Get Out of the Cycle of Debt and Choose Peace Instead

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. Dr.
John Deloney, Ph.D. in counseling, number one best-selling author and host of the Dr.
John Deloney Show on the Ramsey Networks. He's my co-host today.
Open phones here at 888-825-5225. Well, it's official get to start saying Merry Christmas right I mean some people start just before Halloween and then others start right after Labor Day but we're I think we're close enough now we can officially say Merry Christmas it was the day after Thanksgiving my son and I were going hunting it was 4 a.m.
and every channel had Christmas music on it and I was half asleep and i said i can't take this and he said dad in his half asleepness it's the happiest time of year isn't it it's too early for christmas music too early not even up todd's in boston mass hey todd welcome to the ramsay show hey dave thanks for having me i really How can we help? So, um, I just learned to be a few days ago. My sister listens to you religiously and told me I should call you regarding my situation.
Okay. So earlier this year I went with a debt settlement company to handle much of my debt, which is primarily student loans and credit cards.
Um, unfortunately just recently I went into default with one of my student loans, and that is through Navient, which is now Muhela. And what they offered me was something that's outside of my budget.
And my father is a co-signer on the loan as well. And I'm just trying to find out ways of how I can negotiate something with Navient to help me make the payments that I can afford or what other avenues I can take.
Wow. So this is a federally insured student loan, right? This is a signature student loan.
They all have signatures. Is it private? No, it okay all right good news okay all right um well lucky for you uh we have actually a sponsor that refinances private defaulted privately held student loans so they'll buy it from navient and um refinance it and set it up where you can make the payments.
You got a pencil? Yeah. One moment.
Yeah, go ahead. All right.
Y-Refi, the letter Y-R-E-F-Y dot com. And so I'll go ahead and give you the mechanics because they've been advertising with us for a while.
We send people over there. But the mechanics are they buy the loan because it's defaulted at a discount.
And then they – so they don't have full face in it. They pay less than that because, you know, because you're not paying it.
You're not creditworthy, right? So that's not a loan anybody would want to buy that the guy's deadbeaten on it, right? So they're going to buy it at a discount, and then that enables them toructure it and uh put an interest rate on it that's low and they still end up making good money on it but you get the deal of the century so it's a win it's a win-win for everybody even navient and i really don't care about navient i never would i try to help them win with anything but um but it turns out they get money on a loan that they thought was bad, so they're happy. Y-Refi buys it at a discount, and then you are paying them a reasonable interest rate, so they're happy, and you get a payment you can afford, so you're happy.
So that part's taken care of. Now, the rest of this, basically what these debt settlement companies have done and do, and they did to you, is they quit paying any of your payments.
So all of your credit cards are in default, right? Most of them, yeah. No? They should all be.
Did you pay payments to the debt settlement company? I did make payments. Correct.
Yeah. How many? Since May.
So I'd say probably close to six or seven payments. They haven't paid any of your credit cards since you signed up with them until they work a deal with each credit card company.
And again, they're in default, so they're working a bargain with them.

Correct.

If you weren't in default, they put you there.

Correct.

That's why we tell people not to use this company because it actually does more harm

to your credit than even filing Chapter 13 bankruptcy.

So how many credit cards do you have?

Right now I have four what is what is the total

balance of credit card debt uh with all those just shy of 35 grand okay and what do you make sir

uh i make per month net pay i'd make uh just over six grand a month okay are you married

i am okay does she work outside the home she does what does she make

Thank you. just over six grand a month okay are you married i am okay does she work outside the home she does what does she make uh she probably makes less than what i do i'd say about three grand okay so you got like 10 grand coming in a month so we ought to be able to clear up 35 pretty quick once we get our crap together agreed correct okay so yeah this is awesome so what what you do quit paying the debt settlement company just just opt out no more money i'm going to take the naviance i'm going to take them to y refi and i'm going to take these four credit cards and work on myself now here's what you're going to have to do because they're all in default you have to lump sum no payments lump sum settle each one of them so what i want you to do is i'm going put you on a budget you and your wife working together you're married and we have to clean up this freaking mess that we have we're going to get the student loans on a payment we're going to quit making payments to the debt settlement company we're going to live on beans and rice rice and beans because the stress of this is overwhelming and it needs to be out of my life i can't build wealth in the middle of this and I make 10 grand a month.
We ought to be able to win, you know? Yeah. Okay.
So it sounds like you're with me on this. Good.
So now we're going to get you on a budget. We're going to sign you up for a financial, for financial peace university and show you how to handle money.
I'm going to put you in every dollar. Now here's the way you work the debt, the debt off on the credit cards.
Take the smallest one. What is it? Do you know? Yeah, the smallest one is just shy of four grand.
Okay. So you need to put together in your budget $1,000, $1,500, and call the smallest one.
Understand that credit card collectors are the dumbest humans on the planet, and you can tell they're lying if their mouth is moving. They would have a good job if they weren't.
That's a horrible job. It's a high turnover job.
So you're going to be talking to people whose parents are cousins, all right? Okay. You got it? I mean, you've got to understand this because it's warfare.
No, I do. It's warfare.
No, no. And so you're going to try to talk to them, and they're going to blah, blah, blah, blah, and you're just going to have to hang up.

And then you've got to go talk to them again.

So I'm offering you $1,500 as settlement in full,

and you keep beating that drum until you get them to take it and say,

if you don't take it, I've got other cards.

I'm going to take this money and go to one of the other cards.

So you've got about five seconds right now, four, three, two. Are you going to take it because I've got other cards.
I'm going to take this money and go to one of the other cards. So you got about five seconds right now, four, three, two.
Are you going to take it? Cause I'm hanging up and you just got to have some fun with this. Okay.
And it's going to, it's going to take like 10, 15 phone calls per card and you'll settle them for a quarter on the dollar. Lump sum do here's the two rules.
Remember these two rules. Do not give them any money unless you have the agreed amount in writing.
An email is fine. It's got to be in writing from the credit card company or from the collections agency, whichever it is, that they are accepting $1,500 as settlement in full on this $4,000 debt.
And then that's rule number one, no money, not in writing, no money. They lie.
The second thing is no electronic access to your checking account. We'll just take it from your account.
They'll take 4,000 out of your account. No, no.
You send them a prepaid debit card that has just that amount only on it. And then you go get a different prepaid debit card for the next one.
And you keep them out of your account and you don't deal with them except in writing and you treat them all like they're crooks because they are. Hope that helps.
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Dr. John Deloney Ramsey personality is my co-host today.
Number one best-selling author, PhD in counseling. Lucy's with us.
Lucy's in Richmond, Virginia. Hi, Lucy.
How are you? Good. How are you? Better than I deserve.
What's up? I got a real head-scratcher for you. I was wondering if you could give me advice on a financial decision that I'm trying to make.
I'm a single mom of four children, and I wonder if I can purchase a home with going through a divorce.

