Crisis Doesn’t Wait for You to Get Your Financial Act Together

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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.

George Camill, number one best-selling author, Ramsey personality, and co-host of Smart Money Happy Hour, one of the Ramsey Network's YouTube hits.

For sure, he's my co-host today.

Open phones here at 888-825-5225.

Sarah's in Los Angeles.

Hi, Sarah.

How are you?

I'm good.

How are you, Dave?

Better than I deserve.

What's up?

So my husband and I are expecting our first baby in a few months.

Yay!

And yes, thank you.

We are renting in Los Angeles,

and our mother-in-law, his mom, currently lives with us.

So I'm just going to preface with that.

My husband's grandma has offered to buy her daughter, so my husband's mother, a house in our name so that she is not docked by her unpaid debts from the IRS.

And so my question is, is this relationally wise?

I love my mother-in-law.

She's incredible.

And

if it is, what do we need to have on paper to kind of help sort this situation out where it's not unwise for us later on?

So you're not going to live in the house?

We are.

So we would she'd buy it in our name and we would live in the house and the mother-in-law would live live with us.

Is she in poor health?

She's not in poor health.

Okay.

But this is an ongoing.

You're going to take care of her for the rest of her life though.

Should live with you forever?

My husband and I agreed that that would probably be the case, yes.

Why?

A handful of things.

Honestly, I love her.

She's the best woman in the world.

That's different than living with them.

Yes, she currently lives with us right now.

I know that.

Why does this lady need to live with someone else for the rest of her life?

Because it sounds like she's like, what, in her 50s or 60s?

Yeah.

Yeah.

Okay.

Has she got issues of some kind?

Yeah, so she has a lot of unpaid debts.

And

so

grandma is trying to take care of her by providing a home.

Is she not working?

That's not my question.

My question is: why does she need to live with someone else like you the rest of her life?

I guess she doesn't have to.

I guess we would choose to.

Okay.

All right.

I'm just saying if grandma buys this house for her, you're going to be stuck with this forever.

Otherwise, you move out.

No, it's in her name.

It's in Sarah's name.

But the expectation is that you take care of his mom.

Yeah.

Okay.

How old is your mother-in-law mother-in-law?

55 55 does she work

yes

why the hesitation it doesn't sound like not much

she door dashes so she's what no she does door dash

okay delivers so why does a 55 year old woman not have a sustaining job to earn money to pay back her debts

she did and then she lost her job okay how long ago uh in september why did she lose the job?

The company changed the structure of the model.

Okay.

Why did a 55-year-old since September not gone and gotten gainfully employed if she has a bunch of debt?

That is separate from me.

What does that mean?

That's separate from me.

What does that mean?

I see that she is

working DoorDash and she's trying her best right now,

and she's going through a divorce.

She's going through a divorce.

Well, there's an interesting piece of information we didn't have five minutes ago.

Okay.

No, I would not do this

for two reasons.

One is it is a permanent solution to a temporary problem.

It is not good for your mother-in-law.

Your mother-in-law, as she is going through this divorce, needs to recover from the grief of the ending of the marriage and heal and go stand on her own and have a career and have what's known as a life, not hiding at her son's house from reality because she went through a nasty divorce and never re-engages in society again.

If you don't work since September and you're doing DoorDash and you're 55 and you're capable, there's a problem.

Okay?

That's a problem.

It's not good for her.

Her having the dignity of building a sustainable life and working her way through the debt.

How much debt does she have, by the way?

Close to a million.

Okay, how did she get a million dollars in debt?

I don't ask questions.

That's all I'm wrong.

Well, these are questions you should know.

Okay, so no, you should not do this.

You are tying yourself to people you don't ask questions about permanently, and you are taking away her reasons for getting back on her own feet.

This is not good.

It is not healthy.

Secondly, the whole reason to do this is to deceive.

Your grandmother is teaming up with your grandmother-in-law is teaming up with her daughter and using you guys to deceive the people that she owes.

This is deception, and I'm not going to participate in that.

It's a lack of integrity.

It's unethical.

There's a lot more underneath the surface.

Sarah, there's just so much going on here that you're not talking about or you don't know, and it's really, really scary.

There's a line of crazy running through this conversation and for your all sake for her sake she's got to get back up on her feet she's got to deal with this what's going on and I don't know if she's going to end up with a million dollars in debt I'm thinking I'll just I'll I'll suppose I'll just I'll I'll I'm just gonna

we let her go but I'm because she doesn't know anyway but I'm guessing the ex-husband has a maybe a bunch of unpaid IRS debt, and maybe this lady had nothing to do with him, his business failure, and she probably can get rid of all of that using innocent spouse provisions and so forth.

And I'm guessing that if he ran up a bunch of debt in the divorce court, even if it is somewhat in her name, I got a feeling she didn't buy purses.

Yeah.

To get to a million dollars.

I think there's some business weirdness with the ex-hus, assumed-to-be ex-husband going on, melded into this.

Maybe he ends up with a bunch of this debt.

But instead, we're just participating in this cloak of invisibility, and I don't want to participate in that.

I want her to be standing there,

healed a fine 57-year-old two years from now who has a wonderful career and has dignity and stands on her own and comes over and visits the daughter-in-law that loves her dearly regularly.

And I think that's what I would do.

And if grandma wants to give her some money to clean up some of the debt that's left over, I've got a feeling it's not going to be that much.

It's not going to be a million as she leaves the money.

Buying a house for

I would just use the money.

Instead of buying the house, I'd use the money to clean up the debt.

That would be the ethical.

At least try to settle it.

I don't know what to do.

If you want to give somebody money for something, but let's give somebody money to hide.

Let's give somebody money to deceive, put it in somebody else's name.

No, no, no, no, no.

Oh, boy.

Nope.

Well,

you don't get that on every show.

Hey, what's up, guys?

It's Jade.

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Emily is in Bristol, Virginia.

Hi, Emily.

Welcome to the Ramsey Show.

Hi.

Hello.

Hi.

I'm calling it.

I've got credit card debt that has been bought, and they're taking me to court, and I need some advice on how to deal with this before I get to court.

I don't want to go to court.

Okay.

How much is the debt?

$6,067.63.

Okay.

Has a hearing date been set?

Yes, the 26th of June.

Okay.

Coming up quick.

All right.

And

why have you not been able to pay it up to now?

Well, because we had made some

bad choices and

we couldn't make the payments.

That was pretty vague.

What kind of bad choices did you make?

Well,

my husband runs his own business and

it had gotten down to where it was like paycheck to paycheck.

Okay, so you weren't making any money?

Not a lot.

Yeah, okay.

So what do you guys make now?

Oh, gosh.

Hello?

I don't know.

Oh, you don't know what you make now?

Do you work?

No, I don't.

Okay.

I'm a stay-at-home homeschool mom.

Does he work?

Yes, he works for himself.

He runs his own business.

Which isn't making money?

Is it profitable now?

It's coming.

We're working to get the cash flow again.

So it's not.

So how are you?

Are you guys still surviving off of credit cards?

Are you eating?

No, we don't have any more credit cards.

We don't.

And this one has not been in use, and so we've cut them all up.

And we only pay for cash, but

we are doing okay.

By the grace of God, because

he's what keeps

us going and keeps things coming in to where we are able to eat and pay our monthly bills.

We are okay as far as all that going.

If you're getting sued and going to court, I would say you're a little less than okay.

I mean, you act like everything is going great, and it's not.

You guys don't have a lot of income coming in.

And do you have any more debt outside of this credit card debt that's gone bad?

Just our truck payment, and that's it.

What's the truck payment?

How much is it?

It is

$700

a month.

So you have a truck you can't afford.

Well, he uses it for I don't care what he uses it for.

He doesn't have any money and he has a $700 truck payment.

So, no, that's completely insane.

All right.

The answer to your question is

that a debt buyer will buy bad debt, old bad debt, like credit card debt, for somewhere around a nickel on the dollar.

So somewhere around $300 is what they paid for this.

Okay?

This is an unemotional, quick and easy lawsuit that you will automatically lose.

There's no point in even going down there because you owe the money, you did not pay it, he's going to win.

That simple.

Okay?

And then he could take liens against what you have, which is nothing, because you don't have anything.

You're broke.

So there's not a lot that's going to happen.

But given that he paid $300 for it, our experience is that probably $1,500 cash will settle this.

Can you scratch that up?

Yes.

In the next two weeks?

Probably.

Yeah, that's your only shot.

I mean, you do not want to put pay, you do not want to settle for payments.

I would rather just let the judgment hit.

You're better off to let the judgment hit than you are to settle for payments.

So

call the

attorney's office that sued you and get on the phone with them.

You're probably going to be talking to a paralegal, and they are a trained bill collector.

So this is not a nice human being.

Right.

This is not, you know, let me tell you, and please don't bring up God.

It's not going to work.

Oh, I won't.

Okay.

Because, you know, don't blame him for this mess.

And so, and they'll use that.

They'll use that back.

They'll use it back on you.

I promise you.

Anything they can do to needle you, to make you afraid, or make you angry, is their job.

And they're very good at doing both.

So you've got to get very

good shields up emotionally and spiritually.

And it's just a simple conversation.

I have $1,500.

If you will take that as settlement in full, we can do a deal right now.

I'm not going to argue with you.

If you start a bunch of crap, I'm just going to hang up on you.

And I'll call back later and get your replacement.

Okay?

And so you just keep working on it, and you be very, very, very tough.

and argue and just go, I don't have any, this is how much money I have.

If I had a bunch of money, we wouldn't be having this conversation.

Don't be stupid.

So you need to take this money.

It's all I have.

And if you will take this as settlement in full and give it to me in writing that is settled in full for $1,500, I will make arrangements to get you the $1,500.

Okay.

And it's probably going to take a lot more discussion than you and I have had today.

You're going to have a lot of arguments and back and forth.

It may take three or four phone calls.

You may go, you need to go talk to your boss because apparently you don't have the power to do a deal.

But if they can turn $300 into $1,500 and not try to chase you and try to get money out of a broke person, they will.

They'll take it.

Okay, so it's great.

But you got to pay them in cash, lump sum.

Okay, no electronic access to your checking account.

No, you don't give them any information about your husband's business.

You don't trade any.

Do not make their job easier if they come after you by giving them a bunch of information.

Keep your mouth shut as far as your personal details go.

Okay?

Okay.

So you're dealing with the enemy here.

This is a war

and they're good at what they do.

You're about to find that out.

Okay.

So settle it, lump sum for cash.

That fixes it.

But,

Emily, for God's sakes, you two get your crap together.

You don't even know what your husband makes, and you're getting sued for $6,000.

Y'all need to get your head.

pulled where you can see sunshine again.

And that's a $700 truck payment when you're calling me broke and getting sued is insanity.

There is no rationalization or justification for that.

The truck has got to go, and husband has to get profitable, or he needs to go get a job and feed his family.

One of the two.

Because you guys are not taking care of business.

This credit card debt is not your problem.

It's the symptom of your problem, which is an irregular, horrible income and a lot of mismanagement there.

