Get Out of the Cycle of Debt and Choose Peace Instead

Speaker 1 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.

Speaker 1 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.

Speaker 1 Well, it's official. Now we get to start saying Merry Christmas, right? I mean, some people start just before Halloween, and then others start right after Labor Day.

Speaker 1 But I think we're close enough now we can officially say Merry Christmas.

Speaker 2 It was the day after Thanksgiving. My son and I 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.

Speaker 2 And he said, Dad, in his half asleepness, it's the happiest time of year, isn't it?

Speaker 1 Man,

Speaker 1 it's too early for Christmas music. Too early.
The sun's not even up. Todd's in Boston, Mass.
Hey, Todd, welcome to the Ramsey Show.

Speaker 3 Hey, Dave, thanks for having me. I really appreciate it.

Speaker 1 Sure. How can we help?

Speaker 3 So

Speaker 3 I just learned with you a few days ago. My sister listens listens to you religiously and told me I should call you regarding my situation.

Speaker 3 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.

Speaker 3 Unfortunately, just recently, I went into default with one of my student loans, and that is through Naviant, which is now Muhella. And

Speaker 3 what they

Speaker 3 offered me was something that's outside of my budget.

Speaker 3 And my father is a co co-signer on the loan as well.

Speaker 3 And I'm just trying to find out of ways of how I can negotiate something with Navian to help me make the payments that I can afford or what other avenues I can take. Wow.

Speaker 1 So, this is a federally insured student loan, right?

Speaker 3 This is a signature student loan.

Speaker 1 They all have signatures.

Speaker 1 They all have signatures. Is it private?

Speaker 3 No, it is private.

Speaker 1 Oh, okay. All right.
Good news. Okay.
All right.

Speaker 1 Well, lucky for you, we have actually a sponsor that refinances

Speaker 1 defaulted privately held student loans. So they'll buy it from Navient and refinance it and set it up where you can make the payments.
You got a pencil?

Speaker 3 Yeah, one moment. Yeah, go ahead.

Speaker 1 All right. YReFi, the letter Y,

Speaker 1 R-E-F-Y

Speaker 1 dot com.

Speaker 1 And so

Speaker 1 I'll go ahead and give you the mechanics because they've been advertising with us for a while and we send people over there.

Speaker 1 But the mechanics are they buy the loan because it's defaulted at a discount.

Speaker 1 And then they, so they don't have full face in it. They pay less than that because

Speaker 1 you're not paying it. You're not credit worthy, right? So that's not a loan anybody would want to buy that the guy's deadbeat, that the guy's deadbeating on it, right?

Speaker 1 So they're going to buy it at a discount, and then that enables them to restructure it and put an interest rate on it that's low, and they still end up up making good money on it.

Speaker 1 But you get the deal of the century.

Speaker 1 So

Speaker 1 it's a win-win for everybody. Even Naviant, and I really don't care about Naviant.

Speaker 1 Never would I try to help them win with anything,

Speaker 1 but it turns out they get money on a loan that they thought was bad, so they're happy.

Speaker 1 Why 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.

Speaker 1 Now, the rest of this

Speaker 1 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?

Speaker 3 Most of them, yeah.

Speaker 1 No,

Speaker 1 they should all be.

Speaker 1 How long did you pay payments to the debt settlement company?

Speaker 3 I did make payments, correct?

Speaker 1 Yeah. How many

Speaker 3 Since May, so I'd say probably close to six or seven payments.

Speaker 1 They haven't paid any of your credit cards since you signed up with them

Speaker 1 until they work a deal with each credit card company. And again, they're in default, so they're working a bargain with them.

Speaker 1 If you weren't in default, they put you there.

Speaker 1 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?

Speaker 3 Right now I have four.

Speaker 1 And what is the total balance of credit card debt?

Speaker 3 With all those just shy of 35 grand.

Speaker 1 Okay. And what do you make, sir?

Speaker 3 I make per month net pay. I'd make just over $6,000 a month.

Speaker 1 Okay. Are you married?

Speaker 3 I am.

Speaker 1 Okay. Does she work outside the home?

Speaker 3 She does.

Speaker 1 What does she make?

Speaker 3 She probably makes less than what I do. I'd say about $3,000.

Speaker 1 Okay, so you got like $10,000 coming in a month. So we ought to be able to clear up $35,000 pretty quick once we get our crap together, agreed? Correct.
Okay.

Speaker 1 So, yeah, this is awesome. So what you do, quit paying the debt settlement company.

Speaker 1 Just opt out. No more money.
I'm going to take the Navians. I'm going to take them to YReFi.
And I'm going to take these four credit cards and work them myself.

Speaker 1 Now, here's what you're going to have to do because they're all in default. You have to lump some, no payments, lump sum, settle each one of them.

Speaker 1 So, what I want you to do is I'm going to 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.

Speaker 1 We're going to get the student loans on a payment. We're going to quit making payments to the debt settlement company.

Speaker 1 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.

Speaker 1 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?

Speaker 3 Yeah.

Speaker 1 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 financial Financial Peace University and show you how to handle money.

Speaker 1 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?

Speaker 3 Yeah, smallest one is just shy of four grand.

Speaker 1 Okay.

Speaker 1 So

Speaker 1 you need to put together in your budget $1,000, $1,500, and call the smallest one.

Speaker 1 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.

Speaker 1 It's a high-turnover job. So you're going to be talking to people whose parents are cousins, all right?

Speaker 1 Okay. You got it? I mean, you got to understand this because it's warfare.
No, I do. It's warfare.
No, no.

Speaker 1 And so you're going to try to talk to them and they're going to

Speaker 1 have to hang up. And then you got to go talk to them again so i'm offering you fifteen hundred dollars as settlement in full

Speaker 1 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 got about five seconds right now four three two are you going to take it because i'm hanging up

Speaker 1 and you just got to have some fun with this okay

Speaker 1 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

Speaker 1 Lump sum.

Speaker 1 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.

Speaker 1 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.

Speaker 1 And then that's rule number one. No money.
Not in writing. No money.
A lie.

Speaker 1 The second thing is

Speaker 1 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.

Speaker 1 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.

Speaker 1 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.

Speaker 1 Hope that helps. This is the Ramsey Show.

Speaker 1 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?

Speaker 3 Good. How are you?

Speaker 1 Better than I deserve. What's up?

Speaker 3 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.

Speaker 3 I'm a single mom of four children,

Speaker 3 and I wonder if I can purchase a home

Speaker 3 with going through a divorce.

Speaker 1 Okay, so you're in the process of becoming a single mom with four kids. What do you make, huh?

Speaker 3 I'm a registered nurse.

Speaker 1 Good.

Speaker 3 I make

Speaker 3 like $50 plus dollars an hour,

Speaker 3 but I'm working PRN now since I'm going through

Speaker 3 marital issues and so forth.

