Face Debt Head-On Before It Destroys Your Family

Hey guys, it's James Childs, producer of The Ramsey Show.

This week, Dave and the personalities are living it up on The Ramsey Cruise,

so we've put together a compilation of some of our favorite calls and segments from the last year.

Regular shows are back next week. Hope you enjoy!

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 amazing relationships. I'm George Camel, joined by my co-host, Rachel Cruz.
She's also the co-host of another show we do together called Smart Money Happy Hour. The number to call is 888-825-5225.

You jump in.

We'll talk about your life, your money.

We'll help you take the right next step.

And we'll try to make it entertaining too because, you know, life's too short.

Yeah.

Yeah.

And money's fun.

All this is fun.

We can enjoy this.

The world is heavy and we're out here just making light of it all and showing you a path forward, some hope. So Jeremy's going to kick us off across the border in Ottawa, Canada.
What's going on, Jeremy? Oh, just trying to keep one foot in front of the other. How about yourself? That's right, my friend.
How can we help? Well, hopefully with some answers to some money problems. But in a nutshell, I uprooted my family and moved,

ended up taking about a 65% pay cut,

and now everything's just starting to pile up and pile up. And I want to know if it makes me a deadbeat father

if I move back to my old job where I'm making north of $150K versus south of $50K. Oh, gosh.
Just to keep all the bills paid and food in the fridge. Well, what was the reason for you to uproot them and take this pay cut? It was clearly a big enough reason that you guys decided to do this.
Just to keep the family together, be a little bit closer to my partner's family they're they're super close but uh okay and now you're realizing we can't sustain this financially with our lifestyle bills and our much lower income this is stressful for us even though we're closer to family exactly is are you in a when you moved away how far away are you from where you guys moved? Because when you said to go back to my job, does that mean move again to go back to the old job? Or you could do something different with where you guys live now? It's 3,000 miles. And I was told if I go back, I'm going back by myself.
Whoa, like an ultimatum? Yeah. Does she understand what's going on financially at all? How is she feeling? Is she stressed about it? She knows that it's not well, but she's kind of blind to it.
And she just took a different job to work less hours, too, which isn't helping anything. Okay, when you say she's blind to it, does that mean that she doesn't have all the information, or she has all the information, but the way she's processing it is not correct in reality? I think she's just ignoring the issue.
Okay, how much are you guys in the whole month financially with after everything's paid? How much more do you need? I don't know. She doesn't tell me what her expenses are.
Okay. So you guys don't have any finances combined? No.
Are you legally married or just cohabitating? Just we're common law, and we got two little ones. Okay.
And bank accounts are separate. Do you guys Venmo each other for the mortgage? How does this work? I take care of the mortgage in one vehicle, and she does the rest.
Okay, and she's not feeling the stress of this financially? Just you? No, she is too, because apparently she hasn't been able to make her minimums either. Okay, so it's sounding more like a relationship issue, Jeremy.
It sounds like you guys just aren't doing well as a couple in general. I don't know if money's the main issue.
I think it's become a symptom of it. But you guys, it doesn't sound like you guys communicate well or have the same goals or do this life together very well.
It seems very separate, even from an emotional standpoint. Is that right? It's getting there, that's for sure.
Well, it sounds like you went along with this to appease her, to be closer to family, knowing full well you guys were going to be in the hole financially. And I don't know if you didn't make that clear or if she just was blind to it, as you said, and just going, I don't care.
We're making this move. We'll figure it out.
Pretty much. Well, I don't know who your God is, but you need to come to Jesus' conversation where you go, listen, you're clearly not doing well financially.
I'm not doing well financially. This family's not doing well financially.

And life is too short to live with this kind of stress. So if we're going to stay here,

we have to make it work. And here's what that's going to take.
And that's when we lay out the

finances together, get on a budget together and figure out what the hole is and how we're getting

out of it. And that might mean you need to find a higher paying job.
She needs to work more hours. We need to combine bank accounts.
That might be some of the next steps you take. Okay.
And if that doesn't work, should I jump back out to my old jobs just so that I know that my kids are fed? I mean, that's the noble thing to do. I don't think it helps your marriage at all or with this common law situation you have going on.
So you're going to grow further apart while keeping the kids fed. And so I'd rather keep the kids fed.
Can you keep the kids fed, though, where you guys are to be able to work on the relationship and get a higher paying job where you are? Or can you sell the car and make other sacrifices to cover your four walls for now uh the car's upside down by about 15. do you know what she makes at all uh she's supposed to make 85 a year but she has a habit of not going to work.
Wouldn't you get fired?

If I don't show up to work enough, Dave says,

all right, we're going to find someone else who can actually do this job.

Well, she works in health care,

so they're begging for people to work there.

And what do you do?

I'm in the construction.

Okay.

What were you doing before when you were making six figures?

I was working in a mining industry.

And that industry obviously doesn't exist where you're at?

No.

Is there an equivalent or is there a better construction job up the ladder that you can aim toward?

I've progressed up the ladder in my company a little bit already. And the next step would be to become a supervisor.
But that's at least a year and a half out. Because I've asked my boss for more hours.
And if he would be able to give me a wage increase, he just said that I'm not there yet. Okay.
So, Jeremy, I think what it comes down to is you guys aren't paying your bills. I mean, what's happening financially, there's an issue.
So the adult thing is that you both sit down together and say, here's what it takes to run our household. And we have to make X amount every month for this to happen.
And we don't get to decide that we don't feel like doing that. That has to happen.
So either we're cutting our freaking lifestyle and taking everything off the table and doing nothing in order to feed the kids, or we're going to have to decide different jobs. We're going to have to choose to move back.
Like we don't get to just sit and not make money and not pay our bills like that. Like we can't do that.
So that's not an option. We're adults and this is part of life.
And so that's one thing. But the other thing I'm very concerned about, Jeremy, is the relationship.
I mean, I mean, it just it sounds bizarre to me that she's so in the clouds that she wants nothing to do with you financially. Then she's made that very clear.
My question is why? Because long term, this is not a sustained relationship. You cannot live your life on two separate pages financially because what that is, it's an indicator of how your relationship is in general.
And you guys are going to just keep moving further and further apart. And you guys have two kids together.
So it's worth the fight. But you first, from a tactical standpoint, have to

get enough money in to pay the bills. And you both have to

come to that understanding. And if she is so in the clouds

in that, then she may not be a great partner

long-term because she's probably in the clouds on everything else.

So there has to be some big

decisions that are going to be really difficult, but you both

have to step up as adults and decide to

face it together.

It's Holy Week in Jerusalem.

Crowds welcome Jesus as King.

Rebellion is in the air.

Jesus operates outside our jurisdiction. Rome will descend on us all.

But instead of taking the throne, Jesus turns the tables.

My house shall be called the house of prayer, but you make it a den of thieves.

The world will never be the same.

Now in theaters, The Chosen Last Supper.

Get your tickets now. Welcome back to The Ramsey Show.

I'm George Camel, joined by Rachel Cruz.

If you want to check out some other shows that we produce,

you can check out the George Camel YouTube channel

and, of course, The Rachel Cruz Show on YouTube and podcasts.

And it's all on the Ramsey Network app if you want to check that out as well.

All right, let's go to Noel in El Paso, Texas.

Noel, did I get that right? You did. Okay, wonderful.
How are you doing? Doing all right. Taking it one day at a time, as best as I can.
How can we help today? What's going on? So essentially, my question is, you know, I've been listening to your show for a few days, and I've been binging on it quite a bit now, a couple of your other podcasts. I've been contemplating bankruptcy.
It's been something that's in my mind over the course of the last couple months, and I'm just trying to see if it's a better option to throw in the towel and do that or to continue attacking my debt aggressively based on what I've learned so far on the show. Sorry to hear that.
Well, lay this out for us. How much do you make and how much debt do you have? Okay, so I make, I'm practicing, I got two sources of income.
One is my job, which gives me roughly about $81,000 a year.

And then the other one's disability compensation, which is about $56,000.

So about $122,000, $130,000 a year.

Okay.

And then as far as debt is concerned, I have about $80,000 in debt.

Three of them are personal loans. Well, two of them are personal loans.

