Go Slow: Never Invest in What You Don’t Understand

Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm Dave Ramsey, your host, Rachel Cruz, Ramsey personality, number one best-selling author, host of The Rachel Cruz Show, and my daughter is my co-host today.
Open phones here at 888-825-5225. That's 888-825-5225.
Marie's in Sacramento. How are you, Marie? Hi, I'm doing good.
Thank you guys for taking my call. Sure.
What's up? So me and my husband just finished up Baby Step 3D, and we are buying our first home. So we just put in an offer for a house that we really like.
It was very reasonably priced. We have about 5% down that you guys recommend for the first home.
And in negotiations, the sellers weren't willing to give up their appliances. And so that was going to be an extra $3,000 cost.
We have like the 5% down, a little bit extra for closing costs,

and our emergency fund. And I'm not sure if that $3,000 should come from taking a little bit less

down, our emergency fund, or if it's a sign that we're just not ready to buy a house yet.

Okay. So it's not an emergency.
Yeah. so it doesn't come from the emergency fund that's an easy one right yeah and um i don't know if i go so far as it's just not assigned to not buy the house um what's your household income about 150 000 which appliances what appliances fridge and the washer and dryer

where's the fridge the house that you're in are you renting yes we are so you don't own the appliances there at all no we do not okay all right um

okay you know i it feels like to me that you're buying a first house and this bump in the road scared you. And it makes you kind of go, oh, no, maybe I'm not ready.
Because it's not – $3,000 when you make $120,000 a year shouldn't be – you you know we ought to be able to figure out a workaround right like we go get a refrigerator and we wait a month and a half uh or we get used washer and dryer and we figured out where it's two thousand or fifteen hundred dollars to do all this and um yeah or you buy a cheaper version of both and upgrade it a year from now or two years from now throw it out i. I don't care.
But the $3,000 scared you that you were like, we can't even cover $3,000. Can we own a home? Because the expenses of...
No, it's not necessarily... No, I was going to say, because the expenses of other things could be so much more.
I could see how that's intimidating where you think, oh my gosh, if $3,000 is throwing us off, what if the roof, something happened to the roof or the HVAC or something that's seven times more than just this? You've got an emergency fund for that. Yeah, I know.
But I'm just thinking of her thought process, like how that can make you stop and actually question like, oh my gosh, are we okay financially do this? So the contract is still under negotiation or are you signed for it? it's still under negotiation. We offered like $3,000 less than we had originally offered if they're not going to include the appliances, but we're still waiting to hear back.
I think that since we're just at that 5%, I think I'm just like nervous that I want to do that. You're borderline.
I mean, you're not stroking a big check here. You know, the other thing you could do is say, I don't have to buy this house.
Yeah. And walk away and go buy a different house that has appliances with it and it fits your numbers.
That's the thing. And so, you know, and the interesting thing happens when you walk away from negotiations, sometimes they suddenly give up the appliances.
Like I'm not losing. What's the price range on the home? It's the home it's 320 yeah so these idiots are going to lose a 320 000 sale on a house over three grand of used refrigerator we don't know yet they've not come i know but they're willing that they're willing to put it on the line that you're they're willing you know if i'm the agent i'm looking at these people and dope slapping them i mean you, you guys are nuts.
You're going to lose the whole deal over $320,000 over a used refrigerator. You've got to be kidding me.
So that's dumb on the seller's part, honestly. That's an easy— Okay, so then does that same logic go to Maria? I'd be like, you'd be dumb to walk away from a deal because of just the $3,000 appliances.

No.

Listen, if you can't figure out a way to put appliances in it and put down 5%, I'm going to walk away and go do a different deal. I'm going to pick out a different house.
And I'll bet you money, good money, that these people give up their used refrigerator. when you when you turn yeah you're a seller in the current real estate market in sacramento freaking california and you walk away from a buyer standing there with money that yeah this is probably not going to happen it's what you're saying stupid on steroids yeah no don't do yeah i'm negotiating this i'm going to play hard and just go with street fighter and say no or refund us here's our deal and it includes the appliances or we'll look for a house where we can get appliances because we we're taking that as a sign from god i'm kidding it's not it's a used refrigerator god doesn't use used refrigerators as a sign it's not in the bible but it's not second hesitations but the uh yeah see what i'm saying i mean that's that's the thing so yes yeah yeah that's um so your prediction is maria's going to come out okay or maria's because you think they're going to say just we're going to leave the appliances cave like last week yeah they're gonna okay now i'm like yeah they're gonna call back in and see if dave's play this game.
Call back and tell me I'm wrong later because I could be wrong. Sometimes I do that in a negotiation, and I'm shocked at how stupid the people on the other side are.
It's like you're going to walk away from a $320,000 deal for a used refrigerator? It's not even $3,000. And washer and dryer.
Yeah, and a washer and dryer. So what could you get for a used refrigerator and a washer and dryer to garage sale?

I mean, come on.

$700, $800 maybe?

So this is now, this is really dumb.

But people are.

People are.

That's the thing.

So, Marie, that's the way I'm looking at it. And I'm often wrong, but probably not on this one.

Give it a shot.

Give it a shot.

Let us know how it turns out.

Rachel's right.

You can call back and take me to task later.

I lost my dream house because of you, Dave.

You can do that.

That's okay.

That's all right.

Thank you. not on this one give it a shot give it a shot let us know how it turns out rachel's right you can call back and take me to task later i lost my dream house because of you dave you can do that that's okay that's all right you can do that it's perfectly legal open phones at 888-825-5225 listen the real estate market is moving it the activity level out there is probably 4x what it was four months ago and that's's people walking around kicking tires making offers.
But it's still not exactly a boom real estate economy. If you're selling a house, you don't walk away over $700 worth of appliance.
But in California, for sure. Yeah.
And at RamseySolutions.com slash real estate, we have the dashboard. So it does, it kind of gives you a pulse of exactly what's going on in the market.
If you are in the market, if you're selling or buying, check it out. I do love this.
Like the median price right now is 400 and oh my gosh, $400,000 is the median price of a home right now. Days on the market, 73 days on the market.
You know, it shows you right now what a fixed rate mortgage 15 years at 6.1. Yeah, but here's the thing.
There's 829,000 houses on the market. That's 25% more houses on the market right now than this time last year.
That's a big number. That's a big inventory lift.
And so they're not going down in value, but there's plenty to pick from. So if you're a seller and you have a buyer standing there with cash, you sell the stupid house.
You know, if you really want to sell your house, if you don't, don't put a sign in the yard. I mean, come on.
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Thank you for joining us, America.

I'm Dave Ramsey, your host, Rachel Cruz.

Ramsey personality.

My daughter is my co-host today.

Des Moines, Iowa is next.