Speaker 1 Yeah, I got you. Anyways, um

Speaker 1 so obviously you all are separated.

Speaker 1 Yes. Has the divorce been filed?

Speaker 3 No.

Speaker 1 Why?

Speaker 3 Because I have an appointment next week with the other lawyer because the other lawyer said it was a conflict of interest to hear my case.

Speaker 3 So I'm presuming that he has got that lawyer.

Speaker 3 And so I'm going through another lawyer and start all over again.

Speaker 1 Yep. Okay.
Good. Yeah.
So

Speaker 1 no, you should rent until you get this final.

Speaker 1 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.

Speaker 1 Yes. And so

Speaker 1 you need to wait until the divorce is final.

Speaker 3 Okay. All right.
So the divorce is final within whatever.

Speaker 3 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.

Speaker 3 and what do I do with this property that I live at now

Speaker 3 I paid over a hundred and fifty thousand dollars I paid it off in eight years

Speaker 2 well is is your is your husband gonna have claim to it your ex you're gonna split the split the estate

Speaker 3 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 family.

Speaker 1 That will depend on Virginia law, and I don't know the law in Virginia.

Speaker 1 They may force you to split it with him anyway. I don't know.
But obviously, you're going to ask for

Speaker 1 and have receipts and prove that he didn't pay on it, you paid on it. And so you didn't own it before you were married, did you?

Speaker 3 We bought it like three months after we got married.

Speaker 1 Yeah, okay. So it's marital property, and you'll have to talk to your divorce attorney about that.

Speaker 1 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.

Speaker 1 So you could take that house and the other property, sell them,

Speaker 1 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

Speaker 1 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.

Speaker 3 We're not, well, that's the head scratcher. I live right beside his parents.

Speaker 1 Don't care. Yeah.

Speaker 3 And I'm ready to get out of it, but I want my money that I put into it. I'll probably never see it.

Speaker 1 You need to see a lawyer, honey.

Speaker 2 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.

Speaker 2 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.

Speaker 2 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.

Speaker 2 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.

Speaker 2 You may get $65,000, you may get $75,000.

Speaker 1 And if you,

Speaker 2 I'm just telling you, if you think that that other

Speaker 1 you don't know until this is done.

Speaker 2 So you're going to cause yourself more angst by imagining what comes next is what I'm saying.

Speaker 1 You just don't know until this is done.

Speaker 1 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.

Speaker 1 And then based on that, I'm selling that house.

Speaker 1 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.

Speaker 2 Yeah. And I think the

Speaker 2 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.

Speaker 2 Don't do anything for nine months.

Speaker 2 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.

Speaker 1 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 in your state.

Speaker 1 And your attorney can tell you there's zero chance you're getting this or

Speaker 1 he or she can advise you. I think we got a real shot at that.

Speaker 1 They'll tell you 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.

Speaker 1 If you need to move out of that house because of relationship problems

Speaker 1 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.

Speaker 1 We get our

Speaker 1 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.

Speaker 1 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.

Speaker 1 Plus for this asset, minus for this debt.

Speaker 1 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

Speaker 1 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

Speaker 1 that's the deal. So you 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.

Speaker 1 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.

Speaker 2 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

Speaker 2 in a couple of months, I'm going to get $200,000. And then they get a check for $60,000 or $40, and you're up a creek, right? Yep.
So just get after it.

Speaker 2 And the other thing, Dave, I love that you mentioned this.

Speaker 2 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 handshakey. like we're just separate

Speaker 2 we're just moving on and if you've made a legal binding agreement you have to unbind that agreement now 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 all the the t's crossed and the dies the i's dotted and and move on shut all co shut all um accounts down immediately that have both names on them 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.

Speaker 2 I put a freeze on my credit so that somebody couldn't get in there with

Speaker 2 my social security number and open up some credit cards.

Speaker 1 Yep. And all of that.

Speaker 1 So, you know, we'll just take 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.

Speaker 1 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.

Speaker 1 The judge comes in, the divorce decree in probate court, and says,

Speaker 1 I'm going to give this visa bill to the husband.

Speaker 1 Okay?

Speaker 1 That means that judge has told the husband he has to pay it or he has to face that judge.

Speaker 1 That judge does not have the power to undo the contract.

Speaker 1 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.

Speaker 1 So when he doesn't pay it, they sue both of you.

Speaker 1 And you can't go, but the, but the judge said, the judge does not have the power in divorce court to undo contract law. They don't have that power.
Only bankruptcy court has that power.

Speaker 1 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.

Speaker 1 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.

Speaker 1 That's why this is a business transaction now.

Speaker 1 This is the Ramsey Show.

Speaker 1 Dr. John Deloney, Ramsey Personality is my co-host.
Elliot is in Canada. Hi, Elliot.
Welcome to the Ramsey Show. Merry Christmas.

Speaker 3 Merry Christmas.

Speaker 3 So I'm hoping you can help.

Speaker 3 So earlier this year, my wife left me. I've got a daughter who's about 18 months.

Speaker 3 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.

Speaker 3 I make a decent wage. I make about $73,000 a year.

Speaker 3 But I just, I find

Speaker 3 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 you can help me find maybe ways to optimize that.

Speaker 1 Good question.

Speaker 1 Yeah, that would be a normal thing.

Speaker 1 Left to itself, savings never occurs naturally, unless somebody's just like a savings freak. But most people,

Speaker 1 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.

Speaker 1 And so the only way to make the money behave is before the month starts,

Speaker 1 write every dollar down and where it's going to go, and then make it go where you wrote it down to be going.

Speaker 1 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.

Speaker 1 In the middle of all of that,

Speaker 1 you're not even paying attention to the money, it just leaves. Which would be, I mean, that's what most people would do in your situation.
But the answer is, you've got to pay attention.

Speaker 2 When you're struggling to make payments at the end of the month,

Speaker 2 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?

Speaker 2 Or are you still sending money to your ex? I mean,

Speaker 2 what kind of final situation are you?

Speaker 3 So, I mean, I'm currently paying about 40% of daycare based on how much she makes, how much I make.

Speaker 3 put a budget out for myself and you know it says i have three hundred dollars left over the end of the month but that never seems to happen.

Speaker 3 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.

Speaker 3 It's going to be something that I just won't really notice. And I just have that going into investing in stocks and dividend reinvestments and all of that.

Speaker 1 So, that's like. Okay, so what happened was you wrote down a budget and you never looked at it again until the end of the month.
Yeah, you're probably right. Yeah.

Speaker 1 And then you went, whoa, that didn't work. Yeah.

Speaker 1 So, yeah,

Speaker 1 I'm going to give you the,

Speaker 1 I'm going to tell you to do a written game plan, every dollar on paper, on purpose before the month begins.

Speaker 1 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.

