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Normal is broke, and common sense is weird.

So, we're here to help you transform your life.

From the Ramsey Network in the Fairwinds Credit Union Studio, this is the Ramsey Show.

Jade Washaw, Ramsey Personality, number one best-selling author, is my co-host today.

The phone number here is 888-825-5225.

Leslie is in Lexington, Kentucky.

Hi, Leslie.

How are you?

Good.

How are you?

Better than I deserve.

What's up?

Thanks for taking my call.

I have a dilemma.

I'm recently married and I'm selling my home and move.

I've moved in.

to his home on his family farm that's been in the family for a hundred years.

We need to put a new house on the property.

We are looking to spend about $150,000 on that.

However, I am hesitant to go into debt on a mortgage on a property that is going to be 100%

willed to his grandson.

It's likely that

he'll pass.

Yeah, so

he's going to leave the property to his grandson.

What's that going to leave you in?

Nothing.

I mean, I can stay there, you know, but I know 100% that I won't want to stay there after he passes.

And it's likely that the mortgage will still be in existence because

he's like 11 years older than me.

And so I'd be paying on a mortgage for a house that I'm giving away to someone else.

Yeah.

Well, that doesn't work, does it?

It doesn't.

What should I do?

What should he do?

He's in this too.

I mean, he wants to leave this land to his

grandson, and that's kind of understandable if it's been in the family for generations.

I get that.

But also, making your new wife homeless is not understandable.

Yeah.

Or mortgaged up to her eyeballs.

How old is he?

57.

And how old are you?

46.

Okay.

So 10-year difference.

Have you talked to him about the idea of it passing to you first and then

you turning around and willing it to the grandson when you pass

yes he would do that the thing is i don't want to stay there because it's i have no family there you know it's i would want to move closer to where like my family is it's like out in the country i wouldn't want to be there by myself and

seeing poor health wouldn't be able to take do you see this happening relatively soon

um

no i mean i hope not okay

this could be 30 years

i i guess that's what i'm saying you're willing to live there 30 years

And all those people that you want to move towards, they might not even be there then.

Yeah.

So, um, I think you just don't want to live on that land.

I kind of think you don't either.

I think

I'd buy a couple of acres across the street and build a house there that is yours and his together.

And then the family farm is intact to be left to his grandson.

And it's not interfering with you all building a life together.

I think the problem is when you tried to build a life together on something that is not going to be yours, and that's where it got complicated.

So I think you ought to build it somewhere else.

Yeah, the problem is we would have to spend a lot more money if we did that.

Well, why?

Like closer to

double the amount of money.

Why?

No, no, not double.

Because the land is not, unless you're going to buy a whole bunch of land.

I mean, if you bought one acre across the street, it's not anywhere near double.

Well, and to put a house on it.

Well, you're going to put a house on it anyway.

Yeah, but it will be like 300,000 to 400,000.

You're going to build a house anyway.

The only difference is the land under it.

Right.

Remember, we're trying to help you solve the problem.

When you called, you said the problem is if I live on this land, it's not going to be mine.

So that was problem number one.

You want something that's yours and you want to be able to get to your family when the time comes.

So you want the freedom to be able to sell it, do whatever.

So we're trying to help you accomplish that.

Because the other option is you move elsewhere closer, I don't know, closer to your family and buy something there, right?

That's the other option in the complete other direction.

Okay, so either way, the point is, either way, you're gonna have to spend some money.

Does he live on the property now?

Yeah, we live in the old farmhouse that is beyond renovation.

Okay,

yeah, I can tell you what I would do: I would move off of the the property to somewhere else, and I would rent out the old house that's beyond renovation until it's beyond rental even, and just let the property sit there, and it's going to his grandson.

I would not combine your lives on that property.

I'd let that property be what it is.

It's legacy generational property, and you're tangling up two things.

You're trying to accomplish two goals with one piece of property, and it can't do it.

You're asking it to do too much.

Yeah.

It's almost the equivalent of like you marry a guy and he's got like his bachelor pad apartment and he wants you to move into the apartment and you're like, I don't really want to live here.

I'm only doing this to make you happy.

Right.

And then he goes on, he's like, you're not going to still live in the bachelor pad.

You want to live where you want to live.

You want a foundation that you start together where you both feel like this is our home where we live together.

Yeah.

The only other thing I could do is you could plat off one acre off of the family property, build the house on that one acre,

and that one acre is deeded to you, not to the grandson.

But it would be tough to get it.

And then you sell that.

If you want to offer it to the family when you get ready to sell it before you sold it to the public, that's fine.

But when he dies, you're going to move anyway.

By the way, wherever you move to, when he dies, you're going to move, according to you.

But that's also the assumption that 30 years later, the grandson is going to want to keep up this land and wants the land.

30 years later, that the family you're going to move next to are still alive.

Right.

There's a lot there.

So, you know, we're really, really, really.

But I think you are wise to recognize that this is not a good system.

It's not a good plan.

So, no, I would not go forward with a plan.

I would do something different.

So, you know, carve off an acre.

That way you could sell that acre in that house when you got ready to leave after he passes and the family loses one acre of the family farm.

If the family farm's two acres, then I guess that's a big deal.

But if it's a 200 acres, it's not a big deal.

So,

you know, decide how that's going to work.

And then,

or literally go across the street off the family farm and and build something.

I don't care what you do.

And be smart about where you plot it out.

If you pull it out, smack dab in the middle.

Yeah, yeah, yeah.

You don't want to do that.

The corner.

Yeah.

Off in the corner.

And

that way it doesn't harm the value of the property and it doesn't leave you with something that's not marketable when you get ready to sell it.

Right, right.

So, yeah,

but just

you're correct in that going forward with the plan that's on the table is a bad idea.

You are correct about that.

It's not going to end well

sooner, later, whenever this is.

I mean, the grandson

could be really old by the time you're really old.

Also true.

You know, I mean, it's he's 57, so this grandkid's probably six.

Uh-huh.

Yeah.

And so 30 years from now, he's 36 or 40 years old when Papa dies.

Yeah, I mean, that's a whole different thing.

Yeah.

And he might decide he doesn't want the land.

He sells it to somebody.

Now, suddenly, you don't like your neighbors.

You know, there's a lot.

A lot can happen in 30 years.

You know?

A lot will happen in 30 years.

That's very interesting.

Very interesting.

Good question.

But you're recognizing, I think the bottom line is you're asking this piece of property to do things it cannot do.

It can only do one of the two things.

It can't do both.

And so you're not going to be on the property if you're wise.

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Karina is in Washington.

Hi, Karina.

How are you?

Good.

How are you?

Better than I deserve.

What's up?

I have

a question.

I'm trying to figure out the best way for me to proceed.

So earlier this year, I had picked up a second job because I wanted to save up for a house.

And that's what I've been doing thus far.

And I learned that my current second job actually offers a Roth 457B.

And so now I'm wondering, should I put more money into my 457B so that when I leave, I can roll it over into my Roth IRA, or if I should continue saving all my money for a house.

I'd save all your money for a house.

Okay.

Yeah, you got your emergency fund in place and you're debt-free, right?

Correct.

Okay.

And you're going to save up your down payment and then you're going to start your retirement savings, correct?

Yes.

How far are you until being done with the down payment?

How long would it take you?

It really depends.

In our area, houses are pretty pricey, so they average about 500K.

And I have saved up eighty-three K.

Oh, good.

Okay.

So when do you think you're going to buy?