One's my vehicle, and the rest is on credit card debt. Okay.
What are the amounts for all those? So the most expensive one is $38,000. That one has about a $616 payment per month, and it's stretched out over 15 years.
Which debt is that? that one was a home improvement loan that I took out back in 2022. I was in the middle of a remodel of my house.
All right. And so I took that money for a remodel.
Okay. And the second personal loan? The second personal loan was a debt consolidation loan.
It's roughly about $29,000. And then the third one is the vehicle, my truck, which is about $26,000.
And then the credit card debt is roughly about $10,000 or $13,000. Okay.
How much is the car worth, the truck? The truck is worth about $57,000. It's worth $57,000? Yes.
Good. And you owe $26,000? Correct.
I like where this is going. Do you see where this is going? I do see where your recommendation is going to be.
Explain to me why you need this truck when you're on the verge of bankruptcy. Because I'm in construction, and I need the truck to be able to get through the construction site.

I just checked Google.

They make $20,000 trucks.

They do, but I work in heavy civil engineering construction,

so I need something that can tow the amount of weight

that I need to be able to tow.

And you're telling me there's no $25,000 truck

that can tow that amount? Probably so. It's probably going to be about 15 years old.
I'm okay with that. You're on the verge of bankruptcy.
You just told us. You got here because you were unwilling to have delayed gratification, sacrifices weren't made, and you made some poor financial decisions.
And this is the one on the list that you can undo if you're willing to drive a 15-year-old truck for a season so that you can avoid bankruptcy. Okay.
What's the truck payment? It's $583 a month. So you would have an extra $600 a month to go toward your debt, correct? Yes.
I mean, do you realize that if you're going to file bankruptcy, they're going to liquidate and get as much as possible anyway. So, I mean, this could all be on your terms, and it's going to be uncomfortable, and it's not going to look the way that you've been handling your money, but something has to change.
So of course, your life is going to look different if you start making different decisions with money. And it's not going to be easy.
Because I mean, a little bit of the easy route is the debt route, you kind of can get what you want when you want it. And you know, that's how majority of people live.
But you're finding that it's causing stress. You're calling us for a

reason because you're not happy with where you are financially. So something does have to change.

So your mindset around money, regardless of work and construction and weight, I mean, all of that,

like if you're in this desperation part, you know, if you get to this place in your life,

you're willing to do anything, like anything. And I don't know if you feel that or want to experience that.
I've been through a lot of suffering over the last year. It's not necessarily the whole truck thing.
It's just. Yeah.
What's been going on?

What caused me to make all these poor financial decisions, I suffered a traumatic event back in November 2022 when my son passed away.

Sorry.

And so that caused me to sell my house.

And when I sold my house, it was in the middle of a remodel.

And I ended up being upside down about $18,000. So I had to pay $18,000 to sell a house.
It was in the middle of a remodel. Um, and I ended up being upside down about $18,000.
So I had to pay $18,000 to sell a house. Um, and then I moved my daughter and I across the country to bring my son to his birthplace to bury him.
Um, and it had to start all over again. So that's what caused me to take out, you know, the debt consolidation loan for 27 or $29,000.
Um,. And I had a paid off truck.
My truck was paid off. I had a 2,500 Ram that was paid off.
And I traded that in to get this vehicle because it was a four by four and it had more pulling power. I hear you.
I had to buy another house, but it wasn't a house. I bought a mobile home.
That was another $121,000 there. So, you know, I spent a couple hours on the budget app yesterday, the every-dollar-spent app.
And for some reason, it's telling me that I have $2,600 worth of margin every month left over. That's with your minimum debt payments, all of your expenses.
That's what it should be. Yeah.
I mean, I put everything in there, all the payments that I'm making. Still says I got $2,600.
And don't get me wrong. I've paid off close to about $3,000, $3,500 worth of credit cards, full credit cards in the last 30 days.
And, you know, just trying to do what the Ramsey method is telling me to do. You know, and I'm putting $40 away every week in savings to try to get to that $1,000 savings in my underwear drawer to keep it there for a rainy day.
Well, outside of the truck, I added it up. I mean, if you sell the truck, you'll have $80,000 in consumer debt based on what you told us.
Yes.

And so you had said 80 at the top, but you got 80 plus the $26,000 truck loan.

That puts you at six figures in debt.

And I'm trying to help you.

What's that?

That's including it.

That's including it.

The $26,000.

What was the first loan you said?

The home improvement loan?

$38,000.

Yeah.

$38,000?

$29,000 personal.

Plus $29,000.

Plus $10,000. $29,000.
Plus $13,000 in credit cards. $ 38,000.
Yeah. 38,000.
29,000. Plus 29.
Plus 10. 29,000.
Plus 13 in credit cards. 26.
Yeah. And then the coordinator credit card was telling me I got 13 in credit cards, but.
And I'm telling you with a calculator, it's coming up at 80 and that's without your car loan. So I just want you to have a real picture of what your finances are at.
And that's why I'm so desperate to get you to get rid of this truck and downgrade to number one, free you of $26,000 today before your truck goes underwater. Almost every call people are underwater on their truck.
So when you said this truck is worth 57, you owe 26, I was doing backflips because it gave me some hope that you can get out of this faster than you think. And if you do that and then do the debt snowball, every extra dollar outside of food, utilities, shelter, transportation, insurance goes toward that 80,000 you have remaining.
Smallest to largest balance. I think you can get out of this.
You make great money. You're a smart guy who works hard.
And know that, I mean, from that information that you just gave us about this last year,

which is just the most horrific thing that I could ever imagine is losing a child. So I can't

even imagine what that grief does. There's a fog that is there.
And when you make financial

decisions, usually in that time, soon after something like that happens, they're sometimes not the best. So that's not to guilt or to shame you.
That's to kind of free you to say, hey, yes, you as you look back, like, wow, those may not have been the best decisions. I don't blame you for that because of what you walk through.
But I do want to make sure that there's a level of healing that you're getting from this. And that the money is that secondary piece.
But I do, I pray that for you. Well, I'm so sorry.

And yeah, if you stay on the line, Taylor's going to pick up and we'll give you

John Deloney's book and Total Money Makeover.

hey you guys health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy.
So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981.
And CHM has also helped them stay true to their values and avoid miles of red tape. And CHM support goes far beyond meeting financial needs.
They'll also help meet spiritual needs. Members become part of a family who will pray with them and for them when they experience a medical event.
So listen, y'all, there's no better way to take care of healthcare costs. CHM programs start as low as $98 a month.
So learn more today and join at chministries.org budget. That's chministries.org budget.

it.

