You’ll Never Be Able to Outearn Your Own Stupidity

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 amazing relationships.
I am Rachel Cruz hosting this hour with my good friend and best-selling author, Jade Warshaw,

and we'll be answering. do work that they love, and create amazing relationships.
I am Rachel Cruz hosting this hour with my good friend and best-selling author, Jade Warshaw,

and we'll be answering your questions.

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So first up, we have Gellie in Greensboro, North Carolina. Hey, Gellie, welcome to the show.
Hello, Rachel. Thank you for taking my call.
Absolutely. How can we help? Yes.
Well, we have a 35-year-old son who he just struggles with managing his family's finances, and now he's currently in a mental health Um, so he's not getting a check right now until short-term disability kicks in, which we're not sure when that will be. Um, so my husband and I are prepared to step in and help the family, uh, with whatever they need, but also financially.
But we, what we want to know is how do we best support him, the finances? Because it has been, you know, years of poor financial decisions, we wonder if, you know, can we provide help they need, but also say, hey, once this is over, we want you guys to be set up to sustain yourselves if there's ever another issue like this. Sure.
So what was the issue? Can I ask with the mental health crisis? Was he diagnosed with a mental health disorder? Well, yeah, he's ADHD. So that's been since childhood, but he's going through depression and anxiety right now.
It's crippling. So it started about a month ago when it was really bad diagnosed.
And now it's just kind of gotten better, but it's still not good. Okay.
So we're working with my daughter-in-law at the moment. Okay, so he's married.
Do they have kids? Yes, they have four children. Oh, wow.
Okay. Young? Their ages are 7 to 14.
Okay. So has she been staying home with the kids, or does she work as well no she works uh she works a part-time job uh so she is the main breadwinner she works part-time um they have three well four children three are also diagnosed ADHD so there's a lot of uh doctor's appointments and things like that and this job affords her to be able to take off whenever she needs.
So what's their current financial situation?

Because you said... doctor's appointments and things like that.
And this job affords her to be able to take off whenever she needs.

So what's their current financial situation?

Because you said that it wasn't great.

There had been some mistakes.

So where are they financially?

Yes.

Well, right now they are about $600 short a month to make their bills.

And that's all the bills.

But they have, you know, like credit cards. They have a high, their rent is very high.
So, you know, even when he is making his full check, they're still short, maybe a hundred or $2 a month. So when I say six, I'm talking about all the other things that are not needed, like the credit cards and things like that, and the high cell phone bills, stuff like that.
Okay. Okay.
So what are you, when you talk to the wife, when you talk to the wife, what are you guys talking about? Like in your mind, what does help look like? Well, in our mind, we're looking at the four walls just to keep them in their home utilities they they have to have internet so children can do homework things like that um and they're two they're two hundred dollars away from four walls is what you're saying yes yes and that's when his short-term disability kicks in it won't even be his full check i think it's like 80 percent and i, like I said, don't know how long that's going to be, but. Okay.
There's usually an elimination period and he should be able to look into what that is before it begins. So that's the terminology that you want to look for, um, to find out when that's going to start to pay out.
And so after he does start to get half of his pay, will that, will they be fine financially or do you still sniff out that there could be issues oh no they'll they'll still be issues um yeah that won't they won't be able to sustain themselves right and we're willing to help them i mean where my husband are financially you know, things like that, thanks to Dave's program. But I guess for us, it's, you know, we need them to communicate more about their finances.
My son's very, he's a spender and she's very quiet and humble, but doesn't tell him no when it comes to the overspending can i can i can i

butt in for a second sure um what i want to ask is did they come to you for help and what do you and what do you think they would be doing if you weren't kind of inserting yourself into this how do you think that they would handle this because there's part of this where i'm going okay, you're, you're a mom. Like you're trying to do what's best for these, you know, kids in quotes.
You know, obviously they're fully grown. But then there's part of me that's going, did they ask for help? Are they asking you to step in? Do they have a plan? And they have to want to help themselves too.
Like you said, I think that their rent is too high. So regardless, and I don't want this toensitive regardless if you have depression or not math is math so like yeah you know so whether he gets a job where he makes more to sustain the rent that's one thing but it's not sounding like that's going to be probably in the cards for them recently so they have to have some grown-up conversations within themselves and I think you know I, I guess it's okay if you help facilitate some of that

or ask some questions, I guess.

But there does have to be a point

that this can be an endless cycle for you

continuing to come in

and rescue and rescue and rescue.

And so I would want them,

again, I think to Jade's point,

I think the ideal solution

whenever a parent comes down

and helps an adult child

is that the adult child

is very acknowledges

and is aware of the reality

of what is going on

Thank you. solution whenever a parent comes down and helps an adult child is that the adult child is very acknowledges and is aware of the reality of what is going on and they say okay you know for six months there's a timeline like there's there's some things in place some boundaries that make all of this like make this a gift where it's all a blessing and it doesn't end up being a spiraling curse um But it sounds like she's in the clouds.
Yes.

He's sick.

You're looking in the outside wanting to come in and be like,

I don't want you guys to be behind on rent, which is understandable.

But there is a point that I think if you're going to go down this road

to help them financially, I think it would be your responsibility then

to at least communicate out loud some boundaries

and can communicate what you're seeing too

because you're not going to be able to help them forever. do have to make some decisions in their life right and one of those decisions could be the the wife having to pick up full-time work because because he's operating at a deficit you you if they don't have savings if they're dependent on you know credit cards like it sounds like they are this is going to make a bad situation worse very quickly.
And I think you know that. But that would be a big piece of advice, not you trying to fill the gaps for them.
Oh, yeah, that's absolutely right. And we've been watching this for years, to be honest.
It's just this is the first time that we've ever really done anything financially. We have not in the past because we've had conversations before, but I think, you know, there's some neurodiversity things going on.
Like she's not diagnosed autistic, but she is supposed to be going to get tested for that because there's no pushback. There's no conversation.
He blows off, you know, he goes off the handle. She doesn't know how to handle conflict.
So it's, how long have they been married? Yeah. 15 years.
It's been 15 years. So, uh, you know, I feel like there's more that needs to be done because we talked to, you know, we've talked to them and they just, they've, they've lived in government housing before.
So they pulled themselves out. So they have done it in the past.
Yeah. Um, yeah.
And I think, you know, when, when there is a diagnose, you know, something, you know, whether it's a mental sickness, a physical sickness. Yeah.
And I think, you know, when there is a diagnose,

you know, something, you know,

whether it's a mental sickness,

a physical sickness, right?

I think that, you know,

having someone alongside you

is such a gift.

And I don't push that away necessarily.

But then there is a point

that they have to be able

to see the reality too

for themselves of what's going on.

It sounds like they're not there yet

post this diagnosis or after.

So, yeah, that's a hard line to draw for sure. But thanks for the call.
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Up next, we have Scott in Albuquerque. Hey, Scott.
Welcome to the show. Hi.
Thank you for taking my phone call. Absolutely.
So my wife and I are both expecting in April, May time frame of next year. Oh my gosh, congratulations.
Yeah, and we just have a question regarding whether or not to pay off our mortgage early. So I'm going to give you guys a little bit of background.
We're both 30. We have a take-home of about 10, a little bit over $10,000 a month after 25% put into the 401k health insurance and all that stuff.
So we have three pots of high yield savings accounts. The first one is a year's worth of emergency fund.
And I'll give you some more background on why we did a year. And that's about 65,000.
We saved 12,000 on the second pot for like a new baby son kind of thing. And then, um, we also, at the last one, it's about 110 K sitting in cash.
Very good. Very good.
And we have also maxed out our Roth IRAs for the year as well. So what do you owe on the mortgage? What's left? Yeah, it's 200 K at 3.25%.
So the question we have is, what would you all advise on paying off that 110 into our mortgage? And then we would obviously continue to do that in 18 months, and we would probably pay off everything or invest it, given that our mortgage rates are so low. And then the second question is what does, you know, Dave and his team say about paying off mortgage early with a newborn coming? I mean, technically, we would say if you had debt, if you were in baby step two or even baby step three, we would say, hey, pause like all the paying of the debt and just stack up money for the baby.
Right. But you don't have debt and you've already saved up twelve thousand for the baby, which I'm guessing is a deductible.
Or how did you arrive at twelve thousand? That's probably deductible and just like starting up a baby room, you know, serving funds, all that kind of stuff. Yeah.
There's all that stuff for the first couple of months. I think because you have that there, you've got over a year, like you've got a year's worth of emergency fund.
I would not push pause on what you're doing. I'd keep doing what you're doing.
And in this case, it sounded like if I understood you correctly, you're already investing more than 15%. I think you said 25%.
And so technically where you're at right now, the focus should be the mortgage. I'd probably back the 25 percent down to 15 percent and I'd put all of that extra margin or whatever you and your wife determine is a reasonable amount of extra payments on the mortgage and yeah if you have 110 in cash that you've earmarked for paying off the mortgage I would 100 percent do that yeah and throw it at the principal of the mortgage I mean I would do that I would do that today Scott I mean because God that gets you guys down to 90,000 and then Jade's point if you guys even you know take 10% more of your income from that 25% to 15 that's more cash going in and then I you probably you guys are savers so you probably won't do this but I would even take that 65 down I don't think you need 65 000 you could take that down to even 40 if you wanted to throw an extra 25 at the mortgage because what's crazy scott is like if you think about well how many how much is your mortgage payment a month it's about 1700 and the reason why we have a year's worth of emergency fund is um earlier in the year we experienced um uh a miscarriage so going into pregnancy, we're both, you know, scared to death and we're, you know, knock on wood, don't want to have any complications or anything like that.
But the reason why we have, you know, that big cushion is in the event that something happens, you know, we have the money to cover ourselves. Okay.
Okay. Yeah.
Which is very understandable. So yeah.
So that's, yeah, that's great. If you want to do that, I just, the point of paying the mortgage off early, because there's a lot of, you know, people have a lot of opinions about this because you can put it in the market and make more than because if you have a low interest rate on the mortgage, I mean, we hear all these, you know, kind of pushbacks against this.
But the wild thing is, when you don't have a mortgage payment, and you literally owe no anything I mean you think about that 1700 instead of going to the bank you just invested that yeah every month right I mean you can actually start to play out and see mathematically how this fast forwards you so quickly so so yeah I would definitely take the 110 I'd put it towards the mortgage and then from there if you guys want to keep the 65 you can do that for for sure. But let me throw this at you.
Because if your thought is, hey, we're going to have a year's worth of expenses because, God forbid, something happens. And maybe we want to take X amount of months off for mental health, right? If your mortgage is paid off, you don't have payments anyway.
And that eliminates one of your biggest line items out of your budget.