So you guys, I love you, and I want you to be prosperous and win.

And fixing your credit card debt lawsuit is not not going to do it because it's not the problem.

It's the symptom.

Okay?

So please go deal with this stuff.

If you promise you'll do that, I'll give you some tools to help you do it.

You want to work on it or not?

Yes.

Okay, you hold on and we'll put you into Financial Peace University and give you every dollar premium.

And you and your husband need to sit down and clean this mess up, girl.

Y'all have been living in stress for so long.

I can hear it in your voice.

I can hear the pain and the uncertainty in your voice.

And And by the way, that debt collector is going to hear the same thing I'm hearing.

So they're going to smell weakness.

They're going to be like a shark with blood in the water.

So you've got to come in with a little more sass than you came at me with.

No pause.

A little bit more sure.

Very confident.

That's what you need on this phone call.

And just, you need to get after them and settle this thing.

Otherwise, just let it turn into a judgment and then settle the judgment.

It's the same thing.

It doesn't matter.

And they're probably not going to do anything with the judgment.

And if they did, you know, I'm not sure exactly what Virginia law allows them them to do with garnishments but there's not a paycheck to garnish so they'd have to just start scarfing up assets and they don't want a $700 truck payment any more than you should so they're not they're not coming after the truck it's not anything and your husband doesn't seem to make anything so I don't know what they're where they're gonna get any money they're probably not gonna get any so they really ought to take this deal it's good for them

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Investing may seem complicated or confusing.

When someone starts talking about investing, do they sound like Charlie Brown's teacher?

That's how a lot of people feel about it.

And, you know, and then you're like ashamed because you can't understand what they're saying and they're not really saying anything.

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Your job is to manage your money and find someone with the heart of a teacher, not Charlie Brown's teacher.

that has a heart of a teacher that will sit down with you and explain to you what you're doing and what you can do and what your options are and then based on that you do some good investing.

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Lori's in Atlanta.

Hi, Lori.

How are you?

Hi, Dave.

I'm well.

How are you?

Better than I deserve.

What's up?

There we go.

Like to hear that.

So my question, straightforward, is just:

I pulled out some money from investments to pay for my daughter's first year of college.

Yay.

And

this was money that I inherited two years ago.

Do I tithe on that chunk of money?

Okay.

Well, I mean, number one, let's lay down the foundational rule that the tithe is a tenth of your net increase according to Deuteronomy.

Okay.

I'm assuming you're looking at this through a biblical lens, correct?

Yeah, that's exactly.

Okay.

Just making sure that we're on the same page because sometimes people mean different things.

All right.

So I'm going straight to the scripture.

Now, the thing we don't want to do is we don't want to get ever too legalistic or freaked out about this because somehow God doesn't like us if we do it wrong.

Because God loves you.

You don't have to worry about doing this wrong.

You can't give and mess up.

It's impossible to mess up giving.

Generosity is the heart of the Father.

And so you've got his heart

when you're just asking the question, you're good.

Okay?

Now, the technical, mathematical answer is you would tithe on your increase, which would be the growth.

How much is this?

How much was the inheritance?

I had a feeling you'd ask that, so I came prepared.

I inherited $927.

Is that what went into the investment?

Is that what went into this?

So, no, that's not what went into it.

With $450 of that, I bought a house.

Oh, okay.

This account, how much of the money in this account is inheritance?

The one you're talking to me about?

All of it.

Like, I haven't put anything into it.

I just, I used part of it to buy a house and I turned the rest of it over to my financial guy.

Right.

And so, how much has that rest, what was the rest of it?

$400 or $520?

$5.27.

$9.27 minus $450.

Oh, okay.

All right.

That's nice.

Gotcha.

Okay.

So, anyway,

did the amount that you gave to the financial,

how much are you pulling out for college?

$44K.

Okay.

And what has the

do you have?

Ask your financial guy what percentage this account has grown since you opened it.

Okay.

All right.

Let's use a pretend calculation.

Okay.

Let's say that your financial person comes back and says,

okay, your investments that you placed with us a year or two ago have grown 10% since you placed them here.

Okay?

That means that out of the 44K, 10% is increase.

The rest of it was principal.

So you would only tithe on the increase, technically speaking.

Because the other money was already yours.

Okay.

So your only extra income is the return on investment that you got.

Okay, you're starting to go a little Charlie Brown's teacher on me.

Okay, all right, good.

Thank you for catching me.

All right.

So the money that you put, the 527 that you put in, you don't tithe on it or the $500,000 or whatever it ended up being that you put into the investment.

You don't tithe on it.

You only tithe on how much has gone up.

I get that.

Okay.

So how much did the 44 go up?

How much did the 44 go up?

If the 44 went up 10%,

if the whole thing went up 10%, then the 44 went up 10%.

Does that make sense?

Yes.

So when I have a yearly review with him, and I just had it two days ago.

Okay.

No, that's not right.

It was a few days ago.

That's okay.

Did they give you a return?

He didn't give me a percentage.

He gave me a number.

He said it had grown $58,000 over the past year.

Okay.

And you had $477 in there based on your math that you told us.

Ish, yeah, yeah.

Okay.

Okay.

So

I want to look at what I put in

versus what it's at.

What is that?

What is that?

A 12% return.

A 12% rate of return.

Okay.

And so if you're pulling out 44, 12% of that is tithable.

The rest is not.

Which means that's $5,280 is how much that's the growth.

And so if you tithe on that, and let's say it's 10%, that's $528 you would then tithe.

That's the math.

Okay.

So, and again, I don't want to fall into legalistic stuff.

No, it's $5.29.

You gave too much.

$5.27, not enough.

So get it right.

Well, in order to tithe on it, I would actually have to pull it out because, like, I'm not getting payments on this.

Right.

Okay, so

pull out an extra $500.

Okay.

And you're going to be real close.

Oh, just $500?

That's not.

Yeah, that's your tithe.

$5,000?

No, remember, $5,000 was the growth, and then you're going to tithe on that.

And so 10% of $5,000 is $500.

Okay, okay.

Okay, that's really good.

So $44,000.

Okay, so $58,000.

I'm going to Charlie Brown teacher on you again.

I'm not going to do it.

Okay.

But that's the answer.

Yeah, that's how you get there.

I'll crunch the numbers again.

We did it for you.

Okay, so 12% is what you made on your money.

12% of 44

is

$5,200.

And so a tithe on that would be $520.

Oh, okay, okay.

I'm following that.

Good.

Okay, we got there.

All right.

It's a really good exercise to go through.

And then when you finish up, just don't worry about it.

So, I mean,

if you give an extra 500 bucks or we'll give $1,000, I don't care.

It's not, you can't mess this up.

Right.

I just want to have an obedient heart.

You do.

You already do.

You ask the question, and that tells me you got an obedient heart, and then you're going to step in.

You're going to do something here with that heart.

And,

you know, and you're going to be heading in the right direction.

But

I, yeah, I just want to set everyone free that generosity is the answer.

And that's the answer to the question.

And if you want to get into the jot and tittle, so to speak, if you want to get into the tiny details, it's kind of fun.

It's an interesting Bible study, but not for purposes of God loving you more or giving you more grace.

There's no indication in Scripture that he loves tithers more than non-tithers.

None.

Nor is there any indication in Scripture that tithing is a salvation issue.

None.

Okay?

So don't get, you know, I'm not preaching at you, Lori, but I'm just saying we get this stuff a lot because we push generosity so hard.

But we want you to give because God gave His only Son, and you're made in His image.

He's a giver.

Your DNA, your spiritual DNA is that of generosity.

When you give, when you have a heart like Lori, what it creates is increased creativity, increased productivity, increased health, increased passion.

Everything in your life is accentuated when you step into your identity, and your identity includes generosity.

So it's more about the spirit and less about a common core math riddle to get it perfectly right.

Common core.

That's what it felt like.

It felt like theology is like in Sunday school, but make it common core math.

Thank God there was no flannel board.

Oh, man.

I miss a good flannel board.

To see Noah just building his little ark.

Oh, man.

That was fun.

That really was a brain teaser for me.

Thank you for allowing me to do it.

Took a minute.

My pleasure, Laurie.

Took a minute to back into it.

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Matthew's in Atlanta.

Hey, Matthew.

Welcome to the Ramsey Show.

Hey, you can pleasure to speak with you both.

How are you?

Better than I deserve.

How can we help?

My question is, my fiancé and I are getting married in two years.

I just finished baby step three,

and she is finishing in debt school in two years with $50,000 in student debt.

My question is, do I save for her debt or do I start investing?

You save for her debt.

Okay.

Why?

So you can just, the day you get home from the honeymoon, you pay it off.

Yeah, that was my original thought.

Why two years?

I'm a band director, and those jobs are far and few between.

I landed a job in the part of Georgia where we would like to start our life together, and she is at the University of Georgia.

And

if I were able to find a job there sooner rather than later, I would, of course, move there.

But we decided to stick with me working here and while she finishes school and then get married.

Wow.

Okay.

Whew, it's a long wait.

Okay.

Yeah, It's just hard.

Just hard to do that.

We've been long distance for about four years now, so she's a rock to my life.

And so I'm excited to start life with her.

Amen.

Yeah.

How much can you save per year now that you're debt-free with an emergency fund or that you're working on it?

I just super lucked out with a new rental spot.

So I'm putting aside about $1,500 a month, so a little close to $15,000 a year.

Amazing.

Yeah, so you probably can get pretty close.

Yeah.

Yeah.

$18,000 a year plus some interest will get you pretty close to 50.

Yeah, yeah, you keep

and you know, and hopefully she didn't even have to go quite that far.

So it's a good way to start your marriage off debt-free.

Well done, sir.

Good work.

Courtney's in Columbia, South Carolina.

Hi, Courtney.

How are you?

Hi.

How are you guys?

Better than I deserve.

How can I help?

Great.

Yeah, so I'm just wondering if I should continue with my financial advisor that I have right now.

So here's my situation.

Unfortunately, I'm going to have to go through a divorce after almost 38 years.

And yeah, no, thank you.

And the attorney said that I would have to pull out a guesstimate how much money I would need because this, these type of divorces may last 12 to 18 months, meaning pull out from my 403B.

I'm a retired educator.

And so I called my financial advisor to give her that information.

And she's not happy about that.

She said that's a lot of taxes.

You won't get that money back.

On and on and on and on.

So here is my, that's my question.

Should I remain with her?

I feel loyal to her because when I retired, I had so little money and no one would take me on.

She did and has grown my money.

So.

The only money you have to your name is just 403b.

Yes.

And the attorney's saying to pull it out to cover legal fees for the next 18 months?

Yes, because he's going to put some kind of ordinance in place where we cannot touch our money.

So, you know, people can't, you know,

my soon-to-be ex can't hide money and i can't hide money but

where is there no other cash in the marriage

uh no she has his money and i have mine

but you don't have any except a retirement fund yes so how are you operating the household um well i have a pension and he's still working

okay but i mean there's no cash laying anywhere the only thing he has is a retirement account only you've got is a retirement account yes so he's still working y'all were living hand to mouth

No, no.

