You Can’t Build a Future on Borrowed Money

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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.

Dr.

John Deloney, PhD in counseling, Ramsey personality, number one best-selling author, host of the Dr.

John Deloney Show on Ramsey Networks.

He's my co-host today, open phones here at 888-825-5225.

Josh is in Orlando.

Hey, Josh, what's up?

Hi, Dave.

How are you today?

Better than I deserve.

How can I help?

I have a quick question.

My girlfriend and I, we've been together for a little bit under a year and a half, and we're finally starting to have that talk about moving in together.

Now, I am 25, I make a $100,000 salary, I'm doing well for myself.

She's actually a teacher, so as you can assume, she's making

less than what we would wish she was making.

So when moving in together, the conversation arose of, hey, if I move in,

we'll be splitting 50-50 everything because we aren't married or anything like that.

And you'll have extra free money to spend.

I'm currently on step two, so she asked me what that extra money would go towards, and I said debt.

Her response was a little unnerving in the fact of she said, well, technically you're saving that money because of me.

So I feel like that money that you're saving should go into a savings account for us and our activities, since you wouldn't be saving that money if we weren't living together.

Wow.

What a mess.

I kind of understand where she's coming from because she is helping me save money and that money is paying off debt.

But at the same time, I feel like that's not necessarily like a healthy mindset because overall, even if I do put that money into a savings account.

The problem, Josh, is you are trying to do a married thing without being married.

Fair.

And so you're trying to solve a riddle that cannot be solved.

So you want a roommate that you sleep with, but you don't like their answers about money.

And she's totally exposed if she moves in with you, pays off your debt, and then you break up with her.

Right.

That's fair.

Yeah.

That's fair.

Yeah.

If she's my daughter, she'd be crazy to me.

Let me ask you something.

If you're ready to move in, why don't you just get married?

I've got a couple.

I'd like to be debt-free.

I'd like to have a house before we get married.

Why?

Just go ahead.

Neither one of us were.

Yeah, I wasn't.

That's fair.

That's fair.

You just said it would help you get to those things faster.

Agreed.

Her or us moving in, yes, would allow me to.

Marriage would, actually.

Moving in won't.

Moving in actually sets you back on several fronts.

The data is horrible on living together.

It's

the relationship data and the financial data sucks.

And so...

you know it just doesn't it sounds all cool but i i mean i'm serious if you were my son or she were my daughter I would tell you, don't move in together unless you're married.

And because the data tells us that your marriage is going to be better, your relationships are going to be better, and your finances are going to be better.

Now, that kind of was not what you called for.

And here's the other thing.

Here's the bigger red flag for me.

Because

you're doing what feels like culturally is the next logical step, even though the data says don't do that, right?

Fine.

The bigger issue is, is your girlfriend threw a great flag, which is, I don't want to be a commodity on your journey towards your goals.

If we are going to do something, and she said, she tried to get there.

And I would challenge her on how she tried to get there, but she tried to say, hey, let's save up for us when I am not a cog in your system to get your finances under control.

When they're our finances, that's a totally different question.

And so my bigger concern is she threw a flag and and you're trying to end around it instead of dealing with the real issue, which is you have a girlfriend that doesn't feel safe in this relationship or she's feeling used in this relationship.

And

at least a little bit.

Let's have that conversation.

Yeah.

And then also, so I really would, you know,

my challenge to you would be as, because I love you and I want you to win.

would be let's reset our thinking, our decision-making framework here.

And what would it look like?

And what would the timeline be for us to get some pre-marriage counseling, get engaged, and get married?

And it doesn't, you don't have to do two years.

I mean, you could do that in a month

if you want to.

You know, you've got to decide what you're going to do and

the wedding and the production and all that crap.

But the technicality part of it is, without the drama, is that.

Because here's the thing.

We do know, the data tells us that

people that are married.

in their 20s have a substantially higher net worth than people who are shacked up in their 20s when we revisit them at age 40.

We do know that.

And

it's because of exactly the problem you're facing is that you're trying to pull together, but you're not really together legally, financially, because you're both exposed.

If either one of you wants to walk off, let's say you bought her a car and gave it to her.

and she wants to walk off.

Well, she's got a car.

If you buy your, if you and your wife buy a car that she drives and she wants to walk off, there's a thing called divorce, and then we discuss what happens to the car.

Right.

And so

financially, legally,

and then that's the overtone.

Then the underbelly of that is it drives your relationship much deeper because you are aiming at the future together.

You have a very clear idea of the house we're going to build that's going to have the golden rocking shares on the porch when we're 92.

And the household that we're going to build.

Yeah, and then that's when your debt becomes y'all's debt.

Yeah.

And then she's all in because y'all are building this debt-free future together.

She's all in on all of her money and all of your money are going towards paying this.

Because it's now our money.

Right.

But until you're married, it's not our money.

So that's the problem.

It's a real challenge to do shacking up well.

And the data shows us that the divorce rate is higher for people that have first lived together.

The wealth building is

worse for people that live together than people that are married.

Even health issues.

We're even seeing men live, what is it, seven to ten years longer

than married men?

Eight to ten years longer, yeah.

Women live four to five, which is fair.

You have a theory about that.

Well, that's not a theory.

I actually dug into why do men live longer, and it said

the statistician said because men do fewer dumb things when they're married, especially as they age.

So, I mean, there's a there's some truth to that, but death-defying feats of stupidity.

Yeah, okay.

Women live longer, too, but only about three years longer.

I know.

Married women live longer, married men live long.

Every woman in the audience, we talk about that, they all be like, Yeah, we can see dying earlier because we've had to deal with you.

I get that.

Actually, 75% of the ladies outlive their husbands.

Yes.

That one we do know.

That's another one.

So there's some interesting stuff in here, folks, that you can think about.

So there's socioeconomic.

The thing is, when we try to take personal finance, and I love to do it in the early days when I first started doing this, this, and just do math,

it doesn't work because personal finance involves all the personal stuff, like relationships, your spiritual walk,

how you take care of your body, your career, and how diligent and excellent you are at your work ethic.

All of these things end up weaving back into your finances.

And so you can't take the finance piece and just set it over here on the table by itself and analyze it in a vacuum because that's not where it exists.

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

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Bridget is in Toledo, Ohio.

Hi, Bridget.

Welcome to the Ramsey Show.

Hello.

Hi.

How can we help?

Hi, I'm calling because I have an issue that's going on with my car situation of the vehicle I purchased, and it is still not cleared, even after year number seven.

Okay, explain to me what you're talking about.

Okay, so I have a 16-fold fusion that I've been paying on since 2017.

At this point, my loan was supposed to mature back in 2023 of April.

We are now in 2025 of July, and I owe more than what the car is worth.

And I need to figure out what I actually owe

in terms of all these late fees and extensions that we're taking out.

Okay.

So basically,

is it a Ford Motor Company loan or is it a high interest rate loan?

High interest rate loan.

Okay, so you're dealing with a subprime company, and you had a bunch of late fees over the years?

I did.

Okay.

And those have not been paid, so they've been added to the balance?

They have.

Okay.

Is that what the balance is then?

Or, I mean, is there something else wrong?

Not to my calculations, no.

The amount that they're coming up with, I don't know where they're getting this numbers from.

I have a full printout of all of my payments and late fees and the repossession that was on the account.

And it's still going to be a lot of money.

They repossessed

They did for one day.

Okay.

How much are they telling you you still owe?

$17,494.31.

You still owe that?

That's what they're saying.

That's what I need investigated.

Yeah.

Have they printed you an itemized list of all the fees and how they've added up and how they got that

Not how they're added up, but they did print all the payments and the fees so far.

But I believe there is some missing because the information that I received from the company themselves, calling them numerous times to try to get information, I came up with these numbers on my own with the printout that I've been asking for for over three months, and I just finally got it.

Yeah, but they're not giving you a printout of what you actually owe.

Correct.

Yeah, they mean they have to give you an itemized bill if they've continued to jack up the...

Well, you've got two options, okay?

What you're wanting is to solve for the truth of what is really owed.

And

your guess is, based on your math, that it's not 17, but that you do still owe something because you've got a bunch of late fees stacked up, and you probably got some repo charges stacked up in there as well that were not paid at the time of the repo.

That's my guess.

So

you're thinking that there's somewhere south of $10,000 owed, but something is owed.

That's what you're thinking, right?

Not that much, but yes, that is true.

I said south of $10,000.

We don't know how much south.

Correct.

Between 0 and 10, right?

But it's not 17 for sure.

But in your mind, because of the math you've done.

Okay.

And what was the interest rate?

The interest rate that I had on the car was

18.95%.

Okay.

All right.

You have two options.

Well, you've got three options, and one of them is not a good option.

So you have two good options.

One is continue the fight that you're doing, and your frustration is real, and I go along with your frustration.

You're dealing with a subprime lender.

They loan money to people who have bad credit.

They loan money to people who don't pay their bills.

They are not usually nice to work with.

You have figured this out.

Okay?

This is not news to you.

You already knew this.

And so

they're three notches above a loan shark.

And so and two notches above the tote the note guy down in the bad end of town that rips people off even worse.

But they're for sure, it's not a clean business.

And it's people who aren't as business-like as you would get in a different situation.

And you've already discovered all that.

So your frustration is real.

You've either got to plow through that and get to the bottom of this, dealing with the morons and incompetence and the I don't cares on the other end of the phone, or you've got to hire a lawyer.

That's your second option.

Hire a lawyer and sue them.

For $17,000, I'm suing them before I walk away.

Okay, that's another option.

I would try and say, I'm going to devote one more month to this, getting to the bottom of this.

And if you guys can get me a number that we can agree on, I'm going to get it paid off.

But guys, I got to get that.

And I'm going to have to, apparently, I'm going to have to talk to somebody's boss over there to find two people.

Somebody has two brain cells to rub together.

So

let's just keep pushing and fighting for a month.

If you can't do that, then you say, at the end of a month, if I can't get you guys to get to the bottom of this and together we figure out what is really owed and why and come to agreement on that so I can get this paid, then I'm going to hire a lawyer and I'm going to sue you.

Okay?

Understood.

And if that doesn't work,

the third option, which is not a good option, is toss them the keys.

Tell them to come get it.

Yes, that can be explained.

Yeah, tell them to come get it and sue me.

Good luck with that because I'm going to counter sue you.

And we'll see how that repossession thing goes.

You're going to get nothing if you do that, people.

And so I can do that, but I don't want you to do that because two things happen.

One is you further destroy your credit.

And two is you lose control of the amounts and you start having to negotiate based on their weird numbers, not real numbers.

And how about just the fact that I just want my car?

I've been paying on it all this time.

Well, that's fair.

