on a golden horse riding in to save your day here.

There's some tax cuts.

So if, you know, for the people that were doing well, the best thing that they did, the biggest thing, and it's kind of quiet on this, the way this is written up, is that they just made permanent the 2017 stuff, which is really big stuff stuff in 2017.

The thing they did do, for those of you that run a small business, is they brought the RD write-off back.

Thank God, if your business is under $31 million annually, you can start immediately taking your RD tax credits back.

That had been in place for like 75 years and went away two years ago

because they didn't renew it, because Congress sat on their thumbs, which they usually do.

And so small businesses were getting slammed because they lost a huge depreciation issue on R ⁇ D.

I know I did.

If your business is more than 31 million, it's still coming back.

If you're, you know, like ours is about 300 million, so we don't qualify.

And so it's still coming back, but we're going to have to wait till like 26 or 25

for it to show up.

And

it's a different issue.

But yeah, but still, at least they got it all back in and they put the tax law back together.

It's what they did with that.

So

big.

Yeah.

Beautiful.

Yeah.

Bill?

Sure.

It's a bill.

I'll give them that.

It's a bill.

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Kate is in Chicago.

Hi, Kate.

How are you?

Hi, Dave.

How are you doing?

Better than I deserve.

What's up?

All right.

So every year, we get an escrow notice that our account has a shortage.

So they're raising our mortgage payment again.

In 2019 is when we bought the house and our payment then was $1,640.

And our payment now, six years later, is $1,840.

So

with those raises over the years, and now we just got

this year's notice saying our account is $1,200

short.

And so we have two options.

We can send them the check to cover the shortage, or they will add it to monthly payment.

The monthly payment is going up $100 regardless of whether or not we send in this check.

But then if we don't send in the check, it's going to go up $200.

So now our mortgage payment would be around $2,000.

So one, my question is, is it normal that it goes up every year so much?

Okay, your escrow pays your property taxes and your homeowner's insurance.

The only reason your escrow would go up is if those two are going up.

Yeah.

And they probably are.

Yeah.

Well, especially since 2019.

I mean, you live in the Chicago area, and so your taxes are horrendous.

Yeah, I agree.

And they probably have gone up on your property taxes every stinking year.

And it would not be unusual for your homeowner's insurance to go up every year.

For one thing, you need to have your homeowners looked at and make sure that as the value of your home increases, you increase your coverage, which will cause your price to go up as well, your premium to go up.

So escrow is pretty simple.

Whatever your property taxes are for that year,

the year upcoming,

and plus whatever your homeowner's insurance is, the total of those two numbers divided by 12 should be added to your standard principal and interest payment.

And that's what escrow is.

They're collecting 1 twelfth of your homeowners, one twelfth of your taxes.

And what you're telling me is is that you underpaid, you did not pay enough last year to cover those two things by $1,200.

Mm-hmm.

And that's by their their estimation a year ago, how much we would have had to pay a year ago.

Yeah.

If that makes sense.

No, I mean, no, by now,

if you've got a shortage of $1,200, it's because of what actually happened, not an estimation.

And now they they underestimated last year

is there, and that's what caused it.

But,

you know, basically, what you're doing is you're trying to stay, you're trying to have 1/12th of what your actual taxes and your actual

property taxes and your actual homeowners' insurance are.

That's what it is.

And when you come up short, it's because those things have gone up or because they didn't collect enough to pay those things.

That's what it amounts to.

So I'd pay the $1,200 if it was me, keep my payment, and then check on the account and figure out

are they collecting enough based on what your actual homeowners and your actual property taxes are.

Okay.

Do people ever try to manage those things on their own and just pay property tax?

Yeah, if your mortgage company allows it, not all of them do.

And once you pay off your home, then it's on you to handle that.

Because there's no more mortgage company involved.

Yeah.

So like I handle my own escrow and I just make sure to keep track of how much I'm saving for property tax.

Well, you don't have an escrow.

You just have to pay the bill.

I am the escrow.

My bank account is the escrow.

George escrow.

That's his name.

Fancy.

So, okay, there's a few things you can do.

You can track your property tax assessments annually, see if your property taxes are going up, call your insurance company ahead of the renewal to anticipate any increases.

And then you can even request an escrow review mid-year to say, hey, where are we at?

Based on what I'm actually paying, based on what's in the fund, are we on track?

That'll just help you avoid the jump scare at the end of the year when you have this bill.

Yeah.

Right.

Because in the background, we're trying to do baby step number two, paying off debt.

And so as we're like going through this summer, we're like, yes, we're going to put this payment right toward debt.

And then we get this letter and it's like, oh, man.

Yeah.

Well, if you're in baby step two and you don't have the $1,200, it's okay to add it.

It's okay to just have $200 more on your monthly bill.

That's fine.

But

it sounds like your expenses went up $1,200 anyway.

Yeah.

So that's where the 200 comes in.

I need to look more into that.

Yeah, yeah.

I want to find out what's really going on with the escrow and make sure that there's not an overage either.

You can always reshop your homeowner's insurance.

I do that with Xander once a year.

And, for example, they're saving me money this year because they found that the rates were getting higher and another company had a more competitive offer.

Yeah, you can jump in

and look for one of the ELPs on property and casualty in the Ramsey Trusted site.

And, you know, one of the people in your area there can help you do that and help you search that out.

And you might save some money on your homeowners.

That might help the situation, actually, considerably.

But that's how it works.

It's one-twelfth of those two collected monthly.

And if they don't collect enough to pay it, you have a shortage.

If they overcollect, you have an overage.

It's that, it's simple math in that regard.

JD is in Dayton, Ohio.

Hi, JD.

How are you?

I'm doing great, Dave.

How are you?

Better than I deserve.

What's up?

So I have a full-time job.

I also DJ weddings and private parties through a company.

And I do about 100 events a year and an average about 300 per event all over my tri-state area.

So I need a side hustle that I can do everywhere so I can work in between my gigs.

I tried DoorDash, but it seems like it's a lot of wear and tear and maintenance on my car.

So that led me to looking for an online side hustle.

Most of these I've found have turned out to be scams.

So how can I find a legitimate online side hustle that I can do from anywhere that actually pays me?

Well, here's the thing.

When you think about how many people want what you're looking for, it's everybody.

Everybody wants to sit on their couch and make money.

And so that's the problem you're also faced.

That's what you're up against is that anyone can do this.

And so you need to find out what your specific skills are that can make you more than some guy taking a survey for five cents.

And so that might be knowledge-based work like freelance writing and editing, online tutoring, voiceover work.

I don't know what you're saying.

If you're a DJ, I assume you've got some skills that transfer to that world.

And then there's also more tech-driven side hustles.

There's flipping things online, getting into blogging or YouTube and kind of the digital space, online courses.

But for most people, you're going to find that there are pennies to be made with most of these side hustles that involve taking some surveys online.

And so the truth is there's not a ton of amazing opportunities to sit at home unless you find a legitimate job working flexible, part-time, doing customer service calls or something like that for a legit company.

Yeah.

The voiceover thing, I really would love to get into that.

I've been told that I have a pretty good voice, so I think that would be awesome.

How would I go about getting into that?

Because I've looked at, I've seen ads for it like on Facebook and things like that, but I have no idea if these things are legitimate or not.

They're not.

If it's a Facebook ad, there's a good chance you're about to get scammed.

So you can, like a site like Fiverr, you can make your own profile and you can kind of pitch what you're offering and the price and you can find clients through that that might become long-term.

I would get around people who are actually doing it and get in those communities and circles.

That's going to be your best bet if you really want to do it.

But man, it's going to take getting off your butt.

I don't know that there's much you can do from home to make $4,000 a month magically.

Probably on

the voiceover stuff, I would just start hitting ad agencies that are cut at getting ads cut for podcasts and radio.

And you might contact some of your local radio stations as well and say, do you have any opportunities for some of the ads coming on that you need a different voice other than your on-air talent?

And they probably do sounders and other things.

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Elizabeth is in Nashville.

Hi, Elizabeth.

How are you?

I'm going to steal your line and say that I'm very blessed.

Hi, Dave and George.

Hi, how can we help?

So following the total money makeover, my husband and I are doing very well with money.

We are net worth millionaires, and we're actually making our last payment on the mortgage tonight.

Yay!

Way to go.

Thank you.

But here's the issue I'm having.

Even though we're doing well, we have lived so frugally for so long that I'm struggling to feel like I can spend any money.

So if we are managers of God's money, how can I feel more free to enjoy spending the money we've worked so long and so hard for?

How can I flip that switch switch in my brain?

Well, it's probably not going to be a switch.

It's probably going to be a muscle that is rebuilt, that is atrophied.

Your spending muscle

has not worked in a long time.

And so you've got to build that muscle back up again by doing some spending.

And how do you do that and not freak out?

Well, the way I do that is ratios.

I'm always saying, okay, if we do this, does it really matter?

Is it really going to hurt us?

Okay.

And so what is your household income?

It is $138,000 a year.

Okay.