So he's still working and has his large full three.

I mean, 401k.

I get a pension because I retired after 30 years of teaching, 31 years of teaching.

How old are you?

I have a pension.

I am 61.

Okay, how big is your pension?

Almost $4,000 a month.

Okay.

All right.

And what amount was the attorney suggesting that you pull out?

He has not because, of course, he doesn't know.

It depends on, you know, if he thinks it's going going to be contested, that's all he said 12 to 18 months.

Okay, but so he didn't give you a suggested amount?

Nope.

And how much is in your 403B?

About 400K.

Okay.

And so you told me that.

I'm sorry.

So your financial planner, you called and said, I'm going to have to pull some money out for attorney's fees, and your financial planner had a duck fit.

Yes, and also to float me in my place until I find a job, which I'm on it right now.

I think I have one.

But I don't know yet.

You have a pension coming in.

You can eat on that, can't you?

Yes, I can.

I'll just need a little help.

Why would you need a little help?

Didn't you say you have $4,000 a month coming in?

Yeah, yeah, yeah.

Well, I have another bid.

I have one car, about $18,000.

Yes, that's it.

Okay.

And are y'all separated?

Yes.

So where are you living, in the house or in a new place?

No, no, no.

I'm in another place.

Okay, and how much is the rent?

$1,600.

Okay.

Why did you sign up for $1,600 in rent in Columbia, South Carolina when you only have $4,000 to work with?

No, I know.

Is it a long-term lease?

12 months.

And it started when?

Last month.

Okay.

What's your car payment?

$390.

So I would not pull money out to live on.

I would go to work.

Okay.

Okay.

To live on.

And I would add to the pension with your work money.

You can probably substitute.

You can probably do a lot of other stuff that makes pretty good money.

You can probably do some tutoring.

You can probably do a lot of stuff.

It makes some good money.

And you need to throw a couple thousand dollars on top of that $4,000 and you need to live on $6,000 while you go through this.

That's your short-term game plan.

So we don't have ⁇ because every dollar we pull out of the 403B is going to have taxes on it.

It does not have a penalty on it.

Correct.

But

I would pull, you know, I would probably pull 30 grand out and just set it in an account

and get ready to write some attorney's fees checks.

Hopefully, you won't spend that much.

I hope you don't.

Yeah.

And I don't want you to use that to live on.

I want you to go create some income with your pension and live on that.

Okay.

I want that money sitting over there, and the only thing you've got to do is just pay taxes on it.

And your tax rate's not going to be that high.

But your question was whether you should leave the financial planner.

Yeah.

Why would you leave her?

Is it her, did you say?

Yeah, yeah, yeah, yeah, yeah.

She just had a fit, and I'm like, but this was attorney.

Wait a minute.

Now, when you say had a fit.

Yeah, she's like, that's a lot of money.

You're going to have to pay a lot of taxes.

I said, I know.

And I'm just telling you what he said.

I'm just trying to be prepared.

Okay.

You know, this is all, you know.

Right.

Yeah.

Well, I mean, it's not a lot of money if it's for taxes on $30,000.

Right.

Did they think you were going to be able to get a lot of money?

It's going to be like $5,000 or $6,000.

Yeah, so I don't know.

Well, I mean, here's the thing.

If the

I can't tell how this conversation sounded by the way you're describing it exactly.

So there's two possible things.

If the conversation was

sounded like, Courtney, you're an idiot.

I'm smarter than you.

You do what I say.

then you should leave the financial planner.

If the conversation was,

girl, I love you and this is going to cost you a lot of money and this is crazy.

Don't do, oh my gosh, it's a a lot of money and she's trying to take up for you.

Yeah.

Yeah, that could be.

If that's what she's doing, then you stay with her.

She was just covering.

She said, I've never done this before.

It's usually month to month.

Whatever you need, I'll, you know.

Well, it's not, but the attorney's afraid they're going to lock your accounts down.

That's what I've been telling her.

Yeah, that's what, and that's, that's very possible.

That's very possible.

So at least for a short period of time and try to put a pinch on you.

And then you've got a problem paying attorney's fees if that happens.

So, yeah, I want you to be dealing in the divorce negotiation from a position of strength, and that puts $30,000 in the bank.

Okay, okay.

And but as far as changing the financial planner, if you think she was, you know, shaming you

and being condescending, then yes, I would leave her.

Okay.

But if you think she was just excited and was trying to take up for you, then that's a good sign.

Okay.

Okay.

You see the difference?

Yes, I do.

That makes sense.

Thank you so much.

And what do you think it was?

First, I was like, I've told you this before.

And I said, this is the second time I've mentioned this to you.

And but she just said, okay, okay, that's what he's, that's what you, you know, that's what he's saying.

We'll do it, you know, whatever, whatever.

So I was just kind of like,

are you believing what I'm saying?

You think I'm going to take a cruise?

I mean, I don't know.

That was me.

Well, it's not her job.

If you want to take a cruise, she doesn't get a choice in that.

It's not her money.

Right.

Her job is to teach you the implications of your decision

and say, Courtney, you're getting ready to pay some taxes when you pull this money out, and that's a lot.

I implicated it was a lot.

You may want to stop and think about that.

Okay, that's her job.

But her job is not to

treat you disrespectfully.

And sometimes they do.

And you need to get away from those types.

They think they're in charge of your money, which is very weird.

This is the Ramsey Show.

Hey, George Camel here.

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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.

George Camill, Ramsey personality, number one best-selling author and YouTube star of The George Camel Show.

He's my co-host today.

Open phones at 888-825-5225.

Greg is in Columbia, South Carolina.

Hi, Greg.

How are you?

Hey, Mr.

Dave, how are you doing?

Better than I deserve.

What's up?

Not much.

I was calling to see, you know, how exactly do you suggest to get me and my wife on the same page when it comes down to finances?

And how to make sure that we're saving the most money that we can with two kids in private school?

You know, we're just kind of feeling overwhelmed about the entire situation.

We have your every dollar out, and we're, you know, we're kind of new to it.

We've been doing it for a month.

So I just want to make sure that we're taking care and following the right steps.

Okay.

Cool.

And how old are you guys?

I'm 30, and she will be thirty one on the twenty sixth.

What's your household income?

Um, I make forty six an hour and she makes thirty an hour.

Okay.

So what's that equate to annually?

Um, we're roughly bringing in about a hundred and thirty five thousand a year, somewhere around there.

And what is the how much the private school cost?

Uh, right now we're paying about twelve fifty a month uh for two.

So $15,000 a year.

Yes, sir.

I think last year when we filed taxes, it was like $17,000 and some change with everything

extra that we had to purchase that goes along with private school.

Gotcha.

Okay.

All right.

What do you do for a living?

I'm a lineman.

Okay.

And so the two of you a month ago decided we're going to try to start doing a budget and get on the same page, and it's been a struggle.

Yes, sir.

Absolutely.

I mean,

we've been borrowing from

her parents.

You know, we're still paying them back.

We owe them about $2,000.

You know, our family, we're not one to really talk about our struggles, but I guess it's kind of see-through.

But I just told her, you know, we've got to do something different.

You know, we want to start saving for our kids' college.

And we've currently finished baby step one, which is save $1,000, but we actually have saved $1,200.

And how much debt?

Go ahead, I'm sorry.

How much debt do you have?

Right around $47,000.

On what?

It's credit cards.

I've got a student loan.

How much is the student loan?

Her student loan is about $11,000.

And my student loan, I owe about $5,500.

Okay.

And how much on the truck?

On the what now?

How much do you owe on your truck?

It's paid for.

Okay.

What's it worth?

I drive a 2,004, so it's probably

100%.

That's fine.

And what is the other debt then?

That's $1,100 and $5,500.

That's

$16,000 to $47,000.

What's the rest of it?

How much is credit cards?

Credit cards, we've got a case card that we just paid off.

It was like $180,000.

We've got a city card that we have about $11,000 on.

I've got another Capital One card with about $900 on.

I'm trying to see what else.

We've got a whole home generator that we put in whenever we build our house that we owe about $7,000 on.

And

I'm trying to think.

How much is your house payment?

$1,600, $1,648.

Okay.

All right.

So I'm still not anywhere.

The credit cards I got $12,000 on.

I got seven on the generator.

I'm still short a bunch.

Where's the rest of that?

So, um,

so we've got

both of the credit cards.

Um.

There's another 10 or 15,000 somewhere.

Yeah, so we've got her student loan.

I got that.

We've got a city card.

We've got a farm loan.

That's a farm loan.

Yes, sir.

So we sold property

that was inherited from my grandmother.

And whenever we sold that property, we had to get it resurveyed because it didn't have a current survey.

And we didn't have the $9,000 to pay for that survey.

So we had to take out a loan to be able to pay for that survey.

And our intentions were to pay that loan off whenever we closed on the property that we were selling.

And we actually paid her car off instead.

Okay.

So we still have this loan.

I'm getting close now.

Okay.

So basically you've been borrowing left and right, and you've woke up and realized it didn't work.

And we sit down to try to do a budget.

And what happens when you're trying to do a budget?

Because it sounds like there should be some room in this budget.

Yeah, I mean, I'm all for it.

You know, I

take my lunch to work every single day.

That's not what I'm talking about.

I said when you sit down with her to do a budget and you're both in agreement that we have to clean this mess up, is that cor is that a correct statement?

Yeah, yeah, that's right.

Okay.

So she's in agreement that we have to clean the mess up.

Yeah,

she is.

So where are you misaligned, though?

So when you sit down to do a budget, why does she not want to clean the mess up?

Well, I mean, she does, but I guess whenever we're saving whenever we're budgeting each month, she sees some leftover money in the checking account.

And, you know, how can there be leftover money?

Well, we just started

like this month, this past month is the only month that we've had extra money in there because we're not spending as much.

So this month, I guess, with being extra money in there, you know, even though we're on a budget and I'm trying to tell her to save money, you know, she still sees that money and we'll...

We're not saving money.

We're on baby step two.

It's all going on the debt.

There shouldn't be any money left in the account.

It should have all been put on the debt.

Oh, okay.

You said baby steps.

You told me baby steps.

And baby step two is list your debts smallest to largest, pay minimum payments on everything but the smallest, and attack the smallest with a vengeance and any money you can squeeze out of your budget, and you throw at the smallest.

Okay.

And that should be written down in Every Dollar before the month begins.

You don't have slosh money left because you've spent it all on paper before the month begins.

Right.

You're doing it wrong.

Yeah.

That's where your problem is.

The two of you need to sit down and in writing before the paychecks come in on the Every Dollar app, spend every dollar before it comes in.

That's why we named it that.

Okay.

So if there's $400 extra, that should already be assigned in your budget to spend on your smallest debt, which is a credit card right now.

That $900 card, probably.

So you're saying whatever is left over after all the bills are paid and make a little minimum payment on all of our debt, if we have $900 left over in the checking account?

No, honey.

No, no, no, no.

It's not the checking account.

It's on the budget.

