Money Chaos Doesn’t Have to Be Forever

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Normal is broke, and common sense is weird.

We're here to help you transform your life from the Ramsey Network in the Fair Winds Credit Union Studio.

This is the Ramsey Show.

Ken Coleman, Ramsey personality, number one best-selling author and host of the front row seat, a big hit on Ramsey Networks.

he's my co-host today phone number triple eight eight two five two two five daniel is in california hi daniel how are you

hi dave good how are you better than i deserve what's up thank god first i just want to say i'm a big fan um i'm young but i i first heard about you in uh in high school wow i just wanted to say that well thank you um

uh so i'm 23 years old i started a finance brokerage about three years ago uh with some outside investors.

Initially, they promised about a million to two million of investment for half the company.

And then basically, right as we signed like a major office lease,

they had some financial troubles pulled out, leaving me with all the overhead.

At that time, I decided to just try and pick up the business myself.

At one point, we were doing about like 200,000 gross a month.

Now it's closer to like 100 to 120.

After expenses, it's probably around 40 to 50.

And then during that rebuilding process, I racked up about like maybe 80,000 in credit card debt.

Now the investors want their money back.

They originally demanded double.

I negotiated it down to just the principal.

The challenge is given their connections and influence, I can't really just like refuse to pay them even though it was an investment.

So I'm trying to figure out, you know, the best way to pay them off, the credit card debt, while still being able to grow the business in here.

What's your business do?

We're like a brokerage.

We assist small and medium-sized businesses to obtain financing.

Okay, so you're brokering business loans.

Correct, yeah.

Okay.

All right.

And you did all this by yourself at 23 years old.

At the time I was 22, but yeah, now I'm 23.

So the

is the investment that these were venture capitalists that were put putting money in for a piece of the ownership, correct?

Correct, yeah.

And they invested their money in, and is there any documentation on how that investment was to be governed, when it was to be repaid, or anything like that?

Yeah, so they were they basically pledged about a million.

I heard that, and then they didn't do it.

They didn't do what they said they were going to do.

But what's your documentation say on the deal?

Surely you didn't do this freaking deal on a handshake.

Correct.

Yeah.

The contract said that they were supposed to contribute until it's profitable, and that was kind of their role.

So technically, according to the contract,

they didn't hold up to their part.

Right.

And

the contract said they were going to get their money back.

How?

It had just been through equity.

But they were going to be an owner, a percentage owner of the business, correct?

Correct, yeah.

So eventually when the business were to become profitable, they would get half of the profits.

Okay.

Well, number one, I don't buy that anyone has the influence to put you out of business.

I think that's absolute bullcrap.

So I really don't care what they think.

They broke their word.

They violated the contract.

They're in default on the deal.

Okay.

Yeah.

From an ethics standpoint.

And

until they're profitable, they don't get anything.

But they were supposed to put in a million dollars to get half.

They never played through.

They only put in $300,000.

And so

what does the contract say about our parties not following through and being in default?

So what's kind of weird about the situation is given who they are and they're involved in the community I'm in and they were put together by like somebody we personally knew,

It just was going to be a really big mess if I were to try and basically say you defaulted.

You don't deserve the equation.

You know what?

You're so intimidated by something that just does not exist.

I don't believe what you believe.

Yeah.

I'm calling B.S.

You've got these guys made out to be some big deal, and they can't even come up with the money they're supposed to come up with.

So I don't know how they're a big deal.

So the thing is, now that they're apparently doing better, that's kind of like where they came back to light saying we're ready to reinvest.

And I'm like, no, I don't know.

No, you're you didn't follow through on the call.

You're in default.

So, go back to the question Dave just asked you because it's the right question.

You didn't answer it.

You went into, well, because of their influence.

What does the letter of the contract say as it pertains to these investors?

They are in default.

Everybody on this phone call agrees.

So, what does the contract say?

The contract says that they would only have a reduced equity amount based on what they gave.

So

that's what they got.

Yeah.

And if they want their money back, toughies.

Yeah.

So that's kind of like the.

Here's an idea, boys and girls.

You're going to abide by the contract this time.

So the thing is, my question basically is,

that's kind of the ultimatum they gave, which was, okay, either we're going to own a percentage of the company

or

you're going to buy us out.

So given the types of people they are, obviously i want to get them out yeah but you don't have 300 grand

correct so my question is is it would it be smart to try and put together some sort of payment plan with them to to try and wipe that out yeah i mean how much can you do 25 a month be done in a year

it would it would i mean that's kind of the question if i try and put that dollar amount i'm worried in my in my

rules why don't you give them a percentage of profits that is equal to I mean, what's your typical profit in a month?

You said 40K?

Yeah.

Yeah.

Okay.

So let's give them 50% of profits until you get your 300.

That's the idea that I had, yeah.

Yeah, that's good.

And I got to tell you, I do want you to reset and realize that you still have these guys on a pedestal where they do not belong.

You think they have more power than they actually have, and you think they have more influence in the community than they actually have.

Because I know people in our community that screw people over.

They're known, but they're also known for screwing people over.

And so, you know, and when it's not convenient and when it is convenient is when they do deals.

And that's who these guys are.

So they're not as influential and powerful as you have made them out to be in your mind.

I promise you they're not.

Okay, guys that break on deals like this are not guys that they don't hold influence because other people know this.

They know this about them.

You're just finding it out late.

Other people stayed away from them when you did a deal with them.

So don't do any of this based on, ooh, ooh, ooh, these guys are a big deal.

These guys aren't a big deal.

They're a couple of crooks.

Didn't follow through on their deal.

And that's who I'm negotiating this contract with.

Yeah, if you want to buy them out for 300, give them their 300 back at 50% of profits until you get to 300, no interest, then that's fine.

And that's going to take about a year, give or take.

Yeah, I mean, that's okay.

Do that.

And I think you need some legal advice.

Because I don't think you, you know, I think you're reading a contract that was written by guys that screwed you.

And so you need to get someone else to actually look at this contract and make sure.

Because a lot of contracts, what I'm saying, Daniel, is a lot of contracts like this say, if you're in default, you lose it all.

You get nothing, honey.

Just like the cereal.

Nothing, honey.

Okay?

That's what most contracts of this type would say.

Default means you out, baby.

That's what it means.

It means you didn't put a million in.

You only put 300 in, so you lose the 300.

Nothing, honey.

You need to check that.

I think it might have a nutting, honey, clause in it.

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Brian's in New York.

Hey, Brian, what's up?

Hey, Dave.

How's it going?

Pleasure to be speaking with you.

I've been following you for years.

Thank you.

Yeah, absolutely.

Absolutely.

Obviously, I've been following you, I've been listening to you, but I haven't been implementing

your strategies.

So just to give you some information, I'm 29 years old.

I just finished up college last year.

I'm undergrad.

I have about $55,000 in student loans, and then I have about

$35,000 in credit card debt.

And I just got a job with an insurance company.

It's an $80,000 starting salary with a 10% target bonus.

And

obviously, because of the loans and then the credit card debt, the credit card debt got so bad that I had to go into a, like, it basically was a charge-off with the credit union that I was with.

And so it's two cards, one's for about 19 and one's for about 16.

So

I'm trying to, you know, like you said, I'm sick and tired of being sick and tired.

I've been, you know, haven't been using, haven't, haven't had good spending habits the past couple years.

But luckily, I did get this job.

I just started about three months ago.

But my credit score is really bad.

And

I'm making paycheck to paycheck.

Before that, I was working about, I was making about $35,000 while I was in school.

Okay.

What is the credit card debt composed of mostly?

What did you buy?

To be honest with you, just a lot of

partying, just being an irresponsible young 20-year-old and

in my young 20s and just

mismanaging it and just spending it on going out and doing

whatever it was.

Were you able, not counting the partying, but just food and shelter and lights and water, were you able to exist on the $35,000 income?

Not really, to be honest with you.

A lot of people.

What's it take for you to exist bare minimum right now?

Like 40?

Bare minimum amount.

I would say about

45 to 50.

Okay.

Call it 50.

You're making 80

plus bonuses.

You have no car payment, none of that?

No, no.

So if you put 30, if you live on 50 and you put 30 on the debt,

you're

debt-free in two and a half years.

Yeah, yeah, absolutely.

How far behind are you?

How long since you paid the credit cards?

It's been about three years.

Okay.

You can probably settle those for about a quarter on the dollar.

So the first thing I want you to do is I want you to save up $4,000 and call them and talk to them about the $16,000 one and say, I've got $4,000.

If you can accept that as settlement in full, I'll give it to you right now.

No, no, no.

We want payments.

I can't do that, but I can give you $4,000.

as settlement in full.

We can't do that.

It requires six.

Okay, I'll have to call you back later because I don't have six.

I got four.

Right.

No payments, no process, and settle those for pennies on the dollar and clear them out, and then attack the student loans with a vengeance.

But you're going to have to get on a written plan.

And here's the great news: you're about to turn your whole life around so that you can turn this debt around.

Absolutely.

Yeah.

Because you've correctly identified what caused the problem.

Now

you've got a second chance at being an adult, making 80 grand.

And now you've got to be an adult.

Absolutely.

Absolutely.

So the guy in the mirror, he's a different dude now.

Starting ready, ready today.

Starting today, ready, set, go.

Absolutely.

Yeah.

Definitely well.

Because your money's going to flow out of your personal healing and maturing.

The fixing of your money is not going to occur independent.

of you maturing and healing.

You understand what I'm saying?

Yes.

Those two things are together.

They're part of the same equation because personal finance is 80% behavior.

Behavior comes from you.

And so, you know, if you go, okay, this 80,000, I am sick and tired of being sick and tired.

I've been feeling like I'm sitting on the sidelines watching everyone else win while I was screwing off.

And that's no more me.

Now I'm in the game.

They're getting ready to give me the ball.

And I'm going to run the ball in the dad gum end zone.

And nobody's going to stop me.

And I'm going to look in the mirror and say, on Friday night, I'm working extra.

I'm not going to happy hour.

Absolutely.

Because I'm getting out of debt, and I want my life back.

And I want to be a 30-year-old man, not a 20-year-old party animal.

I'm playing back for you what you said, okay?

Yes.

But I'm speaking life over you, son.

You can do this.

Thank you.

Thank you.

I appreciate it.