Julia is with us.

Hi, Julia.

How are you?

Hi, Dave and Rachel.

How are you?

Great.

How can we help?

Well, my husband and I have been working the baby steps plan for about nine years. And as

of last year, we hit step seven. Oh, congratulations.
Thank you. We're mortgage free.
We're debt free

everything. We are looking for mentorship and being outrageously generous.
And I was just

wondering if you had any book recommendations or, or how we do that. We tithe, but you know,

above and beyond that, we're just looking for

a little bit of mentorship. Good for you.
Well done. It's a great question.
So I'll just tell you what we do, Julia. I don't know if this is helpful at all.
And I think there are some, yeah, there's some books out there, I think, when it comes to this idea of being generous. But you know from like, above the tithe, how Winston and I have done it, there are organizations that we align with and ones that are close to our heart, meaning there's one organization we've given to for 15 years because it was an integral part of our story and we really believe in what they do.
So we give there. There elements of different times in life where like you know foster care has been big on my heart and we've given to things towards that or Winston's had things so from the organizational standpoint it is always fun to be able to support someone who's doing what you love and what you believe in so we've done we've done it that way and then this year in January we're're doing something different we're just adding in on the giving section of our every dollar app we are putting we put a an amount of money every single month and we're forcing us we're forcing each other we're holding each other accountable to have that money be given away at some point in the month so that could mean like a very generous tip could be part of that money.
It could go towards if we hear something of, you know, a friend's family member, X, Y, and Z, and we're able to kind of just like anonymously give some money there. So we have found more energy in that, honestly, because the organization giving is wonderful.
And it's a, you know, it's great. People just do incredible things.
And with the Ramsey Foundation that we as a bigger Ramsey family are involved in, there's incredible organizations. But there's something about this joy for me of seeing someone or intersecting your story with someone else and able to help kind of in the moment there.
And again, it could be anonymous or not. But giving room for those things to occur.
And what that's done for me, Julia, is it's caused me in an everyday instance just to be looking and I'm more aware of people because I'm like, okay, we have this money that I want to give. And I do as a believer, I'm like, there's something spiritual about it where I'm like, okay, where's the Holy Spirit kind of nudging me here? And I've just found with giving, when you have a pulse on that and you're just interacting with that part of your soul, if you will, it just creates a richer life where I feel like before we were a little bit tactical with our giving, like we gave our tithe and we'd give to an organization.
But there's something about interacting with individuals on a day-to-day basis that, again, that's one element, one way to give. And I've enjoyed that.
I only in february it's only been two months of it but there's i don't know there's just like this warmth to life there it came alive again for us because sadly giving can get stale if you just have it on autopilot right so like part of this is interacting with the money you're giving to so that's that's what winston and i do but dave and dave and sharon do it on a larger scale

well but it's still it's the same um we budget a certain amount just for um and some of this we keep on the books and some of it we don't worry about as far as tax return goes but just random acts of kindness we just run into somebody and um we want to always look across the restaurant and pick up the tab for a person in uniform. You know, we always want to do that.
We always want to catch somebody doing something we love and just participate in it, that kind of stuff. That's just, that's low budget.
It doesn't take a lot of money, but it's, there's a lot of joy and it's a lot of fun. Yes, yes.
And just, you know, we're, we'll look across and see one of our team members and is there with their spouse and we just end up picking up of course i charge that back to the company but

um that's an hr thing but yeah i may buy their dinner if they're lucky enough to land in the

same restaurant i land in but anyway just something like that just catch people doing something right

and um and random acts of kindness just catch somebody where that you know where uh a few

hundred dollars means a lot and i've been in those situations and a lot of people out there have been

I'm sorry. of kindness just catch somebody where that you know where uh a few hundred dollars means a lot and i've been in those situations and a lot of people out there have been so you want to do that but that's a smaller portion of dollars but it's like rachel said it's very hands-on it's a lot of joy in it random acts of kindness we call it that and it's just god money floating around looking for a place to land and so then we we, with the Ramsey Family Foundation, we do not give to like a bazillion different people $500 because that'll drive you nuts doing the tax returns on it.
So instead, we pick just a few and really, really help them. And they're always something that is close to our heart.
And many times we know the people involved in the ministry. We know the character of the people involved.
We know. And the last thing I'll add to that that Rachel didn't bring up is that I learned many years ago because I was giving a lot and we've always been outrageously generous.
It's part of our DNA. And it's the most fun you'll have with money.
So you're going to love this. I love this question.
But anyway, I treat large gifts, like we're talking about, as if I was doing an investment into a company. If I'm going to buy into that company, I'm going to know what their strengths and weaknesses are.
And I'm going to make sure that I'm not participating, I'm not enabling incompetence or bad behavior of some kind. To the extent I can tell, we don't do that.
So for instance, we don't give to organizations, ministries that run debt. Well, duh.
Of course, Dave Ramsey's not going to pay a bank through a ministry. No.
So if you're going to run debt, you're not going to be on our list of donations. We don't believe in debt.
We don't borrow money. We teach people not.
How dumb would it be for us to take our generosity and give it to a bank through your ministry because you wanted to have a building for your ministry instead of being a renter? No, be a renter. So that's one of the things, and that and that upsets people sometimes but oh well i don't know why it's kind of obvious to me but anyway so we do stuff that is consistent with us and we're looking for their uh operational excellence because if you're going to put x number of dollars in there you're investing it god's money into god's kingdom god expects some excellence there just like he know, those that are faithful in little things will be given more to manage.
And so it's not the diligent prosper, not the inept and incompetent. Yeah.
And then I would also say, Julia, and something I feel like we've learned from you guys is as you guys go down this path, I know you're on baby steps, you just guys just got to baby step seven, but as you continue to build wealth, and I'm talking like in the next decade or two, also with your giving, we've put ourselves in a position where we're not the largest giver, meaning that they are so dependent upon us to fund the ministry or what they're doing, because that puts you kind of in these like handcuffed positions where you feel bad that if something changes and you're like, oh, yeah, we're going to give over here. Then you feel like we feel like we can't because we're disrupting such a huge part of their operating budget.
And if it weren't for us, they wouldn't be here. So even from a percentage level, I would not want to be the largest donation that they get and that they're dependent upon you to continue their ministry.
Like that just puts a, it puts a weird dynamic and pressure element to that too. So that's something to about that we had some friends that they ran into that and it was it just gets messy if you want to stop it then you're like oh my gosh am I closing down a ministry because I'm choosing not to give here anymore so it's just another filter to think through if you'll do what you're doing right now and be intentional about the subject of generosity like you're intentional about the subject of getting out of debt or you're intentional about the subject of investing.
You'll do really good at it and you're going to get great joy from it. What happens with some people when they get to generosity, they just go, oh, I'm just going to give it.
And it's up to God to figure it out. And like, no, no, God gave it to you to manage.
And so it's not up to God to figure it out. So I think that person is's going to misuse the money but it's going to be between them and god no no that's not how it works you need to be a grown-up you can't be lazy on the generosity and really hardcore on the investing so um again you don't want to take the joy out of it and you don't want to turn into a bureaucratic nightmare every time you give two dollars but and that's why i like you know the setup of having kind of those three buckets the tithe the organizational that you know and then just a little bit of that mind that we're talking about that you just have throughout the month that you're like i just am going to be aware of people around me and when i feel this prompting like i get to bless them in that moment it's kind of those three buckets that that one ends up being dollar by far my favorite.
Oh, it is like... But it's impossible to do that at scale as an individual.
It's very hard. It'd be like your full-time job.
That's all you did? You'd be like that guy on YouTube. That's a fun job.
That'd be neat. But yeah, I hadn't got that job yet.
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Sue is in Lexington, Kentucky. How are you, Sue? I'm good.
How are you? Better than I deserve. What's up in your world? Well, okay, so I'm 65 years old.
I only have $41,000 in retirement. I went through breast cancer.
Sue, I'm having a real problem with your phone. Can you walk to a different place, please? It's breaking up.
Or take it off speaker if it's on speaker that helps