And so even if you were to take a lot of time off,

your cost of living would be so much lower because of it.

So there's some math to be done,

you know, to really think through that

because I'd hate to have that money just sitting there

when you could have a paid off mortgage.

Excellent. Thank you.

Yep, absolutely, Scott.

Thanks for the call.

Up next, we have Lloyd in Raleighigh hey lloyd welcome to the show hello hello thanks for calling in how can we help i'm 65 years old i'll be 66 and four months i'm retired and right now i'm living off of my 401k and I wonder would I be better off to go ahead and start drawing social security and let the 401k you know gain value yeah how much would you be getting a month from social security right now approximately two thousand two thousand dollars And how much is in your 401k? About $2,200

$2,200 uh approximately two thousand two thousand dollars and what how much is in your 401k about twenty two hundred uh thousand okay yeah i mean i would i would go ahead and i would go ahead and pull it because i mean the longer you you know don't pull on the social security the more you will get but at that point in life if you've taken it early and you're able to, you know, live off of that and not touch the 401k, that's just going to continue to grow. How much is your expenses a month? Bare bones, $1,600, $1,700 a month.
Okay. Yeah.
I just want to make sure I understood you. Did you say yourk is 22,000 what's in the 401k 20,000 20,000 220,000 220,000 okay you were cutting up it was breaking up i was like i was missing that very important first two okay okay so good so yes lloyd i mean i i would i would start drawing on that now and use it to

your benefit because i mean it's there and again some people argue well just if you keep it in

there longer you'll get more later but i would rather be using that money than absolutely pulling

from my 401k are you able just to pull from the growth of your 401k lloyd or are you touching the

principle part of it um using the principle okay then definitely yeah rachel said yeah i would

Thank you. 401k Lloyd, or are you touching the principal part of it? Using the principal.
Okay. Then definitely what Rachel said.
Yeah, I would definitely pull that Social Security and live off that. And well done, Lloyd.
Mm-hmm. I mean, that's a significant, yeah.
But you, I mean, you've gotten to a point of what most people dream of, of having, you know, $220,000 in your 401k and you're retired and doing it.

Do you have any debt?

Maybe $3,000 in credit card debt.

Okay.

That's it.

And your house is paid off?

Oh, yes.

Excellent.

Well done, Lloyd.

That's great.

Wonderful.

Well, thanks for the call.

Yep, that's what I would do. And enjoy that retirement.

You worked hard for it, Lloyd. Thanks for the call.
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Welcome back to The Ramsey Show. I am Rachel Cruz hosting this hour with Jade Warshaw.
She also gives us a call at 888-8255225. And we're here to answer your questions.
Up next, we have Sarah in Atlanta. Hey, Sarah, welcome to the show.
Hi, how are you? Thank you for taking my call. Absolutely.
How can we help? I pretty much don't even know where to really start. So I've been married for less than three years.

And I've worked for everything that I have and nothing was given to me. And when I got married, my net worth was a little over a million.
but that, consist of most money in retirement and equity and a fee rental properties. Um, my fiance at the time, now husband, uh, did not have as much as I did, which was fine.
Um, and, uh, so we had decided to get a prenup and whatever, uh, he came in with, I matched

and then anything else in excess of that was to go to our children.

What'd he come in with?

Um, he came in with 160,000.

So you were at a million net worth and he was at 160 net worth?

Yeah.

Whose idea was the prenup? Mine. Okay.
Keep going. So, um, fast forward, um, uh, fast forward, um, I'm making a great income.
He's making a great income. I've always been a saver, just naturally.
Very, always, you know, lived below my means. And things just begun, like, just not making any sense.
And my husband owns his own business. And I just started seeing our accounts getting lower and lower and lower when I believe our account should have been getting higher and

higher. So I said, Hey, you know, like what's going on? And, um, his response was, uh, you know,

um, I just haven't done, uh, the paperwork, you know, for taxes and said that he filed the tax

extension. So, um, you know, so, um, it's taking money out of his savings until he goes through

his paperwork so he can know what he has to pay exactly. I said, okay.
Um, several months went by

Thank you. You know, so it's taking money out of his savings until he goes through his paperwork so he can know what he has to pay exactly.

I said, OK.

Several months went by and I still notice these things going down and things just don't make sense to me.

Something in particular happened and I said, I pretty much said, are you sure everything's OK? He said, yeah.

I asked him to please let me see his account, his business account where he said all the money was. And that's when he admitted to me that he has been stealing from his words from us, from me, and it's a fraud.
And needless to say, dove into everything, and he has completely wiped us out. Oh, my gosh.
Our savings, everything. We now only have two months of emergency fund fund we have two very small children to 202

uh-huh um so when you say he wiped out your savings how much did you have saved and he was just funneling it to keep his business afloat is that what you're saying so we had we had over a $100,000 in savings.

He also

took

from me personally

$280,000 in savings. He also took from me personally $286,000.
Out of where? Just various accounts that I had that were deemed as premarital that weren't supposed to be touched. and what did he use that money for so i i so i just went through everything and um there is no addictions there's no other woman there's nothing like that so then when i dove into things so it turns out that he actually the lies began when we were dating.
And he actually lied on his prenup.

And the $160,000 that he even came in with were tied to loans and lines of credit from his business.

So he just said that this is how much credit I have.

It's not real.

It's not real net worth.

I didn't know that. But that's what he just admitted to you, recently so yeah so really he came in with zero and he lied and he lied on a he actually came in with legal document so he lied on a legal document too yeah yeah um yeah when did all this happen Sarah how long ago about two months ago okay and I have to say I'm still in shock sure sure um how's the business doing is is it going into the business and his business is tanking or does he when you look at his business is is there profit and he's just not bringing that back into the personal side his no no his business is not doing anywhere near as well as it used to, or as it was.
And, um, he has been lying about how well it's doing and, um, you know, you know, and, uh, just, you know, like I'm, I'm a budgeter, you know, like if you tell me, Hey, you know, only this much money is coming in, I'll just, you know, pull out a spreadsheet and say, hey, let's start budgeting. But that's not what happened.
Instead, you know, we're going on vacation. Instead, we're, you know, doing things like that that we shouldn't be doing if you have debt.
So he's also racked up about $130,000 now in personal debt. Can I ask you a question? Because he's not here, so I can't question him in the same way.
Yeah. What was the inside of you that made you go, I need to sign a prenup with this guy? Was there a red flag already? No, it was.
No, there wasn't. It was just the fact that our net worth was so vastly different.
So different. Yeah.
Sarah, I'm so sorry. I'm so sorry.
So are you separating from him? No. I feel we have two very small children.
And again, I'm still very much in shock, but we have two very small children. And I know the statistics with growing up in a home with a broken household.
And I don't want that for my children either. Yeah.
Are you in counseling? They're just so young. Are you guys in counseling? Will he go? No.
He said he would go, but to be quite frank, it's not something that we could afford right now. Well, if you're going to make this, the marriage part work, Sarah, you're married to a liar.
And not just a liar, like, here and there. I mean, this is like a, this is, yeah, there's something wrong, deeply, deeply, deeply wrong with him.
And in the process, he's hurting his family. And so for you to draw boundaries for yourself does not make you a bad mom.
I just want to I just want to give you freedom to do what's best for Sarah in this moment. And for this to be a healthy longevity you know level of a marriage there is there's a lot of broken broken broken pieces and without a professional I really believe uh to be in the mix of this and and for him to show deep remorse and a pattern of change until you have trust.
I'm separating everything today,

Sarah, financially.

You need to protect yourself.

You need to,

your income now goes

into a different account

with his name nowhere near it.

I would contact a lawyer

just on the basis

of lying about a prenup.

I would just get

some more information

to protect yourself

and your kids

because...

I have already done most of that and I'm in the midst of a post-op which he has agreed to where you go back and and have like basically a prenup in the middle of the marriage is that is that what that is changing the prenup to make it correct so where you guys currently are no no no um so no. Post-up, just reiterating that, like, his debt is his debt.

And even if I decided to, let's say, help him get out of his debt,

that I would not be, you know, I'm expecting to get reimbursed at some point.

It's not just my responsibility.

I hear you.

Yeah.

Well, what we find so much often, Sarah, with these, I mean, the level of financial infidelity that you've experienced is the level of an affair. I mean, you know, you can, you can put anything in place, but that you start to question yourself.
I mean, there's so much in that when you are so deeply lied to from the person that you're supposed to be in a marriage with. So I would do what I, I would have my own therapist.
I would have him go to therapy if you're going to make this work, but I would also protect yourself until a pattern is proven that he's proven back his trust with finances. But for now I would keep it separate and you have your stuff.
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Welcome back to the Ramsey Show. So coming off that last call, Jade, that was a severe case of financial infidelity.
I mean, that was many layers of being basically a pathological liar to his wife and the situation, which is just so sad. And we hear this stuff more and more.
And I can hear some of the naysayers like, well, this is why we say separate accounts and all of that. But the truth is, if you you're lying about your money that's an indication of your character and who you are and that is going to bleed over into other areas of your life and and so if you can't trust them with your money then you're not going to be able to trust them as a person and there's got to be some deep boundary sets yeah in that way and so um i don't want that to negate and scare people off with the idea that working together with your money is one of the most beautiful things that you can do in your marriage, that you're on the same team, you're doing this together, but you can't be a team financially or otherwise in a marriage when another spouse is lying.
And so that's the point that we draw a line and say, okay, now that doesn't work. So we're separating everything and you have to protect yourself in that situation.
And, um, and it's really difficult, but again, the financial infidelity can go from that extreme, um, from debt, other accounts, lying about income to even just hiding big purchases. And we're seeing this a lot.
There was an article, Jade, in the wall street journal. It says the rise of stealth shopping, how Americans are hiding big purchases from their partners.
So I've been seeing a lot of this. I saw this Wall Street Journal article, then even the Today Show did a whole segment on it.
And it's basically, they did a survey of a thousand Americans and they found out that nearly two thirds of people who live with their spouse or significant other are hiding purchases. Okay, so-thirds of them hid purchases over the past year and a quarter of them started out with small things like clothing purchases right but they said like the target bag yeah you know what i mean like it's like yeah but they said that one in ten manipulated even their financial records to like show that no i didn't spend it so you're actually going in there and doctoring

credit card statements or you know that sort of thing and so to your point this is crazy so