In the Every Dollar app, I want you to have your income for the coming month entered into the Every Dollar app, and I want every dollar of that spent

in the app.

And then when you write all those checks, there's not going to be any money left over.

You might have a little buffer that you leave in the app.

You might leave a buffer in there, but you don't touch a buffer.

That buffer is there just to keep you from bouncing checks.

Got you, got you.

Okay.

But

you don't spend and see if there's any money left.

You do it all on paper on the app before you start.

The two of you together decide that.

This is what we're going to spend on your nails and hair.

This is what we're going to spend for gas in the car.

And this is what's going to be left.

And that amount that's left is going on these smallest debts.

So it's going on these credit cards.

And we're going to cut them up.

And we just start attacking those debts, smallest to largest.

You're on track.

You're going to get there.

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Steve's in San Antonio.

Hey, Steve, welcome to the Ramsey Show.

Thanks for having me.

Sure.

What's up?

So I've been in the sales industry for a long time, and I've been pretty much, I've been pretty good with my money.

And about two years ago, my income

noticeably jumped up quite a bit.

And a bunch of my employees kind of in the sales industry just had the high leverage, high debt to grow your wealth kind of mindset.

And long story short, I ended up getting my primary residence.

And then a year later, bought a rental property.

And

then I got a new car.

And I'm just kind of figuring out what the best way to pay all that off is because I'm a recent fan of yours.

Kind of started listening like summer of last year and just kind of want to get out of the debt life.

Okay, so you were working a plan that's the polar opposite of what we teach people to do.

And now you want to change direction and go back the other way.

Correct.

Okay, so the way you got into this was buying a bunch of crap you couldn't afford.

Why don't you sell it?

So

I paid off my car.

So the car is completely paid off.

And then I just have my primary residence and then just my rental property.

And my rental property is rented out.

And I'm just curious because

The rental property is $300,000, and then my primary residence is $600,000.

And what are you making?

I'm making around $250,000 a year.

Okay.

So you can,

you're making good money.

So

you have any debt other than these two items?

No.

I have just like $1,000 on credit card, but I pay it off every month.

Okay.

All right.

Well, I mean, I would get on a writ.

Are you married?

Yes, with two kids.

Okay, good, good, okay.

Well, I, um,

I mean, what we, what George and I would teach you is just to, uh, let's live on beans and rice, and let's

pay off your rental property and pay off your home.

So

do you pay off the rental property first?

Yeah, it's smaller.

You can knock it out.

You probably knock it out in a couple of years, couldn't you?

Yeah, my goal is to have it pay it off within the next year and a half or so.

Yeah, that'd be cool.

And then if you've got all that cash flow, plus you're making $250, and maybe even then, maybe even your income goes up, then you just start working on paying off the house and making sure you have an emergency fund in place and cut up the credit card and quit using that crap.

But

that's just going to help you with your efficiency on the money.

How profitable is the rental?

It's not profitable because I bought the house when there was high interest rates.

So it's currently about minus $400.

It was my initial primary revenue.

What's it worth?

It's currently worth around $350,000.

Why don't you just sell it?

Well, so our thought process is...

My thought process is you're not making any money.

The idea of owning real estate is to make money on it, and this thing sucks.

Right.

Well, if I were to refinance where the interest rate was a bit lower,

then you still wouldn't be making any money.

You only got $50,000 in equity.

You're not making any money on this.

Right.

My CPA, he advised me just

we got it to where it's just breaking even it's mainly just helping uh for tax write-off purposes i think you need a new cpa he's an idiot right

oh i'm serious you know you know where you get a tax write-off from losing money right

and you're good at that so yeah you need i would sell it i would sell it yeah i don't we don't do anything for the tax write-off and especially when you're losing money on this property you're going to continue bleeding out there's going to be some cost fallacy it's going to hurt to sell it there's going to be a stupid tax but but it'll be even stupider to hang on to it no he's going to get out of it skin yeah he's got he's got oh 300 are you still bleeding money every month yeah yeah yeah i i think combined after the rental i'm about like 35 percent of both of my mortgages and my income yeah but that's not that's not relevant the point is that you would never buy you would never take a risk of this level to make no money and you're making no money you're actually feeding it and if you refinance it you're still not going to be making any money make enough to buy a biscuit or something.

And all in the name of a tax write-off, that's just bullcrap.

This is somebody who doesn't understand risk analysis.

And you're just, you have made a mess here.

And you know it.

And

that's why you hit the car in reverse and stepped on the gas.

Because you knew you were about to run over the cliff.

And you stopped everything.

You figured out your friends that were giving you advice were morons.

And you just decided, I'm not going to go that way.

I'm going to go the other way.

And so, good.

That's good.

And you paid off the car.

That's good.

But I would just sell the rental.

And then you're sitting there with a $600,000 mortgage, which is very reasonable, making $250,000.

You're going to be very wealthy in about $50,000.

You'll be knocking that out in a few years and be sitting there with a paid-for house and be stacking cash.

And now you're going to really build some wealth.

That's the direction you're going.

But I think this rental is an impediment.

I don't think it's a blessing.

And I love real estate, but I mean, there's nothing worse than a bad piece of real estate.

And this thing sucks.

So, guys, here's this is the end of the TikTok story.

High lever you don't see.

High-leverage wealth building.

Did you hear the phrase?

Yeah.

You know where that comes from.

TikTok?

Yeah, or other moronic words.

Well, they say, well, this is what wealthy people do.

Therefore, if I do this high-leverage, high-risk thing, I will also become wealthy.

High-leverage, high-risk wealth-building plan,

which is interesting because when you actually study the wealthy, which we have done for decades,

they don't do that.

And the ones that do that.

Isn't how they built wealth, and they certainly don't do that after they get wealth.

Like, oh, let's go deeply in debt now that we're wealthy.

It's not a plan of the wealthy.

This is the dumbest thing that people say.

They get wealthier pitching this stuff because they have a course to teach you how to do it.

That's how they're actually building wealth, is creating a product to sell to people on TikTok who want to get into it.

Yeah.

But don't you think in the sales world, real estate world, the risk meter tends to be broken with many of them.

They get starry-eyed.

Very cash-poor.

And here's the thing.

I'm a salesman.

That's how I grew up, too.

And I suffered from this, especially in my 20s, because one thing about if you can sell and you can make a good living, you make good money, number one.

Number two, if you can sell, you have an abundance mentality.

And then the toxic version of that is what I fell into and a lot of people do, which is you think you can out-earn your stupidity.

And stupid will catch you from behind.

You can't outrun it.

It's just, it'll get you.

And so I thought for years, because I just thought I could just go make some more money.

I'll just go make some more money.

Anytime I run into a problem,

I've always been able to go make more money.

It was the keeping it that was the problem, you know, in the early days.

And so

that, that, you know, an abundance mentality, when you get out of control, is I think I can out-earn my stupidity.

So because I have the ability to go make money and I can do stupid things and get away with it.

Like the rules don't apply.

And that kind of mentality will cause you to stay broke your whole life.

And it'll be really sad because you will have made a lot of money and have none.

But that's the

so what he fell into is very normal.

He's not a bad guy.

He's a smart guy.

I mean, he's really doing well.

Congratulations, making $250K.

I mean, that's wonderful.

Quarter million dollars.

That's a nice income.

I don't care what you say.

So that it's

great.

And

so

it's really hard for people that are wired like me and him

to commit to the slow and steady wins the race.

The tortoise always wins.

It's less exciting.

It doesn't get as many clicks as well.

We're the hare.

I mean, we're the flashy, flash and dash.

Yeah.

Well, they think speed equals sophistication.

Yeah.

And high-risk, high-leverage wealth-building plan.

This is an oxymoronic sentence.

The words don't even go together.

Wealth-building plans should not be in the same sentence with high leverage, high risk.

Because the data says otherwise.

I mean, the actual data, when you actually study people who have a million-dollar to $10 million net worth, they did not do it that way.

They simply didn't do it.

And

so I was in a...

There was a guy named Robert Allen back in those days, 30 years ago, that 35 years ago, that wrote a book called Nothing Down.

Oh, yeah.

He's famous.

Yeah, he's the OG.

And so, and he'd go, he was famous.

He'd go into a city and just never been there.

And by the end of the week, had bought three houses, nothing down.

He could figure out complete leverage, high leverage, wealth building plan.

And he set up these real estate clubs all over America.

And I was in one of them.

All the guys in those clubs are no longer in real estate business.

Oh, boy.

Except the ones that paid off their debts.

The rest, the reverse course like he was doing.

Yeah.

Like this last guy's doing.

So the rest of them are out of the real estate business.

They didn't make it.

And Robert Allen filed Chapter 11 bankruptcy.

Oh, boy.

Didn't work.

Just saying.

The OG.

You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all.

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If you found yourself trying to explain this Ramsey thing to somebody else, it can be kind of hard because there's a lot going on here.

I mean, it's like, where do you start?

Baby steps, Debt Snowball, or

Ramsey's crazy?

I mean, where do you start?

Because all of those might be true.

There's so much to say.

Yeah, there's a lot to cover.

How to build an emergency fund and, you know, how to live on less than you make, a concept Congress can't grasp.

I mean, all these things, right?

So what we did was was we put together a playlist, the Ramsey 101 playlist.

Free.

It's free.

Did I mention it's free?

It's easy to share, and there's clips on baby steps and debt snowballs and emergency funds and a lot more.

Click the link at the top of the show notes and open the Ramsey 101 playlist on YouTube and text it, DM it, send it to a group chat.

Say, hey, I think this might help.

Don't say you're stupid.

You need to do this.

That one won't work.

Say instead, this helped me.

I thought you might be interested or something like that.

We paid off $10,000 worth of debts already, and we just got started.

Whatever.

I don't care.

But tell your story.

Don't shame people with it.

That's the idea.

So, one person in your life at least, one share might change everything.

Reese is in Indianapolis.

Hi, Reese.

How are you?

Hello, Dave.

I'm good.

How are you?

Better than I deserve.

What's up?

So, I had a couple of questions.

I'm 23 years old.

I got two kids and a wife.

I had

an insurance question about life insurance.

So

I don't have this.

I don't have

a lot of money in my 401k and my retirement.

Well, it wouldn't be weird if you did at 23.

Yeah, well,

I guess I wasn't sure about the so how much do you make, Reese?

I make $60,000 a year.

Okay.

I manage a restaurant.

So life insurance is meant to do one thing.

It doesn't have to do with your retirement.

The goal is to replace your income if something were to happen to you so that your family could put food on the table and cover their bills.

That's it.

You're transferring the risk over to the insurance company.

And there's only one type that we recommend, and that's term-life insurance.

And you want 10 to 12 times your income so that if something were to happen to you, they pay out $600,000 and your family can invest that money and live off the returns.

So that's the goal.

So someone in your shoes making $60,000 would be looking at a $600,000, $700,000 policy.

Trevor Burrus, Jr.: And if you die, your wife puts that in an investment.

It makes 10%.

The investment creates $60,000, and that replaces the income that they don't have since you died.

And that's what it's for.