it's not on speaker is that better a little bit let's try again you're how old okay i'm gonna put you on hold on and they're gonna pick up we're gonna try to get you worked out so we can get you back on and understand you i apologize bell is in denver hi bell welcome. Hi, it's so nice to talk to you guys.
You too. What's up? So we bought a home in May of 2023, and my biggest goal has been to just pay off our home.
I took your class when I was in high school, so about seven years ago, and it's stuck with me ever since. We are only $20,000 away from paying it off.
Yay. And I should be able to make that payment next month.
How old are you guys? 25? I'm 24 and my husband's 31. Look at you.
What's the house worth?

We bought it for $340, and we had to do stuff to it,

but it should be worth close to $500.

So high school teachers, this is what happens when you teach this stuff in high school.

This is your student.

She's now 25, and she's got a half-million-dollar house that's $20,000 away from being paid for.

You're amazing.

24 years old. Way to go.
You're amazing. 24 years old.

Way to go. Cool, Belle.
I love it. You know how weird you are, right? Yeah.
How much do you guys make a year, Belle? Do what? How much do you guys make a year? It really varies. Like right now we're sitting at 200 to 280 depending on our situation that we're in um you guys that's awesome a really unique situation like we're contractors for the state and it just depends on like how busy we are well congratulations okay a fast-forwarding pass bragging on you what What's your question? How can we help? So I remember in the class that I took in high school, it was talking about mutual funds, and if you start earlier, it's better long-term than someone who starts later with a bigger initial investment.
And I remember having a job. I was working at Wendy's at the time, and I was like, okay, I'm going to start doing this when I'm 17.

And I asked the teacher, where do I, how do I do this?

What do I, what mutual funds do I look into?

She's just like, I don't know.

I'm like, you don't do this when you're a teacher.

You're making $50,000 a year.

Why don't you do this?

Because she said that.

Yeah, unfortunately she didn't have any research resources for me and i'm still in that place that i was when i was 17 and i still don't know what to do with we're going to have a lot of extra money once the house is paid off okay rule number one investing is go slow okay rule number two is don't put money in anything you don't understand. See rule number one, go slow until you understand it.
Don't put money in something until you understand it. So this phone call means you're very wise.
Congratulations. You're trying to resource some knowledge so that you know what to do.
Very good, Sue. And then what I would tell you to do is very simple.
I want you to go to ramsaysolutions.com today and click on SmartVestor to find some of the mutual fund brokers that we recommend that we have vetted. And here's what you're looking for.
We have vetted them for being experts and for having the heart of a teacher. I want you to meet with two of them or more and find someone that teaches you something.
You may connect emotionally, relationally with one more than another one, and that's the one you're looking for. You don't want someone that tells you what to do with your money.
And some people in the financial world are so stupid, they think that's what they're supposed to do. They drop their glasses down on the end of their nose and speak down to you.
If anyone ever does that around the subject of money, get away from them. Your job is to understand, go slow, understand before you invest.
And so you're meeting with a smart investor pro not to have them tell you what to do with your money, but to have them teach you how mutual funds work, how to select them. And then based on that teaching, here's some we might look at.
And then you would buy some if you understand them and you look at them and you understand what you've learned. The good news is it's not really that complicated.
Okay. I mean, like you're going to sit down in an hour, you're going to have a real basic understanding and feel very confident and pretty competent about doing your first series of investments and go into it now before you get the house paid off because you want to interview these people.
You're going to be spending the next decade with them. Yeah.
And if you want to, and just from a high level bell, what we teach is 15% of your income going into retirement. So I know exactly the chart that you took.
It was probably the Blake and Jack that shows you compound interest. If you invest at 19 all the way to 65 versus someone that starts at 32 and invests, you know, 65.
And so what that is showing is compound interest, which you're going to get when you invest in things like mutual funds, but you're going to do that within, first and foremost, retirement type funds. So a Roth IRA or a 401k, or you guys work for the government, so maybe like a 403b situation.
But 15% of your income should be going into retirement specific funds. Within those types of funds, of course, there will be mutual funds and all of that of how you're actually investing.
But a smart Vista Pro can walk through and be very specific with your situation too, which is helpful. But just know retirement is the one place you're going to be looking.
So yeah, so Roth IRAs, 403 B, all of that, it's going to be really your first step into the process. But congrats, Bill.
It's awesome. Go slow enough to understand it before you do it.
It's your job to manage your money. This is The Ramsey Show.
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 d, 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.
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Ramsey Personality is my my co-host sue is back with us maybe we got our phone straightened out from lexington hey sue can you hear me now yes can you hear me absolutely that's much better thank you wonderful no problem okay so i am 65 years old i plan to work at least five more years because I only have $41,000 in my retirement account. I have $40,000 plus, give or take, of debt, which I impulsively let a debt relief company take over for me.
I realize now that was a mistake. And that should be resolved within three years of making payments to them.
I also own a home. I mean, I still owe $88,000 on my home.
So I'm wondering if when I become eligible for Social Security in a year and a half, should I, and I'm going to continue working, should I then just try to get my house paid off, double, triple my mortgage payments once my debt is gone, obviously, just so that when I do stop working and I have to live on the small retirement that I have and my social security, at least I won't have a house payment. Is that the smartest way to go? It's not bad.
You're debt-free at that point. And what do you make? With my side hustle combined, it's between 80 and 90.
It just depends on the year. Okay.
All right. Well, what we would normally suggest is get out of debt first with the $40,000, which is what you're doing.
And I want you to accelerate that and do it faster than you're planning. Okay.
I want you to live on beans and rice, and let's do this in two years instead of three. Start trying to figure out what would have to be true for me to do that.
What would I have to get rid of? What would I have to do this? How much do you owe on your car? My car is 13 years old. So a car is not the problem.
Okay. What's the $40,000 in debt? What was that on? An accumulation.
I had cancer a few years ago and basically was out of work and had to live on credit cards here and there. And it just added up and interest took over.
So most of it's credit cards? Yes. $40,000 is credit card.
It's all credit cards. Oh, it's all credit cards.
Okay. Yeah, but it's all but it's all with well here's what i want you to do i want you to work the debt consolidation company i wish you weren't there but you're there now i want you to have them call i want you to save up piles of money and have them call the small one and see if they'll take a deal okay like 50 off or something and then knock them out and then out then then save up some money and knock the next one out and uh yeah and if they won't call them and offer them that you call