I'll just read a little piece of what people are doing so they said that they perfected a strategy

for sneaking in new clothing handbags and shoes she enters through the back door and shoves her

packages in the coat closet behind an armoire or in the laundry basket at night when her husband and three sons are asleep she puts away her like everything she got then there's another guy who I'm not going to read it on here I read it earlier but there's another guy who anytime he buys new clothing he immediately takes it to the dry cleaners and then when he picks it up from the dry cleaner it's like in the bag and it looks it looks huge so it looks like it's been there so when he walks in his wife is none the wiser and she's like oh you just picked up your dry clean like that is sneaky on a whole nother level for sure and here's the thing you guys like the i yeah i talked to a lady one time at an event and she was like all you know been out of shape she's like my husband went to chick-fil-A four times last week and didn't tell me, you know, she's all in tears. I'm like, okay, you need to chill.
Like, like there's a level of forgetfulness and mistakes and you know, whatever, fill in the blank. Yeah.
And then there's purposeful. Yes.
Intentional hiding. And that's where I would start asking questions.
And always my first question is what what is the need for that yeah why are you hiding is it because you don't you and your spouse don't have the money for it is it because they would get mad at you if they would get mad at you why are they getting mad at you is that their problem or are you overspending like you start to kind of peel back the layers to understand and that's where people miss um so opportunities, especially in a relationship like this. I think so, too.
You're you're not only hiding and being deceitful about it, but also there's something going on and why you're hiding it. And then that's a part of growth.
I think absolutely digging into that and facing that. That just allows you to grow as a human.
And I feel like we just push that that that type of growth away so often. Absolutely.
And I mean, that's kind of what the author of the article says. She says, quote, what can seem like harmless white lies can lead to mistrust that undermines the relationship.
Your partner will say, if you lie about buying shoes, what else are you lying about? Sure. Which is 100%.
I mean, it makes me think of that scripture that's, if you're faithful with a little, you're entrusted with more, right? And so it's like, if you can't be faithful with the little truths, if you can't just tell the truth, then your spouse will not give you more trust, right? That's right. So you've got to start with being able to say, listen, why can't I tell the truth about something very small? Yep.
I think it's Dr. John Zalone who talks about how secrets are a poison in a relationship I mean yeah the secrecy it is it does no one any favors and if anything it's it's so harmful so well let's talk about money in marriage because I know that that's coming up in October yes and I know I'm talking about lies that's right on the money in marriage events yes yeah our October event it was sold out it got you know it sold out really quickly for the fall we're actually going to do one evening in october um just kind of a one night event but then our other next big event is on valentine's weekend february 13th through the 15th which will do a very similar event that we're doing here in the fall but yeah you're speaking at it yeah and you're talking about lives yeah in that way because this is a thing like it really does start to unravel and to your point rachel the bigger question is why why am i doing this and so i'll go through like the reasons that i believe are the why behind it but stay tuned you gotta be at the event that's part of the talk yeah oh my gosh the t's are there yeah yeah so instead what we recommend couples doing is you do a budget together every every spouse every family we do family members um has a line item with a certain amount of money and within that money you go and spend and if 18 packages from amazon show up winston just grins and says well rachel that's out of your category because i'm spending and but but there's a point that you say, OK, I still want my, you know, be an individual and I still have things that I enjoy.
And I don't feel like I have to ask permission for every little thing. You know, like I bought fashion tape on Monday for my clothes.
And I don't need to text Wednesday. Can I spend six dollars on Amazon? No, that's out of the budget.
It's fine. So it's not this overly controlling thing when people hear, oh gosh you know you have to share accounts and and your spouse you know you have to agree on it yeah it's just the agreement but then you get to go and enjoy your money so for these people i'm like golly just put a freaking clothing budget easy in the budget and then a line item in the budget and then go and spend and enjoy like that's what it's for here's the thing so there was another i told you the today show also talked about this yeah and they said um so of the people they surveyed 43 percent did say yes i lie about purchases but they're lying about purchases that total 435 dollars or more which that's pretty significant but that just goes to show there's also it's like i think some of it could be solved with a line item, but there's probably some of it that's like, hey, let's be mature about what's a reasonable amount.
And for some people's budgets, yeah, fine, $435. But there is that line of reasonableness where it's like, okay, if we have a budget, if we're divvying out fund money, make sure it's a reasonable amount for your spouse, for your income, and it's not just like you 50 allowance you know right right right um but these are big purchases and probably going on credit cards 100 yeah well one of the girls in the article says so the thing that she does to be quote stealthy is so her husband has an american express card which pings him anytime she uses the card the card and she's like i don't want him to be pinged where she has a credit card that he doesn't get pinged and the only statement he gets he doesn't get an itemized statement it's just a full like it's you know two thousand dollars or whatever yeah and so she if he says man that it seems a little bit high this time she'll just say oh well life insurance came out and so she can lie about the what was on the what made it high yes oh and that's what's that's exhausting it's exhausting and just if you're going to be living that life that way then just say well yeah i bought some shoes and i put it on the credit card yeah mine up yeah just yeah to say it to say it oh man this is it's a big topic the money and marriage conversation you guys and it's so hard because money usually the money fights and the money conflict kind of what we're talking about here it's never about that like you you know the yeah it's never about the shoes it's about the lying about the shoes and why do we have to lie and so if you're out there and you you do have a significant other you are married um you know be thinking about this and and that feeling, God, I'm embarrassed to tell my spouse about this purchase or I don't want to tell them about this purchase.
Start asking some questions to yourself of why. What's really going on there? Because, again, my encouragement and my challenge always is to push into that.
Because, again, those are moments that people say, all right, I'm out. Separate accounts.
Let's just do our own thing because that's too painful to go down there. Yeah.
But that is where health of a marriage and relationship really starts when you start to feel that like, okay, I'm actually going to face something that's uncomfortable. So it's really difficult.
But if you guys want to check out the Money in Marriage event, make sure to go to RamseySolutions.com slash events. We would love to see you there.
Valentine's Day weekend couples. It's a great, great event, Jade.
We'll be there as well. Well, thanks to all the guys in the booth.
Thank you, America. This is The Ramsey Show.
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 amazing relationships. I am Rachel Cruz, hosting this hour with my friend and bestselling author, Jade Warshaw.
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Up first, we have Rebecca in Rochester, New York. Hey, Rebecca, welcome to the show.
Hi, guys. Thank you so much for taking my call.
Absolutely. So my husband and I, we're going to be relocating to Florida in November.
We are on baby steps six and seven, and we're kind of struggling with deciding if we should purchase a home or rent.

Only reason being is if we're going to rent, it's going to cost us about anywhere from $2,100 to $2,500 a month.

And just running numbers on a mortgage, we would be paying about the same thing for a mortgage.

So we're just kind of struggling with deciding with our financial situation what would be best or the smart way to do that. What's causing you guys to move? You're just moving for work.
Yeah, we've always wanted to move there and we both have jobs lined up. So better opportunities for the both of us.
I mean, I could definitely understand the idea of if you own a home now, like you see the value in that. So wanting to go to Florida and also buy a home.
But there's a big part of that where when you make these big moves cross country or even just, you know, to another county, if you don't know the area, it's really hard to make a wise decision because you don't even know what part of the city that you want to live in. So in many ways, I would just say, get there, get settled rent for a while until you can learn which areas of town you like and which areas of town, you know, have the best schools and all of those things that really do go into making a good home buying decision.
Yeah, because buying a home. We've done a lot of research on that, too.
Oh, sorry. No, go ahead.
Go ahead. You're good.
We've been down there a lot the past six months just for the process for my husband transferring his job from here to there. So we do have a pretty good idea of where we want to be.
I guess it's just the struggle of, you know, if we should jump into it. Obviously, we don't know if it's going to work out.
Obviously, the goal is for it to work out and not have to move back home. And then also, you know, we're going to be spending $30,000 a year.
What's the part about it not working out and you having to go back home? What do you mean by that? I guess, I guess if we just end up not liking it, which I don't see that happening, honestly. Interesting.
Yeah, yeah. I mean, if I were you, Rebecca, I mean, honestly, I would probably just go and I'd probably just rent even for six months.
Like go do a half a year a year rent somewhere put yourself in a storage unit if you need to and just like really feel it out let him get you know cycled into a new job I mean there's just a lot of change that happens and there's just something about not having the burden of home ownership during all of that and then just like Jade saying then you're able to like look at houses while you're there you can set up appointments appointments with an agent. I mean, you can really do it well instead of doing it from a distance.
And I know, you know, it's just a crazy world. I know so many people even in my own neighborhood, they go sight unseen.
Like they're moving from California and they don't even see the house, right? Because things are getting bought up so quickly. So I don't know if the area of Florida you're in, if it's a really competitive part, you know, from the real estate perspective.
But I still think it's just wise to kind of slow down because your house, it is the largest purchase that majority of people make in their lifetime. And I just want you guys to be extra, extra sure that, yep, this is the area we want.
We had multiple houses that we were able to look at. We had good options.
We picked the right, you know, the right spot and just feel really good about it. So, yeah, I don't if I were you, I'd probably rent for six months to a year for that process.
Personally, even though the money is the same and I get it feels like you're throwing money out the window, but you're not. You're buying time, which is wise.
And and then you're able to see. So that's usually what we tell people if they are moving to a new city or a new state state we say that even if even your first year of marriage don't get into a home if you don't have to right rent for just a little bit and kind of get your feet under you um so these big life changes i think it just helps to to slow down yeah and the plan is to sell our house here i'm in real estate here and we'll be doing that down there okay so the market's definitely much there.
It's more of a buyer's market than here. But the goal would be to sell our house and then what we met to put that into a high yield savings account until we decide to buy because we would probably put that as a down payment.
Would it be smart to put that full amount as a down payment? I mean, I know. I mean, my whole goal would be to put as much down as possible when the time comes.
Do you guys have consumer debt? We have no debt. No debt.
Yeah. And a good emergency fund, a good fund even for moving expenses and everything to be able to cash flow that.
Yeah. So we currently have $50,000 in our checking and savings account.
And then my husband will also be getting a $20,000 relocation bonus. So the goal would be to put as much more than what we're netting on the house down on the new house.
Yeah, that's fantastic. You know, mortgage when we're doing, you know, the numbers on that, we're like, oh, my God, we're going to be paying more than like what a mortgage would be.
Sure. Yeah.
And it's temporary, though. Yeah, it's not forever.
It's just to buy time. and again could save you in, in essence, tens of thousands of dollars versus getting into a home that you don't like or a situation that you've got to get out of.
And then you actually end up losing money because you have to make a different decision a year from now, right? Versus if you're not attached to a home, you're able to slow down. Right.
Okay. Well, I hope that helps Rebecca.
Thanks. Thanks for the call.
I know this is always a, it's always a tricky, a tricky, a tricky part of life, especially if you're moving. Absolutely.
And I mean, she, you know, she mentioned, and I think a lot of people feel this, well, we've been there before, like we spent time during the interview process, but I'm like, how much time really like, yeah, the equivalent of what 14 days, or it's really not enough time to get a full sense of the area and it's I mean even if you say oh we really like this area because you spent the most of your time there there could still be other areas that you don't even know about yet that could be better for you maybe even less expensive like you just it's hard to know until you really get to a place plus when you get you know into your job you get into your community then other people you start saying oh well they live over there like I like that area and so knowing people also kind of helps you do your research on another level so yeah no for sure and I even know within Nashville right all the different so many neighborhoods yeah so many pockets and and then you know and I don't know if they have kids or not but you know you get into to schools and you get into that whole conversation with different counties and everything. And so, yeah, Rebecca, I appreciate the call because, again, this is one that we get a lot, you guys.
And just remember, renters don't go to hell. Like, you're going to be OK.
You're going to be OK if you rent. And why is you time? People just feel like, oh, my gosh, this is so unwise because I'm just throwing money down the drain.
I know it can feel like that again. I get it's not going towards equity it's not going towards anything but it's giving you time and patience and for a short period of time that is one of the best moves that you can make and the truth is they still have to sell their current residence like that's right that's a big piece of the puzzle for them to buy the next house especially if you're talking about you know using that money for a down payment so yeah take your time is the yes that's the advice yes because when you guys moved here what did you because you guys moved from florida we moved from florida but i'd lived here before that's right that's right that's a long time so i knew the area so we did buy pretty much immediately but i forgot you had yes but i'm here yeah i've lived here so yes that's right that's right i forgot i forgot about that no it is it's uh it's a big decision, you guys.
So the housing situation, slow down. Yes.
Make sure, again, that you have a good down payment if you're a first-time home buyer. 5% you can at least have.
But even up to 20% to avoid PMI. Yeah.
Making sure it's not a big part of your paycheck. You know, 25%.
We love a 15-year mortgage around here. And so just making sure that all of those elements are lined up, and then that way your home is a blessing, not a curse.
This is The Ramsey Show. Statistics show that half of Americans don't have enough life insurance, or they don't have any at all.
I don't understand this, John. Why don't people want to take care of their family? They think they're not going to die or something? Well, I used to be one of those guys.
I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids.
And I immediately went and got term life insurance. That's a gut punch.
For decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them.
Me too. They don't know what to do next.
You're going to have a crisis here. You know, you got two options while you're sitting and talking to a young widow.
She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow. That's exactly the two options.
It's saying I love you to your family. Term life insurance.
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Today's question of the day is brought to you by Why Refi? So if you have private student loan debts and it's taking away your peace of mind and you don't see any way out, you need Y-Refi.