Originally, I was thinking that I would get a mortgage, but a month ago, a coworker of mine turned me on to the Dave Ramsey show, and I read your book and started looking at your YouTube videos.

And so originally, I was thinking probably

this fall or in the winter.

But now I'm starting to think maybe I should wait another year, save up, and then either put a bigger down payment or whether I should wait for about four years and just try to buy a house in cash.

Wow.

What's your income?

Originally it had started with about 70K and right now it's probably going to be about 160 with the two jobs.

160?

That's great.

Correct.

Wow.

Nice bump from 70.

What did you do?

I am in biotech and I have an IT job.

So what are you thinking?

You'll live on 60?

Is that the plan?

And then in four years, you'll have 500?

That's kind of what I'm hoping for.

Interesting.

I mean, I'm never going to discourage you from paying cash.

Just know it's a moving target.

So there's part of me that says if I can get in the game earlier, I'm getting in the game earlier.

So just think that through.

Yeah, I think I would go with your plan, but if the market starts moving on you, you maybe can jump in with a 300K down payment or something if you had to.

But let's work your plan for right now.

I love that.

That's very cool.

Good for you.

Congratulations.

That'd be a very sweet place to be.

We need more people with that mindset, I think.

Talk about hustling, man.

Yeah.

Hustle, hustle, hustle.

I love that.

Mike's in Pennsylvania.

Hey, Mike.

How are you?

I'm doing well.

How are you guys?

Better than I deserve.

How can I help?

So thanks for taking the call.

I have a pretty basically my situation here is I'm going to be receiving an annual bonus in a month, a few months, and I'm trying to decide what is the best use for the cash.

So current situation, I have a little more than an emergency fund in the bank.

I have about 50,000 in cash right now, about 25 of which I would say is emergency fund related.

And I'm going to be getting a bonus of 60,000 gross, so probably about 40,000 after taxes.

Between my wife and I, we have about 50,000 in student loans.

And then I have the only other debt we have is two mortgages.

So I have a

rental property that was originally my primary residence that I have about 80,000 left on.

And then I have my current primary residence that I have about 240,000 on.

And the simple thought was put the money toward the student loans, pay them off completely.

But the rate on my current mortgage is about 7%,

whereas the rate on my

rental mortgage is about 3.6%, and my student loans are at about 5.

Well, you'd still have...

When I look at the long term.

No, no.

When you look at the long term, you're wrong.

You look at the long term.

You've got to get rid of the stupid student loans.

You're not going to prosper as long as you keep those things around.

This is not an investment strategy.

This is stupidity, and you've got to clean it up.

Right.

So the student loans was the...

That was the first one where I assumed that's what I should probably put it towards.

You're right.

You assumed correct.

And then you'll still have,

you'll still have a little bit because, like you said, your emergency fund is inflated so you'll still have a good chunk that i'll take 25 and put on student loan a day uh-huh and when the bonus comes in pay off the rest of the student loan right and then you'll still have money left over that if you wanted to throw it towards uh what were you saying your primary is that what you're trying to do yeah well yeah i have the primary mortgage and the rental mortgage the primary just has a much higher rate so while i would assume like typically i would have paid down the rental but the primary is a much higher rate so i'll just have more savings for putting it toward that and what it's going to do what's the balances on the primary and on the rental the the primary balance is about 240 the rental is about 80 um and the rental is probably worth about 175 and the primary is only worth about 290 ish is the rental local

they're both local yep i manage the rental myself i've had that for about seven years now good for you okay i would clear the student loan then i would clear the rental and i'd refinance the primary

Okay, so you would go toward the rental first after student loans.

Just not because of anything, except it's just only 80 grand and you're going to knock it out quickly.

Because I smell a $200,000 income, don't I?

Yeah, I'm right around $160,000 right now before the bonus.

And the bonus is annual, but it's not guaranteed.

But I typically do receive it.

Yeah, yeah.

And so you're making $200K on average, and almost like I've done this.

And so,

yeah.

With $200K, you're going to knock the $80,000 off pretty quick as well with you sitting there with your emergency fund, refinance, get rid of that seven and some change because you can get a 5.7 right now in a 15-year.

Yeah.

Once the rental's gone, how much will you clear in profit every month?

Just curious.

It's $2,200 a month right now, gross rent.

Yeah, sweet.

So you're probably making $1,500 a month, give or take, whatever your property taxes are in Pennsylvania, which I don't know.

But yeah,

you're probably making some money there at that point.

And that's another...

What?

Another $20,000 a year that you can throw at

the primary.

But yeah, I'm going to refinance that primary because

it's going to be more more than two or three years before you get it paid off, and I want to get that rate down because that rate is a little bit jacked.

But yeah, but here's the thing.

When you're paying off debt, folks, really, really fast, like we are with this student loan almost instantaneously and with

on the

whole thing here is not even five years.

Right.

The whole thing, okay?

And so when you're doing all that, then interest rates, rates, the shorter the period of time in which you're going to pay off the debt, the less interest rates matter.

The only time interest rates matter is when you're playing them out 20 years, when you're playing them out 10 years, playing them out five years.

But when you're paying off in four months, it's irrelevant.

Negligible.

Almost.

I mean, it's not like interest rates are not your problem.

Right.

At that point, cash flow is your problem.

Right.

That's what you're leaning in on.

So good stuff.

Dylan is in Fort Worth.

Hey, Dylan.

Hey, Dave.

It looks like I got the perfect duo today.

I I got the payoff debt queen and the real estate master.

So happy to be back on again in a few years.

So my wife is listening.

So we have a

new surprise coming that was really unexpected of a baby in, of course, nine months.

So we bought our home for $420, probably close to two years ago.

So we're not quite past that capital gains mark yet.

If we were to sell it now, we're probably looking at $420, $4.30.

We owe $388.

I have a feeling, I know what you're going to tell me to do.

We have $62 left in student loans, and that's from myself and my masters

from years ago.

It's now been lingering like a pet for 10 years.

I think our big question is: we're trying to reduce that monthly cash and increase that monthly cash flow.

If we could be going from like $3,560 a month down to like $2,500 to $2,800, which is what we see rentals going for the around here.

Probably a game changer with cash flow.

We could then throw all that in debt, stockpile money, go into sork mode until baby comes.

What's your income?

We've also seen

a monthly take-home pay.

I have very irregular, so

on a regular month.

Quarterly.

What do you make a year?

Six grand.

What do you make a year?

This year will probably be about $150 for me, about $70 for her.

If a regular month is $6,000, then yeah, you got to get out of this house.

It's more than 50% of your take-home pay.

But six grand is not $150 plus $60,000, so those numbers don't add up.

So,

hang on, we're going to come back to you because I can't figure out what the flip you're doing.

Hold on.

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All right, we're talking to Dylan, who's got a baby on the way.

Surprise.

It's awesome.

And we're trying to figure out exactly what's going on.

If I remember, your house payment was $3,500.

Is that right?

Yes, sir.

And as my wife just texted me, her baby wasn't a surprise, but we weren't sure if we were going to be able to have one.

Got it.

We were texting offline, and we're roughly around $9,000 to $10,000 take-home pay a month.

It shows I get paid commissions quarterly.

So like every four months, we have a big surge of like a $10,000 to $15,000 commission.

Above the $9,000 to $10,000 or that included in the $9,000 to $10K?

No, above, above.

So you get $9,000 to $10,000 plus you get quarterly of around $15K.

I'd say so.