Okay, so you're in the process of becoming a single mom with four kids. Yeah.
What do you make, hon? I'm a registered nurse. Good.
I make like $50-plus an hour, but I'm working PRN now since I'm going through marital issues and so forth. Yeah, I got you.
Anyways. So obviously you all are separated.
Yes. Has the divorce been filed? No.
Why? because i have an appointment next week with the other lawyer because the lawyer said it was a conflict of interest to hear my case. So I'm presuming that he has got that lawyer and so I'm going through another lawyer and start all over again.
Yep. Okay, good.
Yeah. So no, you should rent until you get this final because if you buy something in the middle of the divorce it's going to throw that property into the middle of the divorce discussion because you're still married yes and so you need you need to wait until the divorce is final okay all right so the divorce final within whatever and i have another issue i own two other properties because i have read your book and i've paid off my mortgage in five years and what do i do with this property that i live at now i paid over 150 000 i paid it off in eight Well, is your husband going to have a claim to it, your ex? You're going to split the estate? I'm going to try because it was my money that went into the estate.
And I know that you say marriage, you equally 50-50, but he didn't contribute anything to my financial business. That will depend on Virginia law, and I don't know the law in Virginia.
Okay. They may force you to split it with him anyway.
I don't know. But obviously you're going to ask for and have receipts improve that he didn't pay on it, you paid on it.
And so you didn't own it before you were married, did you? We bought it like three months after we got married. Yeah, okay.
So it's marital property, and you'll have to talk to your divorce attorney about that. So what I want you to do is get clear of the divorce, and then you'll know what you own, and you'll know how much money you've got as a result to put into the next deal.
So you could take that house and the other property, sell them,

put the pile of money you get from that out of the divorce in a pile,

put some other money with it, and buy you a house.

But you need to be clear of this so that the same problem you're getting ready to have with this house,

you don't have with the new one, which is arguing over it.

Well, that's the head-scr scratcher i live right beside of his parents i don't care yeah and i'm ready to get out of it but i want my money that i put into it i'll probably never see you need to see a lawyer honey that's right and i'll tell you one of the things that always trips people up when they enter into a divorce is they have an imaginary number that they think they're going to get.

And it's almost never that number.

It's almost never even close to that number.

And so then people think they're getting screwed.

And really, they made up a number.

So in your head, like you're talking to me and Dave, you bought a house as a married couple.

And you might have married a deadbeat who did nothing and he was a joke and a crook and all that. But the court will say, y'all bought that house together.
And so in your head, you might be thinking, I get $150,000 in this sales and I'm just going to go buy a house. You may get 65, you may get 75.
And if you, I'm just telling you, if you think that otherwise yours – You don't know, honey. You don't know until this is done.
So you're going to cause yourself more angst by imagining what comes next is what I'm saying. You just don't know until this is done.
So the answer to your question is you can either sit right there until the divorce is final, and the divorce decree will tell you – the judge will tell you what's happening with the house you're living in and the other property. And then based on that, I'm selling that house.
If you've gained control over it, you obviously don't want to be next door to his parents. We want to leave and we want to take our cash and go start a life.
Chapter two. That's right.
Encore. Yeah.
And I think the, man, if I could tell people one thing when they're going through something hard, whether it's a divorce, somebody just passed away, is slow down.

Don't do anything for six months.

Don't do anything for nine months.

Now, if you've got to get away from mom and dad's house, go rent a place, but don't do anything permanent for six to nine months.

After.

After.

But in the middle of it right now, you need to do something.

You need to go get an attorney, and you need to get this filed, and you need to start learning about what law is is in your state and your attorney can tell you there's zero chance you're getting this or he or she can advise you i think we got a real shot at that they'll tell you what what's going on but you're going to get new information that you don't have yet today and you do not need to buy a house in the middle of this if you need to move out of that house because of relationship problems now, then just go rent the cheapest thing you can rent until you get the other side of the divorce. Because here's what happens.
We get our, in divorce situations, a normal human being will get their emotions woven into and create this false sense of justice in the math. That's what John's talking about.
And it doesn't work that way. A friend of mine that does divorce recovery work and counseling says a divorce turns a marriage into a business transaction.
It's all about pluses and minuses. Plus for this asset, minus for this debt.
And it's about pluses and minuses and 401ks and what ends up on which side of the balance sheet, the ledger, and then the judge signs off and then the money is dispersed. And all the emotions and all the what's right or what's wrong and the justice and all, it doesn't really come up usually.
It's kind of frustrating. Yeah.
So that's the deal. So you've got to walk through it.
So please get the other side of this before you buy something. If you've got to move, if you don't have to move, sit there.
But if you've got to move, then go rent something, rent the cheapest thing you can rent until you get the other side of this. But go get an attorney like yesterday.
I've seen this several times, Dave, where somebody has an imaginary number about what they think they're going to get. And then they do what she's talking about.
They go buy a house based on in a couple of months, I'm going to get $200,000. And then they get 20.
And you get a check for 60, yeah, or 40, and you're up a creek, right? Yep. So just get after it.
And the other thing, Dave, I love that you mentioned this. It seems to be a new trend.
This is new coming up over the last three or four years. It's people getting divorced, but not trying to do it just handshaky.
Like we're just separating. We're friends.
We're just moving on. And if you've made a legal binding agreement, you have to unbind that agreement.
There's state law. That's right.
You're screwed. So call an attorney.
And if you're moving out, call an attorney and go through the process and get all the T's crossed and the I's on. Shut all, shut all accounts down immediately that have both names on it.
Yes, absolutely. So he can't run up debt right now that you end up being responsible for because it's got your name on it.
I put a freeze on my credit so that somebody couldn't get in there with my, with my social security number and open up some credit cards and. Yep.
And all of that. Yeah.
So, um, you know, we'll just take that just the last second here and remind you guys.

Okay, so here's the deal. When you sign up for a car loan or a credit card loan, that is a contract.
You and your husband, folks, if you're out there, you and your wife are on that together. If both of you sign up for it, it's in both names.
It's a contract that both of you have signed. The judge comes in, the divorce decree in probate court, and says, I'm going to give this visa bill to the husband.
Okay? That means that judge has told the husband he has to pay it or he has to face that judge. He does not, that judge does not have the power to undo the contract.
So just because he handed the visa bill to the husband and said, I want you to pay it, the wife is still on that bill. So when he doesn't pay it, they sue both of you.
And you can't go, but the judge said, the judge does not have the power in divorce court to undo contract law.

They don't have the power.

Only bankruptcy court has that power.

And so, no, you know, well, the judge said to give him the house.

I gave him the house and he didn't pay it.

Now they're suing me.

Right.

Because you believe that crap. You're still on the contract.

