You Don’t Need a Raise, You Need a Plan

Hey guys, Dave Ramsey here. Me and Dr.
John Deloney are coming to a city near you on the

Money and Relationships Tour. It's happening soon, so don't wait.
Get your tickets at

RamseySolutions.com slash tour.

This is the Ramsey Show where America comes to win with your money, win in your profession, win in your relationships. Thrilled to have you with us.
888-825-5225 is the phone number. Rachel Cruz joins me today.
I'm Ken Coleman, and let's get right to it. Are you ready to roll? Let's do it.
Answer these questions. Christy is up first in Kansas City.
Christy, how can we help today? So I was just wondering how you guys would handle this. My husband and I are newly married, about six months.
We were both previously married. I was married for 26 years, and he was married for seven.
And both of us through our relationships, it's like we both had financial infidelity by our partners. So I found out that my ex-husband had been lying to me about money for well over 15 years.
And then his ex-wife, she left him and then tried, he's a farmer, so they have a large farm,

and she tried to take the whole farm. So there's been a lot of infidelity there on the financial

side. So both of us have these deep fears of combining finances from, you know, previous

relationship. We don't know how to handle moving forward financially together, biblically speaking.
What do you mean, biblically speaking? Well, I know from listening to your guys' podcast, you say the two shall become one, and that includes finances. And there is just a lot of fear there with combining and afraid that you're going to get what you got before and that you're going to find out, oh my gosh, this person who I was supposed to be able to trust was lying to me.
And then his side of the fence is, well, if I open up to her and I tell her what's actually going on with finances, she's going to mess me over and take me to the cleaners again. Yeah.
Okay. I get what you're saying.
Here's what I would say right out of the gate. I actually think if I were in your shoes, and I understand the trust issues, so what's going on with both of you is very natural.
It's very normal. I think you guys got to get with a therapist without question and work through this.
But I would tell you that just practically speaking, I think that the fact that you have your finances merged and shared actually creates greater accountability for both, right? So that the trust at least has some type of transparency. Now, just because you share accounts doesn't mean that financial infidelity isn't happening.
However, one big step going forward to me is, okay, there are no separate accounts and we both see what's in there. And even just getting into an every-dollar budget and beginning to look where every dollar is being spent, all of that begins to create so much transparency that trust is in some way a byproduct.
I'm not in any way saying that therapy doesn't still need to happen. Because, Rachel, I want to get your thoughts on this because I do think this is a, we need a good therapist to help us both heal because they've both been, they've both had this trauma.
Yeah. I mean, you've both been burned.
Yeah. By the exact same issue from an ex-spouse.
So yeah, Christy, I mean, you're not crazy by any means for this to be so heightened and so aware. But I would also just challenge you that the man you chose to marry and that you chose at the altar and said those vowels, what caused you to say yes to him? What were those things? He loves Jesus big.
And I respected his walk with Christ and who he was. His character was so good.
And he was different than anybody else I had met. Yeah.
So I think what can happen is our emotions and from our path, it's almost like a neuropathway in our brains, right?? Has been formed for you that with money, it's like, don't trust, don't trust, don't trust. And over time, you are going to have to build a new way of trusting.
And I think even leaning on kind of just those facts of what you just told me, Christy, like this man is not your ex-husband. And I know me just saying that doesn't wipe away all the emotion, but just you have to trust yourself as well.
And I think when people get blindsided by a spouse, whether it's financial infidelity and affair or something, there's almost that fear of I can't even trust myself. How did I miss it? Right.
You're probably asking, how did I miss it for 15 years? Right. So you're thinking about that.
And so I would say, trust yourself, Christy, because you chose someone to do life with. And so, um, again, I would, I would talk to a therapist because that trust string isn't going to just be tied to money.
It's going to come out in other parts of your marriage where you probably have a level of that wall. And why we say to to combine finances, yeah, I would say from a spiritual perspective, I think it's wise.
But it's also, again, whether you're spiritual or not, the data shows couples that combine finances not only have a higher level of happiness, but there's also a depth of complete intimacy that when you say, I said yes to this person and I chose to lock arms with them and take on the world together. When you do that in just this like fullness together, you enjoy life together more than trying to keep everything separate and compartmentalized, if you will.
So again, from a spiritual aspect, yes. But I would say it's even bigger than a spiritual aspect.
I think people that aren't spiritual find this level of depth in their marriage when they choose to work as a team. Well, because, and you're right, because of, again, the word we've been talking about, which is trust.
Christy, I want to dig a little bit. We've kind of told you what we thought.
You've been listening. I'm curious, are you both, would you say you both are at the same level of distrust of each other, even though you're probably happily married in every other area? Describe for us where you are and where he is on the particular issue of trust of each other and money right now how would you describe that um well on his side of the fence he farms with his dad so it's a it's that was a you know that's a family business generational and so we also have a mix on his side of the fence of fear from the whole family yeah yes you know what i get that that makes us.
That makes us even. Can I jump in here, Christy? Christy, can I jump in? Okay.
This is, we never talk about prenups. You know, we like our, it's almost an almost never conversation.
I feel like around here with prenups, unless there's a few caveats. One of them is if there is an excessive amount of wealth, you know, there's a level of just protection there.
But then the other one is kind of what you're talking about, Christy, for him, at least if there is some level of a family business, because we've talked to people like this, where they get divorced in this in the ex still has voting stock in the company, and then he gets remarried to someone crazy. And now all of them are still speaking into the ex's family, and it's and it's affecting other people.
So this may be a conversation that you have with him of that specifically that farm because it is tied to other people in the family that domino effect is very real for those for them to be protected in that sense with a farm you know with through through some level of prenup so again we we say almost never a prenup but there are situations that make sense because it's protecting other people as well. So that may be something on his side towards you, right? That's what it would be for you to sign.
Well, actually, we did. We did sign a prenuptial agreement.
So I actually volunteered to sign one. Oh, good for you.
I said, when we were dating, I said, I'm feeling like that there's something here. And I said, if you need a piece of paper, then give it to me and I'll sign it because I don't want anything from you.

Oh, well, that's huge.

That had to create a lot of trust for him.

That had to be huge.

Well, there's still some walls there.

You know, I can sense that he doesn't want to open up to me too much yet.

And from my perspective of having that been violated on my side of the fence, I completely understand it. I'm like, as you should be.
You should be worried. I got to say, Christy, I think you guys are on the way.
I believe marital counseling here because neither one of you were the bad guys. You're both victims.
That's an interesting combination.

And a professional will get you guys the tools that you can heal.

I think you commit big time to some serious therapy.

One time a week, maybe.

And let's dive into this and come out on the other side.

And then I think, you know, you guys will get there.

Really, really interesting call.

Thanks for trusting us.

You spent years trying to get everything just right for your family. Now you need an easy way to make sure your important financial documents are as organized as the rest of your house.
Well, good news. Knockbox, that's N-O-K box, as in next of kin box, is a complete system that helps you be sure that you leave happy memories, not a mess, when you pass away.
Knockbox is a simple way to organize important paper and digital documents, IDs, tax returns, insurance policies, estate plans, accounts, and other personal history in one manageable place. Your family will feel your love and every detail you take care of.

So start taking care of them at knockbox.com slash Ramsey.

A well-organized legacy is a gift to your family.

That's nokbox.com slash Ramsey.

All right, let's go to Shelby in Seattle, Washington.

Shelby, how can we help today? Hi there. So I am in a bit of a pickle right now.
I'm a stay-at-home mom, a new stay-at-home mom. So I was working previously, but now my husband provides all the income for our family.
We have an eight-month-old son. But our biggest issue right now is that our vehicles are taking up way too much of our budget.
And before we got married, my husband bought this really nice truck that he could afford or he thought he could afford then. And that was before we met, before we got married.
And now it's costing us almost as much as our mortgage. And we owe about $25,000 more than the car is worth right now.
$25,000 more than it's worth? Or what is it actually? $25,000 more than it's worth. Oh, my.
Okay, how much do you guys owe on it? About $55,000.

$55,000.

Okay.