Welcome back to The Ramsey Show. I'm Rachel Cruz, hosting this hour with best-selling author George Camel, and we're taking your calls.
Up next, we have Shonda in Cleveland. Hey, Shonda, welcome to the show.
Hi. Hi, guys.
Hello, hello. Hi.
Can you hear me? Yes can we can okay thanks for calling yeah how can we help yes I have money stress I have I have an income of like 22 24 thousand dollars but I have two collection agencies one is five thousand which I could pay I only have two thousand more to pay for that one collection agency and the other one is eight thousand and I don't know what to do or begin to pay that that debt I don't even know where to begin I haven't talked to that collection agency at all because I don't know what to do because I don't have no money to pay them. A driveway that needs to be fixed, that's like $20,000, they say.
So that's an upcoming expense. That's not debt, right? Yeah, that's an upcoming expense.
Okay. What other debt do you have? Um? I have student loans that's $50,000, a car loan that's $11,000, a home loan that's $75,000, and I was like one month behind.
I think I just caught up. Let's see, credit card that's $200.
$200. $200 of minimum payment, or that's the total? Yeah, no, that's the total, so I was going to pay them off when I, next time I get paid.
Okay. Woo! How old are you? Yeah, I'm 53.
Okay. What are you doing for work right now? Nursing assistant, but I feel like I'm overwhelmed.
I don't know what to do. And I know y'all say don't play the lottery, but I've been trying to do that.
Oh, no. I don't know what else to do.
I don't know what else to do. In the convenience store, a gas station, stay far away.
How many hours a week are you working? That's right. Like 40 hours.
And then sometimes I pick up on my off days. Okay.
So I'm working. I'm working.
And you're doing what again? I'm sorry. Say it one more time.
Nursing assistant. Nursing assistant.
But you're only making $24,000 working as a nursing assistant and working 40 hours a week. Yeah.
Okay. Okay.
Yeah. I mean, I think the first thing to be looking at because what's your degree in because you have some student loans yeah um well i went to school for different well i really went to school and didn't really get much of a degree i got one degree...
How long have you been paying on these student loans? A year. And I haven't made a bit.
And I made, you know, during COVID, they wasn't taking any payments during COVID. They were sending money right back.
Are you single? Yes. Okay.
Well, there's some simple steps you can take that are tactical to help you, but it's going to take sacrifice. It's going to take making more, spending less, all of that.
So here's the thing. With the collections, you've got to talk to these people.
We can't bury your head in the sand. And even if you call them and say, listen, I can't pay you.
I make $10 an hour and I got a lot of bills and a lot of people who want to get paid. And so I need to keep the lights on.
So your one priority is food, utilities, shelter, transportation. We call that the four walls.
Nothing else gets paid before those get paid. I don't care who the debt is to, what the collectors are saying.
you got to keep the lights on, keep the mortgage paid so that you don't get foreclosed on and eat something too. And so beyond that, you got to make your insurance payments.
We need to keep all of that to protect us. And then we can start tackling the debt.
But clearly there's not much to tackle it with because you have no money left after making minimum payments, right? That's right. So, I mean, so what do I tell them or what do I do? Do I write a letter? Do I call them? I call everyone you owe debt to and say, listen, I want to pay you, but I don't have any money.
I make $10 an hour. I'm six figures in debt.
I'll pay you when I can and what I can. But right now, I'm flat broke.
Okay. Yeah.
And then on the income sign, Shonda, I mean, honestly, I mean, I was, you know, Walmart, Target, like these places are paying up to 20 an hour. Like you could double your hourly rates by working somewhere else.
I think you're going to need a different job. I just don't, this job is not going to be able to sustain you.
And you're working 40 hours. So I'm like, you have a great work ethic, but that energy is going to something that's not giving you your rate of return of what you need right now.
And so in places like Walmart, Target, some other places, I mean, they have great benefits. Like they really do a great job in helping their employees.
So I honestly would be switching jobs.

You have to make more.

You can't be living on this.

Is there a path for you to make more in the nursing assistant world?

Like it's a CNA where you could be making 40,000 a year.

I don't know.

Like the hospitals or something like that.

I don't know how much they.

I would do some homework and research and talk to people who are in these

Thank you. I don't know, like the hospitals or something like that.
I don't know how much they... I would do some homework and research and talk to people who are in these fields,

in these positions, and ask them the path and what it's going to cost

and what it's going to take and how long.

Yeah, because long-term, you need a solution.

Yeah, agency pays.

I mean, I guess agency.

But beyond the agency, you know, as a certified nursing assistant, you should be able to make 30 to 40 versus 22. And with your experience, I'd imagine this wouldn't be a huge leap.
And so I would just at least start to do some homework. I know life has got you down, but this is the time.
The next 10 years, we need to be really getting focused, get the income up, get rid of this debt, and have no payment. And Sean, to start binge watching some of our debt free screens here on the YouTube channel or even podcasts.
But go through and watch some of these stories, because I know it feels like you're in such a hopeless situation. And numbers wise, it does feel hopeless.
Right. And so we want that some of that to change with your income and starting to get a grapple on this debt.

But just know that there is an there is a way out.

It's just going to it's going to look different than probably what you've done in the past.

And that's OK. But there's people that do it every day.

So continue to feed your mind with this stuff.

If you hold on the line, Shonda, Austin's going to pick up.

I want to give you Financial Peace University.

It's our nine lesson course on money just to get you the basics. we'll throw in Every Dollar Premium as well, which is our budgeting app.
And they have a great tutorial there when you sign up there to really walk through and teach you there. Here's detailed how you do a budget.
And Austin, go ahead and throw in Total Money Makeover too. And that's Dave Ramsey's bestselling book.
And it's The Seven Baby Steps. I just want to get some knowledge of this plan in you, Shonda.
And I want you to just like soak all this up because it's going to kind of be a different world that you'll be navigating with money. It's going to look different, but I want you to have motivation and people behind you cheering you on.
And even if it's us on YouTube cheering you on and giving you some encouragement through other callers or watching their stories, I want that for you because I want you to know that this can change. It's going to be different.
Yeah, it's going to be different from what you've done. And it's going to be hard.
None of this is easy. None of this is easy, but it is possible.
I'm going to throw even one more thing just because I feel for Shonda. I'm going to gift you a free coaching session with a trained Ramsey financial coach who can walk through all of this with you, help you with the collection side, navigate this wild journey, help you make a plan with the debt snowball just because we can't do that in a radio call.
And I really want Shonda to have hope. Yeah.
Because I know a lot of older caller, there's older people out there listening who are in their 50s, Rachel, and they're going, well, I'm in her shoes. There's no hope for me.
And it takes, it's harder to do as you get older. It's just harder.
Yeah, it's deeper habits that you have to break. The mistakes have been compounding for years.
The debt's been sitting around for years, is in collections. So hang on the line.
We'll get you connected and give you a free session with a trained Ramsey financial coach who can help. So that's a big part of the problem is feeling hope and getting a game plan.
That's right. And we talk to people, yeah, in their 50s, 60s, sometimes in their 70s, right? And they don't have anything for retirement and they're trying to figure this out.
And even though it's a hard hill to climb to say, okay, I'm going to buckle down. I'm going to learn something new, change what I've been doing, sacrifice, take on that extra job.
All of that is hard, but it's also hard to go into retirement with nothing if you continue down that path, right? So it's one of those things like you choose your heart. And one heart's actually going to be able to give you money when you start working a plan and get out of debt and be able to have some level

of control over your life versus not at all, right? So don't give up Shonda. You got this

Shonda. We believe in you.
This is the by BetterHelp. All right, you've heard me say this a thousand times, and I'm going to keep saying it.
You're worth being well. And I believe therapy can help.
Right now, BetterHelp is offering 90% off your first week of therapy now through March 31st. So if you've been on the fence, this is your chance to try therapy for a fraction of the cost.
Because let's be honest, we all spend money on things we hope will make us feel better, like new clothes, organic groceries, gym memberships. But when it comes to actually digging in and getting real with our mental and emotional well-being, we hesitate.
We pause. And I know actually going to therapy can seem like a huge first step, but please hear me.
Your mental and emotional health are just as important as your physical health. BetterHelp makes therapy more accessible than you think because it's online, so you can talk with your therapist when it works for your schedule.
You just fill out a short online survey to get matched with a licensed therapist and you can switch therapists at any time for no extra cost. Your well-being is worth it and this offer makes it easier than ever to start.
90% off your first week of therapy now through March 31st, 2025. Visit betterhelp.com slash Deloney to get started.

That's betterhelp.com slash Deloney.

I'm George Camel joined by Rachel Cruz

this is the Ramsey show

and if you enjoy I'm George Camel, joined by Rachel Cruz.

This is The Ramsey Show.

And if you enjoy this show, you should check out Smart Money Happy Hour,

co-hosted by myself and Rachel Cruz.

We have a blast.

And if you need to send someone the show that's not too heavy, too intense,

Smart Money Happy Hour is a breath of fresh air.

There's lots of laughs.

And we sneakily teach you money things while having a good time. But you don't even know it.
You don't even know. It's like a, what? Our writer Savannah said she was at the nail salon and some Gen Z girls were like, hey, you know that Dave guy? She's like, yeah.
She's like, well, his daughter has a really cool podcast. I love it.
We're talking about Smart Money Happy Hour at the nail salon. Current events, pop culture, and money.
Rachel's like the cool sister. It's the best.
And I'm the cool uncle, I guess. Uncle George.
That's right. All right, Gabriela is up next in McAllen, Texas.
Gabriela, what's going on? Hi, guys. Thank you for taking my call.
So my question is, my ex-boyfriend left me with an RV payment and I do not want to pay it.

Oh my gosh. So what happened? You guys? So he took it to go work and could no longer afford the payment on it and left it to me last weekend and was like, here you go.
Here's the RV with the payment. What do you mean left it to you? Whose name is on the loan? It is under my name.

We were together for 10 years.

Oh, no.

I got it for... with the payment.
What do you mean left it to you? Whose name is on the loan? It is under my name.