So you've got to be completely released from everything by getting it paid off and moved and that kind of stuff in the process. That's why this is a business transaction now.
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, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them.
Me too. They don't know what to do next.
You're going to have a crisis here. You know, you got two options while you're sitting and talking to a young widow.
She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow. That's exactly right.
These are the two options. It's saying I love you to your family.
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John Deloney, Ramsey Personality, is my co-host. Elliot is in Canada.
Hi, Elliot. Welcome to the Ramsey Show.
Merry Christmas. Merry Christmas.
I'm hoping you can help. So earlier this year my wife left me.
I've got a daughter who's about 18 months. We are separated, we're not legally divorced.
She used to handle all of the money in the house. So I'm just kind of figuring things out for myself now.
Make a decent wage. I make about $73,000 a year.
But I just find I don't really have pennies to rub together by the end of the month. Like I'm not really saving anything.
So I'm just wondering if can we find maybe ways to optimize that. Good question.
Yeah, that would be a normal thing that left to itself savings never occurs naturally unless somebody's just like a savings freak but most people if you just don't pay attention at the end of the month or really even before the end of the month the money's gone. And so the only way to make the money behave is before the month starts, write every dollar down and where it's going to go, and then make it go where you wrote it down to be going.
You're in charge of it, but you need to tell it what to do because what's happening is in your emotional state, because your heart is broken and you're the daddy of a little baby and you're dealing with all this in the middle of all of that you're not even paying attention to the money it just leaves which would be i mean that that's what most people would do in your situation but the answer is you've got to pay attention when you when you're struggling to make payments at the end of the month um is this you having sat down and done the math and realized i don't make enough money to live where i live and do what i do now that i'm a single dad or are you still sending money to your ex i mean what kind of final situation are you in my ex uh so i mean i'm currently paying about 40 percent of daycare based on how much she makes, how much I make. Like, I've put a budget out for myself, and, you know, it says I have $300 left over the end of the month, but that never seems to happen.
I do have, I have, like, a recurring investment. I was like, I might as well start putting something away if I can.
So I was just like, I'll do $10 a week. It's going to be something like this one really notice.
And I just have that going into investing in stocks and dividend reinvestment and all of that. So that's like, so what happened was you, you wrote down a budget and you never looked at it again until the end of the month.
Yeah, you're probably right. Yeah.
And then you went, wow, that didn't work. Yeah.
So yeah, you, you, I'm going to give you the, uh, I'm going to tell you to do a written game plan, every dollar on paper, on purpose before the month begins. And then before you spend anything out of a certain category, you'd go back and check that category and make sure you've still got money left in it.
And make sure if you're spending time eating out because you're lonely

or you're spending time doing whatever that costs money because you're lonely,

make sure you recognize that and you're writing it down.

Right.

Because, I mean, you're going through a heartbreak right now.

This is a hard time emotionally.

And that hard time will show up in the money if you don't get on the other side of it and crack the whip on it. So what you're facing is a very normal reaction in a situation like you're in.
But that doesn't make it okay. That doesn't make it like because it doesn't feel right, and that's why you called.
Yeah. And, Dave, I don't think you can overstate that when when your world blows up it's easy to feel like the rules don't apply anymore right but they do right math does right math keeps going and the kid still needs to eat i remember a close friend of ours um her husband left her pregnant with number three and oh god um and i remember asking a couple years later how'd you make it and that her answer was so instructive.
She just said, I had to. Right.
And that meant I have to get up and do the next thing, the next, the next right thing every day. And so the next right thing for him is to begin to put some sort of structure to this chaos.
His world blew up. His wife left him and this little one, and no one has that in their head even.
Right. That happened.
Let's get ahold of our money. Let's get ahold of our calendar.
Let's start there. And if you can prove yourself over 30 days that I can stick to this thing and say no, then you can do it again 60 days.
You can do it again 90 days. And then you start asking yourself, is this the job? Is this the apartment? Is this the house? Is this the daycare center? And go from there.
But I guess I don't know. You know a lot more about this than I do, that it feels like grieving a broken heart or grieving a loss of some kind somehow gives us permission to let our body go, to let our mind get on junk food, binge watch stupid stuff on Netflix instead of actually feeding our mind something that tightens it up, and just let our money go.
Yeah, and I think the difference is I don't think grief is doing nothing. I think grief is active.
And if you're actively grieving something, if you're writing letters, if you are choosing your thoughts, if you're doing the next right thing, then that's an action. I think what most people mistake grief for is I'm just going to turn to draw the shades and do nothing.
Yeah. What I'm saying is when something bad comes at me, it's like you said, gives you permission.
so i don't need to exercise that's right i don't need to go to church right i don't i don't i don't need to watch my money right because something bad happened to me so now i have permission to to sit on my butt one of my friends who works in um in the fitness industry said we often treat diets like you blow your diet and he goes you get a flat tire and then you just you're like whatever and he, it's like pulling out a knife and going and slashing the other three tires. He goes, instead of just having one tire off.
Right? So your world blows up. This is the time to actually stop and double down on that stuff.
Double down on everything else. Yes.
This is when you need to get sunlight. You've got to control the things you can control.
That's it, man. And that marriage blowing up is not one of them.
No. That's happened.
So let's do these other things so that we can deal with the hard, hard truth. And what that means is like hardcore, like you were completely energetic and hopped up on caffeine, hardcore budgeting.
I'm going to write this down and I'm going to pinch it and I'm going to pinch it some more and I'm going to, and $300? No. How about a thousand bucks? That's right.
At the end of every month. And I'm going to start putting that towards something.
And then I'm going to work some extra and then I'm, and I'm going to lean into these things. And that's the way I'm going to process while I'm going through this rather than using this as a, um, a reason I was going to say an excuse, but even a reason for taking our foot off the gas and just letting the car go in circles.
It's your choose your heart, right? Yeah. You can choose to double down on your budget.
I will force myself to exercise, even though I don't feel like getting out of bed. And even though it's 44 below in Canada where he is, or I'm going to choose the heart of just getting to the end of every month and getting further and further underwater.
Yeah. It's just, it's human nature.
It's just so interesting when we think it through. Cause I can't, I mean,

doing this for 35 years, I can tell you that the number of times I talked to someone, they go, well, you know, everything was going good. And I went through a divorce and then I went $40,000 in debt and I gained 40 pounds.
And it's like, well, now you got to go clean that up. Yes.
Yeah. So, you know, what you said is before you do that, go ahead and not do that.
Exactly.

Yes, yes.

Exactly.

Or find an activity, find a Xanax, if you will, find a distraction that's not going to be catastrophic. Right.
So often I tell folks you get one. So I hear from husbands who come home, they're like, dude, I just want to veg out.
A lot of guys will go sit in the bathroom for an hour and a half, and they'll just scroll the phone, and it'll disappear.

The pushback is, you need to be present in this house.

You need to be around.

Okay, I need a break.

I always tell them, okay, you get one.

You want 30 minutes?

She's going to keep the kids away for 30 minutes.

You get 30 minutes.