Yeah, I want to ask you real quick on that end.

I'm sitting here listening.

Here you are, a guy who listened to Dave for many years while doing all this destructive stuff.

So that tells me that your conviction, your values aligned with what Dave had been saying on the show, and yet your behavior was different.

So I'm just real curious, not putting you on the spot to embarrass you, but put to lift you.

Of course.

What is what's going on below the surface?

What was really going on?

Why all the partying?

I think

I just had a,

there was just like a, I guess like a low self-esteem issue that I had in my younger years.

And I kind of finished up school late.

I had some like a rough go in my, you know, after high school.

I really didn't

take things seriously until I was about 24.

And then that's when I started.

I realized I was like, I got to get back in school.

I got back in school.

worked my ass off while I was working, paying for school.

And

I got it done.

and I got a great opportunity.

Now you get to ring the bell.

So here's what I want to leave with you on this, because Dave nailed this.

You didn't think you were good enough to pull off this money value stuff that we teach.

You didn't think you just had a self-esteem issue.

And we don't need to dig anymore.

But I think it's really important you get off this call and realize what's really going on here because you're going to be tempted again in the days ahead to believe this false narrative that you weren't good enough to live like no one else.

Yeah, I just really think that's way below the surface.

Yeah, I agree.

And he said it.

I mean, it's what he told us.

Yeah.

So you're exactly right.

You're exactly right.

Hey, Brian, go get them, man.

And call us back when you're winning.

We want to hear your story.

Okay.

I love it.

Hattie's with us.

Hattie is in Indianapolis.

Hi, Hattie.

How are you?

Hi, Dave.

I'm fine.

Thank you.

Thanks for taking my call.

Sure.

How can we help?

I just need some guidance about whether

now that I have the means, I should pay off my estranged son's student loan debt.

Why would you do that?

Well, because

before we were estranged, I promised him that when my father died, that I knew I would receive some money and that I promised him that I would pay the debt.

There's no legal obligation.

I know that.

Okay.

How much is it?

$30,000.

And how much money do you have?

$2.5.

Okay.

Yeah, I'd pay it off.

Yeah.

It's not about him.

Okay.

It's about you.

Right.

You're keeping a promise you made.

It has nothing to do with anybody else.

This is you being you because that's who you are.

Yep.

Yep.

And it just makes it greasy.

It makes it slimy.

But

it does make you go, am I losing my rabid mind?

But 30K out of 2.5, I think you'll be okay.

You can burn that much in the middle middle of the floor and not worry about it.

But I would have zero expectations that this fixes the estrangement.

It's just you keeping your word.

That's all it is.

Right, right.

And I don't want him to feel

like,

you know.

I can't control how he feels.

Right.

No, exactly.

All I can control is what I promise to do, and I'm going to do what I promise to do.

Yep.

That's all I can control.

That's all I can control.

If I could control him, he wouldn't be estranged.

You You know, I mean, I can't make him do anything.

He wouldn't be off the ranch, right?

So, yeah, I'm sorry.

I'm sorry you're going through that.

How long have y'all been disconnected?

Four years.

I'm so sorry.

Over what?

And he's 25 now and doing well.

Well, there was a straw that broke the camel's back, a big argument his senior year of high school.

But I was a single mom most of my life.

And

I think he was raised in a household full of my anxiety and fear

about

how to be a single mom.

I'm sorry.

Yeah.

Hey, you raised him.

He's eaten.

He's alive.

You fed him.

Sometimes you just got to kick back and go, that's what I did.

I was trying to get by.

Oh, well, next thing.

Yeah, I'd write a check just to keep your word.

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Erin is here in Pittsburgh.

Hi, Erin.

How are you?

Hi, I'm great.

Thank you so much for taking my call.

Sure.

What's up?

Okay.

I am a realtor.

And as such, my income fluctuates.

I just started the Every Dollar budgeting.

I have the app.

Here's my question.

That since I started, I've put my business fees in with my household expenses and everything else.

No.

And now I feel like, yeah, I know.

So I'm getting, I have an appointment at my credit union to get a separate account.

But here's my question.

Is there, should I get another another budgeting, should I just open up a different Every Dollar app?

Or should I put those expenses in the current Every Dollar app?

Or how do I budget this?

You could try to run it in the Every Dollar app.

It's not really well designed for a business P ⁇ L

and a profit and loss statement.

And you really need a business P ⁇ L.

So it's just something like QuickBooks.

Or something like that.

They're very easy softwares.

And basically what it is, is it's all your gross revenues, the income you make in the real estate business goes into that separate new account.

And the only thing you pay out of that new account is business expenses.

So your realtor fees, if you buy signs or you buy, I don't know, anything that's a valid business expense associated with you doing your real estate business comes out of that account.

Nothing else.

You don't pay any personal bills out of that account.

Then what's left in that account is the actual profit on your real estate business.

Okay, great.

And what comes out of that account then, when you take money out of that account and bring it home, you need to set aside a fourth of it for taxes.

Yeah.

okay so if you pay

if you pull ten thousand dollars out of that account you need to set twenty five hundred aside because you're supposed to be filing once a quarter your estimated taxes they're called quarterly estimates and you're supposed to be doing that as well if you don't keep up with that number one you'll get behind the eight ball and have a big old tax bill and it'll knock you down number two you're gonna get penalized so um sit down with a tax preparer and help that get them to show you how to do your uh your quarterly estimates set up your separate account account,

run your separate business like you were running it for someone else, and then when you pull the profits out and bring them home, set aside a fourth of it, and that money all is coming home.

So how much have you made selling real estate so far?

I mean, it fluctuates.

This year, my net commission is around $45,

and I estimate a little bit more.

I also have some other income sources.

So

I'm just trying to tweak everything.

It's all in a big pile.

Yeah.

Good.

What are the other income sources?

I teach part-time at a university

and I Uber, and I get some child support.

Okay.

All right.

Well, child support goes straight into your account.

No question about that.

When you teach, is that a W-2 or are they 1099 in you?

That's a W-2.

Okay.

So you don't have any tax problems.

So that money goes straight into your account.

Okay.

Correct.

Okay.

So that just goes.

Okay.

Yeah.

And your Uber's 1099.

What about the Uber?

Yes.

So should I put that in the real estate account?

Yeah,

I would just say this is my business account.

I'm going to put my Uber income in there.

And I'd have two line items.

You know, I have real estate income and I have Uber income.

And so

you can code the expenses.

For instance, let's just use an example.

If you were spending money on fuel to show houses, then we could have gasoline-R

for real estate.

And then we could have gasoline-U

for Uber.

Okay.

And then you could be able to pull up the different expenses associated with Uber, the different expenses associated with real estate.

But they're all still net expenses going right down the list there.

And you'll be able to tell what's happening with your business.

Yeah, question.

How much are you spending?

How many hours a week are you spending in the Uber?

I spend about 15 to 20 given a week.

Is that because you're running really tight financially?

Yes.

correct.

Right now I am, but it's also good income.

Just I've changed.

Not good income if you're selling real estate.

Yeah, I want you to get out of that.

That's where I'm digging there because

that time spent there could be spent in other ways.

And I want to see you get out of that.

I'm not sure that's the best ROI on your time, not to mention tearing the car up and everything else.

So I understand if you're filling a gap temporarily, but you were saying that's going to change.

What's going to change about your real estate business so that you're not ubering?

well i had a few uh sales that got pushed it's usually a little bit more regular but sometimes but it's it's up and down so sometimes i'm so busy i i literally can't eat and sometimes i i have nothing to do and i'm just prospecting and not not earning anything so i'm trying to get more i've never really budgeted so now i have the every dollar app i have the great advice from you all and i have more of a sense of stability and consistency so i think that's going to help me Yeah, the more you can get a steady flow in your real estate pipeline, the more your income is going to be steady in your real estate pipeline.

And it's going to be a better income than Ubering.

That's right.

And now that you're budgeting, I love where your head's at.

That's where you need to get to where you're accounting for downtimes, but you're actually prospecting, prospecting, prospecting, not in the Uber.

That's where you want to get to because you're going to see a much better pipeline and long-term results that way.

Shane is in Texas.

Hi, Shane.

How are you?

Good.

How are you, sir?

Better than I deserve.

How can we help?

I just wanted some guidance.

I'm getting ready to sell my home.

Got divorced within the last year and got a little bit of debt, a little bit of commercial debt, a vehicle, and then some student loans.

Nothing terribly crazy for my income level, but I just want to position myself best for being a homeowner again

about maybe a year or so after I sell my house in the next few months.

So

just kind of looking at what best to do with that money.

So you're going to get enough out of the house to be debt-free?

I'll be pretty close.

So

currently I have about $9,000 in commercials, just credit card debt that I paid about 10% of that down in the last year.

And then I'm currently on baby step two.

And then I've got a vehicle that has a note about $16,000 to $17,000 on it.

And that'll be paid off in just under two years.

Still a new vehicle, reliable, reliable, and that's the main reason I've kept it.

Plus, I'm not upside down on it right now.

What is your income?

About $125,000 gross.

Okay.

And how much will you get out of the sale of the house?

Anywhere between $20,000 to $25,000.

Okay.

Why would you not just pay off these debts?

So that's that's my plan.

I just kind of want to figure out what if you had any guidance on where best to put it first, because I'm not going to be able to pay off the total amount.

Oh, you are.

You're getting $25,000.

You only owe $16,000 and $9,000.

That's 25.

Well, and I've also got a student loan that's about 16,000.

And so, and that's

basically if I pay off, I can pay almost to all of everything.

My idea was if I pay off my vehicle and I hold the value in that for a while and then I also pay off the credit cards, then I'll just be making a student loan payment, which will be my lowest.

If I do that, I'll be paying the least amount of money per month at minimum, and I can pay it off faster.

But I didn't know if that was...

So if you you don't have a car payment and you don't have the other loan, and all you got is the student loan, and you make $120,000, and you're no longer married, how fast are you planning on paying off $16,000 of student loan?

I think I could probably pay that off within the year.

Oh, no, no, no, no, no, no, no, no, no, no, no.

That's horrible.

We could make it more wimpy.

That's so wimpy.

No, like four months.

$4,000.

I mean,

that's also realistic.

Yeah, it is realistic.

Yeah, after that, I've also got, I've got three kids, and I pay child support as well.