Speaker 1 And make sure if you're spending time eating out because you're lonely or you're spending time doing

Speaker 1 whatever that costs money because you're lonely, make sure you recognize that and you're writing it down.

Speaker 1 Right. Because, I mean, you're going through a heartbreak right now.
This is a hard time emotionally.

Speaker 1 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.

Speaker 1 So what you're facing is a very normal reaction in a situation like you're in, but that doesn't make it okay.

Speaker 1 That doesn't make it, that doesn't make it like, because it doesn't feel right, and that's why you called.

Speaker 2 Yeah. And

Speaker 2 David, 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.

Speaker 2 And that meant I have to get up and do the next thing,

Speaker 2 the next right thing every day. And so the next right thing for him is to begin to put some sort of structure out of this chaos.
His world blew up, his wife left him and this little one.

Speaker 2 And no one has that in their head, even right? That happened.

Speaker 2 Let's get a hold of our money. Let's get a hold 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,

Speaker 2 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?

Speaker 2 And go from there.

Speaker 1 But I guess I don't know.

Speaker 1 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

Speaker 1 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.

Speaker 2 Yeah,

Speaker 2 and I think the difference is I don't think grief is doing nothing.

Speaker 1 I think grief is active.

Speaker 2 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.

Speaker 2 I think what most people mistake grief for is, I'm just going to draw the shades and do nothing.

Speaker 1 Yeah, what I'm saying is when something bad comes at me, it's like you said, gives you permission.

Speaker 1 So I don't need to exercise. That's right.
I don't need to go to church.

Speaker 1 I don't need to watch my money

Speaker 1 because something bad happened to me, so now I have permission to...

Speaker 2 to sit on my butt. One of my friends who works in the fitness industry said, we often treat diets like you blow your diet and he goes, you get a flat tire

Speaker 2 and then you just, just like, whatever. And he said, 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?

Speaker 2 So your world blows up.

Speaker 2 This is the time to actually stop and double down on that stuff.

Speaker 1 Double down on everything else. Yes.
This is when you need to. You've got to control the things you can control.
That's it. And that marriage blowing up is not one of them.

Speaker 2 No,

Speaker 2 that's happened. So let's do these other things so that we can deal with the hard, hard truth.

Speaker 1 And what that means is like hardcore, like you were completely energetic and hopped up on caffeine, hardcore budgeting.

Speaker 1 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 $1,000? $1,000, that's right.

Speaker 1 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 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

Speaker 1 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.

Speaker 2 It's your choose your heart, right?

Speaker 2 You can choose to double down on your budget.

Speaker 2 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.

Speaker 1 Yeah, it's just,

Speaker 1 human nature is just so interesting when we think it through because

Speaker 1 I can't, I mean, doing this for 35 years, I can tell you that the number of times I talk 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.

Speaker 1 And it's like, well, now you got to go clean that up. Yes.

Speaker 1 So, you know, what you said is before you do that, go ahead and not do that. Exactly.
Yeah, yes, yes, exactly.

Speaker 2 Or

Speaker 2 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.

Speaker 2 So I hear from husbands who come home, they're like, dude, I just want to veg out.

Speaker 2 A lot of guys will go sit in the bathroom for an hour and a half, and they'll just scroll their phone or they'll disappear. And

Speaker 2 the pushback is, you need to be present in this house. You need to be around.
Okay, I need, I need a break. And I always tell them, okay, you get one.
You went 30 minutes.

Speaker 2 She's going to keep the kids away for 30 minutes. You get 30 minutes.
After that, you got to put that thing down to be present. And so, yes, when your world blows up, it is hard to get out of bed.

Speaker 1 It is.

Speaker 2 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.

Speaker 2 Like whatever that thing is, you got to go do the next right move that you know is good for you.

Speaker 1 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 John, one of the things John did was a talk during that event and choose your heart.

Speaker 1 Decide, okay, you're either going to be overweight or you're going to exercise and manage your caloric intake. Both of those are good.

Speaker 1 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.

Speaker 1 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.

Speaker 2 It's so amazing.

Speaker 1 I was with him. I was with him Monday night.

Speaker 2 That's like two George Camels. Yeah.

Speaker 1 Well,

Speaker 1 more. Two and a half, yeah.

Speaker 2 Yeah, yeah. That's it.
That's so amazing.

Speaker 2 Choose your heart, right?

Speaker 1 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.

Speaker 1 That's what he told me.

Speaker 1 Wow.

Speaker 1 This is the Ramsey show.

Speaker 1 Merry Christmas, folks.

Speaker 1 So

Speaker 1 I don't understand how on Thursday it's still Cyber Monday. I'm confused about all of this.

Speaker 2 I saw a great internet thing from Lecrae.

Speaker 2 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

Speaker 2 was i said it was good the cyber monday sale and

Speaker 1 it's just going to keep going for a while so 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

Speaker 1 the bad news is that that uh cyber monday uh 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 you can get 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 during the holidays, and you might see some humans during the holidays.

Speaker 1 The total money makeover books, $12. The audio books out there are $8.
Building a non-anxious life, John's number one bestseller is $12.

Speaker 1 Check it all out at the

Speaker 1 continuation of the Cyber Monday sale. Ramseysolutions.com slash store.

Speaker 2 It's just the Keep It Going.

Speaker 1 Just keep her going. Just keep her going.
Travis is in Grand Rapids. Hey, Travis, what's up?

Speaker 3 Hey, yeah. How's it going, Dave?

Speaker 1 Better than I deserve. How can I help?

Speaker 3 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.

Speaker 3 I'm planning on buying a cheap little gas zipper four-cylinder car. My question is, when I do buy that car,

Speaker 3 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?

Speaker 1 Are you do you have debt?

Speaker 3 No, I have no debt.

Speaker 1 Okay.

Speaker 1 How much money do you have in savings?

Speaker 3 $10,000.

Speaker 1 Okay. How much in your investments?

Speaker 3 Well, I just started investing and only like only like $3,000 right now. I'm only 24 years old.

Speaker 1 So what do you make?

Speaker 1 You're only how old?

Speaker 3 I'm 24 years old.

Speaker 1 Okay. All right.

Speaker 3 I make $30 an hour, by the way.

Speaker 1 Yeah, good for you. Okay.

Speaker 1 So you're going to buy a cheap little car because the three-quarters killing you on gas. Pretty simple, right?

Speaker 3 Yes.

Speaker 1 Okay.

Speaker 1 You know,

Speaker 1 I love having a truck. I've had a truck most of my life.
I drove a truck to work today, okay?

Speaker 1 So I'm a truck guy. Let's just put that in the parentheses in the answer here.
All right.

Speaker 1 However, if I were 23 in your situation, I would not keep a spare car as an investment of any kind.

Speaker 1 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

Speaker 1 because it'll be a small percentage of your world. But right now, I mean, that truck will bring how much money?