After that, you've got to put that thing down and be present.

Yes, when your world blows up, it is hard to get out of bed.

It is.

Okay, so you get 10 minutes. You get 30 minutes to lay here and be sad.
And then you got to get up. You get one.
And then you got to go do your thing. Like whatever that thing is, you got to go do the next right move that you know is good for you.
So a buddy of mine came to an event that John and I did with Mike Rowe. We're doing it for business guys.
And one of the things John did was a talk during that event. And choose your heart.
Decide, okay, you're either going to be overweight or you're going to exercise and manage your caloric intake. Both of those are hard.
You're either going to be broke or you're going to manage your budget and work some extra and sell some stuff and get your butt under control, right? Choose your heart. One of them, they're both hard.
You might as well choose which one on purpose rather than let it happen to you. A friend of mine was sitting there.
He lost 150 pounds. That's so amazing.
I was with him Monday night. That's like two George Camels.
Yeah. Well, more.
Two and a half. Yeah.
That's so amazing. Choose your heart, right? Choose your heart.
And I said, what do you do? And he goes, stinking Deloney talk, man. Choose my heart.
He goes, I've been choosing to be fat, and I decided I wasn't going to be. That's what he told me.
Wow. This is The Ramsey Show.
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That's betterhelp.com slash Deloney. Merry Christmas, folks.
So, I don't understand how on Thursday it's still Cyber Monday.

I'm confused about all of this. I saw a great internet thing from Lecrae.
It was like a confession video. And I thought, oh no, man, did he cheat on his wife or something? It's like, I'm so sorry, but I said it was good, the Cyber Monday sale, and it's just going to keep going for a while.
It's like this big confession. Well, apparently we're doing the same thing, so I don't know if we need to turn it into a confession or not.
This is my confession. The bad news is that Cyber Monday is not only on Monday.
The good news is you can still get a bargain on stuff. So there you go.
So hit RamseySolutions.com slash store., uh, John's questions for humans decks. They're on sale for 12 bucks right now.
Get you ready for the holidays. You can have questions for the humans or during the holidays, and you might see some humans during the holidays.
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John's number one bestsellers is $12. Check it all out at the continuation of the Cyber Monday sale.
RamseySolutions.com slash store. It's just to keep it going.
Just keep it going. Just keep it going.
Travis is in Grand Rapids. Hey, Travis, what's up? Hey, how's it going, Dave? Better than I deserve.
How can I help? So this is my question. Right now I'm driving to work, and it's costing me quite a bit of money because I drive a three-quarter ton pickup truck.
I'm planning on buying a cheap little gas zipper four-cylinder car. My question is, when I do buy that car, and this truck is totally mechanically sound, nothing wrong with it, has high miles, do I park it in my garage, keep it for a spare, or do I sell it and invest the money? Do you have debt? No, I have no debt.
Okay. How much money do you have in savings? $10,000.
Okay. How much in your investments? Well just started investing good and uh only like only like 3,000 right now i'm only so what do you make you're only how old i'm 24 years old okay all right um i make 30 an hour by the way yeah good for you okay so you're gonna buy a cheap little car because the the the three quarters

killing your own gas pretty simple right yes okay um you know it it i love having a truck i've had a truck most of my life i drove a truck to work today okay so i'm a truck guy let's just put that in in the parentheses in the answer here, all right? However, if I were 23 in your situation, I would not keep a spare car as an investment of any kind. Now, later on, you know, when you're a millionaire and you're 33 because you keep following our stuff and you want to have a spare truck sitting around, I'll be your guy.
Because it'll be a small percentage of your world. But right now, I mean, that truck will bring how much money? Probably $5,000.
Okay, if I put $5,000 in the middle of the table, and you didn't own the truck, would you go buy a truck for a spare? No. The only reason you're keeping it is because you like it.
Right. And, well, if I'm buying a cheap car and if that does go down on me, I will have a backup.
You don't have a backup now. You have a $5,000 truck.
Right, right. Yeah.
Yep. That does make sense, I guess.
If I were you, I'd sell the truck promising myself that I'm going to become wealthy and

drive whatever the flip I want to drive later.

Because I'm not worried about the gas myself.

I mean, I drove a Raptor R over here.

The thing drinks gas like, I mean, you have to stop at every gas station on the way.

It gets four miles to the gallon.

It gets four gallons. Yeah, it gets four gallons to the mile.
But I don't give a rip. You know, that's the difference.
But I'm in a position. But when I was broke, I remember being broke in 23.
It wasn't 20 minutes ago, it feels like. And so, yeah, you don't need that.
You don't need that extra weight on you. But you just like having you just like the truck I don't blame you for that I tried this when I was broke to have a spare little and I inverted it I had an old truck that I like driving around but I had a little zippy card to get around and it was when it came up for registration oh yeah and that gum insurance I did the math in insurance and it was costing me about 75 bucks a month that I didn't have.
And so this paid-for car that I had in the driveway was costing me money that was my light bill, and that's when I was like, I've got to sell it. Yeah, so that's what I would do.
But again, it's not a permanent decision for the rest of your life. It's what you're doing right now at your stage at 23.
Later on, get you whatever you want to get when you've got some money, dude. Live dude live like no one else later you can live and give like no one else alan's in seattle hi alan how are you i'm doing much better than i deserve dave good how can i help well um i have done so well i i started doing dave ramsey about five years before Ramsey started doing Dave Ramsey.
And I discovered he on the radio in the 90s. I said, I'm already doing that.
I'm already doing that. This is great.
It was confirmation from what I was already doing. Well, it's good when a couple of geniuses can meet up.
Old, old, old geniuses. Hey, careful.
That's where that genius stuff comes from.

So now I'm 68 years old.

I survived

about a cancer this year, so I'm

a little tighter than I used to be.

But I'm doing fine. I'm doing great.

My net worth

is $5.5 million.

I've got about

2.9 of that in the stock market in mutuals. I've got about $200K in cash.
I'm living in a house that's worth $1.5 million in Seattle with a lake view. I mean, it's just...
You did it! I can't believe it. I'm proud of you.
I never spent more money than I made. There you go.
It was just obvious to me. You make so much, you spend less.
You save. So that's where I am now.
So now that I'm 68 and getting a little tighter, I've been retired for a long, long time, and I'd spend most of my time doing volunteer work when I do anything. Anyway, I've got a duplex.
It's about an hour and 15-minute drive from here, and it's worth between $800K and a million. And it's bringing in about $50K a year.

It's increasing in value by about $50K a year.

So it's net worth, you know, in value is about $100K a year.

And I'm just getting tired of managing it because, as you know,

real estate isn't passive.