That's okay.

There's not, it's not, you ain't got nothing else to do.

Stop your 401k and pay off your student loan in four months.

And when the house sells, and when the house sells, immediately pay off the other two debts.

There's nowhere to park the money because you're going to pay off the debt.

It's going into your checking account.

You're going to write a check, pay off the debts.

And then in four months, $4,000 a month, dude, roll up your sleeves and get after it.

It's time.

Listen, it's a new phase of life, a new chapter.

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That ball, that's nothing.

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Cherise is with us in Indianapolis.

Hi, Cherise.

How are you?

Hi, good.

How are you?

Better than I deserve.

What's up?

Well, I'm calling my husband and I.

Well, my husband agrees.

I want to add an addition.

to our house.

We've been in our house 14 years and our kitchen is tiny.

Our house is large.

We have a family of six.

so we use all five of our bedrooms.

And I have a home-based daycare, so we use a large living area as my business.

And I would like to add an addition on the back of our house, which would give us the kitchen that I'd like.

It would also bring our laundry upstairs, put a bathroom on for the daycare, so they'd have their own bathroom, and it would give us a four-season room, which would just give us more living space.

The addition would cost us about $150,000,

and

I want to refinance to be able to do that.

My husband is on board, but says you would say no way.

How much debt do you have, not counting the mortgage?

No debt.

Good.

How much money do you have, not counting retirement?

About $15,000 as personal.

The daycare also has its own emergency fund of $10,000.

Okay.

All right.

And you're funding retirement now?

Yes.

Good.

Okay.

Sounds like you've got a pretty good plan overall.

What's the home worth today?

Today it's worth about $375,000.

Okay.

All right.

And

so are you in a neighborhood or on a piece of land or what?

We are in a neighborhood.

We're inside the city limits, but we're on a large lot.

We have about three-quarters of an acre, which is one thing that I love about it.

If I drew a circle of three miles around your home, what's the typical house price in that three-mile circle?

I would say, well, I found another home that checks all of my boxes, and it was selling for $875,000.

I don't know an average price.

That's not in a three-mile radius of your home, though.

Oh, it is, yes.

Oh, it is.

Okay.

So

what do the houses on your streets sell for?

Between

$300,000 and

$500,000 or $600,000.

Yeah, I do.

They don't sell for that much.

It's between $300,000 and $450,000, isn't it, really?

You're getting ready to overbuild the neighborhood, aren't you?

Probably, yes.

You're going to have a house that you would try to sell for $600,000, and people that are looking for $600,000 houses don't drive on your street.

That's probably true.

Yeah.

That means you've overbuilt the neighborhood.

So that probably means you need to think about moving instead of doing this.

How's the daycare business?

How healthy is it?

It is very healthy.

Spend out full.

What did you make last year off of that profit?

Daycare, I made

like $60,000.

Okay.

I guess, Dave, where I'm going is,

are we doing this for the space?

Are we doing this because the daycare is in the house?

And, you know, because she wants a kitchen.

While we're doing it, it's a $150,000 kitchen, and some other stuff got scope creeped.

Well,

I have owned so many pieces of real estate, and I grew up in a real estate guy's house.

My parents were in the real estate business, so our furniture was trained to jump on the truck.

So

I don't get as emotionally tied down to certain locations as some people.

To me, it's just a house.

And so I think you might actually find something that better serves your needs for $600,000 in a neighborhood

that's $500,000 to $700,000 and maybe is a little more modern too

and would be close enough that you wouldn't lose your daycare clients and those kinds of things.

I think that's out there.

And before I overbuilt the neighborhood and did a renovation, and by the way, I've also done a couple of renovations while I was living in the home, and I'll never do that again.

It makes me want to shoot myself.

It's just sawdust and drywall dust everywhere.

And everybody's mad all the time.

The subs are mad because they got to deal with the owners.

The owners are mad because they got to deal with the subs.

And you're screwing around inside my house while I'm trying to wash my underwear.

It's just, it's awful.

It's just awful.

And so I don't recommend it.

From my standpoint of that, this is a massive undertaking.

It's a big deal.

And it's going to take a lot of your life away for a year or a year and a half while you do this, not to mention that when you're done, you've built a house that's kind of weird

and it's overbuilt for the neighborhood.

So you're going to have a hard time getting good appreciation out of it and getting a good sale out of it.

I would consider moving about 10 times out of 10 before I did this deal.

But yeah, that's if you did refinance it, the numbers we would tell you to go with are 15-year fixed on the whole mortgage cannot be more than a fourth of your household take-home pay.

If it's more than that, then it's just off the table, period.

You can't do it at all.

And that's also going to be true when you move.

It's off the table, you can't move.

So,

but

I think

you are getting ready to have another full-time job for a year on top of the full-time job that you have, which is renovation.

It takes up so much of your headspace.

You burn so many calories managing a renovation, especially one while you're living in it.

And

it's just a deal.

I can't recommend that to you.

It's going to interfere with your business.

It's going to interfere with your marriage.

And when you're done, you're going to have an unusual floor plan on a property that you've overbuilt the neighborhood on.

And I can't, I just don't think there's not much good here.

The only good thing in the whole story is you got a new kitchen.

Have y'all ever renovated a house while you lived in it?

No.

we've done little

uh we did a room over the garage but it was so i guess yes yes yeah but it wasn't like it wasn't like a full-blown to where it was like interrupting everybody's lifestyle yeah mo's daughter took her house all the way down and they but they moved out and lived somewhere else for a year yeah that makes sense because you just could she took it so far down she couldn't work on it i mean it couldn't live in it it was it wasn't habitable so um but they they did a massive deal and it's almost like building a dead gum house it's a matter of fact sometimes it's easier to build a house

uh in terms of how much of your brain power it takes up and those kinds of things.

So, yeah, folks, here's the deal.

The best place, you've got a range of 10 to maybe 20%

price range of the homes on your street, the homes in your neighborhood.

And be thinking about the illustration I just used when you're thinking about buying a home or you're thinking about doing a renovation.

Dave, I want to put in a $25,000 pool.

How many houses on your street have $25,000 pools?

None.

You're getting ready to spend $25,000 that you will never see again.

That's a lot of swimming

because that thing, you're not going to increase the value of the house.

No, okay, Dave, 60% of the homes already have a pool.

We're going to add a pool.

The pools are very nice in our neighborhood, and $25,000 or $50,000 or whatever the deal is.

You can spend a million on a pool.

So does it fit the neighborhood?

Otherwise, it's consumption.

And you really can't justify consumption at those levels.

You're better off to move.

And so

when you're buying a home, try to buy in the bottom 25% of the price range.

That is going to go up more.

Because think about it.

Everybody buying a $500,000 house

wants to buy in a neighborhood that's $500,000 to $700,000.

Nobody buying an $800,000 house wants to buy in a neighborhood that's $500,000 to $700,000.

So it's harder to sell and consequently does not appreciate in value as much.

And so you want the full appreciation and you want the ease of selling it.

And if you're in the bottom 25% of the price range in your neighborhood, when you're finished with your renovation or when you purchase or when you do whatever, that's the sweet spot.

But when you're in the top of the neighborhood or over the top of the neighborhood,

you could get stuck in the thing.

And if you build an unusual floor plan, you're just about guaranteeing you're going to get stuck in it.

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Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio.

I'm Dave Ramsey.

Ken Coleman, Ramsey personality, number one best-selling author, is my co-host today.

Ron is in Indianapolis.

Hey, Ron, how are you?

I'm good, sir.

How are you doing today?

Better than I deserve.

What's up?

Yeah, so I'm getting married in spring, and my fiancé said I should probably give you guys a call for some advice.

I have recently lost my job, and I am in a lot of credit card debt, and we're also trying to plan a wedding.

So we're trying to figure out the best way forward.

The question is:

should I dig into my IRA account and take that money to pay off my credit cards or more cash flow?

What what was your job?

I was a construction project manager.

And what were you making?

About $75,000 a year.

And why did you lose your job?

Laid off.

Why?

I have no idea, to be honest with you.

They're not making money?

I got to call.

No, I do have

veterans with disability coming in.

It's about $4,000 a month.

No, I said they are not making money.

Was the company you were working for hurting financially?

I don't think so.

They let a team of us go and said we just have to cut some costs.

So I'm assuming.

We didn't see the big picture.

Just

commercial or construction?

Construction.

I said commercial or residential.

I'm sorry.

Oh,

commercial.

Okay.

All right, cool.

And when did you get fired?

I got

back in in August, so it's been about a month.

And what have you been doing since then?

I have been going to school and

applying for jobs like crazy.

Talk about the jobs you've been applying for and what you did.

So I've been applying for more project management positions, specifically in IT, because that is my

education background.

And I've had a few interviews.

I had one today that was pretty successful.

So I'm hoping and praying that that goes further.

And what's the schooling, and were you doing the schooling while in the other job?

My current schooling, I'm getting a master's degree in information and communication.

And yes, I was going to school while working that job.

And you have no physical disabilities that would hamper you from doing this work?

Correct.

Okay.

Um,

no, I would not cash out your retirement.

I'd get a job.

I'd get six jobs.

And

then when you get a real job, get rid of five of the six.

But I'd be working like a crazy man, doing everything I could, because you got to pay for a wedding and you got to keep the dog the thing afloat without starting to cash out your retirement.

You cash out retirements, you're going to get hit with a 10% penalty plus your tax rate.

It's like borrowing money at 40% interest because you didn't get off your butt and go get a job.

The good news is you are off your butt and you have been looking and you did get an actual interview.

So that's great news.

So

yeah, you are moving your feet in the right direction.

So that's the direction.

That's the answer.

And if you don't land something in the next two weeks and start working like for 75 or 80 or 100,000, then you need to be delivering pizzas and

walking dogs and cutting grass and cleaning toilets or whatever you've got to do to start making some money.

Yeah.

But no, don't cash your stuff out.

Go make money.

Okay.

Go make money.

Work, work, work, doing something, side hustles, anything, and get the wolf away from the door because it's causing you to think weird.

Your whole question is based on I'm defeated, and I'm not going to allow you to be defeated.

When's the wedding again?

May 30th next year.

And who's paying for it?

We are.

Okay.

And how much is the wedding?

We have cut it down to about

$15,000.

Good.

Very conservative.