So you're averaging about $15K a month.

Yes.

So the way I kind of have to budget it out is I kind of have to have those thinking funds ready

to kind of know what's coming over, you know, until the next quarter hits.

Well, that may or may not be, but either way,

your question is, can you afford this house?

Yes, you can afford this house.

Why are you wanting to move?

I think it's just that monthly is so tight on us that it's not tight.

It's because you're not on a budget.

It's not tight.

You make $15,000 a month.

You have a $3,500 house payment.

That's not tight.

Well, and I think it only feels tight.

Because you're trying to live without and act like your commissions aren't real.

Probably true.

Yeah.

So your commissions.

Let's pretend for a second.

Let's pretend for a second.

Let's pretend you got your commissions in your hand, $15,000, and you said, I'm going to allocate $5,000 for each of the next three months.

I'm going to pull from that commission bucket.

And I'm going to put $5,000 on my $10,000 income.

That's making me have $15,000 income for the next three months.

Then, when your next commission check comes in, you do the same thing.

You're trying to do this backwards, looking in the rearview mirror rather than looking out the windshield, like I just outlined, because you've not gotten ahead of it yet.

When you do that, this is not going to feel tight at all.

Yeah, and I have been dropping each big check onto a truck payment.

Yeah, you're just acting like you're acting like you don't get those checks.

It's not even part of your budget.

And the problem is that's leading you to a faulty decision on the house because you're acting like you can't afford the house.

You can afford the house.

If you don't want the house, that's a different issue.

You're obviously a free person.

You're allowed to sell the house if you want to, to, but not because I

pretended like a third of my income isn't there.

Yeah.

So for that, for that first quarter, it's not there.

And then when you receive it, then you can say, okay, for the next quarter, like you said, you're putting that $5,000 per month.

I don't know if you got a lot of it.

And now you're ahead.

You're $18,000, it's $6,000.

But now you're ahead of it.

It's just that first quarter when you're not ahead of it.

Yeah, you just got to say that.

So you have three, if you start my plan, you have three more tight months.

That's right.

And then you'll never have a tight month again.

Yep.

It's the same thing with normal budgeting.

When you get paid on the 30th, the 30th check goes to the next month.

It can't be used for the month you got it.

Yeah.

Yeah, you can't wait to pay your house payment until the end of the month.

So, yeah, you've got to get ahead of it on all of this.

It's just a little, a one-month cash flow, or in this case, a three-month because it's a quarterly commission check.

That's right.

So then you've just got to decide: do you want this house?

Do you like this house?

So I think what happened here is the announcement of the child made you go, oh, we've got to really start.

Yeah,

you do have to start now.

That's right.

That's really good.

It's got to catalyst.

We're going to give you a year of every dollar as a baby celebration.

And I want you to get in the new improved every dollar because it's going to guide you through everything.

But you get ahead on the sinking funds, not behind them.

Right.

And then quit ignoring the fact that you actually make this commission because you're throwing 100% of it at something else.

And no, we can't do that.

So it goes all goes into the plan.

Then you work the baby steps from the plan.

And while doing that, you look at the ratio of your house payment and say, okay, I can afford this house.

I choose not to.

That's right.

But it's not because it's in air quotes tight.

That's right.

Okay, now I feel better.

You feel good.

Nate is in Wichita, Kansas.

Hey, Nate, how you doing?

Better than I deserve.

How are you, sir?

Better than I deserve.

What's up?

My wife and I went through bankruptcy last year and into early this year because we just made an absolute mess of ourselves financially.

And

at the start of this year, we really decided to focus and commit ourselves to getting out of the rest of my student loan debt, which is all we have left, and trying to live really disciplined.

We lost our car last year when we went through bankruptcy, obviously.

And we've been just driving an absolute beater, and we're trying to make it work.

My daughter just turned three last month, and I'm feeling very grateful for that, and she's healthy and happy.

But I'm just trying to maintain hope right now because

it's hard.

It's so hard to stay disciplined, to stay focused, to not give into the temptation to go back into debt to have a nicer car so things are a little bit more reliable.

What's your household income, sir?

Just under 70.

And how much is your house payment?

We're renting right now.

It's just under $1,000.

Okay.

All right.

All right.

And are you still putting money into your 401k?

No, I was pretty undisciplined through my twenties.

I just turned 31 a couple of weeks ago.

We don't have any money in retirement yet.

You're not putting any money out of your check into retirement.

Not yet.

As soon as we get out of the way.

How much student loan debt do you have?

Just over $20,000.

Okay.

All right.

We've paid off about eight so far this year.

Okay.

The thing is that you're facing the math is not as much of a problem as the emotions.

Okay.

Right, I know, I know.

I'm just being emotional.

Well, I mean, you've been through hell, and there's a shame that goes with bankruptcy.

You're like labeling I'm a money failure, you know, and you're not.

But, you know, for a moment there you were, but you're not that way forever, and we're not going to stay that that way forever.

So

I remember how it shook my confidence when I went through that, and that's just very real.

So, okay, now, how do we fix that?

Well, we need some quick wins, we need some small wins, and that starts to build our confidence up.

And the best place to do that is a budget.

Don't you think, Jade?

I agree.

Yeah,

I mean, I agree wholeheartedly.

So, I would

get your, get, you know, again, we'll give give you every dollar for a year, and it's the new improved every dollar, and so it's going to guide you through the baby steps.

But what you've got to do now is say, okay, we're going to look at the money coming in every month.

Are you getting a tax refund?

Not much of one.

I set up my taxes so I don't end up giving the government

any loan.

Good.

So you've done a lot of the things already where you can find some margin.

Every dollar will help you find some more margin.

But with a $1,000 dollar house payment, you've got some margin in this because you don't have any other payments now except the student loan.

And so, you know, our first goal is to save $1,000.

Our next goal is to start knocking off the student loan, making $70,000 you can probably do that in about a year if you live on beans and rice.

And your confidence will come not because the magic wand waves and gets rid of the student loan, but when you start being in control of your money instead of it being in control of you.

The hard part is you're doing something that you've never seen done before, right?

So

you're attempting to pay off debt, to become debt-free, and you've never been there before.

And so the natural inclination is to say, I'm going to go back to what I know.

That's the comfort zone, even though it's not good for me, even though it got me in bankruptcy.

That's why you're like, you know what?

Let me just go back to credit card debt.

Let me just go back.

And you're fighting yourself because you're heading towards truly a brand new frontier for you.

And so what you need is to keep engaging with people who have done it before so that it becomes more and more real to you and you can see it and it starts to become a normal reality.

Right now it's not a normal reality for you.

Is that fair?

Definitely.

So keep engaging.

Keep being around here, watching these shows, listening to these debt-free screams.

Get on social media, follow Rachel Cruz, follow Dave Ramsey, follow myself, and you're going to, this is going to become normal to you, what we're talking about.

And that's what you need so that it doesn't feel like this foreign thing that no one's ever done before.

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Carl is in Cincinnati.

Hey, Carl, what's up?

Hey, Dave.

I'm calling here under some pretty crazy circumstances.

So,

first off, I'll tell you my situation.

I am a 100% disabled veteran from the Iraq war and

my income is strictly from those sources.

It's fixed.

It goes up when the government decides to give us an increase, but that's about it.

And I've navigated a lot of things quite well, I know.

My wife died a month ago.

Oh my gosh.

And yeah, it's been traumatic for my family.

What happened?

She had a stroke in her sleep, according to everything that happened.