I don't want to keep it.

That's fair.

But you don't want that car for $17,000.

Absolutely not, because it's not even worth that.

I got that.

I don't want that.

So there is a point at which I don't really want this car, that the principle doesn't matter.

Okay?

The principle of the thing doesn't matter, not the principle of the loan amount.

Now, last question, our last point to be made.

I want to make real sure, because when I do something like this and I've done stuff as dumb or dumber than you did when you bought this car at 18 freaking percent interest rate, have you learned your lesson?

Are you ever going to do this crap again?

No, Dave.

I'm going to pay cash.

That's right.

Okay.

Yes, Dave.

Thank you.

Love you, darling.

Thank you for calling.

Wow.

Because let me tell you, when you get...

If you do 18% interest, it's because you were scared.

Oh, yeah.

And you didn't think there was anything else life.

There was no way, no, you feel trapped.

No way these things come out of your mouth that are not true, and you start making these absolute fatalistic statements.

I've been there, I was forced like they had to carry it to get a new car.

I had to get a car, and let me just tell you: there's two dumb things in this: a Ford fusion and 18%.

These are two dumb things in one sentence, right here.

Unbelievable.

I'm surprised the dadgum thing lasted seven years.

Yeah.

But oh my God, what a piece of crap of a car.

And at 18% interest.

And I guarantee you.

It's like buying a Dodge Neon.

You know,

one of those square Kias that are like

cars, man.

But here's the thing.

If you miss your payment, I guarantee you that rolled from 18 in the fine print somewhere.

It went up to 34% or whatever.

I'd be willing to bet that.

They may have done that.

They may be carrying a higher interest rate on the unpaid late charges.

That's right.

There's a possibility that's in the contract.

Yeah.

Or there's a $10,000 repo fee that got lumped into the paper.

Because when you sign something that stupid, you don't read it.

Right.

I mean, relief.

You literally drive off relief.

If you tried to read it, you know, I just want, just give me some wheels.

I got to get to work.

This other one keeps breaking down.

It's a piece of crap, and it's costing me so much.

It ain't costing you nothing like Ford Fusion 18% money.

I'm just saying.

That's some serious money right there.

And so, oh, my God.

What a mess.

Bless your heart.

I've been there.

Guys, when you do something stupid, here's the thing.

It doesn't mean you're stupid.

It means you did something stupid.

I've done stupid with zeros on the end.

I've got a Ph.D.

in DUMB.

The trick is, my goal has always been, and it's worked real well for me, is don't do the same stupid thing again.

At least learn from it, in other words.

Now, I might do new stupid stuff, but I've got a whole list of things that I don't do anymore.

And not doing all of those things has helped me become wealthy.

Just all the stupid stuff I used to do that I don't do anymore.

You know, just I don't do that.

And I don't do that.

Why?

I don't really have to explain it.

I don't do that.

We don't do that.

We don't do that.

Nope.

We don't do that.

100% of the time we tithe to our church.

100% of the time we don't borrow money.

100% of the time, Dave and Sharon are in agreement before we buy something.

Because when I do something without my wife's agreement, she does something without my agreement.

We do stupid stuff.

And so this is, this is, these are basic things that I've learned over the years.

And that's why we have this show to help you guys do them.

Statistics show that half of Americans don't have enough life insurance or they don't have any at all.

I don't understand this, John.

Why don't people want to take care of their family?

They think they're going to die or something.

Well, I used to be one of those guys, I didn't even think about it.

And one of my buddies said, Hey, the only reason to not have life insurance is if you hate your wife and kids.

And I immediately went and got term life insurance.

That's a gut punch.

And oh, you're telling me, and for decades, Dave, I've sat across people who've lost a spouse.

They've lost somebody important to them.

Me too.

They don't know what to do next.

Me too.

I mean, you're going to have a crisis here.

And, you know, you got two options while you're sitting and talking to a young widow.

She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow.

That's exactly.

These are the two options.

And terms are your dadgum family, man.

Term life insurance can replace income, pay off debts, cover funeral expenses, so your family can actually have the opportunity to just be sad.

Yeah.

To just miss you.

That's exactly what it's supposed to be.

It's saying I love you to your family.

Term life insurance.

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Jeremy is with us in Los Angeles.

Hi, Jeremy.

Welcome to the Ramsey Show.

What's up?

Hi.

I'm calling because I have a net worth of negative $280,000 after a vendor in my business filed for a Chapter 7 bankruptcy after we did a job that we were expecting to get paid around $2.4 million.

I'm calling to see because I've always been in business.

I've never really held a real job.

And I'm trying to see if bankruptcy is a good option because I can either take on more debt because it's a low margin business to continue to do these piping jobs, or I can figure out how to work off a large amount of debt.

I have around $330,000 in personal debt and $50,000 across six months of living expenses, my 09

Ford F-150 and a Roth IRA.

Okay, so

I'm sorry,

$2.3

million, and you were $280,000 in debt, is not low margin.

That's high margin.

I'm sorry.

The job costs $2.1 million.

I spent all the liquidity that I had and in the business to try to get a lot of money.

Oh, so you put 2.1 million on the table to make 2.2 to make $100,000?

To make $2.4

to make $200,000.

The margin is like $17.

With no draws and no deposits.

Yes, I personally lost $2.1 million completing this job.

It's around

17% margin if you don't include credit card points.

With credit card points, it's around 18.5% to 19% margins.

Okay, but you did not take a single draw or get a deposit of any kind from this customer.

No, they're filing Chapter 7 right now.

I mean, how many of these jobs have you done like this where you put all your chips on the table and then one hand comes up bad?

This is the first time a hand came up bad?

Or you just w this is the biggest one you've done?

it happened before with a much smaller job but i was aware that the company

like this company had very good um credit and we took most of the um yeah how you how old are you paid at then because they were much i'm 23.

this

okay all right so it sounds like i should just probably

i mean i'm very i'm very um much in the faith

I

was like, okay, it makes the most sense here to declare bankruptcy instead of taking on more debt and continuing to do the business or

trying to work this off.

Most of your other jobs were smaller jobs.

How did you start with no money?

I was just the person who bid the smallest amount of money on jobs.

And so probably the industry standard for margins is a lot like 25 to 30 percent.

Yeah, and the the industry standard is you don't be the bank for contractors.

That's the industry standard.

You get draws as a job progressive.

This is a very large aeronautics company.

The industry standard is you don't do that crap because you go bankrupt when they go bankrupt if you do.

That's the problem.

You had bad business practices.

And I don't want you to extend those going forward.

So I've had trouble with collections, and when I have trouble with collections, I blame me, and I change the terms.

I'll give you an example.

A long time ago, before you were born, there was a thing called the dot-com bubble, the first time the internet took off

around the year 2000.

And there was this huge bubble, and all these dot-coms were buying ads from us, and then they were going broke.

And so I figured that out.

I'm like, okay, I'm not doing that anymore.

So if dot-com is in the name of your business and you want to advertise on the Ramsey Show to this day, you prepay.

I'm not going to be your stupid bank because because you're not dependable if dot-com's in the name of your company and so you figured out here that sometimes this crap happens and so you'll never do this business this way again there's no business no amount of business that's worth putting everything on the line for it you did learn that lesson didn't you

of course good okay i'm just making sure so then we say how can you go make money

what is your fastest way to go make good money again because obviously you're a high-capacity 23-year-old.

You've done amazing things for somebody your age, even though you stepped in a big old bear trap and it ripped your leg off.

But you still did amazing things.

And so

I would have to make it.

What's the best way?

What's the best way for you to go make the most money the quickest?

I'd have to take out more dot.

Okay.

Maybe we're not listening.

All right.

Let's try again.

We're not borrowing money to run the business has not been a blessing to you, sir.

Correct.

Okay.

So we're going to say we're going to run a business with this huge brain of yours without borrowing money.

What is the fastest way for you to go make money?

Your entrepreneurial genius.

Even though often,

okay, I understand.

I have trouble because I'm new to the business.

I've been in business for about one and a half to

I started two years ago, but I really actually like I'm not sure my first employee thank you

you'd have been 14.

okay so

how did you get two million dollars

right

um

i we just we always were the lowest we didn't bid the lowest below other low bidders but you made you did a bunch of jobs and you made money

yeah okay

and oftentimes you like they'll pay for half the job up front

but it's still

what yeah there we we go.

Now we're talking.

Okay, but that's not enough to complete the full, like I'd have to ask for well if you're the low bid I'll give you guys the low bid if you will not make me also be your bank.

Okay.

If you will put money up front, we'll order the materials and get the people on the job.

And then I need a draw as we go along

so that I'm, you know, and the profit you can pay me at the end.

But you got to cover my costs with cash flow as we go along.

One or two draws on on the job.

And so that's not unusual in the construction business.

I'm sitting in a building, a couple of buildings here, 600,000 square foot under roof.

100% of this was cash flowed by me, not the contractor.

Every two weeks, we would sit down and have a payment schedule as to the work that had been done, and we paid them, and then they paid the bill.

They did not bank any of this.

Right.

I have some concern about my reputation not being large enough for people to be willing to pay a significant portion up front.

How many jobs did you do to get $2 million?

What's that?

How many jobs did you complete to get that first $2 million in two years?

I've done about 30 jobs.

Okay, you can't find 29 other people besides the one that just screwed you?

You can't find 29 other people to say this guy's good?

Of course you can.

That would vouch for you.

I can.

Your reputation is much better than you think.

You're 21 years old.

You earned $2 million in two years.

That's astounding.

And so if you only earn $500,000 in the next 18 months profit, you pay off the 280 and you have a really nice life because you do one-fourth the number of jobs on our new payment schedule that we just laid out.

You can't get as many jobs.

A, maybe your reputation is tarnished by this.

Maybe, maybe not.

But somebody believed in you, Jeremy, and I think you need to believe in you again.

I think you did a lot of things smart.

You did two things dumb.

One is you believe debt was your way up, and two is you bet the farm on one company because they were a fancy, pantsy aeronautics place, and you found out fancy, pantsy places go broke too.

And I also have to believe that your reputation that you think you have

is an older, a group of wiser construction folks that took advantage of you.

And it felt good.

They patted you on the back, but they knew they were taking advantage of you because they know the game.

And it wouldn't surprise me if somebody chapter seven their way around paying you back because they knew they could roll over on you and not lose their future ability to hire other contractors.

And so, this thing that you think is your

best bet, is your best attribute, I bet was used against you.

Could have been.

Could have been.

Yeah, you can pay this back because you have high capacity.

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Diana is in Lubbock, Texas.

Hey, Diana, what's up?

Hi,

I just had a question for you.