We were together for 10 years. I got it for him.
So he had to go work in the oil field and we split up about a year ago and he can't afford it anymore. So he brought it back to me and I'm left with it.
Oh, no. Shoot.
Well, Gabrielle, you'll never do that again, will you? I've learned my lesson. Oh no.
You know, we talked to somebody earlier in the hour and her and her boyfriend, well, fiance, they don't really have a date. I don't think a wedding date we asked, but yeah, both their houses, their names are on the deed of the house.
And I just thought, oh, no, no, no, no. So you're a great, I guess, poster child of what can happen when you sign on to debt and buy things with people you're not married to.
And I'm so sorry. I mean, on top of the hurt from this long term relationship.
And it was a year ago, though. So now you're like, well, crap.
What's left on the rv loan and what is it worth it is the balance left is around 48 000 and looking it up it's worth around 30 000 so you're 18 000 underwater basically for some reason they took like the prices in rvs were just expensive when i bought it and have dropped well that's been the theme on the show for the last week or month is everyone is underwater on vehicles and things with wheels because it was really expensive and they had good intentions and then the market turned and now everyone's underwater so there's only two ways to go about this. Number one is you need to come up with the $18,000 in cash in order to sell it and pay off the loan.
Or number two, you go get a personal loan for the difference of that $18,000 to get out from under this. Do you have any money? Yeah, I have around $10,000 in savings.
Good. And any other debt? Well, yes, I have a mortgage.
I pay my vehicle, but my vehicle is actually a lease. And I hadn't learned my lesson at the time, but I have a bedroom set under my name that somebody else owes, about $3,000 of no credit card debt um somebody else owes yes it's under my name so technically i owe it but and are they paying are they paying on it or you're yes and no oh gosh is this family is it a friend that you like said hey it is it's family it's.
Oh, gosh. I think you need to stop being generous with money you don't have, Gabriela.
That's what's been happening. It's a theme in your life.
You sound like such a sweet, wonderful person. And now how much do you make a year? So this year, I mean, so I'm actually a nurse and with COVID, I made really good money 2022.
Kind of gone down some. So this year I made 133, but it will probably drop again this year because there's no more COVID crisis.
So that's just how it works. Not if I can help it.
You're going to be out there busting your tail over time, doing Uber Eats and DoorDash and Instacart, whatever it takes. You're climbing out of this thing.
And I think you're not scared of work, which is great. And we got to start with the smallest debt here, which it sounds like is this bedroom set? Yeah.
I think you just pay it off. And if they ever pay you any more for it, great.
You can apply that. Don't expect it.
But don't wait around. Yeah, be done with it.
Okay. Even if it's zero interest, I should pay that one off first? Especially if it's zero interest.
All of it. Okay.
We're done with payments. We're done with debt.
You make too much, you're too successful, and you're too smart to ever do this stuff again, regardless of the interest rate. Does that track, Gabriela? Are you with us on this? Yes.
We are team Gabriela, and so we want you to win. And that's going to mean you have, you know, if you count up all your debt and if you want to get out of the lease, you can look at the early buyout amount and see if that's going to be worth it for you to do now.
Otherwise, you turn the car in and then you need to go get another car. But don't just get another lease.
Okay. It's the most expensive way to get a vehicle and dealerships love it because they make the most money off of these leases.
Okay. So no more leasing.
No more leasing. Buy your next car with cash, which is going to be tough.
When is the lease up? In about two more years. Okay.
Yeah. I would look at the early buyout.
I would just kind of do some research in that. But then in the meantime, between now and two years, be saving some cash, knowing that you're going to have to replace this car.
But I would take, yeah, this 10 grand, Gabriella, I would pay off the bedroom set. And then be looking at the 18 that you'll probably have to take a loan out for uh for the remainder of that

rv after you sell it okay so i shouldn't give it back to the bank and then let them sell it and then you pay the difference you're saying to have the rv repossessed yes i wouldn't do no i wouldn't do that because i would go on your credit i would yeah i would i would just find the private sale list it, sell it yourself

get as much as you can for it, obviously. And then, yeah, you'll have to have, have a loan for the difference and then you'll be working your way out of that.
Oh, okay. Yeah.
I wish we had better news. The good news is you make great money.
You make six figures. We've seen bigger, scarier numbers than this, but it's the hurt and shame and guilt and baggage.
And oh my gosh, I'm so stupid. You got to just pick yourself up and go, listen, that doesn't define me.
I'm going to make different decisions. And Gabriella, is it just you? Are you single kids? Yes, it's just me and my two girls.
Okay. So you do have two girls.
Okay. How old old are they I have a nine-year-old and a three-year-old okay so sweet that's so great okay so what you're probably going to be doing I mean where you can work extra and even if it's you know at night online or something like if there's like something that you can do to find that extra money but with this 133 I mean I would act like I would I would tighten everything up and I mean give yourself a goal to say I'm going to act like I make 70,000 a year or whatever it is and then find a difference to have an end point to say okay I could be completely debt-free be done with all of this and start fresh not owing anyone anything and and start whole process.
I'm like, you could do this in 18 months, Gabriella. I mean, if you really focused and did this, the car lease, you know, kind of hangs in the balance of what you decide there.
But being able to have no payments and this income going to you and your girls and you guys keeping all of it, that's the goal we want for you. Have you been through Financial Peace University? No.
Okay. So if you hold on the line, Scholar's going to pick up and we're going to gift that to you as well as Every Dollar Premium, which is our budgeting app.
And so what I want you to do, Gabrielle, is watch these lessons, even binge them. There's going to be seven lessons and I want you to go through and watch all of this and really get a game plan to say, OK, here is how I take control of my money.
And what that's going to teach you is everything from budgeting to getting out of debt, to saving up for an emergency funds, to investing to your kid's college. I mean, it kind of runs the gamut of everything and it's all packaged in there.
And so to be able to walk through that and apply this stuff, Gabrielle,

because what you've already witnessed and experienced

is that money, it's personal finance,

it's 80% behavior.

It's only 20% head knowledge.

You're gonna watch these videos and be like,

I knew that.

I knew I shouldn't probably co-sign

some furniture for a family member.

I know that I probably, okay, now, okay.

You know, you're gonna get all that,

but actually changing the behavior and doing it

is gonna be the key to you winning.

And I believe in you.

I know you can do this, Gabrielle.

We'll be you on. So hold on the line.
Skylar will pick up.

That's the theme of this hour. Don't spend money you don't have, especially with people you're not

married to. That puts this hour of the Ramsey Show in the books.
My thanks to my co-host,