And you're thinking you can only Kelly Blue book it for, what, $25,000?

About $30,000.

$30,000.

$25,000, $30,000.

Yeah, yeah, yeah.

Is your husband willing to get rid of it?

He is.

And he's actually making a big chunk of change right now. he's working

on

the

community

and

he's working

on

the

community

and

he's working

on

the

community

and

he's working

on

the

community

and

he's working

on

the

community

and

he's working

on

the

community

and

he's working

on

the

community

and

he's working

on

the

community

and

he's working

on

the

community

and

he's working

on the community and he's actually making a big chunk of change right now. He's working up in Alaska, so he's making about four times as much as he normally would.
Oh, wow. So I've been trying to convince him to throw all this extra income at the truck, but he's saying, no, let's just stick to the snowball plan and go smallest to largest.
as Well, it's a lot of money that we could be using for other bills if we could get rid of the truck. Well, why don't you walk us through where you are on the snowball right now? What do you guys would walk that out for us? Smallest to largest.
Yes, we pay off. The mortgage is $1,400.
No, no, no. Tell me your current debts, smallest to largest.
Oh, I see. Okay.
So we have

a credit card that's about $600 left. His credit card, which is about $5,000.
We have, I'm sorry, that wasn't smallest to largest, but my credit card, which is about $600. I have a personal loan for $2,000, we have

a joint loan together for $3,000, he's got a credit card for $5,000, his own personal

loan for $7,000, and then I have student loans for about $8,000.

It's like two, three, four, five, six, seven, eight.

It's like stair-step kids. Okay, so then so then the eight thousand dollar student loan and then the truck or is there another one uh and then my car okay which is about 22,000 okay now what's that worth his truck what's the 22,000 car worth uh about 20 okay um and how much are you guys making a month now that his income is up? What is he bringing in? Right now, he's bringing in about $16,000 a month.
$16,000 a month. Golly, that's amazing.
How much surplus is that? If you do your full budget, sorry, Rachel, if you got all your expenses, including the minimum payments on debt, how much extra do you have now that he's making this $16,000 a month? Yes. So our expenses right now are about $1,500 a week.
So that's about $6,000 a month. So that's about $8,000 surplus.
Okay. And how long has he been doing this? I'm just asking these questions for Rachel because She's running numbers here for you.
So how long has he been making that extra money, and how much longer will he make that in Alaska? So he's been doing it for about four weeks, and he's going to continue to do it for about three more. Oh, three more weeks.
So it's very short. He's Does he have the, okay.
Is that because of his,

is that because he's choosing to make it shorter or is it because of what he's doing?

There's only like that much contract or whatever it is.

It's just seasonal.

It's like a contracting crane operator.

Okay.

Gotcha.

Gotcha.

Well,

what I would say is,

yeah,

I mean,

I'm on his team with going ahead and just,

cause you would not,

you guys would knock out one, two, you know know close to three of these debts using the debt snowball with this extra money coming in um being able to knock those out um with the surplus and if he's going to be working for three more weeks doing that it's like yeah so I would stick to the snowball method and then I would challenge you guys and just say, you know, you're like, you guys can keep the cars and keep trucking down the debt snowball, but run the math and just say, what if we did sell them at a loss, right? So you would have to take out a personal loan. So for yours and for you to have a car, you know, you'll have to take out to probably $7,000 loan.
loan for you to get a crappy car and pay the 2000 that you owe on yours that you're underwater. And then for him, you know, what if you guys took a $30,000 loan versus a $55,000 loan, right? I mean, you're shortening the life of this so significantly because of two cars.
You know what I mean? Like, like it's's it hurts so bad to say that it's upside down and it's like i mean it's just it's sickening right i mean how much you guys are paying per month for this stuff i get it but i think i if you can get a credit union to give you guys two other personal loans i think that's what i would do and then kelly blue book these individually because this is an expensive truck we're talking 55 after he's been driving it for two to three years i mean like yeah i think i would take the hit too and and uh just just you know you're also going to get a real raise here after you start knocking out some of these debts so i agree with hubs but i but i would but i want to make sure you hear what we're saying work the snowball okay, okay? And he's right about that with the extra income. However, take the hit and get rid of both cars.
Yeah. What were you doing before, Shelby, before you went home as a stay-at-home mom? Yeah, I was a court clerk.
Okay. Okay.
Because I'm just trying to think, I just know a family right now personally and she's worked, she was a stay-at-home for years, and she's working three days a week now to get them moving and going. So I'm like, I just wonder for a season if there is something that's, and I don't know what that looks like.
I don't know if you probably can't do that virtually. I have a photography business on the side too.
How many hours a week are you spending on that? It's not super regular that way, but I'd say it's probably maybe a thousand dollars a month. Okay, that's great.
I'm wondering, but I'm with Rachel on this. I wonder if we take that skill set and experience of being a court clerk.
So we're talking about details, right? Good listener, you're administrative in nature. Is that right? You enjoy that and you're

good at it? Dotting the I's, crossing the T's. I wonder if you don't look into maybe doing virtual

executive assistant or something like that. Yeah.
Even if it's 20 hours a week, 30 hours a week,

because you can do that in your sleep. Something like that.
Yeah. Because I'm just thinking,

how much do you guys make a year when he goes back to his normal salary? How much a year?

About $100,000. $100,000 a year.
And what was your previous salary as a court clerk? About $55,000. Oh, I wonder if you can't get $40,000, even $50,000 as an executive assistant, you do it all virtual.
I'm just running really fast math here, but I'm like, if you guys are using all this extras, I'm going down my list. And if you go and get loan for 30 and seven and pay the cars, it's basically right at $50,000 that you guys have left with those cars and then the other student loan and personal loan.
So that's kind of what it goes down to to say after all the smoke clears, we're going to have about 50 grand left to pay off. We make 100 grand.
That's doable. Yeah.
That's very doable. I mean, what if we, yeah, what if there was something for six months? You know, it doesn't have to be long.
That there's just something to bring in. Just because the whole goal here, which you know, but it's just to fast forward this process.
Do this as fast as possible. We call it gazelle intensity, but just get through it as fast as possible.
And there's going to be some sacrifices, things you don't want to do, but it's for such a short amount of time. It's six months to a year.
And be done with all of this, right? right and then save up for the emergency fund and replacing your cars because you guys are going to want new cars after the beaters that you buy uh that are crappy but um it's just this idea of this progress really fast so yeah that the photography stuff's great i mean a thousand bucks is usually what we see a side hustle people bring in if they can bring in a thousand dollars a month that's great and that's great by the way shelby i didn't want to sneeze at that no but i do think there's something even more yeah you have a lot to offer so i'm just like man i wonder for you know and i know it's not ideal and i know as a mom too you know when you decide because i even pulled back from work a lot when my third was born and you kind of have this mindset of like okay i'm gonna be more present as a mom i'm here and so to kind of rewind that a little bit and plug work back in, that's a hard mental obstacle, Shelby. So I get that.
But my only hope in all of it is that it's for such a short period of time. And I really, I think you guys can do this and work as a team.
But to answer your original call, Shelby, I think we agree with the husband, throw it at the debt snowball. But Ken and I both agree, sell those cars, take a loan for the difference, and keep on going.
Make no mistake. It's going to be painful to drive a piece of crap for a while, but if you've got your mindset on where this gets us, then you can drive anything, and here's the deal.
Park around the corner and walk a little bit. 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 health care costs. CHM programs start as low as $98 a month.
So learn more today and join at chministries.org slash budget. That's chministries.org slash budget.
All right, let's go to Rachel in Phoenix, Arizona. Rachel, how can Rachel and I help you? Hi, thank you so much for taking my call, you guys.

You bet.

What's going on?

So my question is, I have a studio that I would like to renovate, and it's going to cost about $10,000.

And would it be a bad idea to rent it out to my parents?

Ugh, I'm going to go ahead without any information and say yes.

But I'm going to admit early on, Rachel, that that might be a snap reaction.

That was a snap reaction, Ken.

I'll give it to Ken.