I just had one of my vehicles totaled out by the insurance for hail damage,

and I still have a loan on it.

And they're giving me the option to maybe buy it out

just because it is totaled by

the hail, but

it still works.

It's just not pretty looking.

And I'm just waiting for also for my gap insurance to approve it to see if they would cover, because I still owe

$20,000 on the truck that I have.

Okay, and so they're going to pay off the truck and take the truck between the gap insurance and the hail damage, right?

Yes, if it gets approved, because um unfortunately, um the first time I had hail damage, we didn't use all that money to fix the truck, so they're using that

against or they took it off the value, so it might interfere with the gap.

So I'm just waiting for them to give me an answer on that.

Okay, so you're not sure if you're even going going to get enough to pay it off?

Yes, yes, sir.

Okay.

The problem is once they declare it total, it goes to a salvage title.

And so reselling it

is very difficult at any stage.

And you're dealing with a $20,000 or $15,000 truck.

You're not dealing with a $3,000 truck.

If you're dealing with a $3,000 truck, yeah, maybe drive it until it finishes dying.

But $15,000, you got a lot of life left in that thing.

A lot of time to drive ugly around town.

And

no, I think this is your get out of jail free card.

If I'm you, I'm going to pay it off and let them have it and move on with my life if you can get completely clear and then take a few, scrape together a few dollars and buy you a hoop tee until you can save up some money and get a decent car

and get out of the get out of the vehicle debt business forever.

Okay.

This is your chance to be free of a $20,000 loan.

Yes,

I hear you.

We do have another car that's paid off, but I'm a stay-at-home mom, and so my husband works two jobs, so he's using the car.

I don't ever have time to go out or do groceries or do anything.

Yeah, but I'm not saying live on one car.

I'm saying get you a cheap car to sit in the driveway to do grocery shopping with.

And then save up and pay you.

Because the stinking truck payment was what 500 bucks

yeah about 600 yeah 600 bucks a month so in 10 months that's six thousand dollars

okay that's not a bad truck no

and so go buy you a thousand dollar garage sale car to drive around somewhere and then save six hundred bucks a month and go buy you a decent a good a decent truck

for six grand uh and then go do it again and then go do it again for the rest of your life you pay yourself yourself car payments and buy a car with cash that's called saving money yeah okay so just buy it with with cash because my my credit is not that great because no more borrowing money we're getting out of the car payment business okay okay I hear you you called Ramsey we're not gonna tell you go get a car payment

yeah yes this is your get out this is your chance to get out of car payments you're stuck in a $20,000 truck that you didn't fix the last time it got hit with hail.

Yeah.

And now you might be free.

You pay $600 a month to go get $400 worth of groceries, don't you?

Yeah.

Yeah.

That's madness.

Don't do that.

Yeah, it's time to get out of that world.

It's time to stop.

And no, don't.

There's no deal to be made here.

What you want to do is fly and be free.

If I'm you.

There you go.

Tim is with us in Philadelphia.

Hey, Tim, what's up?

Hey, guys.

How are you doing?

Better than I deserve.

How can we help?

You guys have been a huge blessing to my family and our church hosts FPU classes.

So we're very thankful for your work, your ministry.

Just made a big difference in our life.

I got a question for you.

I'd love to hear your perspective on it.

So I'm one of two pastors at my church and I came here about eight years ago.

And at the time, they offered me two packages.

I could take a higher salary.

and find my own housing or I could take a lower salary and live in the parsonage with all of my housing expenses covered.

So at the time, I chose the higher salary.

We bought our own house and the idea was I wanted to build some equity.

Yeah.

So here we are about eight years later.

We've pretty much remodeled the whole house.

It was a short sale when we bought it for $115, which you can't even get a shed for that these days.

And I could probably sell it for about $220, I would guess.

The question I'm wrestling with is the parsonage is still available.

and I'm trying to decide if it would be a better move long term to stay put and pay down our mortgage or to sell the house and tap into that equity to invest or boost our retirement savings.

And I'm not quite sure which way to go.

I would stay in the house.

To stay put and pay it down?

Unless they're going to make the numbers so unequal that the parsonage is.

But it doesn't sound like that.

It sounds like the parsonage is a break-even with the other,

and then you have no equity,

no property going up in value.

So pastors that live in parsonages throughout their whole lives have to save money to buy a house at the end of the story

anyway, because you become homeless at the end of the story.

And, of course, we're talking 20 years from now or whatever, and house prices have gone zoom, zoom.

And you have to save money.

You have to have a mutual fund labeled house payment or house purchase for the end of your when you retire and don't live in the parsonage anymore, and they give it to the next guy.

And so you've got to offset that with investments.

And so if you're going to do that, you might as well live there because the housing allowance is you've got a great deduction on that anyway while you're there.

Let that thing grow, grow, grow, grow, grow, grow in value and be part of your investment portfolio, the fact that you own a great home.

I would stay right where you are, my man.

Okay, so the idea that we were wrestling with is basically, you know, having that lump sum available and how fast we could get ahead with that versus the...

You don't get ahead any faster with that than you do owning the house.

You're just borrowing from future you.

Mutual funds are going to go up in value.

Houses are going to go up in value.

Hey, that's pretty simple.

So

long-term play, stay put.

Well, we're entering into baby steps four, five, and six.

We're going to invest our 15%.

Be happy with that.

Yes.

And the grass is not greener on the other side.

Yes.

Yes.

Well, we talked to too many people who are 70 or 65 or 58 and just got fired or let go or their church closes and they've been living in a parsonage and now they have nowhere to go.

And they got paid $22,000 a year plus quote-unquote free housing and now they've got nothing.

But that lump sum that you took out, it would have grown to enough, to your point, to buy a house at that point.

But it's not going to do anything else for you.

It doesn't create more wealth than just owning the house does.

And owning the house gives you a lot of other flexibility,

you know, in terms of,

you know, when you're in a parsonage, the church holds two things over the deacon board, the elder board holds two things over your head, your job and your home.

If they just hold your job over your head, then it's a different discussion in some of those meetings.

But if they got your home too, it changes the flavor.

And so it and it changes, you know, the flavor of that discussion changes from denomination to denomination, too.

There are some denominations that do a lot more parsonages,

but most standalone evangelical churches have gone away from that model.

They're not doing parsonages.

That's more of an old-line denomination of some kind, typically Methodist, Presbyterian, something like that, where you're going to find a parsonage.

There's exceptions to that, but I'm talking about it in the we deal with about 50,000 churches in America right now.

And so that's been our experience.

So

I just like the, I like keeping everything real clean, and you guys own your house.

And it's going to go up in value.

And like you said, be patient with the 15%.

Baby Step 4, you're going to turn out beautiful.

And Tim, thanks for your service.

Thanks for your service to the community and for your walk with God.

We appreciate that.

We need men like you in the parsonage, in the pastorate.

And so honored to help you, sir, any way we can.

This is the Ramsey Show.

Let's get real, folks.

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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.

Dr.

John Deloney, PhD in counseling, host of the Dr.

John Deloney Show, Ramsey Personality and number one best-selling author is my co-host today.

Sid is in Phoenix.

Hi, Sid.

Welcome to the Ramsey Show.

Hello, Dave and John.

How are you guys today?

Great, man.

How can we help?

So I'm 32 years old, married with two kids.

So recently, the solar salesman came knocking on the door, said, like, oh, the solar credits are going away after the big, beautiful bill.

I'm kind of in a situation whether I should go solar before the tax rate goes away or just pass on the opportunity and then just let it go.

Okay.

Yeah, you're right.

The credits on solar panels on residential go away at the end of the year, and the tax credit for them.

Solar panels are excellent in some areas of the country, and it depends on two things.

Obviously, sunshine and high cost of electricity.

If you live in an area like Phoenix, has a lot of sun, and you have a high cost of electricity, you can break even on a solar panel purchase fairly quickly.

And if you do, then solar makes sense.

It never

makes sense to buy solar on debt.

Do you have the cash to do this?

Yes, sir.

I don't have any of the debt except my mortgage.

Okay.

And you have the extra cash to buy the solar panels.

Yes, I do have extra cash.

I have cash sitting around.

I was planning on putting that towards my mortgage.

Yeah, that's fine.

What was the bid on the solar panels?

How much?

Before tax credit, it was $31,000.

And what's your home worth?

My home is worth $610,000, and I have $400,000 left on it.

Okay.

All right.

So you have an extra $31,000 laying around to do this?

Yeah, I have $35,000 sitting around.

You're not counting your emergency fund.

No, I have a separate emergency fund.

Okay.

All right.

I'm just making sure, because sometimes I ask these questions and get different answers.

Okay.

Did they run a break-even analysis after the tax credit?

Because after the tax credit is your real cost, because you get a full tax credit.

Yeah, that will be $22,000.

Yeah, and then how long does it take for you to get $22,000 back in energy savings?

I did a quick map.

It's taking around 8 to 9 years.

Don't do it.

I guess our buyback rate is don't do it.

Yeah.

Solar needs to have a break-even of six years or less.

Okay.

And here's why.

Here's why.

Let me explain why.

Here's why.

Solar is technology.

Eight years ago, solar technology was substantially different than it is right now.

Eight years from now, it will be substantially different than it is right now.

It's like a computer.

I mean, you know,

unless you're operating on an eight-year-old computer, which most people aren't, if they use their computer, okay?

Because what's a computer that you've unpacked from the box already obsolete, right?

And so, I mean,

you don't people don't use eight-year-old technology for hardly anything.

A few things in our cars we do, a few things here or there we do, but by and large, this thing you need eight or nine years is just too long on a technology-based application, and solar is technology.

I believe in solar, that's why I was asking you all these questions.

And there are places that do that, but you need to break even, you need to get your money back faster on something that the technology is becoming obsolete at breakneck speed.

Because I promise you, I mean, look at 16 years ago what solar looked like.

The number of panels that it would have taken to do what your number of panels it takes to do now is drastically different.

You'd have to fill up your whole yard in your neighbor's yard.

And maybe eight feet thick.

Yeah.

And, you know, think about your television.

You know, the one on your wall.

You know, somebody said the other day, I saw a good meme this weekend.

It said, in 1964, no one looted and carried off color televisions because you had to have a box truck for it to do it.

It was huge.

And so it was a piece of furniture.

But the other day I went in to

grab one.

They're like $239.

Yeah.

$200.

Remember Plasma came out and they were $7,000?

$8,000, yeah.

And they weighed two tons.

Yeah, man.

It just goes quick.

Yeah, I got one of those back in the day, those nice plasmas.

It's

on the wall three houses ago.

It's probably still on the wall.

We ain't moving that thing.

Yeah, and that's the same thing.