Rachel Cruz, all the folks in the booth, and you, America. Thank you so much for listening.
Weibly, yeah. I think so.
Okay, because you really prefer credit unions over big banks. So why is that? Well, credit unions, for one thing, are non-profit, which means that the members, the customers, own the credit union.
So any profits that the credit union makes goes back into customer pricing. So you get better interest rate on savings, cheaper checking, and so on, that kind of thing.
But what's more important than that, though, is the fact that the customer is the owner changes the spirit on the credit union. So I find very few credit unions that aren't very customer-centric.
Yes. Well, and I think we have found one that is incredible, and that's Fairwinds.
They are an incredible credit union that is really out with the heart to help the customer. You know, that's why we're partnering with them, because they've got a scope to be able to handle the Ramsey audience, and they're the right kind of people with the right kind of values.
And they've done a really, really good job with customer service. And the deals that they're offering, the Ramsey tribe is incredible.
Yeah, absolutely. And you're right, their customer service is unbelievable.
Winston and I just signed up and we got an account. And I'm not kidding.
It took less than five minutes. It was so user-friendly.
The step-by-step approach was unbelievable. And then the next day, my phone rings and it says Fairwinds on my phone.
So I answered it and talked to someone there. And they said, yeah, they give calls to every new customer.
And so again, they just really care about your experience. And I so, so appreciate that.
So again, you guys, I know it can be a pain to switch banks or to open up new accounts, but Fairwinds, again, they make it so easy. Plus anything that you can do at a traditional branch, you can do with them at fairwinds.org or on their app.
And you'll have free access to over 33,000 ATMs. Hey, you guys know how much I hate banks in general.
And so for me to do this is a big deal. Talk to our friends at Fairwinds and check out the combined checking and savings bundle that they created just for the Ramsey tribe.
You guys, it's incredible. Yeah, you guys, it's so easy to Join Fairwinds no matter where you live.
So go to fairwinds.org slash Ramsey to learn more help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, joined by bestselling author Rachel Cruz.
This is your show, America. Give us a call at 888-825-5225.
You jump in. We'll talk about your life and your money, and we'll try to help you take the right next step when it comes to your biggest life decisions, and maybe smallest.
You know, it can be a first world problem. We're down to chat about that, too.
We're here for everything. No problem.
Too small. Kenneth kicks us off in Houston, Texas.
Welcome to The Ramsey Show, Kenneth. Hello.
Hey, how you doing? I'm doing fine for now. What's going on? So I'm currently in a situation where I'm living in my car.
I started in November because I racked up about $14,000 in credit cards. Oh, man.
And I have $16,000 on my car as well. $16,000? Yes, on my car.
Where were you living before this? I was actually living in an apartment with my cousin and her boyfriend, but they decided to get their own place, so I ended up in a car. And right now you can't afford rent because of the debt? Yes.
It's taking about half of my paycheck every two weeks, and my car payment is $346. So I'm left with about $200.
So I started this debt snowball, and I managed to pay off one credit card, but it's still not enough. Sounds like we need to get your income up.
Are you working full time right now? Yes. Yes, I am.
I actually submitted applications to places. I still haven't heard back yet.
So what are you doing right now for work? I'm a sterilization tech. I clean dental instruments.
Okay. What do you make doing that? I make $18 an hour.
On my W-2, I said I made $32,000 this year. Okay.
And you're working 40 hours a week? It's between that. We work half days on Fridays, sometimes full days, so between $36,000 and $40,000.
Can you work extra if you chose to? Yes, I'm currently looking. Okay, I would see if you can work overtime with your sterilization job.
On top of that, getting another job on the side, I mean, $18 an hour is not nothing. And so it feels like it's not just a car loan.
What's your minimum payment on the credit cards? Altogether, it is over $500, $529. I have a spread between $7.
And do you have any friends or family that you could have to help support you, go live with some friends for now, crash on a couch, anything like that? Friends, no. Family, I do.
They have offered, but the environment for me around them I do not enjoy. So I rather stay in the car instead of having my emotional well-being.
Are you safe living in this car? Where are you actually staying? So I stay around near my job. So far, nothing has happened.
I believe, I don't know how many months, like four months now. Are you able to shower and how are you doing all of that? So I actually have a gym membership.
So showering, doing whatever I need to do, I can handle that at the gym. Okay.
Kenneth, how much is your car worth? It's, I checked on Kelly Blue Book. It's at $12,000 the last time I checked.
Okay. Worth $12,000.
Okay. You owe $16,000 some change? Yes.
Yes. And no money saved? No.
No.

And because my biggest concern right now, Kevin, for you, yeah, is what kind of George was hinting at, but it is your living situation. I mean, one of these four walls is what we say, food, shelter, utilities, transportation.
Like these are things that are necessities. Those are needs.
And you're lacking, obviously, one of those. So the family situation um would it be like is there a way to at least have a roof over your head and give yourself a time frame and say within 90 days I'm going to be out of here and looking for my own place but just for the you know just the bare necessity of, you know, having a home, that's what I just worry for you when it comes to that, is just having a place to stay.
Well, the place, at my family's place, I would have to pay rent, which is not much, but I wouldn't have any left to put towards my credit cards. So right now, if you're working 40 hours a week at 18 an hour, it's about $2,900 a month before taxes.
So how much is getting taken out of these paychecks? Are you actually looking at the paychecks and seeing where it's going? No. I know that about $180 is being taken out for insurance, but taxes-wise, I have not checked.
Okay. I would go look at that.
Make sure you're not taking out too much in taxes. Make sure that you're not putting any money away into investments.
Right now, every dollar you can get out of those paychecks needs to go to covering your four walls, like Rachel mentioned. Yeah, because besides that, you have the car payment, the credit cards, but you should have around $2,000 left.
Because you got about 900 in payments? That's what it's looking like. I get each paycheck.
It depends. I get about the minimum at least $1,060 each month.
I mean, each, every two weeks. Okay, so the first thousand covers your debt payments.
Where's the other thousand going? I have no idea. Okay, so I think that's going to be a key piece to this, Kenneth.
Because $1,000, I'm like, that's a significant amount, right? So I would want you to be tracking and knowing like, this is exactly where every single dollar is going, right? And even just going back to the basic of a budget. And we can, if you hold on the line, we'll give you every dollar premium to be able to figure out so specifically where that is, because I don't want you, yeah, I don't want you behind on payments.
In a perfect world, I want you to be able to have enough money to pay rent somewhere. And you need to be working every weekend.
I was going to say weekends and even nights, Kenneth. It's going to be exhausting, but you're going to have to dig yourself out of this hole.
And the two ways to do that is income and expenses, right? Those are the two parts of the equation. So upping the income, lowering the expenses is going to, is going to help you gain some traction.
Do you have insurance bills as well to pay outside of healthcare? Uh, no, it's, it's too much for me right now. Um, yeah? Yeah.
The minimum for me is $400. Why is that? You have a bad driving record? No, my driving record's good.
It's just been like the lease I have paid is $300. Maybe it's because I was in an accident, but it wasn't my fault.

Kenneth, you need auto insurance, man. Even if it's 300 bucks, you're in a very risky position right now.
Jump on to RamseySolutions.com, connect with one of our insurance pros to help you with

that, and hang on the line. We'll send you every dollar premium to help you make a plan for every

one of those dollars. Wishing you the best.
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. Grieving families are suddenly left behind scrambling to pay bills and trying to make ends meet.
I also discovered that there are a lot of ripoffs in the life insurance world, like that whole life crap posing as an investment opportunity. What you need is level term life insurance, usually 10 to 12 times your income, which is the smartest, most affordable way to protect your family.
The key is finding an independent broker who represents a ton of companies and works for you, not for the insurance company. This is exactly what my friend Jeff Zander and his team at Zander Insurance are all about.
They shop the term life companies to find you the best options, and they've been around for over 95 years so you know they'll

be there when you need them zander is the real deal and that's why they've handled all my personal insurance for over 25 years i trust them and you can too visit zander.com for instant online quotes or for a more personal touch, give them a call at 800-356-4282.

Listen, I know a more personal touch, give them a call at 800-356-4282.

Listen, I know a lot of you would rather watch paint dry in slow motion than file your taxes.

But thankfully, you don't have to dread filing when you've got Ramsey SmartTax.

It comes packed with everything you need to file online before the big deadline.

That means all major federal forms and deductions are covered with no hidden fees.

Plus, with Ramsey SmartTax, you can save up to 70% compared to other tax software out there.

It's a no-brainer. Just go to ramseysolutions.com slash smart tax and see how simple tax filing can be.
That's ramseysolutions.com slash smart tax. I'm George Camel, joined by Rachel Cruz this hour.

Open phones at 888-825-5225.

Call us and we'll help you take the right next step for your life and your money.

Jennifer's in New Orleans up next.

What is going on, Jennifer? Hi, how are y'all? Doing well. How are you? Great.
How can we help today? So I have a 17-year-old son, almost 18, and we've pretty much raised him on FPU principles since he was about six or seven years old. And he is in a pretty serious um healthy relationship with a young lady that we do really like and i know it may seem like too early to tell or anything like that we're not the kind of parents that's like oh my god but you know you're hopeful she might be the one i'm pretty sure so um you know not anytime in the near future future, but she is set on being an orthodontist.
Sounds expensive. Exactly.
That is my question of how to approach this with them. We have talked to him just briefly.
The conversations have just started. He does think it's dumb to take out student loans.
She's briefly said that she's totally fine with having $250,000 of student loans that might take the 20 years to pay off because that's what usually what orthodontists have. And I kind of briefly said that you guys may not even be a force to eat.
And I just don't know how else to approach this besides maybe getting them to watch the borrowed future, take foundations and finance. But, you know, it's just starting.
Yeah, well, a lot of this stems from how she grew up with money and what her parents believe about money. Right.
And so this is a money values conversation that your son will eventually need to grapple with as they head toward maybe a marriage. Right.
That's what we've been talking