All right.

And so if you spend $10,000 and you just completely waste that money,

it doesn't affect your life at all.

No.

You can afford that.

Okay, so I don't know.

And I kind of got to get that in my head.

Now, I'm not going to set out to waste money.

That's not what I'm saying.

But if you're doing something that you're not used to doing, it emotionally feels the same as wasting money.

Like, for instance, let's just say you booked

a cruise for $10,000

and you haven't spent that kind of money on travel in the last 15 years because you've been frugal, okay?

That's going to feel, that's going to like shock the system, right?

Emotionally.

And so you've got to practice doing that, spending an amount of money, an increasing amount of money that doesn't affect you.

Now, I'm not suggesting if you make $130,000 that you go out and blow $100,000.

I'm not saying that.

But I'm going to figure out an amount of money that's a ratio.

And, you know, Sharon and I look at each other and go, it doesn't matter.

If we do this, and it's all, it was a horrible decision, it's still okay.

You know, and so we can, that gives us the freedom to travel or to buy an item or

an experience or spend that amount of money, whatever thing on a ridiculously nice dinner out or something like that, you know, that we used to couldn't do, but now we've lived like no one else, so now we can live like no one else.

And so now we're able to do those kinds of things and it doesn't matter.

It doesn't affect our generosity.

It doesn't affect our

net worth is not damaged.

Our

finances aren't irresponsible and out of control.

But it's going to feel that way in your emotions because you've just not done it for a long time.

Does that make any sense?

It really does.

It does feel like I would have to flex a really big muscle.

I'm used to not even ordering drinks when we go out to restaurants.

And so the thought of buying a $3 drink feels like, ooh, that's a big purchase for me.

Yeah.

So you need to kick that one up a little.

You know, you need to start practicing some stuff like that.

Okay.

It's ridiculous if you're a net worth millionaire and your home is paid off that you can't enjoy a drink when you go out to eat.

That's silly.

Okay.

Mathematically, that's silly.

Okay.

So you need to start practicing having that level of enjoyment.

And then you need to accelerate it and buy an expensive bottle of wine.

So it's okay to not spend because you don't want to.

If you just want water, that's fine.

But don't make it about, well, we can't afford this.

That's what you're going to have to retrain your brain.

And I'm frugal, but I've learned how to to enjoy and spend.

And a good spouse will help you do that because usually there's some opposites there.

And so one thing I've done that is very tactical is I add line items in my every dollar budget to force myself to spend on things that I think are frivolous.

And then my wife keeps this accountable and goes, nope, you said you're going to spend a hundred bucks on fun money.

Where did it go?

Did you do anything you enjoyed?

Show me the fun.

Exactly.

So both of you have a dream day, nice dinner, get an appetizer, maybe even a dessert, get a drink, and start dreaming about the list of things that we want to do, and then add it to the budget.

Wow.

Because you're really good at

how did you pay off the mortgage?

You budgeted for that extra to go to principal, didn't you?

Yep.

And now you have to budget for the fun sides that you can avoid having this flat tire like Dave was talking about.

Yeah, and

again, it just, we move to intentional.

And so this is adults spending, not children's spending in adult bodies.

Okay.

And and by intentional, I mean, we look at it and we go, okay,

it does not damage our ability to retire wealthy if we order drinks with dinner.

Okay.

And it does not damage our, and so you can just kind of get used to that.

And I got to tell you,

Sharon and I have been,

we've been increasing that in the last three years.

Because it took us a long time to get those muscles built back because we lived like on beans and rice forever to get to the point where we didn't have to anymore.

And then it then you've got to just rebuild that mentality.

But the difference is when we were spending before

financial peace, we were doing it

in a childlike manner, an immature manner, with no thought as to the circumstances or no thought as to the whole picture.

And now when we're doing it, it fits into the picture.

So it's an adult viewpoint.

Because you can impulsively spend 10 grand and you can intentionally spend 10 grand.

Exactly.

And the latter is not going to hurt your wealth.

Well, and one of them is, you know,

your level of enjoyment changes.

You know,

when you're doing it impulsively and with immaturity, you get a rush right as you're doing it.

When you're doing it intentionally, you savor it all the way through.

Yeah.

And so you enjoy the trip at a different level.

With no stress on the other end of, oh, gosh, why did I do that?

You did it again.

The trip didn't follow me home.

You always do this.

Why'd you go into debt?

You shouldn't have swiped that card.

And so the way Elizabeth is doing it, you're using debit, using cash.

You got a paid-for home.

Now's your time to live and give like no one else.

And I also think she's, they're paying off the mortgage tonight.

So they've still been in that.

Yeah.

Oh, by the way, you need to do something tonight.

Celebrate.

Celebrate tonight.

I mean, push the submit button from a white tablecloth in a fine dining establishment, kiddo.

I mean, go,

you need to celebrate this.

You don't sit at home and drink water while you pay off your house, okay?

That's not, no, no, no.

We need to have some fun with this.

I wish I knew where they were going.

I'd call the staff and say, bring them a cake on us to celebrate.

Bring them a bottle of wine on you.

There we go.

Add it to Dave's table.

Add it to George's generosity list.

Yeah.

I thought a cake would be more less expensive.

I even know you did.

I need to live by going up.

I upped your game.

I upped your game for you.

Well, you know, Sharon Ramsey and I, we had her on Smart Money Happy Hour, and it was hilarious.

And we talked about frugality a lot.

And Sharon, at her core, is a frugal person.

Oh, God.

But in other areas, she's happy to spend.

And so how have you guys managed that over time?

Because you're still the free spirit spender in the family.

No, I'm not.

You're like a nerd spender.

I'm a nerd spender.

Yeah.

It's the beautiful combo.

Yeah.

Because you like your toys.

You have your hobbies.

Yeah.

Sharon will blow

$6,000 on a purse, but make me eat

mayonnaise that's five years past the expiration date.

That's the

part that has to be done.

It's in the the freezer.

It's still good, Dave.

That's right.

The leftovers are a constant argument still.

You just can't get rid of that one.

So

I make enough money.

I don't need to eat leftovers.

I'm sorry.

I'll just get some.

That's a stance Dave takes.

It's a thing.

But, you know, she's cooking for two.

And I'm just.

There's going to be leftovers.

George, you're not supposed to take her side.

I'm coming over to eat the leftovers, Sharon.

You are.

You don't have to if you start this crap.

I'm going to make you do it.

That's how this is going to work.

It's a good discussion.

It's a wonderful discussion.

And it happens a lot.

Thank you.

Our point is that everyone faces this.

And

the good news is you did learn how to be intentional.

And now all you've got to change is your intentionality towards your generosity and your enjoyment, not just

building wealth.

Yeah.

It's hard to move, though, from that scarcity to abundance mindset, even when you have the abundance.

It does take a lot of training.

And that budget is what helped me personally to make it really tactical and force myself to build that muscle.

Yeah, put that in your every dollar line item.

Yeah, in your every dollar line.

That's the hack.

That's the one.

Good call, George.

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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, George Camill.

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

The phone number is 888-825-5225.

Danny's in Chicago.

Hey, Danny, what's up?

How's it going, Dave?

I was just calling because I've been working baby steps for a couple of years and

I'm back to square zero and I just feel like giving up.

And

life has gotten really hard in the last year, and I just wanted to see what advice you could give me.

What do you mean, back to square zero?

Well, I was on baby step two, paying off my debt smallest to largest,

but I ended up losing my job on July one.

And so I was down to one job.

And

I left I spent through my emergency funds covering my cost of living, you know, protecting my four walls.

And that's gone, and I'm just waiting on my first paycheck from

my only other job.

Why'd you lose your job?

So I was a pastor, and unfortunately, the church just didn't have me in their budget anymore.

And they didn't, you didn't see that coming?

You didn't know that was going to happen?

It caught you off guard?

I had no

insight into the finances of the church.

That wasn't part of my job.

I mean,

there was no warning at all?

I was given about a 45-day notice.

Oh, okay.

All right.

And so what is the job that you still have?

So every summer I pick up a job lifeguarding, and right now I'm working anywhere between 80 to 85 hours a week,

open to close as many hours as I can get I'm seasonal so I don't make overtime pay but it's just enough for me to live off of

yeah what are you making what are they paying you

my take-home pay um is um after taxes is about every other week or so uh just over two grand

okay so you're making four grand a month

roughly uh but that job is going to end here at the end of the summer summer.

Yeah, I got that.

So why would you, if you're making four grand a month, you can't live on that?

No, I am preparing for the end of the summer when I don't have a job like that.

No, no, you said you went through your emergency fund to keep the four walls open.

Why would you do that if you make your four grand?

If you're making four grand a month, why would you need to do that?

Because when I was pastoring, I was only working for them about 10 to 20 hours a week.

I wasn't able to up my hours until after I was let go from the church.

Okay, so

why did you not schedule the 80-hour work weeks beginning the day that the church...

Because they gave you 45 days' notice.

So why did you not sync these things?

You left a month in between or something?