Okay, so don't, you know, you wouldn't buy a television, you know, and eight years later.

You don't have to replace your television if it's eight years old.

I'm not saying that.

I'm not saying you're doing something wrong.

But technology just has a high rate of change, and solar is in that camp.

So you do want a quick break-even, regardless of the, and you know, here's the problem for the solar world.

It's going to get 30% harder as of January 1.

Yeah.

It's actually going to have to make sense not counting tax.

I'm wondering how the margins are going to be on those solar companies.

That's going to be tough.

Be tough, tough, tough.

Going to be a bunch of them go bye-bye, probably.

And I don't, I wouldn't want to be, I'm sad for that business.

And for those of you out there in business, I was in a business one time in the 80s that was based on the tax benefits.

And then the tax benefits went away.

And it bankrupt the business.

It's called real estate.

We used to write off double declining balance for those of you in accounting in the early 80s.

And so you could buy a piece of property, put it on a 15-year straight line and do double declining balance, which means you wrote it off in seven years.

And then

they and they did a whole bunch of loans and this thing that they used to have these bank type things called savings and loans.

They were everywhere.

They were like credit unions.

They were all over America.

Savings and loans.

And they all went broke broke because they had loaned money on investment real estate with double declining.

And the government, with a stroke of the pen, did away with the double declining.

And the value of those properties went away simultaneously because we based our business on tax law rather than on economics, good economics.

So now the solar people have based their business on tax law.

Now they're going to have to base it on economics, meaning that the solar panels are actually going to have to pay back, not counting the government subsidizing it.

So either the cost of solar panels are going to have to go down.

Drastically go down or the business goes away.

Yep.

Or

the technology improves.

Has to get better, right?

Dramatically.

Yeah.

Okay, Dave Smith.

30% better by January 1.

Let me ask you a cultural question then.

So back when savings and loans went away with a stroke of the pen, we didn't have social media back then, but I can imagine there was mass hysteria that there is going to be this particular business is going to go away.

Lending is going to crash.

Everything's going to go.

What was it like seeing things pop up like local banks or credit unions, things that emerged

out of that ash?

Because we're watching real businesses being upended by technology in wild ways or in stroke of a pen, government orders.

And it's easy to say, oh, this is the end of everything without thinking out of that soil grows new things.

Yeah.

Well, all the stuff that those SNLs,

they didn't have the FDIC, they had the FSLIC.

Okay.

Insurance price.

So there was life before FDIC, which means there'll be life after FDIC, whatever that looks like.

And it became something else and the government basically took all the assets and dispersed them and

we went on with our lives.

It was just, but everybody in those businesses were gone.

They had to start doing something else.

Do something else.

And that was part of what contributed to my crash as well.

But although I really wasn't doing as many tax-based deals, but I had a lot of friends that were doing tax-based deals and they lost everything.

Same time, exactly.

And that was Ronald Reagan, by the way, who signed that.

Yeah, he did away.

He's the one who screwed that up.

One of my favorite presidents, but he screwed that up royally.

Yeah.

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Jeremy's in Houston.

Hey, Jeremy, what's up?

Hello, afternoon.

How are you doing today?

Better than I deserve.

How can I help?

Oh, well, Dave,

I'm sorry you said every Houston.

I'm actually in San Antonio, but just a small correction there.

Oh, I'm sorry.

Not your fault.

It's all right.

I wanted to pick your brain, not only as a financial guru, but someone, for our knowledge, you own a lot of residential real estate, and I wanted to get your opinion on something.

Back on February 20th, I sadly lost my mom at the age of 71.

She had been retired for about six years, and

it was a hard time because I think my daughters took it the hardest because I was her only living grandparent, and they were her only grandchildren.

So it was not a good spring break that year.

But on February 20th, after she died, the next week, she had just signed a new lease at her apartment that she was in.

And

I told her the property manager about what happened.

I said, you know, we'll get her stuff out as soon as we can.

She said, of course, you know, take your time.

I understand.

And it was about two weeks later after she died.

On March 7th, me and my wife got everything out of the house, cleaned it up, turned in the keys, and she wished us the best.

I gotta,

I kept her phone on for a while to keep, you know, just to make sure all loose ends were tied up.

And

she,

I'm getting a rent request from Venmo because that's one of the ways she was able to pay was through Venmo.

And she said, no, don't just ignore it.

It's okay.

Like, okay, I turned in the keys, assumed everything was fine.

April 1st, there's a Venmo request for rent.

Again, I call the property manager.

He says, again, I will talk to the landlord.

Don't worry about it.

And May,

I'm getting now letters because I haven't listed it as a contact reference for her.

on the lease and it says that she's delinquent seriously delinquent and so i finally get a hold of the landlord and tell him, Look, I don't know why you're sending this.

She passed away.

I've turned the keys.

The apartment's cleaned out.

You're good to go.

He's insisting that he's entitled to the full remaining value of the lease because the lease she signed, she signed a new one and it took effect this past January.

So

he is insisting that he's entitled to the full value of the lease.

I try to tell him, no, what are you talking about?

She's dead.

Well, he is.

Tragedy for her family.

He is.

From her estate.

Does she own anything?

All she had was a

savings because when she owned.

How much was in savings?

Over $200,000.

Okay.

Then the $200,000 has to be used to pay the lease.

Yeah.

Really?

That's a lease violation?

If you die?

No, it's not a lease violation.

Her estate, when you die, what you own stands good for what you owe.

Assets versus liabilities.

Okay.

And what she owed was a lease.

Wow.

Okay.

Okay.

So if she had $10,000 in credit card debt, that doesn't just go away because she died.

Well, sure.

Well, it's the same thing.

It's the same thing.

It's still a liability.

It's a contractual liability that she owed.

Now, you don't owe anything, but her estate

does owe for this lease.

And yeah, he's technically right about that.

He's being weird about it for sure.

Well, he's being disrespectful, really.

He went off a tie rate on me the last time we talked about how it's post-COVID.

And I'm a landlord and I have no rights anymore.

It's cost me money.

And I feel like

my tenants are all dying on me.

Yeah, what a jerk.

I feel like he's taking a leak on my mom's grave.

And with me, there's just some boundaries you don't cross.

And that's one of them.

Yeah, well, you're going to lose,

probably.

Do you not have this estate being probated?

No,

I was her only son.

She was never married, and there was no one else on lead here.

I think I'm going to spend the $500 to go get an estate attorney and have it probated because in most states, and I don't know Texas law, but in most states, and Texas has some weird laws because it's a republic.

It's not a real state.

I'm kidding.

But not really.

I'm kidding, but not really.

Sitting next to my resident Texan here.

But anyway,

no, they do have some interesting real estate laws that are different than a lot of states.

So check this out.

But in most states, if you go through probate,

what you do is, and I don't know since he's notified you, if you can get by with this or not, but they post in a widely publicized thing, like a legal newspaper, a notice to creditors.

And if none of the creditors apply that they submit that they have a claim against this estate, then they lose their right to claim against the estate after 90 days or whatever the notice of creditor's period of time is.

So you get all of that by going through probate and going with an attorney if that is Texas law.

And I don't know if it is.

I'm just saying, but a lot of you listening out there, that's what you would face.

So I think it's going to be worth your time to step out of this and let the probate attorney deal with the jerk.

Yeah, I don't want to talk to that guy ever again.

Yeah, the other thing,

again, it could have all changed, but when I was in Texas, they could only hold you for the gap until they filled that apartment back.

That's true.

That's what I'm thinking, because I feel like that's double dipping.

It's true in most states.

You're not held to the liable, at least in most states, if they've re-rented it.

Has he re-rented it?

The property manager I spoke to, unfortunately, is no longer there.

And I haven't even been by that apartment because it's on the other side of town.

I bet.

So it may be that you only owe two months of rent or three months.

I knew March because her belongings were still in there.

We didn't clear out the apartment.

Honey, it's a liability, okay?

It's a contract.

Just a stream of payments.

And technically, in most states, you're going to be held liable.

Not you, the estate is going to be held liable.

You're not liable for anything.

You understand?

I think that's where this guy screwed up, because the other thing I haven't told you yet was I got a summons this past Friday, and he is suing me for the value for $27,120 over the remaining 16 months.

Well, you're not on the lease, and so I'm going to counter-sue him for $100,000.

Yeah, because I know on the summons, he's not suing me as the executor of her estate.

I had a power of attorney over her estate in her last year.

She had been on dialysis, and she wanted to make sure that he can sue you for as the power of attorney or as the executor, but he can't sue you.

You're not on his lease.

So

what this guy is is a cowboy out of control and we're going to have to get an attorney smack him back off the saddle, okay?

Will do.

Yeah, you're going to have to get him straightened up.

Because

not only is he overstepped his bounds legally there, but he's also just being a jerk.

Because normal people would say, hey, your mom passed away.

You're technically liable for this whole thing.

Let's work something out.

I'm so sorry you lost your mom.

That would be the phone call you got from Ramsey.

Okay.

How would you deal with a tenant who passed away?

I mean,

now, if they, but, you know, if they got $10 million in their bank and they don't want to pay, I'd go get it.

But I wouldn't have been a jerk about it.

And I'm not going to give you a lesson on COVID landlord rights.

That's just, that's none of that's relevant.

All that's relevant is a simple thing.

Your mom's estate is liable for her lease, probably in Texas like it is everywhere else.

Again, check your ⁇ you need to go get a lawyer.

You need to spend 500 bucks on a lawyer.

Do you recommend probate or a real estate?

I would start with probate and ask the probate lawyer if he can handle this eviction or this other lawsuit and smack cowboy down.

Because

cowboy's out of control here.

He's lost his dad gum mind.

He's

pissed off redneck landlord and he thinks he can sue everybody and he can't.

I mean I had enough dealing with my daughters about my mom passing.

I don't need this.

Well, I mean, it's just, you know, it's $200,000 in the bank versus cleaning this mess up.

That's the way you've got to look at it.

Instead of, I mean, this guy didn't know your mother.

He, you know, it's just, it's, it's just sad that people don't have any sense, don't have any relational sense anymore.

And so you can handle stuff like this and be firm and still be nice.

You don't have to be a jerk about it, but the guy being a jerk is going to get him.

And then he went and got all crazy and sued the wrong person.

Well, he's got somebody on retainer that just prints these letters for him every other week, and it just doesn't mean anything to anybody.

Yeah, but even that guy, if somebody's on retainer, they ought to look down at the lease and go, This guy's not on the lease.

You think?

That's kind of like fourth grade level.

This is not graduate-level business law.

No, they're just flexing on people.

Basic stuff, yeah.

Seeing who we can piss off here.

Oh, gosh.

Sad.

Yeah, get a lawyer.