Thank you. head without any information and say yes.
But I'm going to admit early on, Rachel, that that might be a snap reaction. That was a snap reaction, Ken.
I'm owning that. Okay.
Tell us more. Yeah, give us more of the why.
Why would we do that? Okay. So I got this idea and I got the sense of urgency because my father shared with me his retirement plan in January and he has has very bad spending habits.
He did say that his plan is to retire in Mexico, be a gold miner with $30,000 that he has, and basically leave my mom here with his Social Security check so she can keep paying their rent. and their rent is $1,200 and that's the same exact amount

that he gets for social security. So I'm kind of freaking out here and thinking, you know, my mom won't be able to keep up with that payment on her own.
So I know my dad is going to splurge and spend his money in about one or two years. And he's going to come back and want to also move in with my mother and the

back studio I have.

So in order to maybe not enable his bad spending habits,

that's what I was like, okay, what if I charge them rent?

And part of it would be to pay me back for the renovations I've done.

But the other part is to secretly fund for their retirement

and any future bills that's going to fall on me.

But you're not going to get paid.

Do you realize that, Rachel?

They're not going to pay you.

They're not going to have any money.

Yeah, this is a disaster.

Okay, so Rachel, I want to know how are you financially?

How much debt do you have?

How much savings do you have?

Thankfully, my husband and I are almost debt-free. We have a paid-off mortgage.
In savings, we both have about $100,000 for retirement. For retirement, okay.
And $5,000 for emergency. $5,000 for emergencies.
How much debt do you have left? $500. Oh, okay.
So you'll pay that off this month. I mean, you'll, that'll be done.
That's amazing. Okay.
So, um, how much do you guys make a year? Uh, we make a hundred and twenty thousand. 120,000.
Okay. So, um, man.
Okay. I have so many thoughts.
I have lots of thoughts. Do you want to go first? You have what? We have two boys that are four and six years from going to college, so we're trying to hurry up and pay for a college fund.
Yeah, so I've got to jump in real quick with a question then. I'm with Rachel.
I don't think you can expect any money from them, so for this moment let's suspend this idea that they're going to pay you and I'll pay this thing off and whatever, whatever. My question is, if they live with you in this studio, how much money are they going to cost you, assuming they don't pay you rent? Is it going to be any kind of a utility suck or something? Is it minimal as to what they'll actually cost you and your husband yeah i'll say it's minimal maybe combined with electricity and whatnot it would be like 300 okay i just wanted to know that i also wanted rachel to hear that too so it's going to be a minimal increase because we have to assume i think rachel's right that dad's going to go do something really dumb and and boy oh boy is gold mining like a thing in mexico is that is that like a i that was a question i had i don't hear a lot about it so i i don't know what video he's watching or is he kind of just saying like i'm just gonna leave well no he really wants to be yosemite fan because he did it in his teenage years and he has a friend who has a golden.
How old are your parents? Dance, varmint. Sorry, I just had to say that for everybody who knows who Yosemite Sam is.
It's an older demographic, I got to point out. All the boomers are laughing.
How old are your parents, Rachel? My dad is 71 and my mother is 61 okay and how And how old are you guys? We're 35. Oh, man.
Okay. So here's the reality, and this is what's always so difficult about family relationships when you're the parent.
That's what's happening, Rachel. You are flipping, and that's not fair to you.
So I just need to say, first and, this is not your responsibility. It's not like you can only control you.
They are going to dig themselves into whatever hole finding gold or doing whatever they're going to do. And literally he's going to dig himself in a hole.
So like, like you can't stop that. Right.
And so there is one side of the coin and some people are like this where they're like, we are putting up a boundary. It would be like if your husband was like, we are absolutely not funding your crazy parents.
No, we're not doing this. Like some people put a hard boundary and it's like mom and dad, y'all have to grow up at some point and I'm not going to be the safety net.
I'm not going to be the parent. So that's one side of the coin.
Ken may lean more on that side. Oh, I promise you.
You know me well. I know.
But then there's another part, Rachel, a human part with a heart i also have a brain that does say to a point like am i really going to let my parents be on the side of the road if i have the ability they're not going to be on the side of the road you know why because rachel's mom is going to look at if i went to stacy my wife of almost 20 you're not her parents but but rachel your mom at some point is going to tell your dad to wake up and smell the coffee is she not she has and we've had the pastor intervene and family members with the spending habits and that's why they are where they are right now does your mom does your mom work she works 12 hours a week um okay well if i were her if this show, Rachel, right now, I would tell her as much as we talk about combining finances and being one as a team, he is, he, he is the most risk possible for her not to retire. So if I were her, I would be working 40 hours a week and I would be creating my own retirement.
I mean, honestly, because he's a child. Like this is like, this is crazy.
You know what I Like it's just. But here's something I want to point out.
Rachel, please speak up to this. Okay.
You, Rachel, Phoenix, Rachel. Rachel and Phoenix.
I believe that this is kind of like a teenager. I think your dad needs to be treated like a teenager.
And that's why I agree with my partner here, Rachel's advice on this. Have mom take care of mom for a bit.
Because I don't think anybody's going to get through to this guy. The only thing that's going to get through to him, as Dave has said this for decades, when you land so hard, you bounce.
And I think this guy, I hate this, what I'm about to say. But I think the family, including your mom, is going to go.
You have to get rock bottom. All right, pal, go to Mexico.
Please, for the love of God, be safe. But let the guy go digging and let him go gold mining.
And when he doesn't find any gold and he runs out of all money, he's a bit of the prodigal here. Yeah.
And I think it's the only shot you have. Hitting rock bottom.
Is to let this guy get this out of his system. He's 71.
I think this is his last hurrah. And I think he probably doesn't even realize it.
And I think to get his attention his attention but I think mom protects herself I agree so much with Rachel Cruz on this Rachel your thoughts on that I mean where's mom at on this deal because you're trying to help and I don't think by the way I want to make sure we come back to this point I don't think this is your problem even though it feels like it I don't think it's your problem so my mom opened up her own secret account but uh for 20,000 and she's afraid that she has to speak on it when they file their taxes together he's going to find out not for a savings account no for high yield savings she doesn't need a report to taxes no just earned income right investments i mean if you're i don't think so i don't think so i would i would here's the deal i'm not a tax pro i was certain about it until you looked at me sideways and i was like then i started thinking i don't think that's going to be an issue but i would again i would have her consult with a tax pro go to ramsey solutions.com he'll know what she earned yeah so that he will but again she's but listen that's okay yeah i'm okay with that conversation i'm not suggesting by the way That's right. Don't even make it a secret.
I think she needs to be bold and go, hey, Yosemite Sam, I got to take care of me because there's a good chance. This is really going to be harsh, but I'm going to say it.
There's a chance this guy goes down there and falls into something bad. I mean, gold mining in Mexico? You might as well get on a roller coaster without the seatbelt.
I don't think this is a wise decision. I'm not in any way making light of that.
But she's got to protect herself. And I would say to her, she looks at him and goes, you're putting us at risk with this crazy venture.
So the renting the studio thing? I wouldn't do it. I wouldn't do it.
And the only way I would do it is that it's a ministry to mom and dad, and we don't need the income as rental, and we're fix it up for them and it's there for them if they need a landing daughter but but like i would expect zero zero money from them but if you guys need this as rental income for your life to fund your kids college sorry mom and dad we're renting to someone else tell you one thing i am going to do i am going to uh see what the gold mining situation is in me. She's got my intrigue up.
If Ken doesn't show back up to the show, we know where he's gone. Ken went to Home Depot to get a bunch of pickaxes.
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.
All right, let's get to our Ramsey Show question of the day. It's brought to you by YReFi.
If you're feeling stuck with defaulted private student loan payments, YReFi can reduce your payments and help you regain control of your finances. Take the first step towards getting unstuck by visiting YReFi.com slash Ramsey.
That's the letter Y, R-E-F-Y.com slash Ramsey. It may not be available available in all states today's question comes from Antonio in Indiana I'm 22 years old and getting married this year once we combine finances we will have no debt and we'll be making $205,000 a year while we feel extremely blessed we just recently started earning this much so it's a little intimidating in the next two years we could easily save for a 20% down payment in addition to an emergency fund.
Do you have any tips on how we should remain content with renting during that time? The longing to reach my goals often clouds the journey it took to get there, and I don't want that to be the case for the first two years of marriage. Oh, that's good.
Very good question. What say you? You're the contentment queen.
I don't know. I'm preaching to myself all the time, Ken.
This may be a little Pollyanna, but I also think when you get married, that's such a newness in life that this whole thing of like, oh gosh, I got to like do the next thing money-wise. The intensity kind of changes in a sense because your whole life has changed.
Like you're starting this new life with a new partner and like you're doing all of this. So there's almost this element of life that changes that's exciting that may kind of help naturally kind of loosen this like discontent that you may feel towards a money goal.
It's like when you have a baby, right? Like it's just something just changes and you kind of have like this new thing in life. And then once you kind of get the rhythm of that, if we ever get the rhythm of marriage, let's be honest, it's like then from there, you guys, I mean, then you'll be like, okay, we have 12 months and we'll be good.
So I think being as present as possible, though, I've learned this, Ken, recently with some stuff I've been reading because staying completely present is so difficult because we're always thinking forward or thinking backwards of like, oh gosh, even at lunch today. I mean, you're just where our minds go.
It's rarely in the present. So it's almost a practice to be present.
I mean, it really is because we just, we're either forward and back all the time. So I think it's hard for a lot of people, but also, I don't know, Antonio, I think you'll be okay.
I think that there's a fun new element of your life that's about to change with marriage and you're going to enjoy that. And I don't know, there'll be enough distractions, I think.
When I was 14, I had an old pastor tell me, looked me in the eye, and I'll never forget, he had his Bible in his hand and he kind of thumped me on the shoulder.

