It’s Time To Go Scorched Earth on Your Debt!

Live from Ramsey Network, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey Personality, George Camel, joined

by Jade Warshaw, bestselling author, and we are here to help you take the right next step for your life and your money. So give us a call at 888-825-5225.
We'll try to get you the help and hope that you need. Jackie's going to kick us off in New York City.
What's going on, Jackie? Hi there. Hi, everyone.
What's going on? Well, I would love to be able to help my sister obtain a mortgage. Since the death of my mom in August, she finds herself in a position of needing a place to live.

I want her to move very close to me in the same town, hopefully.

And unfortunately, because she was my mother's caretaker for the last six years, she did not have an income.

My husband does not want to co-sign on a mortgage for her. I'm having a hard time with that.
When he told you that, what did he tell you? He told me I'm 62 years old. We just paid off our own home.
I do not want my name on another mortgage for the rest of my life. I'm having a hard time with that as a reason because it most likely would be a temporary situation.
What do you mean temporary? Well, I would assume that once my sister is settled and with a job, that she would be able to take over the mortgage, I guess refinancing and, I guess, getting his name off of that mortgage. How old is your sister? You're 62.
How old is she? I am actually 60. She is going to be 62 in February.
Gotcha. Does she have income now? She has a very small pension that she's collecting on.
She started that early because of leaving her latest job. Does she have any money to her name? No.
Jackie, do you see the writing on the wall that your husband sees? You are taking taking on this mortgage for yourself it's going to stifle your ability to retire because you're going to have to pay this entire mortgage yeah jackie first off i'm sorry that you lost your mom you it says on the screen that you live in new york what does it cost i'm just trying to get my head around the numbers i'm sorry i. I actually don't live in New York.
New York would be the biggest, closest to me. That was the question.
So where you live, where you live, what is, okay. And what does, what you're looking at, what does it cost? As far as for her to buy a home? well i mean for her to live in a house that she needs or wants to i mean you're the one saying that you should buy or something so i'm just trying to see what you guys have looked at that would suit her needs her her buying a home would be contingent upon selling the selling of my mom's house sure and what would you guys get for that? And I would say that approximately between $80,000 and $90,000.
I am one of seven. So we are all on the deed.
So it's one-seventh of the entire sale. And I have also agreed because I'm not in the...
Can I clarify? Is the $90, one-seventh or is that the 90,000 split seven ways? I'm sorry. No, it's 90,000 would be one-seventh.
All of us would probably collect. Okay.
Got it. Possibly.
Yes. Okay.
So we're trying to sell the home now. So, in other words, her obtaining a home close to me would be contingent upon the sale of my mom's house.
Sure. I have also agreed because I'm in a position where I don't work.
Um, I, I don't have to, um, we're well set. Can I ask a question? Sure.
If you want your sister to live very closely to you, cause that's in one hand, and then you've got your husband who gets a vote saying, I do not want to sign and co-sign for a house, which, by the way, I agree with.

I'm pretty sure George 100% agrees with, too.

What would it look like if she could she stay with you guys for a while until she could you guys set a limit of time and say hey we want

you to live here uh or we want you to live on this side of town or on this side of the country whatever it is uh what if you stayed with us for four months or whatever you guys decide talk to your husband and until you get a job on this side of town and then when you get a job the house sales you'll move into your own place what would something like that look like um probably not doable simply because of the pet situation.

There are two dogs. your own place what would something like that look like um probably not doable um simply because of

um the pet situation there are two dogs and a cat that now one being my mom's pet and and you um her my sister's dog as well so um can she afford to take care of these pets he can

I mean

I mean

I mean, are you asking me if she would give them up? I'm not asking that. I'm saying it sounds like she's broke, and then these pets are adding an extra expense, and now she's going to jump into homeownership.
I'm wondering if she can rent somewhere instead. Why does it have to be she needs to buy her own house or else? Well, unfortunately, from what I understand about renting, you're having to meet so much criteria of having a job for the past six months.
Well, there's way more, let me tell you this, there's way more criteria needed to buy a home than to rent a home. To rent a home want to make sure basically that you can afford the rent and that way if you have debt to pay off or other things to get in place you have the time to do that whereas if you're going to buy there's really quite a bit that needs to be in line first and based on what you're saying it doesn't sound like she has that in line at the very least being able to put a down payment it sounds like she's quite far from that and so here's what I would do

I would do. Take her 90 and park it in a high-yield savings account.
Let her rent for a year in something that's an apartment, maybe a small home if it's reasonable in your area. And then once she has income and has proven that she can make all these on-time payments, maybe then you at least help her buy the home.
Not financially, but just from a support standpoint, walking through all the pieces of it. But I would not intertwine your finances.
If you want to gift her some money to do this, that's fine. But do not sign any piece of paper.
Because the truth is, think about, and I'm not saying this in any negative tone, but she hasn't worked for quite a while. And she's 62 years old, and she's moving

to a new area of town and has to find not just a part-time job, but a job that is going to support her as a single woman. And that could take some time.
Do you know, does she have any other debt, or do you know anything else about her financial situation? No, I mean, she has no other major debt. she might have like maybe $300 in credit card debt.

That's something that she pays the minimum balance on.

Okay. Well, we're really at the bottom of this, Jackie, is we want to make sure that she can sustain her own life and that you're not artificially propping her up for the rest of her life because that's not fair to her.
She needs to learn how to become independent and kind of grieve the life that she had as a caretaker and go, all right, I got to do this on my own now and I got to pay my own bills. And that means I'm going to have to go to work.
Foreseeably, who knows how long? She might have to work into her 70s at this point. And it's not fair to your husband either because the truth is you guys have built a life together and it's allowed you to get to this point and it's okay if he says and he is smart for saying i'm 60 i'm 62 i don't want to put my name on somebody else's debt it's not smart to co-sign for someone else's debt and that's really what this comes down to he knows you guys are gonna have to pay that bill for the rest of your lives or eventually sell it it's going to cause more relational turmoil so we need to figure out a way for her to do this on her own.
Thanks for the call. This is The Ramsey Show.
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Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw.
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Or if you're listening on YouTube or podcast, click the link in the description. Dennis is up next in New York, New York.
What's going on, Dennis? Hey, hi, George. How are you guys doing? Great.
How are you? I'm doing good. I'm into the program.
I'm up to baby step three. I'm raising my three to six months emergency fund.
Awesome. And my question is for the next, as I move forward, do I put the rest of the money I want to save for a down payment, do I put that in a high-ill savings, or can I put that in a low-risk investment like SPY or something to let it grow? What's your time horizon for this purchase? Are you looking at buying a home in the next two years or six years? No, at least five years minimum.
Okay. If you're looking at a five-year plus time horizon, you can invest it in something like an index fund, mutual fund, to help that money grow at a much higher rate than a high-yield savings account.
And the reason for that time horizon is if you're below that, if you're talking a year, two year, three years, there's a much higher chance you could lose money right before you go to make that purchase. So five years plus we've seen in the market, you're likely going to make money.
And so that's a great move. You're talking five years out.
How much are you looking to save up? Here in New York, it's quite expensive for a house, like $600 minimum. So I don't know, like, I didn't map it out exactly, but...
You're probably looking at a six-figure down payment. Yeah.
How much can you save each year based on your current income? Current income, about $13,000, $14,000. A year? Yeah.
Okay. So if you get aggressive, could you save $20,000 a year for five years? With that invested, you'll have a healthy six-figure down payment.
Yeah. That'll get you there.
Yeah, I'm going to have to up my income a little bit and then... Over five years, I think so.
I would hope your income goes up. What do you do for work? I'm in financial healthcare services.
Awesome. What do you make? Finance for healthcare.
Right now, about 65. 65? Okay.
Yeah, I mean, that's a great income, but for New York City, that's tough. It's a very...
It's an ultra high cost of living area. And so I would try to up your income.
That would be my goal to get that core income up over these next five years while I aggressively try to save as much of my income as possible. All right.
That's the goal, man. I hope that helps.
Not easy in New York City, Jade. I mean, people call from California or New York and they go, hey, your housing parameters don't work.
And we go, the math isn't broken. The math of your reality is broken where you want to buy a $600,000 home, but you make 60K.
Yeah. I'm hoping he lives outside the city and somewhere, you know, in the suburbs.
I mean, I got a lot of friends out there and they live in the, you know, suburb of New Jersey and they commute in. And, you know, it's a good life.
If you want to be a homeowner, that's kind of the game you have to play. 100%.
And yeah, especially making sure that that payment is no more than 25%. That's a key, key piece of this.
Because if you make $4,000 a month and your payment is $2,500 a month, you're not going to be able to survive and pay for anything else. Tom is in Seattle up next.
What's going on, Tom? Hi. Hey, thanks for taking my call.
I just need your opinion and if you can give me some guidance on the following. Come on, Tom.
I said, come on, let's hear it. She was excited.
I'm excited. Okay, good.
I'm 61 years old. I'm going to retire in four years.
Our son graduated with a degree in chemistry two years ago. His company has told him that he needs a degree in engineering, which he wants to pursue.
So it's going to be two years full time. And I know he can do it.
But my question is, you know, my wife and i paid for everything on the first degree i'm close to retirement how much assistance do we give him it's up to you you don't have to get you don't have to give him any and that's the thing i want you to walk away from this from if you guys have it to give and it makes sense with the plan that you've created yeah you can decide what that is but uh being it paying paying for education especially paying for it in full really is a privilege and it's something that you get to decide um if you want to do it or if you don't want to do it and there's no guilt if you say i don't want to do this but you do need to have that conversation it needs to be really clear and