Speaker 3 I'd say $5,000.

Speaker 1 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?

Speaker 1 No.

Speaker 1 The only reason you're keeping it is because you like it.

Speaker 3 Right. And, well, if I'm buying a cheap car, and if that does go down on me, I will have a backup.

Speaker 1 You don't have a backup now. You have a $5,000 truck.

Speaker 3 Right, right. Yeah.

Speaker 3 Yep. That does make sense.

Speaker 1 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.

Speaker 1 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.

Speaker 2 It gets four miles to the gallon.

Speaker 1 It gets four gallons.

Speaker 1 Yeah, it gets four gallons to the mile.

Speaker 1 But I don't give a rip. You know, that's the difference.

Speaker 1 So, 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.

Speaker 1 And so, yeah, you don't need that. You don't need that extra weight on you.

Speaker 1 But

Speaker 1 you just like the truck. I don't blame you for that.

Speaker 2 I tried this when I was broke to have a spare little, and I inverted it. I had an old truck that I liked driving around, but I had a little zippy card to get around.

Speaker 2 And it was when it came up for registration.

Speaker 1 Oh, yeah. And I'd gum insurance.

Speaker 2 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.

Speaker 2 And that's when I was like,

Speaker 1 I gotta sell it. Yeah, 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.

Speaker 1 Later on, get you whatever you want to get when you got some money, 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?

Speaker 3 I'm doing much better than I deserve, Dave.

Speaker 1 Good. How can I help?

Speaker 3 Well,

Speaker 3 I have

Speaker 3 done so well. I started doing Dave Ramsey about five years before Dave Ramsey started doing Dave Ramsey.
When I discovered you on the radio in the 90s, I said, I'm already doing that.

Speaker 3 I'm already doing that. This is great.
It was confirmation from what I was already doing.

Speaker 1 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.

Speaker 3 So now I'm 68 years old. I survived a bout of cancer this year, so I'm a little tired than I used to be.
But I'm doing fine. I'm doing great.

Speaker 3 My net worth is $5.5 million.

Speaker 3 I've got about $2.9 of that

Speaker 3 in the stock market in mutuals. I've got about $200K in cash.
And I'm living in a house that's worth $1.5 million in Seattle with the lake view.

Speaker 3 I mean, it's just, I'm doing so much better than I ever dreamed.

Speaker 3 I can't believe it. And I'm not believing it because

Speaker 3 I never spent more money than I made.

Speaker 3 It was just obvious to me. You make so much, you spend less, and you save.

Speaker 3 So that's where I am now.

Speaker 3 So

Speaker 3 now that I'm 68 and

Speaker 3 getting a little tireder,

Speaker 3 I've been retired for a long, long time, and I'd spend most of my time doing volunteer work

Speaker 3 when I do anything.

Speaker 3 Anyway, I've got

Speaker 3 duplex up. It's about an hour and 15 minute drive from here and it's worth between 800K and a million

Speaker 3 and it's bringing in about 50k a year.

Speaker 3 It's increasing in value by about 50k a year. So

Speaker 3 its net worth in value is about 100K a year. And

Speaker 3 I'm just getting tired of managing it because, as you know, real estate isn't passive.

Speaker 3 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.

Speaker 3 And I told my wife, I said, I'm tired of managing this thing.

Speaker 1 Got it. So what's your question, Alan?

Speaker 3 Well, do I sell the place and get a REIT

Speaker 3 to just, you know, be done with it? Or do I get

Speaker 3 a professional management company to do that?

Speaker 1 Professional management company is not going to make vacancy and repairs go away

Speaker 1 no I know that both of those things are still going to be there

Speaker 1 if the vacancy and the repairs are what are driving you nuts those are going to 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

Speaker 1 and those kinds of things and deal with the vacancy. But

Speaker 1 no one cares cares when it's empty as much as you do.

Speaker 1 So that's up to you. If you want to go that route, that's fine.
But just

Speaker 1 look for the right thing out of it. It sounds like you're tired of being a landlord.
It's what it sounded like to me. And so I think I am probably getting out of it.

Speaker 1 And I might get into a different kind of a property that doesn't require as much

Speaker 1 active management.

Speaker 1 Something that's a little newer, that kind of a thing. Or,

Speaker 1 like you said, just buy a REIT, drop that million dollars that you're talking about there into a REIT, and that's fine.

Speaker 2 What's a REIT, Dave?

Speaker 1 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.

Speaker 1 And the cash flow from those properties and the increase in value of those properties give you your rate of return.

Speaker 1 And most of the REITs are paying about like a good growth stock mutual fund, about 10 or 12%.

Speaker 1 A good one is. In the old days when they first started, they were fee heavy and they didn't do well net.
Nowadays, they're valid.

Speaker 2 So you just own a whole bunch of pieces, small pieces of a whole bunch of houses?

Speaker 1 Just like you do when you buy a mutual fund, you own a whole bunch of pieces of a little

Speaker 2 pieces of companies, yeah. A bunch of stocks.

Speaker 1 Same thing. That puts us out of the Ramsey Show in the books.

Speaker 1 Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love,

Speaker 1 and create actual amazing relationships. Dr.
John Deloney, PhD in counseling, Ramsey personality, host of the Dr. John Deloney Show, and the number one best-selling author.
He's my co-host today.

Speaker 1 Jared is with us in Phoenix. Hi, Jared.
How are you?

Speaker 3 Oh, I'm doing better than I deserve.

Speaker 1 Good. What's up?

Speaker 3 Well,

Speaker 3 my dad passed away a few years ago, and he left us a very sizable estate to my brother and I.

Speaker 1 What is a sizable estate? How much money?

Speaker 3 My brother and I probably ended up with $3 to $4 million each.

Speaker 1 That's sizable. Okay, I'll agree with you on that.

Speaker 3 And he taught me to be debt-free at a young age. So

Speaker 3 I've built up

Speaker 3 my own retirement up to about $750,000 anyway. So it wasn't that I needed the inheritance, but you were already a millionaire.
I was working on it.

Speaker 1 Well, I mean, you had other savings on top of the $750,000, so you were there. You had a house, probably.

Speaker 3 I had a very blessed life.

Speaker 1 Yeah, good for you. So

Speaker 3 the conundrum that I have is that he was married

Speaker 3 a second time.

Speaker 3 So I have

Speaker 3 step siblings. And one of the steps had

Speaker 3 mentioned that I should share because he left it to my brother and I and not the other steps.

Speaker 1 Now, the steps are not his kids.

Speaker 1 Correct. They were his wife's from a previous marriage, and it was his second marriage, and so he

Speaker 1 became the stepdad. I'm just making sure I got the exact connection.
So they have absolutely no blood connection to him whatsoever.

Speaker 3 Correct. And they're adults.

Speaker 1 How long were they married?