And the good news is, if you don't smoke and you're not overweight, you're 23, it costs almost nothing.

It's going to be

blown away as to how inexpensive it is.

Just go to xanderinsurance.com.

We've been endorsing Jeff Zander and that team for almost 30 years now, and they do a great job finding you the cheapest possible 15 to 20-year level term.

You should get about $600 or $700,000, and you're going to find it.

It's the cost of a pizza.

And that way, you know that your little kids and your wife are taken care of if something happens to you.

And yes, you need to go get that.

That's not an investment issue, it's a budget issue.

And for anyone listening, if anyone relies on your income, you just got married, you just had a kid, you need term life insurance yesterday.

So don't put this off

unless you have enough investments to produce enough income to replace you or for your family to be okay if

something didn't happen to you.

So, you know, normal 23-year-old, normal 33-year-old, typical student, you know, you're going to need, you know,

some, you know, 10 to 12 times your income on a 15 or 20 year level term insurance.

Absolutely.

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Might not be in all states.

Today's question comes from Joanna in Oregon.

My boyfriend is a financial advisor with a yearly income of around $80,000, but he is $200,000 in debt, mostly credit cards and student loans.

I'm almost 30 and very reluctant to continue our two-year relationship.

I have $100,000 in savings.

in zero debt.

As I talk with him about finances, it seems like he likes having a very high lifestyle and is an impulsive spender.

I also enjoy a great lifestyle, but generational wealth is very important for my future.

He's counting on his next opportunity to transfer to a firm that will provide him a big upfront bonus to pay off most of his debt, but he still spends as if he's got unlimited money.

I know he will become successful at his career, it's just right now he seems irresponsible and it causes me to hesitate about our future together.

Am I being unreasonable?

Or am I being reasonable?

I think so.

You sound like the most reasonable person in this situation.

Yeah.

That's sad, though.

I mean, obviously

you care about him, but you've realized that you're incompatible with your value system.

And

you need to address it now because the number one cause of divorce in North America today is money fights and money problems.

And they come from the differences that we're saying here.

Someone who's responsible, mature, careful, versus someone who's impulsive, out of control, and thinks they can out-earn their stupidity.

And that's what this guy is.

And so, I mean, it's okay to talk with him about it and say, listen, this is a deal-breaker for me.

If you can't adjust this and we can get it aligned, then that's going to be a deal breaker if you want to keep doing what you're doing.

And then, you know,

and I don't care what he says after that discussion.

What I care is what he does after that discussion.

And he says, you know what?

You're right.

I've been thinking about it.

I'm going going to get on a budget and you and I can talk about it.

And you can show me what you're thinking.

And I'm going to start living responsibly.

And I'm going to work on getting this debt paid off.

If that's the response, then maybe you save the relationship.

But if the response is, oh, I'm the financial advisor, you're an idiot.

I can out-earn this.

And

you just don't understand how this math thing works.

And then, yeah, which is probably the response you're going to get.

And so you're probably done.

If he's telling you who he is, believe him.

Yeah.

Yeah.

Dr.

John Deloney says behavior is a language.

So what he does

with this information that this is a deal killer,

not what he says, is what matters.

Because this guy's a salesman.

He's going to sell you.

Oh, yeah, honey, I'll do whatever.

No, no, no.

Okay.

Then I want to see four or five months of you doing

this.

Otherwise, I am going to end it.

You're going to get on a plan.

You're going to live on less than you make.

You're going to quit being impulsive and high lifestyle.

Quit living above your income.

And

this bonus is not going to make him

not impulsive at all.

This is, yeah,

he changes no behavior.

So I was him, so you can change.

It's not a DNA.

It's not a character.

I mean, it's a decision.

You can just look at it and go, okay, I need to change that.

So I used to live that way too.

And now I teach everybody not to.

So

you can change.

And not only that, I don't live that way.

So,

you know, you just, you learn.

the good news about these things is you can just decide.

There's very few people that aren't capable.

It's just a decision.

And so you can decide.

I went, you know, I didn't lose a girlfriend.

Instead, I went broke.

So that was my wake-up call.

His wake-up call might be the threat of losing you.

Maybe that's his wake-up call, and he can just decide to change.

But I,

you know,

don't do it in a shaming or a condescending way, but just say, listen, I know the data says that our marriage is not going to make it if we go into a marriage with these differences.

So we've got to get aligned, and I'm not going to join you.

You're going to join me, or we're going to have to call this.

And so you need to have that conversation.

So,

yeah,

when the kids were in

high school 100 years ago, it feels like now they would say we have to have a DTR

define the relationship.

Yeah.

Yeah, that's what we're doing.

That's what we're about to do.

Yeah.

It's not an ultimatum, but it is.

This is who we are.

It's

clarity.

This is what the next steps look like.

This financial dissonance is only going to get louder and louder, and it's going to get worse if you continue.

Yeah, for sure.

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Buying or selling a home is a big deal, and between clickbait headlines and confusing data, it's tough to know what's actually really going on in the housing market.

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

Median home prices went up slightly last month, sitting right now at about 430,000 median house price across the U.S.

More homes are on the market right now, 1 million for sale, the highest since 2019.

But in many areas, still not enough to meet buyer demand.

So prices continue to increase.

The average 15-year fixed rate rose to about 5.9 last month, a little under 6 still.

So good buying interest rate, good times.

So if you want to learn more about the housing market trends and get some tools to help you figure out if you're ready to buy or sell and do it with confidence, all free at ramseysolutions.com/slash slash market ramseysolutions.com slash market or click the show notes on YouTube or podcast.

Julie's in Cedar Rapids.

Hi, Julie.

How are you?

I'm doing great.

Thank you so much for taking my call.

It's such an honor to be on the show.

Honor to have you.

How can we help?

Yeah, you say, I just wanted to thank you because you saved my financial life in 2008, about 17 years ago after my divorce.

I was in $30,000 in debt and was able to get out in five years.

So I followed your program ever since.

So, I just wanted to thank you for that.

And I mean, it's just been a lot.

I recently got married 12 years ago right now, and we agree on everything except for one thing right now.

And we're prepping our will right now, and we're disagreeing on one thing, and that is our house, but what to do with the house after when we're gone.

My husband,

he wants to just split.

We have, he has two kids.

I have two kids, they're all adults, nothing, nobody under 18 and we have two kids which live in different states so they're gone we have two living at home they're 34

and they're just having a hard time just trying to get an apartment that they can live in right now so he wants to sell the house down the middle straight down the middle and between everybody and just sell the house right out my disagreement is is that if anything happened to us tomorrow that would leave two of the boys kicked out of the house with nowhere to go We're going to have our house paid for.

They're 34.

Yeah, 34.

You bet.

Maybe it's time to do that anyway.

Exactly.

I wish I could.

Why?

No, I mean, I just raise my little wand and I say my wish came true.

I wish.

I wish.

No, tell them to leave.

I'm serious.

It's a heart attack.

And is even if they can't afford the rental.

Cedar Rapids, Iowa.

How much is that?

You're not in Manhattan.

They ain't working much, are they?

They're working full-time.

They actually have a good job.

What do they make?

You know, like that.

What do they make?

They make one, one is,

he makes, well, one doesn't make one as much as the other one.

How much do they make?

One of them makes about

$17 an hour.

The other one makes $12.

My God, you can make $20 at Target.

You said they had good jobs.

Those aren't good jobs.

Yeah, no.

And what has stunted their growth, do you think?

Do they have some kind of disability?

One of them has a disability and he does not drive at all.

What's the nature of his disability?

It's that he has like a

basically a mental disability.

Of what type, darling?

He has anxiety, and then he's been, he is, he does not drive.

He has really bad anxiety.

Why does he not drive?

That, I've been trying to answer that since I've been married.

Okay, he chose not to drive.

Yes.

But anxiety doesn't keep you from driving.

No.

Okay.

All right.

So whose children are these?

Yours or his?

One of them is mine and the other one is his.

Okay.

And so, you know, and then you need to.

Okay, so let's stop a second.

All right.

We need to solve,

number one, let's just go back and answer your question, and you're probably not going to like the answer, but your husband wins.

Okay, okay.

And

the answer to your problem is that we need to solve the problem while you're alive to get these young men to a sustainable life so they don't need their mommy and their daddy at 34.

Exactly.

And so they, you know, we need to start working working on some career coaching and some work ethic coaching and,

you know,

get them out of the house and let them establish a life of some kind.

But

they're in their 30s.

This is called failure to launch.

Yeah, exactly.

And so you're doing them no favors.

You're coddling them.

You're doing them no favors.

You need to set some deadlines with some specific

stage-gated goals that say, okay, by this date, we're going to help you do this.

By this date, we're going to help you do that.

And so that six months from now, you no longer live here.

Okay.

You're going to get a driver's license and a freaking job that pays more than $12, and you're going to work more than 40 hours.

You're going to work like 60 hours.

And by the way, you won't have as much anxiety because you're working all the time.

It helps with that.

You got anxiety when you're underperforming, broke, and have no dignity and live in your mommy's basement.

That causes anxiety.

And that's exactly what he's doing.

I know, I can tell.

It causes anxiety because

there's no confidence

because there's no competence.

And so, you and hubby, let's develop a plan and get these young men together.

And, okay, we're going to get Ken Coleman's materials on careers.

I'll tell you what, I'll send you the set.

I'll send you the proximity principle.

I'll send you

finding the work you're wired to do.

I'll send you two sets, one for each boy, and they can take the assessment and figure out some career paths.

And let's get them in some of the trades.

The trades are paying very well right now, but they're going to get a callus and they're going to sweat and stuff.

Which your husband has done

and you have probably done.

And they will be prouder of themselves and you'll be prouder of them.

And then they won't need you to do some kind of weird, wicked thing with the will to take care of them since they didn't bother to create a sustainable life.

Exactly.

And that's what I'm worried about because they would not be able to take care of the house anyway.

Yeah, so don't give it to them.

And don't get, you know, give them half the money.

But more importantly, let's in the next six months give them a different path.

That's love.

Sounds great.

They need love.

They need to work out, build some financial muscle, some career muscle so they can carry the weight of home ownership in the future.

And then when they're,

and let's visit this time next year and they both have their own apartment, or maybe they're sharing an apartment, that's great.

And they both have good jobs and they're both working a lot more than they do now and they both have a good life plan, a sustainable situation.

And if something happened to y'all then,

they got half the money from the house, the other two get half the money from the house, then I think everybody's good.

Yeah, because it's fair.

Because, I mean, we have to split it between everybody.

It's fair.

So, you know, and yeah.

But the most beautiful part of the whole conversation is that these young men come into themselves rather than sitting in the basement.

Yes.

That's a gorgeous thing.

It's an act of love.

And I needed that step, too, because it's been very frustrating having them still at home.

So you need to sit down with them and say,

See, when I would get in trouble as a little redneck hillbilly kid, my mama would yell, the worm has turned.

I had no idea what that meant other than the beatings were about to begin, right?

And so I found out later it was Shakespeare.

Who knew mom knew Shakespeare?