And you've got how much in credit card debt?

I have roughly $70,000.

Okay.

So $85,000 changes your whole life.

Yeah.

Yeah.

And once I quantify it that way, you're a project manager.

I

start looking at it like a project.

Okay, how do we go get $85,000?

What must be true?

And what period of time?

And what's reasonable?

And I'm going to work IT on the side and I'm going to,

oh, by the way, you should be doing that.

That's what you're going to be doing.

Is get some IT stuff, some side hustle there, because all kinds of that.

You can pick up a freelance immediately on contract work and start helping people with IT, whatever it is, hardware, software issues.

But aside from that,

I just set the goal.

It's like I'm building a building.

What's the process?

Well, I need a budget.

I need a plan.

And I need a schedule.

And I'm going to plug the contractors, the subs into the schedule, and I'm going to plug them into the budget.

And then we're going to execute and push every domino.

And when one domino refuses to fall, we're getting a new domino.

In other words, the sub doesn't show, we get a different one.

Or he comes in and decides he's going to double his bid.

No, that's not how this works.

We have a bid.

We're going with it.

And we hold to the project and we push, push, push, push, push.

Okay, $85,000 in two years is $65,000.

is

$42,500 a year.

So $4,000 a month.

That's what I need.

Above my living expenses.

And I'm out of this whole thing in two years.

I paid for the wedding and I paid off all the credit cards.

And that's not counting the fact that you're going to have a dual income after May 31st.

I'm just showing you an example.

How do you eat an elephant a bite at a time?

But now we've got to go get the money to do that.

And that involves

getting employed.

And if, this is a big if, you can pause the master's program, I'd pause it.

I don't know if you can, but if you can, I would, because that'll still be out there.

And right now, everything now is about getting out of debt, paying this wedding, paying for this wedding.

The master's degree is always going to be there.

Creating a sustainable situation, and that means income.

That's right.

And so we need income, income, income.

Here's what's going to be weird, Ron.

As you add income to this equation, whether it's four side hustles combined to make a full-time job while you're looking for the full-time job, or a full-time job plus four side hustles, as you add income, every time you add income to this equation, your confidence level is going to go way up.

And it's going to be associated with your level of activity.

And, you know, and then you're going to be much more

appealing in an interview.

Yeah.

That's exactly right.

Activity is absolutely the key when you get let go.

There's all kinds of data out there about it's the same thing emotionally as losing a loved one.

So you have to acknowledge that, wait a second, whether I was a group of people or not, and whether I did anything wrong or not, if it was just a layoff, in this case, it's an economic layoff or the company's economics, it still hurts.

And so activity is the key.

It's still feeling valuable because you are providing value and getting paid for it.

Dave, you're absolutely right on that.

That's the best thing one can do.

Lick your wounds for a day or two at most,

and then get back into it and stay active.

So let's give him a copy of both books of Ken's, or two of Ken's books anyway.

The proximity principle, which will help you in the job search,

and finding the work you're wired to do.

Take the assessment in that and verify that you're in the right field and that you're heading into the right mindset.

And both of those are a gift to you, Ron.

And we'll just call it an early wedding gift.

How's that?

Yeah, I'm going to fix this with income, not with cashing out my retirement.

That does things for your heart, your soul, and your future.

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John's in Madison, Wisconsin.

Hey, John, how are you?

Good afternoon, Dave and Ken.

How are you doing today?

Better than we deserve.

What's up?

Wonderful.

So I either need confirmation of how I'm feeling or I need a kick in the shorts.

My wife and I are trying to decide if I should quit working, well, kind of, at least for a time.

So every weekend and during many work nights, I do admin, property management, and accounting and HR work for my wife's small business and our, we have a few side hustles, mainly rental real estate.

But during the day, I daylight as a manager at a construction company where I average 40 hours a week over the year, but that emphasis is on the average.

Winter is really easy, but the rest of the year I'm just running on fumes.

Between

my wife's business and our rental and remodel side hustles, I work 25 hours more just during nights and weekends.

And I'm always behind.

I feel like I need another five to eight hours a week to catch up.

If I hire out all that extra that I do, we estimate we'd add about 83 grand in expense, more or less, depending on the project load.

I make $120,000 a year with bonuses to $40,000.

My wife makes between $4,000 and $500,000 a year,

which has been lower because we've had four kids in the last five years and she's been on maternity leave for parts of all of that.

This year we're shaping up around $592,000.

What does that mean?

Next year, if we don't make she's an attorney.

And you're running the business ops side of the law office.

Exactly right.

Admin, HR, anything that's a lot of people.

How many team members at her law office?

How many that work for her?

Five members, counting her.

Okay.

It's not a ton of HR of five people, but

just payroll every two weeks.

That's a counting.

How much is your side work make, spin off for you?

For 2025, we're looking at $42,000.

Okay, so

if she paid someone $80,000 to be her admin, her office manager,

and instead paid you to be the office manager, and you went down there and went to work for 80K, and you made 40K with the side stuff.

That's 120, and then she makes $400 to $500 on top of that, right?

That's exactly right.

Okay.

I just love working, and I don't like to admit that I don't have enough hours in the day, and I just don't know if I'm being aware of that.

Well, you did admit it.

You just gave us a very detailed breakdown.

What you don't want to admit is you think you need a Superman cape or something, and I don't think that's necessary.

What's the quandary?

Why'd you call it?

What would you rather do, be the office manager for the law firm or

do the

what's your construction work during the day?

Which one do you like doing?

I like doing the other one.

I want to do the side hustles.

I think that helps our life.

You know, I can, we got four kids that, you know, in five years, they'll stop destroying the house, but for the next five years, it's hard to keep up with just the life, you know, laundry and eating healthy and all that stuff.

But it feels like I have to do that.

House husband was not in this equation until just now.

No, no, no.

That wouldn't be what I would be doing.

I'd be doing the 25 hours of work plus the eight hours I think I need in addition to keeping up.

Yeah, you're going to have an office at the law firm and you're going to get up and take a shower and go in at 8 o'clock every day.

Yes, exactly.

And work there all day long and from that home base run the side hustle as well.

And then both of you are going to go home at 5.30 to be with the kids.

Exactly right.

Okay.

Spot on.

Yeah, this is not, we're not working from home.

This is not remote.

You're going to go down there and run the freaking law firm, and it needs to be run much better due to you being there and become much more profitable.

So you ought to be cutting expenses and help the other attorneys increase revenue, billable hours.

Yep.

Correct.

Yep.

Okay.

That's exactly what I want to do.

And I wouldn't be at 8.

It'd probably be at 5.30 in the morning.

And, you know,

be able to be home earlier and do those things because right now

I mean, you basically got two jobs.

Which one do you want to keep is what it amounts to.

And I think you've already decided.

But I don't think you keep both.

It's not sustainable.

There's no reason.

Not like you all got a shortage of money.

Yeah.

It doesn't prove anything.

Listen, if you don't have a shortage of money, working 100 hours a week doesn't prove anything.

That's what I got to, that's kind of the paradigm shift to wrap the head around.

So I think you, you know, let's commit to increasing the value of the law firm as a result of you being there.

Commit to the side hustle becomes increased in value as a result of you being there more fully.

And

so you end up moving from $120,000 to

$150,000 worth of value that you're adding to the equation.

And then she's making the $400 to $500,000, and y'all are killing it.

Yeah, that's what I'm doing.

I'd quit.

All right.

But I'm going to work.

But I'm going to work down there.

I'm not doing this from my bedroom with my slippers on.

Yeah,

I just sense that you're still struggling with this.

You know this is right.

What's holding you back?

Something's there.

It's a classic

gazelle intensity and not knowing when to let off.

In the last five years, we...

charged into baby step five, six, and seven, and

how do we let off the gas?

This is it.

This is how it is.

Can I also say that I don't know that this is what you feel, so I don't mind being wrong, but I just have a hunch that you're a good dude and you believe in hard work.

And hard work is a part of not just your identity, but I would say your value system.

And this feels to you like you're mailing it in while the wife is making big money and you're having a hard time with that.

That's what I think is really going on.

Am I right or wrong?

You're very right.

Yep.

So I thought you...

You should do this for a living, Ken.

Yeah, that's right.

Well, I've talked to a few people.

Here's what I think then.

Okay, so thank you for being honest about that.

What Dave laid out for you is not a guy who is mailing it in and letting his big shot wife, lawyer bring home the bacon.

That's not what we heard from you, nor is it what Dave prescribed.

So the narrative needs to be, hey, I'm actually going to cut back on this other gig to immeasurably improve our life.

And what I'm doing as the husband, as the man, I am making a massive change, which will also be a massive contribution.

You believe that.

I heard you say it.

So that's what the focus is.

So I get it.

I completely see where you're coming from, but you got to change your focus.

Yeah.

Yeah.

It's,

I'm able to add enough value to this situation that it makes sense.

And that's what it comes down to.

And that's what we did.

And I'm doing that.

And I'm not cloaking this in some weird work-life balance crap or

this is an excuse to be remote or all that.

It's none of that.

It's not you hiding at all.

This is you stepping into another thing, but much more fully.

And

yeah, you got your lack of focus, you're probably not doing great at either job.

And all of a sudden, when you start doing great at this job, I think you're going to see an increase in revenue and net profits anyway, whether it's reduced expenses or increased revenue on both the side hustle and the law firm just because you're freaking paying attention all day long and you've had a good night's night's rest.

Yeah.

It's an old phrase.

I think they made it at one of those cheesy successory posters once.

If you chase two rabbits, you lose them both.

And there's some great wisdom to that.

There's just only so much you can do with divided.

I've never even caught one.

What are you talking about?

I never even.

Have you chased a rabbit and caught it?

No.

I've shot them, but I've never chased one down.

I never was that quick.

I know.

I said it was cheesy, but it's an old phrase.

A lot of truth.

All right.

Yeah, that's it.

I mean, you can't, you know, tough to serve serve two masters.

Yeah.

We should say, if you chase two rabbits, you're going to be double frustrated.

Got to prove how slow you really are.

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Today's question comes from Hannah in Minnesota.

I worked for a small business for 30 years until it was sold a few months ago.

I still work for the company under the new owner.

My former employer surprised me recently by telling me that because of the part I played in his success, he will be gifting me $25,000 next month.

I am not his employee anymore, so no taxes will be taken out.