How old was she?

37, man.

She had a heart heart defect, but we didn't expect this to happen.

I'm so sorry.

Goodness.

Wow.

We lost about 40% of our income when she passed.

And

gracefully, we've at least had some life insurance, which was just two years of her salary split evenly between her youngest, our youngest, and myself.

Because of that, I was already in the middle of the Dave Ramsey plan at the time.

And because I wanted to do the right for my kids and set ourselves up and economize, we are debt-free other than our mortgage.

We have six months of savings set up, set aside, largely due to because of that life insurance.

And I am just trying to figure out with my income, which is about $81,000 a year,

just strictly that trying to live comfortably while saving for my son's future.

Both my boys got education benefits guaranteed to them, so we don't have to worry about that.

I want to try to investigate.

Stop a second.

You're doing like 43 things at once, and your wife just passed away.

Let's just calm down a little bit.

Yeah.

I'm sorry, man.

The

life insurance was how much?

My share was $45,000 and the other was Theodore's, and that's going to be in the certificate held until he's 18.

And how much is that?

About the same, about $45,000.

Okay.

All right.

And

so that was structured wrong.

Okay.

It was strictly through her work.

It was a benefit through work.

Yeah.

Because of her heart defects, it was pretty hard to get her any insurance.

Yeah, but by structured wrong, I mean, there should have been none left to the child in a certificate.

That's horrible.

So you're treating the 45 as your emergency fund.

Did I hear that right?

I put that towards paying off

credit card debt and the rest in the savings.

And

economize, economize.

That's literally what I'm doing.

Okay.

And how much is your house payment?

$2,600 a month.

And as soon as my lending guy,

a really dear friend of mine who works in the lending industry for veterans, he helped me get this house when I didn't have the credit to deserve it, but I got it anyway.

And as soon as the rates are low enough for me to do an Earl, VA Earl, I'm going to, I'm going to lower the rate, but not restart the loan.

That should hopefully bring me down a few hundred dollars a month once that hits.

But I can manage with what we got right now.

Okay, so if you got an $80,000 income, you have no debt except the house, you have some money in savings, you have some money in savings, you don't have to save for Theodore's future.

You're fine.

My thought was I want to leave him something since I don't qualify for life insurance because of my disabilities.

That is not my thought right now.

My thought right now is you get your house balanced.

Quit worrying about saving for kids.

He's got $45,000 sitting there in a shirt,

and he's got a free education because his dad served his country.

Thank you for serving your country.

And so that's all set.

And he can make his way.

He'll be just fine.

I'm worried the way you leave him an inheritance is not by having a kid's savings account.

The way you leave an inheritance is you get yourself straightened out.

And you begin to build wealth for you over time.

But right now, the first thing you do is you just get balanced.

You buy groceries, you keep the lights on, you pay the house payment, and you live on your income.

And you can do that.

It's just been easier to focus on that than to just sit and,

you know, idle time socks.

Yeah, I don't doubt that.

I mean, it's waves of grief coming at you and catch you off guard at the worst possible time.

But in terms of the math of your situation, don't try to make this do too much.

The first thing is just live, set up sustainable.

And that's food, shelter, clothing, transportation, utilities.

You know, you're in good shape.

You're not in a pinch.

Now, if you start trying to put, you know, 25% away for retirement, and I'm going to put another $2,000 a month for Theodore, you don't have that kind of room.

That's not an option.

You did have survivor benefits that are going to start this month, and I want to invest that.

That's what I want to do.

If and only if your dad gum budget is balanced.

Got it.

Okay.

If you do so much investing that you call me stressed out, then you're just

over-analyzing this.

How much is her benefit going to be when that pays?

$1,600 a month divvied up between the two of us.

Divvied up?

What does that mean?

Between the two of you.

How old is Theodore?

Hello?

I think we lost him.

Let's have.

All right.

Yeah, that's.

There he was.

Well, okay.

Anyway, yeah.

So

it shouldn't be divvied up between the two of you.

There's a survivor benefit that should go to you, Shouldn't go to a minor child.

But even if it does come to him, it's for his care, and we're going to use it in the budget for his care.

Right.

You're the.

So we're going to take care of the household.

Let's get the household going.

Then we'll start worrying about investing.

Breathe.

Give yourself six months to cry, man.

I mean, 37 years old.

Oh, my God.

It's just a month ago.

Jeez.

Just give yourself a, let's just get this budget to where we're not going in the hole.

We're not having a problem.

And we're just, everything's running smooth.

And we'll worry about investing a little bit later.

You got time.

You're okay.

You got plenty of time.

We'll get to investing six months from now.

But for right now, let's just see how big a pile of cash we can pile up and living on the income that we have coming in.

Right, right.

Just keep it real clean, real simple, and then

that gives you, you know, if you don't want to add financial stress to grieving.

Yeah.

Well, like you said, especially since you don't have to.

Trying to give him, he's giving himself something to do when when really there's not much to be done i really wouldn't i'd find a different hobby yeah than screwing around with his money stuff right now um i you know let your give yourself a little room to breathe and to hurt and um then six months from now your brain is going to be working a little better and then you can talk about doing investing at that point that's how i would do it

wow so um

couple of pointers then uh across the board you always need to be in touch with xander insurance and get term life insurance.

And you need 10 to 12 times your income on you if you're insurable.

Now, Carl's not insurable.

His wife may not have been either.

They may have already detected the heart.

Matter of fact, he said that because he'd done it through her.

But for the rest of you, you're walking around out there and you're 37

without any medical issues.

For the cost of a pizza, you can get 10 to 12 times your income.

And so you're making 50 grand.

You put 600 grand on you.

And it's for people who are dependent on your income of somebody if something happens to you.

Because all the time people are like, I'm taking a policy out on my kid.

I'm like, no, no, no.

You got it twisted.

No, you put it out on you.

And 600K and 15 to 20 year level term insurance.

And Xander Insurance can help you do that.

They've been doing it.

Ramsey

endorsed Ramsey Trusted for God 30 years.

And we've been sending people over there.

And you need your life insurance information if you can.

Now, Carl's family was not able to, but that call can remind some of the rest of you to get your stuff done.

Make sure you're lined up.

If you've listened to me for more than five minutes, you know that being normal with your money is not a good thing because normal is broke.

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

Jade Washaw, Ramsey personality number one best-selling author, is my co-host today.

Kayla is in Virginia.

Hi, Kayla.

How are you?

Hi, I'm doing pretty good.

How are you?

Better than I deserve.

How can we help?

Okay.

Let's see if I can get through this without Carney.

So I recently separated from my husband because of abuse.

Okay, I'm good.

And I'm currently living with my parents in Virginia, but my husband and I originally lived in a different state, so I'm going to have to go back there for custody reasons soon.

And I was wondering, obviously I'm not moving back in with my husband.

Is it smarter for me to get a cheaper apartment that's around, the one bedroom that's around $600, $700?

for me and my two-month-old or

is it better for me to get a two-bedroom apartment because I work from home and I'm just wondering what's more important paying off my debt as fast as possible or

keeping up to my mental health with just having more space and a space for the baby versus a space for my work how much debt do you have

I have about 32,000 in student loans

6,000 and 6,000 in credit cards.

6,000 credit cards?

And so how much,

what does he make a year?

He doesn't make anything.

He's a student.

And so honestly, I don't know how he's going to pay for our current house.

He was insistent on keeping it, and I kind of

want to stick it to him and see him struggle because I know he won't be able to afford it.