But yeah, the worm has turned.

And it's like, hey, I got some bad news and I got some good news, honey.

The bad news is you're moving out.

The good news is I'm going to help you put together a plan and we're going to have a six-month exit ramp.

So let's sit down here tonight and start going over these materials and we're going to start working on your career.

We're going to get you a driver's license and we're going to get you with a therapist and help you with anxiety.

And we're going to do this stuff to get you whole so you can go out here and win because you're not having fun and

it makes us cry watching you and we want to smile watching you.

So we're going to help you.

You deserve a better quality.

We're going to help you.

And eagles don't fly when they don't leave the nest.

And an eagle that doesn't leave the

nest

eventually is known as a turkey.

So you have to help them fly.

And they don't like themselves.

Nobody likes them.

They're not like a bull right now.

But you're going to help them get there.

That's the fun thing.

Yeah, when I lived at home, I was comfy, but I needed some problems.

I needed some purpose.

And so when I got out, I found it pretty quick.

Yeah, hillbillies make it uncomfortable to stay home.

That's the way to do it.

You can stay here, but you're not going to like it.

You're not going to like it.

You don't like the rules.

Hang on, we'll send you some of Ken Coleman's materials and help you with this, huh?

This is the Ramsey Shop.

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.

George Camill, Ramsey Personalities, my co-host today.

Thanks for joining us.

Open phones at 888-825-5225.

Catherine is in Augusta, Georgia.

Hi, Catherine.

How are you?

Good.

How are you?

Better than I deserve.

What's up?

I was calling in.

We currently own two homes.

The first was our first home that we bought, and

we recently bought a new home for us and turned our previous home into a rental in hopes to keep it for

investment purposes and building equity.

And my question is: we've had a really bad first renter experience, and it's kind of turned us off of the

investment property.

And we're not sure if we should keep the property for long-term purposes or if it would be best to sell it.

Okay.

What do you owe on it?

I owe $131,000.

What's it worth?

It would probably sell no higher than $190,000 right now.

Okay.

All right.

So a good way to analyze some of these decisions is to say, all right, I have $60,000 cash sitting in a pile on my kitchen table and I don't own this house.

Would I go buy this house today with $60,000 down and take out $130,000 mortgage?

It's not a hypothetical

today,

if you did not own this house and you had $60,000, which is what you're going to have when you sell it, right?

If you had that stacked in cash on the kitchen table and you said, okay,

what are we going to do with our $60,000?

One thing is we could go buy a rental property with $60,000 down, the $130,000 mortgage in the neighborhood where we used to live.

Would you do that if you didn't own this?

No.

Why?

Because of the renter experience?

Well, partially, but also

it needs some work on the home, and it's not in the best area of town.

Oh, okay.

All right.

So this is good.

This is very good.

Yeah, there's a couple aspects about it that,

you know, I probably wouldn't buy it at all.

Probably kept you from attracting a high-quality tenant, too.

Yes.

Now the

yes.

Yeah.

Because it needs some work and it's in a less than desirable neighborhood.

Yes.

Yeah.

Okay.

That's a good analysis.

I like that.

It sounds like you know what you want to do and what you should do.

Yeah.

So really what we're saying is the bad tenant, the bad tenant really isn't making the decision here.

What's really making the decision is

that if we were going to buy rental property, it wouldn't be there.

So we ended up with this property by default, not by strategy.

By default, I mean you already owned it, so you just kept it.

So you backed into it rather than intentionally entered into it.

Does that make sense?

Yes.

And we do that a lot.

All of us do that.

And so what we just walked you through is called a sunk cost analysis.

And you can do that with anything that you own.

You can do it with a boat that's sitting in the garage.

You know, it's worth $12,000.

Okay.

If I had $12,000 in the middle of the table, would I go buy a boat?

Yeah, we love this boat.

We go out fishing every weekend.

Yeah.

Okay, then you keep the boat, right?

Or heck no, we didn't use the thing in four summers.

Why are you taking up the garage with it then?

You know, sell it and put the $12,000 in your pocket.

It's the same kind of thing.

You just do a reverse,

you reverse engineer out of where you are and say, would I do this again if I hadn't already done it?

And it helps you to clarify because you were instantly started giving me really logical, good reasons.

And so, yeah, you need to sell this house.

Okay.

Yeah, and I guess on top of that,

you know, we don't have a huge margin of like extra funds.

Right now, the renter is essentially squatting.

So that's another reason is, you know,

we don't even have really extra funds when no one's paying and we have to evict them.

Yeah,

you need to get an attorney.

You need to get really, really aggressive and get them out of there.

They're a thief.

Yes.

A renter that's squatting is a thief.

Throw them out.

Get after it.

Thank you.

Yeah.

And then clean it up and sell it.

No more than you would put up with somebody stealing stuff out of your garage, do you let them sit in that house?

Yes.

That's a thief.

We are doing everything we can to get them out right now.

Get a lawyer that's so mean you don't even like them.

And turn them loose off their chain and go, bite them.

Get them.

Yes.

Yeah, that's what you do.

That's how you handle that.

Real aggressive.

And

because that's the only language that people that are thieves understand.

Okay.

So

you have to deal with it, because you can't treat them like you'd treat like normal people because these aren't normal people.

These are thieves.

So now, yeah.

So, yeah, you guys need to sell the house because it's in a bad, it's in a less undesirable neighborhood and it needs work and you don't want to do those things.

And

you're not thrilled with being a landlord, but that's really number three.

It's not number one.

Yeah.

Even a new tenant who's decent doesn't solve these other problems.

Yes.

Okay.

Sell it.

That's what I would do.

And so that's a commentary for those of you, because real estate, everybody likes the idea, not everybody, but a lot of people are intrigued by the idea.

A lot of people want to be real estate people.

I want to be a real estate investor.

I want to be a real estate investor.

So let me just tell you: 100% of the time that you have a problem with a tenant and you're the landlord, it's your fault,

not the tenants,

because you let them in your house.

You didn't screen well enough.

You didn't ask enough questions.

You didn't, whatever.

And so it's your fault.

You set this up.

And so it's like, well, I mean, they're a little crazy.

I didn't know they were crazy.

I know, but you should have smelled crazy.

That's what you did smell it.

You just were desperate to put somebody in there because you're tired of paying payments.

You are HR for this house, and you made a bad hire.

Exactly.

It's the same thing I tell leaders inside Ramsey.

We got 1,100 team members here.

And if we have a team member that goes sideways, they go, oh, those people, look at those people.

They're misbehaving.

Look at you.

You're the one who hired them.

You're the one that let them into my building.

Come on, man.

You know, which door did crazy use?

Put a lock on it, right?

We don't let them in anymore.

This is not hard, y'all.

And so it is hard.

It's very hard.

So once I established that, and I had the huge benefit of in my 20s, I was buying low-income property, bad property.

And so I was dealing with really tough tenants.

And so I learned real quick to be real tough on the front end before I let them in.

And then if anything blinked, I was on it immediately.

If there was a little bit of a hiccup, you know, the cops were over there last night.

They must be doing drugs.

Okay, that's a hiccup.

We're going to be in there.

Okay.

We're going to clean these people out.

We don't run crackhouses.

Okay.

So

that kind of stuff.

We're going to be right on it, right on it, right on it.

So I learned to be real tough on the front end and right on the problem real quick.

And so then when you're dealing with a high-class tenant, then the same thing works, but you don't have to be as rude about it.

That's true.

But you still go, okay, I'm going to be tough on the front end so I don't have a problem later.

I would rather run you off.

You get mad about us being too thorough

because I want to get paid and I don't want you to tear up my house.

It's not hard.

You got to protect your investment.

Freaking part of it.

It's freaking drama.

If you don't want to do all that stuff, you don't need to be doing real stuff.

Just leave it in a mutual fund.

You can make money with less hassle factor.

like virtually no hassle factor compared.

You won't make as much, but um,

yeah, don't don't deal with this unless you want to deal with it.

That's why I laugh when people say, Oh, it's passive income.

Boa crap, there anything passive at all about owning real estate.

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If you're tired of living paycheck to paycheck and you work too hard to not get any better traction than you do, well, you need to get a plan, and that's called a budget.

All the people that build wealth use budgets.

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hi dave thank you so much for taking my call sure how can we help

so i'm calling on behalf of my mom she is 54 years old um newly married did you say 64 or 54

54 54 54 okay All right.

Go ahead.

I'm sorry.

That's okay.

She's newly married for the first time.

She's considering selling her house now that she is married and moved in with her husband, although she's not 100% certain that she wants to do that.

She's recently confided in me on what would be the smartest decision for her from a financial standpoint.

And if she does sell the house, what's the smartest thing to do with those profits from the sale?

Okay.

Well, they're not living in the house, and we would assume if they're married, they're living together.

So the house is sitting empty?

Correct.

The house is sitting, would be sitting empty, yes.

Would be.

When do they get married?

Recently, within the last few months.

Are they not living together now?

The transition is happening right now.

So as of next month, the house will be empty.

Why did it take three months to join your new husband?

I'm not sure.

That's weird.

Okay.

But starting in July, there will be nobody in the house.

Do you like the new guy?

Yes, I do.

He's great.

He's wonderful.

Okay.

Why wouldn't she sell the house?

I think that

two things.

So one, there is a sentimental attachment to the house.

She's a single mom and raised me in that house, so there is the sentimental piece to that.

But also, she did not have anything in retirement, so this is really the only form of quote-unquote investment that she really has with her money.

And I can give you some more background on the specifics of her financial situation as well.

I would sell it.

Is it paid off?

It is not paid off.

She has about $40,000 left on the mortgage.

I would sell it.

This lady does not need to be a landlord.

Okay.

This does not sound like

and you don't keep a house as a keepsake.

And if you have your you take your sentimental thing and you put a renter in it, it's going to really be emotional.

Yeah.

What's the smartest thing she should do with the sale of that house since she does not have anything in retirement?

Sit down with a Smart Vestor Pro and put it in four mutual funds.

Growth, growth and income, aggressive growth and international with long track records.

Like I do with mine and George does with his.

So how much is the house worth?

Okay.

Do you think?

We think it could be worth about $200.

Yeah, that's great.

So, let me give you a couple numbers.

Let me give you a couple numbers.

The stock market is in the last two years, if it had been just in a simple SP, which is not a very sophisticated investment, but it's just a simple place to park some money.

It's the stock market average, is what the SP is.

She would have made 25% and 24%.

The average over the last hundred years is about 11.8%.

Okay.

Okay.

And so let me, if you take 200 and you're 54 and you park it, and if it makes 10%, it'll double every seven years without touching it.

Okay.

And so that means at 61, she's got 400.

That means at 68,

she's got 800.

And that means at 75, she's got 1.6 million.

Wow.

See why I sold the house.

Yeah.

Can she put all of that money in at one time?

Because originally I was.

Okay.

I was looking at Roth IRAs.

I know you can only put so much in at one time.

Right.

This isn't an IRA.

This is going to be a taxable event.

Just a normal taxable account that's not retirement.