I've researched this scenario, but can't find an answer on how I deal with this when it comes to tax time.

Is it called a gift or should I ask for a 1099?

It is not really compensation in terms of me working for it.

I want to avoid tax problems if at all possible.

That's

outside my expertise.

What do you think on that one?

I would sit down with a Ramsey Ramsey tax pro, an ELP, an endorsed local provider under the Ramsey Trusted Program, and get an actual piece of advice.

My opinion, just reading this, is it's a gift.

You don't have to do anything.

Now, the gift is large enough that it does trigger a gift tax, but that's on him, not you.

And so, if he tries to claim this as an expense in his business, then that's compensation.

It's not a gift.

Because a business can't

give a gift and write it off as an expense unless it gives it to a nonprofit,

a 501c3, right?

And so

if you give a gift to an individual from the business, it is not an expense.

But that's not up to you.

All that's up to you is you got a gift.

Somebody gave you $25,000.

It's that simple.

I don't think it's taxable, but you should double-check with

you might

here.

Here's the problem: if he claims it

as an expense, he has to issue a 1099.

Does it matter that this is probably coming from the proceeds?

It is.

It's coming from the proceeds.

Yeah, it doesn't matter.

But he's still,

he could claim it as a business expense and say, you know, I'm just paying out some of the old employees and claiming it on 1099.

If he pulls a 1099 on it, now you've got a compensation issue.

Now you've got to pay taxes on it.

But if he just simply sent you a gift, Merry Christmas from an individual to an individual because you don't work for him anymore,

that's not taxable.

Shockingly not.

Yeah, again, it is taxable on him if he hasn't done, hadn't gotten some tax advice on how he does this.

So anyway, wow.

Hannah's in Missouri.

Hey, Hannah, what's up in your world?

Hey,

Dave and Ken.

Glad to be on here.

Well, glad to have you.

How can we help?

Yeah, so my husband and I are newlyweds.

We've been married for just shy of four months.

And we come from very different worlds when it comes to money.

I'm a pastor's kid, number four, like no money in the family.

And he's an only child and comes from a lot more money than I do.

And

we are still in that weird transition of just getting out of college.

still young enough to be on parents' health insurance.

And I'm wanting to find the best way as a wife to encourage my husband to become fully separated from his parents financially.

I know that that's the healthiest, the smartest, the wisest decision, but they still are very much like, hey, you need something?

Just call us, give us a call, and we'll pay for it here, we'll pay for it there.

And wanting him to stay on everything for as long as he can to soak up all the money he can.

And I have not had that luxury.

So I'm trying to find the best way to go about that conversation, I guess.

Well, I think there's two or three issues.

One is them giving you cash or buying items for you.

Two is staying on health insurance.

Three is staying on their Netflix plan and their cell phone bill, furnishing a cell phone or something like that.

That's the kind of stuff that you people usually look at, you know, not

getting rid of that and those kinds of things.

So

what does he say when you talk to him about this?

Sometimes he's like, well, they're just being nice.

Like, it's okay.

If it's a really big thing that we need help with, he's like, well, just let them help.

And I personally am just like, hey, we can go without and struggle through this without having the extra help.

Like, give me an example of a big thing.

For me, it would be furniture.

I'm used to living in an unfurnished house until you can get it, right?

But they hear, oh, he wants a a bookshelf or wants a couch or whatever and they're like well let's just buy it let's just buy whatever he wants and i'm like well no we don't have the money so let's just wait and um that i guess that's an easy example yeah that does that makes sense okay and you've been married a year No, just shy of four months.

Oh, four whole months.

We're not even there yet.

When you say that to him,

does he dig in as to asking you, why do you feel that way?

I get why he says what he says, but I'm curious, does he lean in a little bit to understand where you're coming from?

Yeah, he understands that

why independence really matters to me.

I think it's just all new to him.

He lived with his parents up until we got married.

So he had not been independent until about he's 24.

He had gone to college, and they're just like, this is my baby boy, so let him stay for as long as possible.

And I'm like, well,

the good news is they're very kind people.

They're very generous people.

They're not toxic about it.

They're just being overly helpful.

You're not describing bad people.

You're describing sweet people.

But they are violating boundaries, and you guys are not able to have the dignity of a stand-alone house.

And you're missing that dignity.

Yeah.

And

they don't even realize they're doing that.

They're really,

these people are not.

There's no malice in anything you've described.

Yeah.

Yeah.

So I think you just continue to talk to him and say, honey,

I'm not okay with us not having the dignity of a standalone situation.

The only way we need a couch in here is if we buy a couch.

Or if there was a special moment and they said, okay, for Christmas, we're going to furnish the living room for you.

Okay.

That's an okay thing, but that's a Christmas.

That's not just every time you had a wish,

the stuff starts showing up on your porch.

You know,

we don't need that.

I think it eats away at my pride a little bit because I'm used to being independent.

Yeah, it does.

It does.

I'm not used to that.

But I think you described that perfectly.

I think you need to set your pride aside when it's an honest and a clear gift versus a pattern.

That makes sense.

Like, for instance, Christmas.

Or, for instance, they say, hey, the whole family's going on a trip next year.

We're paying for everybody.

Set your pride aside and go.

Okay.

If they want to pick up dinner, same deal.

Yeah.

Mom and dad, they're old.

They got money.

They want to buy dinner when they take you out.

I buy dinner for my kids.

My kids got plenty of money.

But that's just a that's okay.

I mean I

you know you do some of those things, but that but what is those should be one-offs and individualized situations, not a pattern.

And what you're dealing with is a pattern that your husband needs to respect

your desire for some

individuality, some dignity on.

Yeah.

And so, honey, it's really, really important to me that we have our own Netflix account.

It's really, really important to me that we have our own cell phone.

And it's really important to me that when you turn 25, we move the health insurance and we've got a plan to do that and we lay it all over there.

Until then, we can ride this one.

It's really, really important to me that we just don't randomly get things from them every time we had a wish.

Sometimes some generosity in individual holidays or birthdays or gifts or trips or something, we can look at those things.

But this pattern of they support us,

I can't deal with it.

It eats my guts out.

And

you can tell him that.

He can hear that.

Yeah.

That's a good way to approach it.

I like that.

Yeah.

So I left, when I left home,

I was more in your camp, and it was like,

good luck.

You're on your own.

Sink or swim.

You know, if you really get super hungry, call two days in advance.

We'll have some spaghetti on the stove when you get here.

But other than that, you're on your own, right?

My wife, on the other hand, her family was more like your husband's family and very kind people, very generous, and

a lot wealthier.

And

I couldn't stand it.

He owned a market, a convenience market.

And when we would go in at Thanksgiving, all the kids filled up their cars with gas

to go back home.

And it drove me nuts, just like it's driving you nuts.

But it's like that was a little gift, a little something that was, but they grew up going to the market and getting gas their whole lives because they owned a market the whole thing.

I mean, but now when you're 26, you should probably quit getting free gas from dad.

You know, it's like, golly.

John's in Minnesota.

Hi, John.

How are you?

I'm doing great today.

How are you guys?

Better than I deserve.

How can we help?

That was great.

I say, I am currently dating a woman.

We've been dating for two and a half years, and we plan to get married and all of that good stuff.

And we've already talked about finances, and we're going to join them together, and we're on the same page about that.

So that's all good.

The question that I have is that we are both currently homeowners.

She operates, we both operate businesses out of our homes.

She has a salon built into hers.

And then I do IT stuff 30 hours a week.

And then I'm also a musician.

So I play about three times a week as well.

And so when we get married, obviously, you know, we only need one house.

So I'm trying to figure out what to do.

There's not enough room for me to office out of that house as well.

She has four children.

And so I won't be able to move all my stuff and all my music gear and all that fun stuff there.

So I do currently have a roommate that's helping with the mortgage.

And so my dilemma right now is just, do I keep the house and continue to office out of it and have that space as well or should I sell the house and then then if I do sell the house what do I do with the money and then rent an office

hmm

so there's not room for you to move everything you do into her house with her salon and her four kids

that's correct Yeah, there's not even enough room, bedrooms for all the kids.

One of them sleeps in the big main room in the basement, has his own little corner, and he's happy.

But yeah, there's not even enough bedrooms for everyone to fit.

Okay.

What's your home worth?

My home is roughly worth around $170,000, and I owe about

$72,000 on it.

And so there's a decent chunk of equity in there.

But I do also, I have an equity loan out right now to my ex-wife for $24,000.

So it's probably down to about $22,000 now.

Okay.

Okay, so what would let's see, you do IT work from home?

Yeah, so I'm a service desk tech, and so a lot of what I do is based out of the house.

I get the tickets and kind of the first line of response and then we can remote into a lot of different clients that we have and help them.

Otherwise, I do go on site, but I do need an office of some sort.

And that you don't need an office for your music?

No, but I do have a lot of gear associated with it.

I do a little bit of recording.

Most of the revenue from the business comes from actual performances.

And so there's a small SUVs worth of equipment, essentially, that I also need to store and load and load it out all the time, too.

Okay, and there's not garage room at her house for that.

There's a garage, but it would need some substantial works in order to become a little bit more proof from the elements and stuff.

We're in Minnesota.

I don't know if you've been up here.

It's a little colder in December here than it is in Nashville.

Heard the rumor.

What is the mortgage on the house that you own?

He said 71.

70.

No, no, what's the payment?

Sorry.

Oh, I'm going somewhere with this.

The monthly payment.

What is that?

The payment is $9.60, so it's not a large payment at all.

And the reason I'm asking that is if you play this out the way you laid it out, I'm wondering what would it cost you to rent a small office space?

So, yeah, I started investigating that, and in the downtown area here, it would be about $5.50 to get an office, and then it could be first floor and stuff too.

And I would have 24-7 access to so what I need to access it to load and unload gear for the weekend gig.

Oh, so you could also store the stuff there as well.

That's what they're telling me.

I haven't had a chance to tour it on that.

Where I was going next, the next question I was going to ask you is: well, it's going to cost you for a very small storage unit to store the stuff.

I'm looking at at least run through those numbers if I'm you to go.

If I sell the house, clear my debt, and you know, my expenses actually can go down.

In other words, I'm not paying a mortgage anymore over there.

How much is your roommate paying you?

$550.