I would be very um forthcoming on ways that he could pay for it himself so that he doesn't go into debt and I think that's the most important thing that you could do is say debt is no is not on the table and it shouldn't be on the table for you um however your mother and I are only going to pay for x percent or zero percent or whatever you guys decide what are you thinking about?

You know,

I'm just, I'm kind of lost because he just it he kind of sprung this on us. Yeah.
You know, I think, you know, we've got we're debt free houses paid for. We got six about 600 in IRAs and 401ks, $450 in cash and mutual funds.
What's your house worth? House is worth about $300 to $320. Okay.
And, you know, household income right now is about $185. Oh, wow.
Great job. if you wanted to do this could you cash flow it as part of your budget versus

take it out About $185,000. Oh, wow.
Great job. If you wanted to do this, could you cash flow it as part of your budget versus taking money out of your investments or savings? Yeah, I think so.
With my work, it's a draw against commission. So I get four big settlements a year.
Okay. What's it going to cost? I am thinking $40,000 to $50,000.
And when you say he just sprung this on you, what does that mean? When did he say it? Oh, like two weeks ago. Listen.
He'd had a talk with his boss who who just kind of waited on the line for him well can i can i be honest i think it's ridiculous that the employer's not paying for this if dave ramsey said hey we want you to do this job it's going to require this degree go get it son go pay 50 grand i'm not doing that usually if the employer wants you to do it they're going to foot the bill for it that's a really good point there's another point that I'm thinking doing that. Usually if the employer wants you to do it, they're going to foot the bill for it.
That's a really good point. There's another point that I'm thinking of, which is, I'm trying to put this in a delicate way because if it was sprung on him, then I can see why he's springing it on you.
But there's also a part of it that to just be like, hey, I need $50,000 makes me feel like maybe he doesn't understand just how much money that that is and it might be good for him to pay for a good chunk of this and feel that so that it's not just oh i can just up and get the degrees i need uh you know what i'm saying like i don't know your son you do but there's part of that that i do want him to understand this is a lot of money money it's like our parents told us money doesn't grow on trees like you have to go out and what happens what happens if he tells the boss hey i can't afford fifty thousand dollars for this degree what's going to happen well okay the the way they the way they put it to him is that uh his career his future with the company of progressing is limited without a degree in engineering. Did he know that when he stepped into this role?

No. future with the company of progressing is limited without a degree in engineering.
Okay. Did he know that when he stepped into this role? No, he did not.
And he's, he has been, he's, the company he works for is a very well-known worldwide electronics manufacturer. Got you.
Okay. I might, I mean, it might be time for a career change where the ladder is higher while keeping his chemistry degree.
I don't know. But I would not just foot the bill for this without doing a lot more research and pushing back.
So there's some conversations to be had with his boss and then he with you. And we got to figure out if we're going to do this.
And if we're going to do it, we got to do it debt free. Thanks for the call, Tom.
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Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw.
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Today's question comes from Antonio in Washington, D.C. He says, I'm 26, finally graduated as an electrical engineer, and I'm about to start working in 2025, so I'm trying to plan out what happens in the next year.
One of those concerns is leaving my parents home and finding my own place. Good for you.
My worry, however, is that I am not sure if I should do this by renting or by buying a space. I know the consensus is never rent, but I see it as a stepping stone of sorts, a place of your own while not being able to comfortably purchase a property yet.
Very smart. This is considering the mortgage, the maintenance, taxes, etc.
My idea is to rent for one to three years while I build my career and income streams and then consider buying a small property to call home. Is this the correct way of thinking or are there things I'm not thinking of? Antonio, I think you hit the nail on the head.
You're a smart dude. He thinks he's the crazy one when in reality, everyone else is crazy for telling you that renting is a waste of money.
You should need to buy, buy, buy, buy, buy. Buy, buy, buy.
Full in sync on this one. I know.
Thank you. Thank you, George, for the setup.
He's spoken like a true electrical engineer. I know.
He's like, I don't know. The mathematics, they're not computing.
You're like, you're right. You're right, Antonio.
You don't need to buy a house just because you're out of mom and dad's. Rent for a while.
get out of debt, get the emergency fund in place, get a nice healthy down payment. And then once you feel ready, financially and emotionally, go ahead and buy a small property to call home, as he says.
Very good. And here's the other thing.
You don't know what's going to happen with relationships in the meantime. You might get married and she decides, I hate this little house that you bought.
I wouldn't have done it if I were you. So I think it's wise to wait and see a little bit as, you know, there's nothing wrong with buying a house at 29 instead of 26 or even 35 instead of 30.
Well, the good news is we've got a real estate home base for him waiting on him when he's ready. And it's waiting on you too.
If you're thinking about pulling the trigger on a home, we've got a wonderful real estate home base. You can find it at ramseysolutions.com slash real estate.
They can actually help you if you're buying or selling whatever your real estate needs are. It's a nice little hub there that has everything you're looking for.
That's right. Including, you know, there's tools, resources, calculators, articles, but I also did a course, Jade, for first-time homebuyers.
Tell me more. Check that out.
Well, I walk through little quick videos to help you understand what it's going to take, what all the pieces of the process are. Oh, I love a video.
It's the course I wish I had before I bought my first home. I love a video.
It's different when you hear somebody saying it versus trying to read it. I don't know why when it comes to things that have that many details.
Oh, yeah. And our team did a great job making it visual, making it clear, helping you understand all the, what the heck is escrow? What's going on there? We break it down for you.
Go to ramseysolutions.com slash real estate to get access to all of those resources. You probably made it funny too.
We tried. There was a Men in Black reference that I'm very proud of in that, including VHS tapes.
So, you know, I got to make it fun. If I'm involved, I want to

pigeonhole myself as a guy who cannot be boring. Good job.
That's what I try to do. All right,

let's go to the phones. Matt is in Baltimore.
How can we help Matt?