them and offer them that so can i do that can i take it back from them you don't have to take it

back you can just call them it's your debt they'll always talk to you right but does that mean i'll

still owe the relief company no i mean you owe the debt relief company anyway you prepaid them

Thank you. Right, but does that mean I'll still owe the debt relief company? No, I mean,

you owe the debt relief company anyway. You prepaid them.
They took all their money up front. No, I'm paying them $1,000 a month.
You're going to pay them $1,000 a month for 36 months. That's $36,000.

Well, that's handling one debt.

I have other debt that they haven't the small ones they haven't touched did you hear me you're going to pay them a thousand dollars a month for 36 months that's 36 000 you only owe 40 000 right the other small credit cards they aren't they haven't oh honey 36 pay off your debt. Oh, you're not paying them that in fees.
You're paying them that in total. Yes, I'm paying them.
Yeah, okay, so you can save up. The $1,000 is not their fees, so you pay the $1,000 anyway, and you call up the smallest one if they won't do it, and you offer them 50 cents on the dollar when you've got a little cash saved.
Okay. Anyway, that's how we can accelerate it.
Then back to your question, I want you to say 15% of $100,000. I want you to say $15,000 a year into retirement.
As soon as the debt is paid off, after the debt's paid off, while you put everything else you can find on the house. But don't pay any extra on the house until the debt is gone.
Don't put anything into retirement until the debt is gone. Once that $40,000 is gone, then the first thing we're going to do is put 15% into retirement, and everything else we can scrape together goes on to the house.
Okay, so I have a question about the retirement. If I'm 65, are there rules around how much you can put into a 401k? No.
Or do I have to do your debt in an IRA? You can put as much as you want to put in. And and as much as anybody else can put in you can do catch-up contributions you can do you can do even more but you don't need to do more you just need to do 15 000 until you get your house paid off so what you're looking for though is you are looking for a roth a roth okay roth ira roth 401k that's that's what i want you to do but none of this until you're out of debt then 15 and% and the rest of it towards the house.
And here's the good news. I think you're going to have all this done like by 71, it sounds like if you do what we just talked about.
And so you have a paid for house and you're sitting with 100, 150,000 bucks and you got social security, not the best of all worlds, but a whole lot better than some people we talk to. For sure.
Hope that helps you. Yeah, that's the right way to go.
Well done. Very well done.
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All right. Today's question comes from Greg in New York.
He said, how is it considered ethical for people to own so many houses? I'm just wondering how as a Christian, this isn't seen as greed. Don't you know that buying up all these homes is what's causing the housing shortage? You know what? Well, actually, Greg, let's just start with not the spiritual part, but your economic understanding.
That's not what's causing the housing shortage. Investors buying up houses is not causing the housing shortage, okay? Period.
So you're just wrong. Now, that is it.
Can we stay on that for just a second? Because that is a thing going around that these massive hedge funds or Blackstone, like all these, they're coming in and buying up. Well, they are, but they don't have a soul.
That's right. Okay.
So hedge funds don't have a soul. Yes.
So because an individual investor, right, for the average person out there who has maybe two or three rental homes right they're on baby steps and they're doing it they're not they're not causing the but blackstone yeah those guys are buying up houses so that's true is that and is that affecting the housing market at all because that is probably is to some extent but not as much as tiktok says it is yeah yeah so um i mean you really don't want your economic lessons on tiktok i'll just help you with that in general but um but anyway you're on tiktok though i know but that that just proves that i'm lacking in judgment but um yeah so anyway the uh uh yeah that's the thing now you know i own greed i own i don't know i don't even know 15 20 houses among about a bunch of commercial real estate as well. How is that not greed? Because I don't own anything, Greg.
I'm a Christian, and that means God owns it, and I'm managing it for him. So I guess you're calling God greedy now.
Okay, so devil's advocate, what would you say if Greg was like, well, Dave, why why do you need so many houses why don't you just give all that extra money i'm managing money for god that's my job well and i've done a good job i've done better job than greg has done and and that's why he thinks i'm greedy well this mindset so this is an extreme right of you know 20 houses thing but this is the same logic of well is it greedy to have more in your retirement than maybe you may not need right like listen if you got three bathrooms you have three more than most people in the world why are you not greedy if you have two cars you have two cars more than most people in the world if you make $38,000 a year, you're in the top 1% of income earners in the world. How are you not greedy? Because amounts don't create greed.
Greed is a spirit. It is not an amount.
And, you know, if you want to be a communist, just be a communist. Don't try to blame Christianity for it, okay? If you want to be a socialist, just be a socialist.
Don't try to blame Christianity for it. That's a form of heresy called Gnosticism that believes that the material is bad, and anyone that has the material, their soul is in jeopardy.
The Gnostics taught that in the first century.

They were heretics.

So if you want to do a little theological rabbit hole, we can do that.

I love the rabbit holes, Dave.

No, that's good.

I think that's it, though.

Greed is not an amount.

It's a spirit.

That's it.

That's it. And so hoarding is not an amount.

The difference in saving and hoarding is intent.

It's not the thing.

You know, I have a collection of water skis, but I don't worship them.

You know, they're stinking antique water skis on the wall.

That's it.

But that's not hoarding.

It's a collection because it's about the intent. This is the Ramsey Show.
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Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships.

I'm Dave Ramsey, your host, Rachel Cruz.

Ramsey personality is my co-host today. Number one, bestselling author and my daughter, Bobby is with us in Chicago.
Hey, Bobby, welcome to the Ramsey show. Bobby, sure, man.
What's up? So I'm 29 years old, and back in 2023, after a harsh talk with my wife to manage her spending, we made the decision to get out of debt, and we achieved that. And 2025 was going to be our year that we were house shopping and going to buy our first house.
And about a month and a half ago, I got a statement in the mail for some credit cards and found that my wife has pulled about three new credit cards in, has maxed them out, and we've now accumulated some new debt.