So your net out of pocket is about $400 if you keep the house.

Correct, just for the house.

But then double up on utility bills and all that.

If I rent an office, as far as I saw that they were communicating to me, I won't have to pay for internet or your air conditioning or any of that fun stuff.

I think the office is a better play because I think it simplifies your life.

I think keeping the old house is a more complicated thing, and it's going to take up more headspace while you're trying to learn to be married to a lady with four kids who runs a beauty salon.

And

while you're trying to run your business and everything, you've got one more thing to deal with, and that's roommate and all this other stuff.

And I think it's just the cleanliness of it, the simplicity of it, of being in the office feels really good.

And that's kind of what I'm leaning towards as well, too.

I've had the house, I find the papers with my brother and my father the day after I turned 18.

So I think a lot of my hesitation is probably sentimental.

Yeah.

Yeah.

Well, I mean, but it is, you know, we are turning the page to a different chapter in your life.

You're now going to be a married dude.

You know, and so married dudes have different things.

Nothing wrong with that.

This is true.

Nothing wrong with that.

Yeah.

And, you know, and I'm trying to let go of that side of it too.

And I don't really, I'm working through the baby steps right now.

I'm, uh, I was up to my one, my step one being complete, but I just had to get some

repairs and stuff.

Uh, not a whole lot.

So like I said, I do have a home equity loan.

No, no, I got that, but I mean, how much debt other than the house do you have?

$6,000.

Oh, not very much at all.

Okay, so you can clear that too by selling the house.

Oh, yeah, I can clear it.

Yeah, this advances you into baby step three pretty solidly.

Does she have any debt, not counting the house?

She does.

She has some credit card debt and stuff like that, too.

And so just yeah, you guys combining your finances, cutting up her credit cards and clearing all this debt with the sale of your house and moving into this office.

Now I've got a whole nother reason to do this.

Yeah, sell the house.

Okay.

Yeah, and get out of debt, both of you.

And you're both together are now unified.

And this is upon marriage, of course.

We're talking about all of this.

And

then we're, you know, we're combined and we're moving forward.

Absolutely.

Absolutely.

That's the way to go.

Lynn is in Ohio.

Hi, Lynn.

How are you?

Hi there.

Good.

How are you?

Better than I deserve.

What's up?

Well, what's up?

My son, when he was around 18, co-signed for a car loan with a girlfriend at the time who is now an ex-girlfriend.

Wow, that was stupid.

It was really stupid.

And I had no idea that this had happened because he didn't ask me about it before he did that, or I would have said no way.

So now, of course, they've gone their separate ways.

And

she's not paying.

Well, not very well.

Okay.

Is the car in his name or her name?

I believe it's in her name.

Okay.

Nothing he can do except talk her out of it.

Well, we've tried that.

I've tried to encourage her to refinance with another.

You tried to encourage her to refinance or he did.

I did.

I've talked to her, but she has since stopped communicating with me.

Well, no kidding.

Who wants to talk to you?

Right?

You're completely interfering in something that isn't even yours.

Boychild needs to grow a backbone and call his ex and get this straightened out.

He only seen his mama in.

Well,

I don't think she'll communicate with him either.

Yeah, well, that's the only one she should communicate with because that's going to keep him from suing her.

But you got no footing in this.

He wants to file bankruptcy to get his name off of the car.

No, he doesn't file bankruptcy on a car that hadn't been repoed just because he's pissed at the ex-girlfriend.

Let's just take stupid and double it.

No.

No, no, no, no, no.

Mama, you've got to stay out of this.

This is not your play.

Boychild done made this bed.

He gets to walk in it.

So,

yeah, he needs to call her up.

He needs to get an attorney and tell her that if the car is not sold or refinanced in 30 days, that he's going to sue her and ask the judge to force her to sell the car

because she's not paying on time and she's destroying his credit.

So,

wow.

But you cannot,

this is not your job.

Let me tell you what, if she didn't hang up on you in the first 30 seconds you were talking to her, there's something wrong with her.

She shouldn't have been, I mean,

she should have gone.

Who are you calling me?

That's what she would have.

I'll tell you what this is.

This is that helicopter mom.

You know, that seats.

Hey, I'm trying to help out my boy.

Yeah.

You know, what are we doing here, man?

This is the thing that's happening in this generation.

The parents are showing up in places that if our parents would have shown up in.

A buddy of mine got himself into a mess when he was that age, and he called his dad, who was an old Marine Sergeant.

He said, Dad, what do you think I ought to do?

And he goes,

If you're big enough to get yourself into this, you're big enough to get yourself out.

Call me and tell me how you did it.

I'm going to finish my glass of sun tea.

Talk to you later.

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Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio.

I'm Dave Ramsey, your host, Ken Coleman, Ramsey personality, and number one best-selling author is my co-host today.

Thank you for joining us, America.

Michael is in Seattle.

Hey, Michael, what's up in your world?

Hi, Dave.

I'm a single parent with disabled children, and I have about $15,000 in Sally Mae loans and $80,000 in government student loans on the SAFE plan.

And

I've done Baby Step One.

I'm doing the Every Dollar app

and that's going well.

And I've been getting my hands on your advice and on your podcast about student debt and how to try to improve that.

And I'm just

looking for some advice on kind of what to do here.

Okay.

You said you had your single dad of disabled children.

Tell me about that.

Yes, sir.

So

I take care of them and I take care of their needs.

And they have

medical appointments

throughout each week that I take care of.

What is the nature of the disabilities?

Intellectual disabilities,

neuromotor disabilities, all four of them.

All of them, yeah, all of them have a have a variety of disabilities.

Wow.

And you have full-time custody?

I have

full primary custody

what do i mean does that mean you have them all the time or what's that mean

uh yeah i have them i have them most of the time um i uh

i don't have them for

um a few weeks in the summer and then uh i split christmas and spring break

what do you make what do you do for a living

I work as a care coordinator, so I help people get into assisted living homes.

I help people get on

a variety of Medicaid waivers, and then I help them get

disability supports.

And I

currently am at an hourly rate, and I'm working part-time.

But as I build my clientele, it moves to a commission.

And it seems like the commission is actually

a pretty good commission.

Like, for example, you know, part-time, part-time commission is about $5,000 a month.

Full-time commission is closer to $8,900 a month.

But I'm not there yet.

Who's watching the kids when you're working?

They're at school.

They're at school.

And then

after school, they're watched by family.

Okay.

So what is the...

I'm just sitting here listening to this, and it feels like you need more money.

You need to make more money.

Yeah, I need to make more money.

That's what's the long term.

What's the long term?

Let's, and you got a lot going on, but let's just assume that you could snap your fingers and do the thing you wanted to do and make more money.

What is that?

At 8,900, when you get to that point, are you going to be okay?

I feel like I would, yes.

It's a good job.

There's a lot of potential for growth.

It takes four to five years to really learn it.

And I've been doing it for about a year part-time.

Why are you only part-time?

Because

I'm

taking care of

the children's, you know.

Well, then, how would you be able to be full-time?

Say that again, sorry.

How are you going to be able to move to full-time?

I've been

slowly adjusting my or increasing my hours.

I've been able to

work a little bit at night, work on the weekends from home.

Well, you told me,

you told me just a few minutes ago that the kids are in school, and then when they're not in school, families watching them.

So that would tell me that you have time to work full-time.

So they get to school about

they get to school about 9.30 and then they're out of school about 4.30.

And I commute, I commute an hour each way.

And so I'm working

Tuesday through Friday from about 11.30

to about 4.30.

And then I need to pick them up by 5.30.

So that's my work schedule.

Okay.

So what glares to me is we need to get a job locally or two jobs, talk to family.

I mean, you've got to really step this game up here.

The work situation you have is not helping you.

And four to five years to be able to make that,

you've got to make way more money than that well beyond four to five years from now.

So you need a new professional plan is what I'm trying to push at you.

So are these children

adopted or biological?

Biological.

Okay, and is there

prognosis to be self-sustaining as adults, or will they always need care?

One of them will probably always need care.

One, okay.

So

I don't know the answer to the equation unless there's some way you can do some of the work remote.

and some from the actual office

that allows you to be there as much as you're trying to be there.

And I don't know.

You've got two things pulling at you that are both very valid

things.

And one of them is very valid is to make enough money to clean the mess up and have a sustainable life.

And two is to take care of these children.

And you're a great guy trying to figure out how to do both.

And I don't have a great answer for you.

But bottom line is

what Ken said earlier, and you already knew that before you called, Michael, is this is a math problem and it's an income problem.

And so what can we do?

How can we shift around how we're caring for these children or who's caring for the children or whatever?

What can we do to get you in a position that you can make your $8,900 and that means you're working full-time instead of part-time?

And I don't hear how you're getting there right now.

So, but yeah,

it's a...

It's a terrible paradox to be stuck in betwixt and between this.

But it's it's also one that,

you know, you've been appointed to solve this.

And so, yeah, you've got to create some

income while providing this care.

And I don't have a magic wand.

I don't know where to tell you.

I wish I did.

I mean, if there's anybody I wanted to help today, it was you.

Man, what a thing.

Yeah, I would just say simplify this.

We've got to find something from 9.30 to 5.30.

We've got to get a job that doesn't require me to drive two hours a day.

There are are some things that can be changed here, which will make this far less hectic for you because you already got a hectic life.

So simplifying so that you can then maximize your income is the goal here.

Without us giving you super specifics, that's the goal.

So I'm thankful that the kids are in school.

Thankful that you got family to support you.

That does give you a chance here.

Even though I'm sure it feels really, really hard,

you can't get out of this.

It is about arranging life in such a way that you can make a living.

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Mary's in Colorado.

Hi, Mary.

How are you?

I'm doing well.

Thank you, Mr.

Ramsey.

Thanks for taking my call.

Sure.

What's up?

So I have a whole life policy, and I've been paying on it for the last five years.

It's got a cash value around $35,000 currently, but I pay $792 a month.

I was looking to see about canceling that and cashing it out.

The only problem is the reason I ended up with the whole life policy was I had

insurance, life insurance, through my employer.

The employer did a relocation.

I left the company and I had it converted to a whole life due to medical cancer diagnosis previously.

So I couldn't qualify for any term life at the time.

Are you single?

No, married.

Oh, okay.

All right.

And what is your income?

My income is $50,000 per year.