No, sir.

I let my boss know and she upped my hours as soon as she could.

Maybe they're scheduling about a month in advance.

Oh, okay.

All right.

Okay.

How much debt do you have?

I started with $200,000 and I'm down to just about $120,000.

Good job.

All right.

And what were you making as a pastor?

I was making about $35,000 to $40,000 depending on how I was working.

Sometimes I would put up extra hours for them.

Okay.

All right.

So what's your plan in the fall?

What are you going to do for income?

So my game plan is to go back to McDonald's.

That's what I did in my undergrad.

And I'm trying to apply to

10 jobs a week.

But I'm in the early stages of applying, and so I'm not sure where I'm going to succeed there.

Okay.

I'm sorry.

You're going to work at McDonald's?

It's some form of income for me, yes, sir.

It's what I did in my undergrad.

Yeah, why would that be your plan, though?

Why would you not have

a

career plan?

What was your undergrad for?

Mass communication and applied communication.

So why aren't you using that to have a career instead of just a job?

I am working towards that, but I've got to finish up my master's degree before I can do that.

No, no, no, no.

I have a communication degree.

I work here.

Oh, yes, sir.

You can work in media, PR, marketing.

Yes, sir.

My career goal was to be a pastor.

And you told us your plan is to work in McDonald's.

So

we need to have some bigger goals since we did this undergrad.

Yes, sir.

What advice would you give me on how to utilize?

Apply for jobs that are in the communication field that will pay you double or triple.

You pay $60,000 or $80,000 a year.

Why would you go back to being a teenager?

Yes, sir.

Okay, so I think you need to think about a big career aspiration.

Start working towards that.

I'm going to send you Ken Coleman's book, Finding the Work You're Wired to Do, and take the assessment.

And I'm also going to send you his book, The Proximity Principle, on how to properly apply for jobs.

Just filling out applications will not get you hired in today's digital world.

Okay?

It's a waste of time to just fill out applications.

Okay, so instead you have to create connections and move in a direction you want to go.

But don't don't,

you've got a little bit of time until the end of the summer.

Let's use that time wisely to not be so desperate

and already have, out of desperation, already have dumbed down your life to McDonald's.

It just sounds like you're scared and you're just running back to the last thing you knew that was comfortable.

And so what we're trying to do is give you some, you know, I think you're a whole lot better than you feel like you are right now.

And so,

and this pastoral, the loss of the pastor's job has hurt you emotionally.

And because it's what you always wanted to do, and now you can't do it.

So, at least at that place, maybe there's some jobs in the pastor that are out there.

Maybe there's some

youth pastor jobs or something like that that are out there that you can get into.

And so, I don't know what it is you're looking for, but I don't think McDonald's is a desperation move.

I'm not putting it down because it's McDonald's.

I'm putting it down because it's a desperation move.

And I just think you can do a whole lot more towards your future.

And that's what I want you to aim at.

And that,

when you get the income situation and the career thing stable and moving again, instantly you're going to get back in the saddle.

You're going to start reducing your debt again.

But right now, your goal is to get enough income coming in and

to get in the proximity of people doing the type of things you need to be doing in communications and pastoring or whatever it is.

So a fast food is not your solution.

A master's degree, not your solution.

You're just going to be overqualified at that point and definitely not get the job.

And so you need to focus on what you can do now with the degree that you have, with the skills that you have.

And I think you just need to get your mojo back after you got knocked down.

You landed a job as an associate pastor of some kind.

So do it again.

You did it once.

Do it again.

This time do it with a church that actually has a little money to pay the bills.

And,

you know, that's what I'm looking for here.

Amen.

Keep at it.

I think you're better than you feel like you are right now.

That's what we're trying to tell you.

Let's be real.

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Patrick's with us in Chattanooga.

Hey, Patrick, how are you?

Hey, Dave, I'm great.

How are you?

Better than I deserve.

What's up?

Hey, thanks for taking my call.

I'm 28.

My wife's 27, and we bought a duplex last year for $325,000.

We live in one side and rent the other.

We've paid the mortgage down to $166,000, and we're throwing really large sums at it each month.

And we have a six and a half percent interest rate.

We've got about $190,000 invested and $110,000 of that is in a taxable brokerage account.

My wife is super debt averse.

She's been that way since taking financial peace in high school.

And even with the progress we've made, the mortgage just stresses her out.

She wants to cash out the brokerage.

It'd be about $106,000 after taxes to pay most of the house down so we can finish paying the rest in roughly six months.

And then after that, we plan to put the large thumbs currently going towards the house back into investing on a regular basis.

Cool.

Another thing I should mention is we're considering starting a family.

And when that time comes, we're both on board with my wife staying at home and we've cut our income in half.

Paying off the mortgage quickly feels like a smart security, but I'm worried about selling the investments early.

We're long-term buy-and-hold index fund investors and have never touched those accounts before.

And we both realized how powerful compound interest is over time.

And I really wouldn't like to lose the momentum if we don't have to.

So I would leave the brokerage alone and keep paying large sums on the mortgage and be debt-free in around 18 to 20 months.

And then tip all the money into.

You definitely married well.

Well, thank you.

I would have to agree with you.

In other words, she's right.

She's right.

You lost the argument, Patrick.

And here's why, okay?

Here's why.

If we reverse engineer this, you would not do it.

So let's pretend that

you owed $100,000 less on the duplex and you were in a process of paying it off, that you'd already done all this, okay?

And you're in the process of paying it off within six months.

And the opportunity came up to borrow $106,000 on the duplex

at 6%

so that you could put it into an index fund.

You wouldn't do that.

She for sure wouldn't do that, but you wouldn't even do that.

Right.

And that's the same thing that we're talking about.

We just did it in reverse.

Sure.

You see what

I lost you, didn't I?

No, no, I'm with you.

I'm totally in tracking.

Yeah, so, in other words, if you owed $100,000 less on the duplex today and you did not have this brokerage account, you would not go borrow 100,000 at 6% against the duplex to put it in a brokerage account for the same exact reasons you would cash out this brokerage account.

And you're not going to lose any ground.

You're going to be fine.

You're still going to be multimillionaires.

And here's why I know that.

Number one, you have a propensity to save.

Number two,

both of you are very, very intentional about these things.

Number three, you're aligned and you're not doing things against the

both of you are talking about this and you're coming into alignment before you do things.

These are all the key things we have in all of our data points of people who become wealthy.

Spouses that work together and are aligned and that talk through these things together, which you guys are.

People who live on less than they make and have a forward-thinking mentality about saving and investing, which you are.

And people that hate debt, which both both of you are.

She just hates it a little more than you do.

Yeah,

we definitely talk a lot about these things, and that's really why I'm calling you.

Yeah,

you guys are amazing.

You're a power couple, man.

Thank you.

I appreciate that.

We've asked friends and family, but

some of the friends and family we've asked don't have a paid-off house.

Yeah,

they're in behind you.

And so don't ask broke people about finances.

I mean, that's just so no.

I mean, you guys, you're a power couple.

You have all the data points of somebody that's going to be worth $10 million in

probably in about 15 years from now.

And I can help crunch the numbers here to give them some hope.

But, you know, if let's say they're throwing nine grand, it sounds like, with the principal and interest plus the extra based on all the numbers he was telling me.

So let's say you cash out the brokerage and you start back at zero a year from now, right?

You pay off the mortgage, we freed it up, now we're investing all of that.

From age 29, because you're 28 right now, to age 65, 10% return, 9 grand a month, You'll have $37 million, $65.

I think we're going to be okay.

Yeah.

You've got plenty of time.

So my $10 million wasn't far off 15 years from now.

Yeah.

Yeah.

So that'd be 45, yeah.

Exactly.

And it's because of the reasons you mentioned.

They have a great income, they know what to do with it.

They're being very intentional.

Those are the things that we try to teach people to do that we can't get them to do, to work together, to be aligned, to have discussions about big things like this.

And he's, did you notice his tone and his sentence structure all indicated he was actually

just trying to figure this out.

It wasn't defensive.

It wasn't arrogant.

It wasn't talking down about his wife.

He said, you know, this is her viewpoint.

She got this because of financial peace in high school.

For you, high school teachers that are teaching financial peace, thank you.

There you go.

This is what you create, $37 million.

This is what happens when you guys teach this class to these teenagers.

Thank you.

And thank you to you administrators that are buying it and putting it into your high school.

That's what happened.

But he's treating his wife's opinion and concerns with respect.

Yeah.

Not with disrespect.

It wasn't, well, I'm right, and I just need Dave to

justify my decisions.

No, he was honestly looking for the answer.

And that's somebody who's searching for alignment.

with their spouse.

And that's what I mean.

If you guys can get that stuff going, instead of this, I'm dragging some princess or prince along with me that doesn't want to work and and doesn't want to deny themselves and I want my bass boat and all this other bull crap, you know, instead of these guys are, they're living in a duplex.

Yeah.

One side of it.

I mean, these guys,

they have a lot going on.

Your tenant is next door.

