This Is How You Take Control of Your Own Life

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RamseySolutions this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by number one bestselling author and all-around good guy, Dr.
John Deloney. Taking your calls at 888-825-5225.
Jump in. We'll talk about your life, your money, and try to help you take the right next step.
Jason's going to kick us off in Cincinnati. Jason, how can we help? Yeah, so my mother was advised by a lawyer to stop paying some of her debts.
My adult sister moved in with her about three years ago, and they've kind of accumulated since then a decent amount of debt, and a lot of it is in my mother's name. And the lawyer told her just to stop making payments on it and just let it go.
Why was she working with a lawyer? I don't necessarily know that she was working with a lawyer. think she just called the lawyer to ask for advice and the lawyer no lawyer would do that making payment yeah i that's that's kind of what i felt that didn't pass my smell test yeah i would question who she got in contact with and what their actual credentials are but yeah this sounds like a debt relief company that's the only people who would tell you hey stop paying on your debt, give me the payment instead, and we'll resolve this on the back end

when you tank your financial life, and we'll try to settle it.

Was that the intention, you think?

No, I don't think so because they didn't follow it up with anything like that.

I mean, that's why I told her.

I said, Mom, it just sounds to me like they just didn't want the business

and just was a quick way for them to get off the call, in my opinion. Yeah, but they won't give you legal advice to just get off the phone like that.
Like they've got a fiduciary interest, a licensed attorney to do what's best for you. And that's why they're not just going to rip off like, yeah, quit paying it.
We'll talk to you later. They're not going to do that because it may put your mom in a situation like she's in now which is pretty dire yeah how bad is the debt uh i would say probably all in all it's about 30 000 okay and then your what is your sister's involvement in all this uh so she she was recently divorced kind of really left in a and not such a great place and she's had uh several different jobs some that were high paying some that were not she's in one right now that's not very high paying she's making probably about 16 18 an hour and it just kind of keeps them afloat with my mom's social security and uh my mom also has a small pension from when she was uh employed earlier in her.
Okay, and then what's your involvement in all of this? Why are you calling today? More just out of concern for them. I didn't know if that, I didn't know if just not paying the debt, you know, could come back on my sister since she lives with her or any of it because that's what my mom's under the impression that she just stops paying it.
When she dies, it all goes away. And it was kind of, I don't know, I didn't sit right with me because I listen to you guys all the time on my way home from work.
And I don't know, it just didn't sound like sound advice to me. I would agree.
Ignoring your debt and saying, well, I'll just die with it. That's a terrible financial plan.
And I can't speak to all of the ramifications of, you know, if it's an unsecured debt, they might write it off when you send a death certificate. If it's a secure debt, it's going to get paid from the estate.
So any assets she has will be used to pay it off. And so I'm not sure how all that's going to shake down.
Is your mother in good health? Is she able to work? uh's in decent health. She, you know, and when she retired, she was working from home.
So I don't necessarily know. I don't think she's opposed to that.
And I think she's actually looking into it, but I think she, you know, she's in the mid seventies. So she's kind of like, I don't think she wants to have to go back to work, but I think that's just kind of where she's at right now to where she's just trying to figure out what she has to do.
Was she unable to pay all of her bills, including her minimum debt payments? So, I mean, like when she was on her own, no, she had no problems. I mean, now that she has my adult sister living with her and they make $16 an hour and she's, you know, they probably don't live on the tightest of budgets.
No, they don't. But why did your sister moving in add all of these extra expenses to where now your mom can't stay afloat? Yeah, that's a great question.
I think it's their living habits, really. It's eating out quite a bit.
It's DoorDash being delivered to the house, and I think they are trying to clean a lot of that up but i think now it's it's more so i have not once tried to clean up mass and said you know what let's just door dash tonight we've worked hard yeah so i i think you're the concerned brother watching your family drown and you want to give them a life raft and there's nothing you can do yeah you can give them all the. I don't think they want to hear it from you, do they? Have you tried to talk to them? I have.
Yeah, I have had more so my mom because my sister doesn't want to. It's not always easy to talk to my sister about it.
Not a great relationship? Yeah, it's not stellar, yeah. And how much debt does your sister have? Do you know? Oh, I couldn't even begin to tell you i know she has student loans and uh student loans and a loan against the trust that my family uh left for us so man i i couldn't i couldn't tell you exactly what it is but i know it's it's got to be close to 100 000 yikes and that's a guess a complete guess, to be honest.
And do you know your mother's income? I want to say my mom brings about maybe $1,500 a month from her pension and Social Security. Combined? Roughly.
I think. I think, yeah.
Wow. Yeah, there's no way they're even staying in this house.
Is the house paid for? Are they renting? The house is paid for by my family who left it in a trust to them. The only thing that they have to pay for for the house is $400 a month for the HOA fees.
I'm not sure they can even afford that. Plus insurance and taxes.
They're struggling. And eating? They are struggling, too.
Correct. And car insurance and gas? I mean, I don't see a way out unless we increase the income, and I don't know how mom's going to survive with or without your sister living there.
It's clearly not helping to have your sister there. But even if your sister left, I don't see a world where mom pays off $30,000 in debt making $1,500 a month, barely making it.

Yes.

Will they listen to you?

If you went and sat down with them and said,

hey, I want to get

an honest,

true, what is reality picture

financially? I want you all to both pull

your credit reports. Will they

hear you on that? Are they drowning enough to where

they're willing to accept help? Or are you just concerned that they don't really care what you have to say? I mean, I think they would listen to me. My only concern is that with my mom getting this advice from this lawyer, I think that she's just kind of like, she sees that as easy street.
It's like, oh, nice, that's the solution. Just stop paying it.
Yeah. I don't know who gave her that.
If a licensed attorney answered the phone and just said, yes, ma'am, I'm not going to take your case, but just quit paying and went on, or if she's got a friend who's a licensed attorney, like at a church, who said, oh, yeah, just quit paying, that person should lose their license. Yeah.
If she sat down and hired a lawyer who went through everything and found some reason why she didn't have to pay, that's another story, but that doesn't sound like the case here. No, no.
Yeah, that's definitely not the case. Have collectors started coming after her? She never didn't hire.
Not that I'm aware of, but I can't imagine it wouldn't. I mean, it's probably coming soon.
I think it would be pretty soon. Probably followed by lawsuits.
Yeah. She's not just going to bury her head in the sand and have this go away.
So there's going to be some hard conversations, some major lifestyle changes. Everyone's going to have to get to work, and I don't want you to enable it.
It doesn't sound like you're trying to do that. You're not trying to just fund their life.
But there's going to have to be a conversation about what the next year looks like, five years, ten years. Otherwise, you're going to be left with a mess and have to just wash your hands of it and go, you guys do what you want to do.
You get to sell this house and pay off all these debts. You got to get sold and find somewhere to rent.
Sister's got to go make some real money. Mom might have to work part time.
Man, I'm so sorry you're dealing with this. It's a series and pattern of terrible financial decisions over a long period of time.
That's a hard knot to undo, my friend. This is The Ramsey Show.
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Welcome back to The Ramsey Show. I'm George Campbell joined by Dr.
John Deloney. Give us a call, 888-825-5225.
Kelly's up next in Salt Lake City. Kelly, welcome to The Ramsey Show.
How can John and I help? Hi, thank you for taking my call. My husband and I started a business here just the end of last year and we were making pretty good money, but it's not quite enough to make ends meet.
And at this point, we've put pretty much everything we have into it and it has the potential, but we're just trying to figure out some more ways to bring money into the business to try to increase that to make ends meet. What kind of business? It's an indoor baseball training facility.
Okay. And you said you've sunk everything into it.
What does that mean? Pretty much. We started completely debt-free.
We pulled an SBA loan, ended up being about $325. We had a very large chunk of money in the bank when we started.
Part of that was going towards our security deposit. The other we kept was about $40,000 in the bank.
Now we're to the point where we have about $30,000 in credit card debts. We've used my husband's 401k, and our entire savings is put into it as well.
There were some factors that came up that we weren't really expecting for and that money ended up going towards the business. Was the business ever profitable to where you weren't needing to go into debt for it? Well, I mean, we're not really behind yet on the business.
I mean, the money that we spent on credit cards and stuff was actually to get the business open and started.