Your name's on the mortgage, too, honey.

It's a rental.

Oh, your name's on the lease also.

I explain everything to my landlord, and he understands.

Yeah, I bet he understands.

Your name's on the lease.

Unless he understands by giving you a ⁇ unless he releases you from liability in writing, your landlord hasn't understood nothing.

Okay.

What's your interest?

So I don't know.

I'd be careful about sticking it to him with your name on there.

Okay.

Now, what do you make again?

I make 20 an hour.

I think it's about 40K.

Okay.

There's part of me that I would really focus on getting your situation financially cleaned up.

And if you're able to live cheaply for $600,

I would do that, especially while your baby's young and you guys can kind of huddle up in a one-bedroom.

And then if you can clear out some of this debt,

then the time can come where you can move to a two-bedroom.

But I think now's the time while the baby's little and doesn't take up a lot of space.

Now, you said mental health.

I'm guessing because living and working and sharing a room and all in one space, that's claustrophobic.

Is that what you're saying?

Yeah.

Yeah.

Yeah, but you've been in a domestic violence situation, so you got a whole different issue on mental health.

You've been dealing with a 10 out of a 10 on mental health.

A baby being in the room is a 2 out of 10.

I think you're going to feel relief.

So, yeah,

are you talking about moving back to that city because of custody?

I don't know about the same city, but the surrounding areas within 30 minutes.

Okay.

Are you going to be safe?

Are you going to be safe?

I think so.

It was emotional and verbal abuse.

It wasn't physical, thankfully.

But he is violent, and so that

it just depends.

Like he would break things.

So I really don't know what he would do if he found out where I lived, but.

Yeah, so here's the thing.

You're coming through an absolutely horrible situation.

And so you've got some spiritual recovery to do, some emotional recovery to do, and some financial recovery to do.

Agreed?

Yeah.

And so the last thing you need is right now is to be spending any money on

an extra bedroom.

So right now I'm with Jade.

Let's keep everything as cheap as possible.

How long have you been with mom and dad?

How long have you been there?

Two weeks.

Okay.

How much longer do you plan to stay there?

We're meeting with some lawyers tonight to

figure out how long I can stay

without him being able to charge kidnapping or anything, which is

threatening.

Yeah, he can't.

Well, so well, yeah, let your attorney advise you on that.

And I would recommend you stay with your parents as long as you can.

Like for a couple months if you can.

And during that time, I want you to pile up cash.

Okay?

Don't pay down debt right now.

You're in the middle of a storm.

I want you to pile up a big old pile of cash for attorneys and for deposits on apartments and all that kind of stuff.

Okay?

Then once you get settled and you've got a divorce underway, you get settled on the cheapest possible apartment, then and only then will we turn loose on these debts.

Now, if you haven't cut up the credit cards, you need to cut them up.

Okay,

they're cut up.

Good.

Yeah, I've been trying to pay them off, but my husband is, for some reason, against going ham on paying off our debt.

Oh, it's real easy.

I don't know why that was.

He's trying to control you.

Yeah.

That's control expensive.

So, yeah.

So what we're going to do is you're going to clean this stuff up after you get stabilized.

And the way you get stabilized is you keep your housing costs as low as possible, utilizing mom and dad for the next one to six months.

And after that, then and only then, as the divorce progresses, and only when the lawyer says you absolutely have to move back into the market, do you move back to the market?

And you do the cheapest thing you can then, and you clear the debts, and you pile cash, clear the debts, and pile cash.

And pile cash in the meantime.

Because

if you had $15,000 saved right now

and it was just sitting there in a pile, it would give you a whole different comfort level than sitting there with no cash and this other.

You probably wouldn't have even called us.

But because you'd have that much different of a feeling.

That's right.

And that's where I want you to get to first.

Then we'll clear the debt.

And then we're going to be in an inexpensive

temporary housing, which is like for a year or two.

Okay.

It's not your whole life.

It's for a year or two.

So that you get away from the jerk.

And

wow, pretty crazy.

That's

something.

Good for you.

Good for you for pulling away and for having the strength to do that.

Good for your mom and dad dad to give you a safety net to land in.

I agree.

And,

you know, and it sounds like you've got your head on your shoulders.

You're already seeking legal counsel.

You're figuring out what you can do and can't do.

You sound like you've got a good support around you, which is how you break free from this kind of stuff.

Because it's got a, this level of stupid has a gravitational pull.

Yeah.

Sucks people back into it over and over again.

Especially the more desperate they feel.

Yeah.

You know.

And control.

That's the financial control is

one of the things we learned 30-something years ago is when we see a guy that is 1,000% controlling every ounce of the money, there's very often domestic violence included.

That's right.

It's a symptom.

It's an indicator

of what's going on.

It's not 100%, but it's really close to 100.

It's in the 90s.

And so if the wife is not allowed to go to the grocery store without her husband, if she's not allowed to do anything, make any money decision without her husband.

If she's not allowed to, he's got a complete death grip on every single dollar.

There's usually domestic violence tied with that.

So that's a little bit of what you were experiencing there, Kayla, where he didn't want you out of debt because it gave him a power over you.

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Not in all states.

All right, today's question comes from Chad in Washington.

He says, my wife and I follow the baby steps and are debt-free except our house.

Our net worth is $1 million, and we owe $75,000 on a house that is worth $750,000.

We are in our early 50s.

When we got married, my wife had a $100,000 annual salary.

But when we had kids, we made the decision together for her to stay home and homeschool them.

Fast forward 20 plus years, the kids are grown.

We are doing well, but my wife is still not working.

My income is $150,000 a year.

I have asked her to get a job for a few months to knock out the mortgage and build up a gap fund so I can retire a little early.

We have plenty to live on, but I've noticed some budget drift as the kids don't require as much attention as they did when they were little.

Is my wife a princess or do I just need an attitude change?

Interesting.

Okay, so just to recap, you guys guys are millionaires.

You owe $75,000 on the house.

Your wife has not worked in 20 plus years is what it sounds like.

And now you're saying, hey, I could retire a little bit faster and we could pay off the house a little faster if she would just get a job.

That's where we're at.

I don't think she's a princess.

I think there's something that maybe you guys need to do to work.

to meet in the middle.

I can understand you wanting to go a little faster on the house and I can understand you wanting to retire a little faster.

But I don't necessarily, I wouldn't go as far to call her a princess.

I think you need to frame up the argument in a way that she's also excited about it because whatever you've been saying

in the West, it's not, you know, it's not,

she's not excited about it, so she doesn't want to do it.

Yeah, Chad, if we look up nerd in the dictionary, we're going to see your face.

Okay,

you got you completely dialed in here, bro.

And that's good.

That's good.

That's what got you here.

But,

yeah, you're 100% concentrating on numbers, which is what I do.

That's how I know what you look like.

I know who you are.

And if you're not careful, you forget about relationships.

No, your wife's far from a princess.

Does she need to dial it in and get a little bit more serious and

join the crusade to build some more, the last little bit of wealth so that we can...

Yes, she does.

We tighten up that budget a little bit, and we can,

but does she have to necessarily go back to work to accomplish that?

I don't think so.

I don't think so.

I think the budget is her, that's been her thing for 20-plus years.

So, if she can tighten up her end of the thing, which is managing the money at home, and if you can tighten up your thing, which is bringing in the money from outside, I think that's fine.

Well, I mean, you manage the money at home together.