Y-Refi refinances defaulted private student loans that other places will not touch and gives you a low fixed rates loan that you can, again, it's built just for you, specifically for you. So if you go to yrefi.com slash Ramsey today, that's the letter y r e f y.com slash ramsey may not be available in all states all right today's question comes from layla in pennsylvania she says i finally got my husband on board with the baby steps and we have done well communicating and holding each other accountable in pursuit of our goal the one one thing that both of us consistently overspend on is our kids.
Daycare is an expensive. I'm sorry.
Daycare is an expense we budget for. But beyond that, we struggle.
My husband buys them toys and takes them to the movies. And I find myself gravitating towards extracurricular activities to make up for lost time due to my busy work schedule.
How do we determine how to budget for our children and their activities and what is or isn't necessary for the kids in this phase of our life? I mean, for me, this, I go back to what you said, we're making each other accountable in pursuit of our goal. And so I don't, you know, you don't mention anything about debt or anything like that.
So I don't know what baby step you're in. Did I miss it? Nope.
You don't say what baby step you're in. So I'll kind of phase it in a couple of different ways.
If you're in debt, then the number one goal should be to get out of debt, right? And so if that's the case, then I would say, okay, daycare, yeah, that's expensive. It's necessary.
And so that stays on the budget. But there's some things that are not going to be necessary.
And I'm all for, you know, with kids, maybe having a little line item for entertainment because kids are kids and they do want to do, you know, things. But you also don't tell me how old the kids are.
And I'm like, if you have like really under two years old. Yeah, they don't know.
like i was the first person to say when your child turns like one and a half years old you could literally or like one years old you could literally wrap up a old toy and put it under the christmas tree and they would never even know like so there's a layer to this where it depends on what baby step you're in it depends on how old your kids are and it also depends on your scope of like some people would say to go $10 over budget is like, wow, like we've just gone crazy. And other people have the margin where it's like, okay, I went 10 over, I can be flexible in another area.
and so there's a lot of nuance to this that we don't get in the question but I think just by

kind of spreading it out and thinking through it like that Rachel she should be able to find

herself um in one of those categories to see okay have we gone totally crazy are we reasonable is it something that we just need to just add to the budget yep um because you know we're in baby step four five and six so that's really the way you need to think through this that's great all right let's go to the phones we have Rick in Tampa hey to the show. Hi, ladies.
Thank you for taking my call. Absolutely.
How can we help? So I just came across Steve Ramsey's videos yesterday. Oh, wow.
So I have been listening and listening and listening. And I'm 55.
I'm married. I have two young children, preteens, and both

my wife and I work. And we're about, I'm taking a guess, about $125,000 in debt.
Our income,

combined income that we bring home, or gross, should I say say is roughly about $145,000. So I don't have any student loan.
My wife doesn't have student loans. What kind of debt is the $125,000? Can you itemize it? It's mainly we rent.
We live in Florida. We rent.
So my rent is like two grand. Okay, but that's not debt.
Okay. I know.
But we have two cars, and I have two motorcycles. How much do you owe on all those? $80.
easier. Can you go through like 80

Can you go through like the first car

What do you owe?

So the first car

So a lot of this is during

COVID when we bought

Because COVID

Really screwed us up financially

So the first car is about 3030,000. The value is $11,000.
Okay. That's what they're saying.
What about the next car? And then the next car I had to get after I had a car accident, my car got totaled. I went lower just to try and find a car for work.
So I think I owe like 26. I think the value is like 15.
How'd that happen? If your car was totaled and then they gave you a payout for you to go and get another car. The guy that, no.
Because the car that I had was was upside down and the guy that hit me uh no license no registration no insurance got you oh my gosh okay what about the motorcycles so the motorcycles i have a friend of mine he took both of them he's making the payments on them so they're kind of out of sight out of mind but they're in your name they're in my name how much you owe on those um 40 what are they worth probably 30 okay oh my goodness so what we're learning like what I want people to learn who are listening is vehicles are depreciating assets. They go down in value.
And we're seeing this in real time with four different vehicles, things with motors and them go down in value. And you're feeling this in a really hard way.
What other debt do you have? So we have credit card debt. It's not that much.
Maybe, you know, six, seven thousand. I have hospital bills because of the accident.
Okay. How much are those? Probably three grand.
Okay. How are you doing now after the accident are you still working everything's good i'm i'm forcing myself to work i don't have a choice and you're in pain uh my level is like a 10 every day my wife has to help me up out of bed to get to work oh rick i'm so sorry yeah what kind of job what kind of what kind of uh career are you in i drive a truck i do flatbed work are you um is there a is there a plan for you in the near future to maybe exit that type of career and do something that's less physical i i want to and i can uh the problem is that I have guaranteed pay.

So I have 40 hours plus 10 hours of guaranteed overtime.

And once I take a 40-hour job,

automatically I'm going to lose about $1,900 a month just in overtime pay.

So of the $145,000 income, what portion of that is your income?

About $90,000. Okay.
Okay. so of the 145 income what's what portion of that is your income uh about 90 000 okay okay well for the short term rick who and you said yeah the car's worth 11 000 that's what they said who is they um blue book okay okay so you did okay no that's great because yeah because private sale, you're always going to get more than going to a dealership.
Um, so yeah, for you guys, you are, um, definitely way over the, you know, suggested amount when it comes to having things with, you know, we say wheels, motors, uh, we want that to be half of your annual income. And you guys, from my calculations with the motorcycles,

which I know you're not counting in your head because the friend has them,

but it's still under your name, it's around $116,000.

So you guys are way over, way over in car.

And so if I were you, I mean, this is where I would really,

and it's going to hurt financially because there is a point that some of these, i think i think there's one maybe one maybe your car i may keep and and try to pay off but the others i mean honestly the thirty thousand dollar and the motorcycles rick i mean i would sell them to your friends if he wants them i'm trying to okay good good so i'm trying to sell them to him okay that's great yep and you're just gonna have to take out a loan for the difference on some of these. But I'd rather have a $10,000 loan on a car versus a $26,000 loan.
And you guys are going to have to scrape up some money and really replace that car for you. I think it's going to be one of the biggest things.
And then you and your wife, I want you to sit down and do a budget. Rick, stay on the line.
Kelly's going to pick up. We're going to give you every dollar premium because I want you guys to sit down and know where exactly every single dollar of your paycheck's going.
That's going to help you on this debt payoff. Let's be honest.
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All right, up next, we have Wanda in Los Angeles. Hey, Wanda, welcome to the show.
Hi, thank you so much. It's really a pleasure to be on the show.
Thank you for taking my call. So I do apologize if I'm hyperverbal.
It's the excitement and the coffee couple together. You're good, Wanda.
You're great. How can we help? So I recently got a divorce and I owe my husband $50,000 and I'm not quite sure where to take the money from or borrow the money from for the first $50,000.
I don't have any money in my savings. I owe $25,000 on my car, $12,000 to my 401k.
And my other expense is my home and my mortgage is $24,70 a month. I looked into refinancing.
I really don't want to refinance my house because my interest rate on my house is two and a quarter. And so I've been looking at other like HELOC personal loans, but personal loan is like 12%.
The HELOC is 10%. And I just don't know.
Okay. So Wanda, yeah, 50,000.
Is it because of the house? Like, are you supposed to give him the equity? Yes, I'm supposed to give him the equity out of the house. Originally, I was supposed to give him 150,000.
But he knows that he didn't put any money into the house or anything like that. So he settled and said, I'll take $50,000.
So I'm just trying to figure

out the best course to give him the $50,000. I did take on a second job.
I've been working the second job now for about three months. I haven't received any monies for it because I just haven't turned in the invoices.
What's the time frame that you owe the $50,000? it's supposed to be

because we went back to court

so it's 30 days after Because what's the time frame that you owe the 50K?