We've brought in about $52,000 since we opened December, like mid-December.

So it's making money, but, I mean, our lease payment is $30,000 a month, so we're not making enough.

Yeah, you're not making money.

Dang.

What your lease payment is, $30,000?

Yeah.

What is your... $33,000 square feet.

What's your debt overhead?

What have y'all taken out?

Thank you. payment is 30 grand? Yeah.
What is your, um, what's your, what's your debt overhead? What have y'all, what have y'all taken out? Well, we don't really have, I mean, the business essentially runs itself and we don't have hardly any overhead. Like our utility bill is about the highest we pay.
Well, your debt payments are your biggest. No, what's your debt payment? You said 325 on an SBA loan? We actually haven't started.
They gave us a six-month draw period, so we haven't actually started paying that payment yet. We've been paying the interest on it, which has been about, I think, about $2,500, the last one I think, coming in, give or take.
I'm expecting those to increase now, obviously, since we have used the funds from the loan, so that draw period closes, and then we should start seeing the first payment come through. You don't know what the payment's going to be? No.
Well, we do and we don't because when we talk to them, basically they told us, it's been a rough go with them, but basically they told us we have a six-month drop period. We only pay interest until then.
Obviously, the interest will increase every month as we're spending more utilizing our funds from the bank. So was this like a line of credit from the bank up to $325? No, it was an actual...
A lump sum? Uh-huh. Okay.
Yeah. And what else? You said you maxed your credit cards out.
How bad is that? About $30,000. We had, I mean, well, two of those are personal cards and one is a business card, but all of it went towards the business.

We started with nothing on those cards.

And when did you start this business?

December the 10th.

We're talking a few months ago.

Yes.

And so far it's making, what, $15,000 a month?

Last month, I believe, we brought in about $18,000 a month prior, about $16,000. And our first month was a bigger month coming in.
But your lease is $30,000. Correct.
So you're bleeding money every month. Correct.
And we're waiting on our realtor actually, hopefully today to give us some information on having a tenant come into part of that space to sublease it out, which we're hoping will help. Yeah.
But you're not going to, you%, right? You need this thing to be making 75 to 100,000 a month. 100 grand.
Well, we're not actually paying ourselves out from the business, and we don't really have any overhead. That's the scary part.
How are you guys living? Yeah, how do you eat? Well, so you're working for free while going hundreds of thousands of dollars into debt. Yeah.
So we were both working right up until we opened the business. I am currently in an IOP OCD treatment program.
So I have a couple more weeks of that before I can go back to work. My husband is, I think he's doing interviews today actually to take on remote work from our business while he does that at the same time.
We need to be making about, I mean, we can make ends meet and actually profit on about $45,000 a month. There's no way.
Because we don't have any. What about your insurance? You have to be insured in case a kid gets hit by a ball or turns his ankle and sues you for the whole thing.
What's your insurance? Our insurance is about $2,000 a month, I believe. We had to have general and then we had to have workers' comp as well, even though we don't actually have any employees.
Okay, so are you never going to take a vacation? At this point, no. I mean, that was the goal.
But yeah, at this point, our intentions were to pay ourselves out, obviously, from the business, and that didn't work out. And so we've kind of burned through savings up to this point, both being there all day, every day, trying to make that successful.
And it's to the point now that we're going to have to go back to work and do both at the same time. Have you sat down, if you haven't, please, anytime somebody's in this level of stress,

whether it's in their marriage, with a new business, there has to be a moment in this chaos when everybody exhales and you and your husband get a whiteboard and you write down on that whiteboard every single person you owe. And then you also on that whiteboard write down every single dollar it costs to run this thing every month.
Because right now y'all are robbing Peter to pay Paul. You've got money coming in one way.
Some of this is borrowed. You've got a credit card over here.
It just feels like it's everywhere. I don't think, I don't know if you can, you can't see me and George.
I don't think you understand how bad this is. Yeah, it's, we're, we're pretty scared.
And we, I mean, we don't, it's kind of hard because there's certain bills that we know are coming that we don't know what they are because we haven't seen them yet. Like our, our utility bill, we're estimating probably about 5,000, but we haven't actually seen it yet because our building is a split space.
So the other side doesn't have a tenant yet. So the landlord didn't actually even split the utilities until not even 30 days ago so we don't even know i think you need to talk to the landlord and explain what's going on and see how quickly you can get out of this lease because it's going to continue to bleed money for the foreseeable future i mean how are you talking about getting a hundred percent more business how do you how do you expect to go about doing that Do you even have enough Little League and high school and college players to utilize your facility? We do, actually.
Yeah, it's kind of a huge market for it here. And when we started the business, there was nothing within 30 minutes of us.
And we've had a lot of people coming in, at least, I mean, for weather permitting, obviously, that changes things. But I do, I guess with the potential that I've seen, I feel like there's a way to do it.
There's got to be another way I can bring some more money into it. I'm just kind of stumped as to how...
Let me tell you this. You have to get to a point where your feelings are very important, but you have to get to a point where you're trafficking only in math.

Right.