about with him. Yeah.
And I think it's, I mean, he's getting to the age, he's 17, almost 18. So, and again, I don't have kids that age, but, you know, there starts to be that level of letting go, right? That eventually they're going to be off in college.
They're going to be making their own decisions. Like there is that season of life is coming soon.
And so it always begs the question. It changes a little bit because he's still under your roof, in my opinion.
But it always begs the question of if no one's asking advice, you know, when do we give it? And what can we control? Because the truth is you can't control what she chooses to do. and it gets to a point too that eventually soon they're going to just be making their own decisions regardless of what you guys think or not right so so if anything it would be a conversation with him I I don't know what y'all's relationship was obviously they've been dating a while but you're not her parents right so um but you are your's parent.
And so I think having that relationship of being able to have the conversation of, hey, this is what life will look like, you know, if she chooses to go down this path. And then, you know, we get people, you know, in the medical field call us all the time, Jennifer pharmacists and all this, and they have $200,000 in debt, but they're making 160,000, right? And so usually the hope is, is that you have a bigger shovel if you're choosing to go a path, you know, in this medical type field.
It doesn't always happen. You know, they could get married, she gets pregnant and wants to stay home, and then all of her options are gone, right? Because she has to go pay the step back.
So there's a lot of life in there. But as a, for, I don't know, I don't know how much you can control it.
Right. And until they're married, he doesn't really get a vote in her life.
He may have influence, but he doesn't have a financial vote as to what she does or doesn't do. The worrisome part was how flippant she was about it.
Well, she's 17, though. Well, this is normal.
I'll just pay off my 300,000 over 20 years. I think we need to give her a dose of reality and i think you're right like sitting them down and saying hey would you guys watch this documentary but if it's not her daughter well if she's over the house a lot if they're not engaged and stuff like i don't know yeah i mean i'd probably pop on barred future because i am that dad and just to have it on in the background yeah i mean i guess if it's in like a very organic conversation you know but i don't know it would i don't know i don't know like overstepping boundary do you feel like that if you brought this up it would be overstepping your boundaries well i have brought it up to my son and he said to your son yes he would watch it with him he has brought it up to her and um so we do plan on doing that this summer okay and is her family jennifer is he is he about to buy a ring like when you say they're serious okay so honestly honestly too and you know this jennifer at 17 you're 17 i'm like i knew multiple friends that were dating in high school they go to college within you know nine months or so they're they're off on different schools they mean i mean you change so much in that also rachel got married in college i wouldn't i had a semester left thank you winston had been graduated a year i'll have a semester left thank you george so it can happen but what i'm saying though is i do wonder if you're ringing your i don't want you to worry about something that's not your problem right now do you know what i mean like it's not like they're getting engaged this summer and getting married and then she's choosing to go in at 18 years old right like i don't know yeah we may have different opinions george i just think it's one of those things you gotta you cross the bridge when you get there and if she ends up in a bunch of debt and they do end up getting married and she's aligned on the values of wanting to get out aggressively then they'll be okay yes their life's not over you can still have a great marriage but it is going to add a wrench in whatever their plans are.
Yes, that's right. It just adds that weight.
It's going to hold them back building wealth. But the long-term hope is that she gets on the same page with money and goes, you know what? I'm not waiting 20 years.
If she does end up taking this debt, it's I want to be done with this thing in three or four. Yeah.
And Jennifer, you do this after school too. And I know people, majority of people change their major, right their major right like halfway through so i'm like she may not even end up doing it anyways right so that's what i'm hoping yeah yeah and they may not even be dating i mean i don't know that's a tough one yeah yeah there's no easy answer here i don't want you to worry jennifer because i just don't feel like um the reality is happening it may happen in like four years but a lot of factors have to play in for this to actually happen but i really do appreciate you you know looking out obviously for your son that's what i'm thinking it's for your son what she does though is i don't know yeah well keep us posted call us back in a few years yeah okay so tell me this let's flip the tables a little bit george okay let's say mia comes home oh my we need a different okay let's go first of all america mia is my eight month old daughter just for context okay she comes home and this is not picking on jennifer but it does raise the question where was she if she wasn't at her boyfriend's house okay okay and her boyfriend's um i was gonna use health i don't use money, but health.
Okay. And she comes home and she says, yeah, I mean, Brad's mom set me down.
She's dating a Brad? She has to date a Brad in this scenario. She's dating a Brad.
I already have feelings about this. And she says, oh my gosh, Brad's mom.
You know what? You're not the mom. You're the dad.
You may feel differently. Brad's mom set me down and told me like the way the way you've been feeding us gluten-free, all this stuff is actually really harmful.
And I actually need gluten and dairy and all of this that you've deprived me of, Dad. So I, like, because of this Brad's mom, like, I'm choosing to say, would you be like, Brad's mom, what the heck? Stop teaching me about.
I'm trying to put myself in a place where there's a contentious argument about gluten i'm trying to try and put it in my world i'm trying to put it in your world yeah i mean i think as an adult i'd have an adult conversation with the other adult and come to a compromise okay so you would reach out to brad's mom and be like hey okay so that's what what I'm saying. Like the blurred line with Jennifer and this girl who's not her daughter.

Is it overstepping boundaries?

Is it parenting another person's child when the girl isn't asking?

Sure.

You know what I mean?

Yeah.

And it's not a fiance.

It's just a girlfriend.

That's right.

Yeah, yeah, yeah.

I feel like future mother-in-laws give unsolicited advice all the time.

It's just a part of being a potential future mother-in-law.

You know?

I guess so. I don't know.
They may never get along. I'm so glad you called Jennifer.
That's a really good. It's an interesting scenario to be thinking about.
For sure. I would love to hear from the girlfriend's parents.
But I also. And I'm thinking about little Charles now.
My son. Like if he was, yes, dating a girl.
And she was going to go. I would be like, y'all don't do.
Like stop. No.
No. Like I would feel that.
You know, that tension. Oh, I'd i'd feel a way like you're about to enter into something really hard that you don't have to enter into right now like you know because the damage hasn't been done yet that's right going like we can prevent a lot of this yes there's another way right right that's what i don't know did the girlfriend parents save for college at all did she just on a whim decide i want to be an orthodontist one year before going off to college yeah there's a lot of further questioning that we don't have the answer to.
100%. If Mia starts eating gluten and...
We have had that discussion in the camel house. We're like, will she eat gluten one day? I don't know.
We don't have it in the house. If she dates a Brad, we have a lookout.
It's like she's not drinking in our house. I'll tell you that much, that would have been a better one if you're a family that doesn't drink.

Save that one for next time.

Yeah, we'll do that next time.

Hey, more of your wonderful calls coming up.

Always a great conversation.

888-825-5225.

This is The Ramsey Show. Hey, what's up guys? It's Jade Warshaw.
And look, if there's anybody who knows student loan debt is a problem, it's me. My husband and I had $280,000 of it, but we were able to dig ourselves out and you can too.
If your student loan payment and interest rate are burying you, refinancing could be the solution. Now, I recommend contacting my friends at Laurel Road today.
Through their online application, you can get an initial rate quote in less than five minutes. And if you have a more complex situation, you can schedule 30 minutes to talk to an actual human being.
Thank goodness. Laurel Road makes it simple.
There are no fees involved and you could save thousands over the life of your loan. Remember, you should only refinance if it makes sense in your situation.
So if you're looking for a low rate or a shorter term so that you can pay off these student loans fast, talk to my friends at Laurel Road about their competitive interest rates and how you could actually get a lower rate by signing up for auto pay. Listen, nobody's coming to save you from student loan debt.
If you want them gone, you can't mess around. Go to laurelroad.com slash Ramsey to find out more about student loan refinancing.
Again, that's laurelroad.com slash Ramsey. Laurel Road is a brand of key bank national association.
All credit products are subject to credit approval. Hey guys, good news.
Presale is on now for my new book, Build a Business You Love. If you're a business owner, you know running a business is hard.
That's why I wrote this book, to share what we learned over the last 30 years so business owners can grow your business faster with fewer mistakes. Pre-order your copy today and you'll get access to over $350 in bonus items only at RamseySolutions.com slash store.
RamseySolutions.com slash store. Pre-order today.

welcome back to the ramsey show i I'm George Campbell, joined by bestselling author Rachel Cruz, and we're taking your calls at 888-825-5225. You call in, and we'll help you take the right next step with your money and your life.
Mike is in D.C. up next.
Mike, how are you doing today? Hey, I'm doing great. Thanks.
How are you? Doing well. How can we help? All right.
So around August last year, I finally decided to accept the fact that I found myself about, well, I'll just tell you $11,660 in credit card debt. So I decided to put myself on a budget and start paying it off.
I've made about $5,486 in payments toward that debt. Just about? Was that exact? Wow.
Yeah, that was exact. And then it leaves me with exactly $6,173 in remaining debt to pay.
Is that all of your debt? Yes. Okay.
So, and as I'm paying this off, I want to get more aggressive with it, but, you know, I'll be honest, I'm, I'm really a little, um, worried about pulling money, um, away from a recurring retirement and savings contributions to do it. I just wonder sort of what's your perspective on should I stop, you know, paying my 401k to get that debt paid down as aggressively as possible or should I just continue on? How old are you, Mike? I'm 32.
Okay. What are you contributing right now to retirement? I contribute about $300 a month towards it.