Hi, guys. Big fan.
Great to be on with you. You as well.

So I'm currently debt-free myself, and I'm working on paying off about $41,000 of my wife's debt. Okay.
Now, we split everything down the middle, making minimum payments, but I am a disabled veteran and I work part-time, so I have a little extra money in my pocket, about $1,200 a sorry, 1,200 a month, which I spread load between my son's college fund,

a down payment on a house and a building my retirement,

or building my emergency fund. Okay.

So my question is whether you think it's smarter to spread loan my extra

unspoken for income across different savings accounts, or if you think I should attack each thing individually. Well, first off, it's Veterans Day.
So thank you for your service every day of the year. We're appreciative of that.
What you said, I know you have another question there, but what you said about you and your wife kind of threw me off from the very beginning, to be quite honest, when you said that you're debt-free, but your wife isn't, that was kind of like my signals went off. Because here, we really, really believe in combining money and doing that if you're a married couple.
So my question is, how long have you and your wife been married? So me and my wife have been married about four years. Okay.
And that problem kind of became twofold, one of which is she wasn't really handing her finances very well, and she hid debt from me until very recently. Okay.
And we don't share one bank account. We just combine it for all the household bills.
So you pay half of her minimum payments? Yes. And then she pays half of all household bills, you pay half? Yes.
Do you guys make the exact same amount of money? So I make more with my benefits. Okay.
So I try to help out with a majority of it doesn't that feel unfair though if she

doesn't make the same exact amount but you're splitting things equally i feel like if i'm her i'm going hey this isn't fair i'm paying two grand out of my three you're paying two grand out of your four you know do you see how like there could be some relational problems with that some resentment Yeah.

So we, she has, she has, you know, we have the household bills.

She has her personal car.

That's $16,000. with that some resentment yeah so we she has she has you know we have the household bills she has her personal car that's 16 000 then she uh had to consolidate a consolidation loan to cover 25 000 so she's paying for her car and i'm paying the insurance and i'm paying half of her debt what um when you told me earlier that she was hiding i have actually have two questions, when you told me earlier that she was hiding, I have actually have two questions for you.
When you told me earlier that she was hiding debt from you, I want to know how much she hid and how long that went on. Then I want to know what you guys have done to rebuild trust.
Because what I don't want is, um, depending on what you tell me, there could be a situation where I understand that you guys have, if you've been working with a counselor, maybe there's a separation going on. But I also want to know what you guys are doing to rebuild that trust.
So she had, you know, various credit cards for buying product as well as lifestyle payments, like just regular payments that she was putting on a credit card and then just paying the minimum payment. And how much was that to the tune of, like, what type of debt did that rack up? So that ended up racking up about $25,000.
Okay, and that's the consolidation? To get all that consolidated and pay off all her cards. How did you find out about it? Did she tell you or you discovered it? So a little bit of both.
Basically what had happened was, you know, the rent goes up, the daycare goes up, things like that. And she came to me saying she couldn't pay her half anymore.
So I went over her finances to see where the trouble was or what we could cut out. And I realized she had about, you know, $300 a month payment spread across like four different cards.
Got you. And so what'd you guys do? You went to counseling? No.
I took the consolidation loan out to pay everything off to make her solvent. And then splitting that, it's about 400 change a month, cuts her half down to about 200 a month.
Okay. So she's paying that off about 200 but you're not listen that's great i if you notice i i have veered completely away from your monetary questions because i care mostly about your marriage and it bothers me that what this is telling me is you still don't trust her because this thing happened which is a big deal by the way i'm not minimizing that at all but it's caused you to say, my gosh, you did this without me knowing you're not good with your finances.
I don't really trust you. So we're going to keep it separate.
I'm going to control my half, you control your half, and I'll also chip in, right? So there's this, this is not a good way going forward. And my, my encouragement to you is, don't let it go on like this.
You guys need to get with a counselor and figure out how to mend this so that you can be back on the same page again, because it's very hard to accomplish a singular goal when you're on two different paths. And I want you guys on the same path so that you can combine, you can support each other.
There's no kind of like animosity. There's no resentment.
There's no on her end. There's no guilt because once she said, said, hey, I did this, I'm sorry, please forgive me.
She's not going to be, you guys aren't going to be able to move forward until she knows, okay, this guy, we're back on the same page. There's trust there again.
And I'm not saying that that's going to happen overnight, but I want you to work towards that. Marriages are either growing together or they're growing apart.
And I want to see more unity. I want to see you make progress with your marriage and your money.
And that's going to take unity. That's going to take one bank account, one budget.
We're getting out of our debt. This is we, not us and you and me.
That's how to do it right. Thanks for the call.
Happy Veterans Day. This is The Ramsey Show.
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I'm George. She's Jade.
We're here to help you with your life and your money. Call us at 888-825-5225.
Linda is up next in Madison, Wisconsin. Linda, how can we help? Hi, thanks.
I'm glad to be able to get some really good advice. I have a pretty difficult situation.
My question is, what is the best strategy for me to pay off my debts, given my current circumstances? What are your, what are they? Yeah. So I'm 58 and I was diagnosed with cancer two years ago.
Oh my goodness. What kind? Yeah, I'm doing well.
Praise God. Uterine cancer.
Wow. Came, you know, blindsided, of course.

So... What kind? Yeah, I'm doing well, praise God.
Uterine cancer. Wow.
Came, you know, blindsided, of course.

So I was making really good money as a veterinarian and, you know, working on trying to save a nest egg when all this happened. and because of everything, I decided to take an early retirement and I was fast-tracked onto

full Social Security disability in 2022. But unfortunately, I hadn't saved a large nest egg by this time for retirement.
What did you have? Well, well, right now this is, this is where I'm at. I, I own a house, my home, no, no mortgage.
It's a brand new construction house. So I literally just moved in.
Nice. Um, I, what's it worth? That's another story.
I haven't had it appraised, but I'm thinking I could probably get 250 for it.

And you live alone? I live alone. No kids.
I own my car. So are you debt free and completely? No.
So this is, no, this is my fear is I do have approximately $35,000 in debt right now, of which $24,000 is on a credit card that I had used where I went over budget on the house. About $3,900 is for special medical care and supplements on a credit card.
Neither of those credit cards are, they're interest-free right now. Okay.
But that will end next June. The medical, the credit card that you're putting the medical stuff on, is that an ongoing expense that you're using that for, or was it kind of a one-time deal?

One-time deal. So I'm done with that.
And then I, unfortunately, I had to have a high deductible insurance in 2024. So now I'm going to have a total of, right now I'm at 7,100 of medical bills that are going to be coming due next year.

And my complete and entire life savings is $97,500. And so my question is, what strategy would you recommend I use to pay off this

debt and rebuild savings or work on that? How much do you have in savings? Where's the $97,000 stored? I have it in a high-yield savings account at 4.8% interest. Okay.
So you could pay off all of your debt today using that money? Correct. It would just leave you with less in savings.
That would still be a fully funded emergency fund.

Correct.

How are you doing with your...

And it would be living expenses for...

Well, I was going to...

My living expenses are quite low, except for... I actually spend a lot on groceries and supplements.

Yeah.