Because if you feel, you should know how many Little League teams are actually fielded in a 30-minute radius of your house. If you haven't already, you should be knocking on the coaches' doors of the middle school teams, the high school teams, the junior college teams, university teams, giving them special deals, going 24-7.
I mean, if you're not knocking on every single door of every coach over and over and giving them coupons and i mean that's the only way you can survive and if you haven't done that then maybe you've got a shot but the fact that you don't know i mean you guys are just like no it's a big market like man you need to know how how many little league players are in your area right yeah when we did our projections for the business in In order to qualify for the SB loan, we had to have an entire, I mean, I had to have stacks of paperwork detailing exactly what's in our area, exactly how many kids, exactly how many teams. I don't have it sitting in front of me right now, but we do have all that detailed out.
My husband's been coaching for years, so he actually has a lot of personal relationships with high schools, the leagues, everything. So he's reaching out to all those people as well.
Okay, but here's the thing. If he is, there may become a moment that y'all realize you're over your head and it's not going to work.
My hope here is that there's 100% more people that y'all haven't reached out to yet. Right.
Then you've got a shot. If there's not, what does that look like as far as exiting a business that's not profitable? You need to sell all the assets you can on the equipment, get out of the lease with as little damage as possible, and then go get full-time jobs, both making six figures and clean up the debt of the failed business.
Yeah. And maybe reach out to softball teams too.
And so you have softball, like if there's an equally large softball market in your area too, maybe that's a chance. But yeah, otherwise you're selling assets and you're just going to go back to the owner of this building.
Hopefully your lease isn't a five-year lease or something, but yeah, this is in a really gnarly way. But y'all need to sit down with a whiteboard and be very honest about how much you owe.
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That's nokbox.com slash Ramsey. Welcome back to The Ramsey Show.
I'm George Campbell, joined by Dr. John Deloney, and we have a special guest for this segment on the debt-free stage.
We have Jawanda. How are you doing? I'm doing pretty good.
Thanks for coming to celebrate with us for a debt-free scream. My pleasure.
Where are you from? Really excited to be here from Philadelphia. Were you born and raised? Can we say that? The playground you spent most of your days? You could say.
Yes. She hates you now, but you can say it, John.
That's fantastic. I love it.
Okay. How much debt did you pay off? $86,613.
How long did that take? About 48 months. Wow.
And what was your range of income during that time? Started around 70 up to about 84. Awesome.
And what do you do for uh work i'm a construction manager i work for a general contractor and um just help with um our teams there and we build multi-family projects very cool and what was this 86 000 in debt so 14 000 was a car loan. $4,000 was unemployment repayment, which was interesting and unexpected.
Another unexpected thing was $4,000 of local taxes, like city taxes, that wasn't coming out of my checks, and I had to pay it back. Like some back taxes.
Yeah, that wasn't fun. And $,000, about 64,000 was student loans.
Wow. Tell me about this repaying unemployment.
I've never heard that. So in 2020, I wasn't working like most people when I filed for unemployment.
And I didn't think that I applied, but a few people encouraged me to file and I did. And they said, hey, we'll send you this much money every month.
And about 16 months later they sent me an email and said hey all that money we gave you you actually weren't eligible for it we need you to pay it back oh wow very unexpected but fortunately I didn't take a lot and um I got it paid off pretty quickly wow and what were the student loans about what'd you what was the degree? So I got a bachelor's in urban planning and a master's in construction management. Awesome.
And you're putting it to good use now. I am.
Woo. Okay.
So 48 months ago, you look down and you're like, okay, I owe a car lender some money. I owe the government a bunch of money.
I got the student loan over here. What made you get on this Ramsey plan and go, I'm going to clean this up fast? So I actually took Financial Peace University when I started grad school in 2013.
And I got rid of all of my credit cards, closed those out and was like, okay, the college loans, when I graduate, I'll deal with them then. So I started off well, but I got distracted just trying to do other things or trying to figure out another way to get out of debt and then four years ago I was like you know what it's just gonna take the time that it takes and I just decided to get after it I got an accountability um partners or um a Ramsey um I believe financial coach yeah um yep and um We've been meeting ever since then twice a month and it's um it's been really helpful to have someone to talk through financial decisions with wow and so you just made a decision there was no like rock bottom thing that happened you just decided i'm done with this what am i doing i work too hard to be this broke okay hold on i'm fascinated by something fascinated by something.
One of the hardest things when it comes to diet, nutrition, money, school, all that, is to look in the mirror and say, what I'm doing is not working. Will you talk somebody through who's listening, who's literally living in this moment? They've got a plan here, and they're moving this over here you make that turn because that that if if america as a whole and as individuals could get that moment what we're doing is not working right we gotta do something else tell people how you came to that conclusion well i was i was really trying to do entrepreneurial things because i was like well if i had a side hustle i could do this a lot faster and it the side hustles just weren't panning out.
And I was like, you know what? I need to start saving for retirement. And I want to do that sometime in the near future.
So I kind of cut my losses and said, I guess it's just going to be the income that I have. And just kind of got after it and was chipping away at it and in the past year just got really

aggressive and was like i'm just i'm done i don't say this lightly you are a modern american hero thank you seriously because are you you're are you not married just by yourself yep and so you had to look you didn't have anyone to blame inside your own house right you had to look in the mirror and say, this is me.

I'm going to make a turn right now.

And then you did an even braver thing. I haven't been able to pull this off.
I'm going to call a coach, right? And people often say like, well, I don't want to pay a coach when I'm in debt, but you hired a coach. You've been walking with you and it's clearly paid off for you.
And you've just kept going. What lit your fire a year ago that you said all right I'm hitting the gas even harder I think so I'm really adventurous and I love to travel so I think it was just putting off travel putting off driving past restaurants um and but really I think it's it's just been like wanting to save for retirement one retirement wanting to buy a house and those things and just feeling like I'm in delay.
Like I've been so delayed and just was just ready to be done and get that part of behind me and stop paying interest and start earning interest. Wow.
That takes a lot of emotional maturity to put down the instant gratification and go, you know what? I'm going to make some sacrifices now so I can have the best later on. And the future is looking bright for Jawanda.
I'll tell you that much right now. What was the hardest part of the journey for you over those four years? I think just feeling like I'm in delay, like that I'm so far behind.
And I just wish that I knew when I was in college, how much of an impact those college loans would have on me. Was it a lot of regret and guilt and even some shame? I don't know if I would say that.
Maybe just disappointment for not paying more attention. It's like you're smarter than this.
You're a smart person. You're just trying to beat yourself up a little bit.
Yeah. Wow.
Well here you are now. I mean you got a lot of life ahead of you.
Four years of sacrifice. Was it worth it? It was so worth it.
How do you describe the feeling to someone who is where you were? They're sitting with a big pile of debt and now you're debt free. How would you say this is what it's going to feel like if you're willing to make that sacrifice? I would say it feels like though, like opportunities, exponentially more opportunities have opened up to you.
And that you just have some emotional peace that you can't really put into words until you get here. And yeah, it just feels like there's so many opportunities that I can take advantage of.
And that's really exciting. How old are you? I'm 38.
38 and so you've got the back two-thirds of your life we're gonna we're gonna think positively here the back two-thirds of your life what are you gonna do now that you don't owe anybody anything? So I am I'm almost done with baby step three I'm gonna start saving saving for a house and plan to be a part of that 30% of people that don't get a mortgage. And because I'm a construction manager, I think I can do that.
I think I'm savvy enough to make it happen and just going to save like it depends on me and pray like it depends on God. Sometimes people are on the debt-free stage and they actually paid their debt off a while ago.
Have you had a month or two or a few months where your paycheck deposits and it only goes into wherever you want it to go? Yeah, I actually set up for my direct deposit to be some for just living and everything else is going to my high yield savings account just for baby sub three. So it's been, I've had about maybe one and a half months.
Tell somebody what it feels like when that check deposits. Oh, it's exciting.
It's even better that it's automated. Like I don't have to think about it.
I don't have to accidentally not touch it. It just goes to my my high yield savings account and i look at it and i'm just like you're building it for your future you're so awesome lenders yeah you're done paying for the past congratulations man it's amazing we've got a parting gift for you we got two every dollar one year subscriptions for you you can use that you can pass it on to someone else who maybe encouraged you maybe doubted you you know give it to the haters and say hey this is for you check this out so we're so proud of you We're happy to celebrate with You know, give it to the haters and say, hey, this is for you.
Check this out.

Thank you.

So we're so proud of you.

We're happy to celebrate with you.

Let's get to the moment we've all been waiting for.

It's Jawanda from Philadelphia.

$86,613 and not a penny less.