It's supposed to be because we went back to court.

So it's 30 days after the court ruling.

And I got the court ruling in the mail two weeks ago.

So I have.

Yeah.

Yeah.

So basically in two to three weeks it's due?

Yes.

Okay.

So let me kind of set the stage for this right quick. Is his name on the mortgage? Like is he on the deed or the title of the house? It is.
So typically, typically what would happen if you're divorced, you would do a refinance to get his name off of it and you would do a cash out refinance so that you could also pull the 50k out give him his money and now you're free and clear from that um but i see why you don't want to do that because of the interest rate but i now double check this because i'm not sure but i feel like you can when you refinance you don't necessarily have to refinance the entire entire mortgage yeah but just the amount that you're a portion of it yes yeah and so a portion of it would be at the old interest rate and a portion of it would be at the new interest rates yeah have you talked to have you talked to your lawyer wanda about different options when it because considering it's because of the house uh and his name is it. So you are going to have to get his name off the home.
Yeah. Right.
So what I was advised was I actually talked to the accountant. And so what I was advised to do was to do a quick deed to take his name off the title.
And if he agrees to stay on the loan, let his name stay on the loan. Because if I asked him to take his name off the loan, they may make me refinance anyways.
And then I lose the two and a quarter. And so he said he was agreeable with his name being on the loan.
And he would just quick deed the home into my name. Yeah, yeah.
A quick deed is definitely a great option when it comes to the situation. Yeah, I mean, I mean, and we never tell people to go and take on debt.
but there is a point that you're you're going to be owed this from a legal standpoint and so you you i mean you you have to give that money and wanda you don't have it right now and so i don't want to see you take equity out of your home and get into that mess of of a heloc or anything like that so it may just have to be a personal loan okay even though the interest rate for the personal loans is just through the roof? Well, my, I mean, from the court of law, you have to give this money. So either, Wanda, you sell your home and, you know what I mean, take the equity and pay him what he's due, and you have to go find a new situation.
Are you able to sustain the home that you're in? Oh, most definitely. Most definitely.
Definitely. Yeah.
The house is now worth almost $700,000. When we purchased the house, it was at $391,000.
And so I'm very comfortable. How much do you owe on it? How much do you owe on it? $360,000.
Okay. And in California, I can't buy another house at $391,000 and not in the area that I live in anyway.
Sure, sure. How much do you make? How much are you making? I make $188,000 a year.
Good for you, Wanda. And you're bringing, how much are you bringing home after taxes and insurance and everything per month? What's your take on pay? A little over $6,000.
Okay. Yeah, I mean, and your mortgage payment's $2,000 Yeah.
So you're in. But, and that's the reason why I got a second job too, because whatever I do, I want to chop it down with the second job.
For sure. Because I don't know which way to go with that yet.
A hundred percent. Yeah.
I mean, I mean, I mean, you're, you're, you're kind of stuck between, you know, a hard place. I don't want you to make a bad decision with your home I think that would be unwise so it's not this idea that like you know and it's one thing if you couldn't afford the payment on your income but you're able to sustain that which is wonderful and great um but yeah I would I would yeah do the yeah do the quick deed I would again ask ask the accountant again wrap back around and just ask what Jade was talking about and if there's a way to take a portion of it um where you're able to pay him out of it um and and the entire loan is not then you know subject to the new interest rates because that would be that that would not be smart and it's a blessing that he dropped from 150 to 50 000 like that's that's a big blessing yeah so so Wanda, I mean,'m looking at this so let's just say you have you have you have $50,000 in debt because of the divorce you got a $25,000

car and you got a $12,000 401k debts uh seven eight I mean that's yeah that's $87,000 you make

188,000 I want you to pay this off in 18 months Wanda that's why I got a second job yeah which I'm so proud of you.

Seriously.

Put all the money to it.

Yeah.

And that's the thing is,

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going to be going to be going to be going to be going to be going to be going to be going to be $188,000. I want you to pay this off in 18 months, Wanda.
That's why I got a second job. Yeah, which I'm so proud of you.
Seriously. Put all the money to it.
Yeah, and that's the thing is, you know, that when you look at this high income, I'm like, man, this is, and I know you're in Southern California, so it doesn't go as far as it would in Kansas City or something. I get it.
But man, you have a lot on your side, Wanda. But from this point forward, I want you to draw that line in the sand and say, no more, I'm not doing car payments.
We're not doing credit cards. We're not, you know, borrowing our 401k.
I'm living on what I make. I'm going to be, you know, funding retirement.
I mean, why is because, I mean, how old are you, Wanda? 55. 55.
Yeah. So 55 this year.
It's great. So yeah, here in five to 10 years, wanting to retire, you know, and do something with your life.
And you're going to be able to make a lot of progress really quickly, which I'm so excited for you. So congratulations.
I'm so sorry that, you know, with the divorce and everything that's kind of brought you to this point, that's always heartbreaking and grief in and of itself. That's so hard.
But you have a lot of great change ahead and a lot of things that's yeah that you can do and make a big a big impact thank goodness that he was a good guy and was like I know I didn't put any money into this house right it could have been 150 yeah I mean that's I think that's the really difficult part about one of the many difficult parts about divorces there's all these assets and it's like somebody gets to keep the house but But if you've been living in that house together, there's also a portion of it that goes to the other spouse. And so how do they get their money? And so that's one of the frustrating things.
And I know like during these times where interest rates, it's like if I had it at, you know, 2.3 percent, you don't want to refinance in order to with these rates. And so I think that's very painful.
Yes, for sure. Yep.
And again, it's one of these things that to tackle the debt snowball method and even looking at the car, I mean, she's still she can pay off her car in 18, 12 to 18 months, one kind of our, you know, buffer. So she can keep the car, pay it off.
It's not an outrageous, you know, different amount considering her income. But she never needs to borrow from her 401k.
No, ever againanda you hear me thanks for calling in this is the ramsey show welcome back to the ramsey show so one of the parts of winning with money is being intentional that's right and the way to be intentional and really specific and detailed with your money is to do a budget. And we tell people, regardless of where you are financially, a budget is there to help you win.
So whether you are drowning in debt, you need a budget. Whether you're completely debt-free and you're doing great, you still need a budget.
So you're just being intentional with your money. And you, Jade, you talk about this a lot, especially on your social media.
and people have been submitting budgets to you. Yeah.
And you've been talking about, you know, walking through line items and all of it. I did a call out.
I was like, listen, if you want help with your budget, send me your numbers and I'll plug them in and I'll feature you on social media. And so I got tons and tons of submissions.
And so one of the women that called in, she was like, listen, here's, you know, I'm, I live in Atlanta, Georgia, I'm divorced. I make $95,000 a year, help me out.
And so I thought it would be actually really fun. Her name is Ariel.
If we brought Ariel on and I can go over her budget with her live on the show, because I've already looked at it and I kind of started thinking like coming up with some ideas because she told me her biggest goal is to get out of debt. Okay.
And so I think we should bring Ariel on and kind of get into it with her. Wonderful.
Ariel, are you there? Yes, I am. Hi.
Hey, thanks for calling in and letting us do this because I think a really tactical budget walkthrough I think is so, so helpful. and those of you listening either on radio or podcasts

you may not be able to see the visuals of this but those of you on YouTube will be able to bring

some stuff up for sure so Ariel I'll just kind of give a quick overview of the numbers and you tell

me if I'm wrong about anything or if anything sounds weird but I have that you make $95,000

a year but after taxes investing in insurance you bring home home about 6,200 a month. Yes.
Okay. And so on your budget, I broke that into, do you get paid twice a month? So I don't get paid.
I get paid once a month, but I also have some little side hustles. Yes.
I've, I've, I'm used to it. It's 17 years I've been getting.
Okay. Well, when I did your budget, I I just because I didn't know that I broke it into two checks just because I figured most people get paid like that.
But if you I know you can't see it, but I did not see any side hustles. And I was thinking if her biggest thing is to get out of debt, she needs a side hustle.
So if you're watching on YouTube, you can see that I wrote in the line item of side hustle for you just as an idea. The side hustles I have are like, they're not consistent.
So I didn't know how to put it into my budget. Okay.
What would you, what do you think like monthly you put in? Just a guess. If I were to guess maybe about $600 extra from the side hustle.
That's amazing. So I'm just going to plug that in live here to see how it changes your budget.
Because before your margin, like after all of your expenses, your margin was like $241. But adding that side hustle is huge.
Now your margin is like $885, which is a big deal. Before cutting anything, before anything.
Yeah. So then you told me that you have an emergency fund and that emergency fund is like $2,200.
Yes, I'm rebuilding it for the third time because it's always an emergency. Well, I built it back up.
Well, one of the things, you know, you told me that your biggest goal was to get out of debt and then save up, you know, three to six months of emergencies. So for us, baby step one is getting $1,000 saved.
And you're above that with this $2,200.

And it looks like you're still planning to put $300 a month towards it.

So if I were in your shoes, I would cut that down to zero like today.

And that adds back.

If you see like your margin.

She's so scared.

Now your margin is $1,185 to put towards debt.

Okay.