Because I have to buy, you know, organic food and grass. What's your SSDI income? What is your total income each month? 3,117.
And what are your monthly bills? If you exclude the debt payments you need to make, let's say you were debt-free today, how much would your total expenses be per month? So my total expenses are coming out around $2,500. Okay, good.
That's without the debt. Without the debt.
So let's say you took your $97 in savings, you subtracted your $35 in debt, you were debt-free tomorrow, less stress, better for your health, that leaves you with $62,000 for your emergency fund, correct? Yeah. And then you'd be able to cover all your bills with about $600 left over.
What's your out-of-pocket max every year for your insurance? Well, starting on January 1st, I'm going to be on Medicare. Okay.
So I have a very... that'll help.
And I, it's only, it'll be 255 a month. And they cover a lot.
I mean, I'm going to still have some co-pays and things, but. That'll be life-changing.
I should, that is part of that 2,500. Okay, good.
So if I was in your shoes, truthfully, I would get rid of this debt today using your savings. I know it's going to knock it down.
I know it's your life savings, but that's also going to free up $600 you could put in a savings account to add to that, to start to cover some of these expenses. That's what I was wondering.
And the risk here is you got to live off of $3,100 for the rest of your life, right? Do they have a cost of living increase each year with that? They do. You know, it's based on the government, but they do have a cost of living increase.
I mean, technically I could. I'm trying to make it work.
I could get a part-time job or something. I mean, I'm not completely disabled, but I'm trying not to do that because, one, it's just more stress on me.
And, two, if I don't have long, I enjoy it. I would be focusing on your health right now for sure.
What is the prognosis? You know, is there a way you beat this? What does the doctor say? Well, originally it was bad. I mean, I was like, I was bad.
You know, we're talking about grade three, stage four. Wow.
So I was an overachiever right out the gate. But I am on immunotherapy, which has been just a game changer, a lifesaver.
I'm in complete remission, and I'm doing everything. I'm doing all the naturopathic stuff that you can imagine.
We are so glad to hear that. Wow, Linda, that's great.
And I truly think that debt has a physical weight on our bodies. I think when you pay this off today, you are going to feel so much better emotionally physically mentally spiritually all of it and then yeah your job is to get on an every dollar budget you were gonna say oh my gosh you like failed epically no no i'm so far behind me linda linda there is always there's always a measure of peace that can be achieved.
Always. Always.
And you've got actually, you know, you have the money to do exactly what George said. You can be debt free.
You've got a paid for house. To be able to say that is amazing.
You've got paid for cars. You've actually accomplished quite a bit.
You may have done it in a roundabout way. But the most important thing is you're healthy and you've got your life back.
Exactly. And beyond that, now we've got to make sure we're living on less than we make.
We're on a bit. You may have done it in a roundabout way, but the most important thing is you're healthy and you've got your life back.
Exactly. And beyond that, now we got to make sure we're living on less than we make.
We're on a written budget. We have margin left over instead of being right to the line every month.
And that's what's going to happen when you pay off this debt. And that extra 600 bucks, we need to just keep living like that didn't exist.
Let's pile away into savings, maybe even investing long-term. You can jump on Ramamsaysolutions.com and get in touch with a smart investor pro who can teach you how to invest this money.
So instead of a 4% rate of return in your savings, you could get 12%. I mean, this year, we've seen 38% returns in the market, Linda.
So your money could grow for you. I mean, you know, if you continue to live a healthy life, you know, 30 years from now, I want to see this money grow for you to have an even better retirement than you thought possible.
And, you know, based on what you said, I probably would encourage you to start working part-time again. That's definitely not going to hurt you financially.
It's going to help you financially. And if you're healthy enough to do it, it'll give you some great purpose as well.
Yeah, yeah. I'm just trying to enjoy every day right now, and am enjoying everything and yeah that'll change your perspective really needed this advice i'm so glad i got to talk to you because it's been weighing on me like you know all these different ways i could go about it but i've been watching your shows and learning a lot and got my written budget.
I've got, I've got things down to the penny. You know, I know exactly what's going on.
So Linda, hang on the line. We're going to send you a whole year of every dollar so that you can budget the Ramsey way and get over this.
As soon as you're out of debt today, it's going to feel so good. Man, Linda, what a lady.
That's the gift I'd be giving myself, going through what she's going through and has gone through. I want a life of freedom.
Okay. Get rid of those brain calories and replace them with something much better.
Linda, we are cheering for you. We hope you continue to have good health and call us back if you need any help.
This is The Ramsey Show. From Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships.
I'm George Camel, joined by Jade Warshaw, and we're taking your calls at 888-825-5225. If you want to talk about your life and your money, this is the show for you.
If you're looking for something else, I don't know why you're here, but we're glad you're here. Glad you're here.
Stick around. Maybe you'll enjoy it.
Mackenzie kicks us off in Pittsburgh. How can we help today? Hi, how's it going? Great.
How are you? I'm well, thank you. So I had a quick question.
My husband and I, we bought a house in 2020 for an extremely low price, and we got a really good interest rate on it three percent

it's not in the area that we would like to stay long term but we are in debt so we're not planning on moving right now my question is would it be wise to sell our house and because of the market and the work that we've done to it um we would make a significant amount of money off of it How much?

We bought it for $70,000, and we're estimating $140,000 selling it. And we owe $65,000 on it currently.
Okay. What kind of debt? So we have, obviously, the $65,000 mortgage.
We owe $27,000 on one car, $11,000 on another, and 70 on our student loans combined. What's your household income? $166,000.
That is new. That started happening in September.
Awesome. Great income.
So let's walk through two scenarios. One is you stay in the house and you aggressively pay off the debt.
How quickly, making $166,000, could you pay off $100,000 in debt? I mean, pretty quickly. Two years? 50K a year? Yeah, I would say that's definitely possible.
Okay. The other part of that is my parents are moving and they are looking to rent out their house now that they're currently living in and

they're moving into another. So I was thinking, what if we rented my parents' home and then use

the income from our home to pay off almost everything? We would just have a little bit

of student loans left and we can get that paid off in like a few months. Do you like the house?

Do you like your house that you live in? I like our house, but I don't particularly like the area.

Thank you. like a few months.
Do you like the house? Do you like your house that you live in?

I like our house, but I don't particularly like the area. We live in town and I want to be somewhere more secluded.
So in the future, we do plan on moving. Okay.
Can I, I'm going to ask a question. I know it's going to be hard to answer, but just try your best.
If you didn't have this debt right right, if there was no $109,000 of debt, would you be so pressed to leave or rent right now to get out of that area? No, but we would definitely be looking for a house. You'd be looking.
Okay. I'm trying to, what I'm trying to assess is if this is feeling like a a way get out of debt quickly and kind of avoid pain, but possibly at the expense of, I mean, you've got some nice equity in this house and doing things that you wouldn't normally do like rent because in your situation, you shouldn't necessarily have to rent again if you wanted to move to a different house.
That's just what I'm looking at. If you sell the house, you're probably going to get about $60,000

after paying off the mortgage and realtor fees and closing. Okay.
So you're going to knock out a little over half the debt, which is great. And you'll knock out the rest of the debt in a year.
So really what we're talking about here is one year difference. If you stay in the house, it's going to take you a year longer.
If you sell the house, it's going to take you one year shorter. So it's up to you.
This is not an on-fire

situation where I go, you got to sell the house. That's a drastic last-ditch effort to get out of

a bad situation. Nothing is on fire here.
Your mortgage payment is probably not that large

compared to your amazing income. Yeah.
I probably wouldn't do it if I were in your shoes. I think