Car loan, unemployment, back taxes, city back taxes,

the student loans, it's all gone in 48 months,

making $70,000 to $84,000. Count it down.
Let's hear a debt-free scream. Three, two, one.
I'm debt-free! Woo! Yeah! Yeah! See, that one came from your soul. That was cathartic.
From her chest, man. Oh, my goodness.
If that doesn't light you up, if that put a little fire in your belly, you're not living. Check your pulse, man.
Jawan does an inspiration. This is The Ramsey Show.
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Welcome back to The Ramsey Show. George Campbell here with Dr.
John Deloney. The number to call is 888-825-5225.
John, I don't like to hit the news very often, but there's one thing that applies to people's personal finances, if I can connect some dots for you. Just one thing? You ready? Just one.
There's like a thousand things impacting people's personal finances. So much we could talk about.
But this is the one. Trump's IRS layoffs have some people asking, why bother filing taxes this year? So a couple of weeks ago, the Trump administration, they started to lay off almost 7,000 IRS employees.
Commerce secretary told the media that Trump's goal is to, quote, abolish the IRS. This has a lot of people confused whether they should hold off on filing.
Like, is this a government shutdown? We're like, we're good. We don't have to file.
Yay. Some people are taking this as an opportunity to just ignore it and not file.
So whether you agree with, believe, or put stock into anything politicians say, it takes a long time for anything big to happen in the government. So layoffs do not mean a shutdown.
The IRS is still very much alive and well, ready to make sure you file your return. So if the IRS were being closed, Trump would let us know.
You still need to file like usual, and the earlier, the better. In fact, John and I were just talking about how we got ours done.
We like to get ours done as soon as possible. As soon as possible, yeah.
So that we know. Yeah.
I just want to know, am I going to owe? Am I going to get a refund? Let me not let it live in my head rent-free until April 15th. Exactly.
And listen, we have to say this as clear as day. You have to file your taxes this year, despite what all the rhetoric, despite what like, oh no, you don't understand.
You have to file taxes or you'll be in violation of the law, period. Yep.
Pay your taxes. Now here's what could happen.
The layoffs will likely slow down refund processing time, support phone lines, and the longer you wait, the worse you could get if you do need help down the line. So tax collectors are still on the job.
They're not going to stop just because of the layoffs. And the IRS penalty for you not paying your taxes is a half a percent of your tax bill every single month.
The failure to file penalty is 5% of your tax bill per month, and it spikes to 25% after five months. It compounds interest on you.
That is yikes. Pay your taxes, people.
So I don't like it. George doesn't like it.
No, none of us like it. But also it's what we have to do.
And so we pay our taxes and we move on with our life. That's it.
And you won't go to jail for not paying your tax bill all at once, but you could go to jail for not filing at all. So that's the key is you got to file regardless of if you can pay it all upfront or not.
You can work on a payment plan. You can get that extended, but you got to file by April 15th.
So if you're holding off on filing because you may not be able to afford your tax bill, you have options. File as soon as possible, even if you can't pay.
Pay as much as you can over the next month. If paying is going to take longer than a month, you can set up that payment plan and then make adjustments like you were doing the debt snowball to cut everything in your budget.
So you don't have this problem again. And we tell people IRS debt goes to the very top of the debt snowball.
It's the first thing you pay because they can destroy your life. And let me say this one more time.
Pay your taxes, pay your taxes. And this isn't just us preaching at you.
George and I have already done our family's taxes. We've already submitted them.
So it's not just like a fun little game we're playing. People on the internet are like, don't pay your taxes.
Those people are paying their taxes, y'all. Everybody's paying their taxes.
Just get over it. Let's get it done and move on with your life.
And we can help you make it easy. If you have a simple tax situation, you haven't had any major life changes, big investments, check out Ramsey Smart Tax.
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Stop letting it live in your head rent free hey can I say this I wanted to know so before I even submitted them I ran mine through oh yeah ramsysmart tax it almost nailed it it was amazing how good this product was to the point that it made me reconsider next year like if I might just do it again on my own do I need a pro because I was able was able to do it on my own. I used to use Ramsey SmartTax,

and then things got more complicated,

and it even dealt with my complication.

My wife has a small business.

We went right through it,

and dude, it was exquisite.

If it can handle the chaos of John Deloney's life,

you're going to be fine, guys.

That's right.

You're going to be fine.

But it's very impressive in how simple it makes everything.

Yeah, love it.

And very good.

Ramseysolutions.com slash SmartTax. All right, let's go to Renee in Akron, Ohio.
What's going on, Renee? Hi, thank you for taking my call. Sure.
I'm currently on baby steps four through six. You might tell me to go back to three after this.
But I feel like after 20 years, God's leading me to leave corporate America and go into vocational ministry. My heart's been there for years, and now that I'm debt-free, I don't, there's not really anything holding me back other than my goal of like making it to baby step seven.

Like, is that me being selfish?

Is that me being smart?

And I was just interested in your insight.

Sure.

So you have a mortgage right now?

Yes.

It's about $559 a month.

So I'm debt-free except for my house.

Wow, $559.

What a steal.

Yeah. That's amazing.
$500? Yes. Wow.
Most people's car payments are higher than that. On that mortgage, man.
Half of America just sneezed while they were driving down the road listening. Well, everyone's mad at you right now.
You've lost all empathy with the people listening. Forget this lady.
You should look at look at rent prices in acronym do you have a job on the table right now that you're weighing or you are just philosophical for you it's more philosophical i'm uh i'm like two years sober and so um just lately i've really been more passionate about um helping like teams with their recovery, know and making a lifestyle like vocational decision that's not going to give me the income I have now do you have so um George will get into the numbers here but let me ask you a few questions do you have the training to be like a teenage addiction counselor?

Not like, not psychology, no. Okay, okay.

Psychology.

What would keep you from keeping your job and also running meetings in the morning or

running meetings in the evening?

You'd be tired, of course, but what would keep you from doing that?

And the reason I'm pressing on you is some of the greatest, what I would call vocational ministers have full-time jobs. Even Paul made tents, right? And so people always say, think like, in Georgia, I hear this all the time, I need to quit everything to go be a musician.
I need to quit everything to go be a comedian. I need to quit everything to go be a minister.
And I always want to hold off and say,

could you begin to work your way into this and see,

is this the life I want to live?

Does that make sense?

Yes.

Good question.

There's not.

I'm a CR leader now.

What are you making with your corporate job? $95,000.

And how much do you have in savings?

$11,000.

And what are your monthly bills to cover all your expenses?

I think at about $3,000 when I include my insurance and stuff that comes out of my paycheck. Okay.
So a six-month emergency fund, let's call it $20,000 to round up to be conservative. Okay.
That's what you'd be looking at for a six-month emergency fund. And you could take your income down and still survive.
But again, you have other goals. I want you to retire with dignity when you want to and not work because you have to.
I want you to be able to pay off that house one day. And so cutting your income down to like a ministry income of $30,000, I don't like that plan.
I'm with John on that, that I would keep your full-time job or take another job full-time that still offers flexibility for you to do this vocational ministry part-time. And I think that's a great question.

Are you running towards a life of full-time Celebrate Recovery

where you're working with people and you're sitting side-by-side with them

in a psychology standpoint or a ministry standpoint?

Or, let's just be honest, do you hate your corporate job?

Because those are two different things.

I don't hate. Intellectually, I do not hate my corporate job because those are two different things i don't hate intellectually i do not hate my corporate job okay my heart like corporate like ethics is a little bit of uh not like not like i work at a shady place because i don't but there's it's tough kind of like that it's just weird yeah it's yeah.
I got you. I got you.
What George and I both know is one of the chief stressors in somebody's life is financial stress. And for somebody who's two years sober, I would hate to say, yep, let's take a $60,000 pay cut or a $50,000 pay cut with 10,000 bucks in the bank.
Because George and I both know, man, that kind of stress just leans on you in a tough way. I would love to see you, no pun intended, baby, step your way into increasing your role in CR, increasing your role in AA meetings, increasing your role volunteering in local organizations, and begin to see, is this the life I want to live long-term? Love it.
Hey, Renee, we're going to send you a copy of our friend Ken Coleman's book, Find the Work You're Wired to Do. It has a Get Clear career assessment in there.
I think that's going to really help you create some clarity around this next chapter of your life. We're excited for you.
This is The Ramsey Show. Live from Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships.
I'm George Camel, joined by the host of The Dr. John Deloney Show, Dr.
John Deloney. Open phones at 888-825-5225.
Jason is going to kick us off this hour in Columbus, Ohio. What's going on, Jason? Hi, George.
Dr. John.
It's a pleasure to get to talk to you both. You as well.
What's going on?