That's what you're going to have to do.

I'm sorry.

I hate to pay those people, but somebody needs to.

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Might not be in all states.

Today's question comes from Justin in New Mexico.

Justin writes, I'm 35 years old and I have a net worth of about 2.5 million bucks.

My family, oh, great.

My family has decided to pool money and invest together for a larger return.

We currently have $5 million in the fund.

Now that we have this nest egg saved, where should we invest it for the best return?

I don't think I would do this with my family.

Is that bad, Dave?

I'm 100% sure I wouldn't.

There is no advantage with $5 million pool to invest over a $2.5 million pool to invest.

None whatsoever.

There's no deal you can do with five million dollars that you can't do a similar deal with two and a half.

The only way you would get that kind of leverage is if you got, you know, okay, we put money together instead of two million, there's a hundred million.

And now we start talking about hedge funds or something else that are ultra-high plays that are completely different than anything you guys should be doing with this money.

So, um,

the

no, I would not pool my money money together at 35 years old with my family.

So I think it sounds like the cow's already out of the barn, though.

It feels like it, and it feels like he is funding half of this bankroll.

Yeah.

He's 50% of it.

And they don't even know what they're going to put it in.

Right.

This is really dangerous.

Yeah.

Justin, I would not do this.

I would say, you know what, I've had second thoughts, family, I'm out, and the math works the same.

So go ahead.

Well, it works the same.

I mean, you can buy a two-and-a-half million dollar piece of real estate, pay cash for it, get the rate of return, get a similar rate of return.

What you get for a five million dollar piece of real estate.

I've got both.

So, I mean, I've got properties that I paid two for, I've got properties I paid ten for, I've got property that, you know, and they all, you know, it's all about buying the property right, not about that set amount of money.

And so, you can get the same rates of return in real estate on two and a half that you can get on five.

Um, so there's no advantage to pooling.

The same thing's true, certainly, with uh, stuff like mutual fund investing and that kind of thing.

And, um,

and there's no, there's no real break.

The breakpoints are all done in a million.

So

in terms of commissions and that kind of stuff with your financial planner going into mutual funds.

So once you've got a million in, you're not paying commissions anyway.

So

I don't see any advantage of pooling it, and I see a ton of disadvantages.

So

if you can not do it in a gentle, kind way without it being a reflection on you hate them or something,

yeah, I would not do it.

I can't imagine a way this ends well.

I'm trying.

If you stay in it.

If you stay in it.

Yeah, yeah.

Somebody somewhere is going to go cuckoo.

Yes.

Or it's not fair that you're taking half the returns and you would say, well, I put half the money in this fund.

And they're like, yeah, but it was for all of us.

And we should all, this just ends badly.

Yeah.

Family socialism.

Yeah.

Alex is in Reno.

Hi, Alex.

Welcome to the Ramsey Show.

Hi, team.

Thanks for taking my call.

I appreciate it.

Sure.

How can we help?

So I'm in step two: attacking my debt.

I'm $15,000 in debt, including my car payment.

I'm working two jobs right now, but I'm still living paycheck to paycheck.

And I've had an index universal life insurance policy for myself and for my daughter.

It sounded really good at the time.

I'm not so sure it's the plan for me anymore, and I'm looking to pinch pennies where I can.

Ultimately, one is a face value of $250,000.

My daughter's is a face value of $150,000.

How old is your daughter?

And my daughter's nine, and she's had it for five years.

No correction, nine, seven years.

Okay.

All right.

So yeah, I mean, I'll use mine.

I can save you a lot of money.

I would not own that stuff.

It's crappy investment and it's crappy insurance bundled together.

So it's a bundle of crap.

And so,

you know, I would just go to Xander Insurance that we've recommended for 30 years here on the air, get a good term insurance policy on you.

And a nine-year-old doesn't need life insurance.

They're not producing an income.

She needs coverage, and your family needs coverage if you pass away to replace the income that dies with you

because they're counting on your income.

And so you need life insurance, a lot of it, 10 to 12 times your income.

But your nine-year-old doesn't need life insurance.

You didn't buy it for life insurance anyway.

You bought it for an investment on her.

And so you're much better off to do your investments and other things and following the baby steps, getting out of debt and then loading up real investments, not insurance crap, with cash that is freed up because you got out of debt.

That's how you build wealth.

So, yeah, make sure, though, you get the term insurance policy in your hand before you cancel because I don't want you dying between policies.

So definitely just, there's no surrender value on either of these.

So just take the bite on it and move on, essentially.

Oh, so everything you put into it, they're going to keep?

Yes.

Well, you got screwed.

How long have you had this?

Since 2019, 2018.

Good lord.

Six years and they still have not given you any cash values?

Yes, sir.

That's correct.

I was

essentially making the minimal payments of it, and I assume that's probably why when they wanted more.

But the more I look at it, I'm like, this just doesn't feel right.

Okay.

Well, you may not have put enough in to make it make it past your commission base then because they click all the commissions up front, and that's one of the reasons it's a crappy product.

Is oh God, man, you got hammered.

You could have paid a tenth of this for the same amount of insurance all this time.

For six years, you've been getting screwed.

So, yeah, regardless, you need to get, yeah, definitely get the get the term insurance in place as fast as you can.

Go to xanderinsurance.com or you can call them at 800-356-40-282.

You hear them ads on here every day.

We've been advertising them for them forever.

They're great people.

And just get your good term insurance policy in place as fast as you can, 10 to 12 times your income.

So I've been investing for six years, and my investment equals zero.

That's a quality investment.

Golly, dude.

How do you sell that stuff with a straight face?

To a friend that you went to college with.

I don't know how people sleep at night, man.

God,

what a horrible product.

I've been investing for six years.

What's your investment worth?

Zero.

Where'd all the money go that you put into it?

I don't know.

They get it, I guess.

My old roommate has a cool new truck, man.

Gee.

Wow.

Steve is in Charlotte.

Hey, Steve, what's up?

Hey, Dave, how you doing, man?

Better not deserve.

How can I help?

Hey,

got a question, and I want to know what what would you do in this situation?

I'm getting ready to turn 65.

I'm retired.

I have $300,000 in my retirement account.

And from retirement, I get $7,400 a month.

And it costs me about $1,400 to pay all my bills.

My house is paid off.

I have a

$1,000.

Thank you.

Thank you.

Thank you.

That's what my mom said.

I have $1,000 in my

emergency fund, and I have one car payment that will be paid off in about three months.

But my question is, how much do I, when I build my emergency fund up to the full amount, how much does that need to be since I'm already retired and I love traveling?

$10,000.

$5,000.

How much?

$10,000.

Put $10,000, okay, into my emergency.

Yes, sir.

And out of that $5,000, and out of that $5,000 that I get every month,

how much can I put toward traveling?

Because I love traveling.

I got a son in L.A.

and one in New Hampshire, and I just love traveling, going to different schools.

Well, obviously, you can't spend more than that because you can't go into debt to travel.

And if you spend less than that, you've got some money to give and you've got some money to invest.

So I spend less than that.

But how much less than that's up to you?

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Brianna is with us in Phoenix.

Hey, Brianna, what's up?

Or not.

Anyway, where am I going there?

There we go.

Okay, there we go.

All right.

And how about that?

Brianna, you there?

Hi, can you hear me?

Yes, how can we help?

All right.

Well, to give you a little background, I am a newly single mom, and I'm living with my parents right now while I get back on my feet.

I have a one-year-old daughter, ten thousand dollars in savings, and I owe about the same on my car until it's paid off.

I just returned to work as a server,

and I just want to make smart choices and work towards buying my first home.

I'm just wondering what your advice would be for me if you were in my situation.

How old are you?

I am 25.

Do you have child support coming in?

No, sir.

Why?

How come?

Yeah.

I'm just trying to keep the peace right now.

Tell me more about that.

We didn't really end on very good terms.

He was cheating on me.

So

right now he doesn't really care to see our daughter, so I'm not going to push for it.

don't really care to get child support from him right now.

I think you're making a very short-sighted gamble.

If he was abusive or you were scared for your life, I would tell you to call the police.

If the fact that you're mad at him and you don't want to risk him seeing his daughter so that you don't have to deal with him for her,

for you, financially, emotionally, otherwise, I think that's a very short-sighted move.

He needs to pay to take care of his child.

Take care of his kid.

Even if you don't want to see her.

That's A, the law.

B, it's the right thing to do.

And unless he's horrifically abused,

anyone say horrifically, unless he's abusive or whatever,

she needs to know that her dad is out there because she's going to ask those questions whether you like him or not.

Yeah, I know.

So that would be step one.

Yeah.

Then step two is, you said you're 25?

Yeah.

Okay.

So regardless of how we got here,

what do you plan to do with your life?

Well, I was a stay-at-home mom for the last year, right after I had her.

I just returned to work as a server where I make pretty decent money.

I don't know if that's what I'll do for the rest of my life.

Well, I hope not.

Right.

But right now it's just getting back on my feet so I don't have to live with my parents and my daughter and the whole thing.

Well, her first step is get some income coming in and get a job.

I don't blame you for that, but you don't want to be a 55-year-old server.

No.

Okay, that's not your career goal.

You're just trying to recover emotionally from what you've been through and find some safe space and everything else.

But I want you to dream again.

What is it you're going to be that makes $100,000 a year?

$200,000 a year, $300,000 a year.

What are you going to do with your life?

You're not defined as a waitress that had a baby.

That's not your definition.

Thank you.

So what's your answer?

What do you want to do?

I don't know.

I've thought of going back to school.

For what?

Why?

Well, originally my first career choice was a teacher, but my father kind of

strayed me away from that because they don't make the best money.

They make way more than a waitress does.

Yeah.

And they have

not a great one, but they have a retirement plan and health insurance.

Yeah, so I guess my next step would be going back to school.

Okay, well, if that's what you want to be, I don't care.

You don't need to go back to school to escape.

There's going back to school is not a magic pill unless it takes you somewhere.

You're going back to school to study these three things because I have to know these three things to go be what I want to be or whatever the thing is, okay?

So I want you to figure out what you're aiming at and then figure out how to get there.

If school's the way to get there, fine.

But just I'm going back to school, just generally, I'm 25, I had a baby, I live with my parents, I'm going to go back to school.

Why?

Because that's what everybody does.

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

That sounds like a good way to get a bunch of student loan debt to me.

Exactly.

No.

You need to go back to school only if it's with a purpose to get the skills to go be the thing that's going to cause you to be a really smiley 60-year-old grandmother someday.

Do you have an undergraduate degree already?

No, I don't.

Do you have any classes at all?

Yeah, I went for the first two years before COVID happened and that kind of.

Okay.