She's always had a bit of a spending problem, and I thought we got through it,

and we were pretty happy being debt-free.

Just not quite sure how we have this conversation again and how to make this stick and be on the journey of being debt-free and managing our money. How much debt on the three cards? From zero, we've now accumulated a little over $3,000.
Okay. And when you said, hey, I thought we were getting out of debt and saving for a house, and you ran up credit cards, and you knew I hated debt, and we had worked to get out of debt, and you did this, and didn't tell me, what did she say? Well, she's pretty embarrassed but defensive.
Her mother stole her identity at a very young age, and she's never had great finances.

We did a lot to get her out of debt from debt bills accumulated as she was eight years old with TV, utility bills, cable bills, all done by her mother.

But we did a lot to do that, and she doesn't want to end up like her mother.

How old is she?

She's 30 now. how old are you 29 and how long have you been married eight years okay all right um i'll give you an observation of what i think i heard you saying and I want to play it back to you, okay? I think you were using the words we and our when it was only you.
I wanted to get out of debt, so I talked to her about her spending, and I got us out of debt so that I could buy us a house. I had a harsh conversation with her.
I don't think she was involved in any of this emotionally. I don't think she agreed with the decision.
I think she went along with it because she's embarrassed and shamed about her handling of money. But I don't think as a grown-up she stood up and said, I'm going to join hands with you, and we are going to hit these goals.
Instead, I think she's been treated like a little girl again by you. That's the language you were using, and I'm going to play it back to you.
Did you hear that? Yes, I did. Absolutely.
Yeah. And, you know, when he said, or when you said, Bobby, you know, I had to have a harsh conversation with her about it.
And so, so yeah, so I think, I think the real question is number one, kind of what Dave was just proposing of, okay, so looking back now at the whole journey and what you guys have walked through the last few years with money, you know, how has she been through that? And obviously not very on board, or she has some major issues. And honestly, the whole spending addiction world has really exploded in the like, even more recent because of how easily it is to have access so whether it's to credit cards or um you know shopping online all of it just like gambling addiction has gone up with sports betting and all of it so there's such this environment bobby that she's having to honestly fight a bigger battle now today in 2025 five than even in previous generations.
So my question would be to her is, what's going on with her? What is it that's causing this to happen? Because we see it all the time that there is levels of really deep pain, and the medicator is the spending. And so I'm curious, and with her backstory of her mom and not trusting fully the adult in her life and the adult in her life used her completely and stole her identity to mismanage money on top of that, right? Like there's a lot there for her.
And so does she recognize any of that or is any of that in the conversation? Yes. You know, we sat down early on when we wanted to buy a car together and people would like to finance something and she didn't know anything about credit and all that.
And that's where it was found. And she was very upset by that.
And it came as far as she was actually arrested on felony charges for deceptive practice for a bad check written by her mother and luckily found not guilty.

And that's where the changing point in our lives were to get out of my debt, her debt.

How long ago was that check thing?

The check was made when she was 18, still in college. I mean, when did this charge come? Charge came in 2021.
Four years ago? Yeah. Okay, so this is four years in the past, and apparently we've gotten mom off the stealing pattern.
Mom's not stealing her identity anymore, at least as far as we know, right? No, we're completely locked down with our identities. Good.
Okay. So all of that's in the past.
She didn't do anything wrong there. She was a victim there.
Then that changes gears when she runs up debt in contrast to what you guys have talked about.

And so Rachel's right.

It could be an addictive behavior. It could be coming out of pain.

It could be coming out of you just controlled everything and she didn't have a vote,

and this was her only way to have a vote.

So she just ran off and did whatever the flip she wanted to do

because you tell her everything to do and she doesn't, you know, she's saying, her little girl's saying, you're not the boss of me, I'll show you.

And sometimes people react that way too.

So because I think you told her what to do, I don't think you got agreement.

There's a difference.

Would you agree with that, Bobby?

I absolutely agree in a half and half scenario. I know I can that kind of tendency you have on the phone with us yes okay we heard it that's why that's where it's coming from i'm not being mean to you i'm just saying that you know what there's a difference in getting people to buy into a vision and go forward that's leadership there's a difference in a leader and a boss.
A boss has got a cattle prod and tells you what to do. It's a stick and no carrot.
And that's in business, but it's also in ministry. It's also in your marriage.
And so versus getting, I'm going to get collaboration. We're both going to sit down and talk about the pluses and minuses of debt.
We agree we're going to get out of debt because it's the fastest way to build wealth. We agree we're going to get out of debt because we want to buy a house.
Not Bobby wants to buy a house. And he told her what to do so it could happen.
I kind of think that's what happened, Dave. So I'm not blaming you for this.
She shouldn't have lied. She shouldn't have deceived you under any circumstances.
That's wrong. And so you guys probably need to sit down with a good marriage counselor, ask them about a possibility of a spending addiction.
But also let's get some different patterns to get agreement and sell a vision for the future. The Bible says where there is no vision, the people perish.
Let's both buy into where we want to go, not where you tell her we're going. There's a difference.
This is The Ramsey Show. 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.
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Simply head to the show notes and click in the link titled, Are You On Track With The Baby Steps? Take a quick quiz and we'll tell you exactly where you are. Oh, and we'll start to tell you what some of your next steps are.
Riley is with us in Jacksonville, Florida. Hi, Riley.
Welcome to the Ramsey Show. Hi.
Thank you for having me. Sure.
So here's my question. Would a budget of $20,000 be unreasonable as a college student? A budget for what? For $20,000.
$20,000 to do what? what to get married to have a wedding oh a wedding wedding budget yes oh cool oh well congratulations yeah when you get married um we're hoping to get married by 2027 we kind of have to um to be stationed together as naval officers since we're both commissioning after 2028. All right.
So you got like two years. Yes.
But you guys are in college, so you're thinking about getting married after or something? So we have to get married right before we graduate. Since we're both in NROTTC um our requirement is that we commission straight out of graduation um and you graduate you graduate may of 27 yes so we we have to be married that summer because it'd be kind of hard to plan um a wedding when we're away from home sure okay yeah and I was just wondering what the why you guys are waiting but're in school, so you're going to wait until you're toward the end of school.
Yes, that's right. So basically two years.
Okay. And while you're in school, are you earning an income? We are.
He's earning more than I am. I'm currently just getting a stipend, so that's about $250 a month.
It'll increase slowly, so by my senior year, I'll be getting $400 a month. He's getting that as well and working.
I think his annual income, he's trying to hit under $15,000 just so that he can stay under a certain tax bracket for his parents. Riley, are you guys paying for the wedding? Yes.
so him and I will be paying for the wedding