So basically, I, over the last month or so, have been kind of undergoing a bunch of anxiety and stress regarding my debt and everything.

And after meeting with multiple people, they're all saying I should file for bankruptcy, but I'm not sure if I should.

Who are you talking to? Yeah, usually multiple people are wrong. What's going on? I mean, it's a combination of things just starting back from a few years ago, and the debts have just been piling up, the minimum payment's been piling up, and I feel like I't breathe and I can hardly sleep at night sometimes because it's just.
So step one, and I've been there,

brother. I've been there.
I've been there with your body. You feel like you're being betrayed by your own body, right? Like it's just, you're anxious all the time.
The first path through is

like no holds barred, choose reality.

So be very specific.

How much do you owe and to who?

Combined at all is about closer to 60,000,

counting my truck and the credit cards,

the personal loans, everything.

35 of it is the truck.

And then the rest is a mix of credit cards, personal loans, and lines of credit. Okay.
I can tell you right now, no, bankruptcy is not your solution here. Okay.
Put that off the table, take that out of your head. Okay.
And let that give you some peace. Now, how much money do you make? Gross last year, I made 65.
Okay. The good news is you can sell that truck.
You might be a little underwater on it. Do you know how much it's worth if you sold it private party? Uh, I don't through KVD.
I haven't looked. That's going to be part of your homework.
You got to figure out exactly what it's worth if you sold it for top dollar and you owe 35. So there's going to be, there may be a gap.
Let's say it's only,000. You need to come up with the extra $5,000, either through saving it up or going to your local credit union and getting a loan for the difference and then getting enough to get a little beater car on top of that.
Is this your only vehicle? Yeah. Okay.
So that's the good news. Think about that.
I could free you today by selling that car down to $25,000 total in debt. Can you breathe a little bit easier now? A little bit.
And now we go, okay, what's a plan to pay off 25 grand? Well, easy math says if I was able to throw two grand a month, this debt, it would be gone in a year, right? Yeah. And how much do you make every month? What's your take home pay? So I work on base salary or base hourly and commission.

So it varies, but typical month is usually between $3,500 and $4,000. Great.
So let's say $4,000. Are you doing any investing right now at all? Is there a company 401k? Is there a match or anything you're doing? The company does offer a 401k with 100% match,

but I'm not contributing. Okay.
So you make 4k. Now we look at, okay, what are your monthly expenses?

What does it take for you to live? We're not eating out. We're not doing anything exciting,

no frivolous spending here, but how much does it need? Do you need to live? Pay rent, bills,

food, all that? Probably at the most 2000. Jason, do you see what we just unlocked? Done.
I just told you if you put $2,000 a month toward your debt, you're debt free in a year, and you said you make four, your expenses are two. That looks oddly like $2,000 left over to throw at the debt, doesn't it? They wouldn't even finish the bankruptcy paperwork in that time.
They wouldn't even let you file. They'd say, dude,

you don't even, this isn't even a problem.

You're going to be done with this debt in a year.

And so then you do the debt snowball

method where you pay off the smallest balance

first. So what is the smallest balance you currently

owe?

Smallest one is

$5,000. Okay.
So

two and a half months you're done with that first debt.

Now we're down to $20,000 and we free up that payment. What's the payment on that $5,000.
Okay. So two and a half months, you're done with that first debt.
Now we're down to $20,000 and we free up that payment. What's the payment on that $5,000 debt? I believe it's close to $300 minimum.
So now you freed up another $300 to throw out your next smallest debt. Do you see the momentum that gets built with the debt snowball? Yeah, I do.
So I just showed you the math. And again, there's two parts to this.
There's all the emotion. There's a psychological aspect that John can talk to you about.
But I just showed you on paper how easy this is to fix. While all your other friends said, dude, it's too bad.
You just got to file bankruptcy, man. That's America.
What can you do? And I just showed Jason how to take control of his life with the guy in the mirror. Tell me about this job.

It's a sales job, working in retail.

You know, a lot of customer-facing interaction and stress on a daily basis.

So, I don't want to be overdramatic here,

but your whole cadence, your whole tone changes

when you talk about your job.

And I wonder if you're just not in the right job. I wonder the same thing.
It's just my concern has always been the money in that, like, trying to stay afloat. I got you.
Because in an ideal world, like, when during COVID, I actually had went to school to be a software engineer. And then when I graduated, the tech market crashed and nobody was hiring.
I couldn't get a job anywhere. Okay.
But what did you learn to do when you were coding? You learned to solve problems. You learned to work independently.
You learn to go through very fine details.

And you learn to talk to knuckleheads like me who are these big artist dreamers who are like, I just want it to like feel like this.

And you're like, okay.

And you took a bunch of hieroglyphic looking things in Ruby on Rails and you made it like, dude, you're literally limitless with that degree.

Not just because from coding or software engineering, but because you know how to take a project from start to finish. And somehow, some way you've got your body is telling you that you're not safe.
And sometimes that's because we're in the wrong place. and I would love to see you bro right now I would love to see you

make 30 grand a year

throwing boxes half the day

and make 30 grand a year

working at Starbucks the other half the day and make that same 60 grand and you're on your feet and you're running around, but you're not having to meet sales quotas and stuff like that that's keeping you up at night while you then look for a job that might be a product manager that might be able to see some of these projects from start to finish that job as hot as could be right now you're an engineer maybe not in software maybe ai can do that now okay cool where am i going to take that a that engineering skill set and go make somebody else's life some customer's life some business's life better do I'm saying? Yeah, I do. There's an underlying anxiousness.
Your body doesn't believe that you're safe. But when it comes to the money part, brother, it's a year of obnoxious hard work, asking your friends to come over and bring whatever peanut butter and jelly sandwiches they got because that's what we're going to do.
We're going to play Dungeons and Dragons or whatever weird stuff you're into. And we're going to do this for a year.
And then we're going to call it. And then I'm going to be all paid up.
I'm not going to have a $35,000 truck that sits in my driveway losing money every second and makes me not able to breathe. It's not going to do it.
I'm going to have a used Camry that's going to get me from A to B. But here's the deal, man.
We believe in you. Hang on the line.
I'm going to send you a copy of my book, Building a Non-Anxious Life for free. It's going to be my

gift to you. I'm also going to send you Financial Peace University.
I want you to watch the videos

and it's going to give you peace because it's going to give you an actual plan. Okay, brother?

Hang on the line here. We'll get you hooked up.
Bankruptcy is not in your future, my friend.

Only financial freedom and debt freedom. Stop listening to other people, man.

All right, Dave, you have some strong opinions. Possibly, 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.
That's F-A-I-R-W-I-N-D-S dot org slash Ramsey.

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.
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That's RamseySolutions.com slash SmartTax. Welcome back to The Ramsey Show.
I'm George Campbell, joined by Dr. John Deloney.
If you're not sure if you're on track with the baby steps, take a quick quiz that can help you check your progress and you'll get a personalized plan just for you. Simply head to the show notes of this episode, click on the link that's titled, Are You On Track With The Baby Steps? and complete the quiz.
Molly's up next in Macon, Georgia. Welcome to The Ramsey Show, Molly.
How can I help? Thank you for taking my call. I have a question about giving.
The Lord recently blessed us with an inheritance, and it stopped, and we don't need it to live on, so we are able to just invest it and give it. And it was a big surprise, and I've never had this happen before.
So I'm wondering, okay, first of all, in being a good steward of this and thinking about giving it, do we tithe the stock? Do we just invest it? And then what we earn off of it, we give out of that. I'm not sure how to do that.

You're such a sweet, wonderful person. I'm glad that you were the one gifted with this money.