Before you go to school, if you want to be a teacher, I want you to call one of the region centers in Phoenix or in Arizona because they're so short on teachers right now.

They're paying premiums and they're paying signing bonuses and they're putting people through fast-track programs in certain states.

Or if you want to go to nursing school, or if you want to go to med school, like whatever it is you want to do, like Dave said, decide who you want to be and then reverse engineer that.

Write a letter to your 35-year-old self and say, thank goodness that when I was 25, I took these steps so that we, you and your daughter, can have this life when you're 35.

Yeah.

But I can hear it.

You are frantic to get out of your parents' house.

And this is a recipe for coming up with some schemy mortgage mortgage that you can't afford and a house you can't afford because you quote unquote have to have a house and you're trying to get this life that you thought you were having.

You're going to try to duct tape it together.

Please don't do that.

Please develop a game plan and step by step by step, gradually walk into what you need to.

If that's first into an apartment, that's fine.

But you don't need to leave your parents' house into a new home purchase as a waitress.

No, thank you.

We'll send you a copy of Ken Coleman's Find the Work You're Wired to Do, and you can take the career assessment in there and and see if that'll give you some guidelines.

But, man, I'd be real careful about if you want to go do something and people are already throwing grenades at you, well, that's not going to make any money.

You're not going to like that.

Maybe, but also maybe not.

And maybe you've taken advice from some folks you shouldn't have been taking advice from for a long time.

Yeah, something to think about for sure.

All right.

Precious is in Chicago.

Hi, Precious.

How are you?

I'm well.

How are you?

Better than I deserve.

What's up?

All right.

So my question is,

how do I

find work while on workers' comp?

Well, I think if you're out on workman's comp, it's because you're not able to work physically.

Yes, to an extent.

I'm sorry?

Yes, to an extent.

Okay.

So when will you be able to go back to work?

That's the key.

Because if you go get a second job while you're taking workers' comp, they're going to deny your workers' comp,

right?

Right.

So I go back around September or September, is what they're saying.

It might be October, but September is the earliest.

Why is that the earliest?

Just from what the doctors and the physical therapists are saying.

Okay, so they are saying you're not ready to work.

Yes.

So, but you say you're ready ready to work?

I'm ready to work only for the financial benefit

because

what I'm getting on workers' comp is not enough, and I'm depleting my savings quickly by trying to stay afloat.

Yeah.

Okay.

I'm going to work with your employer and your doctors to get released and get back to work.

What do you do?

So, I was a truck driver for a nonprofit,

but since the injury from the job, I'm not able to do that quite yet.

Is that what you'll be doing again in October?

Um, no.

I'll probably be doing some type of light duty work.

Um then let's see if we can get that going now.

Because here's the thing.

If you go take a side job and they discover that, they're going to make you repay your workers' comp.

Workers' comps based on you being disabled and unable to work.

That's what it's it's based on.

And so it's workers' compensation, compensation for workers who can't work.

And then you go work, they're not going to go along with that.

So, you know, I'm going to start to work back into the job is what I'm going to do as fast as I can, as fast as you're able without hurting yourself.

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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, Dr.

John Deloney.

Ramsey Personality is my co-host.

Today,

it's a free call at 888-825-5225.

Kelly is in San Diego.

Hi, Kelly.

How are you?

Good.

Hope you're all having a great day.

We are.

How are we doing?

So

doing good.

So my question is kind of twofold.

So my parents are in their late 70s, and God willing, I don't get their inheritance for the next 20 years.

But I just want to be prepared because my fiancé and I are getting married in March.

And I know you always say prenups are more to protect from the crazy brothers, cousin, uncles, and he's got those.

We've made

really good rules in our lives where we aren't giving away money to family members.

But my fear is if one of his brothers or either of them have a child, that's going to be a soft spot for him because in his mind, the children are innocent.

It's not their fault that their parents are irresponsible with money and don't make really enough to sustain life.

So I'm trying to protect the inheritance that I will receive from my parents.

I'm an only child.

My fiancé and I are entering the marriage with almost equal assets.

So

cleanup wouldn't be for those items.

It would just be for the inheritance.

I don't know what to do.

How much do you stand to inherit?

About $2 million.

There's a million in stock and a million in real estate.

Okay.

And so I don't know if it's a thing that my parents would have to do to word it or protect it in a specific way so it only comes to me and would never be his.

They could easily leave it into a trust, and then it's completely protected.

Okay.

And so even though we would be married, like he trusted.

Yeah, if you're the only beneficiary of a trust, you'd have no marital access to it.

As a matter of fact, you can stay in the trust that someone has to be in the bloodline to receive the benefits.

But that's not your real problem.

Your real problem is you and your fiancé have not come to terms yet on how you're going to live your lives.

You just told me you can't trust him with $2 million because he has a soft spot.

That's a little scary.

That's a little scary.

Yeah, kids are his weak spots.

Yeah, that's a little scary.

But that means you're coming into this marriage with your one foot out of the canoe already.

You're already hedging against a perceived or a real

deficiency that he has.

That's a scary place to enter into a marriage.

Yeah, you guys need to be in agreement on that, regardless of if there's $2 million on the line.

Because it's not the $2 million of your parents.

It's the $2 million you all will earn in the next 10 years.

And you're not prenupting that.

And

you're not in agreement on that.

So when he wants to take $500 out of your checking account that the two of you have together, that both of you put money in while you're both working, we're going to have a problem.

And the prenup is not, this question is not solving for that problem.

So I'm going to tell you to go back to the pre-marriage counselor, and the two of you need to sit down.

Y'all need to work through this because you've got to have enough belief in your husband having your best interest and be in agreement with you over and beyond anyone else outside of our walls.

Okay.

You remember the old language?

You may not be old enough, but the old language in the marriage vows where

a man leaves his mother and father, and a wife leaves her mother and father and cleaves, leave and cleave.

It's old English language.

You ever heard that?

Yes.

It means that you set up an independent household and it's the two of you together against the world.

And against the world, including nephews and nieces and mother-in-laws and

whatever.

And y'all don't have that right now.

Because you feel like that the future nieces or nephews have a secret passageway through the wall

into your lives.

And that's not a pre-nut problem.

That's a husband problem.

It can be solved, though.

I mean,

I'm very hopeful.

I'm not saying this is a dire situation.

But I think your fear is revealing more than just what happens to the $2 million from your parents.

It's revealing things that you guys are going to face as you go along.

Does that sound right to you?

Yeah, a little bit.

I mean,

his brothers have said they're not going to have children, but

that's not it for sure.

That's what I'm talking about.

That's not the point.

That's a proxy.

The point is

that you think your husband's soft heart towards crazy is going to cause him to do something irresponsible with money without you going along with it.

Is that making sense?

I mean, I think, yes, I think the way I'm seeing it and that he would see it as well is that,

you know, you say,

so that we could give like no one else, he'll see it as charity.

Okay, I know, I know, but my point is, my point is, you've got to solve for that.

Y'all have to see this as charity, and y'all are going going to have a thousand of these kind of issues pop up.

No matter how well you think you know each other, you're going to have a thousand of these.

And Dave and I both have soft spots in our hearts for different things, and our wives do too.

That's not the issue here.

The issue is

you have a value, and he says, when it comes to this, I don't care what your value is.

I don't care what our values are.

I'm going to do what I want to do.

And until you address that issue, you're going into your marriage and it's going to have a hole in the boat.

That's what I'm saying.

Yeah.

Exactly.

Got it.

Like the kid part of this, the charity part of this,

I have a soft spot for over-tipping.

I worked at Burger King for four years and I know how people are treated like garbage.

And

it's a pathology.

And my wife has said, I love this about you, and you are making it to where we can't go out to eat much anymore because you over-tip so much.

And she was right.

And I was using the waiter to make me feel.

So there's all this to it it has nothing to do with the issue of tipping it had to do with a shared set of goals and values that we had and I was overriding it yeah and you can't let the waiter violate the walls that were that were formed by leaving and cleaving that's right you're putting a wall around it's a walled city like a medieval city It's a walled city, and the only two people that live in the city have to be in agreement before anything goes outside those walls.

That's right.

That's right.

And if he can't be dependent, if you can't depend on him to not send stuff over the wall without you two agreeing to it, then you've got issues that you guys need to get to the bottom of.

And otherwise, it's going to pop up at the most, at the weirdest time, and you're going to be left being the bad guy.

Exactly.

It'll be, oh, you don't care about so-and-so.

Yeah, what are you, a test pilot for broom factories?

You don't like children?

You hate children.

Or so-and-so has special needs.

Why do you hate that?

Why do you hate them?

Or you will turn to him and say, why are you so generous, right?

So it's that deeper issue that we're talking about here.

Yep.

Yep, yep.

I know that's hard.

I know that's hard.

It's so much easier to solve for these proxies.

You can't solve for it by just think, but if you want to fix the parent thing, it's pretty easy.

Call them and tell them to put the money into a trust to you and blood only can touch it.

So you and your kids will be the only ones that can touch that money then.

And

or your designee, but he can't just throw that money over the wall.

But

this is pointing out a broken part that you guys need to solve for now because it's going to come up again in a different setting, having nothing to do with the inheritance.

And I promise it's going going to come up nobody else nobody has just one soft spot where they violate the values that shows up everywhere in a relationship yeah my soft spot's probably gun purchases i was going to say a couple others but i'll go with that one

i don't violate though because it costs me a purse every time

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Hey, Dave, can I ask you a quick real estate question real quick?

You can.

All right, so this might be bad math in my head.

So let's say we're in nashville tennessee where the real estate has gone way up in value over the last five ten years right okay so let's say the house i bought back in 2020 is quote unquote worth double and i put on the market for double what i paid for it in 2020 and let's say because of the influx in inventory i have to drop the price a bit

and somebody comes in and bids ten thousand dollars left so it's just a little under double i feel like on social media and whatever it the report is house prices are falling.

But the way I look at it is I'm still on house money because it's worth almost double what I paid for it.

And just because I take it, is that a bad way for me to look at the real estate investment?

Okay.

Do you get what I'm saying?

No, it is house money, but it's different than that.

The reason social media is wrong is for a different reason.

Market value of a property, by definition, when I went to real estate, when I got my four-year degree in real estate, I have a degree in real estate and finance.

If you go to appraisal class and you go to even take your real estate test, they teach you this.

The definition of market value of a piece of real estate is what a willing buyer is able to give a willing seller and willing

when neither are under duress.

Okay?

So, in other words, if you're getting foreclosed on, that's not a valid

sale.

You can't use that sale when you're doing an appraisal.

Right.

Because it does not establish market value because one of the parties is under duress.

Okay.