next week certain are you guys paying for parents riley are you guys paying for the wedding uh yes um so him and i will be paying for the wedding but my parents are going to be giving another 5k um by the time i get to my junior year will you guys have twenty thousand dollars saved oh absolutely currently we both have um combined a little over $30,000. Saved? Like total.
Where'd you get that? Not just for the wedding. The numbers you gave me don't equal that.
Where'd you get that money? So that's just from savings throughout lifetime. I'm a huge saver.
Okay, so you have $30,000 saved today, which is your total life savings um you're going to add a little bit to that but you're not making much money i mean you're making three or four thousand dollars a year two years okay and you're eating during that time so um you know you've got you're not you're not going to have you're not going to do a bunch of addition to this 30 000 bucks so the answer to your question is the answer to your question is is 20 000 too much to spend on a wedding the answer is no the quite their answer is always relative to uh if you've got 200 000 and you make 300 000 a year 20 000 wedding is perfectly reasonable if you have,000 to your name and you're going to spend two-thirds of your net worth on your wedding, that's probably too much. What's going to be your income when both of you come out as commissioned officers? We'll both be making about straight out, I think it's about $90,000 each.
Yes. Okay, good.

So now we're talking about somebody making $180,000 a year fresh out of school,

and they've got $30,000 to their name.

Do they spend $20,000 of that on the wedding?

But the good news is you're used to living on nothing,

and so you could probably save $20,000 in three months

once you're making $180,000. Agreed? Yes.
That's $15,000 a month. Follow me? Yeah.
Yeah, I mean, what I would say is this, okay? The average wedding in America today is $28,000. The average household income is $78,000.
So it's about a third of your income is the average, is one way of measuring it. That's the average.
Now, do you want to be above average or below average on your spending? That's up to you. Anywhere in there.
Pay cash, number one. Just listening to your story, I think I would say, yes, I'm going to have a $20,000 wedding, but I'm going to do it with new money that I make after graduation well they have to get married before graduation is what she's saying that's right before you have any income is that right riley you did say that you did i'm lost okay my plan just fell apart um okay so riley here's a question i don't know just trying to get creative here could you guys go get married have your family have a great fun dinner out and that be the quote-unquote marriage right you're you got married and then six months later are you you guys be stationed away I'm just trying to think like is there a way to do a really beautiful nice wedding that you really want a celebration yeah and it be and it be a few months later and and that's what I thought as well the only concern is we have no clue of knowing our timeline so it could if we do that we could get married by chance three years later depending on both of our deployments yeah oh like having the wedding because you guys could be deployed pretty quickly yes yeah i hear what you're saying yeah yeah yeah but if you're married do they separate you on deployment um so our deployments could be at different times.
They try to keep us on the same base, but since we're both college students and under the program, there is a chance that for a year or two that we would be on different bases. Okay, all right.
But we're trying to prevent it as quick as possible. Well, thanks for your service to the country.
Okay, If you spend $20,000 and you, and you have 30,000 and you have basically no income and you get married and two months later, you start making 180,000 a year. That is dangerous, but it's not completely suicidal because you're spending most all of your money and you don't have any money.
You follow me? Yes. But you're getting ready to start this huge income unless something really goes sideways.
So yeah, I would not spend a dollar more than that, and I would push that as close to my $180,000 income starting as is reasonable. Okay.
I realize you've got to do it before the income starts, right? Yes, sir. sir okay but i want to push it right up next to it because i don't want the gap between you having ten thousand dollars and sitting around you only have ten thousand dollars left you're married and it's six months later and you still got no income we don't want that game that's a bad game you follow me yes sir okay that's what we're looking for i just i just don't want you living on the edge kiddo life's too short i agree you know that was why i called you're a saver you don't you don't want to live on the edge yeah yeah so i mean like if you guys get if you do the wedding in june and you graduate and your income starts in july or august i'm fine with that you follow me i'm not fine.
I don't love it, but at least you're not completely stinking broke. You don't have four kids and you're trying to keep a household running.
You guys can do it. Yeah, and then you guys got a pinky swear and spit shake with each other.
We're not doing nothing until we build up a big old emergency fund because I assume you have zero debt right yeah absolutely no debt okay

that's what i started this whole conversation with that assumption but um yeah i think you're i think you're on track and here's the good news riley you're going to be okay because you're thinking about it and because you're a saver which means you're being you're concerned about overextending because your nature is that where rachel is a spender i'm a spender our nature is Woo-hoo!

Let's go buy it.

And we have to guard against that nature to be wise and not get up over our skis and fall on our face. So I think because you're asking the question, that tells me you're probably going to be okay.
Because you're a saver, you're probably going to be okay. If your fiancé is on board with those two things.
And And I'll say this too, that the income is pretty guaranteed. It's not like, oh, we're going into sales and I think we're going to be making X, Y, and Z.
Like it's a, you know, you know the salary ahead of time. Yeah.
It's laid out pretty black and white. You know what's going on.
So that. Straight in the officer.
Yeah. That predictability is helpful in the scenario too, Riley.
So that's great. Sharp, young people serving, serving their country.
I know. Thank you guys so much for that.
Very cool. And congrats.
Have fun planning it and everything. It's going to be fun.
It's very exciting. Very cool.
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Pre-order today. In the lobby of Ramsey Solutions is the debt-free stage.
And if you're standing on it, it usually means one thing, that you're debt-free. And that's where Patrick and Chelsea are.
Hey guys, how are you? Hi. Hey Dave.
How are you? Welcome. Where do y'all live? Louisville, Kentucky.
All right. Well, welcome to Nashville.
And how much debt have you two paid off? $250,000. All right.
How long did that take? Just over five years. Good good for you and your range of income during that