Speaker 3 16 years.

Speaker 2 Okay. Oh, so they were adults.

Speaker 2 He didn't raise these kids.

Speaker 3 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.

Speaker 1 So they in no way even looked at him as a father figure. Bye, Felicia.
Well,

Speaker 3 this step doesn't have a good relationship with her father.

Speaker 3 And she did kind of look at him for advice and so forth.

Speaker 1 Yeah, well, well, that's nice.

Speaker 3 And he was good to their kids, too.

Speaker 1 I bet he was.

Speaker 3 To the steps.

Speaker 1 Okay, so she calls you up and says, I want some money?

Speaker 3 No,

Speaker 3 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.

Speaker 3 And I mentioned that to her, and during that conversation, she got upset because of the numbers involved.

Speaker 3 And she started crying and saying, I can't talk with you about this. And I just really,

Speaker 3 I just don't understand why we can't all just share.

Speaker 1 Because we're not communists?

Speaker 3 But what do you say to that?

Speaker 1 Nothing. Nothing.
It'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,

Speaker 1 listen, I care about you, and I'll be here to emotionally be your step, whatever I am, and that kind of stuff. But

Speaker 1 I understand that this is hurtful to you, but gosh, I'm so sorry. And I'll just leave it at that

Speaker 1 because it's not about you.

Speaker 3 Do you feel bad about this?

Speaker 1 No, you didn't do anything. What'd you do? Why would you feel bad?

Speaker 1 What'd you do?

Speaker 3 Well,

Speaker 3 not that I did do something, but that, you know, that I'm in a better situation than she is.

Speaker 3 It just,

Speaker 1 you know, she's making 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.

Speaker 1 Had he left some to the stepchildren, that would have been unusual.

Speaker 2 Step adult kids.

Speaker 1 Yeah, that he never were never in the house that he lived in.

Speaker 2 He didn't adopt them, did he?

Speaker 1 No, they were adults.

Speaker 3 No, their father's still alive.

Speaker 1 Yeah.

Speaker 1 Yeah.

Speaker 1 So, no, I mean,

Speaker 1 that's

Speaker 1 this poor girl's just got emotional issues on her own. I mean, I can't talk to you.
You've got too much money that I thought I needed some of. I mean, come on.

Speaker 1 That's her. Okay, well,

Speaker 1 I don't feel guilty at all. And I'm not going to be mean about it.
I'll be kind to her. And your dad loved her.

Speaker 1 He'd be gentle with her, and you were going to be gentle with her, but your dad didn't leave her any money.

Speaker 1 And he was closer to her than you are.

Speaker 3 No, We're pretty close.

Speaker 1 Your dad was closer to her than you are.

Speaker 1 He married her mother.

Speaker 3 All right. Well, I appreciate the vote of confidence that I was doing the right thing.

Speaker 1 So

Speaker 1 were the assets of you and your brothers intermingled?

Speaker 3 Some of them were. There were just a couple of things, but my brother and I got that worked out.

Speaker 1 So how are you involved in the divorce then and his death and so forth?

Speaker 3 Because I'm his trustee.

Speaker 1 Oh, geez. You're the executor of his will.

Speaker 3 Well, she sidestepped that and got the, I forget what it's called, when you're the

Speaker 3 she became,

Speaker 3 and lack of terms, the executor because the will hadn't been put in place.

Speaker 3 So she's kind of in charge of the estate, but I'm in charge of the trust

Speaker 3 because I was the trustee. So, yeah, that's a whole nother mess.

Speaker 2 I bet Thanksgiving dinner is amazing at your house.

Speaker 1 No, not anymore. This chick's on the out.
She was on the out before. He got so much.

Speaker 1 Wow.

Speaker 1 Yeah.

Speaker 1 It's like, I get to make the rules.

Speaker 2 But I've got the money.

Speaker 1 But I get to make the rules. No.
But I get to make the rules. Not really.

Speaker 1 You're like, you were almost the ex-wife. Keep that in mind.

Speaker 2 Yeah, that's what I figured out.

Speaker 1 The reason we were going to put an X in front of your name, kiddo.

Speaker 2 How the Fed uses the road money. Like, we're estates.
We can do do what we want.

Speaker 1 That's cool.

Speaker 2 You want roads?

Speaker 1 Okay, we'll do it.

Speaker 1 We'll do what you say. Oh, man.

Speaker 1 So, hey, guys. Wow.
Jared, you do whatever you want to do, honey. But bottom line is this back to the stepsister thing or whatever she is.

Speaker 1 If you were to give her some money, it's not going to make her okay.

Speaker 1 She was not okay before. She will be not okay after

Speaker 1 because this is not about the money and it's not about you.

Speaker 1 So you can't fix her with a check. Right.

Speaker 1 It's a waste of money.

Speaker 2 And even, I mean, y'all call each other what you want to call each other. That's that's your family's business.

Speaker 2 I don't even know this qualifies as a stepsister.

Speaker 2 It's not. I mean, it's, it's, it's, I guess it is.
It's the child of, it's an adult child of someone your dad married, right?

Speaker 2 But that's a separate life. It's a separate world.
And maybe y'all are close now and that's wonderful and great and good.

Speaker 2 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

Speaker 1 already decided what he wanted to do with this money he made that decision she was sitting there when he wrote the will right

Speaker 1 i mean she's she was on the planet at that point yeah this is not this is not like something that just oh i didn't know right you know he already clear dad already clearly said what he wanted to have happen yes behaviors and language he he was loud and clear yeah yeah and he didn't say he was mad at her her.

Speaker 1 No. He just said she wasn't his.

Speaker 2 And you don't know what she's already left them.

Speaker 2 Who knows if she paid for her college or her kids' college? You don't know any of that stuff. She just saw some huge numbers and says, I want some of that.

Speaker 1 Yeah. That's what happened.

Speaker 1 There you go. This is the Ramsey Show.

Speaker 1 Dr. John Deloney, Ramsey personality, is my co-host today.

Speaker 1 So I ran out of time and we ran into the break on the dysfunctional stepsister

Speaker 1 dad left money to his own boys

Speaker 1 discussion.

Speaker 1 And I was actually having a talk with one of our team members before the show.

Speaker 1 Christian and here were talking about a dysfunctional succession plan that's blown up in the public eye that he's aware of. And

Speaker 1 how do you 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,

Speaker 1 so

Speaker 1 there's two broken things in that call. One is

Speaker 1 the stepkids had no knowledge. And so

Speaker 1 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.

Speaker 1 You need to give me some of this money, right?

Speaker 1 The other broken thing was his brother, who had received $3 million,

Speaker 1 he and his brother had some of that intertwined. They were able to untangle that so this brother was standalone.

Speaker 1 And then his brother starts going through a divorce, and instead of making sure he had a completed will,

Speaker 1 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

Speaker 1 estate planning, okay?