And for anybody, we haven't scrolled down to the debt yet. This is per month.
Yeah, per month. Which is great.
We haven't scrolled down to your debt yet, but I'm just going to like spoiler alert and let the people know that you're paying out $1,700 in payments. Yeah, it's a lot.
In debt. So having that kind of margin to pay off is good.
So let's keep going through. I'm just going to call out like everything going on that I see.
So your mortgage is 1800 bucks a month, which is fine with what you bring home. You have a great income.
The typical thing, cell phones. You know, I love that.
I love that everything looks pretty reasonable. Cell phones felt a little high, but I know you have kids.
So I'm guessing that one of your kids has a phone. Okay of two of them have phones oh okay then that's a good number gas at 350 um and what do you do for a living by the way I am a teacher in elementary school okay wow you have a great salary I love that now yes I've been doing it for 17 years okay there we go right now here's where I'm really proud of you groceries 500ceries, $500.
Yes. So this is something I actually started last year after I read a book about budget mom.
So I actually take out $500 a month and I do $125 a week in cash. And once the cash is gone, we're done with buying groceries that week and we eat whatever's in the house.
And it's been working for a now I love that that's amazing and I love that your restaurant budget is zero it can be done yeah we can't yeah I'm like so I gave myself an entertainment budget and it's like well there's something over here guys but my kids know we eat at home we eat at home I love that so you set the precedent they already know so going down into your personal items the things that I would cut because I see like you and your daughter get your hair done it sounds like you spend three hundred dollars how necessary is that because listen when I was a kid somebody had to do my hair we just get our hair braided and in Atlanta it's just I know actually 300 for the two of us to get braids is actually pretty cheap I know know that it is. But that's my only luxury item.
Okay. So then if you keep the hair braiding, because listen, I know the way I grew up.
I wish somebody could braid my hair. If you keep that on there, then I would say that you need to cut this $60 for the kid's allowance because there will be a time for that.
But the time is when you're out of debt. And if you keep the hair, then I'd also take off the $75 for nails what would you okay Rachel yeah the nails is not that important yep gotta get out of here it hurts a little bit but yeah now you also have on here $150 for child care but you told me that this is the last month for that so we can take that off it was the last month my son is now in middle school so no more child care I love it I did the dance.
Yeah, for sure. And I know you're on the phone and you can't see this, but your margin just making those changes, you started at $241 of margin and now you have $1,470 of margin.
Okay, that's awesome. So much.
So great. Guys, this is just Rachel us plugging the numbers in every dollar, being intentional then going through and going okay what's necessary what's not necessary and what and that side hustle has helped too so that extra job but yeah so when you go down to the debt jade um I mean quick math but for her to be able to throw it her at her lowest debt oh there it is Yeah.
I actually paid off the two lowest credit cards i love it you paid them off yes yeah great job okay i love that so if i click into here because the balance was 84 on one and you were paying 40 bucks a month that one's gone and then 17 that's gone oh my gosh i'm just gonna delete them yeah and the third one is almost gone i only have 37 which is this month wow i'm paying that this month but you're and with the margin we we just found too i think that you'll be able to knock out credit card two or three four and then what was right below that the social security she should be able to knock out everything with security eq like security equity what was that april ariel uh the security the vivid security for my house oh okay so like that probably will be able to be out this month and then you look at next month credit card five which is almost a thousand dollars yeah we had done and then a little bit of credit card seven yeah and then the next month and you keep going down you know you keep going and seeing like oh my gosh it really is and all those minimum payments will be going to the next step because you're using the debt snowball method and i think the way your debts are is really a great teaching point to show people how the debt snowball works because to rachel's point you pay one off that money goes back into your margin. And so I kind of played that out on paper for you.
And if you keep going the way you're going, here's the thing. When I played it out, I didn't know that you had a side hustle.
So I played it out without a side hustle and just cutting those few areas in the budget. And it was going to take 20 months for you to pay off the debt.
But now with that side hustle, I bet that bought back several months. Yeah.
Oh, yeah. Ariel, are you there? Yeah.
Okay. Yes.
So and also I cut up all my credit cards last year. So there's I'm not amassing any new day.
Slow clap. This is how it's done, guys.
That's so wonderful. Oh, my gosh.
Ariel, well done. See, and it's just changing these habits.
It's cutting up the credit card. It's saying, okay, I'm going to take on a side hustle.
I'm going to eat for $500 a month. Did y'all hear that? Her and two teenagers eating for $500 a month.
No restaurants. I mean, she's doing it.
So yeah, Jade, I mean, I think within, yeah, I mean, 18 months. 18 months, easy.
16 months, amazing. Ariel, thanks for doing that.
And what a great teaching point. And make sure you guys go to everydollar.com and check it out.
You can build your own budget for free. 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 amazing relationships.
I'm Rachel Cruz, hosting this hour with my friend and bestselling author, Jade Warshaw. And we are here, again, to help you out, America.
You can give us a call at 888-825-5225. And we'll answer your questions about money, about life, relationships, career.
Give us a call. Up first, we have John in Houston.
Hey, John, welcome to the show. Hello.
Welcome. Thanks for having me, I guess.
Absolutely. Yes, for sure.
How can we help? Well, I filed for divorce from my wife about a month ago. Lots has transpired since.
We're kind of trying to maybe make it work, going to marriage counseling. In the interim of all this, we kind of split our finances about two or three months ago due to her spending and daughter.
That's a long story. So fast forward to this last week.
I got a bonus from work, a $30,000 bonus. By the time it was put in the bank, it was about $24,000.
I currently owe $11,000 on a credit card. Most of that is for the divorce attorney.
And then the other issue I have is I have, during COVID, we had two credit cards with Chase that we quit paying because we lost our jobs and obviously employed now. But there's a lawsuit pending against me, and those are about $26,000 each.
So I don't know what to do with this bonus money. One, I don't know if I should tell the wife or not because we're not divorced.
We're trying to work. That's part of it.
But the other part is do I keep the cash and try to settle with Chase? Do I pay off the current credit card that I have so I can get me back to debt-free, sort of-ish, other than my home? Just not real sure. Sure, yeah, absolutely.
Any other money saved? I have just a couple thousand dollars in the bank. Nothing, nothing major.
Okay. Okay.
By a couple like six or like two? Like two. Okay.
Yes. So the bonus is three thousand? Yes.
No, no. The bonus is twenty four thousand.
Twenty four thousand. My hearing is off today.
Okay. So what do you think you can settle these chase cars for have you kind of floated it out there to them i talked to the uh the debt attorney that i filed the lawsuits he said there may be a 25 000 or a 25 reduction yeah so he's thinking they could probably settle for about 20 000 each that'd be a total of 40 okay so they're two separate cases so i don't one's coming up the first of september and the other one i don't have a date on yet okay so the one coming up the first of september if you can settle it i think there's part of this since it's already like gone to court like it's already you know it's progressed to the point where you're going to have to pay something i do think there's a smart part that would hold on to that money and not put it on the other $11,000 debt because you know this is coming and you know you're going to be on the hook for paying, whether it's the full sum or a reduced amount.
Okay. Okay, and then I guess just go ahead.
Well, I was going to say yes. So, and anything obviously you get in that lawsuit haven't haven't writing and i and i would tell them hey i have 24 000 well i guess there are separate lawsuits you were saying um all right okay yep so i think getting them down as much as possible obviously would be the goal um and ideally not going into collections and all of that that that you kind of just take care of it.
Absolutely.

And if that's the case, then yeah, you have $4,000. When does the other lawsuit hit?

This one's September.

Do you know when the other one will be?

I don't know.

I don't know.

I mean, they've already kind of hit.

This is obviously in the caressives,

so now it's like going to the trial thing

and all this other stuff where I'm going to have to pay Chase.

It's already been on my credit.

All that stuff's already kind of happened.

How long is this?

Oh, sorry.

Was it all under your name, or is your ex, or I guess she she's not your ex is your wife's name attached to this as well no they were all mine they were cards that i had prior to our marriage and then we've always done good and then we spent a bunch of money and then we tried to get out of debt and then we were doing okay and then covet hit we both literally lost our jobs in a week and it was pay mortgage and feed our children or pay this credit card well we chose a home and children as you should yeah how much are you making a year John um I bring in my base salaries 104 and my bonuses um are in the 60 to 80 thousand dollar range annually okay and with her what does what make? It varies. We own a small business, a food truck business.
So she brings in roughly, I would say seven, 60,000 a year. Okay.
And considering you guys are somewhat separated, I don't know if it's, you know, through legal means or not. Have you guys separated your finances?

Yes, we did that about two or three months prior.

And that was kind of her like final straw for us.

But her spending was really the issue for me.

So, okay.

So these three accounts, are these the only debts that you're on the hook for?

Is there a car?

Is there anything else?