time uh started around 150 and up to 280 good for you what do y'all do for a living we're small business owners we own a franchise a security franchise and we just started a consulting business on the side very good so you're killing it yes congratulations well done so five years 250,000 did you guys pay off your house? We did. We did.
Look at that weirdos. A couple of weirdos.
I love it. How old are you two? I'm 39.
And I'm 37. All right.
Mid-30s to late 30s. I like it.
What's this house worth? Probably about $550,000. Good for you.
And how much in your retirement accounts? $360,000. Okay.
Bumping up on, well you are millionaires yes baby step millionaires way to go guys and you're not even 40 that was our goal that was our goal i love it well done okay how does this story start how in the world do two people like you become weirdos by the time you're 40? Well done. Well, so we've always kind of lived by your principles, avoided consumer debt.
When we started our business, I had the same mindset, you know, stay away from debt as much as we can. We moved cross country from San Diego from my previous job in federal law enforcement, started our security company from scratch, you know, working long days, long hours.
I think it was seven months in the beginning where i didn't have a day off uh she's at home with the kids just fully supporting us and yeah we make a great team and we're we're so thankful for the position we're in now man so security as in like alarm systems and cameras more security guards you know for apartment complexes walmart so you're utilizing your law enforcement background yes okay i got So smart. smart oh very good yeah that's a big deal yeah recession resistant is like what we like to call it what'd you say recession resistant definitely so good actually recession can cause it yeah it's true that's fun how many kids do you guys have we have two okay how old are they luke is five and ryan is three okay they're keeping us young man so you had babies during kind of all of this i mean at least the second one during this process yeah starting a business and leaning on the debt no stress yep yeah no stress no big deal just lean in for five years get it done get it done well done so how did you connect up to this ram? So we've listened to the show for years.
I've always, like I said, lived kind of by the principles. No consumer debt.
We just really wanted to get rid of this mortgage as fast as we can. I hated seeing the amount of interest that we're sending to the bank just for them to lend us some money.
So our goal was to pay it off by 40 and we achieved it by a little over a year. So it was great to set that goal yeah i'm a little closer she's got three years by the time he got old yeah okay good so where'd you come from in california san diego huh okay so when you moved to louisville and you buy this house you had to go oh this is so cheap right i could pay this off that had to be part of the emotion yeah the the difference in the real estate markets are pretty significant obviously our house has gone up a little bit since uh you know 2020 and and the last few years but um yeah that the just being able to pay off the the loan where we have no debt is just there's so much peace behind that we love it the grass feels different grass feels different.
It does feel different. And the other thing, small business people are the only ones that grasp this because you're in sales every day, and you have, you know, the weight is off your shoulders, and you suddenly start making different and better business decisions.
Because, you know, when you're early in business, you'll take any client. And now the problem of clients, you clients you're like yeah i think you need to go see my competitor you're high maintenance i think i think i'll let you work for somebody else yeah yeah you're not as desperate when everything's done right you end up making more money because you're because everything's just peaceful and you know it's a different it's a weird thing so way to go you guys i'm so proud of you well done you guys okay so in this process because you guys started with no i mean i think no consumer debt anyways because you guys have been following this for a while so when the five years kind of began was it that hey we're making more money we're just not going to increase lifestyle and we're throwing extra at it like what was your plan of action for people listening that okay that's our next big step where did you feel like you were still intense or do you feel like no we were able to like live and breathe but we just didn't up our lifestyle majorly what did that look like for you guys i'd say we did increase our lifestyle some but not nearly as much as we could have and i mean we also finished our basement we had a new roof that we put on the house so yeah lots of expenses that you know we were still having to you know live but we didn't really have extravagant lifestyle we did

take a nice trip when we finally did pay off the house so we went to the Maldives so that was uh

that was our celebration trip but yeah we've we're just thankful to be able to be able to be

in this position well you're making 150 to 280 and you average 50,000 a year for five years

so you you were able to do some stuff there's wiggle room in there yeah yeah that's the proper

way to do it so very well done who was cheering you on anybody yeah I would say I mean our

Thank you. So you were able to do some stuff.
There's wiggle room in there. Yeah.
Yeah, that's the proper way to do it. So very well done.
Who was cheering you on? Anybody? Yeah, I would say, I mean, our friends and family have always been huge cheerleaders in each other. I mean, working together is not for everyone, married couples.
But I feel like we make a great team and we kind of offset each other. And yeah, when he started, he worked seven months straight, like you said, no days off.
He worked nights. He worked during the day doing sales.
And I just was trying to be there to be the grounding person because I also had a full-time job. So I was also supporting us with my full-time job.
So yeah, we cheer each other on too. Yeah, well done.
Well done. So good.
So what do you tell people that are listening? What's the key to being almost 40 years old? You now have a paid for home. It's worth $5.50 and zero debt of any kind and including the value of your business, have a net worth well in excess of a million dollars.
What do you tell people the key to doing that by 40 is? I would say just do something. You know, get control of the person behind the mirror because the person in the mirror, you know, most of it's your behavior.
And if you can get control and spend less than you make, you know, get on a written budget, you know, you can set goals and achieve them sooner than you think. And of course discipline just being um being living living like you like no one else like you like you say we always we always kind of repeat that to each other like we we want to live like no one else so that later we can live and give like no one else and here you stand yeah you did it wow how's it feel to not have a payment in the world? It's amazing.
It feels great.

It feels great. A side note.
So you always talk about how the grass feels different, you know, walk through your grass barefoot. So the day that, you know, we made the final payment on the house, I decided I'm going to walk through the grass barefoot.
You actually did it. We did get 10 inches of snow on that day.
I feel like I'm doing it. I'm doing it.
Yeah, so after I shoveled the driveway, I took off my boots and went for a quick little brisk walk in the grass. In the snow.
It did feel different for sure. Because it's cold! Wow, that's hilarious.
You could have waited until spring. Really? No.
It's like an intense cold plunge. You were tired's right you did oh man across coals here good job man that's fun well done very proud of you guys you're excellent excellent weirdos very cool all right patrick and chelsea not even 40 along with luke and brian whose family tree has been completely changed They're here, they're here.
Oh, they're here! Oh, they're with us! I didn't know they were here! Oh, man, how great. These guys have no idea how great their life is because their mom and dad are heroes.
You've completely changed everything for them and those grandkids that'll come from them. Excellent stuff.
Very good stuff. Patrick and Chelsea.
Luke and Ryan.

Louisville, Kentucky.

$250,000 paid off.

House and everything in five years.

Now with a net worth in excess of a million dollars.

Baby Step Millionaires at 39 and 37.

Count it down.

Let's hear a debt-free scream.

Three, two, one.