And she'll probably net, let's say she nets $120,000 after paying off the mortgage and all the fees, right?

Right.

I crunched the numbers from $54 to $72.

I used 200.

I'm sorry.

I used the wrong number.

But it's close.

By 72, at that 12% return Dave mentioned, she'll have over a million bucks sitting in that one account.

Without even putting more into it.

Without putting anything else into it.

That's just growth.

Wow.

Okay.

And that's if you pick good mutual funds that have done a little bit less than the stock market has averaged.

Okay.

Which really wouldn't be the definition of a good mutual fund.

That would be a poorly performing mutual fund if it averages less than the stock market has averaged.

But yeah, that's the kind of, so sit down with a good, go to ramseysolutions.com and hit SmartVestor Pro and sit down with one of those folks.

They're in that business.

They don't work for us, but we vet them for having the heart of a teacher, and we know that they're going to give them advice very, very close to what you hear here on the air.

So the key is your mom will understand exactly what's happening, not just being told what's going to happen.

She's going to be in the driver's seat.

Yeah.

A keepsake is a Bible,

your grandpa's hand tools, your great-grandpa's gun that he shot squirrels with in Kentucky.

Those are keepsakes.

Okay.

Your grandmother's Bible, your grandmother's shawl, your grandmother's diamond ring.

Those are keepsakes.

Houses are not keepsakes.

Okay.

You know, it would be a nice gift, get a little watercolor painting of the house and she can frame it in her new place.

Yeah.

Wouldn't that be nice?

That'd be cool.

And take a bunch of pictures and

build out one of those cool books or something

to remember it by because it's it is a valid place where he's where a warrior princess

a single mom went to battle and won all those years and so it's a good thing to remember it but we don't keep it for that reason

right

yeah okay awesome you're you're great you're a great daughter and i think you're i think she's gonna do great absolutely

that's cool that's very cool man

After all these years.

54.

I'm just impressed.

If 54 found love for the first time like that.

That's neat.

Very neat.

So for those of you out there who are wondering, is it ever going to happen for me?

Just know.

It absolutely can.

That's as opposed to the girl who Jade and I talked with yesterday.

Who is that?

Did you hear Jade?

No.

Jade has a talent we didn't know.

Uh-oh.

Jade is a professional catfish detector and catcher.

Like a catfish scammer?

No.

She caught it in the call.

She caught it in the call.

The guy lady called up and said,

do I break up with my boyfriend?

He wants me to cash out my 401k and put it in his crypto.

Oh, my God.

And I'm sitting there going, well, this guy's either an idiot or he's a con man.

And idiots are more prevalent than con man.

And then as we're going down into the call, Jade goes, wait a minute.

Have you ever actually met him?

Is this all online?

And she started crying and she is all online.

Oh, it's a catfish.

Wow.

And Jade caught a catfish.

And she live on the air.

She spared this lady who knows how much, hundreds of thousands of dollars.

Yeah, we broke her heart right in front of her, but yeah.

Yeah, that is the hardest part is crying.

Because

she believed that this was real romance, and it was a boiler room in Russia.

Yeah.

Oh, my God.

That's sad.

Complete catfish.

It's sad that a scammer in Russia has more riz and romance than real men in today's society, that they can scam these poor ladies out of hundreds of thousands of dollars just by communicating and being interested in their life.

That's what's sad.

Well, you find vulnerable people is what you find.

You came out of a bad toxic breakup.

It sets you up.

Anyone that gives you attention, you go, all right.

But I mean, Jade, who knew?

That's amazing.

Jade's the catfish woman.

She could pick them out, man.

It's pretty cool.

Proud of her.

A woman of many skills.

That's right.

Who knew?

Who knew?

So

we're going to have to get her a little plaque.

Actually, we probably need to get one of those stuffed catfish and put it on the wall.

Oh, my gosh.

Right above her desk.

She would love that.

Right above her desk.

I think she eats fish.

We should not.

It's not a real fish, George.

Oh, it's like a taxidermy?

Yeah, like a taxidermy catfish to hang above her desk.

Hang above her desk.

I was excited for an old fish.

We should give it to her as an award in staff meeting.

Oh, my gosh.

That'd be awesome.

Dave's got some ideas.

We'll see if HR allows us.

HR is not in charge.

I am.

I own it.

Oh, boy.

That's how this works.

I'll go now.

Buying and selling a home is a big deal, and you want an expert in your corner fighting for you to get the right deal at the right price.

That's why we only recommend Ramsey trusted real estate agents.

They're hand-picked pros who know their stuff, listen to your needs, and have your back from the first call all the way to closing day.

To find a Ramsey trusted agent near you, visit ramseysolutions.com/slash agent.

Ramseysolutions.com/slash agent.

On the debt-free stage in the lobby of Ramsey Solutions, Wade and Carissa are here.

Hey guys, how are you?

Good, hey.

Welcome.

Where do y'all live?

We live in Pine Grove, Pennsylvania.

It's about 45 minutes northeast of Harrisburg.

All right, fun.

Welcome to Nashville.

Thanks for having me.

And how much debt have you two paid off?

$291,700.

Whoa, and how long did this take?

About eight years, 11 months, and 20 days.

Wow.

And your range of income during that eight years?

When we first got married, we started at 108 and we ended last year about 205.

Excellent.

What do y'all do for a living?

I drive truck for a food distributor.

Mm-hmm.

And I'm a registered nurse.

Okay, cool.

And you guys got married eight years ago.

About, yeah.

And sat down and told all this up.

Is this your house and everything?

Sure is.

Weird.

Look at you, weird people.

You have a paid-for house.

Wow.

Sure do.

That's whacked.

How old are you, weirdos?

I'm 33.

I'm 32.

I love it.

I love it.

congratulations very cool what's the house worth uh about 390 we just had it assessed excellent and how much have you guys got in your retirement plans now probably around 275.

okay very cool you're gonna be millionaires in about 20 more minutes yeah not long man way to go i'm proud of y'all thank you very cool so eight years ago you get married and both of you had a pile of debt and you had one of you had this house i guess Sure did.

Yeah.

Okay.

That was me.

And so you looked at, was the house the whole thing?

No.

So we had about, our baby step two debt was about $100,000.

Okay, so the house $190,000.

Yep.

Okay, cool.

Fair enough.

All right, so how'd you get connected to this Ramsey stuff and decide to do all this?

So I was listening to another radio show, and he's talking about if you want to get your money in shape, this is the first place to start, listening to Total Money Makeover.

And I was like, yeah,

I think I'm pretty good, but I'll listen, see if I can pick something up.

And I was hooked immediately.

Wow.

We were not good.

We were not good.

Okay.

We were very normal.

Some good until I looked down and looked at all of it.

We call it problem unaware.

Yeah.

Wow.

Very good.

Very good, you guys.

I'm proud of y'all.

Excellent.

Okay, so you sit down, you're newly married, you do the total money makeover book, and you say, not good.

We have a problem.

And

so, Carissa, Wade's the one digging all this up.

He comes in and goes,

We have

what did you say?

I was not on board at first.

My bad.

Did he come in too hot?

What did he do wrong?

No, it was almost just like

not even at all.

It was like not a conversation.

It was just like, let's just do this.

And I was like,

I was maybe 22 years old.

I was like, nah, I don't know.

That doesn't sound fun.

That doesn't sound like anything I want to do.

I have plenty of ideas, so

she took it skeptically.

Yeah, I hear a lot of ideas, and I was like, I don't know about that.

And then once we actually sat down, then I was able to get on board.

this isn't one of his schemes this is

a little bit but yeah he actually he did good this time well that's a long journey how does it

feel how does it feel to be 32 years old and have every single thing in the world pay for no debt it it feels incredible it's like we have every opportunity in front of us and so many possibilities in the future yeah you're free i'm free it's a whole different kind of liberty wow so did you guys just barrel through baby step two into three and then just went, let's keep going and knock out the mortgage?

So we went very gazelle intense in baby step two and three.

Baby step two took us about 18 months.

Yeah.

Baby step three took another six months after that.

So once we hit baby step four, we did kind of relax for a while.

You're supposed to.

Yeah.

You're supposed to.

You're supposed to.

It's supposed to be intentional, not intense when you get to baby step four.

That's what I'm going to do.

Yeah, and then the last 12 months on the house, we paid off $72,000 in the last 12 months.

Oh, you turned it back up?

Oh, yeah.

Is it because you could see the finish line?

You're like, we're under the 100,000 mark.

Let's just go.

So, Carissa actually had a job loss during COVID,

nurse mandates, all that stuff.

So, we said we're not going to be in a position where

we're going to be forced to go to work.

So,

we stepped it up.

Wow.

That was good motivation for us.

Good, good.

Way to go.

Now, are you downshifting again now?

Trying to.

You got $200,000 income, no doubt.

What are you going to do?

What big thing are you going to do to celebrate?

Well, we brought the whole family here.

Okay.

That's a decent start.

I mean, what are you going to do big?

Come on, man.

Does she need a new car?

A better car?

No, we upgraded her in Baby Step 4, 5, 6.

So she's in good shape there, I think.

I drive older cars, but I love driving older cars.

People make fun of my cars.

That's a good car.

Those are good cars to have.

Oh, I see one.

Is that yours in the photo if you're watching?

That is my baby step two car.

That was like one of Dave's old cars.

That's how old that is.

That's a year older than me.

Hey, hey.

It could be in the Smithsonian.

Hey, hey, hey.

That car looks awesome to me, George.

You need to shut up, Tesla Breath.

Oh, that's good.

Okay.

All right.

Wow.

Oh, man.

So good.

God, this is so cool, y'all.

Well done.

We have property dreams of owning property, so that's our best.

So you'll be able to.

And travel.

Try to be great.

And travel.

Y'all, what's the first big trip?

Let's plan a trip.

Well, we did a big trip.

What'd you do?

Two years ago, we did a cross-country road trip.

Oh, that's fun.

Four weeks.

Took four weeks.

Oh, wow.

10,000 miles on the car.

So

we did it up good that time.

So now we're kind of going back and revisiting the places that we spent a day in, loved trying to go back, like Grand Teton National Park, Yellowstone.

Oh, cool.

That's awesome.

Very good.

That's a good use for money.

I like it.

And you guys had some life happen on the way, literally.

You've had some kids along this nine-year journey.

Were they a part of this?

Did they know what's going on here?

They're slowly starting to realize.

Yeah.

You two have changed your whole family tree.

Their lives will never be the same.

That's the reason we've done all this.

Their lives will never be the same because of you.

Way to go.

So proud of you.

Thank you.

You're heroes.

Thank you.

Well done.

Well done, man.

Very, very, very cool.

I love it.

What would you tell that person in their 20s, maybe even early 30s, who feels like this is a pipe dream?

Like, maybe I'll pay off my house when I retire.

You know, the earlier you start, the quicker it happens.

The earlier you start, the less of a mess you make before you start.

So I would say get on board as soon as possible.

Don't wait around until you're in your 30s to start living life and start doing adult things.

Start as early as possible.

Have you talked to anybody in your friend group or your family into doing the Ramsey stuff?