Every year something happens. One of the tenants moves out.
We've got to turn it around or we get a water leak or something happens. And I told my wife, I said, I'm tired of managing this thing.
Got it. So what's your question, Alan? Well, do I sell the place and get a REIT to just, you know, be done with it? Or do I get a professional

management company? Professional management company is not going to make vacancy and repairs

go away. No, I know that.
Both of those things are still going to be there. If the vacancy and

the repairs are what are driving you nuts, those aren't going to leave. Professional management company will just handle the grief associated with those two things, but not the money.
And so you're going to give up a little money in order to have someone else deal with the tenant, deal with the repairman, and deal with the vacancy. But no one cares when it's empty as much as you do.
So that's up to you. If you want to go that route, that's fine.
But just, you know, look for the right thing out of it. It sounds like you're tired of being landlords, what it sounds like to me.
And so I think I am probably getting out of it, and I might get into a different kind of a property that doesn't require as much active management, something that's a little newer, that kind of a thing, or like you said, just buy a REIT, put drop, drop that million dollars that you're talking about there into a REIT, and that's fine. What's a REIT, Dave? A real estate investment trust.
It's basically a mutual fund for real estate is how it functions. And so many, many, many Allens out there put money in, and they buy a bunch of different properties.
And the cash flow from those properties and the increase in value of those properties give you your rate of return. And most of the REITs are paying about like a good growth stock mutual fund, about 10% or 12%.
A good one is. In the old days when they first started, they were fee heavy, and didn't do well.
Net. Nowadays, they're valid.
So you just own a whole bunch of pieces, small pieces of a whole bunch of houses? Just like you do when you buy a mutual fund, you own a whole bunch of pieces of a bunch of stocks. Small pieces of companies, yeah.
A bunch of stocks, yeah. Same thing.
That puts us out with the Ramsey Show in the books. 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.
Dr. John Deloney, Ph.D.
in counseling, Ramsey personality, host of the Dr. John Deloney Show, and number one best-selling author.
He's my co-host today. Jared is with us in Phoenix.
Hi, Jared. How are you? Oh, I'm doing better than I deserve.
Good. What's up? Well, my dad passed away a few years ago, and he left a very sizable estate to my brother and I what what is what is a sizable estate how much money uh my brother and I probably ended up with three to four million each that's sizable okay I'll agree with you on that and and he he taught me to to be debt-free at a young age.
So I've built up my own retirement up to about $750,000 anyway. So it wasn't that I needed the inheritance.
You were already a millionaire. I was working on it, yeah.
Well, I mean, you had other savings on top of the $750,000, so you were there. had a house, probably.
Yeah, I had a very blessed life. Yeah, good for you.
So the conundrum that I have is that he was married a second time. So I have step-siblings, and one of the steps had mentioned that I should share because he left it to my brother and I and not the other steps.
Now, the steps are not his kids. Correct.
They were his wife's from a previous marriage, and it was his second marriage, and so he became the stepdad. I'm just making sure I got the exact connection.
So they have absolutely no blood connection to him whatsoever. Correct.
And they're adults. How long were they married? 16 years.
Okay. Oh, so they were adults.
He didn't raise these kids. No, he waited until he said that he didn't want to get married until everybody was out of the house.
They dated for a considerable amount of time. So they in no way even looked at him as a father figure.
Bye, Felicia. Well, this step doesn't have a good relationship with her father, and she did kind of look at him for advice and so forth.
Yeah, well, that's nice. And he was good to their kids, too.

I bet he was.

To the steps.

Okay, so she calls you up and says, I want some money?

No, she, it was, I'm having problems.

My brother has passed away since then, and he was in the middle of a divorce,

so I'm having problems with his wife that was divorcing my brother,

and I mentioned that to her.

And during that conversation, she got upset because of the numbers involved.

And she started crying and saying,

I can't talk with you about this.

And I just really,

I just don't understand why we can't all just share.

Because we're not communists?

But what do you say to that nothing nothing that's not your fault you don't say anything yeah you say you know what i'm so sorry yeah i'm sorry you know i i listen i i care about you and i'll be here to emotionally be your step whatever i am and that kind of stuff but um i i and understand that this is hurtful to you but gosh i'm so sorry and i just leave it at that because it's not about you feel bad about this no you didn't do anything what you do why would you feel bad what you do well not not that i did do something but you know, that I'm in a better situation than she is, and it just, you know, she's making me feel good. You didn't harm her in that process.
Your father had money, and your father decided to leave his money to his two sons. That is a very normal act.
Had he left some to the stepchildren that would have been unusual step adult kids yeah that he never were never in the house that he lived in he didn't adopt them did he no they were adults yeah no they their father's still alive yeah yeah so now i mean that that's this poor girl's just got emotional issues on her own. I can't talk to you.
You got too much money that I thought I needed some of. I mean, come on.
That's her. Okay, well.
No, I don't feel guilty at all. And I'm not going to be mean about it.
I'll be kind to her. Of course.
Your dad loved her. He'd be gentle with her, and you were going to be gentle with her.
But your dad didn't leave her any money.

And he was closer to her than you are.

No, we're pretty close.

Your dad was closer to her than you are.

He married her mother.

All right.

Well, I appreciate the vote of confidence that I was doing the right thing. So were the assets of you and your brothers intermingled? Some of them were.
There were just a couple of things, but my brother and I got that worked out. So how are you involved in the divorce then and his death and so forth? Because I'm his trustee.
Oh, geez, you're the executor of his will. Well, she sidestepped that and got the, I forget what it's called, when you're the, she became, in lack of terms, the executor because the will hadn't been put in place.
So she's kind of in charge of the estate, but I'm in charge of the trust. Because I was the trustee.
So, yeah, that's a whole other mess. I bet Thanksgiving dinner is amazing at your house.
No, not anymore. This chick's on the out.
She was on the out before he died. Oh, my gosh.
Wow. Yeah.
It's like, I i get to make the rules but i've got the money but i get to make the rules no but i get to make the rules not really you're like you were almost the ex-wife you keep that in mind yeah that's what i figured out we were going to put an x in front of your name kiddo how the fed uses the road money like we're states we can do That's cool. You want roads? Okay, we'll do what you say.

Oh, man.

So, hey, guys.

Wow.

Jared, you do whatever you want to do, honey.

But bottom line is, back to the stepsister thing or whatever she is,

if you were to give her some money, it's not going to make her okay.

She was not okay before. she will be not okay after because this is not about the money and it's not about you so you can't fix her with a check right it's a waste of money and even i mean y'all call each other what you want to call each other that's that's your family's business i i don't even know this qualifies as a stepsister um that's not i mean it's it's it's well i guess it is it's the child of it's an adult child of someone your dad married right um but that's a separate life it's a separate world and maybe all are close now and that's wonderful and great and good but i always like to think back on these situations as if my dad was here and i've got a decision to make what would bring him joy right with this money he left me well and he already decided what he wanted to do that's right he made that she was sitting there when he wrote the will right i mean she she was on the planet at that point yeah this is not this is not like something that just oh i, I didn't know.
Right. You know, he already cleared,

dad already clearly said

what he wanted to have happen.