He says, young man, hear me on this. Don't sacrifice the future on the altar of the immediate.
Now, that's a lot of old man speak. But what that statement says is don't risk or sacrifice your future on how you're feeling in the now.
And so to Antonio, I would say, how do you stick with renting while you're accumulating that down payment? You start looking towards the future and you say, if I wait and I get that 20% down payment and I do it the right way and I buy that way when I'm ready, my future is so much better. But if I don't wait right now and I go in and I become house poor, what is that going to do to my mind, my wife's mind? So just look out to the future and go, what do I want that future to be? And that's going to require me to sacrifice now.
You want to go lose weight. You want to lose 30 pounds by summer.
Well, now we start to go, I have got to win the now.

And I've got to be disciplined in the now or else I don't get where I want to be.

You can pick any category of life.

So that would be my encouragement there.

Two things I want to get to really quick.

I want to go back.

You and I did a little research.

You did the research.

Oh, yes.

I want to cover that tax question. For the interest.
Yeah. So the interest earned on the high-yield savings, if it's over $125 in 2024, it is considered earned income.
So if she, which depending on how long she's had that $20,000 in the high yield. That's right.
Yep, there will be taxes on that. But we'll circle back to that call again.
Who cares? If he learns about it? It didn't change our advice. He should be learning about it.
He should know about it. But we wanted to clarify that.
And by the way, that's what we would call a simple tax situation. So if you have a simple tax situation, I want to make you aware of Ramsey Smart Tax.
We're really excited about this. This is a 100% accurate tax software that's going to save you up to 80% compared to what you see on TV and commercials.
And here's what's cool. It's powered by TaxLayer.
A lot of you know TaxLayer. So Ramsey partnered with TaxLayer.
They've been in the industry for 50 years. We've got it doctored up the Ramsey way.
So that's a great simple tax solution. It's called Ramsey SmartTax.
You can get it at RamseySolutions.com slash SmartTax. Again, that's RamseySolutions.com slash SmartTax.
All right. I think you call that Wooster.
We'll find out. Is it Worcester or is it Wooster? I have a fun fact about Wooster.
Oh, you want to get her on it? Okay. So let's go to Jessica.
Jessica, is it Wooster, Mass? It's Worcester. Worcester.

Oh, I should have known.

Jessica, do you know Holy Cross that's there?

I know Holy Cross very well.

My best friend graduated from Holy Cross.

Okay, my brother-in-law played basketball there.

Fun connection.

Yes, I know.

And I went to an American versus Holy Cross basketball game in D.C.

and watched it happen.

So anyways, that's my fun fact about that. Did you get a funnel cake while you were there?

No.

Very cool.

All right.

How can we help you, Jessica?

Well, first, thank you guys for what you do.

I'm really grateful to be speaking with you.

And my question is, a little bit of context really quick.

My husband and I are currently working Baby Step 2.

We've been working it since July of last year.

We are on pace to complete Baby Step 2 at the end of April, so next month. And then we will be at Baby Steps, thank you, four and five by this August.
So saving for our kids' college fund this August. But at that time, our twins will be 15 and heading into their sophomore year of high school.
And while I wish we found you guys sooner, we didn't. So we will be starting from scratch.
And my question is, what is the best way to go approach saving for their college fund, knowing that we're going to need to dip into it within three years? Does it still make sense to invest in a 529? Is there something else that you would recommend? Honestly, I would recommend a 529 more to you guys than even others. We always recommend a always recommend a 529 because it grows tax free for educational purposes.
So the money in there, the big fear around 529s, especially people that have young kids is that they're going to overfund it. And or college is going to change so much between now and 18 years that who knows like if that money gets stuck.
So there's some caution around it with people with younger kids. But for you guys, I mean, yeah, I would for sure.

I would sit down with a SmartVestor Pro

because they're going to be able to look at

what the market's doing.

They're actually, a lot of these financial advisors

who are great, they're going to be able

to run these numbers to know, okay,

should they go in more aggressive funds,

more conservative funds,

and they're going to do the best

to really work with you guys.

But I, yeah, I mean, if I were you, I would. I would go ahead and invest into a 529 for them.
What's expectation of college for them? Is it state school, community college? Are they scholarships in the future? What are you thinking? Great question. So it's a little bit up in the air.
there's definitely possibility of you know college um so i've got a boy and a girl my daughter is considering you know being a vet they're in an agricultural high school right now but they both are also talking about potentially joining the military to help fund their college so there's so much up in the air okay yeah the gi bill would be an answer to prayer for you wouldn wouldn't it? Absolutely. And we've learned that, I guess, the Army ROTC pays for vet school as well.
Yeah. How much do you guys make a year, Jessica, you and your husband? Combined, we make $240,000.
Okay. Yeah.
Okay. So a follow-up.
Let's go right where you left us off in the actual question. 10, 11, 12, those high school years, how much do you anticipate that you could sock away in each child's 529? What do you think that would be? So I'm projecting that once we get into August and we're at that step five, we'll have approximately 5,000 to 6,000 each month of extra, you know, what was previously our snowball.
So split it up, let's say $2,500 each maybe a month? Potentially, but then there's also things, you know, I'm the nerd in the relationship, so I'm thinking, all right, we're both going to need new cars in about two years. Yeah, you can't take all of that surplus and split it to the $529.
Right, yeah. So what do you think is more realistic? I was, I don't know if, you know, a thousand each makes sense.
So it's like half of it is going to 529 and half of it going towards others. Yeah, that's what I was thinking.
Yeah. And I think too, Jessica, number one, communicating with the kids.
You guys all need to be on the same page of what's happening here. No debt.
Debt is just off the table. So what other options do we have besides debt? Is it community college? Is it not? And you guys are in the Northeast and they love their education up there.
So there may be a humble pill to swallow too, that they may not go to the college they want. I'm going to say this though.
If my kids were thinking about the military, what a great growing up experience, not to mention the financial benefit. Rachel, do you ever get these sketchy text messages that are like, hey, you need to update your address and verify so we can get you the package you didn't order? Yes, I have.
George, sketchy and never trust them. And that's why we recommend Delete Me.
They help with that. Yeah, they do.
Delete Me actually goes in and removes your information from data broker websites. And it is an incredible service that everyone needs.
And there's a lot of shady companies out there that solely exist to sell your personal data to bad guys. And that means your info, like your email address, your home address, your kids' names, your name, everything is just out there for scammers and spammers to find.
That's right. And then once they remove your information, then they're going to send you a detailed report telling you where they found your information, when they removed it, how many hours they've saved you.
I mean, it is incredible. So detailed and it's beautiful.
I love these reports so far. Get this.
They've reviewed 27,000 listings on my behalf, removed me from 240 data broker sites and saved me 77 hours of time. It's incredible.
Absolutely amazing. And Winston and I now get fewer texts, weird emails, spam calls, all of it.
I love it. So you got to be sure to check them out.
Ramsey fans get 20% off their annual plans. Just go to joindeliteme.com slash Ramsey.
That comes up to less than nine bucks a month. Super affordable.
It's amazing. So again, that's joindeliteme.com slash Ramsey.
Make sure to check it out, you guys. This is the Ramsey Show, where America hangs out to talk about your money, your profession, and your relationships.
Alongside Rachel Cruz, I'm Ken Coleman. Excited that you're with us.
The phone number to jump in is 888-825-5225. Billings, Montana is where we're going to go.
Christy is there. Christy, how can we help? So I have been in a relationship for about 10 years, and I am very much