Because there is a Cadillac that we purchased together. That's her car, not my car.
So in the divorce, she would get the car. Okay.
Kind of the thing. She would get the car paid.
I have a truck. It's paid for.
Other than if we were divorced today, the only debt I would have would be the two chase and the $11,000 credit card. Okay.
But you're making, you know, on a good year, $180 plus a year. Yeah.
Correct. So, I mean, when I look at these debts and knowing that one of them is going to be settled, you should have this knocked out like lickety split.
What's your living situation? Currently living is she moved out Thursday. So literally just two days ago, she moved out.
She's living with a friend and her two kids, and I'm living in my house with my two kids. And what was the second marriage then for both of you? Yes.
Okay. And are you able to cover the mortgage in a way that it's no more than 25% of your take-home without her income added to it? Mortgage is $3,000 a month, so that's not a problem.
okay that's great yep so um yeah so to answer your question of why you called in for sure it would yeah i would take the one that had the lawsuit attached to it go ahead and knock that out and then like jade's saying i mean i would cut back on on everything until you get this mess cleaned up and then i think you do have this kind of fresh start but i also i'm cheering on for you guys that, that possibly, I heard a little bit of hope there at the beginning of the call that you guys can, yeah, I think you do, do some work, do some counseling therapy. And I, and I pray that it is reconciled.
I think that's always the best hope for, for this. We never want to see, you know, marriages torn apart.
And he said part of it was because of her spending, but we do see money issues play into that. But always, you guys remember that those money issues usually is an indicator of something else going on underneath.
And that's why having, you know, professionals on your side to really dig in to know why. I mean, we are complex people and the way we, whether it'sate or whatever it may be our habits come out sideways um and when you can get to the root of that of who you are as a person that's really a beautiful thing so john we're cheering you guys on i really do hope that there's reconciliation um but just from the the money standpoint on your side um i think you can have a lot of this cleaned up really quickly so i'm thankful you got got back on your feet job wise since COVID because I know that was a pain point for a lot of people.
Absolutely. No, I feel like today, Rachel, we saw a big theme of divorce, which is tough and it's so difficult, but I think it just drives home the point even more like I've heard Dave say it, marriages need maintenance.
Like you need that regular, the same way you bring your car in for a checkup you go to the doctor for a physical every year like you need a regular rhythm of let's go see a counselor like let's just make sure everything's good yeah and let's make sure you know premarital counseling all those things that are checks and balances to make sure that you're operating at an optimal yep safe level right in your marriage Yep, and we have Dr. John Deloney here on our team, you guys.
So check out his content and books because it's kind of in this whole realm of life. This is The Ramsey Show.
So I always hear someone will kind of ask something or be like, hey, there's a situation like it, it's not me. It's my friend.
Right. It's kind of that I'm asking for a friend because you never want to admit it's you.
And it's whether because the situation is terrible and you're like, I'm so embarrassed by it. And or you feel like it's a stupid question.
You're like, I should know this, but asking for a friend. And so you came up with this like whole idea, Jay, which I love.
Yeah. Asking for a friend.
And so like, I feel like Rachel with money, there's all these terms or like lingo or jargon out there. And it's like, should I know that? Like at this stage in my life.
And so gross versus net pay. I feel like that's one that we toss around asking for a friend.
And there's a couple of ways that we could explain that. But honestly, Rachel, I think this video explains it best.
Take a look at this. So basically all it is, have you ever been to a restaurant and you get a drink and you're like, yeah, I'll have a Coke.
And it's filled with ice, right? And you there's hardly any coke in here and when they take the ice cube out you see how much drink is actually left it's basically not a lot less than half less than half in that example very disappointing yeah it's a great example of gross versus net and gross is the cup that looks like oh it's full it's great yes and then the net is what home and you're saying, oh yeah, after taxes. Yeah.
The ice is the taxes. The ice is the taxes.
That's right. That's right.
And so when you look at your paycheck, you know, you might, you'll probably see like the different numbers. Like this is your gross pay.
This is your net pay. A lot of times when you, I mean, most of the time when you go for a job interview and you're negotiating pay, what you're really talking about is gross salary, right? It's like, you're going to make $50,000 a year.
You're going to make, you know, $100,000 a year. That is gross.
And it would behoove all of us to look and go, okay, what does that mean for me after taxes with my budget? Does it work? Because I know there's so many people who, when they finally get their check, they're like, wait a minute. Oh yeah.
I was planning for. I think we all had that.
Our first jobs, right? You go, you know, mine was at the mall. I had a job at the mall.
You know, it's that first big job. And you're like, OK.
And you get that paycheck. And you think, what? Yes.
I thought it was going to make, you know, you calculate your head. You're like, oh, no, no, no.
Taxes. Yeah.
So gross pay is the total you earn before any deductions or taxes are taken out of your check and the net is what you have left okay so for example if you have a salary of 50 000 that's your gross pay for the year and your yearly salary is divided by the number of pay periods you have such as if you're paid weekly or semi-monthly or monthly that's the gross amount that you get to see on the check. If you're paid semi-monthly, which is twice a month, you would have 24 pay periods in the year.
So the 50,000 divided by 24 would be about $2,083 gross per check. But nobody cares about the gross amount.
We want to know about the net amount. The way I always learned it or like remembered it in my head is that if you go fishing, you get to take home what's in your net.
Yes. I thought that or mine, the gross, I always look and I'm like, is this the gross? Oh, gross, gross.
I don't want to see that number because I'm going to be disappointed. I was like, gross, gross number, gross number.
I don't like that. Gross, nasty.
Don't, don't show me that number. Inside the minds of Rachel and Jade.
I love that. So here's the thing.
Again, if you own a business, maybe you're self-employed, your gross income is usually like, this is like the total revenue that I'm bringing in. This is before like payroll and all the business expenses.
Right. So that's kind of the way to think of it.
So net pay is your total pay minus taxes or deduction taken out of your check. We could also call it take home pay.
Right. That's right.
Yeah. Which is when people call on the show all the time, they'll say I make $80,000 a year.
And we're like, okay, yeah, what's your take home pay? What do you see every single month? And so, you know, we don't always do that trade. And that's some of our negative Nancy's in the comments.
They're always like, y'all just use that number. And you know, but you forget about taxes.
We don't forget about taxes. But we don't forget.
They're just the fact of the matter is it there's a different differential there depending on what state you live in and so sometimes it's hard for us to guess and so we usually try to ask but the deductions that take place between gross and net we're talking about federal income tax state income tax which is the biggest differential um social security and medicare taxes if you have any like wage garnishments that we don't know about, health insurance premiums. A lot of times if your, you know, job will, you know, give you a health insurance that's coming out of your check.
And so I wouldn't call that a tax per se, but it is something that will lower your take home pay. And then, of course, if you have retirement or 401k coming out of your check, again, it's not a FICA.
You know, that's right. It's not something that's coming out in that way.
But it is something that is lowering your take home pay. So all of those things you really have to think of when you're planning your budget and making sure that you're looking at your pay stub every single time.
So, so important. But yes, whether you're an employee or a business owner working with the tax pro can help you make accurate withholdings.
So you know exactly what's coming out of your paychecks. You know, you want to make sure like those withholdings are correct because a lot of times withholdings are too much or not enough.
And that is determining your tax return, whether you have this big hefty tax return or not. So a big tax bill or you're getting a big tax return yeah either way you want kind of more that middle ground so looking at your looking at that part is huge yes so again gross versus net gross is the gross amount you don't want to get too stuck on it because that's not the amount that you keep gross nasty don't look it's yucky what you get to keep is what you take in your net and take home that's right see we're so helpful no but it's like of those simple concepts that again, it's that jargon that everyone's like, golly, I wish, you know, some people are like, I wish I learned this in school.
Like if I did, I didn't have to Google or ask Jade and Rachel. And so honestly, learning this stuff as early as possible, I think is such a gift.
And we talk about this a lot at Ramsey Solutions that if you have kids, you guys, it is your responsibility to teach them these things. But also when schools get involved or churches or places in the community, that is just a bonus.
And we are seeing a lot of states are actually mandating financial literacy now for high school, which is great. And hopefully, you know, they have a great curriculum.
And Ramsey, we actually have a curriculum that is in high schools all across America called Foundations and Personal Finance. And I think we actually have a video from them because it's such a great, such a great resource.
How do people make money investing in the stock market? I'm not sure. I don't even know what a stock market is.
Yeah, I don't know what that is. It's like gambling in Vegas.
How do you know when you are able to retire? Don't you have to be like old? I feel like for most jobs they give you a retirement plan and insurance and all that. Tell us what you know about how taxes work.
I haven't been taught a whole lot about that. I just know you get them every year I think.
Yeah, I ain't gonna lie. I have no idea about that one, so.
What types of insurance do you need to have? Phone bills. Does the dentist have insurance? I think that's when you get older, though.
Life insurance. Yeah, I mean, I don't think, unless you're worried about dying.
What is a good credit score? I learned about this. I did.
Not that late. Around, like, $700.
Yeah, $700. So good, okay.
So that was something our team did, where they just interviewed a bunch of high school students on some of the basics about adulting. We'll call it just adulting.
That's everything from insurance to taxes and investing. And again, when you can have this knowledge early on, then you're able to really change, you know, your mindset around money, the way you're doing your habits around money.
And the and the earlier the better so if you guys want to check out foundations it really is an incredible resource you can go to ramsey solutions.com slash foundations and thanks to all the teachers and the school districts across america i mean we graduated what was it like how many students was it over 10 i mean 10 million or something i mean it's been it's crazy it's grown so much over the past couple of years. And we really want good education, the right education into our schools.
We don't want credit card companies, obviously educating our kids who have alternative motives. We want them to learn the common sense way when it comes to money, but also educating them on some of these more complex issues like investing and that kind of thing.
But man, the earlier you can learn that, the better off you're going to be. So again, you can go to Ramsey solutions.com slash foundations and check that out.
I didn't know about any of this stuff when I was in school. I remember the first person to mention anything about investing was a professor that I had in college.
And it was just like off handed he said you know like if you invested a dollar a day for this many days you'd have and whatever the number he said I just remember being intrigued by that being like wait what do you mean and like I had questions yes after the class about that not like music history or whatever we were learning about I'm like what was that investing thing that you were talking about like what is the is the stock market? Like I just had never totally heard of it. Well, if no one's, yeah, if no one's talking about it or teaching it.
So yeah, parents out there, talk to your kids. You know, one thing mom and dad did so well is that they did not force us into like a mutual fund summit or something on the weekends.
Like it was nothing legalistic, but it was just in the ebb and flow of life. Just be like, hey, did you know this?

Or, hey, let me talk to you about this.

It's such a gift.

It is.

It's such a gift to give the youth, the kids of today.

This is The Ramsey Show.

Welcome back to The Ramsey Show.

Up next, we have Chris in Charlotte.

Hey, Chris.

Welcome to the show.

Hey, how you doing? Thanks for having for having me absolutely how can we help all right so my question so a little bit about myself um i'm 27 married with two kids my wife and i wrote a check to pay off her 58 000 graduate student loans and we're officially debt-free. Amazing, Chris.
Well done. Thank you.
Thank you. I have a