Yeah, you're gonna do your budget.

We're not gonna do it,

but no budget drift.

We're not gonna be drifting.

But

I think you could dial it back a little and she could dial it up a little.

And like you said, meet in the middle.

Meet in the middle.

That's what it sounds like.

But no,

it's neither.

It's not that you are completely out of line and need an attitude change, and it's not that she's a principal.

That's right, that's right.

But I think you're making some valid observations from a nerd's perspective, and she's probably gotten just a little comfortable.

That's true.

Dial up the seriousness just a little bit, dial down the seriousness just a little bit, and I think we'll find a really happy place right here.

By the way, you guys have done great.

Yo, woohoo.

Luke is in New York.

Hi, Luke.

How are you?

I'm doing good, Dave.

Much like you, I'm doing better than I deserve.

How are you?

Just the same, sir.

What's up?

All right.

So I am 25.

I just moved back home from graduate school.

I just got my master's degree.

And, you know, I listen to your show a lot, and I know sometimes there's recent graduates on, but I guess I just needed like a refresher.

So, you know, I'm having trouble in my job search.

I know you always say to not just apply to a thousand jobs on the line without really talking to anybody.

But, you know, I have kind of a niche skill set.

I worked in the sports industry for a few years, and I guess, you know, that's what I want to do.

And I guess I'm kind of being picky at this point, I'll admit.

So I just kind of wanted to get like your advice or whatever on, you know, handling a job search postgraduate degree.

So what are you wanting to do in the sports industry?

So my master's was in data science, sports business analytics, which, you know, I didn't just choose that degree.

It was what I was doing out of school.

I was working for a major sports organization, moved down to get my graduate degree at a school that had, you know, pretty good sports and was working for their basketball team.

And, you know, something in that field.

I live around New York City, so obviously there's tons of opportunity for roles like that in other fields.

So I have kind of broadened my search in that sense.

But it's still just kind of been not the most fun process.

Yeah.

Well, you're right.

You're in an epicenter of sports, without a doubt.

If you were going to be close to a whole bunch of teams, that'd be the place to be, right?

In all kinds of different things.

And yet, having said that, it's a fairly small pond you're fishing in.

Yeah.

So that means you've got to go one direction or the other to jog something loose.

And one is you lower your expectations for salary and position and you take more of an entry level, get your foot in the door in a sports organization, or two is you step outside sports.

And

you make what you think you can make.

So,

what do you think that this position you're trying to get is worth?

Well, I guess that's kind of definitely part of it.

I've definitely lowered my expectations in terms of salary.

I would guess like the $85,000-ish range, but at the same time, I'm not really locked into this area.

You know, I just moved to Mississippi for school and for this job.

So, you know, I'm not kind of, I'll kind of move wherever if the opportunity is right.

And there's definitely, you know, a path to developing as a professional and developing my technical skills.

But I'm just in a weird tweener spot where like I'm not entirely entry-level.

And then for the jobs, you know, I'm doubtful to have gotten a lot of interviews.

It might be, it might be.

I think I heard language that you were using early in the conversation that it's possible you are overvaluing the degree.

For sure.

Like, I got this degree,

and you think that's going to be like the magic bullet, the silver bullet.

The silver bullet, the secret sauce is Luke

and what Luke learned while he was getting the master's.

The master's degree has zero value in and of itself.

Only the knowledge that you put in

your brain while you're getting the master's degree.

Now, that knowledge has value.

So, knowledge is valuable, but degrees are worthless.

So people don't care what degree you got.

They don't care where you went to school.

What they care is did you learn something that you can use to help us move our process, our company, our organization forward.

And so if you'll concentrate on how you can add value, not concentrate on, look at me, I got a master's.

So good.

That might change your interview

posture, the posture of your heart in the interview.

It's like, hey guys, I went back to get a master's so that I could get really good at this data stuff.

And I'm really good at this data stuff, and I can help you with your data analysis.

And it's going to do this, this, and this.

And I want to add value, and I'm excited, and I'm bumped up about adding value, adding value, adding value, instead of like opening up your shirt and showing them the S on your chest or the MBA on your chest, right?

Superman.

I know where you were going to be.

Superman, okay.

Superman is here, right?

Right.

And so, you know, like Clark Kent.

And

you got to be real careful with a new degree that you worked really hard to get it.

And I'm glad you, you got the knowledge,

but then don't place too much emphasis on that.

Plus, there's a certain level of, I don't know, ladder climbing with any position, right?

No matter what, when you start out, you're kind of at the low end of the totem pole, and there's some building that has to be done

in your role, right?

Like you're building your personal brand and you're building your skill set.

And you're, so there's that part of it.

There's a grunt work aspect all the time as you're building.

So that's just.

Well, when we're doing our onboarding and stuff here, that you know, I want sometimes I'll swing in and sit in with the new team members inevitably when I watch the question, what's it take to get ahead at Ramsey?

I'm like, oh, here's an idea.

Be really good at your job.

Yeah.

Start proving your value.

Add value.

Add value.

Make us really happy that we hired you.

And that's how you move ahead.

We're very utilitarian.

That's right.

Most businesses are, by the way.

We really just want a return on our investment.

That's how this thing works.

And so

you to make us more and you cost us, or we all go down, right?

That's how this works.

So how can I add value?

How can I add value?

And how can I, in a very practical way, hit the ground with my feet and start running from day one?

Well guys, big news: the Fed cut rates.

You know about that a couple weeks ago, and the 15-year fixed rate mortgage rates have dropped as well.

Lowest we've seen in about 11 months.

If you're financially ready, it's a great time to buy houses because house prices have kind of been basically flat up a little bit.

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Tyler's in Toronto.

Hi, Tyler.

What's up?

Hi, Dave.

Hi, Jade.

I want to start by saying I'm a longtime listener, and God bless both of you and your team for the work that you do.

It's made a great deal of difference in my life, and I'm sure for many others.

So

thank you.

How can we help you today?

Well, I am calling because my wife and I, we are both 30.

We've been together six years, and we are currently on baby step step three.

But we are stuck.

We're stuck on step three because we have been working at gazelle-like intensity for the last five years or so.

And we, between the two of us, we have two full-time jobs and three part-time jobs.

And I'm calling to ask for help on what advice you would give to boost a household income.

so that we don't have to be working 70 to 80 hours a week each.

Because I'll be honest,

we work conscious and hard and we love each other, but we are tired.

Yeah, sounds like you don't make any money.

Yeah, what are you making?

Well, so part of we live just outside Toronto, so we are in an ultra-high cost-of-living area.

Our monthly budget, which we have followed dutifully since we moved in together four years ago,

we so our monthly expenses total, including everything,

is about $6,800.

And we make,

and between the two of us, we bring in about $105,000 a year.

Okay.

And what did you pay off during that five years of Baby Step 2?

Our total debt wasn't very high.

We only had about $8,000 or $9,000.

So that's the hard part.

So if you don't get different jobs, you can't afford to live there.

With our current ones, we can, but the compromise is no, just on our full-time salaries, we can't.

Yeah, that's what I mean.

You don't make enough money to live there without working 70 hours a week and three part-time side hustles.

It's a cost-of-living thing.

So, I mean, you also can't live in Manhattan, and you can't live in L.A.

either.

What's keeping you in Toronto?

What's keeping you there?

Two reasons.

One, all of our immediate family is here, and both of us are fairly connected with our families and churches.

And And I mean, we've lived here for 30 years.

We just want to stay in our home.