secure in my assets, and my boyfriend is not. And I wanted to know if there's anything

that I could do to avoid or to protect my assets from what could possibly be common law marriage.

Well, okay. So when you say could be possibly, Rachel and I are not common law marriage experts.
We certainly don't know the law in Montana. So what do you know? Because it sounds like you're uncertain.
Well, I don't know. I think there's a seven, he's not living with me right now.
We're talking about it, but I think there's a seven year living together. And you guys have been sharing a residence for seven-plus years? No, no, no.
We have not as of yet, and I don't want to get there. I don't want to be put in the position that it becomes a common-law marriage.
What's up with the relationship? Yeah, that's what I want to know. What are you guys doing? Why don't you get married? Do you love them? We've both been married.
We're older. But what does that have to do with anything? Why aren't we married? Because we live in different cities, and we didn't see a reason to.
Like, we've had kids. We've done the whole thing.
You still live in separate cities? Yep. How far away? It's great.
You should try it. okay wow that's that's a little awkward i'm very happily married i'm rolling into 27 years and i actually this is going to freak you out christy i sleep in the same bed as stacy it's wonderful you should try that now i will tell you mouth tape has really helped it's helped i use the mouth tape now rachel i haven't told you this That's an has really helped.
It's helped. I use the mouth tape now, Rachel.

I haven't told you this.

That's an old man move.

It's a great marriage move.

It's a great move.

Stacey's happy about it.

Okay, so how far apart do you all live?

A couple hours.

Okay, so...

How often do you get together?

Why are you worried about the common law marriage?

You guys aren't living together.

Yeah.

Because we're now looking to...

So now my daughter's in college,

so we're now looking to what does the daughter's in college so we're now looking to

what does the future how old are you guys i'm 56 okay you're not too old okay so according to what i'm seeing here a common law marriage in montana um is recognized if the parties are competent to marry i don't know if you're competent to marry after that little comment you made mutually agree to it. Hold on, hold't know christy you're a little saucy today and i can be saucy back uh you you have to mutually agree to the marital relationship and then cohabit well you guys aren't cohabiting for how long does it give a time frame what does it does it give a time frame at all no it just says cohabit we know what cohabiting is well i know but usually there's a time frame with common law marriage if you have been together for you know 12 years or whatever it is but again have you guys ever lived in the same house well for what period of time just answer the question we've lived in yes we have how long a couple weeks that's not a common law marriage i might as well she's going to though she's going to you won't like you're gonna have to do it for a long period of time on that deal i just i i'm not sure we can answer your question because i don't think you guys actually the definition of it's not going to happen unless you guys are together for living together for a of time.
And I, in this case, would say common law marriage, I don't think, under our Ramsey way of thinking, I don't think I'd combine finances. I think you keep your assets separately.
Your question was, how do I protect my assets? I don't think you guys are combining them because I don't think this is a real marriage. I think you guys get together for conjugal visits, if I can be very that's what i think this is it's more than that you don't see as long as we've been doing for conjugal visits i'm just saying you live two hours apart for 10 years how often do you guys see each other in a year um we see each other every weekend my point exactly okay just i'm just saying this isn't a marriage i'm not judging her Sorry you called weekend.
My point exactly. Okay.
I'm just saying it. This isn't a marriage.
I'm not judging her. I'm so sorry you called today.
I'm not judging you. I swear I'm not judging you.
Okay, Christy, our advice would be you are 56. Keep the assets separate.
You still have a good, you know, 30, 35 years together. You could have a longer marriage than what Ken has today from when he married.
I don't buy it. That's not a marriage.
No, but they could have if they got married.

They're not going to.

That's what I'm telling her.

She called our show.

She doesn't want to get married.

And my advice is that I would get married.

Oh, okay.

I see what you're saying.

And you have another 30, 35 great years.

Maybe my papal is 96.

So that's what?

45.

I love your sweet papal.

You've got a long way to go, Christy.

And so all of this would be summed up if you're like, yeah, we want to be in a committed then don't have a permanent residence together and the common law marriage isn't even an issue and keep assets separate you agree that was my but i think some people will go to court if they if they break up though i think that they can it can feel like a marriage where it's 50 50 regardless of i don't know anyways christy now after all of that and i tried to answer your'm having fun with you, but I'm dead serious. Everything I said, I completely stand behind.
No judgment, by the way. Zero judgment.
You do what you want to with your life. I'm a libertarian on that deal.
All right? What I am saying is, is that I would keep the assets separately because I don't think you guys actually want to even do the common law marriage. Am I missing that? Or is that what you're saying you're thinking about doing? So that's, well, if we're thinking about marriage, possibly, we're thinking about moving in together.
We're thinking about a lot of different options, but. Well, if you move in together, I agree with Rachel, you should get married.
It's the statistics are absolutely undeniable that it is better for you. And Rachel's right.
You're going to have a greater quality of life. Now, if you don't love him and he's not marriage material, then I wouldn't be living with him anyways.
Do I? Yeah. I wouldn't be having this conversation if that wasn't the case.
Yeah, that's right. Exactly.
Exactly. I don't know.
I don't know. If you love this guy so much.
Why are you so hesitant in this? Because I, here's why. I'll tell you why I'm hesitant.
And I'm on your team. He didn't call.
So underneath this snappy sweater here, I've got a Team Christy shirt on. Okay.
So I'm cheering for you. I mean this.
Okay. Here's what I'm telling you.
And you're better off financially, Christy. Yeah.
So what I'm hearing is, if you were my sister, Christy, I'd be like, sis, what are you doing? You don't love this guy that much. If you did, you couldn't stand and be away from him.
My wife left town last week with my daughter for a trip with her sister and they were gone for four nights. I really, truly missed my wife.
I could not do what you're doing. So maybe, and I'm honest about this, maybe it's just me, but I don't see enough evidence that you really want to commit to this guy and truly marry this guy based on one of the first comments you said.
You're like, well, I said why? And you went, well, we're just older now. And I think you've rationalized it.
And I also don't think that you can – I think you can live without this guy. And this is not my opinion.
You see this guy once a week, and you live a couple hours away. That't leaving cleave in my opinion now i'm old school and i don't mind when you push back on me but but christy that's why i'm a little bit cynical i think if you would have said you know what we've done it this way for a long time but now i just can't i can't live without him and i want us to have our life completely intertwined for better or worse, rich or poor, bad Tuesday night, great Thursday morning, whatever.
I don't hear that from you. So therefore, I don't want you to do it.
Is there any fact, Christy, that there's a level of you that you've handled money well, you're successful, and he hasn't? That's a little bit of a deterrent? That's a huge deterrent. Ah.
You buried the league. There we go.
That would have been nice to know five minutes ago. Man stand by what i think do not move in with this dude do not marry this dude until you guys are on the same page don't marry him unless you're on the same page and don't combine your finances keep them separate what are we doing on the weekends christy what are you doing this guy's not like Values.
I stand by what I said.