If you've had a house on the market, if you bought another house and you're having to sell your house out of desperation because you shouldn't have bought the other house and now you've got two house payments, one of the parties is under duress.

Okay?

So they might sell it, quote unquote, below market value.

Yes.

Just to get rid of it.

Yes, because but it has but it does not establish market value.

So when someone says house prices are going down, they mean market values are going down.

Market values have not gone down.

But there are some parties, because the market has been sluggish, that are under duress.

Gotcha.

And are selling.

They may have leveraged

what you call a motivated seller for one reason or another.

And house has been sitting on the market, and they lower the price

below.

what the appraisal would be, what a willing buyer, but they're no longer without duress.

They have duress, meaning they're in a stressed situation.

And so that doesn't establish market value.

That doesn't establish what home prices are doing.

Now, but if you're in

a seller's market, then the buyers are under duress because that's when you get 83 offers on the house.

If you're in a buyer's market, which we haven't seen in a long time because inventories have never kept up with demand, But if you're in a buyer's market, that means there's houses everywhere and the buyers could come in and cherry-pick cherry-pick what they want, and they can demand stuff from sellers because the sellers are under more stress.

And that drives prices down.

But we haven't seen that in two decades.

But even if

market value went down 20%,

I'm still up.

You're still on house market.

But house prices would have gone down, if that was the case.

Correct.

There you go.

So social media would be correct.

But social media is a drama queen.

Correct.

It's not functioning on anything except

some 20-something-year-old living in his mother's basement having a little snowflake attack.

Correct.

And that's your social media.

That's not got anything to do with the actual reality of what's happening in the market.

That's just somebody pissed off because they feel like they got boxed out of the market because they're a barista after getting a PhD.

People are pissed off because they did some napkin math and looked at their own internet website and said, my house is worth $1.2 million.

They get an offer for $700, and in their soul, they feel like they lost $500,000.

When

if it was not worth 1.2.

That's exactly right.

Yeah.

It was never worth that.

And so is there actual market value?

So if you're going to do an appraisal on a piece of residential real estate, you find three comparable sales within the last 90 days, comparable in area, comparable in attributes, and comparable in square footage.

And you adjust for square footage.

If one's a five-bedroom, one's a four-bedroom.

One's got six baths, one's got four baths.

One's got a five-car garage, one's got a three-car garage.

You adjust for the differences, and you do that, and then you take the average of those three after adjustments, and you have a residential appraisal.

But the qualification is all three of those comparable sales cannot have had a buyer or a seller under duress.

So you can't use two foreclosures in the neighborhood.

Gotcha.

Okay.

As your comp, as your comparable sale.

Otherwise, you have an invalid appraisal.

What did they do in 2008 when whole neighborhoods were getting wiped out?

Well, then you've got a new market.

The market established that this neighborhood is a foreclosure neighborhood.

Okay.

So it drove it down

because everything in there was.

So if you had like those townhouses and stuff where they, you know, where these bogus investment deals, that's what all happened in 2008, and the market, the mortgage bank securities, all that crap crashed.

And so they started punting on these loans left and right.

And so they end up with whole neighborhoods back.

Now you've got a complete reset on that neighborhood.

But that's not a statement of real estate.

That's a statement of that neighborhood.

A neighborhood was full of investment real estate, 100% renters, and 100% of the investors in air quotes were

walked away.

Right.

And so now you've got to reset.

And now we've got, okay, what will people pay in that neighborhood

where neither are under duress?

And that takes about a generation to get through that.

Not a generation of people, but a generation of sales.

Because the bank, when they take it back, they're under duress.

Ah, okay.

So when the bank resells it, you can't count that.

That's a real estate owned, an REO.

You can't count that as your appraisal.

And so that's what we're getting into.

So no, that's what this thing I just said, go to our website.

We track this stuff.

There's 1,036,101 homes on the market right now.

We know exactly how many are on the market.

We know exactly.

And we're tracking all this stuff in detail.

And you can go there and find the actual data.

And month over month over month, every month this year, median house price, which is the middle, not the average, it's the middle of house prices, is what what a median is in statistics, has gone up every single month.

It's not gone up much, it's gone up like a thousand bucks

or two thousand bucks.

But it's not crashing like every single month.

It's not going down, right?

Is the point.

It's going up.

Yeah.

And there's good inventory, and there's good demand, and everybody's sitting around waiting to see if the Fed chairman's really going to get fired and if we're really going to see some interest rates adjusted.

And once they get past that waiting game, probably about September, you may see this market take off like a dead gum hair on fire thing.

September could be wild

in terms of house prices going up again.

But we're not, we've been telling you guys this out there, and it's proven to be true.

I've been telling you this for five years.

House prices are not going down.

This is not a bubble.

A bubble is when there is an uh is when the prices have gone up faster than the demand.

Demand has outpaced inventory.

Demand is higher than supply.

Every time you see that in economics, you see prices go up.

It's a simple thing.

It's seventh grade economics, if anybody taught economics in seventh grade anymore.

But that's it.

I mean, when there's a shortage of goods or services, the price goes up on those.

When there's an overabundance of goods or services, the price goes down on those.

It's very simple.

And you really can't hardly figure out any time in economics, with an open market anyway, that that gets violated.

It just shows up that way every single time, given a half a minute.

But I mean, you get weird anomalies like COVID and that kind of stuff that hit a marketplace.

It takes a little while to get the wrinkle out of that, out of the sheet on that.

Like the supply chain stuff, same thing.

But

the problem is everybody's just so frustrated that wants a house and can't get one right now.

So they're throwing all these darts out there that they call truth to try to make themselves feel better about it.

And it's just not, it doesn't change anything.

You still have to do do the math.

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In the lobby of Ramsey Solutions on the debt-free stage,

Emily is with us.

Hi, Emily.

How are you?

Hello, I'm good.

Thank you, Mr.

Ramsey.

Good to have you.

Good to have you.

Where do you live?

Decatur, Alabama.

Very cool.

And how much debt have you paid off, Emily?

$110,000.

All right.

And how long did this take you?

15 years.

15 years?

Yes, sir.

All right.

And your range of income during that time?

Let's see.

In my notes, I have it was

39,861.

Okay, up to what?

And now I am at 68,052, but in Alabama, we get a 3% raise in our district this year.

I love it.

I love it.

What do you do?

I teach French and ESL.

Very cool.

And who's the good-looking gentleman to your right?

Well, this is my dad, Jeff West.

All right, Jeff.

Welcome.

Good to have you, sir.

Thank you, Dave.

Thanks for being here to support your daughter, Emily.

Very cool.

Emily, 15 years.

Yes, sir.

There's a story here.

I think.

Tell me about this.

How did you get started on this Ramsey stuff?

And what does a 15-year journey look like?

Well, thanks to my dad and my mom, they raised us on you, guys, of course, and your principals.

Anyways, before I went off to college, my dad had paid off the house, and he called me downstairs to the basement and said, Hey, I'm going to call into the Dave Ramsey show, and I want you to listen.

And so, just seeing him do that was pretty inspiring for me.

Oh, so he caught you, you did your dead-free scream from the basement.

Yes, sir.

You made your college-age daughter watch it About 24, 25 years ago.

Oh, man.

I think it was in

2000 or 2001.

Now I'm looking at a baby steps millionaire for sure.

Yes, sir.

Yeah, well, cool.

Very cool.

I like that.

Thank you.

It's good stuff.

Yes, sir.

All right.

And so,

anyways, we were able to pay for my college and stuff.

I didn't have to have student loans because they were able to pay off.

their debt from the house and stuff.

So, where was I?

So you started this journey then.

What was the $110,000 in debt?

What kind of debt was that?

That was to pay off my house.

You bought a house after college, okay?

Well, actually, I went to North Carolina and taught there for two years, and then I moved closer to home to Decatur, Alabama, of course.

Anyways, two years after being there, I bought my house.

Oh, okay.

All right.

And then 15 years you've been paying off the house?

Yes, sir.

It was just a good investment at that time.

All right.

So a single lady teaching French in Alabama.

You teach high school, I guess.

Yes, sir.

All right.

And you fight your way all the way through and that was a paid for house.

Yes, sir.

What's the house worth?

Let's see.

I think it was $118,000 at that time.

No, what's it worth now?

Oh, now?

$300,000.

We'll say $300,000.

Yeah, okay.

Very cool.

Wow.

Very cool.

And you've been investing in your retirement all that time?

Yes, sir, I have.

Good.

What's that look like?

What's the balance on that?

Well, let's ask this man right here because he stays on that one for me, too.

Okay.

Well,

her schooling, or her school, actually takes out about $500 a month.

So she's putting in roughly 10%.

Yeah, okay.

And then she's got another little bit of nest egg.

Yeah, that goes in also.

How's that feel?

How old are you?

I'm 42.

And you have a paid-for house.

Yes, sir.

And you do anything you want to do.

How's it feel having no payments?

It feels fantastic.

Wow.

Yes, sir.

And I don't do credit cards either.

Good for you.

Well done.

Yeah, that's amazing.

Thank you.

And especially, I just, in fact, I just went through with my show producer Kelly

the number of families that call in that either kids aren't talking to their parents or parents aren't talking to their kids anymore over political issues or drama or whatever.

And so it's pretty cool to see a father and a daughter still united and

working together on things this far down the road.

That's pretty cool.

Yes, sir.

Dave, I got one story right quick.

Whenever Emily, and I've got a younger daughter that's two years younger,

there was a rainbow vacuum cleaner salesman.

Oh, yeah.

You remember those?

Oh, yeah, I do.

Well, he is.

It's kind of like buying a Cadillac.

Exactly.

So he came and he knocked, and I let him give his spill.

And I think Emily and Jessica, my younger daughter, was there, and they were just shaking their head.

And then all of a sudden, whenever the salesman started telling about the

to buy it on

payment plans, they just just started shaking their head and said, Uncle Dave's not going to go with this.

So he kind of got

headed on out the door.

That was the day I knew my daughters were going to make it.

So you've been gone, your name's been Uncle Dave.

Okay, I'll take it.

I'll take it.

I've been uncle to a lot of worse things, I can tell you.

That's good.

Emily, what's next for you?

Let's see.

I'm a few years out from retiring from education, and I think I'm going to go into into real estate maybe.

Okay, fine.

Something I'm looking at.

Good for you.

And I travel overseas every summer and stuff.

And as I had wrote into my email,

I use my tax refund check as my spending money over there, so I don't have to use any of my money here.

Well, it's still your money, but it's still my money.

But, you know, it's like that extra that you're going to be.

It's like loaning it to the government a little bit a year.

There you go.

Yes, sir.

All right.

All right.

So $39,000, she starts out now making $68,000.