Speaker 1 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.

Speaker 1 Have a reading of the will or a discussion with the parties that think they might be involved. You can either do it in one room or a series of rooms.
I don't care.

Speaker 1 Have the courage to tell people what it says while you're alive. So if dad,

Speaker 1 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.

Speaker 1 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.

Speaker 2 Would that be his conversation, or would that be their mother's conversation? I think it's his.

Speaker 1 Okay, I think it's his.

Speaker 1 Right now, who's she angry at? Him. Yeah.

Speaker 1 Because she felt connected to him, and this

Speaker 1 cut her. Yeah.

Speaker 2 It makes me wonder if if he gave her 50,000 bucks and then 4 million, and

Speaker 2 that's the gap. She didn't say.
She didn't say.

Speaker 1 He said he left everything to my brother and I. That's true.
So, 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.

Speaker 1 We didn't get that in the story. But the bottom line is tell people,

Speaker 1 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.

Speaker 1 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.

Speaker 1 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.

Speaker 1 And so you're not going to get any money in the current version of the will.

Speaker 1 And it's not because I don't love you. It's because I do love you.
And you're out of the will.

Speaker 1 And he knows that now. And your brother's the executor, and don't you say a word to him.
So dad

Speaker 1 threw his shoulders back had a backbone and had the discussion with a grown child drug addict while he's alive yes so this is not a movie this is life yeah 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 fun babies and the reading of the will and they're all shocked that the one kid who's somewhat normal gets it all.

Speaker 1 That's a movie. That doesn't happen in the real world.

Speaker 1 Whatever you're doing in the real world, tell the people.

Speaker 1 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. Yeah, your cowardice.

Speaker 1 It's an act of cowardice.

Speaker 2 Your cowardice will blow up the lives of the remaining people.

Speaker 1 That's exactly what this is.

Speaker 1 If dad had had a 10-minute conversation with his grown stepkids and explained to them 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.

Speaker 1 You're not my children, 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

Speaker 1 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.

Speaker 1 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

Speaker 2 so you've got to do these documents people yes it drives me nuts and here's the other side of it here's the other side of it um i just yesterday sent my dad a text message my dad's in his 70s and i'm gonna 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

Speaker 2 what your picture is for the next 10 years. Where you and mom want to live, because I think he's retiring in the next couple of years from his professor job.
Where are you going to live?

Speaker 2 What do you want this to look like? And as a part of that conversation,

Speaker 2 and my dad was a homicide guy. I've known where that wheel was since I was six years old, right?

Speaker 2 But talking through what kind of support are y'all going to need? What kind of health challenges are y'all facing? But there are millions of

Speaker 2 senior adults that won't have that conversation you're having, but there's also millions of people my age, 30s, 40s, and 50s.

Speaker 2 If you don't know, don't just say, well, they wouldn't have the conversation. Then you need to go have the conversation.
Somebody has to be an adult in this transaction.

Speaker 1 Right. Guys, 78% of Americans die without a will, which is insane to me.

Speaker 2 That's stupid.

Speaker 1 It's asinine.

Speaker 1 If you're 18 years old, you need a will. It's cruel.
I don't care if you own anything or not.

Speaker 1 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.

Speaker 1 And so you need to be in charge of your kids. It's a will.

Speaker 2 And there's zero correlation between making a will and a likelihood you die soon.

Speaker 2 It's not a thing. Talking about death doesn't

Speaker 2 encourage me.

Speaker 1 Probably. The more we discuss my death, the better I feel.

Speaker 1 We call it the Monty Python meeting where we sit and talk about Dave. When Dave 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.

Speaker 1 Really? Just a flesh wound?

Speaker 1 i've dave over the last year on my show i think the one of the most common questions i get is how do i do x without somebody getting mad how do i do how do i talk about why without them getting blowing up our you can't control that so i think we all as a country we just got to have some hard conversations and we got to do it in our at our kitchen tables you don't have to be mean about it no my buddy that 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 he he would help him any way he can but he's not going to give him a money in order the same amount of money everybody else.

Speaker 1 He gives him zero.

Speaker 1 So, because, you know, and he said, when you clean up, I'll change the will if I'm still here.

Speaker 1 If you don't clean up before then, you're just out. Yeah.

Speaker 1 So, you know, and it's a good incentive, but we're not trying to buy something with that. We're just trying to say, this is what's going on, so don't be hurt later.
Yeah. There we go.

Speaker 1 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.

Speaker 1 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.

Speaker 1 And I do a podcast that we've done a podcast for about, gosh, since podcast started. It was one of the first podcasts out there.

Speaker 1 It was the first one we ever did here before we even put Ramsey on a podcast. It's called Entree Leadership Podcast.

Speaker 1 And I took it over two years ago, and I just take calls from small business guys and gals who call in and go, I got this team member that's doing this. I can't get my dad to do the succession plan.

Speaker 1 I'm having trouble with this marketing idea. And so we just talk business during that entree podcast.
I do it once a week. If you want to be a caller on that, go to entreeleadership.com slash ask

Speaker 1 or call 844-944-1070. 844-944-1070.
So mama bearlegalforms.com has been a sponsor of ours for almost a decade now. And that's a quick, easy way during the holidays.

Speaker 1 If you have an uncomplicated estate, you can knock out a will just for a few dollars and in a few minutes. And then just hand it to everybody if you want to.
Merry Christmas, right? I don't know. But

Speaker 1 if you've got a complicated estate, you may need to sit down with an estate planner. Like you got a lot of money or a lot of weird stuff or something.
That's fine.

Speaker 1 But if you want to knock out a quick, easy will and do all the health care power of attorney and all the rights stuff, mamabearlegalforms.com will help you.

Speaker 1 Dr. John Deloney, Ramsey Personality, is my co-host today.
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Speaker 1 who have defaulted private student loans.

Speaker 1 And they help them refinance with a low fixed interest rate that you can't get anywhere else. One guy named Chris did it.
He had a student loan. He cut his payment by 40% with YReFi.

Speaker 1 Go to YReFi.com slash Ramsey. That's the letter YREFY.com slash Ramsey.
Might not be in all states.

Speaker 2 All right, today's question comes from Jenna in Minnesota. Jenna writes, should I help my boyfriend pay off student loan debt? No.

Speaker 2 I guess we can 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.

Speaker 2 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.

Speaker 2 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.

Speaker 2 He has about $15,000 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.

Speaker 2 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?

Speaker 1 Should you cave to his blackmail?

Speaker 2 That's exactly. I was going to say

Speaker 2 he is, this is a, it's a red herring. It's a, it's a proxy.

Speaker 1 It's a ploy. Yes.
So listen, kiddo, we tell folks when they get married, everything becomes shared.

Speaker 1 So you will have $125,000 student loan when you're married because your husband does. He will have $300,000 in stocks.
that his wife's grandfather left her.