We're debt-free scream. Three, two, one.
We're debt-free! Yeah! They did it. I heard Luke.
Luke did good. I love it.
He's ready, man. Oh, so sweet.
He's great. So good.
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.
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Open phones at 888-825-5225. Investing.
When I say the words, some of you are immediately intimidated. Dave, I can't invest.
I don't know what that even means. It scares me.
I understand. And the good news is it's not as complicated as some of the goobers in the financial world make it sound.
It's as if they need to use $10 words so they can charge you a commission. So we teach investing where everyone can understand it and do it because everyone should understand it and do it.
And we're going to go even deeper for you super nerds. We're going to do our Investing Essentials virtual event March 4th and 5th next week.
Tickets start at $1.99. Now, this is two nights.
It's a two-night event. The first night is several hours, a couple of hours plus on investing of all kinds.
The second night we're going to teach primarily on real estate,

and I'm going to open up how I've learned to do real estate investing in detail, and it is

nerdville. If you're having trouble sleeping, you'll not have any trouble after this.
I'll put

you straight to sleep. It's really nerdville, but if you nerd out on this stuff like I do,

if you like doing the spreadsheets and the math and so forth, you will love this event, Investing Essentials. Both nights are going to be where everybody can understand it.
I'm kidding around, but it's really stuff I don't get into much. It's only the second time I've ever taught this much depth on real estate investing.
And I own several hundred million dollars worth of real estate. So several hundred million dollars worth.
So we're going to get into that. It's not a theory is I actually freaking do this stuff.
Okay. And I'm not teaching you to do something.
And then I go do something different. This is what I do.
And then you can do it or not do it. It's up to you.
So get your tickets at Ramsey solutions.com slash events and click the link in the show notes if you're tuning in on podcast or youtube this is a great you guys did this event last year and it and the only time we've ever done it was last year they loved it loved it so honestly it really is it's a great deep dive into the subject so george camel is like he's nerding out from now on he is this is like this is like his uh his special spiritual gift. It's like his hobby.
It's what he likes to do. George, get a life.
He is really enjoying this. It's really, he's going to, and he's really good at it.
It's going to be, he's going to, his part will probably be better than mine, but it's pretty incredible. All right.
Sarah's in Philadelphia. Hi, Sarah.
How are you? I'm good. How are you guys? Better than I deserve.
How can we help? Okay. So I fell for the lovely money trap of taking out a lot of student loans.
And I had 85,000 in my name and 50 were through parents plus loans through my parents. Now I did tell my parents, of course, I would help them pay off whatever they put into their name.
So I've been working really hard for the past eight years, and I paid off all of the student loans that were in my name. So I have no debt legally in my name.
But when I went to tell my parents about it, like, hey, I know I've been throwing money at you guys for this every month, but I'm really going to start to focus on it. They kind of told me that

they combined my loans and my siblings' Parent PLUS loans that they took out for them

into one big student loans pot. So I am kind of, I was kind of shocked that they said that

because I've been paying towards it. And instead of paying towards mine, I've kind of been

Thank you. So I'm kind of, I was kind of shocked that they said that because I've been paying towards it.
And instead of paying towards mine, I've kind of been paying towards everybody. No.
So now I'm like. No.
No. No.
And at a point where like I don't know what to do. You did not make an obligation.
Okay, number one. Stop.
Number one, you don't have any legal obligation at all. You do have a moral obligation because you promised to pay your part, but you did not promise to pay your sibling's part, correct? Correct.
Okay, so how old are you? I'm 29. Okay, how much have you paid towards the loan that your parents have? I've paid almost the full amount of it, like the four interest.
I've been giving them $1,000 a month for like almost eight years. Okay.
All right. $1,000 a month for eight years.
Is that what you said? Yeah. Okay.
So why would a $60,000 loan not be gone?

The interest rates were high.

What were the interest rates?

They were at like 7% to 8% per loan, and it was a few different loans.

Is the $1,000 a month steady for eight years?

Yes.

Yes, that's correct. And you know what the original balance was, right?

Yeah.

Okay.

All right.

I'm sorry. steady for eight years? Yes.
Yes, that's correct. And you know what the original balance was, right? Yeah.
Okay. All right.
So, and you're how old again? 29. Okay.
Are you married? No. Okay.
Do you have an investment advisor? No. Okay.
All right. Because it's a simple math, it's a financial calculator.
I don't have one laying in front of me. I could almost do it on the air, but probably not.
But we could simply say, all right, $60,000 at 7% and $1,000 on that. What would be the remaining balance after eight years? I think it's going to be zero.
I know it's coming pretty close, which is why I mentioned it. And so I don know i don't owe you anymore mom and dad i've fulfilled my obligation how did they respond sarah because they know how much you've been paying and and yeah did they say oh yeah yeah your terms almost up or like what you've given us or was it pushed back to you kind of just like dropped the bombshell like oh well this happened you know like to make payments lower, a few years ago we've fallen.
It doesn't matter. Yeah, but did they acknowledge the amount of money you've already paid them? They did, but now it's like they're treating it like it's different.
Like a one big lump, yeah. Okay, so that's a relationship issue.
So mom and dad, here's the deal. I did not promise to pay anyone else's loans.
I promised to pay mine. Mine was $60,000 at 7%.
And with $1,000 a month for eight years, the remaining balance would be zero or would be X. And so I have $2,600 more to go.
And then I'm not paying you anymore. I've met my obligation to you.
The fact that you chose to consolidate it for a smaller debt and my brother has chose not to pay his does not affect my deal with you. Yeah, that's pretty much the exact scenario of my siblings not being able to pay theirs right now.
So you just need to get real clear. Number one, you need to get the exact math done.
And I can't do that for you. Have it visual, have it on a sheet of paper, like here's exactly do it.
Go online and you can print it out. Okay.
You can just go online and find a calculator online and put in six or seven percent, $60,000 and $1,000 a month for eight years. And what is the balance? And you can put, you can do it online in, in probably about 45 seconds.
I, if I was smart, I could do it right now, but I'm not. So I used to keep a financial calculator here on the desk in the old days, but it's, I think your balance is going to be zero because you're going to be up over $90,000 you've paid in, including interest.
That should be at zero, okay? Because we're talking about 45, you know, 96 months that you paid in, about $96,000 you paid in, and 7% interest. So you probably have overpaid, but I wouldn't worry about it, if you've overpaid relationally.
But I would just say I paid in 96,000 dollars including interest that means I don't owe anymore sorry mom and dad the rest of it's on you and bro I did my part I did my part but you can use the actual math and show it to them yeah and please say bro yeah just since a boomer since I made a bad dad joke no it's great no no no sarah is this um is this going to be a hard conversation or do you like when you have the math and you lay everything out do you have the type of relationship that you feel are they going to understand yeah how is that going to go oh god i think it's going to be a tough conversation only like, they've done a lot of other things for me, you know?

Yeah, they changed your diaper, but you don't have to pay them for that.

That's called being a parent.

Right.

Now, they fed you, but you don't have to pay them for that.

That's called being a parent.

So this is a mess they have made.

And they're very lucky, honestly, as Parent Plus holders that sarah actually has paid 96 000 because 90 of the time i take this phone call it's the parent griping because the kid has never paid a dime after they promised they would and they're stuck with a big old hairy parent plus loan but in this case mom and dad are the ones that stepped in it. Well done, Sarah.
And they got some on their shoe. Morally,

you've done everything to the T. You don't have to do any more.
You're free. I wouldn't do any

more. You don't owe any more.
But run

the numbers to be 100% sure.

This is The Ramsey Show. Thank you.