I wasn't trying to be salty.

I like Christy. But there's a guy in the lobby that agrees with me.
This is adult conjugal visits. We're playing house.
I got head shaking all throughout the lobby. I stand by what I say, Rachel.
Stand firm, Ken. Stand firm.
Oh, it's tough being a Puritan. statistics show that half of Americans don't have enough life insurance, or they don't have any at all.
I don't understand this, John. Why don't people want to take care of their family? They think they're not going to die or something? Well, I used to be one of those guys.
I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids.
And I immediately went and got term life insurance. That's a gut punch.
For decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them.
Me too. They don't know what to do next.
You're going to have a crisis here. You know, you got two options while you're sitting and talking to a young widow.
She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow. These are the two options.
It's saying I love you to your family. Term Life Insurance.
Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years.
They're the only people I trust. Go to Zander.com or call 800-356-4282.
People ask me all the time, George, what's your number one money-saving hack? I'm glad you asked. Nothing makes me happier than helping another frugal friend.
So here's the hack. Get on a budget.
Seriously, how are you supposed to save money if you don't know how much you're spending in the first place? And that's what makes the EveryDollar budgeting app a game changer. With EveryDollar, you'll get a clear picture

of your spending

and from there, it's easy to see

where you can get more intentional,

cut back and save more money.

So how much money are we talking here?

Well, the average EveryDollar budgeter

frees up $395 in their first budget.

That's the hack.

And if you ask me,

I think you're way above average

and you'll save even more.

So what are you doing still listening to me?

Go download the EveryDollar app for free and start saving more money right now.

Let's go to Sue in Sacramento.

Sue, how can we help today?

Hi, thanks for taking my call.

Yes, we have baby number seven on the way and we are considering a move to Texas.

My husband and I have been talking about it and I wanted to bring it by to you guys and see what you thought. We're coming into some money.
We don't have a lot of savings, but we're trying to decide if we want to pay off debt first and stick it out here or move to Texas for lower cost of living and so my kids can go to school. Wow.
Sounds like there's two really good positives. Is this also a good professional move for both of you? It could be.
There's definitely jobs in the same price range as what we're earning now. So it's going to be about the same earning.
Just different taxes. But if we combine that with the other two issues, it sounds like this is a real big win.
So when somebody calls in this situation and it sounds like, you know, there's a lot of positives here, what are you considering? What are you worried about that you want to get our take on? What do we not know that's giving you pause? Right. Well, the main thing is just that, you know, we've outgrown our house here.
We've outgrown our car here. We're always in the, you know, falling into the negative, and we do still have debt to pay off.
So it's like when we do come into this money, you know, are we going to be spending it on making a move? Because obviously it's going to cost a lot to move seven kids out to Texas. Or are we going to try to get our situation looking a little better? Okay, so let's go into that.
So let's paint the picture here for Rachel. All right, so tell us how much money you're going to get or that you believe you're going to get, and then let's walk through your debt.
So how much money are you getting first? So about $10,000 is what we got in our tax return, something like that. Okay, and then tell us your debt situation.
So we owe $13,000 on the car, and then we then we have 23k that we're not currently paying and charge off in collection. From credit cards? Basically yeah some medical stuff and yeah credit cards.
Okay now what do you think the move is going to cost? Oh I mean I was thinking it might take somewhere $8,000. I mean, the whole...
I don't think that's unreasonable. What I would tell you to do is get about three or four quotes, and let's come down to a pretty concrete number.
And so let's just play off the $8,000, Rachel. Let's say the move costs about $8,000, but it does lower your cost of living.
I'm curious, do you know, or can you ballpark what your new budget would be with the lower cost of living so that we know how much more we're going to keep if we're going to have the same jobs? And you said similar jobs, so I'm assuming similar pay. So what's the analysis there? How much more money would you have at the end of a month, if you will, that we could put towards the debt if we move? I haven't calculated it exactly, but I know the cost of living is going to be a lot less in terms of everything across the board.
Right now, we're about $650 over budget every month, and that's because of how much we pay in California. And I know Texas would probably give us a lot more wiggle room.
Yeah. For sure.
I would do it based on this, because I think what's not mentioned in this is I think you guys are going to have a better quality of life. Is that what you think? Absolutely.
Yeah, right now my kids have no religious freedom to go to school. So I'm not able to work.
I work per diem because'm home with them. Could you work in Texas full-time? I do think I could work, yes.
What kind of income are we talking about there? Well, I'm a nurse, so I make a good but I make around $40 an hour. There's some Texas jobs that pay more out there.
Rachel, I think it's a no-brainer because it's not that much debt and they can tackle it. And Sue, I'll just encourage you.
I feel like we've heard more and more over the last probably three years or so of people making this move. People, and I hate to pick on California, but it's just true.
They're leaving California and they're going to Florida, Texas. This is an extreme example, but you and I have a friend.
I will not mention his name because he's a public figure. We have a good friend, mutual friend, who essentially bought a house in Nashville on the savings from his taxes in California.
Yes, exactly. Now he's very successful, but that's real.
But genuinely, yes. That's crazy.
So for that reason, I think that's the only debt you have. And for the kids' school, I mean, you think about that, right? You add on all these layers of what life.
The kids get to go to school. She can work.
Yeah, of what life can look like. And then you make guys get in a situation soon and you don't have to work in three years, you know, because you guys are ahead and you've.
I love that. Paid off debt and everything.
Sue, what do you think now? And you think about the housing even. I mean, again, housing is expensive everywhere, but compared to California.
I feel like this is a no-brainer. Sue, do you feel better, worse, the same? I feel better.
Yeah, I'm excited. What does your husband want to do? I just need to really hear that.
Well, it's hard to talk to money talk with him. He always thinks I'm coming down on him about his income, you know, and it's not that.
No. You know, I respect him and I appreciate his hard work.
I try to tell him a lot. I appreciate him working hard, but I just, you know, Does he want to do the move? Has the move? That's the question.
Has he, have you guys talked about this together as a couple? We have, and he's pondering and he's looking and he's, you know, he has his eyes peeled and he's actually open to it a little bit more these days since things have gotten pretty bad.

So I think he's open to it,

but it's hard to talk to money about money.

I mean, we end up just walking away from the conversation. And it's him, you're saying, when you approach it,

he gets defensive.

Right, yeah.

Like he just doesn't want to be told what to do

or talk about our earnings. Okay.
I got a thought. Why? What is it? I'm curious.
It's just kind of always been that way. I've always been kind of the breadwinner in a way.
So I've always made more. And now that I'm a stay at home mom and he's doing it, you know, we cut down so many things that I've become honestly a little bitter and I probably have been not the nicest about it.
And I'm not yelling at him or anything, but, you know, it's probably not nice to hear that, you know, he's really not making enough to provide out here in California. That's exactly, let me tell you right now, you just self-diagnosed.
A man puts so much self-worth in his ability to provide and with the dynamics you you just shared with us i think there's some potential healing there and i think you got to defrost the situation a little bit i'm not saying it's all on you but you acknowledge some things and i think the dynamics have changed and where you were the breadwinner now you come home he's not making enough this is a tough situation i wonder if we don't pivot this move to a non-money conversation and the move is about life. And I'm curious, with that being said, does he agree with you that a move to Texas would be better for the kid's school? Schooling situation.
He didn't. He didn't for the longest.
And even a few weeks ago, he didn't agree that Texas has a lower cost of living. I mean, he's completely in denial.
It's like a family thing. Like, wanting to stay by family, I understand.
So there's family in Sacramento. Yes, yeah.
His family, your family? They're all the way in Monterey. So they're all the way, they're far away.
But, yeah, they're in California. So it's kind ofifornia it we're you know we're born and raised here so it's a mentality a lot of people deal with this you know that it's hard to leave here sure but let me get back to where we were does he does he now agree with you that cost of living is significantly less in texas he's on board with that he does he now agrees yeah what about the schooling the schooling is you know it's a hit or miss with him because he does like that we home school he doesn't love the school year but i think in texas he would be okay with them going to school because it's a lot safer yeah so i think you all need to take a weekend trip yeah well and visit and let him see it you guys need to pick an area i'm going to suggest that yeah and i think sue you guys need to press into this i'm just hearing enough of i understand what ken said that so much is tied i mean so much of america let's be honest of our self-worth is tied to our money what we make how much is in our account what kind of car we drive i mean so much is attached to that and and i so i understand why he can get defensive but i also if i'm being the the female in the chair i'm like i'm sorry your ego hurts a little bit but the math shows we are 650 behind like i agree he needs to get over it yeah we have to do something has to change so that change either sue is you earning extra money him earning extra money you guys moving to a cheaper area i mean something has to change.
So that change either, Sue, is you earning extra money, him earning extra money, you guys moving to a cheaper area. I mean, something has to change.
But your dynamic within marriage, I don't like the tiptoeing or we can't talk about this because there's usually no resolution. We end up walking away.
Like that kind of stuff will follow you guys to Texas as well. And it'll come up, its head will pop up in a different issue as well.