Speaker 1 He will have $80,000 in savings that his wife had before they got married. And so when you get home from the honeymoon,

Speaker 1 pay off the student loan. But this is bull crap.

Speaker 2 It's bull crap. On a stick.
So frustrating.

Speaker 1 Yeah.

Speaker 1 Tell boy child time to get, you know, part of the problem is we're all playing house over here, so he's got no incentive to get married other than blackmail you into it.

Speaker 1 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.

Speaker 1 That's bull crap. You're shacking up.

Speaker 2 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.

Speaker 1 Oh, yeah, that's like

Speaker 1 standard.

Speaker 2 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.

Speaker 1 No, he would never do that. Yes, y'all.
The guy that won't marry me would never do that.

Speaker 1 You know how you sound?

Speaker 1 So seriously, no.

Speaker 2 Don't, please, don't, please, don't, please don't.

Speaker 1 Time to get married, boys and girls. Look, I think this is a, I think it's a good, I think it's a good, like an altar call right here.
It's come to Jesus.

Speaker 1 Are we going to do this or not? Yeah. Because if you're going to get married, y'all come home from the honeymoon.

Speaker 1 We would tell you to take the $380,000 that you have in assets and pay off the $125,000 debt that he has.

Speaker 1 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.

Speaker 1 So, yeah.

Speaker 2 And by the way, when you get married, what you're agreeing to do is to help carry burdens together.

Speaker 1 For richer, for poorer.

Speaker 2 And so

Speaker 2 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.

Speaker 2 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 stuff.

Speaker 1 You put our wife on our life on who.

Speaker 2 He doesn't want to burden me with that.

Speaker 1 You put her life on hoof.

Speaker 2 And he's not ready to marry you then. Oh, brother.
We're going to work together. Work together, work together.

Speaker 1 I'm going to give this guy about 20 minutes.

Speaker 1 Get me to the church on time, baby.

Speaker 1 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.

Speaker 1 And I'm usually a little bit, I'm pretty mean, but I'm usually a little bit more gentle than this.

Speaker 1 But there's something wrong, Jenna.

Speaker 2 Here's what is

Speaker 2 getting under my skin.

Speaker 1 Oh, I know what it is. You have worded all of this.

Speaker 1 It's all the dad gum language. That's what's killing me.
You have worded all this because you have bought this freaking sales line. That's it.

Speaker 2 That's the thing. She puts both of you.
She's the problem. She thinks she is the problem here.

Speaker 1 This guy has completely...

Speaker 1 I'm afraid he's a con artist. He's a leech.
Yeah.

Speaker 1 So. Either way, if you're going to, listen, you either need to leave or you need to get married.

Speaker 1 There's no in between. Don't pay off his loans.
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.

Speaker 1 But you got about 20 minutes, buddy. About 20 minutes.
Stop the sales job.

Speaker 1 Don't like con artists who are sleeping with the person they're conning. It's a problem.

Speaker 1 Dad gum salesman.

Speaker 1 Sorry. I think I've had too much coffee, John.
Merry Christmas. Ho, ho, ho.
Oh, my gosh. I need to calm down.

Speaker 1 But yeah, I just, I I think about my girls, and they did not, thank God, you know, thank God that we taught them how to pick and they picked studs. So I've got two sons-in-awaul.

Speaker 1 They're absolutely incredible.

Speaker 2 Yeah, I've got a young daughter.

Speaker 1 You would kill him.

Speaker 2 But here's what, here's why.

Speaker 2 I know, I do. Here's why.
This young woman, Jenna, is

Speaker 2 astounding. Yeah, she's a dad guy.
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.

Speaker 2 And she's got this guy that she loves, and the guy is making her the reason.

Speaker 2 And so she's asking herself every day, what am I doing wrong? Oh, I have another way I can save this thing.

Speaker 1 I want to help. I know what you're going to say, but I'm different.

Speaker 2 No, no, no. Jenna, it's not you.
It's him.

Speaker 1 It's him.

Speaker 2 You're worth more than this. That's what I'll say.

Speaker 1 You're more violent.

Speaker 2 You're the dad of a daughter. You're worth more than this.

Speaker 1 I'm angry for you, Kenny.

Speaker 1 Yeah.

Speaker 2 So brought to you by Y ReFi and

Speaker 1 Preparation H. Because I got hemorrhoids now.

Speaker 2 God, it makes me so mad when guys are idiots.

Speaker 1 Patrick's in Orlando. Hey, Patrick, what's up?

Speaker 3 Hey, guys.

Speaker 3 So the situation is

Speaker 3 my wife and I are 67,

Speaker 3 and we've got 2.8 million in four different mutual funds.

Speaker 1 Way to go.

Speaker 3 Thank you. Thank you.
We're debt-free, and we got an offer we couldn't refuse on our business. We close December 11th.
We get 575 cash and we hold a note for five years for $300.

Speaker 3 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

Speaker 3 and

Speaker 3 They're saving for a house. They're also debt-free.
They're doing everything right. They're both teachers and

Speaker 3 they want to get a house, and they're saving like crazy.

Speaker 3 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 $5.75.

Speaker 3 I could probably, you know, give them the money for a pretty nice house in Austin. with that 575.

Speaker 3 And so that's one option.

Speaker 1 Option two would be

Speaker 1 really strong.

Speaker 3 Just do it.

Speaker 1 Yeah, I like it.

Speaker 1 I like it. Can I add one thing to it?

Speaker 3 Yeah.

Speaker 1 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.

Speaker 1 Right. But I would sit down in person with them,

Speaker 1 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.

Speaker 1 We're going to make a production out of this and say, this has nothing to do with the grandkid, although you said it six times that it does, but it doesn't. Okay.

Speaker 1 It shouldn't. It shouldn't.
Because you shouldn't give it to them because of the grandkid.

Speaker 1 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.

Speaker 1 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.

Speaker 1 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 promise to never borrow money again.

Speaker 1 Love it.

Speaker 1 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.

Speaker 1 But if you go screw that up by borrowing money, it's going to break my heart.

Speaker 1 And I would do it. Yeah.
Now, oh, unified estate tax credit. Talk to your tax guy.
You need to use up some of your estate tax exemption so you don't have gift tax. Don't do this without tax advice.

Speaker 1 Go get some tax advice, please. This is the Ramsey Show.

Speaker 1 Dr. John Deloney, Ramsey Personality, is my co-host today.
Thank you for joining us, America. If you haven't heard, Cyber Monday is no longer just for Mondays.

Speaker 1 It's pretty much any day of the week we want it to be, so it's just a cyber thing. Cyber forever.
It's a cyber. Cyber's forever.
That's what we're at us, yeah.

Speaker 1 And apparently, we lied to you when we told you it was only on Cyber Monday, and we're going to continue to lie to you until we choose not to. So that's the bad news.