that the idea to get out of that area, I think that's good and I think it's in your head. But I don't, I'm with George, I don't think it's on fire.
And I like when people walk through this process, especially when we're talking about cars that we can't afford. It's just a good lesson in, okay, this is what it really costs me.
I can actually feel the cost of $27,000 and $11,000 and $70,000. It's an insurance policy to never go into debt again when you sacrifice to pay it off over two years.
And honestly, one year after that, you could pay off the mortgage if you continue down that path. So now we're talking about three years from now, we'll be completely debt-free, including the house.
That gives us a lot of options when we move. And your motives just change.
I mean, truly, we don't realize how much debt kind of pushes our motives forward. And then when it's gone, it's like, oh, wait a minute, things look different now.
And so there's part of that that I'd like for you to experience, because I really think that right now, even this debt is clouding your motives slightly. But George is right.
Sitting on a paid for house makes you think of the whole thing a lot differently. And so I'd like for you to be able to experience the situation that you're in debt free.
And I'd also love for you to build up the habits to keep it that way by paying this off. What are you guys paying for your mortgage right now? $590 a month.
America is mad at you right now. I just want to let you know.
We're not happy. Way to go.
What would your parents charge rent if you moved to their place? I mean, I don't know the exact number. I'm guessing because of the area, it'd probably be about $1,200 a month.
So you're paying way less now. Yeah.
So I don't think the juice is worth the squeeze on this one just to get you out of debt a little bit faster. I would use that amazing income, live on little of it as you can to cover the bills and throw the rest of the debt.
I mean, with a $590 mortgage, you guys should have a lot of this. That's a lot of margin left over with that $166,000.
Yeah. And we've been paying off debt.
We had about like $12,000 in credit card debt that we paid off. And we're starting to work on and like attack these things.
But I got a little excited thinking we could expedite it. It is exciting to when you look at all the ways you could get out of debt faster.
But selling the house, that's a big one with a lot of numbers on the end. Can I take you to task a minute? How long did it take you to pay off the 12,000 in credit card debt? So it was kind of a process.
We actually, we have a one-year-old and we initially were going to go like gazelle intensity. And then I found out I was pregnant and I was not going to get a paid maternity leave.
So we paused, decided to save for my maternity leave. So I would say it took us maybe like four months to pay off her credit card.
But this was after the baby? Yes, yes, correct. Okay, because she's one years old.
My point is, and like I said, I'm taking you to task. My point is, I don't think you guys have, I truly don't think you've been willing to embrace what it will take to pay this off.
You have a great income. And I want you to see that it's gonna cause a level of discomfort to do this.
And I think before you were searching for a way that it wouldn't be discomfort. It's like, okay, we can sell this house.
Oh, it's moving my parents' house. That'll be better.
And so I don't want you to search from place to place to find how this is going to be the most, how it will give you the most comfort to do this because you may end up putting yourself in a worse situation trying to do that, like paying double for rent than you are for a mortgage that can be paid off in a year. So that's kind of what I want to leave you with is you will feel this.
I would just stay put where you are, Mackenzie. I mean, you guys are bringing home probably 10 grand a month.
Yeah, about. So think about this.
If you can live off a five and put the other five toward debt, that's 60 grand a year in debt payoff. You're done in less than two years.
That's some napkin math to get you excited about this. And that's no side hustles.
Yeah, that's without doing anything extra.

I could live off five grand.

We could do this.

So that's what my goal is.

Sit down with your husband tonight,

do an every dollar budget and go,

okay, we make 10 grand.

It's disappearing right now into a little bit of laziness,

a little bit of comfort.

Let's really get on this thing and be done in 18 months.

Let's get a big, hairy, audacious goal

so that we can move on with our life and have our home and our dream location one day. This is The Ramsey Show.
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Welcome back to The Ramsey Show. I'm George Camel, joined by Jade Warshaw.
Open phones at 888-825-5225. Well, tax day isn't until April, but there are some really important moves you can make before the end of the year that will affect what you owe.
And we're all about trying to help you pay the government less legally. I feel like I have to put my spectacles on for this.
We're about to get nerdy. So we got seven quick tips.
We're going to make this painless and you might even learn something. So what's tip number one, Jade? All right.
Number one, check your paycheck withholding. That's a good one.
The goal is to not have a big refund. That just means you're overpaying to the government, right? Every single month you're giving them too much.
So you need to adjust your withholding to get as close to zero as possible. And again, I'm saying that you do not want a tax refund every year.
That's what we're talking about here. We get our three grand refund every year.
You just gave the government an interest-free loan. That should be coming back into your paycheck every month to the tune of almost 300 bucks a month.
Next tip, income is taxed only in the year you receive it. So if you can, defer any income until January 1st or later to save on this year's tax bill.
So you might be self-employed and you've got vendors that are paying you. You might say, hey, can you pay me January 1st? And that way I have less income this year that will be taxed.
That's one way to do it if your employer allows that. Caveat, consider whether that extra income will push you into a higher tax bracket next year.
So if you kind of know what next year is looking like, you can figure out what's going to happen there. It's good to note, though, that the way the tax brackets work, if you are pushed into a higher tax bracket, your whole income is not going to be taxed at that rate.
Just the amount that places you into that bracket, if that makes sense. So if you hit the 22% bracket, well, you're not paying 22% on the entire amount.
That's right. It's just on an amount over a certain.
So that's a helpful tip. People think, I don't want to make more, Jade.
I'm scared. I'm like, no, you're not paying that much more in taxes.
Making more money is a good thing. Yes.
Please. Okay, keep going.
What's the next one? All right, number three, let's save by contributing more to tax-advantaged retirement accounts. You know what I'm talking about, 401ks, 403bs, IRAs.
That could be traditional. You want to do traditional 401ks and traditional IRAs that are funded with pre-tax dollars, okay, so that you can write off the contributions as a deduction.
That's right. You can't deduct like a Roth 401k contribution.
You've already paid taxes on it. But the pre-tax stuff, the traditional side, you can save some money there in your taxes.
Next one, if you're 73 or older, you need to withdraw from traditional retirement accounts to avoid penalty. True that.
So these are required minimum distributions, RMDs, as they call it in the biz.

And there's a minimum you have to withdraw every year.

And here's why.

The government wants their piece.

So if you've got these traditional accounts that have been sitting there, the government's like, hey, when are you going to take money out to pay us taxes?

Yeah, they want that tax money.

Best believe it.

Another reason why I love the Roth, you already paid the taxes.

So there's no RMDs on that.

Yeah.

I had somebody, this is a sidebar, I had somebody on social media George that was like hey my my plan is I do all traditional and I'm just when I just before I retire I'm going to go back through and convert it all to Roth and I was like wait wait wait you're gonna have the biggest tax bill of all time yeah of all time yeah it was a scary thing I hope she read Yeah, would not recommend. Oh, boy.
Okay, what's the next one? All right, the next one is, let's use the gift tax exclusion to avoid filing a gift tax return. For instance, if your gift is greater than the gift tax exclusion amount, the remainder goes towards lifetime gift exclusion.
I believe it's like, I don't know, 17 grand per person, per child or whatever. So you can really move a lot of money around and gift it without ever needing to file for that gift exclusion lifetime, which is millions and millions of dollars.
That's right. This really does not apply to a whole lot of people out there.
All right. Next one, take advantage of tax deductions and credits.
Now we've all heard about deductions and credits, but you can really reduce your taxable income by doing a bunch of things. So, for example, paying property tax in full by December 31st, you could write off property taxes when you file.
If you pay your January mortgage bill early before December 31st, you can deduct the interest portion of that payment, making charitable contributions to receive deductions. Keep that list there.
There's EV tax credits you can file for, energy efficient home upgrades. There are a lot of things you can do, but this is really for those that itemize, which because of the 2017 Trump tax cuts, the standard deduction almost doubled for everyone.
So it made way more sense for people to do standard deduction versus itemize. So less and less people are doing that.
Are you a tax deduction or credits? I like a credit. Oh, well, you know, I feel like the deduction will lower your taxable income.
The credit is taking some money off the bill. Yeah, I kind of like that.
It feels better to get the money taken off the back end of the bill. It feels like a coupon.
Yeah. Or like some sort of a deal.
I don't know why. But I'm not eligible for a lot of credits these days, you know, so it's fine right number seven should i go to this okay we just talked about this converting retirement accounts to roth has its tax advantages you'll get tax-free growth on your retirement savings which we talked about in tax-free withdrawals at retirement the thing is when you're going to do this we really say this should be like a baby step seven activity because again you're going to you're paying you money yeah and depending on how much you had in traditional accounts that you're converting over it could be you know decent definitely something to plan for yeah so you're better off using that money toward getting the home paid off and all that that's why it's a baby step seven um thing to do and that's why you need to do a healthy mix throughout the years that That's right.
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They'll help you save money on taxes now and in the future. All right.
Was that quick and painless? I felt a little discomfort, but yeah, it wasn't fun, but it wasn't painful either. That's right.
No pain. Some, you know, some weirdo out there enjoyed that.
Some accountant, some spreadsheet loving guy was like, yeah, let's go. All right, let's go to Fort Worth, Texas up next.
Kara joins us there. What's going on, Kara? Hi.
My husband and I just found out recently that my parents are in a bit of debt and don't have really any savings, and both of them are living on a fixed income due to medical diagnosis that leave them on disability and Social Security for their income. And just wanted to know the best way to help them out of that.
We found out just recently that that debt had been enrolled in a debt relief program. So it was almost $40,000 that was enrolled last year.
And year to date now, I think of the seven different debts, three of them are settled and payments made.