But I mean, is there a...

Both of our jobs are tied geographically.

She is a high school teacher.

And so she would lose her seniority and her salary if we moved.

And I work as a copy editor for a municipal company.

So if I moved away, I would have to find another job.

Right.

But I do feel like both of you have jobs that you could find in

outer rings of Toronto, right?

I mean, how far out from Toronto do you live currently?

Are you an hour outside of town?

Yes, we already live in a suburb.

But

both of us have been looking for the last year and a half because we set a goal and said, we're fed up with this.

We want to get it so we have more time together.

And so we have been consciously applying.

Right.

And I've had multiple interviews and two offers, but both offers were for less money than I currently make.

Well, there's going to be a cat.

I mean,

you've got to go into this knowing for my job, for my career, here's kind of the salary cap.

Like, here's a generality of what I'm going to make.

So just because you apply for more jobs doesn't necessarily mean they're going to be higher paying.

And Dave made the, Dave made the point.

If you choose to live in Toronto, there are certain things that are going to go along with that.

price-wise.

And you have to at some point say, I can either afford it or I can't.

I have family members who lived in LA for the longest, and they said, the truth is, even I'm a teacher.

I know the spouse did something else.

If we work here for our pay, we will not be able to afford the lifestyle we want.

We won't be able to buy a home.

We won't be able to do XYZ.

And so, because of that, they moved to Georgia where they could have that life.

So, you guys have to decide as a family what's more important, working 70, 80 hours a week to have this dream of staying in Toronto or having the picket fence and having some breathing room and being able to have, you know, whatever that is.

You guys have to make that choice.

And the third option is completely change your careers.

and get your income up.

But you cannot, you know,

you're right.

The reason you're tired is that you don't see a way out.

You feel like a rat in a wheel, and because mathematically nothing's changing, and you're smart enough to realize doing the same thing over and over again and expecting a different result is the definition of insanity.

So,

you know, you've got to change something if you want something to change.

So there's three possible variables, and you know, it's location and

it is one of them.

And then the second one is

to change careers completely.

And, but I, I, you know, I feel for you, but there's some things you just can't, you know, you can't afford to live on $20 an hour in Manhattan.

Right.

You're not doing it on $20 an hour, but you're trying to do it on about $40 an hour.

And so, and you just can't afford to live in Tokyo

and London and Toronto and Manhattan.

You just, you can't make it there on that kind of income.

So,

I mean, you guys are staying afloat, but you're doing it by just, you got every finger stuck in every hole in the dam.

And if you pull one out, the whole thing's going to flood out on you, and you realize that.

So, I'm sorry, man.

I wish I had a magic wand that would make it easy to do, but it's not.

You're going to change careers or you're going to change locations.

And or you're going to work 70 hours a week, which I don't recommend as a way of life.

I don't mind doing that to get somewhere.

Right.

But I don't want to do that to say that's that's for the next 40 years what I'm going to do.

Yeah, there's a cap on there's a cap on that.

And five years is a long time to be in that mode.

You don't only get physically tired, you get emotionally tired.

Yes, yes.

You're doing it that long.

You lose sight.

You lose sight.

Justin's in Illinois.

Hi, Justin.

How are you?

Good.

How are you today?

Better than we deserve.

What's up?

Awesome.

Awesome.

So today I I'm trying to get right to the point.

I'm 48, and in my 20s and 30s, and in my early 30s, I never gave retirement a passing thought.

You know, the word 401k meant nothing to me.

And so now that I am retiring, you know, I know you can't make up for lost time, but I just want to make sure I'm doing the right things so that, you know, hopefully I can retire someday and with

a healthy retirement.

And I, you know, just want to run numbers by you and basically see what you think and, you know, what I wish to change.

Are you out of debt except your house?

Yeah, completely.

The house is paid for and

very good.

Okay.

Yes, sir.

So are you maxing out your 401ks, IRAs, and so forth all in Roth?

Yeah, but my 401k is in Roth.

I do 14%,

which is my company's max.

I guess I fall under their high earner category.

So

I'm at 14%.

How much is that?

I understand that 50%.

I make about $140,000 a year, so it's $18,000, $19,000.

And even if I'm $30,000, $1,500 a month, and what else are you doing?

On top of that, the reason I'm not worried about

the 401k that much is my company also have profit sharing, which obviously fluctuates, but the last two years, it's been $30,000

that they put into my 401k.

That's great.

What's in there now?

What's the total Nest Egg?

The total is

only right about $100,000.

That's why I was calling you today, making, you know, because they had a financial advisor come in a few months ago and just look at your numbers and see where you're at.

And he gave me some numbers for 15 years down the line.

And just, I don't know compound interest.

So I look at my numbers today and, you know, the numbers he gave me, I'm like, that's not right.

You know, one of those deals.

Listen,

I plugged it in now.

If you work from your current age, 48 to 68, you've got 100,000 in there now.

You put $1,500 in a month.

Average rate, annualized rate of return, 10%.

You're at 1.8 million.

That ain't too shabby.

There you go.

If you want to get some more help, sit down with a Ramsey Smart Vestor Pro, and they'll show you in detail exactly how that works and how you're going to get there.

Emily is with us in Detroit.

Hi, Emily.

How are you?

Hello, Dave.

How are you?

Great.

What's up?

Hi.

Well, I'm calling with with sort of a financial, moral, ethical, and biblical question all in one.

I'll let it rip.

So my brother and I, we both work in ministry, different churches.

We live in different states.

He's clear across the country than me.

He and his wife, they have eight children, and their belief is that God called us to go forth and multiply, and they believe Christians should be having as many children as possible.

Well, they are doing a good job of that.

Well, regardless of finances, so their only income is my brother's pastor's salary.

And as you may imagine, pastor's salaries, you know, nobody goes into ministry to, you know, make it big.

So he has actually said in podcasts and interviews that if you have more children than you can afford to have, that qualifies you as the needy.

And the church and family members are called to help the needy.

And so his solution to this is to be on state aid.

in addition to a salary and his in-laws also pay them a stipend every month because they believe he's in ministry and they should be helping them with their bills.

I think it's lunacy.

I think it's crazy.

And I was just kind of curious what your opinion was of that.

I completely agree.

Thank you.

That is not biblical.

I don't believe it's biblical either.

And even though

the Bible does say to be fruitful and multiply, the Bible also says that those that won't take care of their own household are worse than an unbeliever.

I would 100% agree with that.

And he and I are the same denomination, but sometimes I wonder if we're reading the same Bible.

But my only question to piggyback on that is: do you think Christians in any capacity, whether you're a pastor or a firefighter or whatever, should ever be taking advantage of government, or as I like to call it, taxpayer-funded aid?

Well, I'm not ready to throw rocks at everybody who ever does anything, but

obviously

we at Ramsey are big on helping you prosper.

And I've never met anyone who prospers on government aid

I would 100% agree with that so it's not an act of love for me to recommend that or you certainly wouldn't tell people to do it as a way of life because it's not good for them

not not it's not a it's not it doesn't it's not as much a moral judgment as it's just loving the person and saying, gosh, I've never met anybody on welfare that had just a wonderful life.

I would agree with that.

Yeah, but are you going to hell or are you a bad Christian if you go through a rough patch and the government helps you for a little bit?

I'm not going to be that judgmental.

I'll give you a break on that.

Okay, not just perspective.

And my other question was actually kind of on behalf of my parents.

My parents are very generous people.

They fly out.