Oh, God.

Yeah, but I mean,

there's just impressive.

Very, very, very impressive.

Emily is in Denver.

Emily, how are you?

I'm good.

How are you?

Better than I deserve.

What's up?

So,

just trying to figure out the right money moves.

My husband just recently retired or will be retired as of August 1st from active duty military 20 years.

Wow.

Tell him thanks for service.

I will.

Thank you.

And thank you for moving around all over the world.

Thank you.

It was fun, though.

Yeah, I bet.

We essentially doubled and then some our income in the last month.

Wow.

How?

So with him being retired, he took a really good job.

He'll have his pension and his VA disability.

And then I got a promotion.

Wow.

What's the total income?

It will be about $316,000 before taxes.

Woo-hoo!

Thank you, Jesus.

I love it.

What's your question?

So we are actively paying down debt.

In the last year, we've paid off about 42,000.

Mind you, that's on the old income.

I work two jobs.

He has one plus his retirement and disability, and then he's got a hobby that makes a couple hundred dollars a month.

I lost my father about 15 years ago.

And when that happened, he was supporting me through college and life.

I had been divorced, and I was full-time college student.

And of course, when that money went, it was very scary.

So I have an anxiety with not having a savings account

because of that.

How much do you have saved right now?

My question.

Right now we have, because we just sold money to pay down a bunch of debts, we have 12,000 cash and then we have his TSP.

So

how much debt is left?

52.

If you include the cars and the solar, it's about 125.

Okay, well, you just had an increase of 150, so let's just do that in a year.

Right.

If you take home, let's say, 18K

and you live off of five or six and throw, you know, 10 or 12 at the debt, this thing's gone in less than a year.

Yeah, take all of your increase and be debt-free in a year.

Okay.

Way to go.

This is so cool.

Happy for you.

That means

it's going to be a tough year, but going to be a glorious ending to the next 12 months.

Yay.

So you don't get to enjoy the raises because you got to pay back the miss for a year.

And then you'll get to enjoy them.

For the rest of your life.

I get it.

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Might not be in all states.

Today's question comes from Ava in Indiana.

My husband plays in a local band and does all the bookings as well as receiving and dispersing payment to each band member.

For the last four years, all the checks have been written to him directly as the band has not had a business entity.

Now, the IRS thinks my husband and I earn an extra $40,000 a year.

We met with an accountant who gave us a plan for moving forward, but because of how poorly things have been handled in the past, the IRS is hounding us for almost $25,000 in back taxes.

Is it fair to ask the band members to help with paying back those back taxes, or are we on our own?

Oh boy.

I don't know that they can legally demand it.

They can ask politely, and this could end the band.

But I don't think they have any legal standing to require the band members to pay taxes.

It's on your husband for doing a piss-poor job of running the thing.

It was cute until it wasn't.

I'm just wondering why your accountant accepted the IRS's

deal here.

I mean, I think you could go back and file amended returns in those other years

and distribute 1099s.

To the band members with him as the payee?

Yeah, and then that does send it to the band members because they should have to pay their taxes on their part.

They essentially got paid without

tax-free income, yeah.

Yeah.

Because they didn't report it, and he did.

And how this went on for four years, I have no idea.

Well, because no one was looking at it.

That's why.

They must have got audited or something, is how they found it.

Yeah.

So, yeah, I think you can go back and file amended returns and get it off of you.

And I think that's what I would look at doing and let the other guys know, hey, you know, we were supposed to have sent you 1099, so we didn't.

Sorry about that, but you have to pay taxes on income.

You knew that, and you knew you got income.

And

if you did pay taxes on it, then you're ain't got any problem.

If you didn't, then you're going to have some tax due on that's going to come back at you for that.

So, yeah, I think you're going to have to.

I think that's what I'm going to explore doing.

I know you can file amended returns.

What I don't know is if you can send 1099s three years late as a result of amended return.

I don't know about that.

But I'm going to check with your tax

person.

I may get a new tax person because this one's not giving you much answers.

I'm hoping they told them to make an LLC and open an actual business.

She said they got it figured out going forward.

You don't even have to have an LLC.

You just got to keep up your books.

And you have to distribute 1099s.

You have to have a set of books that shows that I didn't keep all this money that I distributed.

It was dispersed to the other partners.

This business that we're running

has expenses.

And the expenses are the payroll, the contracted payroll.

So, yeah.

And so

that's fairly easy.

You can run it as sole proprietor.

You can run it as LLC.

The one's fine.

Going forward, that doesn't matter.

But the back tax thing is just due to

you didn't show the expenses.

But you've got checking.

You've got checks that went out.

So you've got proof that the money was distributed.

I think you need a new accountant.

I'd get a second opinion.

Yeah, I'm going to go.

And I'm hoping all these guys are like grown men with jobs.

It sounds like this is a fun side gig for them.

So I'm hoping they have enough integrity and income to just help him cover this and then fix it moving forward.

If I was the friend, I would do that.

Yeah, but

I don't know that we have to give them a choice.

I think you need to file 1099s and then then it's up to them to deal with it yeah because that all that all we're trying to do is get the money off of you the liability off of him yeah and if we can get it off of you and it goes to them then let them know you know you're gonna get if you hadn't paid taxes on the income i gave you you should have and now you're gonna have to uh that's that's the answer it's not like do it out of the goodness of your heart thing it's just you should have been paying if i if he distributed the money it was income and they didn't claim the income that's on them but if they claim the income, it makes it even that much easier.

If they didn't claim the income, now they get to claim it.

Hello.

They should have.

I mean,

if you're receiving money from someone, folks, for work, that's income, and you're supposed to put that on your tax return, whether you got a 1099 or not.

And whether you like it or not, that's integrity.

Yeah.

I mean, that's just how it works.

I'm just glad to see musicians making money.

That's the most impressive part of this whole story.

Just a grown man gone, I'm going to start a band with my friends.

We're going to make some, that's some fun siding money right there.

Yeah, well, they made

$40,000 a year total among four of them.

Yeah.

So $10,000 a year each, maybe?

Yeah.

And they spent that on guitars.

Yeah, that's all going back to gear.

James did work.

James did anyway.

This is

the curse of the creative is that they're not very business-minded.

They just want to make art and play the music.

Oh, yeah.

Think about that.

You're exactly right.

And so they go, businesses, we're not going to worry about that.

Yeah.

So what I would do, Ava, is I would go to ramseysolutions.com and I would click on endorse local provider, Ramsey Trusted ELPs, for tax help

and get someone to consider filing amended returns for those years and properly doing this and getting rid of the tax liability because the IRS is simply

saying you haven't claimed the expenses or the income, so we're just going to stuff the income down your throat.

So you need to go file amended returns that show the expenses, which is the payroll, the distribution of the payroll, and that's a 1099 issue.

And you need to file the income.

And when you do that, it makes the tax bill go away, except for the part that your husband actually did make, which would be roughly a fourth of this, I suspect.

It sounds like.

Amy is in Los Angeles.

Hi, Amy.

How are you?

Hi, Amy.

I'm well.

Thank you so much, you guys, for taking my call.

So appreciative of what you guys do.

Thank you.

Okay, thank you.

So

So I have an inheritance from grandparents.

May they rest in peace.

I inherited $163,000.

I was on baby steps three when I got the inheritance.

So I plan on tithing, obviously, a certain amount and setting aside, you know, automatically filling up that emergency fund that I had been working on.

Good.

My question is, with the rest of the money, so I'm a mom of a five-year-old.

I'm currently single, and we live with my mom.

My son has been asking for his own room for about a year now.

So I have basically five options, and my goal in this phone call is to seek Godwy counsel as to what I should do.

Since I have that inheritance, putting a down payment on a house would be awesome, but in LA, I don't want to be house poor with a high mortgage.

I was thinking possibly just renting with my son somewhere in LA and investing that money.

I heard that maybe I could do that, invest it more for a long term.

And then I was thinking I could also just change careers so that I'm less tied to Los Angeles and possibly look into moving to more affordable area.

There's also my mom offered for us to build an ADU with that money on top of the garage so my son and I can be here with my mom and my grandmother.

It's just the four of us.

I was also thinking maybe doing a duplex.

So I was really looking forward to getting some godly counsel on how to make the like honor the memory of my grandparents with this money and use it in a wise way

how heartbreaking is it to change cities and change careers that sounds like the best option

yeah it's it that's a little pretty heartbreaking difficult um my extended family is in the l a area but most most importantly my it's basically just me my mom my son and my grandma and and she's tied in l a so it would be neat

um she works in l a and uh

Yeah, she works here.

She has three more years until retirement.

So that's like a, that would be a huge move.

I don't know.

I don't know that I could handle that.

But that is something

that I've been praying about.

That's the best move for you and your child, with the exception of it breaking your mother's heart and your grandmother's heart.

Could they leave L.A.

and join you wherever you go upon retirement three years from now?

Yeah, possibly.

Possibly.

Let's talk about that.

Do not, I don't want you to rent your life away trying to stay near your grandmother.