Two of them have reached an agreement

and are in progress on making those payments.

But unfortunately, the last two are the largest,

totaling almost $25,000 left that are in advanced negotiations.

And I believe a lawsuit has been filed for that. What is their income? So income with, so they're both on Social Security due to disability, and there's also some long-term disability coming in that totals about $5,500 a month.
Okay.

So that's their fixed income.

And what are their monthly expenses?

So they do still have a mortgage that's about $1,650 a month. They're currently making payments to the debt relief program of about $650 a month.
And then everything else, bills and food, comes out to total, including the mortgage and the debt release program, comes out to about right at the $5,500. It comes pretty close every month.
Okay. Have you had a conversation with them? Which is part of them.
Saying, hey, mom and dad, you're broke. Here's like, let's look at the numbers.
Do you see the reality of your situation? Have you had a conversation with them? Which is part of them. Saying, hey, mom and dad, you're broke.
Here's, like, let's look at the numbers. Do you see the reality of your situation? Have you had that conversation? Yeah, so that's where the conversation started is, I mean, my parents are scared.
Are you guys in a place to help them financially? Like, if you were to cover the $25,000 they owe to get out of this lawsuit, Could you just gift that to them? We do have money available that is sitting in a non-retirement investment account that could be used to essentially pay that off. I don't know the process.
What baby step? I was going to ask her what baby step she's on, but that's okay.

We're getting to the line.

This is a tough one.

If you want to gift it to help them out of the situation and then say,

you're never going to debt again.

There's going to be some strings attached if we do this.

But otherwise, they're going to have to do this on their own and use their income to do it,

which means lowering their lifestyle and potentially trying to do some part-time work,

which might be difficult with their situation.

No easy answers here, that's for sure. This is The Ramsey Show.
All right, Dave, you have some strong opinions. Possibly, yeah.
I think so. Okay, because you really prefer credit unions over big banks.
So why is that? Well, credit unions, for one thing, are non-profit, which means that the members, the customers, own the credit union. So any profits that the credit union makes goes back into customer pricing.
So you get better interest rate on savings, cheaper checking, and so on, that kind of thing. But what's more important than that, though, is the fact that the customer is the owner changes the spirit on the credit union.
So I find very few credit unions that aren't very customer-centric. Yes.
Well, and I think we have found one that is incredible, and that's Fairwinds. They are an incredible credit union that is really out with the heart to help the customer.
You know, that's why we're partnering with them because they've got a scope to be able to handle the Ramsey audience and they're the right kind of people with the right kind of values. And they've done a really, really good job with customer service and the deals that they're offering.
The Ramsey tribe is incredible. Yeah, absolutely.
And you're right. Their customer service is unbelievable.
Winston and I just signed up and we got an account. And I'm not kidding.
It took less than five minutes. It was so user friendly.
The step-by-step approach was unbelievable. And then the next day, my phone rings and it says Fairwinds on my phone.
So I answered it and talked to someone there and they said, yeah, they give calls to every new customer. And so again, they just really care about your experience.
And I so, so appreciate that. So, again, you guys, I know it can be a pain to switch banks or to open up new accounts, but Fairwinds, again, they make it so easy.
Plus, anything that you can do at a traditional branch, you can do with them at fairwinds.org or on their app. And you'll have free access to over 33,000 ATMs.
Hey, you guys know how much I

hate banks in general. And so for me to do this is a big deal.
Talk to our friends at Fairwinds and check out the combined checking and savings bundle that they created just for the Ramsey tribe. You guys, it's incredible.
Yeah, you guys, it's so easy to join Fairwinds no matter where you live. So go to fairwinds.org slash Ramsey to learn more.
That's F-A-I-R-W-I-N-D-S dot org slash Ramsey. I talk to people every day who want to know how to do better in two areas, money and relationships.
That's why I'm pumped to bring the Money and Relationships Tour to a city near you. Join me and Dr.
John Deloney for a night that will challenge the way you think about this stuff and possibly change how you live forever. Starting April 21st, we'll be in Louisville, then on to Durham, Atlanta, Phoenix, Fort Worth, and Kansas City.
Grab your tickets at RamseySolutions.com slash tour before they're gone. Welcome back to The Ramsey Show.
I'm George Camel, joined by Jade Warshaw. And from time to time, we have some guests that want to celebrate their debt-free journey.
They come visit us here at our headquarters in Nashville, Tennessee. And Brooks and Shannon have chosen to do that.
Welcome, guys. Thanks for having us.
Thank you. This is exciting.
Where are you from? Dillsburg, Pennsylvania. Just outside of Harrisburg, state capital.
Awesome. And how much debt did you pay off? We paid $145,000.
Whoa. Tell us more because I have a feeling.
This is great news. All right.
How long did this take? Six months. Six months.
And what was your range of income during that time? $62,000 to $144,000. Okay.
I got a lot of questions here. That is a lot to pay off in six months.
Yeah. What did you pay off? Well, there's about $35,000 for the food truck for the business.
Nice. And then? You're looking at weird people.
Let's go. You paid off the house.
Wow. Wait, can I set this up for the listening audience right quick? Because the truth is you guys came up to me on the break and they were like, Hey, Jadeade i don't know if you remember this but you and rachel were hosting and it was kind of a help us decide what we should do i think we call it this or that yeah pick a side whatever and it was between paying off your house or like remodeling your backyard correct and based on what you laid out i think rachel and i were like do the backyard and it was gonna because you're like we could do the backyard or it'll take us two years to pay off the house.
I feel like you told us. Correct.
And now it hadn't been two years. So what happened? We just started playing around with the calculator and realized, um, cause I was a photographer for 10 years and I said, if I retire and go back to work, I'm a actual tech writer.
Uh huh. And I'm like, if I go back to work and we put everything, everything.
And just go after it. And, you know, the first goal was, well, what does it look like if we can pay off the house by the time our oldest is graduated from high school? Okay, we can do this.
Well, what about the youngest once he graduates? Okay. And then boom, boom, boom.
And then we found like, what if we do this in six months? If we do this, we do this, we do this. And let's just go after it and just be tenacious with it.
And we didn't go gazelle tents. We went scorched earth.
And nothing is left. Can you walk me through this? Because I'm like trying to do the math and it's hurting my brain as to how you paid off 145 grand in six months making 144.
So the 35 was from retained earnings from the business. I had the cash on hand, but I was reluctant to spend it just because that's that safety net, just in case anything happens.
And, you know, like you all say, just, just pay it off and it's better off for it. And we are.
And thankfully we just sold it last week. We closed on it.
So. Oh, wow.
Are you done with the food truck business? It just didn't work out. What kind of food was it? Just, you know, pub, pub food, you know, fries, things like that.
It's a tough industry. We own and operate a craft brewery, so that was just an addition to it.
And it's a tough industry to live and work in. And so we just decided to move on because it wasn't working.
That's awesome. So focus on other food that was much more profitable and mainly less stress for me.
Yeah, absolutely. What's in your hand? That would be our Lucky Lobster.
This is our hazy double IPA. Wow, this is good

marketing. I was wondering, I was like, is this guy drinking on the clock here? Not yet.
Okay.