Yes, behavior's a language.

He was loud and clear.

Yeah.

Yeah.

And he didn't say

he was mad at her.

No.

He just said she wasn't his.

And you don't know

what she's already left then.

Who knows?

She paid for her college

or her kid's college.

You don't know any of that stuff.

She just saw some huge numbers

and says,

I want some of that.

Yeah.

That's what happened.

Yeah. There you go.
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John Deloney, Ramsey Personality, is my co-host today. So I ran out of time and we ran into the break on the dysfunctional stepsister, dad left money to his own boys discussion.
And I was actually having a talk with one of our team members before the show, Christian in here, and we were talking about a dysfunctional succession plan that's blown up in the public eye that he's aware of. And he was asking me, how do you avoid that? So let's go back to that particular thing and say, how do you avoid this? Okay.
So there's two broken things in that call. One is the stepkids had no knowledge knowledge and so once they got once the daughter got knowledge of how much money then her feelings were hurt and her reaction was i can't even talk right now you you need to give me some of this money right yeah the other broken thing was his brother who had received three million dollars he and his brother had some of that intertwined they were able to untangle that so this brother was standalone but and then his brother starts going through a divorce and instead of making sure he had a completed will his will was incomplete so now his soon-to-be ex-wife has stuck her nose into it and is screwing that up.

Both of these are poorly handled estate planning.

Okay?

So every one of you need a detailed will,

but here's the important part that is left out of the first one of these things with the stepkids.

Have a reading of the will or a discussion with the parties that think they might be involved you need to do it in one room or a series of rooms i don't care have the courage to tell people what it says while you're alive so if dad who loved this girl's mom and was married to her for 16 years, had sat down with this girl and the others and said, hey, I care deeply about you guys, but when we got married, we decided that my money was going to go to my kids, and so I want you to know ahead of time, it has nothing to do with whether I like you or whether I care about you, but I'm leaving my money to my sons. And it's substantial, but that's none of your business.

Would that be his conversation or would that be their mother's conversation?

I think it's his.

Okay.

I think it's his because she's right now.

Who's she angry at?

Him.

Yeah.

Because she felt connected to him and this, this cut her.

Yeah.

It makes me wonder if he gave her 50,000 bucks and then 4 million.

And that's the, that's the gap.

She didn't say, she didn't say, but he said, he said,

the cut her yeah it makes me wonder if he gave her 50,000 bucks and then four million and that's the that's the gap she didn't say she didn't say but he said he said he left everything to my brother and I that's true so um which I don't even know what happened to the mom right did she not the second wife not get taken care of I don't know we didn't get that in the story but the bottom line is tell people this is what's going on and so I've got a friend whose kid is doing drugs, and he's in his 20s. And he sat down with everybody and he said, honey, I can't leave you money.
Not because I'm punishing you, but because I'd be buying you drugs. I'll kill you.
I'll kill you. You'll use that.
Your addiction will be ramped up and you'll have an overdose and die. And I love you.
And I'm not going to fund something that brings harm to you. And so you're not going to get any money in the current version of the will.
And it's not because I don't love you. It's because I do love you.
And you're out of the will. And he knows that now.
And your brother's the executor and don't you say a word to him. So dad threw his shoulders back, had a backbone, and had the discussion with a grown child drug addict while he's alive.
So this is not a movie. This is life.
It's not like we have the paneled room with the trophy wife and the dysfunctional four children who come in and they are entitled and trust fund babies and the reading of the will and they're all shocked that the one kid who's somewhat normal gets it all. That's a movie.
That doesn't happen in the real world. Whatever you're doing in the real world, tell the people.
That way they don't have to deal with the other people who are pissed off after you die because you were a coward and didn't tell people what was going on. It'sice act of cowardice your cowardice will blow up the lives of the remaining that's exactly what this is if dad had had a 10 minute conversation with his grown stepkids and explained to him that he loves them he loved their mother but this was my money before i came into this marriage and so it's going to my children you're not, even though I care about you, then that would have probably handled this whole thing.
And if brother had kept up with his own dadgum will and gotten it done and changed everything over. So you get divorced, change the beneficiary three weeks before on your 401K and your life insurance policies.
Don't expect your ex-wife who hates your guts to leave to take a half a million dollar insurance proceeds and just give it to somebody because you forgot to change the beneficiary because you didn't do your job so you've got to do these documents people yes it drives me nuts and here other side of it. Here's the other side of it.
I just yesterday sent my dad a text message. My dad's in his 70s, and I'm going to see him over Christmas, and I said, I want to go out to lunch with you, and I just want to listen.
I want to hear what your picture is for the next 10 years. Where do your mom want to live? Because I think he's retiring in the next couple years from his professor job where you're gonna live what do you want this to look like and as a part of that conversation he my and my dad was a homicide guy he's been i've known where that will was since i was six years old right yeah um but talking through what kind of support are y'all gonna need what kind of health challenges are y'all facing but there are millions of senior adults that won't have that conversation you're having.
But there's also millions of people my age, 30s, 40s, and 50s. If you don't know, don't just say, well, it wouldn't have the conversation.
Then you need to go have the conversation. Somebody has to be an adult in this transaction, right? Yeah, 78% of Americans die without a will.
Which is insane to me. That's stupid's stupid it's asinine if you're 18 years old you need a will it's cruel i don't care if you own anything or not you want the you want the state to decide what happens to your children have you seen what some of these states are doing with children you don't want these states in charge of nothing they're morons and so you need to be in charge of your kids.
It's a will.

And there's zero correlation between making a will and a likelihood you die soon.

It's not a thing.

Talking about death doesn't occur.

Might be the opposite.

Probably.

The more we discuss my death, the better I feel.

We call it the Monty Python meeting where we sit and talk about when Dave dies.

I'm not dead yet.

I'm really not dead yet. It's just a flesh dies.
I'm not dead yet. I'm really not dead yet.

It's just a flesh wound.

I'm not dead yet.

I'm feeling better.

Really?

Just a flesh wound?

Dave, over the last year on my show, I think one of the most common questions I get is

how do I do X without somebody getting mad?

How do I talk about Y without them blowing up our, you can't control that.