unique situation where I'm a pro athlete and I build a cover by each team I play off. After saving up for the next two years since we're debt free, should I focus be on buying a house with cash and buying a car with cash? That's a great question.
So are you, how are you guys doing currently with your cars? Because you mentioned paying a car with cash. Do you got, but you're debt free.
You don't have any loans on your current cars, but you're just looking to upgrade. Is that what you're thinking? No, no.
So we don't have cars. So when we go overseas, they get, they provide us with a car so when we come home we usually just rent a car for the for the two months that we're here but um we don't want to do that no more we want to actually go ahead and start owning cars oh i hear you okay so you guys don't currently own a home in the states because you're traveling i guess to europe or where are you going for to play yes yes okay okay Europe, or where are you going to play? Yes, yes, to Turkey.
Okay, and then where are you going? Turkey. Okay.
Nice. And then when you come home, you're now saying, gosh, I mean, we have no debt.
We have probably, you know, you're making, I'm sure, great money. So you're thinking we want to have a house in the States that we can really start, you know, having some money.
Land on our foundation. Yeah.
So the first thing, yeah, with your income, can I ask what your income is? Or you don't have to say if you don't want to. Yes, yes.
So next year, so this year coming up, I actually leave tomorrow. I'll be making $400,000 for the next 10 months.
And then the next year after that, it'll increase to $450,000. Okay.
And then you have two months where you're not making anything, or do you have other deals that kind of fill in those gaps for the other two months of the year? Two months, not really making anything. I run a camp, but it's nothing substantial.
Okay. So the first thing that I would want to make sure is, I mean, you guys are debt free.
I'd want to make sure you guys have stacked up three to six months of expenses as quickly as possible. Do you have that in liquid? Yes, I do.
Okay. And then the next thing is, are you regularly investing at 15% of what you earn? No.
Okay. That's the first rhythm I'd want to start is like, okay, we're investing because I don't have to tell you like in sports, you know, you're on top and then something happens and you're injured and you're like, oh crap.
Right. So I want to make sure that that rhythm starts as quickly as possible.
And then after that, you know, the way we teach home buying is you're saving up. In your case, I'd save up, you know, no less than 20 percent.
And then of the down payment. Right.
And then after that, you don't want the payment to be any more than 25 percent of your take home pay. Now, if you're like, hey, I just want to pay cash for a house like that's also an option.
If you're like, I just want to save up the income and pay cash, you have that option as well. Okay.
Yeah, and I think too, Chris, there's a reality to your situation that you guys will just be in the States for two months at a time. Are you looking to retire and come back full-time soon, or are you going to play this out as long as possible? Yeah.
So my time frame, I'm 27 now. So I think I would play for another good six to seven years.
Okay. My income might not be as high as it is right now.
But I was thinking projected around the $200,000 to $300,000 range, you know. Okay.
Going forward. For sure.
So, yeah, so I think, yes. Okay, so since, you know, you're only going to be in this house for two months out of the year, you guys, it'd be tempting to get something crazy and be like, you know, big and flashy, but I wouldn't.
I would go really conservative on the first home. I would put as much down as possible, even pay cash for it.
And again, you guys will just be back two months at a time. And that's going to grow so much in your home value over the next few years.
That by the time you come back, you know, full time, even if it's in five years, there's a good chance you could sell that, take some of this cash that you've been accumulating over the past and then go get a great home that you guys will be in year round. So I think it's a really smart idea.
Yes, I would go cash forward. If you can, again, it can be something, you know, really conservative, but paying cash for it would be a great, but if not, you know, you can just put down maybe 50% or 75% down.
That would be great and pay cash for a car, but start that investment, Chris. You can check out our SmartVestor Pros if you go to ramseysolutions.com and sit down with an investment professional and really work through some of these numbers with them too because you guys have some great opportunity to do some amazing things and you already have Chris like well done I just I applaud you for the decisions you guys have made all right up next we have Savannah in Houston hey Savannah welcome to the show hey thanks for having me absolutely how can help? So I reached out because I had a fraudulent loan pulled out my name.
It was one of those classic, you know, text message scams, and I had just fell right into it. This happened back in February or March, I believe.
Yeah, So back in March, and I've just been dealing with it ever since it happened. I've reached out to Navy Federal multiple times to get help.
They've since told me after multiple encounters three times that I was responsible, after me appealing, responsible for this Fed debt, and have also taken my paychecks for my direct deposit automatically, have also, whenever they were investigating the incident, they gave me, I forget what they called it, but it was about $2,000 while they sorted out the investigation. and then they later pulled that money back and different deposits that have gone to my account they've automatically taken out okay so they have access to your checking account yes yes maybe federal does that's who i had my bank with okay so they're garnishing your wages on a loan that is not yours so right so i would close your account.
You need to open up a new one. They don't need to have any access to your account.
And then, I mean, if they're not doing anything, then I would pursue legal action. I mean, this is a classic case of identity theft and someone taking your identity.
Have you talked to any legal counsel? Yes. So I've done a lot that I haven't mentioned yet, but I mean, I've really taken just about every action that I have access to or can afford.
So I first went to my JAG office. I'm active duty, so we have a JAG office.
Okay, okay. I went to talk to them, and basically they are military related.
There's nothing that they can do for me in this section of law. But he advised me to report to the government that I'm at risk for identity theft.
Did that. Take out all of my money and move it to a different bank account did that um and report to a a bureau called one moment it's a credit bureau that is over navy federal basically report a complaint to them that maybe federal isn't taking my um issue seriously um i did that and haven't really heard anything back from them.

How long has it been?

Well, I filed a complaint with Consumer Financial Protection Bureau

two months ago.

I got a package back from them,

but it was kind of just documentation that I filed the complaint.

There's no new information.

Thank you. a package back from them, but it was kind of just documentation that I filed the complaint.
There's no new information. On that, okay.
I mean, my, yeah, honestly, Savannah, my next step would probably be to contact an actual lawyer and have them get involved because they're going to be able to, you know, do more legal action than you just as like a citizen and hopefully have some level of intimidation to some of them, right? To say, oh my gosh, this is not, yeah, it's obviously not correct. And you're not liable for any of that.
You are not liable. Someone forged your signature, they took your identity, and they took money out in your name.
So yeah, so obviously you've done a great job, Savannah, at this point, keeping all the documentation. I would keep a very, very close record of everything.
But if you don't hear anything back in the next 30 days, again, from them, after contacting them, you know, a third, fourth time, I would probably contact, yeah, get a lawyer. I'd be turning the tables and be like, well, maybe I'll come after you.
Yeah, that's right. I mean, absolutely.
But I'm glad that, yeah, you've moved your accounts over for sure so they can't garnish your wages. So I'm so sorry, Savannah.
So sorry. This is The Ramsey Show.
Our scripture of the day is 1 Peter 3 at 15. But in your hearts, revere Christ as Lord.

Always be prepared to give an answer to everyone who asks you to give the reason for the hope that you have.

But do this with gentleness and respect.

You can't knock on Opportunity's door and not be ready.

Bruno Mars.

Well said, Bruno.

Well said. All right.
Let's go to Taylor in Dallas, Texas. Hey, Taylor.
Welcome to the show. Hello.
Hi. Thanks for calling in.
How can we help? I lost my son in a car accident a couple of months ago. Oh, Taylor.
And he had a big life insurance policy that we didn't know about. He wasn't married and no children.
And I would like to share the money with my other children, but right now I'm just overwhelmed. We're not sure how to go about doing that.

One is very responsible financially.

The other one is not.

And I'm just not sure exactly what we should do.

I'm so sorry, Taylor.

What was his name?

I'd rather not say.

Okay, that's fine.

That's fine.

Oh, I'm so sorry. I'm so sorry.
I can't imagine. How old was he? 24.
I'm so sorry. Yeah, grief is, I mean, that's the hell on earth.
That no parent, that phone call that no one wants so um our hearts are with you i'm so sorry um so what i honestly would do taylor is nothing right now um you guys are grieving um there's no urgency there's not a you know there's not kids in the picture his you know he doesn't have children or a spouse um so there's not immediate urgent need right now and honestly what we always recommend to people that have gone through something really traumatic or really um difficult whether it's a death or a divorce is just to slow down and you know wait a year wait a year before you make any major financial decisions. And so giving his life insurance away, I think is a really beautiful way to honor his legacy.
But I would consider that a major financial decision. So I would honestly just open up a high yield savings account and I would put that money in and I would just sit and cry and grieve as a mom and um just kind of let some of this settle yeah and then I think you may have um more of kind of a clear um mind to make some of these decisions uh and in regards to your other two kids.
How old are they? 30 and 34.

30 and 34. 30 and 34.
Okay, so they're older. Yeah.
Do they have, are they married with kids? One, yes. One married, no kids.
Okay. Which one was the, you said one was really responsible, one is not, is the one that is have married and kids?

No, no children. Okay.
Very responsible. Okay.
Okay. Yeah, I agree with Rachel.
You probably have some thoughts in your mind right now that maybe you would do with this money, but there's a lot that can change in a year. you might find the one that's quote irresponsible now

might start turning things around, or you might see other patterns that start to develop that change kind of what you're viewing. But the biggest point of this is nothing's clear right now.
Like grief is such a, it's such a cloud, right? And I agree with Rachel, a year, like even if it's longer, the thing with this money is there's not a high sense of urgency on it. Generally, life insurance is to replace, you know, income that was dependent on by somebody and no one was dependent on that income.
And so you do have the piece to kind of just sit on this like rachel said you put it in a savings

account it's still going to grow and you have the time to kind of wait until that right point where you go okay i know what to do with this i know what he would have wanted me to do with this and you can feel confident in the decisions that you're making um and so i'm right with rachel on And I just, my heart goes out to you.

Taylor, did he have...

Oh, absolutely.

Did he have a will in place on what he wanted to do with his money? No. No, okay.
And as, yeah, so there's, I'm just thinking through any logistics on this side of it. Do you, where are you and financially can I ask that oh yes we're um we're everyday millionaires okay wow wonderful yeah yeah we've been doing this since I think about 2015 okay very good yeah yeah um I think we don't need it but you know I don't I don't want to be irresponsible with it and you won't be no you won't.
I think we don't need it, but you know, I don't, I don't want to be irresponsible with it. And you won't be.
No, you won't. And I think, and I think even what you can do is, you know, and again, this is a year down the road and I think you can kind of make this, but different people that have, have sums of money that give to their children, you know, some people do it in the form of assets that they help with a big down payment on a home where they help put towards paying off a mortgage.
So it's not just free cash, it's actually going towards something. So even the one that's irresponsible, you know, that could be something you kind of think through that you're not just handing him cash.
But if there is a way in his life that you're able to kind of help set him up better, if's what you choose to do uh that doesn't you know it's not magnifying an issue that he has you know is is a great thing or you know even um with the son that has a family you know even talking through with them um you know giving them i think the the freedom to say hey here's here's some money and maybe they get help their kids with it, you know, but I do think the legacy piece is honoring to your son, and so I do love that thought of kind of passing that on to the rest of your family, because, I mean, that's a beautiful way to honor his legacy. Yeah, we've set aside 10% to give to different charities that we thought he would be, that he would like.
It's beautiful, yeah. I think that's a great plan.
Taylor, are you guys, are you seeing anyone, a counselor, or do you have a good church family around you? We do have a good church family. We haven't found a counselor that we're comfortable with.
We've been led to a grief-share group that starts next month. Good.
Okay, that's good. Yeah, that's great.
We all need that. Oh, for sure.
Yeah, and I think those intense emotions, ones of grief and that kind of thing, I mean, having somebody in your corner that can walk you through this I mean it's just painful it's it's it physically is just it's torture it's absolutely torture but I think you're doing a wise thing to take care of you and your marriage because I do think as well know, some marriages, they don't survive traumatic

experiences like this, like a death of a child. And so this is the time to lean into that with all of your might, whatever strength you have, lean into your marriage.
Yeah. And I have a good one.
So I'm grateful for that. Yes, I'm so, I'm so, so glad.
Well, Taylor, I hope, oh, I hope that helps. And again, I'm so, so incredibly sorry.
But for any of you listening, you know, just make it a point that there's, there's usually not a lot of rush. And, you know, we talked to even widows, you know, of a wife who has lost her husband or a husband who's lost their wife and, and they want to take, you know, they get life insurance and they want to take it and pay off the house they want to do all these things really quickly and we even that just gotta wait even that we just say slow down and and this is the time to grieve like this is you don't need to make major decisions if you're in a um a dire situation and something needs to happen you can use that money for that but if you are in a position where nothing no action has to be taken um I wouldn't um and and sometimes even jade which is terrible but there are people that even take advantage of those in grief of course and they they set them up in a bad plan and a bad financial product or whatever it is and that's you know and emotions are so high at that time that some people are really they fall to that so quickly that's That's right.
You're not thinking clearly. You're not reasoning the same way you would.
Yep. That's right.
That's right. So Taylor, our hearts and prayers are with you and your family.
I'm so, so incredibly sorry. Well, that puts this hour of the show in the books.
Thanks to everyone in the booth, all the guys and Kelly. Jade, thanks for a great show.

You too, Rachel.

Love hosting with you.

Thank you, America, for listening.

This is The Ramsey Show. Thank you.