Can I ask where it came from?

My father passed away recently.

Oh my goodness. And this was part of your inheritance.

Was there anything else? No, because everything went to my mother, but he left this to me.

Wow. And my parents taught us live within your means, save, and they taught us that we should invest.
They didn't teach us how to invest, so I'm working with somebody to help me know

Thank you. taught us live within your means, save, and they taught us that we should invest.
They didn't teach us how to invest, so I'm working with somebody to help me know how to do this, and so I need some advice, just because I want to be a very good steward of this gift, and so as I was thinking through that, I wanted to have many advisors who could,

you know, with many advisors, our plans will succeed. I want to know, um, should, should I go ahead and just give 10% of that stock away or, or is it better to just invest it? And And then as I don't even know how to, like, how it would come back to me.

Yeah. I know that I've been right there's a lot of ways there's a lot of ways to do this and truthfully this is going to be up to the matter of the heart and so I don't want you to feel like there's a right way and if I don't do it this way I'm not being wise the fact you're even asking this question tells me that you're already a generous person.
Let's pull that apart real quick. Molly, I'm going to talk to George, but I'm going to do it on your behalf, okay? Okay.
George is smarter than me in some of this stuff. So, George, I'm thinking you could sell the stock and take $850,000 in cash minus whatever the...
Yeah, I assume you're going to have capital gains taxes on this, Molly, right? Well, as my accountant and my financial advisor said, that it's only going to be... I would only have capital gains on the amount between the date of transfer to me.
Perfect. Step up.
And because, yes, the step, because when I received it, I thought, oh, no, all my eggs are in one basket. They would say, don't do that.
My accountant said, don't do that. My personal financial advisor.
Yes, you can sell it all the day of transfer and essentially have no taxes. So I sold 75% of it, and it's just in a money market fund right now waiting for me to figure it out.
And the other part, the 25%, I kept in case I was going to give stock, like transfer stock, because they had said, several people have said to me, you don't want to sell it and give what you gave, give off of the earnings of that or what you sold. You want to give the stock, transfer the stock.
But I mean, you'd just be putting somebody else in that same situation, like some church or educational institution or wherever you sold it would have to convert it. I think that's overcomplicating it.
What I would do, Molly, if I was in your shoes and I was gifted for this money, I would just go, okay, I'm going to tithe off my first fruits. And so the income that I actually take home, I'm going to tithe off of that.
And so if the stock is growing and you're not actually selling it and making money from wherever it's invested, that's not going to count as income that year. You see what I'm saying?

But whenever you do sell it, I would take 10% of whatever that is and tie that.

Okay.

So at this point, I sold $646,000 worth, and that's what's in the money market.

Yes. And then the other stock, so you're saying tie it off of that, and then...
Well, is that going to count as income for you this year? Only $12,000 is counted as income. Okay.
And so that's what I'm talking about here is you just, there's basically an asset here that was invested. It hasn't really turned into income for you.
You're just basically converting it into a different asset. Okay.
And so what I would do if I was in your shoes is just tithe 10% of your income. You can also be more generous than that.
It's up to you. You could give all of this to charity today.
But if you're just saying, hey, what's the right way to tithe out of this from a biblical perspective? The way we see it at Ramsey is it's first fruits. It's based on what you actually took home.
You know, gross or net, you know, Dave always makes jokes about that.

It's up.

That's really a matter of the heart.

If you made $100,000 gross this year, you can tithe $10,000 to your local church and

even give above and beyond that to whatever organizations or causes you sow cheese.

Or after taxes, if you feel like tithing the $80,000 you actually brought home and you

pay $8,000, like everybody's going to be different there.

Okay.

Because at this point, nothing is in my bank account. Exactly.
And that's what we're saying. It's all a brokerage firm.
Nothing has come to me. I have got nothing.
It's all sitting at the brokerage. But so if it was me, and again, take this with a grain of salt, right? If it was me, I would cash out that $850,000 and take $85,000 and tie it to my church.
And then my wife and I would decide, do we want to do something else with it? Do we want to help a kid go to college? Do we want to like what, you know, whatever. And do we want to give to my daughter's little school or whatever we want to do with it.
And then the rest of it, I would put into some sort of retirement vehicle. Yeah.
If you just invested this money, and I'll just give you a quick example, $750,000, you never add another dollar to that. You just let it grow.
How old are you, Molly? 55. 55.
Let's say even for the next 10 years, you just park that money in a good growth stock mutual fund or even in a taxable brokerage account in an index fund. And it made, let's say, 9% on average over those 10 years, it would turn into 1.77 million.
So 750 gained another million without you doing anything. So that's the power of compound growth at this level and this scale.
And so you can really create some sizable wealth to do even more good in your community and in the world with that money. And it sounds like you're going to do that.
And so I love that you're thinking about how do I manage this well? Do you trust the financial advisor you're working with? I do. Good.
They're helping explain all of this to you. They're educating you.
They've got the heart of a teacher. Yes.
He spends an awful lot of time. And he says that I ask him questions nobody's asked.
I love that. He explains things to me.
You got to challenge him. Yeah, make him think outside the box.
That's how I would look at it, Molly. And again, I don't think there's a wrong way to do this.
The way I look at it is whatever income I took in that year, if I want to tithe the 10% off of that, that's what I'm doing. But you don't need to look at it as one giant pile, and I've got to do this today.
You can invest it. And based on what you actually convert to income, tithe off of that.
Or you can do what John said and just go, you know what? I'm just going to take 85K off the top of this. And that's all.
I'm going to tithe off of that. And the rest is going to be investments.
And then next year, if I made an additional 10 grand, I would take that on top of my salary that I made for that year. And my wife and I would tithe 10% off top of that.
Okay. That way, for me, in my house, it would be in perpetuity, right? It would continue to be a blessing further and further.
Yeah, you wouldn't even touch the principle of that money. It's all going to just be growth at that point, which is incredible.
And you said you don't need this money. It sounds like you're doing really well financially yourself.
Well, I mean, we have no debt. We're paying cash for my son's college and we have a six month and I'm getting my own pension from retirement and I have a little other in my 403B, so no.
So can I tell you something, Molly? What? What was your dad's name? Rick. He's real, real proud of you.
Thank you. If I passed on, I left my daughter 850 grand, and these were the questions she was asking, I would know that I raised her right and that she's going to be a good steward of this money.
You're doing a good job. And guess what? I can tell you're going to do the same for your kid, and I hope they do the same for their kid, and that's generational wealth.
A good man or woman leaves an inheritance to his children's children. You're an inspiration, Molly.
Thank you so much for the call and trusting us with this. This is The Ramsey Show.
Hey, guys. Good news.
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All right. Today's question comes from Paige in Ohio.
And I, I just love this question. My husband and I are new listeners and began the baby steps late last year.
I'm struggling to cope with the shame and guilt that I feel over our financial mess. It feels insurmountable even though we are working hard and seeing progress.
I cry every day and it feels like we're never going to get there. How do I celebrate the small wins when we mark a debt off our snowball in the midst of being intense to get out of the rest of the debt? I feel like this is a really is like a really honest question.
Yeah. And we don't talk about it a lot here.
And we tell people just like, crush it, go kill it, go, you know, like murder it. There's another side to that.
There's another side, which is you sitting at your kitchen table. You just drew a line through the $700 credit card.
You finally got it. And your kid needs braces and your other kid needs shoes.
And the next payment is $1,500. That's the next credit card.
And you put $200 towards it and you just sit there at night. The kids are asleep, your partner's in bed, and you just have your face in your hands.
And what I would tell you, Paige, is crying is not a bad thing. Cry.
That's okay. And if you find yourself unable to move and unable to take that next step, you need to call somebody.