Speaker 1 The good news is the store has everything on sale. Cyber Monday.
Cyber Monday. Here we go.
So, yeah, Breaking Free from Brokes on sale for $12. The number one bestseller by George Camill.

Speaker 1 Building a Non-Axious Life, the number one bestseller by Dr. John Deloney on sale for $12.

Speaker 1 Baby Steps Millionaires, Total Money Makeover, Get Clear Assessment. Audiobooks are $8,

Speaker 1 by the way. Just check it out, ramseysolutions.com/slash store until we decide Cyber Monday is over.
And when we decide it's over, you will have missed out.

Speaker 1 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.

Speaker 3 Thank you for having me.

Speaker 1 Sure. What's up?

Speaker 3 So, me and my fiancé are just really stressed. Our debt-to-income ratio is horrible.
So

Speaker 3 we just wanted to know what steps we need to take to go in the right direction to get out of debt.

Speaker 1 When are you getting married?

Speaker 3 We haven't planned a date yet.

Speaker 1 Then there's not a we.

Speaker 3 Right. Okay.

Speaker 1 Okay. There's not legally, morally, ethically, monetarily,

Speaker 1 we aren't in existence until we are married. And I'm not just making

Speaker 1 a statement.

Speaker 1 You literally have absolutely no rights to the other person's income, legally speaking.

Speaker 1 Okay.

Speaker 1 So

Speaker 1 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.

Speaker 1 Now, when you're married, that's different.

Speaker 1 So

Speaker 1 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.

Speaker 3 Yes, sir.

Speaker 1 Okay. How long have y'all been engaged or dating?

Speaker 1 About three years engaged. Time to paint or get off the ladder, kid.

Speaker 1 What do you mean? I mean, get married. Oh, okay.
Sorry. We've been almosting a long time.

Speaker 1 Yes, sir. So y'all just, how old are you?

Speaker 1 I'm 24. Okay, cool.
So what do you make and what does he make?

Speaker 3 So I make

Speaker 3 annually 38K.

Speaker 1 What's he make?

Speaker 3 And him annually,

Speaker 3 okay, I don't have it totaled, but $26.40 monthly.

Speaker 1 Okay, he makes about the same you do then. Okay.
Yeah, right. And

Speaker 1 how much debt do you have?

Speaker 3 So my debt

Speaker 3 about

Speaker 3 so really I only have the home loan and

Speaker 3 the

Speaker 1 house? Yes, sir. Is it your house or do you buy it together?

Speaker 3 I'm the only one that's on a lease.

Speaker 1 Oh, it's a lease.

Speaker 3 Yeah, so I'm financing a mortgage loan.

Speaker 1 Honey, that's not a lease.

Speaker 1 Oh, man. Did you buy a house or are you a tenant?

Speaker 3 I bought a home.

Speaker 1 It's a mortgage. In your name.
You have a mortgage.

Speaker 1 Lease does not enter into it.

Speaker 3 yeah 243 000.

Speaker 1 okay

Speaker 2 and um and so you have a mortgage you bought a 240 000 house and you make thirty five thousand dollars a year

Speaker 1 and you're 24 years old oh geez on the promise that he was going to help her pay but they're not married

Speaker 1 and he's not on the loan

Speaker 1 correct yeah this is what i've been talking about before i started talking okay now the uh

Speaker 1 all right.

Speaker 1 So

Speaker 1 let me, what debt does he have?

Speaker 3 He has, in total, including his auto loan, $28,330.

Speaker 1 Okay.

Speaker 1 So here's what I would tell you guys to do.

Speaker 1 And you're, I don't know if you're going to do it. I can't tell from talking to you.
Will you actually do it?

Speaker 2 You sound terrifying. I kind of don't think.

Speaker 1 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,

Speaker 1 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?

Speaker 1 This guy walks off.

Speaker 1 You're screwed, girl.

Speaker 1 You understand?

Speaker 1 You can't pay this house payment. Okay.

Speaker 1 Can you?

Speaker 1 They qualified you for it, but can't you can't afford this house if he gets up and leaves, right?

Speaker 1 Right. Okay.
Now, I'm assuming your is your relationship good?

Speaker 1 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.

Speaker 1 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.

Speaker 1 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,

Speaker 1 and we take all the overtime we can. We quit eating out, we don't go on vacation, and we clean up this mess.

Speaker 1 And 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, you'd be in pretty good shape, right?

Speaker 1 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 sorta doing this because it won't work.

Speaker 1 Because

Speaker 1 doing things in the wrong order has left our precious Madeline here

Speaker 1 unbelievably vulnerable.

Speaker 1 You will be the victim if this thing goes sideways, not him.

Speaker 1 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

Speaker 1 you talked yourself into, or you got talked into, or you guys together sat down and had

Speaker 1 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,

Speaker 2 potentially. Let's say he's not going to break up with her,

Speaker 2 but they cut his hours.

Speaker 2 He quits his job, or he decides, I want to go to the NBA, and he just quit, like, it's so exposed.

Speaker 1 I mean, she doesn't have it, it's all on her.

Speaker 2 Yeah, that's what I mean. Like, he's got a free ride now, he got someone else to buy a house that he lives in, and he gets to pay rent.

Speaker 3 Maybe, maybe, yeah.

Speaker 1 Yeah. So

Speaker 1 this is why these numbers don't work. Okay.

Speaker 1 All right, guys. There's a couple of issues.
We've got to stop for a second because we've got just a moment here.

Speaker 1 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.

Speaker 1 Go download that for free. So the numbers.

Speaker 1 If you do just a couple of things in the right order,

Speaker 1 there's less than a 3% chance you'll be at the poverty level. And the right order is

Speaker 1 before you do anything with your, with building a family, you graduate from school, high school.

Speaker 1 Okay?

Speaker 1 You do not live together before married.

Speaker 1 If you don't live together before married and don't have children before married, so you do it in the,

Speaker 1 it's called the order, the

Speaker 1 poverty order. Okay? So you graduate graduate from high school, get married before living together and before having children.

Speaker 1 You have less than a 5% chance of being at the poverty level. That's the national statistics.

Speaker 1 Almost all of our poverty occurs when you do those things in the wrong order.

Speaker 1 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.

Speaker 1 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.

Speaker 1 You set yourself up for prosperity.

Speaker 1 You want to add to this and get it down to almost zero chance? Graduate from a four-year degree

Speaker 1 in a usable degree field. You want to add further to that? Do all of that with no debt.

Speaker 1 If you just do a couple of little things like that, you're down to less than a 1% chance you're going to be at the poverty level.

Speaker 1 These are controllable variables in your life.

Speaker 1 But instead,

Speaker 1 you just

Speaker 1 buy a house with somebody you're not married to.

Speaker 1 This is the Ramsey Shop.