We have not.

Nobody done it yet.

Nope.

Nope.

We've kept it pretty much reserved.

I mean, we try not to push it on anybody.

You know, we don't want to be those people.

So if people ask questions, we have friends that have asked.

We have some family that have asked, but we mostly keep it to ourselves.

Yeah.

Well,

you need to celebrate.

I'm proud of you.

Thank you.

Well done.

Very, very good.

All right, bring the kiddos up.

What are their names and ages?

We've got Lucas.

He is seven or eight.

And Eliza is seven.

All right.

Very cool.

Very cool.

And a big trip to Nashville here to celebrate.

I love it.

I love it.

Well, your kids, your mom and dad are heroes.

They're pretty incredible.

Your whole lives are going to be different just because of them because they're acting like grown-ups in a society full of children.

So amazing.

Absolutely amazing.

All right.

Wade and Carissa, Lucas and Eliza, Harrisburg, Pennsylvania, $292,000 paid off in eight years, 11 months.

Making 108 to 205.

Debt-free.

House and everything.

Soon-to-be Baby Steps Millionaires.

Count it down.

Let's hear a debt-free scream.

Ready?

Three, two, one.

We're debt-free!

Yeah!

Can you imagine the generational wealth that's created by people like this on our debt-free stage that are in their 30s become completely debt-free?

Oh, they're going to be worth $10 or $12 million.

I mean, easy.

Could change

unless they really screw it up.

I mean, it's pretty incredible.

Yeah.

It's pretty incredible.

The thing that just rings in my ears is all we hear you know, from the media or the social media garbage is that, you know, millennials can't make it today.

Their home ownership's out of reach.

Wait a minute.

They own their, they paid it off.

Shut up.

I think they're millennials.

Yeah.

I mean, they're about my age.

I think 32 in that millennial.

32 makes them solid millennials.

Yep.

And don't tell me that there's no good millennials.

I see them all the time on this stage.

I don't see any entitlement here.

No lack of work ethic.

I didn't hear any lack of responsibility.

I heard somebody just did it, baby.

They happened to their life.

Get up, leave the cave, kill something, drag it home, man.

It's what you do.

Well done.

Look at these heroes.

It's amazing.

I love it.

This is the Ramsey Show.

You work your butt off for your money, but your money's never going to return the favor if all you do is hope for the best.

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Our scripture of the day, Colossians 3:14, above all, clothe yourselves with love,

which binds us all together in perfect harmony.

Earl Wilson says, this would be a much better world if married couples were as deeply in love as they are in debt.

Oh, I haven't heard that one before.

That's pretty good, all right?

That's good.

Pretty good, man.

I'll go with that one.

All right, Michelle's in Lubbock, Texas.

Hey, Michelle, what's up?

Hi, Mr.

Ramsey.

I embarrass me.

I'm nervous, but I need some kind of direction in my life right now.

Question is, should we buy a van or should we wait?

Or when?

So the situation is my husband got laid off from his job about a year.

year ago and he got one now.

Thank God he was having trouble finding one.

And he had that job for 18 years.

So we did the baby steps, I guess, about three years ago.

We were on baby step three, fixing to move to baby step four.

And that's when he got laid off.

So we had to use the emergency fund.

And like

I said,

yes, right on time.

Yeah.

And

so now the situation is we have to.

And he's back.

He's back to work now.

Yes.

And you rebuilt your emergency fund.

Well, we still have about 5,000 in there.

So so but you haven't you haven't have you rebuilt it to where it should be, three to six months?

It's at three months.

Yeah, it's about three months.

Okay, and so yeah, so and then we also had a large lumps of money that he got as well.

So we also had to use that, but that is gone.

And so

now the situation is we have two cars and they're both paid off.

They're older cars and they're both having problems.

We had used

$700 to go to the AC unit in my car, which is still struggling.

We've been back and forth with them for a long time now.

And we've got corporate involved, and we're working towards fixing it.

His car is in the shop currently.

And we have a one-year-old grandson that we take care of to daycare, back and forth, and help my son and his wife.

And then they have another one on the way.

So there'll be two grandbabies that we need to, you know, pick up from daycare sometimes or drop them off.

Anyway, so the problem is we need a van because I have a Nissan Centra, a 2015 Nissan Centra, and it's very small.

The AC, of course, is not working.

We have a daughter as well, 15-year-old.

So AC is very tight on space.

And I didn't know if we should use the emergency fund to go toward the van.

And we're looking in maybe the $10,000 range.

It's not an emergency.

Okay.

The repair is the emergency.

The actual purchase of another vehicle isn't.

Right.

I mean, I understand why you want it to haul the grandkids around.

And I think that's a a valid thing.

I don't disagree with that, but

it's not an emergency.

So, I mean,

what is your household income?

Roughly about $60,000.

Husband working 40 hours?

Yes.

Yes, sir.

Okay.

That's together.

You're both working 40 hours.

Correct.

I mean, it's not like exactly 60,000.

It's somewhere in that range.

Okay.

You're not making much.

Yeah.

Yeah.

And we usually, you know, work a lot of overtime.

Well, since he's not at, we worked together previously, and we would get lots of overtime.

So that's usually how we make extra income.

And now

overtime is limited at both of our employment.

What are you doing for work?

I work at a semiconductor foundry.

Okay.

Okay.

So

I think you guys develop either some overtime or some side hustles and quickly pile up $10,000 if you want to buy a $10,000 car.

What would your car sell for?

Oh, not very much.

That's what I was thinking.

I'm not sure.

Yeah.

Maybe $2,000 or $3,000?

Yes, exactly.

Yeah.

So if you could get three out of it, then you'd need to save up seven to do a $10,000 van, right?

Correct.

Or maybe save up five and get an $8,000 van.

Right.

Does it need to be a van?

Could it be an SUV or a larger sedan?

Because really, you're just trying to fit two car seats.

That's the goal.

And a 15-year-old.

Yeah.

Yeah, and a 15-year-old.

Yeah.

Okay.

Yeah.

So I

van does not necessarily mean 10K.

Right.

It could mean 7K.

It could mean 37K.

Right?

You know, vans come in all price ranges, just like cars do, and ages and everything else.

So I think that's what you're looking for.

But no,

normally, what happens is that

when you get a bunch of car repairs back to back to back to back, you get frustrated, and the frustration makes you want to lurch into something that's dumb.

And here's how we know it's dumb.

What if you had bought that van and had no emergency fund, and he got laid off the next day at that other job?

Yes, yes.

That's what I don't want you to be, okay?

So that's how I know this isn't an emergency.

Yeah.

It's a good want

and it's something to work toward, and I would get with it.

I would save everything I could get, squeeze everything out of the budget and try to create some extra income and get there.

I'm not saying you shouldn't do it.

I'm just saying I don't want to leave you vulnerable

because

that's what you would be.

You'd be back in a mess, wouldn't you?

Yes.

Yeah, so

I think we're going to stick with our plan here and pay cash.

Yeah, you'll regret it if you drain the emergency fund for this purchase.

Yeah, it's like you're inviting an emergency when you do that.

Jorge is with us in Miami.

Hey, Jorge, how are you?

I'm good.

How are you doing, Dave?

Better than I deserve.

Do you go by Jorge or George?

Either one.

Okay.

All right.

How can we help?

So, Dave, the reason for my call is because I just need help just getting myself together again.

I mean, I make money, my wife makes money, but I'm constantly over budget.

That's basically my life.

I mean, and I've been, you know, living paycheck to paycheck for a while now.

And every time that I get myself out of it, I get myself back into it.

It's just not, it's a revolving door.

And what I've figured out, at least in the short term, until I get under a budget that I can maintain under my regular salary,

I need to make a little bit extra cash on the side.

And I need help with what recommendations you guys would have to be able to do that.

So that basically that was the reason for my call and just to try to get myself

my head around where I need to start, what I need to look at, how I need to detail everything, because I do

have a spreadsheet that I use.

Between the both of us, we're around 270K a year.

Wow.

So it's not a lack of money.

No, it's not a lack of money.

It's just disorganized and chaos.

And when you say over budget, it sounds like you're not doing a budget, an actual written budget.

Well, I do have one, and I can show you, and I can send it to you, but it's just not working.

I need to start over.

You're not sticking to it.

It's, yeah, that's what it is.

It works fine.

It's you that doesn't work.

It's me.

I love your honesty.

That's honestly very refreshing.

That's why I called you.

That's why I said you.

So if we looked at your bank statement at your actual expenses that are going out, what would you say is the major issue here?

Is it eating out?

Is it DoorDash?

extra spending.

The overall

break my month.

Well, that's what I'm saying.

It's the overall overspending on either groceries or eating out.

But it's more than that.

It's just the grocery portion of it.

Whenever there's something missing, I go and get it, and it's just I'm over budget.

That's what it is.

How much do you have budgeted for groceries?

I have budgeted for groceries about per month,

but I pay groceries every two weeks.

So

it's about $600 a month.

A month.

Yeah.

How many children do you have?

One.

Okay.

That's

ridiculously low

for three people making $270,000.

Yeah, you're bringing home $1,500 or $20,000 a month.

I don't think the $600 in groceries or even $1,000 in groceries is the problem.

No, it's not.

I mean, he can't stick to it because he's got it set too low.

It's unrealistically low for somebody that makes $270,000.

Right, right.

Well, the house makes $70,027.

I make $150,000.

I know, but the house is in the budget, isn't it?

Oh, yeah, it is.

You're working together on this hypothetically.

Yeah.

Okay.

All right.

So we're going to sit down.

We're going to spend out $270,000, but we know we're blowing the grocery budget every month, and Dave says it's because it's too low.

Let's raise it to $1,200.

Okay.

Doesn't kill the budget.

It's $600.

All right.

Now let's live on that.

And then don't go over it.

Act like your life depends on it.

Get disgusted enough with the situation to fix it.

And cut everything that is not adding direct value that's necessary for your life right now.

A friend of mine just lost 150 pounds, and I asked him how, and he said, I got disgusted.

There it is.

That's how you do it.

That puts this hour of the Ramsey Show in the books, and we'll be back with you before you know it.

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

Hey, you guys, I was shocked to learn that 88% of you out there are sharing the Ramsey show.

I mean, that is so incredible.

Thank you so much.

And I want to tell you that we're making it even easier to share.

So, this June, we have pulled together the brand new Ramsey 101 YouTube playlist, a quick start collection of how to get started walking the Ramsey plan.

Now, this playlist is perfect for that one person in your life who needs help winning with money and just doesn't know where to start.

So, here's what's inside: what the baby steps are and why they actually work, how the debt snowball helps you pay off debt fast, and how to build wealth and invest for the future, and so much more.

So, here's what you need to do: click the link at the top of the show notes, it'll take you straight to the YouTube playlist, copy it, text it, send it in a group chat.

Just say, hey, I thought this might help.

Because one playlist shared at the right time could be the turning point.

One share, one playlist, one step could change everything for that one person in your life.

So click the link, share the Ramsey show, and let's help someone out there start winning with money.