And not a bad thing. Cry.
That's okay. And if you find yourself unable to move and unable to take that next step, you need to call somebody.
And if y'all have guilt because y'all hid money from each other, you just lived rambunctiously, now you're having to tell your kids no, that's not a bad thing. And if you're ashamed of some of the things that you've bought, if y'all have a bunch of ATVs and a boat and a jet ski, but also $100,000 in student loan, shame's not a bad thing.
It's when it becomes, as they say, toxic, when it becomes where you can't move and you can't hear anything positive or good. So here's the deal.
Feel those feelings and just keep doing the next right thing. And that is where the magic is.
And what's going to happen is you're going to look up in seven months and you're going to have paid off several of these little tinier credit cards, or you're going to plowed through one big one. And you're not even going to realize it, but you're going to find yourself standing an inch or two taller.
So sometimes it takes a while for our feelings to catch up with doing the next right thing. And George, I for one, man cry, cry.
That's your body getting it out. Cry.
It's the only time I'm concerned is when I cry and I can't do anything or I find myself going back to old bad habits. You're sort of frozen.
That's right. Or I start buying stuff again to try to make myself feel better.
Or I find myself taking another drink and another drink, or I start skipping my side hustle to watch Netflix. That's when I want you to call somebody.
But it feels like we're never going to get there yet. If we're honest, we are getting there slowly, but surely we're getting there.
Right. So challenge those thoughts.
That's the old CBT, like challenge those thoughts and see if it's true or not. And then let's just keep doing the next right move, man.
But Paige, this is a common thing at the very beginning where you just look back and go, my gosh, how are we living, right? I've been there. I'm sure you're like, I've been there and we don't talk about it enough, but this is a very real part of it.
And then you just got to go do the next right thing. And then having that deep why of like, oh, that's why I'm doing this.
Because when you're in the middle of it, you sort of forget like, why am I running this? Why did I decide to run a marathon? Oh, that's the reason why. And what I found, this works for me, John, this may not, I don't know if this works in your world, but when I find that I'm getting too emotional about something, I try to lean toward the facts and reality.
And when I get too into the math and that becomes overwhelming, I try to lean into the emotional side of here's why I'm doing this. And so that tends to help me not be out of balance on one or

the other. And so it may help to go, look at the numbers, look how much debt we've paid off.
Let's make the little chain and make it visual and let's make the thermometer and color it in to show the progress. Cause sometimes it is hard to see the forest from the trees when you're in the middle of this.
Yeah. And there's something, there is something about some sort of cheesy project, whether it's drawing the thermometer.
Me and my wife hung the paper chain in our bedroom. I was like, I want that in the bedroom.
I want to see it every night. And I will say this, Paige, and to everybody just getting started on the baby steps, you're finding yourself in March of a new year.
You're already exhausted. You haven't been to a restaurant in three months, and it's miserable.
And now you're on on spring break and you're not going anywhere like i get it i get it you're right where you need to be don't go on this on this adventure beating yourself up like you're on it's only you're only going to get so far if you're choosing to get out of debt because you hate your former self don't do that get out of debt because of who you're going to be on the other side of this thing and where you're going to go yeah it's not because you hate yourself it's because you love yourself enough to see that version go towards something don't run from something um i remember um man he's just a sage sal de stefano with the with the mind pump guys guys i just love their fitness guys but um i remember him telling me when i was just about working out. And he said, hey, if you go to the gym every day because you think you look disgusting, if you go to the gym every day because this is what you get because you're 10 pounds overweight, you're always going to quit.
You're always going to quit because your body can only take hating itself so long. Not a great motivator long term.
But if he says, if you get up every day and you're like, dude, I get an hour, I'm worth an hour to where I can just go feel good. He said, you'll do that the rest of your life.
And that was such a light bulb for me. I went to the gym because I didn't like how I looked, not because it makes me a better husband and a dad.
And when I made that switch, now it's something I look forward to. It's something I get to do, even when I don't want to, versus something I have to do because it's my punishment for the day, for being unattractive, right? Same with your money, right? We got to update the operating system.
That's exactly right. We're going towards something, not just continue running with our head over our shoulder.
That'll preach. Well done, Paige.
We're cheering you on. Blessings, man.
All right. Cole is in Cincinnati up next on the phone.
What's going on, Cole? hey, so I had a question. So basically I'm on baby steps four, five, and six, and I have a little bit, so I'm kind of curious.
Once I put my 15% into retirement and after I have my emergency fund and all that, what do I do with my extra savings money? Because I know I don't want to just have it in a savings account. Do you have Venmo? No.
Okay, get it and send it to George underscore. I'm just kidding.
Don't send him your extra money. You said you're in baby sets four, five, six.
So those are done simultaneously. So once you have 15%, they're done in order, but at the same time.
So 15%, boom, we got that going. Next up, do you have kids? No, I'm only 20.
So. Oh, great.
So you're going to leapfrog past five. Do you have a mortgage? Yeah, we just, I just bought a house.
Awesome. What's left on the mortgage? 172.
Okay. So here's what you can do.
Jump onto ramsysolutions.com and use our mortgage payoff calculator and set a goal of, hey, man, how cool would it be to have a paid for house in four years? And here's what it looks like. If we make an extra payment every month of a thousand bucks that we have, you said, left over.
So however much that is that you want to allocate toward the mortgage, let's allocate that money every single month and have a goal to have that home paid off in a certain amount of time. Yep.
I'm already planning to have it paid off in eight years, but outside of that, I still have money left over. Great.
And that can become extra on the mortgage. That could be, hey, you know what? I need sinking funds for a vacation.
I'm going to put money away for an upgrade in a car two years from now. And so what I've done is just set up a bunch of sinking funds in my every dollar budget to where that money has a name.
The most dangerous thing you can do is to not have every single dollar assigned to a job in your budget. And so assign it and sit down.
You have a wife? No, girlfriend at the technically renting from me so yikes that's got to be awkward you need to call my show we've not renting we're just not married so i bought the house and she's just giving me some for staying with me bro go down this weekend and you'll get married how long you been dating about three years okay what are you waiting on actually you're 20 fine. I get it.
His prefrontal cortex has not developed yet. I know, but he's got five years left on that prefrontal cortex.
We're just waiting for her to get out of school. Why? You're already living together.
Just call it. Is she the one? Yeah.
Yeah, for sure. All right, take some of that extra money and you'll get a ring this weekend and y'all go wrap it up.
And for now, it's Cole's money. And so we're going to have only goals for Cole, only Cole's budget.
And so again, I would set up sinking funds, probably looking at a ring, probably looking at cash flowing a wedding, maybe further education, who knows? Just assign it to all of the places you want it to go. And if you don't have a place for it, I just start chunking it at the mortgage for now.
Okay, and then also, would it be able to put it? So after I get done with all that stuff, should I put it into like index funds or? Yeah. Once you're in baby step seven, once you get rid of that mortgage, you can increase investing beyond 15% and you'll max out retirement first and then move on to index funds and non-retirement accounts and all that good stuff.
But you're a ways away, but keep dreaming of it, man. This is the Ramsey 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.
Welcome back to The Ramsey Show. I'm George Campbell, joined by Dr.
John Deloney. if you want to see Dr.
John Deloney and Dave Ramsey they are headed out on the open road

for the Money and Relationships Tour, and they're going to make this event a little different. You get to choose the content before the event, and they'll talk about things like raising great kids, handling money fights the right way, making real friends in the 21st century, and they're coming to a city near you, hopefully.
Louisville, April 21st. Durham, April 23rd.
Atlanta, April 25th. Phoenix on May 5th.
Fort Worth, May 7th. Kansas City on May 9th.
And these are some really cool venues and theaters you guys are hitting. Yeah, it's amazing.
Imagine if my show and the Ramsey show had a kid, and then that kid was let loose on a stage. That's what this show will be.
It's going to be a blast. I can't wait.
I'm scared for them. I hope they're not filming it.
If you ever wonder, like, did they edit stuff out? Yes, and this will be the unedited version. You'll get to see it.
Get your seats today. You can get tickets at ramsysolutions.com slash tour, and if you're tuning in on YouTube or podcast, click the link in the show notes.
Let's get to the phones. So Hybe joins us in West Haven, Connecticut.
How can we help today? Yes. Hello.
So I have found myself like in 14 months that I've been to say, you know, I've been into this loop and I, and my income is like very low and I can't seem to bring it any higher because I don't have any experience.