So I think we all, as a country, we just got to have some more conversations. And we got to do it at our kitchen tables.
You don't have to be mean about it. No.
My buddy, he's not mad. He is upset.
He's hurt that his kid's doing drugs. But he'd probably pay for rehab, right? He would help him any way he can, but he's not going to give him money in the same amount of same amount of money everybody else he gives him zero yeah so because you know and he said when you clean up i'll change the will if i'm still here if you don't clean up before then you're just out yeah so you know and it's a good it's a good incentive but it's not we're not trying to buy something with that we're just trying to say this is what's going on so so don't be hurt later.
Yeah. There we go.
Hey, folks, we love talking about money and life and everything else. One of our brands where we help people is a small business brand called Entree Leadership, and we coach about 10,000 small businesses around America, showing them how to run a small business, all the aspects of running a small business.
And I do a podcast that we've we've done a podcast for about gosh since podcast started it was one of the first podcasts out there it's the first one we ever did here before we even put ramsey on a podcast uh it's called entree leadership podcast and uh i took it over two years ago and uh i just take calls from small business guys and gals who call in and go i got this this team member that's doing this. I can't get my dad to do the succession plan.
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I do it once a week. If you want to be a caller on that, go to EntreeLeadership.com slash ask or call 844-944-1070.
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Dr. John Deloney, Ramsey Personality, is my co-host today.
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All right. Today's question comes from Jenna in Minnesota.
Jenna writes, should I help my boyfriend pay off student loan debt? No. I guess we could just end it there, but I'll keep going.
I know what you're going to say, so let me explain. Still no.
We both went to college for mechanical engineering. My parents covered my tuition, but my boyfriend has over $125,000 in college loans.
We both work good jobs and bring home a combined income of $200,000, but his loan payments are killing him. He didn't want to burden me with them, and he wants to put our life on hold, marriage, house, and children until they're paid off.
He has about 15K in savings, and so this is

going to be a long process. I have 80,000 in savings and roughly 300,000 in stocks that my

grandpa set up for me when I was a kid. Should I help pay off my boyfriend's loans by adding an

amount to his payment every month, pay them outright, or do you think I shouldn't help him

at all? Should you cave to his blackmail? I was going was gonna say he is this is a it's a red herring it's a it's a proxy it's a ploy yes so listen kiddo we tell folks when they get married everything becomes shared so you will have 125 000 student loan when you're married because your husband does he will have 300 000 in stocks in stocks that his wife's grandfather left her he will have eighty thousand dollars in savings that his wife had before they got married and so when you get home from the honeymoon pay off the pay off the student loan but this is bull crap bull crap on a stick so frustrating yeah tell Tell boy child time to get, you know, part of the problem is, is we're all playing house over here. So he's got no incentive to get married other than blackmail you into it.
So now if you want to have a healthy relationship, y'all get married yesterday since you're playing house anyway. We have a combined income.
You don't have a combined income. You're not married.
That's bull crap. You're shacking up.
And we would not have a show if people like you didn't withdraw $125,000 from the money that their grandparents sent them to pay off a boyfriend's loans, and then y'all break up. Oh, yeah, that's like standard.
We wouldn't have this show if that didn't happen all the time. And I know you can say, no, not us, not us.
No, he would never do that. Yes, y'all.
The guy that won't marry me would never do that. You know how you sound? So seriously, no.
Don't, please don't, please don't, please don't. Time to get married, boys and girls.
Look, I think it's a good altar call right here. It's come to Jesus.
Are we going to do this or not yeah because if you're gonna get married y'all get y'all come home from the honeymoon we would tell you to take the 380 000 that you have in assets and pay off the 125 000 debt that he has and then we take off with our life with our fabulous combined income and zero debt and whatever's left of that money which would still be 200 000 bucks so. And by the way, when you get married, what you're agreeing to do is to help carry burdens together.
For richer, for poorer. And so if he already says, well, I've got this thing going on, so I'm going to hide it from you.
I don't want to be with you. I don't want to be apart from you.
This will be the rest of your life. This will happen with kids.
This will happen with tuition. This will happen with which church to go to.

This will happen again and again and again.

This is the big glaring neon sign.

Just to put our life on hold.

He doesn't want to burden me with them.

To put our life on hold.

Then he's not ready to marry you then.

Oh, brother.

We're going to work together.

Work together, work together.

I'm going to give this guy about 20 minutes.

Get me to the church on time, baby. I'm serious.
I'm done with this guy about 20 minutes get me to the church on time baby i'm serious i'm done with this guy this is bothering me for some there's something about this that's running all over me and i i'm usually a little bit i'm pretty pretty mean but i'm usually a little bit more gentle than this yeah but this is this there's something wrong jenna here here's what i here's what is is getting under my skin oh i know what it is you have worded all of this it's all the dadgum language that's what's killing me you have worded all this because you have bought this freaking sales line that's it that's the thing she thinks she's the problem she thinks she is the problem here this guy has complete he's a i'm afraid he's a con artist he's a leech yeah so either way if you're listen you you either need to leave or you need to get married please don't pay off his loan and don't pay off his loans unless you get married and if you get married then it's our loans and our money and we'll do that but you got you got about 20 minutes buddy about 20 minutes stop the sales job don't like don't like like con artists who are sleeping with the person they're conning. It's a problem.
Dadgum salesman. Sorry.
I think I've had too much coffee, John. Merry Christmas.
Ho, ho, ho. Oh, my gosh.
I need to calm down. But, yeah, I think about my girls, and they did not thank God.
Thank god that we taught them how to pick and they picked studs so i've got two sons-in-law they're absolutely incredible here's i i yeah i've got a young daughter and you would kill him but here's what here's why you know i saw you just i know i do here's why this young woman jenna is is astounding. Yeah.
She's a dadgum. She's a mechanical engineer.
She makes a hundred grand. She's got half a million dollars already put together because her grandpa hooked her up.
And she's got this guy that she loves. And the guy is making her the reason.
And so she's asking herself every day, what am I doing wrong? Oh, I have another way I can save this thing.

I want to help.

I know what you're going to say, but I'm different.

No, it's not you.

It's him.

It's him.

You're worth more than this.

That's what I'll say.

You're more valuable.

It's the dad of a daughter.

We're angry for you.

Yeah.

So brought to you by Y refi and preparation H because I got hemorrhoids now.

God, it makes me so mad when guys are idiots. Patrick's in Orlando.
Hey, Patrick, what's up? Hey, guys. So the situation is my wife and I are 67, and we've got $2.8 million in four different mutual funds.
Way to go. We're debt-free.
Thank you. Thank you.
We're debt-free and we got an offer we couldn't refuse on our business. We closed December 11th.
We get 575 cash and we hold a note for five years for 300. So that brings me to the question because I've got a daughter that lives in Austin, Texas, and she and her husband have been married for 20 years, and we have a beautiful grandchild, and they're saving for a house.
They're also debt-free. They're doing everything right.
They're both teachers, and they want to get a house. And they're saving like crazy.

Two rounds of IVF to get Julia here pretty much wiped out their savings.

And they're trying to come back for that.

And I'm thinking, you know, December 11th, I collect $575.