My husband is $150,000.

Okay.

And how old are you two?

44.

Okay.

All right.

And

do you guys have any nest egg built, any 401ks or anything like that?

Yeah, we have

1.5 in retirement,

$500,000 liquid investments, and then our home is paid off $1.5.

Okay.

So if you had no life insurance and died, your husband can probably struggle through.

Given that he's got $2 or $3 million and $150,000 income.

Yeah, we originally got it because the kids were really young at the time, but now five years later and they're not.

Well, you're self-my point is you are self-insured.

the purpose of life insurance is to replace lost income in the event someone is dependent upon your income no one's dependent upon your income

if you die your husband's got three million dollars and a hundred fifty thousand dollar income did I miss something

no but he I mean I guess if that happened um

I was previously staying at home so he would then want to you know maybe make adjustments in his income maybe not work take care of the kids until they're grown.

Yeah.

But he's got two million dollars.

Correct.

Yeah, I think it'd be okay.

We're only 44, so we still have to.

I wasn't saying he was going to quit forever, and I wasn't saying we're going to drain the account.

But my point is that your little whole life insurance policies are relevant financially, mathematically, agreed.

Yeah.

So don't get, don't get, keep getting screwed by these people then.

Cancel this thing.

Cancel it and then take the $800 and build wealth with it.

You don't need term insurance.

You don't need insurance.

If he loses your $50,000 income mathematically, he's okay.

I'm sure he'll cry, but mathematically, he's okay.

Yeah, we would rather take that $792 a month and invest it in our

stock.

Yeah, absolutely.

You'll make a whole lot more money.

If you had been doing it for the time you've been doing this, you'd have a whole lot more than $35,000, agreed.

Agreed.

Well, at the time, we didn't have this,

you know, we didn't have that net worth.

I know, but over the last five years, we've paid off our house and, you know, done other stuff.

Yeah, you've done a really, really good job, Mary.

You guys are in great shape.

You don't need this policy.

Okay.

That's what I'm saying.

Do you understand why I'm saying that?

Yeah, because we're self-insuring with our investments now, and kind of things have changed in terms of

it.

Just cancel it and put the $35,000 in a good investment and put the $800 a month into a good investment and quit getting screwed by these people.

It's wonderful.

It's a wonderful thing to get rid of these people.

I got nothing to add.

I mean,

you just have to realize the math on this and go away.

So here's the thing.

When you're 30 years old and you have no money and a bunch of debt,

and you have three little kids, you need term life insurance to to cover the loss of your income because your family's dependent upon your income to eat.

But fast forward 20 years and you're 53 years old and you have $2 million and you're 401k and your house is paid for and the kids are grown and gone,

your need for life insurance has gone away because you got out of debt and built wealth.

And so no one needs life insurance their whole life.

Hello.

That's why they call it whole life.

You know why they call it whole life?

Because they want a commission from you their whole life.

That's why they call it whole life.

Not because you need it for your whole life.

If you need life insurance your whole life, it's because you did a crummy job with money.

Because you got none when you're old.

You got a big pile of debt and no money saved, no investments when you're old because you didn't do a good job with money.

And then you will need life insurance to bury you.

And that's about it.

But, you know, the purpose of life insurance is to

cover your family while you can't, as soon as you can, quit buying it.

Life, whether it's term life or whole life, but certainly a whole life.

This product is just nuts.

$792 a month.

Yeah.

And $35,000 is always yielded.

I mean, it's just horrible.

This is terrible.

Just, can you imagine what would.

Yeah.

Anyway, yes, yes, yes.

You did good, Mary.

And then cancel the policy.

Dalton in Detroit, Michigan.

Hey, Dalton, what's up?

Hey, how's it going?

Better than I deserve.

How can I help?

I'm in an interesting situation because mathematically this shouldn't work and historically this shouldn't work.

So I have a home.

I've got about $190,000 equity.

Me and my wife were looking at buying a second home as a rental unit.

So we go and to get a home equity line of credit, which this doesn't make any sense to me, but the bank will give it to us us at a 5.1%

interest versus getting a mortgage on the second home, it would be a 6.25%.

So

typically your HELOCs or your home equity line of credits are going to be greater interest

not over investment property because investment property is not as more risk for the bank than your personal residence is for the bank.

Gotcha.

When they got your personal residence, they got you by the neck.

Yeah, that was my question: is if I use a home equity line of credit and then something happens to the rental home, I don't want to lose my primary residence.

Yeah, you will.

Versus if you mortgage

an LLC, you can only lose that property.

No, they can sue you for the deficit.

You're personally

LLCs can't sign for a mortgage.

You can put the property in an LLC's name, but you're still liable for the stupid mortgage.

And if the house doesn't sell for enough at foreclosure to cover the mortgage, they're going to sue you for the deficit 100% of the time.

So they'll still come take your home.

So overall,

you know, that's the reasoning for these interest rates, which is, I guess, why you called, but you're going to get something more than you called for, and that is don't do this deal.

You don't have the money to buy a rental and you shouldn't buy one.

So the home we're looking at is about 75, like there's three options, and we have about 90,000 cash.

It's in Detroit in the area that's being revitalized.

I'm sorry.

You have 90,000 in cash and the home is 75.

Right.

But it's in the revitalization

area of Detroit.

And so typically

it's been appreciating the area.

No, do you have to spend money on it after you buy it?

I'd have to spend about $15,000 to $20,000.

Okay, so why can't you just pay cash for it?

Because that is our like that's our nest egg for

any repairs to yeah, yeah,

so you're trying to ignore the fact there's risk by borrowing money and instead you're adding risk by borrowing money

that's true this is a form of financial denial denial is not just a river in Egypt buddy

Yeah, you're trying to hide this from yourself and act like it didn't happen Please don't buy this house.

I can't stop him.

He's gonna do it.

Forget it.

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Randy's in Missouri.

Hi, Randy.

How are you?

Oh, I'm absolutely peachy.

How are you?

Better than I deserve, Randy.

What's up?

I am trying to find the way with as much grace and kindness and love as possible

to

get my mother-in-law on her feet and out of the camper in our backyard.

Whoa,

cousin Eddie's in the backyard.

And it's your mother-in-law.

Wow.

How long has she been there?

Yeah.

Three years.

In a van down by the river.

Oh, my gosh.

Wow.

So how did this, how did this come about?

Well, we moved here from North Dakota in 21.

We did the same thing.

Spent three months in a camper on my mom's property, but we're on top of employment and housing right away.

And we're in a home in three months.

We purchased our first home.

And we've got five kids that we did it with too, by the way.

So I mean that you spent time on her property?

No, my mom.

My mom.

Oh, your mom.

Okay.

My mom, yeah.

And a camper.

And yes.

With five kids.

And yes.

But we're at my mom's place.

She had them in the house half the time.

They've got 20 acres, plenty of room to run around, play in the pond.

And so you were there for how long?

Three months.

Okay.

And then you bought a place of your own.

And how did your mother-in-law end up on your place?

So she waited to follow us down because it was a single mom, only child situation with my husband and her.

And she was about a year and a half after it.

She was like, oh, I think I'll do, that sounds like a good idea.

It worked really well for you.

She came down, was in the camper.

Here she is.

And I don't know how to broach the conversation at this point.

Well, it's not with her.

It's with your husband.

Yeah, I've had that with him as well.

And he struggles.

He's the problem, not her.

She's the symptom.

You know,

he has a hard time telling telling his mom hey no i love you but it's time to yeah yeah yeah

there's been some so basically this lady didn't really even ask permission to move on the property she just kind of told y'all she was doing it no no no it was a conversation but we expected her to be quicker about it and do similar to what we did did you have an agreement that she would be quicker about it

No, I mean, to be completely fair on our end of things, no.

No, y'all just said, okay.

You want to come down, put the camper back there?

That's okay.

And that was the whole discussion.

Yep.

And no one's ever corrected her.

So

she actually doesn't think she's doing anything wrong.

I mean,

I lost my mind on her once.

I said some not-so-nice things, so I'm trying to go about it more politely this time.

How long ago was that?

A year and a half.

Oh, no, no, no.

Wait, no, that wasn't a year and a half.

I did that.

No, it was a year and a half ago.

And your husband couldn't have been thrilled with that either, yeah?

No, because he was there when I started it.

He walked away and put his hands off him.

So now you're a year and a half removed from you, lost your mind on her.

Number one, she didn't move.

Number two, your husband didn't force the issue.

And number three, you're more pissy now than you were then.

Actually, I'm less pissy.

Wow, I would.

That's fast.

That's pretty heavy on the pissy category.

But yeah.

All right.

So the on the pissy spectrum, but the

how old is she?

63.

Oh, and she has no money?

Yes.

Nope.

Okay.

So what makes you think she can move and into it.

Why do you think she can move into a sustainable situation when she has no money?

She's working, kind of,

I think.

I mean, I know she works part-time cleaning houses, and that's part of my issue.

So I work in a middle school.

I'm a paraprofessional.

And over the summer, I'm home all summer.

And I was kind of tracking, like, how often are you leaving?

What are you doing?

And she's got cleaning jobs that she does, but it's not very much.

I think max 20 hours a week.

Yeah.

And I don't know how to broach with, like, I don't know how to say it lovingly because I don't want it.

I don't want you to be gone.

You're way up on the

pissy spectrum.

So you can't say anything lovingly.

I am not.

The problem is you are.

There's nothing loving going to come out of your mouth.

So,

and besides that, it's not your job.

It's your wimpy husband's job.

See, you enjoyed that too.

You can't do it.

Because it won't work if you do it.

There is nothing you can say or do that's going to work.

The only thing that's going to work if you want her to move is for him to have a conversation that says, Mom, I'm going to help you get a place, and you're going to have to get your hours up.

And

by the time Christmas gets here, you're going to be hanging your stockings in another place or whatever it is.

I don't care what the date is, but he needs to sit down with his mom.

He needs to have a conversation.

We were not planning to do this forever.

And we need to look at a timeline where you'll help you get things going.

And let's figure out an apartment and let's get the camper sold.

Or let's find you a little piece of ground and let's get your hours up so you have a sustainable life.

She's not asking y'all for money, is she?

No.

And I've and which one of my suggestions to him was: I think that that we should ask her for rent.

No.

You don't want her to stay.

No.