Okay.

Okay.

And I don't want you to build onto their house for sure.

Absolutely.

Don't do that.

So the one I like best is the move.

What do you think?

Yeah, that gets you to home ownership faster, which was the big goal you stated there.

Gets you to sustainability.

Versus the down payment in LA, that's not going to get you very far, as you said.

That's a lot of home you got to buy.

Yeah, and you know, it doesn't match.

The only reason you're there is mom and grandma.

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Judy is in Canada.

Hi, Judy.

Welcome to the Ramsey Show.

Hi, Dave and George.

How are you?

Better than we deserve.

What's up?

Hi, so I have a question, and I was hoping to get some of your insight on my question.

So my father had presented an opportunity where I could invest in a home with him.

Currently, I have a significant amount of debt, and I wanted to know what both of your thoughts are on doing that, whether it's not a good idea in general, if I should pay the debt off and then think about doing it later.

Why would you, a grown lady, buy a house with your dad?

That sounds kind of like you're going back home or something.

So, I currently live at home now, but we rent.

And that's again, that's why I was kind of I'm 28.

Okay.

So I finished.

So your plan is to be 48 and living with your dad?

Abs well, absolutely not.

So his thoughts were that we can, you know, I'm planning on moving out the next couple of years, but the goal was to pay off some of my remaining law school debt.

Once that gets down to zero, I would leave and presumably he would find a way to get me off the mortgage.

And then from there, he would take over just paying it off.

You're assuming he can take the mortgage on his own, which right now he can't.

What makes you think he will in the future?

Yeah, so that's my concern.

Like, I don't think he can.

And I, I, I'm

thinking about

this is a trap.

It's akin to him buying a car and saying, hey, will you co-sign?

It's going to be great.

It's an opportunity.

We can both own this car.

Yeah.

No, thanks.

Yeah.

And I was curious if you guys have any maybe tips or suggestions on how to navigate that conversation.

Like I know it's something I think he's had a vision of wanting to own a home, but my concern is I don't want that to be on kind of on my back and at my expense down the road.

Yeah, I wouldn't even go there.

I would just say,

Yeah, thanks.

Really, I really appreciate you thinking enough of me to give me the opportunity to do this, Dad.

But after thinking about it, I think I really just want to work on getting my law school debt clear, and I don't really want to get in the home ownership thing right now.

But thank you.

Okay, I appreciate that.

And here's the thing: less is better in this conversation.

If you get nervous about it and keep talking and talking and talking, you're going to say something that's going to do harm.

Just make it very brief and concise.

Dad, I love you.

Thank you for thinking of me on this.

I've thought about it.

I want to work on my law school debt instead.

I don't really want to have that hanging around, and I'm going to have to pass on this one.

But thanks for offering it.

See, that was like 15 seconds there, not four and a half minutes.

If you do four and a half minutes, you're not going to land the plane and the whole thing's going to crash.

Yeah.

And it sounds like he's a good salesman.

And so he's probably going to have some objections and want to overcome them.

And so you've got to be careful.

Just circle back to, yeah, but thanks, but I thought about it.

And I really, I'm just going to, I'm going to work my plan on getting out of debt.

That's all I'm, and just keep going back to that.

And just,

don't, you don't need to explain to him anything about him.

It's about you.

It's about, I have this goal and I'm going to work on this goal.

It has nothing to do with you.

It has nothing to do with, I mean, I'm not, it's not that I'm afraid you're not going to be able to pay it off or get me out of it or anything like that.

It just sounds.

But between you and me, Judy, this is a trap.

He doesn't mean for it to be, but you're going to get stuck in this.

Don't do it.

Yeah.

Okay.

Please don't do it.

Yeah, no, for sure.

I appreciate that.

Okay.

All right.

Hey, thanks for the call.

I've seen a lot of these on the show, Dave.

You've seen probably 4,000 more.

I've never seen them work out.

No, they don't work out where everyone's happy and no one's relationship with strained because of it.

Well, here's the thing.

A lot of times when you're looking at a decision like this, if you'll do two things with the decision,

both of them will probably tell you the same thing.

One is go way out in the future and visit the decision and go, okay, you're 28, and that's what I did.

When you're 48, do you want to be no.

Okay, there we go.

That tells us we're tells us we're on the wrong road, right?

And the other thing you can do is expand the size of the decision and say, okay, if this makes sense for this, what if we wanted to do 10 houses together?

Oh, no.

Well, then one doesn't make sense for the same reason 10 doesn't make sense.

You know, and so if you if you add scale to it and you add time and distance to it, and it doesn't make sense, that tells you that you're thinking short term.

The only time it makes sense is in the moment.

And in the moment is always a bad decision financially.

You always have to think long term.

And as Zig Ziglar used to say, you know, people that think long term.

So millionaires

have big libraries.

Poor people have big TVs.

You know, that was what he always said.

See, that's thinking now versus long term.

So you're always thinking long term, long term, long term.

And, you know, to keep going on that thread for the rest of you out there, not just Judy's sake, but

know one of the favorite studies I ever saw was when I first started on the show 30 years ago I ran into this

and they asked people about giving

and

they they ask someone

a child or they ask a yeah a child about giving and the child

their experience with giving and they described receiving something

oh And then they ask a young person about giving, and they tell the time that they gave $20 to the homeless guy.

And then they ask the old person about giving and they talk about a lifetime of steadily tithing at their church.

So it means something different when you've got this longevity to it.

The stage of life and the perspective.

And in the same sense, the same types of research is like

they ask wealthy people,

you know, what blocks of time, what vision do they think in?

They think in 10 and 20 and 30-year blocks of time.

And poor people think in in terms of, thank God, it's Friday because they're worried about food, worried about lights, worried about, you know, party, the party on the weekend.

But wealthy people thinking, okay, when I do this, how's it going to affect me 10 years from now?

How's it going to affect me 20 years from now?

And so they buy a different kind of car a different way when you're thinking 10 years out than you're thinking, how's it going to feel Friday?

Friday is a completely different car than 10 years from now.

Yeah.

Well, and when you think about the short term and an opportunity, that always is a trigger word for me.

I go, oh, there's a red flag coming up here.

When they say, I have an opportunity to do something that's going to harm me in the long term.

That's a word that just, yeah, that word should throw up pyrotechnics.

Yes.

And so there's, you think about the short-term benefits in those cases, but rarely do you think about the long-term consequences, which is this question.

What happens when?

What happens when she moves out and meets a nice man?

And now she goes, hey, dad, I need to get out of this situation.

I need my money out.

Well, he's got to now refinance and afford it on his own, or he just refuses.

And now you got a situation on your hands.

Yeah, and it's your dad.

How do I make my dad own?

Now you break the relationship.

How do I put my dad in the street?

Well, you don't ever get in a situation where you have to make that decision.

That's what you're saying.

And he's using her as a proxy to accomplish his goal, whether intentionally or unintentionally, which is only going to hurt this relationship and turn it into a transactional one.

So for a lot of reasons, I don't like this.

On top of crippling law school debt, let's not get into an investment property while we're trying to clean that up.

For real.

And this is a trap, yeah.

But you're right.

That word opportunity.

Hmm.

I have an opportunity.

Yeah, maybe.

It's a needle in a haystack on this show for you to tell us that you have an opportunity.

And we go, yeah, no, that's a great opportunity.

Yeah, occasionally that happens.

But yeah, there we go.

Oh, boy.

Tread lightly when it comes to family and real estate and finances.

We've taken a lot more calls lately about that, and it's become more of a relationship discussion than it is financial.

And it's boundary conversations.

You had a lot of those.

It's toxic in-laws that want to force you to do something.

It never ends well.

So just, we tell people stay away.

Keep your family as family, not as business partners.

Works for me.

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Tripp is in Houston.

Hey, Trip, welcome to the Ramsey Show.

Hey, Dave, thank you.

Thank you all for taking my call today.

Sure, man.

How can we help?

Well, I've got an interesting situation that I want your advice on.

My wife and I are young, in our early 30s.

We're very fortunate, about to make our first million.

And she's a dentist working in her mom's practice.

In September, we're going to be buying half the practice.

We're very happy about that.

However, there's a space next to their office that's been vacant for a while.

And we're thinking of

buying this office space, renovating it for a specialist, and maybe hiring on a specialist to this business so that we can, there's a lot of referral cases that go out that we're sort of losing the revenue on.

And we think that if we could have a specialist work in the office, we'd be able to capture that revenue.

But it just, I'm torn because there are a lot of issues that we're not comfortable with about hiring on a specialized employee and also using debt to

expand the business.

I mean, we'd have to take probably a seven-figure loan out to do this.

So I was hoping as a successful entrepreneur, you could give me a bit of guidance guidance on this.

I'd pass.

Yeah.

You think just

stick with the way the business is going?

Yeah.

Well, I don't mind expanding the business, but I'm not expanding it with debt.

Because 100% of the time that you do something with debt, you magnify your mistakes.

And obviously, we don't see mistakes when we're doing it.