I could probably, you know, give them the money for a pretty nice house in Austin with that $575. And so that's one option.
Do it. Option two would be really strong.
Just do it. Yeah, I like it.
I like it. Can I add one thing to it? Yeah.
Okay. I do want this to be a gift, and I'll teach you a technical thing you need to do.
But aside from that, I do want it to be a gift without strings, sort of. But I would sit down in person with them, you and your wife, go to dinner, and make this a big deal.
This is not just a drive-by breakfast one morning coffee. Okay? We're going to a nice restaurant.
We're going to make a production out of this and say, this has has nothing to do with the grandkid although you've said it six times that it does but it doesn't okay it shouldn't it shouldn't because you shouldn't give it to them because the grandkid you should give it to them because they have been responsible and you're not bringing harm to them and you're not enabling bad behavior instead you're accentuating and lifting the positive thing that they have been doing with their life. And it's going to, it's going to change your family tree the rest of the way.
So yes, you should do it. And I would say, I'm going to give this to you with no strings attached.
I will tell you, I have a favor to ask that you promised to never borrow money again. Love it.
and I wouldn't make that. It's not a contract.
But I would just say, I'm doing this to change my family tree. But if you go screw that up by borrowing money, it's going to break my heart.
And I would do it. Now, unified estate tax credit.
Talk to your tax guy. You need to use up some of your estate tax exemptions so you don't have gift tax.
Don't do this without tax advice. Go get some tax advice, please.
This is the Ramsey Show. Hey, guys, good news.
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So that's the bad news. The good news is the store has everything on sale.
Cyber Monday. Cyber Monday.
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Just check it out, RamseySolutions.com slash store, until we decide Cyber Monday is over.

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But you don't know when that's going to be, because I don't know when that's going to be. So there we go.
This is the Ramsey Show. Madeline's in Atlanta.
Hi, Madeline. Welcome to the Ramsey Show.
Thank you for having me. Sure.
What's up? So me and my fiance are just really stressed. Our debt to income ratio is horrible, so we just wanted to know what steps we need to take to go in the right direction to get out of debt.
When are you getting married? We haven't planned a date yet. Then there's not a we.
Right, okay. Legally, morally, ethically ethically monetarily we aren't in existence until we are married and i'm not just making a a statement you you literally have absolutely no rights to the other person's income legally speaking okay so uh you can act like you're playing house you can act like you're married and it doesn't change the law the law says that your debt is your debt okay now when you're married that's different so i would suggest if you're going to be a we that you make it a we and you run down the courthouse this weekend and get married yes sir okay how long you all been engaged or dating um about three years

time to paint or get off the ladder kid

what what do you mean i mean get married oh okay sorry we've been almost in a long time

yes sir so y'all just how old are you i'm, cool. So what do you make and what does he make? So I make annually 38K.
What's he make? And him annually, okay, I don't have it totaled, but 2640 monthly. Okay, he makes about the same you do then okay yeah and um and how much debt do you have so my debt um about so really I only have uh the home loan and you bought a house together.
You bought a house? Yes. Is it your house or do you buy it together? I'm the only one that's on a lease.
Oh, it's a lease. Yeah.
So I'm financing a mortgage loan. Honey, that's not a lease.
Oh, man. Did you buy a house or are you a tenant? I bought a home.
It's a mortgage. In your name.
You have a mortgage. Lease does not enter into it.
Yeah, $243,000. Okay.
And so you have a mortgage. You bought a $240,000 house and you make $35, 35 000 a year and you're 24 years old

on the promise that he was going to help her pay but they're not married and he's not on the loan correct yeah this is what i've been talking about before i started talking Okay. Now, what debt does he have?

He has, in total, including his auto loan, $28,330. Okay.
So here's what I would tell you guys to do. And I don't know if you're going to do it.
I can't tell from talking to you. Will you actually do it? You sound terrified.
I kind of don't think. I don't know if you're nervous on the radio or if you're just going to go do whatever you want to do.
Anyway, if you were my daughter, I would take you two knuckleheads to breakfast and bump your heads together and say, you knuckleheads go get married this week because you're very – do you understand how vulnerable you are? This guy walks off. You're screwed, girl.
You understand? You can't pay this house payment. Okay.
Can you? They qualified you for it, but you can't afford this house if he gets up and leaves, right? Right. Okay.
Now I'm assuming your, is your relationship good? It is. Okay.
Then I would say, let's quit acting like we're married and go and get married because it's very, very important that you all do combine everything. And then what we've got is we've got a home mortgage with an $80,000 household income approximately.
And he's got some consumer debt that we need to get paid off as quick as we can, and we'll walk you right through the baby steps at that point. You cut up your credit cards, we get his car loan paid off, and we take all the overtime we can.
We quit eating out, we don't go on vacation, and we clean up this mess where you have $20,000 cash in the bank for an emergency fund and no payments but a house payment and a combined income of $80,000'd be in pretty good shape right yes sir i can get you there in about a year if you're married i can't get you there while y'all keep sort of doing this because it won't work because because this the doing things in the wrong order has left our precious Madeline here unbelievably vulnerable. You will be the victim if this thing goes sideways, not him.
You'll be the one that's in a mess if this thing goes sideways, not him. And you're worth more than this.
And so somehow you talked yourself into or you got talked into or you guys together sat down and had a combined lack of brains and decided this was the right way to go and it wasn't because it's left you my daughter in a real mess potentially let's say he's not gonna like break up with her but they cut his hours they he quits his job or he decides i want I want to go get an MBA, and he just quit. It's so exposed.
I mean, she doesn't have – it's all on her. That's what I mean.
He's got a free ride now. He's got someone else to buy a house that he lives in that he gets to pay rent.
Maybe. Maybe, yeah.
So this is why these numbers don't work, okay? All right, guys, there's a couple issues. We've got to stop for a second because we've got just a moment here.
Number one, we'll remind you that if you want to catch the next segment of the show, the third segment of the podcast is always on the Ramsey Network app, and it's completely free. Go download that for free.
So the numbers, if you do just a couple of things in the right order, there's less than a 3% chance you'll be at the poverty level. And the right order is before you do anything with building a family, you graduate from school, high school.
Okay. You do not live together before married.
If you don't live together before married and don't have children before married, so you do it in the, it's called the order, the poverty order, okay? So you graduate from high school, get married before living together and before having children, you have less than a 5% chance of being at the poverty level. That's the national statistics.
Almost all of our poverty occurs when you do those things in the wrong order. And you're a 17-year-old with a baby and he takes off because we got pregnant before marriage, and so on and so on and so on.
And I'm not picking on anybody. I'm just saying if I could sit down with a 14-year-old and say, hey, you have less than a 5% chance of poverty level if you'll just do these three or four things in the right order.
You set yourself up for prosperity. You want to add to this and get it down to almost zero chance? Graduate from a

four-year degree in a usable degree field. You want to add further to that? Do all of that with

no debt. If you just do a couple of little things like that, you're down to less than a one percent

chance you're going to be at the poverty level.

These are controllable variables in your life.

But instead, you just buy a house with somebody you're not married to.

This is The Ramsey Show app, right? All you got to do to finish the episode is search Ramsey Network in the App Store, Google Play Store, or just click the link in the show notes to download the app for free. Yep, you heard me right, for free.
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All right, I'm getting out of here. Enjoy.
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