So I want you guys to be so unified on this decision.

And it doesn't need to come out of strife or fine, Sue just wants to do it.

It needs to be, we have run the numbers and we are in full agreement for our life and our money that this is what we're doing.

Listen, I know a lot of you would rather watch paint dry in slow motion than file your taxes. that this is what to be a fun, fun night.
They're going to be talking about everything from raising kids to handling money fights to making friends and so much more. Here are the cities, Louisville on April 21, Durham on April 23, Atlanta April 25, Phoenix May 5, Fort Worth May 7, and Kansas City May 9th if you want to get your seats.
To see Dave and John go to ramseysolutions.com slash tour that's ramseysolutions.com slash tour and as with everything on the show if we mention anything and you didn't catch the link you can get the link in the show notes if you're watching on YouTube and podcast did you know that James Childs our fearless producer he tells me all the time the show notes are just chock full of goodness. So much stuff in there.
So anything we discuss, James wants you to know if you miss it because I garble it or I say it too fast, the show notes, it's all there. You can find it there.
Boy, it's the show of Rachel's today. I know.
Is it our third Rachel? I think so. Oh, it's very exciting.
Rachel number three in Lexington. How can we help? Hi.
So my husband and I bought an investment property next door about two years ago, and we would like to know if we should, A, move into it and renovate it ourselves, or just sell the property and, you know, take the money. Give us the reasons why we would do either of those.
So go with option A. Why do you think you should do that? So we currently have our home paid off that we live in.
The property that is the investment property is actually next door to us. So combined, it's six acres.
Hillside is really pretty. It shares an easement.
And it's the only two houses on the hillside. It's just, it's a really pretty location, and so we are very attached to it, but the home we live in currently, we have it paid off, and so that's a bonus, so we could either, that's kind of where we're stuck.
So what I'm understanding is, I'm trying to understand is, why would you want to move to this other house next door? Okay. So I have four children.
There are six of us in the house and it is a, we currently live in a two bedroom single wide. So it's getting really tight and we are needing a solution.
And so that's why we're calling. Um, we do the only debt that we have is the investment property and we got it at a really good deal.
We got it at $75,000, and we paid it down to around $60,000. And so that is the question of the day.
Do we sell it because it's worth more? Do we take that money and we just, you know, what do we do? Okay. I would sell the current house that you're in.
Okay. And what would you make on that? Any idea? We have had people come look at it and realtors and on people who know what they're doing.
So a really cool fact is we purchased it nine years ago for $32,000 and it was livable. It was actually really nice.
And we bought our little single-wide trailer on two acres for $32,000.

And now we can sell it for at least $120,000.

Oh, my gosh.

I would sell that.

Yeah. And then go ahead and pay off the other house.

You got 60 left.

And that becomes your primary residence because it's got the space you need and you love the little hill.

100%.

And take the extra money, the 60 grand, because you owe 60. You're going to make 120.
Pay it off. It means you've got 60 left and use that for renovations.
Cash flow, the renovations. Do you guys know what you're doing when it comes to renovations or have you ever done that? We have not.
We don't know what we're doing. I would not recommend doing doing it yourself i would get a contractor in there and having someone and they can do what they need to do and you may have to live in a construction zone for a little bit but i would do that just in order to cash flow it you know okay uh how much work does it need is it terrible it it is not in good shape i will tell you that um it is an old house it's a really cute oldhouse.
However, to give you insight, it doesn't have any doors inside. It doesn't have closets.
It's a really old house. We have gotten it looked at by contractors and they say that the bones are good, that we would be losing money if we completely demolished it.
But we're kind of just stuck because... Have they given you a number of what it would take? I mean, I'm sure you guys haven't picked...
I mean, that would be a ballpark, but I'm curious. They said it would take at least $50,000, and we have $40,000 in our savings.
So we just are really stuck. We just don't know.
No, you're not stuck. You've got a great option, Rachel.
With that cash set aside, plus the profit that Rachel's talking about after you pay off this little house, you stay on the hill that you love. You got the room for the kids.
You make it your own. You don't have to get it all done right away, but you got the cash.
It sounds like to do it all. You know what you could do, Rachel? Sell the trailer, pocket the money, and you guys go rent somewhere for six months.
It's not going to be a fun six months, but to get the house all fixed up and stuff, rent rent somewhere for six months and then you guys move in and you're cash flowing all of this as you're doing it construction zone yeah okay it's gonna be a headache so hear me say that that's a headache you're moving twice but but am i i mean all day right to be able to do next door neighbors the the investment property and the home we live in are technically next door neighbors so we really do you think we could just live in the home we have or move into the investment property and fix it up you think we should completely get off of the property correct well in order to get the cash is what i'm saying but you guys have 40 how much you guys make a So this year on taxes, we're going to be bringing home about 110. Okay.
So for, but you have 40 saved. So you could cashflow it without selling the current house you live in.
Well, cashflow the rent. Yeah.
But you still got the mortgage on it and stuff. I don't know.
You guys run some numbers and just say, okay, what would our, how would we feel? What would our emotional state be? What gives us the most peace? Is it to sell the current home, pocket the 120, sell off the house, you got 60 left, you guys put 60, 70,000 of cash into it and go rent somewhere? Or is it less stressful for you guys to say, okay, we're going to pump the brakes a little bit. We're not in a rush.
We're going to take some of this 40. We're going to start chucking and paying it off.
I don't like that because then you're going to have to save up all this. But it's your option.
We're giving you multiple options. Yes.
Thank you. It's all sounding really good.
I think Rachel's option is cleaner. I do too.
You get rid of the current house. You get all the cash.
You go rent. You get the whole thing renovated.
That's a little easier. It is a pain to move twice, but it feels like it's, it feels like now, but again, I think what I'm hearing

you say is you guys could cashflow the renovations while staying in the existing house. Correct.