And so,

I mean, anything that can go wrong will here.

So how long has your wife been a dentist?

She's been working for four years now.

Okay, so she was not in practice in 2020.

That was her graduation year.

That's right.

Yeah.

But her mother was.

Yes.

Yeah.

You think you want to survive 2020 with a seven-figure loan?

I don't.

Yeah, that's one thing we've talked about is they've not really seen a slowdown in no practice.

Yeah.

Well, they they did in 2020.

There was nobody coming in to get their teeth cleaned in 2020, buddy.

Yeah, I think they did okay.

They did okay during COVID, but obviously there's definitely a slowdown.

And then another thing that I, you know, even if we're not going to be able to cash, let's say we're not going to be able to do that.

No, wait a minute.

I'm sorry.

You really don't believe that, do you?

Okay.

Dentists in the middle of COVID did not do okay.

Their income evaporated for a period of time.

No one went to the dentist in the middle of COVID.

Zero.

Think about it.

Now, I don't know what period of time that was in Houston, Texas, whether it was a three-month period of time or a two-month period of time or an eight-month period of time.

And Texas opened up faster than a lot of people did.

But these are the types of things you face in business from time to time.

Now, we don't, COVID was a highly unusual experience, but and I'm not predicting that in the future.

But my point is that when your plan can't survive negative consequences in the marketplace that you can't control, something like a COVID, then your plan's a bad plan, and that's why you don't borrow seven figures to expand a business.

Absolutely.

Do you mind if I ask just one more follow-up?

Sure.

So imagine that we had the cash on hand to not take a loan out and do it all.

Hiring on a specialized employee,

what do you think are maybe some pros and cons to that?

Well,

the pros are that you're dealing with a wonderful team member,

hopefully, if you get it, someone that's culturally aligned with you and that believes in running a business the way that you believe in running a business and so forth.

But the pros are that typically when you're dealing with a highly specialized employee, you're dealing with somebody that's smart.

So they're easier to work with than dumb people.

So that's the pro.

The negative is, is that the referral flow might not be like you think it does.

And

so I'm going to try to figure out,

I'm going to do some detailed, if I own this practice, I'm going to do some detailed, before I did this with cash,

I would do some detailed analysis of exactly how many referrals we've sent out and exactly what they were worth.

Not just this vague feeling of, oh, we send a lot of business over there.

Okay, great, but let's look at exactly what that is.

So I'll give you an example.

We built this building in 2019 and we were making the decision of whether or not to put a cafe in here because Ramsey spends a ton of money on food.

And that was our feeling.

When we actually investigated at the other place where we didn't have a cafe and we were bringing in catering all the time for different things happening inside the building and with clients, with each other, meetings that needed to have, you know, Chick-fil-A or whatever, when we actually added up the actual accounting of what we spent on money, it made the cafe decision easy

by looking at actual data.

Okay, so you might look into this and the referrals are so juicy and there's so many of them that hiring the specialized person when you actually have the data in front of you, it makes it a no-brainer.

Yes, we've got to do this once we can save up the money to pull this off.

Okay.

But no, I'm not borrowing seven figures to do anything in business, period.

You knew that before you called Dave Ramsey.

So that wasn't, that's not.

How are you guys purchasing the half of the business?

What's that going to cost?

That's also a loan.

But the extra income as an owner, our increase in income pays the middle on the loan and also gives us about a 50% increase in take-home.

Well,

and take loan.

Yeah, it goes to the loan.

You don't get to use any of that money.

You have to put it all on the loan because you've got to get this loan paid off really, really fast.

Is this a seven-figure loan as well?

It's going to be about $800,000.

Good God.

And how much student loan debt does she have left?

We are just about done with the student loan debt.

I think there's something like 80,000 left on it, and it's actually a 0%

loan her parents.

Dude, you are in love with borrowing money like nobody I ever met.

We're almost done.

80,000 is almost done?

Oh, but it's zero.

It's $80,000 in debt.

Yeah,

you have no perception of debt equals risk, and you are in a danger zone for that reason.

Debt equals risk.

More debt equals more risk.

A hundred percent of the time.

And until you get that right, you're about to trip over yourself and make a mistake here, a bunch of them in a row.

So, but the answer to your question earlier is, once you have the cash, once you get all this paid off, the $480 or the $880,000.

God, I can't breathe.

No,

just don't do it.

I hope you continue to out-earn all the decisions you've been making.

I really do.

You're making a million dollars this year.

You better keep living like you make a hundred because it's going to be a grind to get out of this.

Man.

Wow.

Dentists borrow money like nobody I've ever met.

They made Congress look frugal.

Ouch.

That scares the crap out of me, y'all.

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Nick is in Dayton, Ohio.

Hi, Nick.

How are you?

Good.

How are you today?

Better than I deserve.

What's up?

So I work for a small company.

It pays really, really well, but unfortunately, it doesn't have any 401k, no investing, anything like that.

And I'm just

so last Halloween, my mother passed away and she literally had nothing.

And I just, when that day inevitably comes for me, I don't want my kids to have to go through that.

Amen.

You know, financing it and everything like that.

Yeah.

I'm sorry.

Thank you.

And I'm just,

what would you recommend?

I have a general idea on how everything works, but what do you think would be the best bet for

are you married?

Yes, married, two kids.

Okay.

You can both do Roth IRAs for $7,000 each.

How old are you?

32.

Okay.

So you can put $14,000 a year into two Roth IRAs between the two of you.

So that's more than $1,000 a month.

What's your household income?

Around $8,000 a month.

Okay.

All right.

And

so, you know, that gets you a long way.

Are you fighting through any debt first?

No, debt free other than our mortgage.

Good for you.

All right.

And you have your emergency fund in place.

Yep.

Okay.

Then what we teach folks is to try to get 15% of their income going into retirement.

And so if you put,

if you're making eight grand a month, you're making $100,000 a year.

That's take-home pay, right?

Yes.

Okay, so you're probably making like $130,000, right?

Correct.

Okay.

And so, you know, we need to get this to about $17,000, but $14,000 is two of those.

Does your wife have a 401k at her work?

She will.

She is in between jobs.

She is currently being hired on to a government job.

Okay.

Or a federal job, I guess you would be.

Yeah, I would do a couple of Roth IRAs and just go to ramseysolutions.com and click on SmartVestor Pro, and that's the people that we recommend.

We're not in the investment business, but these are the people that we've checked out, and they have the heart of a teacher, and they'll sit down and teach you how to do this and put it together for you,

but teach you, put it in good growth stock mutual funds.

We suggest you spread it across four types.

It's what I do.

It's what George does.

Growth, growth and income, aggressive growth, and international.

Four types of mutual funds.

And you can spread those, you know, these two Roth IRAs across that very easily and start investing steadily.

You can have that automatically drafted from your checking account.

And it's just every month it's just going to, you know, your money's going to come home and then it's going to come out of your checking account as a budget item, right?

Okay.

And it's very easy to do, but you just need to learn a little bit about it from one of the Smart Investor Pros.

They've got the heart of a teacher and they'll walk you through this process.

But you're going to retire with a lot of money if you do that.

And then add another

few thousand dollars over in your wife's 401k at the new place and you'll be at your 15% and then you start working on baby step six pay off the house, right?

You said you're 32?

Yep.

Okay.

I just crunched the numbers for you.

From 32 to 65, if you just invest that 15%, you guys never get a raise, which would be very unlikely.

You'd have 4 million in that one account.

So I want to give you some hope that it doesn't have to, you can break the cycle that's been in your family.

And I think you guys are going to do that based on the way you're talking in this call.

And if he's half wrong, you've still got $2 million.

And he's not half wrong, I'm telling you.

So that's what steady investing does from 32 to 65.

Okay.

Yeah, you're going to be wealthy.

And just because,

and, you know, so,

you know, it stinks the way you got your wake-up call, but the good news is it woke you up.

Right.

So, yeah, make that call.

Get on Ramsey Solutions.

As soon as you get off the phone, get on Ramseysolutions.com.

There's $4 million on the line.

Let's get this done.

Yeah, click click on, you know, get your Smart Vestor Pro in your area that you like.

You and your wife sit down with them and begin a relationship that lasts 20 years, 30 years with your financial planner of sorts here.

And the Smart Vestor Pro will walk you through this and show you exactly how to do it.

And, you know, yeah, you're doing really good.

And the good news is you...

you caught this in time.

You know, you still got a lot of time on your side.

Yeah.

And the simplest strategy is five words.

It's match, beats Roth, beats traditional.

So if you have an employer match, take that first, then go to all your Roth options.

For you guys, that would be the Roth IRAs.

Then move to traditional.

And if you run out of buckets and you still haven't hit 15%, then you can move to a non-retirement account, if need be, to do your investing.

But that's a great problem to have.

Yeah.

If you've maxed out all of those accounts.

The eighth wonder of the world, Albert Einstein said.

Compound interest.

It's amazing.

Because I just said $4 million.

Only a half million of that was actual contributions that he's going to invest.