I think we'll have the first. That's for after the debt-free scream.
You got it. Absolutely.

I love it. So you paid off the 35, the food truck with retained earnings.
What about the mortgage?

How'd you knock that out in six months? So like I said, I went back to work in the corporate world. I also got a part-time job.
And then I also work at our tap room. So a lot of it was on my shoulders.
It was. But we knew it was for work because we're going big.
So this was all cash flowed through income. Yes.
You didn't sell anything to get rid of this. You didn't have saving.
You just went, we're going to put every dime we can from our income and live off of very little. All the tips we earned from the tap room, everything.
I mean, we were scouring the couch cushions just to get a couple quarters here. We have a goal and we're going to be tenacious at it and we're going to get after it.
Mission accomplished. I mean, I'm just tripping because you guys, you went from a two-year horizon to six months.
Yeah. Yeah.
Just by crunching some numbers and going, we could do better. We could do better.
It's all about the budget. Yeah.
All about the budget. And now you don't have a payment in the world.
No. No, we don't.
So what's next? How do you celebrate that? Well, I mean, we're, Mama Needs New Car, first and foremost. We've been driving hoopties.

I mean, my entire life I've been driving paycheck cars.

Okay.

I kind of like them because you don't have to worry about getting them damaged.

The first thing that you do when you buy new cars,

someone scratches up against it in the parking lot.

Yeah, you got to park in the back.

With the new house we have, we haven't completely finished the basement off,

so the bar is going to go down there.

And then possibly Europe as well, too. Wow.
backyard. What happened to the pool? There was never a pool, but it's just, you know, you put different priorities on things, which is the most important.
Nothing wrong with that. And the basement bar has clearly been the priority.
Well, you know, and getting back to the new house. So we actually lost our original home.

So the home we paid off, we lost in a fire.

Oh, my goodness.

January of 2023.

Holy moly.

No way. We got a photo of it.

Oh, my goodness.

So that's 15 minutes after I called.

Wow.

911.

That's the day after.

Were you in the house?

We were at home at night.

And at night.

Yes.

10 o'clock at night.

Thankfully, we were up watching TV just before we went home and long story short um it started in our garage and we had a door with a doorbell and we had no notice of the fire except the doorbell rang the doorbell rang we got up to see what's going on we thought you know who's at our door at 10 o'clock at night on a monday night we walked to the back door where the doorbell would have been, and we heard something weird. He opened the garage door.
And the garage was completely in flames. Who rang the doorbell? Nobody.
The Lord did. The Lord rang that bell.
Girl, I felt those chills. Holy smokes.
In my head, I was like, please tell me there was nobody at the door. No, no.
Because that would be a literal miracle. And the next day, the fire marshal asked, what did you see smell here? And we're like, we had no idea the house was on fire until the doorbell rang.
Is that a feature on the doorbells now or if there's like smoke and fire, they ring? That was the hand of the Lord. Maybe that's something we need to look into for business.
Wow. Okay.
So what happened after that? Does the insurance company write you a big check? They did. So we had the choice whether we wanted to sell off the land and then buy a house somewhere else or rebuild a new-to-us house.
And we got to design the house of our dreams within budget. Wow.
And it's the house we live in. We often say we paid off the old house.
The current house which we live in is is the gift the Lord gifted to us and will propel us to do marvelous things in the future. And actually one thing Shannon left out as we were walking away from, from the fire, I, to this day, I can still remember her saying to our boys, something good will come from this.
Something good will come from this. And, uh And it really has put us into a financial position to do a lot of good things within our community.
Because our community, I can't say enough about, we can't say enough about. They loved us.
They clothed us. They housed us.
I mean, we literally only had our clothes. You lost everything.
We lost everything. Yeah.
I mean, you can go from living high in the hog. Life is great to being homeless in a matter of an hour and not having anything.
What perspective did that give you? Because few people will experience that. Yeah.
So honestly, that became our why. How our community responded floored us.
And we're like, we need to give back even more now. And so that motivated the why.
And honestly, it was just stuff yeah it's our boys can all be replaced the four things that needed to get out of the house got out without any harm we can replace other other things we can replace the cars we can replace this replace that it doesn't matter it really doesn't matter and and i want to tell people who are listening we did not use insurance money to pay off no mortgage. The insurance money went to rebuild the house.
This was hard work. A lot of sacrifice.
And sacrifice. I mean, the long days, long nights working every Friday night, Saturday night, Sunday, just to reach our goal and just to go after.
You guys, all four of you, because I see the boys there, you guys are incredible people. An incredible family.
And you give new meaning to the word scor word scorched dirt which you used i want to just point out the irony is rich here let's get let's get the boys up here what's going on guys names and ages so this is colin we call him tank he's 14 here when you go by mom and this is uh ian we call him e or big e big e so he's 12 tank is Wow. And these young men got a front row seat to a lot of sacrifice, a lot of life change, some trauma.
But here they are, resilient, persevering, and they're going to live lives of debt freedom thanks to mom and dad's hard work. Absolutely.
All right. Count it down.
We've got Brooks and Shannon, Colin and Ian from the Harrisburg, Pennsylvania area. $145,000 paid off in six months.
House and everything after it burned down and they rebuilt, making 62 to 144. Count it down, guys.
Let's hear a debt-free scream. Let's go, guys.
Ready? Three, two, one. We're debt-free! There's a lot of firsts in this debt-free screen.
Wow, wow, wow. And cracking the can, that's a first for me.
Listen, he should have got a can for all of us. Wow, that was incredible.
Inspiring, guys. This is The Ramsey Show.
You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage.

To protect your biggest assets, I recommend using Ramsey Trusted Pros.

Whether you're looking for car, home, or any other type of insurance, Ramsey Trusted Providers

have been coached and vetted to serve you like we would.

Find what you need at RamseySolutions.com slash insurance. Welcome back to the Ramsey Show.
I'm George Campbell joined by Jade Warshaw. I've got to mention we just met our debt-free screamers out there and Shannon is an Air Force vet.
So I wanted to say a very happy Veterans Day. Very thankful for the service and sacrifice of so many today.
Indeed. And not to be outdone, Jade, there is a much lesser holiday.
It is Singles Day. Ooh.
Tell me more. That rests in the shadows of Veterans Day.
Deep in the shadows. 1111, 1111, all single, I guess the same single digits.
So for all of our single friends out there,

I see some hands being raised in the booth from our friend Will.

But it has nothing to do with relationship status.

It does.

Oh, it does.

It has almost everything to do.

Tell me more.

That's it. We just, you know, it's the largest shopping day in the world, apparently.
This is what I'm told, again. And we love any excuse to give our folks a great deal.
Whether you're

single or not, these deals apply.

So it's not about the digits.