What percentage of your income is that?

So I make $81,000 a year.

So I guess, I don't know, back at the napkin math, I'd say that's probably like 6%.

You're saying $300 a month?

$300 a pay period, so $600 a month.

Okay, okay, $600 a month.

Well, I'll tell you this much, that's not going to give you a great retirement anyways.

And so our plan is to pause contributions to retirement so that when you get back to investing, you're investing 15% consistently without fail for the next decade or two until you get your house paid off and then you can invest even more. And so that's the purpose of us telling people to pause the 401k is twofold.
Number one, it actually frees up the 600 bucks a month that can now go toward the credit card, right? Right. And number two, it lights a fire under your butt to get out of debt faster because you desperately want to get back to investing, don't you? Yes.
And the problem right now is you're a little bit comfortable. Like, yeah, you want to get out of debt, but you also want to invest, and, you know, nothing's on fire.
And I like the fire that is created when you pause the investing. It tells your own body, this is serious.
We need to get out of this debt ASAP because I want to build wealth and stop paying for the past. What is the debt of the interest rate on these credit cards? Well, I actually was able to consolidate my debt into a 0% card.
So I've had some high interest debt that I've already paid off. And the debt that remains is one single amount on a 0% card, and that 0% goes until March, next year.
Okay. So how quickly can you pay off if you pause investing, you've got the extra 600 bucks back, you got six grand left on the credit card, you're making 81.
How quickly can you pay this off if you do all of that? Probably seven to eight months. Let's call it six months.
Okay. How would you like to be debt free in six months? Do you have any money in savings? Yes, I do.
I've got $3,000 in a brokerage, $70,000 in retirement, and $1,500 in my emergency fund. Okay.
So you've got $4,500 in liquid cash right now. Yes.
Well, you could lower this, I mean, more than half today if you wanted to. If you wanted to keep a $1,000 emergency fund and then throw the brokerage account and $500 that's in your emergency fund at this debt, then you're down to, you know.
$2,600? Yeah. And if you pause investing, now you have an extra $600.
This thing's done in like two or three months, dude. It's done like really soon.
And then just build your emergency fund back up for a few months and throw some cash in there to get that back up. And then I would, yeah.
By the end of the year, you'll be investing 15%. Yeah.
You'll have almost tripled your investing. Do you see the excitement that we have as to why this plan works? Yes, I do.
And I think I just needed to hear somebody tell me it was okay because, you know, I'm just very wary of liquidating that extra cash, but I totally see what you're saying. Yeah.
And Mike, and the reality is to, you know, people kind of are like, oh, a thousand dollar emergency fund. These Ramsey people are crazy.
But here's the truth. If a larger larger emergency fund or a larger emergency comes up usually you don't have to pay for that like today usually you can say okay i have two to three weeks i got to come up with some cash with my emergency fund and figure out how to pay this you know you'll pause the debt snowball and figure it out but the problem is is that people try to do kind of what you're doing mike six different things at once or they try to go and build up this big emergency fund before they get out of debt.
And they never even get to getting out of debt because they spend so much time with just the savings portion to feel comfortable. And there's really never a number that you're like, okay, now I feel good that I can go pay off debt.
It's kind of this idea immediately when you become debt-free, what we say, your largest wealth-building tool, it's your income. It all comes back to you.

And it's an amazing thing

when you say,

okay, all these credit cards are gone.

There's no bank in my life left.

And now I get to decide

what to do with my income.

And you're able that much faster

than to build up an emergency fund

to three to six months of expenses,

which is what we want you to do.

We don't want you to stay

at $1,000 forever.

But for you, Mike,

you're only going to stay there for like two months, month and a half, right? I'm like, it'll be so fast that you're going to be fine. Okay.
All right. So I think I know what I need to do.
Booyah. Another one bites the dust, Rachel.
We did it. Mike's on the path.
All right. Let's see if we can help Jordan out in Boise up next.
Jordan, what's happening? Hi. So my wife and I, we've been married about six months, and we're just now starting baby step one.
We're working towards getting $1,000 in the savings account. Awesome.
And we just feel really overwhelmed. So we had to move to Boise for my job, the housing market is awful here and we only have about six thousand dollars in student loans left and then probably at about another four thousand because of a medical emergency that happened with the ER.
Okay so you got 10k in debt? 10k in debt, I separated those cause we're not getting interest on the, on the hospital. It's just a payment plan.
Um, and so, yeah, just this idea of, you know, once we get to that point, by the time we get to, you know, 20% down on a minimum of a $400,000 house, which is not, uh, like that's the lowest I've ever seen it in Boise. It just seems impossible to buy a house.
Well, you're not going to buy a house now, Jordan. You guys are broke.
You don't even have $1,000 in savings. Yeah, so it's going to be a few years.
Yeah, so it's not a 20% down payment. That's a suggested amount.
You can go down to five for a first-time home buyer, so 5%. And by the time you guys do all of this, how much do you guys make a year? Together, we make about $66,000 before taxes.
Okay. So yeah, by the time you guys pay off $10,000 of debts and get a fully funded emergency fund of three to six months of expenses, it's going to be, I mean, 18, 24, three years, you know, till that happens.
And honestly, Jordan, And it's going to be a whole new world. We you know till that happens and honestly jordan it's going to be a whole new world we got an election year who knows what interest rates are going to do like we don't know what's going to be going on um but we would still stick with that at least five percent down idea and i just don't believe that the lowest house you can find is a four hundred thousand dollar house in boise i don't believe that well you know why Because I live in Nashville and it's the hottest market right now.
And my husband, I mean, he just went and we were doing investment real estate right now and he got like a great $200,000 house. It's a two bedroom, one bath.
They're flipping it in a place outside of Nashville. So I just don't believe the $400,000.
I get that housing is expensive. Well, I debunked it, Rachel.
I'm literally on Realtor.com right now. What do you got? There's at least 30 houses that are beautiful, three bedrooms, single family homes under $400,000.
All right, Jordan, let's... So you can do this, man.
You sound a little like us when we get dramatic sometimes. Focus on one thing at a time.
It's never going to happen. It's going to happen, Jordan.
Get your income up and you'll get there. Calm down.
You've been married six months. You guys just be patient.

And in three years, it's a whole new

world. And hopefully there'll

still be these wonderful houses in Boise that I'm looking

at right now on George's computer. It's not in the

Constitution that newlyweds have to own a home.

So I hope that frees you, Jordan.

Thanks for the call. This is

The Ramsey Show. show.
I talk to people every day who want to know how to do better in two areas, money and relationships. That's why I'm pumped to bring the money and relationships tour to a city near you.
Join me and Dr. John Deloney for a night

that will challenge the way you think about this stuff and possibly change how you live forever.