French teacher teacher has a paid for $300,000 house, and she's 42 and has substantial money in retirement.

So it's interesting that when we did the study of millionaires, that

the most likely career to be a millionaire was an engineer.

The second was accountant, and the third is teacher.

And people always write in and go, well, that can't be.

You can't do that when you're a teacher.

Well, ladies and gentlemen, meet Emily, okay?

And I got news for you.

You can do this.

But, you know, that's amazing what you've done.

This is

incredible.

I'm so proud of you.

Thank you.

I have two paid-off vehicles as well.

Two?

Well, you need two for

weekend, Emily.

For me to work on.

So she's got something to go mudding in on the weekend.

I like it.

I know you're proud of her.

Obviously, you're here to support.

And so, way to go, man.

This is absolutely incredible.

Very well done, young lady.

Very, very well done.

I appreciate it.

What What do you tell people the key to getting out of debt is, Emily?

No credit cards.

And you just, if you don't have that money, you don't get it.

You pay for what you have.

Yep.

And you put back.

And then you just work with the system,

which is what you've done.

That's exactly right.

You've been very, I can tell you're a very precise person.

It's all about system.

Yes, sir.

Yeah.

Good for you.

Thank you so much.

Very well done.

Proud of you, kiddo.

Thank you.

Good work.

I guess I get to do my screen now because I didn't do it at the beginning of.

That's right.

We're going to do it now.

All right, Emily and Jeff's gonna help from Decatur, Alabama.

110,000 paid off in 15 years, making 39 to 68 French teacher in high school.

Count it down.

Let's hear a debt-free scream.

Count it down.

Let's do it.

Okay, five, four, three, two, one.

Here we go.

All right, debt-free.

Yeah,

yeah.

That'll work.

I'll take it.

Good stuff.

stuff.

Well,

the interesting thing is that, folks, you can do it.

That's the point.

Why did we start doing these debt-free screams?

Because somebody just started screaming one day on the phone.

And then some guy called back the next week and said, hey, can I do that?

And we said, sure.

And so it started with that.

He must have been from Alabama, too.

Yeah, well, he definitely was country.

I remember his country fried like that.

That sounded like I did, you know.

And so I knew where he came from.

And,

but anyway, it was, yeah, let's celebrate.

Let's celebrate.

This is hard work.

It's sacrifice.

You sell so much stuff the kids think they're next.

You live on beans and rice.

You don't go out to eat.

You don't go on vacation.

You get the debt cleaned up so you get your life back and the companies don't own you anymore.

Your stress level goes down.

Your relationships are better.

And you get on this process of building wealth.

And it's called hope.

Yeah.

And it just goes counter to everything we're taught today, which is

maximize everything, leverage everything, get all the shiny new stuff all the time, get new stuff and get new stuff and get new stuff that you can't afford.

I love how simple what she said, what Emily said was, what was the key here?

Living on less than you make.

Don't buy it if you don't have the money.

Don't buy it if you don't have the money.

Sounds like her great-grandmother would have said.

Yeah.

Honey, if you don't have the money, don't buy it.

And 20 years ago, $118,000 house, I guarantee you there are people pressuring her to get a bigger, nicer place than that.

And to have the discipline even back then to get a house that was $118,000, this is what it looks like.

She's paying it off in her early 40s and now she's free.

It's awesome.

100% dead free on a teacher's salary of 40 years old, 42 years old.

Shut up.

Don't tell me this stuff doesn't work.

Our scripture of the day, Luke 12, 15, and he went on to say to them all, watch out and guard yourselves from every kind of greed,

because your true life is not made up of the things you own, no matter how rich you may be.

Dr.

Joyce Brothers said, Credit buying is much like being drunk.

The buzz happens immediately and it gives you a lift.

The hangover comes the next day.

Amen.

Katie is with us in Houston, Texas.

Hi, Katie.

How are you?

Hi, I'm good.

How are you doing, Dave?

Better than I deserve.

What's up in your world?

So between 2022 and 2024 was probably the roughest part of of my life.

I am very young.

I'm only 27, but I was married, experienced domestic violence.

We separated, dealt with a miscarriage, then I got divorced.

Didn't feel like being on earth.

But I've come to find to really, really, really know Jesus Christ more than I thought I knew him.

So that's the plus of it all.

But I made a lot of foolish,

no matter what I went through, I can't victimize all the foolish financial mistakes I made.

I used to like be a restaurant manager.

I've made

over 60K, over 65K

before annually.

Last year, I experienced a bit of homelessness and I was able to come back home with my parents.

And October, I didn't have a job for about six months.

I never imagined being there.

And I finally got a job, but the income, this is probably one of the lowest jobs I've ever had, which is not anyway it's 37 I think 35 or 37,000 so for me just never knowing how to budget or like I've seen a budget sheet and thought oh that's cute let me try to play with the number never really like understanding not knowing what to do like I'm like help me I think I got about like thirty thousand dollars worth of debt not too much

You have a car debt I've been watching the show for the last year.

You have car debt.

Yes, and I would be negative if I tried to sell it.

No, no, it wasn't what I was asking.

I'm asking how much you owe on your car.

That's all I ask.

$24,000.

Okay.

And is that in the 30, so there's six more or there's 30 more?

No, no, it's six more.

Okay.

And so six is on credit cards.

Yes.

Okay.

All right.

Good news.

All right.

So here's the situation as I hear it.

And then Dr.

John can chime in as well.

I hear a person who is a trauma survivor.

Okay?

When you go through a miscarriage, that's trauma.

When you go through a divorce, that's trauma.

When you go through domestic violence, that's extreme trauma.

Okay?

All of these things

gut punch you.

All of these things mess with your confidence.

And therefore, you end up on the street and are bouncing back in mom and dad's house and getting a fresh start.

That's what I heard.

Tell me about the six months of not being able to work.

Were you unable to find a job or were you struggling with your mental and emotional health?

Tell me about that time.

So I have

experience with sickness due to type 1 diabetes.

So when I came back initially in October, I had strep throat, but it just hit me way worse maybe than it should have.

I'm not sure.

I was out for like maybe two to three weeks with that, and then I started back on the job hunt

around,

I think, a couple of weeks before Thanksgiving.

I was filling out applications.

At first, I was doing it, you know, on inde but I'm like, okay, well, let me put in some more effort, fill out full applications.

I have found that on a YouTube I watched, let me fill out the full application.

And I could not get any

that aren't very successful.

Are you staying with your parents now still?

Yes, yes.

Do you have a good relationship with them?

Is that an okay place to be?

Yes.

Okay.

I would love, let me ask you one more question.

How old are you?

27.

Oh, 27.

27.

I would love

for you to get a whole bunch of little wins in a row.

Before

what I hear is somebody that like broke a kneecap, broke the other ankle, tore their Achilles tendon, and you're just now walking and you're calling us asking how you can get, what marathon training program.

If you had nowhere to live and a very unsafe situation, then we would be having another conversation because you would be in a mess.

The fact that you have a safe place to land for a minute, I would love to see you go 60 or 90 days and just do this job, clock in, clock out, feel good, start to trust yourself again, work really hard at this job.

Even if you think, like, man, it's just a $37,000 year, be the best person in that whole arena.

And if it's selling cell phones, sell cell phones like no one has ever sold a cell phone before.

Come home and be a present,

like present with your family.

Hey, let's get our feet underneath us for a second.

While you were racking up this debt and all this trauma was going on, did you also gain weight?

I recently, the last year, through homeless, I never noticed, but when I came back, all of my family was telling me how much

weight I gained.

And I forgot to tell y'all, actually, in between 2021 and 2023, I actually couldn't walk.

I was dealing with peripheral neuropathy, but thanks to God I could walk again.

So it was just, yeah.

That wasn't a slam.

There's a normal correlation with that, okay?

Because when all things fall apart, it's not unusual for people to eat their way out of it.

I even tried that during COVID.

It didn't work.

I I ate every donut in a 50-mile radius.

It was great.

But it didn't work, but I tried it.

So, you know, what I would add to John's thing on your quick wins is

it sounds like you've got a recently found great, wonderful faith in Jesus.

And so I would set up a morning routine that involves your spiritual health and some

beginner exercise programs.

Going for for a walk for 30 days.

Let's get some beginner exercise programs going.

That releases a bunch of wonderful chemicals in your body that helps you feel better.

And you'll have the benefit also of losing weight and feeling better about yourself from the disciplines.

So lots of little wins.

You know, let's see how many days in a row you can walk at least a mile.

getting up at 5 a.m.

Let's see how many days in a row you can read at least two chapters in the Bible and spend 15 minutes in prayer.

Let's see how many days in a row.

Let's get some streaks going, some good streaks.

And then that gives you the foundation for I'm winning.

And I can start talking about, okay, when I'm 37, I want to be a XYZ.

And that means I need to start making some moves, some career moves that way.

But right now, I'm with John.

I think a good 60 or 90 days of just...

going on a walk every day, doing a Bible study every day, going to work every day, and being an excellent version of you, that's going to be really, that's going to be a breath of fresh air for you, kiddo.

And that's going to build the confidence back up because all this crap that's happened to you, when I went through bankruptcy, one of the things it is, it stole my confidence.

I was a cocky little twerp, and I was, all of a sudden, I was completely humiliated.

He's got that back.

Don't make any sense.

Don't worry about it.

It'll come back.

It'll come back.

But I mean, no, now I'm just confident.

It's different.

But

what happens is your confidence grows back with these experiences.

Your experiences with the Lord every morning, your experiences with the rain and the sunshine out there doing that one-mile walk or whatever it is every day, get some light weights and start moving them around to get some tone back.

You're going to start to feel better about you.

And that version of you has a lot better chance of landing better and better and better jobs.

I'm also going to hook you up with my friends.

I'm going to give you three months for free with our friends at BetterHelp.

Free therapy.

You can do it at home on your computer online with a licensed therapist, okay?

Thank you.

Yeah, and we'll.

But you got to use it though.

Is that fair?

Yeah, that's a deal.

Awesome.

And we'll also put you into every dollar into Financial Peace University.

We want to walk with you while you get better on this, but I think you're going to walk before you run again to John's Point.

And that's so okay.

It's the way you got to do it.

Is that cool?

Yeah.

Yeah, yeah.

It was just so unfamiliar just being just this broken.

And

it was like, okay, God, where are you?

But it's like, okay,

like, I'm ready.

He's right there.

That's where you find him, is right there.

You can do a whole bunch of little steps in a row.

That's where you find the best parts of him, is right there.

We're super proud of you.

Yeah, good job.

Awesome.

Good job.

Hang on.

Christian will pick up and get you taken care of.

That puts this Hour of the Ramsey Show in the books.

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

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

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