Did you pull that up on our site?

I did.

So

we have the calculator on our site.

The investment calculator, rampsolutions.com.

It might as well be my homepage.

I use it so often.

That's how much of a nerd I am, Dave.

It worked pretty good.

I like when math gives you hope.

When math makes you hopeless, it's not fun.

But when it gives you hope to show, oh, if I just keep this up over a long period of time, I'm going to be very wealthy.

But most people only see the short term and go, what's 500 bucks going to do if I invest it?

The first time I saw that, I have a finance degree, for God's sakes.

But the the first time I saw that, I was in my 20s and I was working and I went, oh, God, the power of compound growth, 100 bucks a month and I can be a millionaire.

I mean, really, I,

yeah, because it personalizes it.

It's me.

I can do this.

Changes everything.

Jessica is in New York City.

Hi, Jessica.

How are you?

Good.

How are you?

Thanks so much for taking my call.

Sure.

What's up?

So I recently became partner of a law firm in January of last year, and I leased my car prior to that.

And now my lease is up in December.

Around August last year, I became a Ramsey fan and started doing the baby steps.

And I'm curious, I have a K-1,

and I'm curious what your thoughts would be.

Should I continue to lease so I could get the tax write-off?

Or should I go ahead and purchase a car in cash for this next car that's coming up?

We got to work on this Ramsey fan thing part with you.

No, we're not leasing a car.

It's the most expensive way to operate a vehicle.

And a tax write-off doesn't make it smart.

You understand if you get a tax write-off for $10,000, it just saves you $2,500 in taxes, right?

You give the lease company $10,000, it saves you $2,500.

You're stepping over a dollar to pick up a quarter.

Yeah.

So we're, no, we're not keeping a tax write-off.

It's

trading dollars for quarters.

What are you driving, Jessica?

I'm curious.

Sounds like a nice ride.

Mercedes.

Oh,

boy.

What are you making a year?

$350.

Okay.

You're telling me you can't afford to just go outright buy a Mercedes in cash?

Well, I'm on baby step number two, so I took everything in my savings and I brought it down to $1,000 so I can pay off a boat.

Pay off a boat.

And

got all kinds of toys.

Yeah, good for you.

I'm proud you're getting out of debt, kiddo.

And part of your getting out of debt is you're going to turn the lease car in and figure out something to ride in until you can save up the money and get clear of baby step two and buy you a good car.

You make enough money to not be broke and you're on your way out, but let's not stay in debt.

And a lease is a debt.

You've already made partner.

You got no one else to impress.

You've made it to the top.

So what car you drive into the parking lot, who cares?

Yeah.

You own the place.

Congratulations.

You're doing really well.

You're on a good track, though, and no, we're not going to stay.

A car lease is the most expensive, mathematically, the most expensive way to operate a vehicle.

It's horrible.

It's just in a really expensive car rental business where you prepay all the depreciation with a bunch of restrictions.

That's one way of looking at it.

That's accurate.

Doesn't sound fun.

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Laura is in Seattle.

Hey, Laura, what's up?

Hi,

thank you so much for taking this call.

Okay, so I'm calling because I was laid off almost two weeks ago, and it was a bit of a surprise.

We had our

second child set to start daycare in in August, and they required a full month's tuition and deposit

like last year, like when we knew she was going to be born soon.

And so that was paid, and I knew that was non-refundable.

Anyway, oh, I should also say we are in debt, and we have like student loans, and we've been doing baby steps and using the Every Dollar app.

So, you know, right now, Every Dollar is...

is important to us.

And so anyway, we decided to give notice right away on the day that I got my layoff notice.

My mom, grandma, said she could help watch the baby.

And I just decided to enroll her for one month in August and then withdraw her at the end of the month, which falls into their 45-day withdrawal notice terms in the contract.

Based on our friends who are lawyers, they said this should all be good.

And the deposit would go towards the first month and the last month's tuition.

And that's, yeah, $3,400, which is a lot for us.

Anyway, talked to them after some emotional back and forth, realized they were not going to budge on this.

They demanded that we had to enroll her for a second month in September, at which time there would be a whole week off for a holiday, as well as a $350

increase in tuition, which I just was not willing to take the chance

based on the job market.

I'm sorry.

Wait a minute.

I'm sorry.

I got lost.

The contract said that you could go in August and half of September, and they're not abiding.

The contract was

45 days withdrawal notice.

Okay.

It was July 2nd.

And so we were going to be able to withdraw August 31st.

And then our deposit would pay for the last month's tuition, which in our case would also be first month's tuition.

Anyway,

it was emotional and it kind of

wasn't.

Well, based on the contract,

we had planned this and we just didn't think there was going to be a problem.

So why are they thinking they don't abide by the contract?

That's my question, exactly.

And

so it was really,

I was really confused why they weren't, they were saying that it said something else.

And we asked some lawyer friends and they said we were right.

So

I kind of sent this, you know, I tried to be as professional and clear as possible.

I sent a last email, included the board, and said this is done.

And I knew that I was really emotional because of the layoff, and I have two babies at home, and I just wanted to end it there.

My husband and I were getting really emotional over it, and, you know, I just wanted to like, I guess, protect our peace.

And I just knew that we could just unenroll and eat the deposit.

However, we have a lot of friends, both lawyers, Christian, non-Christian, who are all like, that's a lot of money.

You should fight them for it.

And I'm just trying to figure out if it's

just not worth it.

Okay.

Easy answer.

I mean, it's going to cost you that much in retainer fees to get the money back.

Right.

Okay.

You need to burn your calories, getting in a new job, not fooling with daycare, people that you don't want your kid with anyway.

Right.

If you can't trust them, then I don't trust my kid with them.

Exactly.

I mean, it's sad because our first child was there and we loved it.

So this was so.

Now you don't.

Now I don't love it because I don't like the people that are.

You've got a bad taste in your mouth if the people that run it are mean i don't want them watching my kids yeah yeah okay so one more question we had someone say you should because it's a breach you should just say like we're going to leave a review like a google review unless you give us a deposit back i don't know if i like does that

how do you feel about that that's fine i mean the truth is is that they didn't go along with the contract and if you lift the truth in a google review you know and you've got email proof of that.

But, you know, the point is, I'm not sure why it matters.

Well, that's what I was wondering.

You know, the amount just I don't think.

Do you think you call those people or you email those people and you say, hey, I'm going to leave a trashy review on you if you don't give me my money back since you breached the contract, since you didn't go along by the contract?

You think they're going to send your money back?

I don't.

Yeah, I don't either, I guess.

So then you just leave a trashy review.

I mean, yeah,

I don't think you're gonna get your money back here.

I really don't.

I don't think these people are gonna give you your money back.

You don't either.

All right.

I think you'll leave the review to vent, and they probably won't do anything.

They might respond to the comment and defending themselves publicly so that the internet can see it.

But I don't think threatening them over the phone saying, I'm going to leave a review if you don't.

Again, like today's point, I don't think you're going to get anywhere with that.

If I thought it'd give me the money back, I would, but I don't think it will.

Based on the other interaction.

That makes sense.

Yeah.

Thank you for that.

Maybe your friends take it on pro bono to help you out.

I don't know.

I don't know, right?

They go, hey, we're just going to write a letter saying here's what the contract states.

It sounds like their interpretation of the contract is different than yours.

Yeah, but it doesn't matter.

You're not going to put your kid over there in August anyway.

Yes, correct.

I'm not letting my kid go over there.

No way.

Yeah.

Yeah.

This is a blessing.

That's horrible.

You discovered bad people were getting ready to be watching your kid.

And so that's a good thing.

It's a good thing that this worked out this way.

So, yeah, you know, go get you another position and find some other child care, make other arrangements for child care, and go on with your life.

And dad, gum, I hate this.

I'm sorry.

It's just very inconvenient.

But it turned out great because otherwise you'd had your kid over there.

Oh, my God.

And then what would you have discovered two years later?

You know, oh, man.

No, thank you.

No, I don't.

Yeah, it's really, really good.

So, wow.

Myra is with us in Virginia Beach.

Hey, Myra, how are you?

I'm doing good.

How are you?

Better than I deserve.

What's up?

All right.

Okay, so basically I'm on baby steps two, baby step two,

in trying to pay down debt.

Now, my question is, I'm using the snowball method, but the question is, I have personal debt as well as small business debt.

Your small business debt is personal, too.

You signed for it.

100%.

So that's my question.

I have been solely focusing on the personal.

It's irrelevant.

It's all irrelevant.

So I should take the whole picture and apply the smallest.

How much business debt, in quotes, do you have?

Too much.

Roughly about $65, and it's including a very bad choice that I made last year in buying a new car, thinking I was getting a great deal because my husband works with dealers.

Yes, terrible decision.

Wait a minute, this is for the business.

Correct.

You have a car for the business.

Exactly.

What kind of business is this?

It's TechSix Repair Center, computer, cell phone, technology replacement, like screen replacements, computer repair, gaming systems.

Cool.