Starting April 21st, we'll be in Louisville, then on to Durham, Atlanta, Phoenix, Fort Worth,

and Kansas City. Grab your tickets at RamseySolutions.com slash tour before they're gone.
Today's question of the day is brought to you by Y-Refi. If you are struggling with defaulted private student loans, Y-Refi offers a great solution to get you back on track.
For a low fixed rate and more flexibility, go to yrefi.com slash Ramsey today. That is the letter Y-R-E-F-Y dot com slash Ramsey.
May not be available in all states. Today's question comes from Alexis in Tennessee.
We recently received credit cards in the mail from my son and daughter who are both under the age of 12. When I showed them to my husband, he responded that he had taken them out in our children's names to help them establish a credit score before they became adults.
We have followed your principles for years, so I was shocked that he did this without talking to me about it. How should I handle this situation? This feels like there's a tinge of financial infidelity here.
Behind her back opened up credit cards and the kids' names. So weird, yes, and not mention it.
And the way that you're, when you said, you know, we've followed the principles for years, I'm assuming that means you guys are on the same page. You're talking about money.
I mean, there's some couples that, you know, they don't know what the other one's doing. but if you are following a level of Ramsey assuming that means you guys are on the same page you're talking about money i mean there's some couples that you know they don't know what the other one's doing but if you are following a level of ramsey and that means you are you know connected and you're talking about money so the fact that he didn't bring it up that feels that feels very off to me very off yeah and the fact he opened up credit cards in your kids names well i'm guessing he it's in his name they got cards with their names on it as authorized users yeah because if you take out a yeah a line of credit for a child right i mean you you it's a trend because of these tiktok videos where they go hey parents here's a life hack for you add your kids as authorized users and they can take your credit score when they're 18 and have great credit so they can go get some more debt yep well what we've heard too is people calling the show saying yeah my parents took out debt in my name to build up a good credit score and then they ended up destroyed my credit destroyed the credit because they couldn't handle it and so you're just like oh it's yeah and it gets to be a fine line too of identity theft i'm like if you're you know what i mean like it's kind of to a point of like there was no consent here i mean I mean, yeah.
So it's, I don't like it. I don't like playing the game.
And so, yeah, but a lot of, it is a TikTok trend. Yeah.
We have an article here related to this. Parents are gaming their kids' credit scores, and it's around the same idea of stories of people who had their parents add them as authorized users.
There's some horror stories in there. There's some explanation, but it says many are taking advantage of these tools.
A 2019 poll commissioned by creditcards.com, that's perfect, 8% of roughly 1,500 American parents surveyed said that at least one of their minor children had a credit card, presumably through authorized usership, because kids under 18 can't get their own card. And TransUnion data showed that nearly 700,000 22 to 24-year-olds had authorized user accounts.
Oh, dang. Yeah.
So, and here's the thing. I don't think these are terrible people.
They're just well-meaning parents who have fallen for the system who go, well, this is the path. They got to have the credit score because otherwise, how are they going to rent an apartment and how are they going to travel? And they can't book airlines with that.
And I'm going, have you ever tried a different route? You don't need to do all this gyration to live your financial life. Yes.
There's so much more freedom, you guys, when you're chasing the credit score. You can live life without a credit score.
You can do everything you just said without a credit score. It is possible.
You can even get a house through manual underwriting without a credit score. And so, yeah, I think like you said, it's good intentions.
I'm going in saying, I I'm gonna try to set my kids up, but you're falling right into the system that gets so many people, millions of people stuck and in that wheel of debt. And it's like, it's not worth it.
It's not worth playing the game. And then let alone having any level of risk for another human being of their financial wellbeing, that if you screw this up, it doesn't just hurt you.
It's hurting your kids then at that point. I mean, so it's just, it's a mess.
It is absolutely bonkers. And I cover this in my book, Breaking Free from Broke.
I have a whole chapter on credit scores, a whole chapter on credit cards, and I unpack how to live life outside of the system. And it's not as complicated or as difficult as people would have you believe.
Yes. In fact, it's way more peaceful.
It's way more simple. I don't have 16 cards to manage to try to get the rotating cash back rewards.
I have a debit card and I use it and it has my money on it. And when that money's gone, it is gone.
You know, it's funny, George, I feel like when things are less complicated, they feel less sophisticated, right? Everyone's like, oh, but that's so boring. It can't be the smartest way.
Yeah. Yeah.
There's got to be so many other hoops to jump through. And you can live your life that way financially.
You can, but you're going to be exhausted. You're going to be exhausted, again, with a system that is set up to screw you.
Like, that's what it is. It's not there to free you and for you to be financially free.
They want you in the system because they make so much money off of you. But when you exit out of the system and you're like, you know what? I'm going to live with a debit card, with cash.
We're going to save gonna save up and pay for things and we're not gonna sit here and try to play the industry's games over and over and over and over and over and over what is sophisticated is peace it is i'm like there's just that level there that is it is so much worth it than the mental dance and gymnastics that you have to play so here's a game here's a wild concept what if as a parent you taught your kids how to manage money instead of managing debt that That's all a credit score is, is how well you've managed debt. Doesn't reflect how much money you have in the bank.
Doesn't reflect your income. It just reflects your relationship with the lender.
And so that's how I'm aiming with my kid. I'm going, they're going to look at people with credit scores and credit cards going, why are they doing all that work, dad? And I'm like, I don't know.
America, it's it's crazy lost her minds it's crazy out there oh man yeah parents don't uh take credit cards out and don't be an authorized user you follow our principles for years while you still clearly have credit cards you don't get to pick and choose this isn't a buffet this isn't a buffet get out of here get out of here all right let's go to shane in let's go to Shane in St. Paul.
Hi, Shane.

Welcome to the show.

Thanks, Rachel, for taking my call.

How are you today?

We are doing great.

Glad you called in.

How can we help?

Thank you.

Well, I'm a relatively new listener.

We're on baby step number two.

And my question is, we have probably about $17,500 in credit card debt.

Okay.

And a couple of other small loans.

And, um, we have some money set aside and I was wondering, is there any way that you

can deviate from that snowball plan?

Uh, tell me, um, yeah.

Why would you want to? What the what's what are the numbers

you're seeing shang it usually comes down to numbers okay um basically uh the biggest one we have is we have a credit card with a high interest rate that has a balance of about 10 thousand okay how much what's the interest rate on that uh it's like 18.5 i think okay and then we

have another credit card with the balance of 7500 and that interest rate is is 9.9 percent and then we have a um kind of like a small um home improvement loan with the of like $350 that you have to pay off. And then I have a work loan that I got through my work with zero percent interest, and I have a balance of like $800 on that.
Okay. And how much do you guys have saved? Well, we just got our taxes back, and so we have about $14,500.
Amazing. Oh, my gosh.
So the math doesn't matter that much because you've just knocked out all the debts but the last credit card in this scenario. Right.
So I guess my question is um you know would would it make sense to pay off that the highest one the ten thousand dollars first and then pay the two small loans and then whatever's left pay on that last credit card uh no i mean listen if you're doing the math i understand what you're saying because of the. And what we always talk about on this show, Shane, and what you're going to start to realize is that personal finance and winning with money is so much more about your behavior than it is about math.
And so if we were all chasing math, we wouldn't be in debt in the first place, right? So it's not a math problem. It really is us winning.
And so the fact that you do have a bulk of money, which is absolutely amazing, what that does to me, that just that jump starts. I mean, tonight, you could have that $800 paid off that 350.
I mean, those are just like ankle biters, right? You're just like, you just need to get in there and just get them done with. And then to pay off a $7,500 credit card in full and it be completely done.
And knock the next debt down to probably around six grand or four grand. You have almost six grand to throw at the 10K debt.
So you'd be down about $4,000 left. So the 18% interest, the way you're going to attack this thing, it's not going to amount to much.
Because you're not going to be in debt, Shane, that much longer. I mean, when you're looking from a math standpoint, you guys can take on extra jobs and get that paid off in two months.
You throw a thousand bucks a month at this thing, it's gone in four months. Yeah.
So it's going to be so quick that the math at that point doesn't matter. But I'm excited for you.
You said you're a new caller, so I'm so glad that you're joining in. And using that refund for good instead of a vacation because you deserved it.
Well done, Shane. Well done.
Well, thanks to all the men and women in the booth making this show

happen. George, thank you.
Thanks to our great audience here in Nashville, Tennessee. And thank

you, America. This is The Ramsey Show.
Hey, you're still here?

What are you doing?

You do know that the rest of today's show is playing right now over on the Ramsey Network app, right?

All you got to do to finish the episode is search Ramsey Network in the App Store, Google Play Store,

or just click the link in the show notes to download the app for free.

Yep, you heard me right, for free.

Then right there on the home screen, you can watch the rest of today's show.

Bada bing, bada boom.

All right, I'm getting out of here.

Enjoy. We'll see you on the app.