I don't know. I'm not in charge.
You think they put me in charge of the

Thank you. And we love any excuse to give our folks a great deal.
Whether you're single or not, these deals apply. So it's not about the digits.
I don't know. I'm not in charge.
You think they put me in charge of the holidays? I don't know. National Pizza Day? I'm not in charge of that.
But today only, we figured, you know what? Fine, let's give the people a great deal. So today only, we've got deals as low as $11 in the Ramsey Solutions store.
Popular questions for Humans Thanksgiving edition. Total money makeover.
Baby Steps millionaires, building a non-anxious life from our friend Dr. John Deloney, Ken Coleman's Get Clear career assessment.
So many deals, just $11. So today's a great day to just go ahead and start stocking up before the holidays.
Is your book $11? I don't think we're there yet. I think mine is.
Maybe we'll get there. Yeah, okay.
Check it out. One day.
You'll have to see for yourself. I don't know what they put in there.
They don't, again, they don't put me in charge of this stuff. RamseySolutions.com slash store.
Find out for yourself. Or if you're listening on YouTube and podcasts, click the link in the description.
All right. Tate joins us up next in Seattle, Washington.
How can we help Tate? Hey guys, just want to say I'm a really big fan. I appreciate that.
I'll try to make this, I'll try to make this quick. So backstory, I recently graduated college six months ago and got a really good job and just became debt free and just maxed out me and my wife, our Roth RAs.
Way to go. Yeah, we're soon to do our HSA, and in January we'll max out both our Roth IRAs for 2025.
Cool. And doing our 401k and everything.
You guys are crushing it. Yeah, yeah.
Thank you. All the baby steps work.
Yeah, you're doing much better than I was after graduation. I'm impressed.
I want to be like you when I grow up. Okay, so what's your question today?

So we want to buy a house, but we're kind of just, we're kind of, just the market's not good.

So it's not looking good, and we don't know what to do.

Like, we plan on saving up about $50,000 this year.

Okay.

And I don't know if that's even enough to put for a down payment for where

we live. What are you looking at? How much do the houses cost that you're looking at? About for a small house of a thousand square feet that was built like, you know, like in the 70s, it's about $400,000.
And there's only probably about a handful out there. And this is the Seattle area?

It's actually in Bellingham,

Washington.

Bellingham, okay.

My company's office is at,

yeah.

Okay.

So, about a handful out there. And this is the Seattle area? It's actually in Bellingham, Washington.
Bellingham, okay. Yeah.
Okay. Which is a pretty, you know, high cost of living area, some big companies over there.
Have you done the math? We've got a really great calculator of basically how much home can I afford? And you can plug the numbers in and see, okay, what do I need to put down? And basically, you can work backwards to say, how do I get this payment to where it's only 25% or less of my take home? Have you done anything like that yet? Yes, we have. It would take us a few, like two years.
Okay. And what's the amount? Hold on.
Is that a long time for you, Tate? I guess, yeah. I feel like I'm behind in life.
How old are you? You just graduated. Yeah.
Okay. How old? I just turned 27 a week ago.
Can I tell you a secret that's not even a secret, but it might make you feel better? Sure. What if I told you that my husband and I rented for 10 years before we bought a house and we didn't explode or burst into flames just letting you know because you got to be able to afford it right yeah but you don't think we're missing out no building equity i mean every year i could put like 30 000 in my well you know what i wish let's build a time machine let's go back in time buy a house when it was 14 000 in order to build equity.
There's a lot of things we wish we could do, right? The best time to plant a tree was 20 years ago. The next best time is today.
But that doesn't mean that you should get impatient and entitled and go, we got to get it in now because we're throwing money on rent. Learn to have patience.
You're 27. Go talk to a 60-year-old and you'll see there's a level of, I guess, maturity that happens when you go, okay, not everything's going to happen on my timeline.
And I remember 827 feeling like time's running out. I have one year to do this in my career and hit this financial goal or else.
And then five years goes by in an instant. You're like, oh, okay.
I have more patience than I thought. Plus there's the whole thought here of if you buy this house before you can really afford it, you're not going to be thinking about equity.
You're going to be focused on making the payment every month because it's going to be eating you alive if you even get to keep the house, right? So you have to run this equation for what it is. You cannot, and the truth is you could buy a house before you can afford it, but it'll be a problem for you.
So it makes sense to wait in two years in the grand scheme of things is a drop in the bucket. And if you don't want a crappy house, like you're kind of talking about this thousand square foot, super old, then don't, then wait, save up more, get a bigger down payment, and that will lower your monthly payment.
So that's what I would do if I was in your shoes. And if you don't like the timeline, we got to figure out a way to make more and spend less to create more margin to save up faster.
And so I would just turn this into a math equation that puts some fuel on the fire versus a woe is me shaking our fist at the, you know, the sky gods. You know, it's a funny, renting is a funny thing.
I think that you can really enjoy your renting experience while you're renting. You know what I mean? Like there's more to life in an instant than whether or not you're renting or buying.
And I think it's really easy in a moment to kind of base your whole life and like whether or not you deem yourself successful in a moment or not. Right.
It's like you're 27 years old. You got so much time ahead of you.
And you're going to look back on this and go, oh, my gosh gosh it was so funny that I was so rushed at 27 to have a home because a lot of times we're compared like without even realizing it self-conscious subconsciously we're comparing ourselves to something else we've seen it's not even really just our race that we're running we're thinking about what our friends have we're thinking about what our cousin did or what the people on social media did. And yeah, you got to put blinders on.
Yeah. If you couldn't see any of that, if all you saw was the race that you have to run in front of you, you wouldn't be so sidetracked by that.
If we said the average person takes seven years to buy their first home, you'd be like, oh, wow, I'm doing great. Right.
So I think we need to look at this glass half full situation and go, man, what a blessing it is to be 27, no debt, maxing out Roth IRAs, maxing out HSAs, and be able to buy a house two years from now in a very expensive area. Yeah, I suppose you're right.
Yeah, that's a pretty good way to think about it. Perspective, man.
It's a wild thing when you can change your mindset. you'll be there in no time what's the household income uh after we put our 401k up and just the gross household 150 net amazing oh gross oh gross okay good that's great and how long you've been married uh we just a little bit of a one ago.
Yeah, you guys are doing great. You need to just take a chill pill.
I'm mad that Tate is upset. Take a chill pill.
You're doing great. Yeah, you're doing great, Tate.
This is a lesson in patience. What do you think that is, George? I feel like more and more we get calls.
And if I had to sum it up, it's just like this race to get a house and be, know have wealth and like it's just this well it's the 19 year olds calling and saying I need a million dollars by 25 and I go why and they go I don't know I just I I feel like I have I need to or else I'm behind I'm like behind on have you listened to the calls on this show like people are happy to have a million bucks in an s tag by the time retire. Who told you that time is running out and that if you're renting, you're throwing away money and it's probably a mix of society, parents and TikTok at this point.
Yeah. And don't get me wrong.
I think it's great if you, I think it's great if you enter into your adult life, you've largely avoided debt or if you did have it, you paid it off quickly. I think it's great when you're able to walk through the baby steps and get further at a younger age.
I think that's amazing. I mean, that's the whole goal.
The sooner the better. But if you're just this rush to kind of like check these boxes, I just want to remind people to like, life is a journey.
Life is a highway. It's a highway.
I can't sing anymore because I think we'll get taken off the air. Enjoy the ride.
Put the top down. Speaking of the ride, it's almost over here if you're listening on YouTube or podcast.
So if you want to finish the show, head over to the Ramsey Network app for a distraction-free experience. You can download it in the app store if you're choosing or click the link in the show notes to check it out.
But this ride's over, Jade. I'm sad to say.
It's been fun. I am sad.
And so if you're on radio,

hang tight. We'll be here.
But if you're on YouTube or podcast, go jump onto the app.

We'll see you for a whole not the episode is search Ramsey Network app, right?

All you got to do to finish the episode is search Ramsey Network in the App Store, Google Play Store,

or just click the link in the show notes to download the app for free.

Yep, you heard me right, for free.

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

Bada bing, bada boom.

All right, I'm getting out of here.