And then paying the mortgage off later. Yeah.
Or at least get it to a point that you can move into

it and then whatever's left is not a complete construction zone. I think they got options.
Yeah, that's true. So at this point, one more question I have, I'm so sorry.
One more question I have for you is, um, I've heard, I've heard people say that it's smart to have rental properties in this situation. Would you suggest having both houses and living in one and renting the other? Would that be a good option? I don't think that money yeah not in your financial situation i wouldn't and having renters next door to you okay not a fun not a fun um and it's just not a lot of money you guys i don't even know where you live by the way when you're buying a house for thirty two thousand dollars that's mind-blowing to me or the other one for 60 so i just don't think it's going to spit off enough rental income that it's worth a hassle.
Okay. Yes.
So we're going to say no to renting. Those numbers are not common where we're at.
Oh, I know. Trust me, I knew that much.
I'm no real estate baron, but I was like, wow. But I think y'all go to the house on the hill, Rachel and whether you guys cash flow renovations then move in then sell or sell and then move in i think either way you're great but cash flow the whole thing and yeah go live on six acres because how many kids do you have we have four little children yes they're just gonna be right what a dream you know what i'm picturing in kentucky i'm picturing wild flowers do you have wild flyer flowersers on that property? We absolutely do.
And that's another thing. We're so attached to the property.
How do I know these things? I'll do you. It's the spirit.
I got to say, I'm also picturing a little, I think you should get the troop together. How old are the kids? Their ages? So we have a three, four, five, and nine.
This is perfect. Good.
Have you ever seen? I know. Three, four, five.
Yeah. God bless you.
She's a busy lady. God bless you.
Have you ever seen The Sound of Music? I have, yeah. I put the little kids together and it gets to that point.
The hills are alive with The Sound of Music. Von Trapp children.
The Von Trapps, the wild flowers. Get some of the old curtains.
I got such a great vibe about this place on the hill. I'm going to go with my partner's recommendation.
Sell the current place, go all in, go rent, go all in and fix the other little place up. And

then we watch the sound of music and we run through the wildflowers. I think it's going to be great.
I like everything about it. I hope you're not allergic to pollen.
So magical. 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 ramsaysolutions.com slash tour before they're gone.
So how are you folks doing with the baby steps? Some of you are brand new to it. Some of you are test driving it.
Some of you are in the middle of it. You know, we got a fun little quiz online that will allow you to check your progress in just a few minutes and get a personalized plan.
And this is really valuable because you kind of see, okay, this is where I am. And now I've got some help, some action steps to keep going.
Because remember this about the baby steps, it is about momentum, pure and simple. And there are times where you need that little boost.
So if that's you, you can head to the show notes, click on the link titled, Are You On Track With The Baby Steps? and complete the quiz. It's really encouraging, and it'll actually equip you as well.
All right, we're going to go to Portland, Oregon now, and Karen is there. Karen, how can we help? Hi, I'm 68 years old, and I probably, put it all together, have about $75,000 that I don't know if I could or should invest.
About four years ago, a financial advisor told me, and my situation had totally changed at that point, and he just told me I was too old to get 401ks or buy any property or anything like that. And to just live as frugally as I could and try to get as much income as I could within that point.
So now fast forward four years and I, and I, I still have, I may at some point need to live off that money if my income changes, my income stream.

So I don't know if I, and I've been doing like little CDs with my bank, you know, three months and six months and that kind of thing and making a little bit of money there.

But I'm really a novice on how to invest anything or if I should or if I could.

Yeah. How much are you making a year, Karen? Let's see.
I broke this down. About $53,000 a year.
$53,000. Okay.
And how much per month are your expenses? I'm living under them all the time. So because I've been tracking for years now, I track compulsively.
I'll sometimes live, you know, a thousand dollars a month underneath what my income is. So I don't have the exact number, but it's not.
But you're not in the red necessarily. Not at all.
Not at all. Okay.
Yeah. So you're coming up even a thousand.
Okay. And you're how old again? I'm sorry.
I know you said that at the beginning of the call. Seventy? Sixty-eight.
Sixty-eight. Okay.
I'm so sorry. In a critical health situation too.
You are. What's going on there? I have to have a very serious surgery that is unconsidered critical but stable.
Oh gosh Karen I'm sorry. So I can't work.
Okay when is that surgery happening? They don't know for sure yet. It depends on, it's very metabolically challenging.
And so metabolically, I have to be strong enough to be able to withstand it. Okay.
And that's what I, that's basically what I feel like is my job right now is to stay healthy, eat healthy, get healthy.

Absolutely. Absolutely.
Yeah, for sure. Did I understand you're unable to work right now because of this preparation or you would be unable to work after the surgery? I think both.
Oh, okay. So how are you living right now? Right now, I have, since four years ago, have alimony.
And see, I consider that unstable. Well, has he been consistent on his alimony payments? Relatively.
And is that the $53,000 a year? What was that number you gave me? Yeah, 53.

It's coming all from alimony.

Yeah.

Okay.

How long is that?

How long will that go?

That's not perpetuity, is it?

I don't know.

What do you mean you don't know?

Our divorce order doesn't say specifically.

Well, as long as he's working, I guess is what it says.

As long as he's working and making an income, he'll be paying you alimony. How old is he? He's a little bit younger than me.
Will he be, do you know, I mean, do you talk to him ever? Do you know what his plans are? Well, that's one of the reasons for divorce. Okay.
Yeah. Yeah, I'm with you on it's being unstable because you don't, you never know.
He'd sign up to work next year, you know, and this is done. So you have $75,000 in savings.
Do you have any other savings? Yes. And that I just, I didn't include that in the amount that I, because I didn't know how much you wanted to, but just that's's for, um, that was in like the CD in my checking account.
And yeah, we need to know your total financial. What's your, what's like in retired, do you have any other money saved in retirement or investments or anything? No, no.
So the 75,000 is pretty much it. That's everything in checking and CDs, all of it.
Okay. Okay.
Right. Um, well, I think think from a mathematical standpoint i know that you are living below your means but i want to know what your means are so i would give you homework to say okay you know figuring out do you rent on a home what's your housing situation yes i rent and that's my biggest expense i rent in the least expensive place in the where i live But but of course, rents are all high.
So there's nowhere I could break it there, but I own everything else. And I, you know, I miss, hey, I put my grandkids through your book too.
So I mean, I'm doing all the right things. I just feel like there's this money there.
Should I be doing something with it? Okay, my answer is yes, you should be. And what I would do, Karen, I would recommend you sitting down with a SmartVestor Pro.
And if you go on RamseySolutions.com and look up SmartVestor Pros, there should be a couple in your area there in Portland. And talk to a couple of them and sit down with one that you, you know, interview two or three of them, find one that you like and sit down and lay out the whole situation because some of the 75,000, yes, should be invested.
Now, should it be invested within a retirement account like a Roth IRA? Not necessarily. I mean, you know, a lot of that stuff is to grow tax-free till you're 59 and a half.
And if you start pulling from it, but you can invest into those past 59 and a half, right? So I would sit down with them and honestly let them run some of these numbers because I want to make sure that you have enough to live off of. And on top of that, knowing, and again, the health thing puts a whole other spin factor to your situation, which is just but to know for yourself of like okay this money eventually if i just if alimony stops and if this is the only money i have eventually it will run out so what do i need to do to kind of safeguard how much do i need to be living on a month um with the amount of interest that we can be getting because that's the crazy thing about the market.
In 2023 and four, it was like up at, like the S&P was around 20%. Like we had crazy returns.
This year, not looking so great, right? So there is a level of this rollercoaster ride that we talked to people, Karen, to ride out. Now, again, at your age, at 68, you are on the latter end, if I'm kind, of the ride.
No, that's fine. So the aggressiveness of it may look different because of your age and situation.
And that's why I would want you to sit down with an actual investment professional for them to look at some of this because they probably will have a good game plan for you on how to get the most out of this money without losing a bunch of it if you need it, right? Because the market game, if you're living off of that, you want to make sure that there's a level of it that principle-wise is still there making you the money you need, but yet you're still able to pull money and live off of it, even if you have to pay taxes, if it's a standard investment. So there's kind of a lot there, Karen, but I would, I hate to hand you off to someone else, but I don't think I can answer this in a five minute call.
This is tough. The only thing I would add is if I were you, I would be trying to find another golden girl or two in your area and let's see if we can roommate.
I'm not kidding you. I really think you got to slash your expenses as much as you can, because you're in such a, this whole health thing is just limiting you and your ability to work and hoping the alimony payments keep coming in.
But in the meantime, I'm going to be pinching like I have nothing coming in. And I would really, truly consider a roommate situation, getting yourself in that.
Let's see if we can cut your rent in half. My goodness.
Don't tell me there aren't other ladies out there like you that wouldn't mind having a roommate, somebody around the house.

I would at least look into that.

I've joked for years about starting the Golden Girl Arms.

See, I had no idea.

I think it's meant to be.

I do think there are some Golden Girls out there

that would love to have a Karen in the house,

and I would consider that.

The good Karen, by the way.

That's right. Be careful how you use that.
She's a great Karen. She's a great Karen.
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.