Don't ask people for rent that will pay it.

Okay.

Okay.

Fair enough.

My thing was after X amount of time of asking for rent, saying, okay, here's a lump sum, not a minute for me.

You just wanted something that felt righteous in this whole deal.

And so you don't want anything.

I'm not going to help you with that at all.

I'm just going to be practical and look, your husband has to handle this, and he has to sit down and have a personal, quiet conversation with his mom and if he doesn't have a backbone he can run down to Walmart and pick one up on aisle three and sit down and go mom uh we got to get you a thing that's a better life for you than a trailer in my backyard now let's figure out where we can get you a place and let's figure out how many hours a month you got to work to get that done and I'll help you with your budget and even if he you know and I'll help you get the trailer sold so you got some money to move and so on but

you do not want a budget I'm sorry

she won't accept help with the budget she knows what she's doing with it she will if your husband sits down and says mom if you don't do this you have to leave anyway

she has asked us for help and recommendations on things like what do I do with my car and then when we give her legitimate recommendations like slaps them all down I have come up with lists of low-income and senior housing different apartments and said, hey, here's some good options.

Hey, here's some good options for this.

Here's some good options for this.

You haven't heard a thing I said.

I have.

He said my son.

You came up with all these options.

You are the wicked witch of the West in her eyes.

She does not want anything to do with any suggestion that comes out of your mouth.

You need to quit.

You need to stop doing this.

You're no help.

You're a problem.

You're not a help.

Your husband, however, needs to take the list that you came up with and go sit with his mother without you around.

You don't even need to be in the county when he does this.

Like four counties over

at happy hour while he handles his mom.

You cannot fix it.

She ain't listening to you.

She hasn't listened to you in a decade.

I can promise you.

She's had it with you like you've had it with her.

This is not, you have no grounds for persuasion with this woman.

She does not think you have her best interest at heart.

You know why?

Because you don't.

You don't know, not at all.

And we don't think you're a bad person.

We just hear a person who's exhausted.

You're over it.

You have none of those left to give.

You know what I'm saying?

The only way you're going to fix this is install a backbone in your husband so baby boy deals with his mommy.

Yeah.

That's what's going to have to happen.

It's the only thing you can do.

And then stand back and watch, and hopefully he'll wander over there and get it done.

Probably not at the speed you would have.

But that's your only shot, Brandy.

You can't come up with any more solutions.

This is a marriage problem.

You and your hub's got to get together because you're a couple cocktails away from a Jerry Springer episode.

And, you know, none of us are above it, but I think you are on your last nerve, and I get it.

It's funny, though.

It's hilarious.

Goodness gracious.

Yeah.

Hey, by the way, that's a good recipe for everybody, regardless of how pissy you are, okay, or how far up the pissy spectrum you are.

Is

how about you let

the do not fix the in-laws.

Let the blood relative of the in-laws do the fixing, and you stand back with suggestions way in the distance.

And don't let them even think the suggestion came from you.

That's always a good idea.

Our scripture of the day, Romans 13, 1, Let every person be subject to the governing authorities, for there is no authority except from God, and those that exist have been instituted by God.

PJ O'Rourke said, giving money and power to the government is like giving whiskey and cars to teenage boys.

True statement.

Yes, it is.

If you're buying or selling your home, it's a big deal.

You will want an expert.

Oh, yeah.

Rates are coming down.

It looks like, boys and girls.

You're going to want somebody in your corner if you're going to list that house or sell that house that is an expert in real estate, not someone who got their license three weeks ago and is your aunt Sally.

Bad idea.

Bad idea.

Yeah, Ramsey Trusted program is the only way to find a top agent you can trust.

Make your home a blessing, not a burden.

You can compare agent profiles, interview them, choose the right one to work with among several that we have vetted for you.

Find a local Ramsey Trusted real estate pro for free at ramseysolutions.com slash agent or click the link.

in the show notes.

Kevin's in California.

Hi, Kevin.

How are you?

Hi, how are you doing?

Better than I deserve.

What's up?

Yeah, I had a question.

I got divorced a few years ago.

I'm kind of,

my spouse used to handle the finances, so I'm kind of a late boomer financially.

I'm going to be, I got about a year to go at my work before I'm eligible to retire and get a pension.

And basically, I would be making the same money.

with a combination of the pension and my Social Security as I am making now.

How old are you?

I'm 63.

Okay.

So you're going to retire at 64?

Yeah, I was hoping to.

I mean, I might still do something else, you know.

What do you make?

I was hoping.

I make about $66,000 a year.

Okay.

And what are you going to do with the rest of your life?

Well, I had, gee, I didn't think of that.

I would like to, you know, spend time with my kids and, you know, do something.

I mean, I definitely want to work or do something positive and just also be able to pay my bills.

I do have a house.

I owe $418,000 on it.

It's worth about a million.

I have a $60,000 HELOC and a $10,000 credit cards.

And my question is,

when I retire, do you think it's okay if I pay off the

HELOC and the credit cards with money from my IRA and 457 plan?

How much is in there?

Combined, let's see.

Well, let's see.

I have $136,000 in the $457 and $56,000 in a Vanguard IRA.

So you only have $200,000.

Yeah.

Okay.

All right.

I would maybe want to work a couple more years and build that nest egg a little larger.

It's a little scary small.

And yeah, definitely.

And I think during that time, you need to pay off the HELOC.

And And during that time, you need to pay off the credit card, cut up the credit card tonight.

But I would get on a written budget with a set goal of how much nest egg I could build in two years and be debt-free because you've got another problem here.

You've got a $418,000 mortgage, and that is not something you want to carry into 90 years old.

We need to have a plan also to get that mortgage paid down and off.

It could be a five-year plan or a six-year plan, eight-year plan, or whatever, but you've got to develop some way to get rid of that mortgage because that thing's going to destabilize your retirement.

Yeah.

I do have hopes of putting in a junior ADU in my bonus room.

My brother's a contractor and he is going to do that for me.

I would just have to pay for the materials, which I would estimate would be about $10,000.

What about selling the house and buying a $600,000 paid-for house?

That's a thought.

Yeah.

And then you'd be debt-free going into retirement.

I think I might go that direction rather than trying to look for a roommate.

I don't really want to retire with a roommate.

That's just, ooh, gross.

That's how we started our lives in college.

I don't want to end them that way.

Yeah, I agree.

I agree.

Oh, man.

Yeah, I think you've got to think the math part through a little more.

And that's probably going to lead you to work a couple more years and pile up your nest egg, clear the debts, and then say, okay, when I retire, I'm going to sell the house.

I'm going to move near the kids.

Maybe you're not near them now.

and into a $600,000 paid-for property or whatever your equity is that you can get out of the house.

But if you can go into retirement with $300,000 or $400,000 and a paid-for house, whew, that's a whole different

sense of solid ground than you've got with a $418,000 mortgage and a $200,000 estate.

Yeah, and including that math, Dave's right.

I would extend the amount of time working, but I'd also begin thinking about what does that next chapter look like?

Because you said you still wanted to do something.

That's very normal.

But I would be looking at what would be really enjoyable work that I could do after retiring from day job one and still make some decent money for the sole purposes of continuing to contribute to your retirement.

Yep.

Casey's in Boise, Idaho.

Hi, Casey.

How are you?

Hi, Dave.

I'm well.

How are you doing?

Better than I deserve.

What's up?

I have a question for you.

So, my husband lives in Canada and I am here in the States.

I am planning on moving there in the next few months.

I'm trying to get a current job,

transfer with my company into a similar position so I can have an income when I move there.

Thankfully, we're in a position where he can support us, if not.

And we've laid it all out worst-case scenario where we can afford everything we want and still have $4,000 at the end of each month to put into savings.

But what we're trying to decide to do right now is between renting and buying a home.

So that's just kind of where we're at.

I would rent for one year.

Rent for one year?

Okay.

Get everything settled and stable and learn how to be married.

Okay.

Okay.

That's helpful.

And then, yeah, and I have my house in Idaho too.

And so we're planning on renting that out.

And probably hold on to that.

Sell it.

You can use that money to buy your house in a year.

Okay.

okay, got it.

That's helpful.

Okay, perfect.

See how all this feels very clean?

Yeah, yeah.

And that was kind of like my thoughts on it.

And we've gone back and forth on everything, on like, should we buy, should we rent?

And we've, you know, played it all out.

And we're just like up in the air, even a conversation we had 30 minutes ago.

I think the

how old are you two?

I'm 32 and he's 30.

Both first marriages?

Yes, both first marriages.

It takes a year

to get to know each other well enough to figure out which house to buy wisely.

Okay.

We always laugh and say it takes a year to know how close to your mother-in-law to buy.

Yeah.

Right, but that may not be the case.

But I mean, that's a joke.

But the point being,

you will know stuff about each other and have insight into this relationship one year later that you do not have today.

Okay.

Okay.

That's very helpful.

Okay.

That's something I can do.

It'll cause you to pick a better house and a different house.

Absolutely.

Than you would pick today.

And so

there's actually a biblical standard for that, for those of you that are people of the book.

In the Old Testament, when the kings went out to war, if a person had been married, they were not allowed to go to war in the first year.

They had to stay home and be a husband.

They wouldn't let a man newlywed go to war.

And it takes a year.

Takes a year.

So um it's good stuff fun fun fun good for you sounds like a good exciting exciting adventure you've gone into and it all sounds positive and good and upbeat that's fun stuff fun stuff but if you can

um because

if you buy a house with your boyfriend which is who you are who you are right after you got married versus your

your husband of a year it's a different conversation right

i mean 20 minutes after you're married it's a boyfriend's year yeah you got to figure out how what we're bringing into this thing.

The other thing we didn't really hit on is we caution people about being long-distance landlords, and now you're talking about in another country.

So that having a house in Idaho while you're living in Canada just creates a bit of an onion there that can unravel in a not-so-fun way.

Yeah, and it just puts more pressure on a brand new marriage.

That's what I meant by cleanliness.

It's just crisp and clean.

I like it.

I just like things simple.

That's the people that build wealth.

They keep things clean, very focused, very simple.

Everything's not disorganized and chaotic and bifurcated and everything else.

There we go.

Good show, Ken.

Well done.

Thank you, sir.

That puts this hour of the Ramsey Show in the books.

We'll be back with you before you know it.

In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.