I'm server at restaurant, like I make about 3k per month. So I was thinking like, um, should I, um, avoid rent and then buy like a, um, SUV, um, and then kind of live in it until, um,

I save up some money and get some, uh, some some skills, or is it a stupid idea?

Where are you living now?

West Haven, Connecticut.

No, where?

Like, are you renting an apartment?

Are you living with family, friends?

Yeah, I'm renting an apartment.

It's about like $650 per month.

It's not much, but my income is also very low.

Okay.

No, $650 sounds very reasonable.

Yeah, so what's wrong with that?

Yeah.

Well, how are you having trouble keeping it together? Did you take on debt? I have like 4K for down payment. Yeah, I was thinking about financing one and then putting the rent on the financed car and that way I could go to school like easier at everything.
But if I can, I can buy a car and rent a room, but I won't be able to save a penny. And like I would be stuck in this situation for like very long.
That's what I'm thinking. Can I give you a pro tip for being a new immigrant to the States? And if you can avoid this thing, you will have such a wonderful life of opportunity and it's this don't fall for the american trap of debt no country in the world makes it so easy and so attractive to take on payments like the u.s and i'm scared that you're already getting starry-eyed gone who could a car.
And they're saying they can get the payment down to $300 a month.

And so I might as well get a nicer, newer car.

Do you have any debt currently?

No.

Yeah, please, please, please, please, please take it from two guys who've been down that road.

Don't do that.

I would rather see you go four years and get out of school, scratching and clawing and barely making making it every month and you get out and you have a degree and you don't owe anybody anything other than having a car that is now worth 35 or 40 percent of what you bought it for and um being stuck you got a you got a good deal you live in one of the most expensive places to live. It's very expensive.
Like a cost of living in West Haven, Connecticut, it's very expensive. Why did you pick that place? I just chose this school back there from my country and then I got accepted and I was like, okay, let's try it.
It wasn't my plan to come here. And then I got into school for free and everything was good.
But I'm thinking that, cause I've never paid rent, never worked before, never had like money to manage it. And this whole thing is new for me.
I'm kind of like, So let me tell you this, there's a- I'm paying $650 on rent and it's's going away like $7K, you say $7K per year.

I mean, I know it's reasonable, but I would say like— $650 is a very good deal.

But listen, there is a—it kind of barbells, right?

It kind of is an either-or.

There are students in the United States who borrow everything and live high on the hog for four years,

and then they end up calling this show because they are, have run their life into the ground. The other part of the culture that doesn't get much media play is millions and millions of students scratch and claw their way through.
And they, they work as waiters and then they get up in the morning and they drive Uber and they live in a crump, the cheapest apartment they can safely live in, and then they get up in the morning and they drive Uber, and they live in the cheapest apartment they can safely live in, and then they just bide their time for four years. And they take advantage of the school health clinic, and they take advantage of the school counseling system, and they take advantage of the school gym, and they keep their expenses low.
So if you've got free tuition in the US, you're already way far ahead.

Don't make it worse by borrowing money. I would much rather, you're on the right path.
I'm going

to send you, we're going to send you a financial peace university. And it's a class that 10 million

plus people have gone through to teach them just what you're experiencing is how do we manage this

money? Okay. And if you'll watch these lessons, it will give you a play-by-play on how to do it, okay? But man, you're ahead of the game.
You're ahead of the game. You're ahead of the game.
I know you feel like you're not. I'm telling you, you are.
And you're going to look up in four years and have a US degree. You're going to have learned some great skills.
And please don't owe anybody any money when it's over, especially not on a depreciating asset. What I mean by that is when you buy a car, the moment you drive it off the lot, it has lost money and every day it loses money.
It just becomes worth less and less and less, but your payment never changes. Okay.
Okay. You said you have $4,000 saved up? Yes.
Way to go. So instead of seeing that as a down payment, see it as this is my car budget right now total, right? But can I get like a reliable car for $4,000? Well, you might.
Let's say you could save up another $2,000 over the next three months, right? Right. Now your car budget is $6,000.
And yes, absolutely 100%. Yeah.
And it's not going to be the nicest.

It's not going to be anything like the new cars that they show you on the lot,

but you're not driving this car for 20 years.

You're going to drive it for maybe two years until you can save up and be in a better place

and upgrade the car.

You'll sell that one for probably what you paid for it

and then upgrade with the money you have saved up.

Do you see that kind of slow burn by using cash

and how it slows you down to make better decisions? Yes, yes. And here's the other thing.
Anybody who tells you otherwise isn't telling you the truth. I was a dean of students at a law school and I drove a $3,500 truck because me and my wife are trying to get out of debt.
And she was a professor and she drove, it was probably a $4,000 Corolla and nobody cared. They just just wanted to know are you showing up and doing a great job at your job and so when you're young people are like no dude they won't take you seriously if you don't have this car dude they don't pay your bills show up and do a great job at school and be able to focus on school and do you need you need as little stress as possible trying to figure new culture, new languages, new schooling stuff.
You don't need to add financial stress to a bank on there. So yeah, go buy yourself a $5,000 car, man.
It's going to be an old Camry. Find yourself an old truck.
It's not going to be sexy. It's not going to look great.
It will get you to and from. And let me advise you, get a pre-purchase inspection.
It's going to cost you 100, 150 bucks. It's going to be worth every penny so that you don't go, oh my gosh, I got a $5,000 car.
It needs 3,000 repairs the week after I bought it. Get a pre-purchase inspection from a mechanic that you trust, an independent one that can look it over and go, all right, this car is not going to have a bunch of issues.
It's in solid condition. This will get you another 50,000, 100,000 miles.
And that will put you in a place to then save up because you free up that payment. Now you can save that money and upgrade in car.
And I'm going to also send you my book, Breaking Free from Broke on top of financial peace, read the car loans chapter specifically. And I walk you through the right way to buy a car every single step from the payment to the research, the negotiating, all of that to give you some confidence and clarity.
And the one thing you're not going to do is walk away with a payment. Okay.
I appreciate it. You're 14 months in.
You're doing really, really good. Yeah, we're on your side, my man.
We're rooting for you. We're glad you're here.
Go to school and get a great degree, man. And don't be tempted by American stupidity.
I know they make it look so cool, but everyone is miserable and broke and anxious, and I don't want you to become that. There's too much opportunity for you.
So hang on the line. We're going to send you Financial Peace University and Breaking Free from Broke.
I hope you can avoid the traps that America has created for you. That puts this hour of The Ramsey Show in the books.
If you want to catch the next hour, jump onto the Ramsey Network app. It's totally free.
It's linked in the show notes or just search Ramsey Network in the app store of your choosing. And we will continue the show over

there. If you're on radio? What are you doing? 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?

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

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I'll see you next time. just click the link in the show notes to download the app for free.
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