Sell the car.

Yeah.

I knew you were going to say that.

You're saying your husband works at the dealership?

He works at a car dealership, yeah.

Can he get you unhosed out of this deal you got hosed on?

Trust me, I'm looking.

When did you get it?

I'm trying to figure out the best

last year, July.

Okay.

Is it brand new?

Unfortunately, yes.

I mean, I did get it $8,000 under the price.

It doesn't matter.

It's stuck in a loan.

You know how the interest is.

It was a terrible, terrible, terrible debt.

Definitely would undo the terrible.

Sell the car for sure.

Okay.

So, yeah.

So take because it is considered all personal debt, so work on the snowball between the two.

Yeah, and how much personal debt do you have aside from the car?

Car and the other little business debt?

Roughly about 12.

I was I said my husband

well when you factor in all the interesting payoff on the car not the interest what's the payoff on the car

roughly 27.

Okay so you have 27,000 and other stuff on the business

correct okay all right and so basically we're trying to make better choices each of the household income location yeah what's your household income?

Household income combined is roughly 82 to 85.

Okay.

But I don't know if you can see that.

So basically if you sell the car, you've got

about $50,000 off.

If you sell the car, you got $52,000 in debt.

You make $85,000.

Right.

Yeah.

And so you've got 18 to 24 months to be debt-free.

Yeah.

That's your plan.

Sell the car for sure.

Don't overthink it.

Start attacking those debts, smallest to largest.

Get rid of this car.

It's not the deal breaker in the business.

Yeah, it's not.

It's not.

No screens are getting replaced with this car, I can tell you that.

Wow.

Our scripture of the day, Proverbs 15, 22,

plans fail for lack of counsel, but with many advisors, they succeed.

Al Rise said, you don't have to focus on everything to be successful, but you do have to focus on something.

Amen.

Morgan is with us in Wichita, Kansas.

Hey, Morgan, how are you?

I'm good.

How are you guys?

Better than I deserve.

What's up?

All right.

So I am 27 years old.

I'm a teacher.

And starting in September, I will have a raise to $50,000 a year.

I'm still living at home in my parents' house in their basement.

And I have no debt.

I am starting a master's degree, but I have the cash saved up for that already.

So the question is,

is it wise to, now that I have this raise, to go ahead and take the jump to living in an apartment?

Yes.

Okay, so don't wait to save up for a house.

Just jump right in.

You'll be there for 28 years.

Yes.

You'll keep saving.

You'll get comfy.

Mama's cooking's good.

The laundry is getting folded by someone else.

And for that reason, I would fly the coop.

Yeah.

I told him I was out by 30, like hard, like hard end, but okay.

Out by fall.

Yeah.

You got this.

Do what?

Get some roommates if you want to.

Get some gals and, you know.

Yeah.

And make it happen on the ground.

I've had a lot of struggles finding communities.

Like, so the roommate situations never actually worked out, but it's finally able to where I think I can find an apartment I think I found an apartment that is in a safe area that I can actually afford good good for you yeah I think I think it's going to change your life yes it's the next stage in your

your maturity and your development and it's going to affect everything else you're doing in a positive way

taking on the the responsibility of being head of household.

It's going to be wonderful for you.

You work harder at your job.

You get better at relationships.

There's something that changes when you're on your own that is just good for you.

I'm excited for you.

It's time.

And you'll get to home ownership.

I have no doubts.

Oh, no question.

You're a planner,

and you're a teacher.

Thank you for doing that, by the way.

Very cool.

Sarah is in Oklahoma City.

Hi, Sarah.

How are you?

I'm home.

How are you?

Better than I deserve.

What's up?

I've been doing the Rainfree Plan for several years.

I was diagnosed with a disease that was going to make our house not feasible.

For me, everything was upstairs, so we were going to have to change.

We looked around for something, and there was nothing that was not going to be extremely expensive.

So we opted for a HELOC, which I know is against your rules, but it was the cheapest that we could do.

And so now I'm wondering: what baby step am I on?

Is a HELOC actually baby step two?

Or

well, if it's is it how much is it?

I had $50,000 saved up.

How much is the HELOC?

The HELOC is $67,000.

Okay.

What do you guys make?

About $110,000.

Okay, it's a mortgage then.

It falls in baby step six.

Okay.

The rule we use is if it's less than half your annual income, we put it in baby step two.

But it's more than half your annual income and uh what's your first mortgage balance

um twenty one thousand

okay and what's your interest rate on the halock

um six point two i think and my mortgage is three point one yeah well you didn't get any mortgage you got twenty one thousand

okay um

Do you have any other debts?

Only that we have.

No, we have no other bet.

Okay.

I'm going to plow through both of these pretty quick then,

even though they're baby step six.

That's my plan.

Yeah, because you don't have much balance here.

So, I mean, 80 grand and you own this house, right?

Right.

Or 90 grand, really.

88.

So, yeah.

Yeah, I'm going to get after that.

That's what I'm going to do really, really quick.

Emma's in Minneapolis.

Hi, Emma.

How are you?

I'm great.

How are you?

Better than we deserve.

How can we help?

Awesome.

Okay.

So my husband and I, we're young.

We're 21 and 22.

And I know I've heard you say that you can pause investing for two years and save up for a down payment.

I'm wondering, I want you to tell me exactly what you think we should do because right now

we are only investing about 4%,

but we're saving the rest for a down payment.

Should we stop investing completely?

for a down payment.

What's your household income?

Right now it's flexible because we're both in college, around $50,000 to $75,000.

You're in college.

Correct.

When will you graduate from college?

We both have one year left.

Okay.

And you're going to save until after you graduate and after you get jobs to buy a house.

Well, we're both working right now.

But I mean, you're going to

are you going to stay in the jobs that you're in after you graduate from college?

No.

Okay.

We'll probably upgrade to better paying

career jobs.

And maybe in the same location, and maybe not.

So do not buy until you graduate and do your job upgrades.

Well, we don't plan on buying for about two years.

Okay.

All right.

I'm just making sure we're

that's part of the program here.

That's part of the no, I would not buy a house while you're in college, is what I'm saying.

Yeah, I know.

And even after that,

it's like $75,000, so 4% is $3,000 in a year.

It doesn't matter.

$3,000 is not going to make the swing one way or the other.

Okay.

Because, I mean, we could do 15%, but our goal is $100,000 down payment.

Yeah.

But three grand is not going to make the goal.

Yeah.

You said you're saving 4%.

Should I stop that?

Yeah.

Yes or no.

I don't care.

Because it doesn't matter.

It's not a majority.

It's not enough to matter.

To get to that $100,000 mark.

Yeah.

Or for compound growth,

your income will increase, and your savings rate will be the key that gets you there versus a percentage.

So you could do 0%, you could do 15%,

and it's going to slow down your home progress.

But at your age,

she's asking, should she stop doing 4%?

I would just keep it.

It doesn't matter.

Yeah, it doesn't matter.

If you want to stop it, it's fine, but it's $3,000.

$3,000 doesn't equal $100,000.

So it doesn't get you to your goal by stopping.

If you want to keep doing it, it's fine too.

It's $3,000.

It's not a lot of money.

So you're going to get there.

And your long-term goals, you're going to hit all of them.

But this 4% is not going to make or break this decision one way or the other.

So you're right on track on that stuff.

So again, George, let's go back.

So baby step one is save $1,000, beginner emergency fund, or reduce all of your savings down to $1,000 and throw all of your cash, not counting retirement, at your debts.

Baby step two is pay off all your debts, smallest to largest, using the debt snowball.

Three is have an emergency fund of three to six months of expenses.

At that point is when you would start saving for a down payment.

And so, what she's bringing up is what we always call baby step 3B.

How much do you do you go on to baby step four and put 15% into retirement, or do you put a little bit in or none in?

It's completely up to you, is what we say.

And what you were pointing out is the more you put into

your baby step four,

the less down payment savings you have.

Her amount that she could reduce her baby step four to zero, not put any towards retirement, would change the equation only by $3,000.

So that's my point on that.

It doesn't matter.

But our overall point is save up for a house as fast as you can.

And they're going to do this very, very young.

They're coming out of college.

They're already making $75,000 between the two of them.

And then they're going to come out of college, get upgrades and jobs, and they've got a good savings goal.

So they have great long-term plans.

I'll be very impressed.

If they save up $100,000 in two years, I mean, they're living like they're broke college kids even after college.

And so if you make that sacrifice, sacrifice, they're going to be homeowners by 23 and 24 in a good financial position.

Strong down payment.

So this is the benefit of working hard to graduate college debt-free with money in the bank, with a marketable skill and a job on the other side.

This is

very well done.

Poster children for how it should be done and a very logical analytical question with the baby states.

Yeah, very good.

Always good to take your percentages and convert them to actual dollars.

It helps you go, oh,

that's the answer.

I'm losing the match.

It's three grand.

You'll be okay.

You'll survive.

Not the end.

When you're 21 for sure.

That puts us hour of the Ramsey Show in the books, and 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.

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