So they live in Detroit with me, but they fly out to where my brother lives periodically, you know, to see the kids to keep up that relationship.

And they're very generous when they're there.

But when they are there, you know, they kind of have their limits on generosity.

My brother will make comments like, gee, you know, my van needs new tires and, you know, see these ball tires, it's not safe.

Or one of the kids lost their glasses and, you know, we just can't afford to repair them.

What are some good boundaries that parents of adult children could have on saying, well, this is your problem?

You know?

Yeah.

So that's kind of my question.

Is there any good guidance on that?

The thing is, there's not anything your parents are going to say or you're going to say that's going to change your brother.

He's made his decision.

True.

It's very true.

And so I'm either just going to love him where he is and disagree with him.

I mean, I have relatives that vote wrong, and I love them anyway.

You know?

And so,

you know, that's okay.

You know.

And they think I vote wrong, so it's okay, and they love me still.

But now, you know, how much money am I going to pour into a situation like that?

Listen, fixing the ball tires or replacing the lost glasses is not going to repair this situation.

It's bigger than that.

Correct.

And that's what the advice they've been given by other people is that's just a band-aid on it.

But the tires are going to be an issue again.

The glasses are going to be lost again.

Whatever it is, it's not.

So, you know, I would just say, okay,

I have a budget of money I'm going to burn on these grandkids

just to be that guy, and I'm not going to worry about it.

But past that, the answer is no.

And so, you know, when we go out here and visit, we're planning to drop $1,000 into kids' stuff that they need right now because their dad's kind of a doofus.

And so, you know, I'm just going to have that as my line item.

And then when it gets above that, I'm not going to, you know, I'm not going to do any more than that.

Also, Emily, everything that you're talking about is not even a direct effect on you.

You're talking about this is your brother.

This is your brother and your parents' deal.

So if I were you, respectfully, I'd just mind my own business because nobody's coming to you for money, right?

Well, her mom, and this has not been said directly to me, but a good friend of mine is actually married to my sister-in-law's brother.

And she has made many comments about how, oh, gosh, they're in such bad straits financially.

Everyone in the family, including, you know, myself and my husband, should be helping them.

And I just think it's wrong.

I think you should be embarrassed.

If you're in your 30s and 40s and you're counting on family members to pay for things for you, I think you should be so ashamed.

As an ongoing pattern, yes, but as an off thing.

But yeah.

But, you know, again, somebody four degrees of separation away doesn't need to vote on what I do if they don't like that.

I don't agree that he has labeled himself needy biblically,

and I don't agree with that label, so I'm not going to biblically step up and make him not needy.

He's needy, but it's not money.

He needy a new job.

Careful, you'll get a Jadism.

You'll get a Jadism dropped on you like a bomb.

You needy a job.

Oh, that's it.

That's the deal right there.

Oh, boy.

Here's the thing.

It is frustrating to watch people that you love, especially when they're taking advantage of people that you love.

And they're not winning.

But I'm also not going to get sucked into anyone else's guilt trip.

Or

I particularly resist

someone trying to Christianize their guilt trip.

I know, that's right.

So, like, we had a guy one time at the old office, Jay.

This was funny.

He came in and he was at the front desk.

And

I walked out.

They said, this guy's out here to see you.

And I walked out front and he said, God told me that you're going to give me a new van.

And I said, no, he didn't.

He said, oh, yeah, yeah, he did.

And I said, no, he didn't.

Because if God told you that I was going to give you a new van, he would have told me.

And there'd be a new van sitting out there with the keys in it.

I know, that's right.

If God told me to do it, that's what would have happened.

But God didn't tell you nothing.

You had bad pizza last night, and you're blaming God.

And so, and then, of course, he starts cussing and screaming about how we're not real Christians and had a little duck fit right there on the floor, and we had to have him removed.

But because you don't challenge these God people when they're doing this stuff, so

I mean, crazy Christians give the rest of us Christians a bad name, y'all.

I'm just saying.

So, yeah, God told me that, you know, and so you're going to quote scripture that demands that you remove my private property from me.

We're going to have an issue with that, needy,

needy a new job.

That's it.

Yeah.

Wow.

And here's the sad thing.

Wow.

There's eight kids being affected by that.

That's what I know.

Yeah.

That's tough.

That's tough.

Now they're being raised by that, and then they come, then they can't figure out why they strayed away from the church.

Exactly.

Yeah.

Because they were raised poor because their mom and dad had decided to have a bad

biblical definition, series of biblical definitions.

Yeah.

But I tell you, I do love the idea that we ought to be fruitful and multiply.

But

maybe we also ought to raise our income while we're doing that.

Right.

So that we can feed them.

That's supposed to be the kind of the thing that goes with it.

So I agree with you.

I agree with your frustration, Emily.

But to Jade's point, there's not anything you're going to do about any of this.

So this was just a discussion we all had.

Does nothing changed at the end of this discussion?

Nope.

Because we could give no one instruction.

in this process that's going to take the instruction.

Yeah, if they wanted help, they would have called in.

If the parents wanted help, they would have called in.

Yep.

So, and so now you get to just sit on the sideline and be frustrated or just watch them and grin and go, that's my brother.

Yep.

Yep, that's him.

That's the guy.

I know that guy.

That's the hardest part of all this, though, when you see a better way and you know a better path and you just want that person to just

change.

You want it more than they do.

Yeah, that's that's how we become enablers if we're not real careful.

Or just really frustrated with family members.

You're just sitting back there just, meanwhile, they're broke eating a sandwich.

They don't

You know they're broke eating a sandwich somebody else made.

That's right.

That's right

Need a job.

I can't believe you Jake.

That was really good.

That's good.

That's good.

I like that.

I'm going with that.

I'm sticking with it.

I'm going to steal that one after about three more times.

That'll be something I said.

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Ramseysolutions.com slash agent.

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

Jade Washaw, Ramsey Personality, number one best-selling author, is my co-host today.

Kayla is in Milwaukee, Wisconsin.

Hi, Kayla.

How are you?

Hi, how are you?

Better than I deserve.

What's up?

So I had a question about term life insurance.

I've been listening about you saying that we need about 10 to 12 times our annual income.

And I just, I guess, from my point of view, it seems like that's very, very high.

And maybe I'm just like missing something in the calculations and so I'm just hoping to kind of get an idea of like why why that number you pick that's a great question thank you so much I appreciate that because a whole bunch of other people probably wondering exactly the same thing if you are so glad you called

so um

to start with uh it is not universal Number one, everyone does not need life insurance.

It's if people are counting on your income to live and you die, then they're up a creek, right?

And so,

and as you build wealth through your life and get out of debt through your life and your net worth increases through your life, you progressively need less insurance to the point that you're self-insured.

I'm 65.

I'm worth millions of dollars and I don't have a dime of life insurance.

Okay, my wife will be just fine if I die.

Okay.

As a matter of fact, she's kind of planning it.

Okay.

So, but that's because we're out of debt and have built wealth.

You follow me?

And there's no kids to raise.

The kids are all grown and gone and so forth.

Okay.

Jade, on the other hand, has two littles, and she and Sam are raising a family right now.

Okay.

And so

different positions in life.

So if you're 20 and you have no spouse and no kids,

you don't need much life insurance because no one's counting on your income.

So that's the sidebar.

That's the caveat.

But then back to your original meat of your question is, let's say you're 34, you have two kids, and you make $60,000 a year, and your spouse makes $70,000 a year.

That's when we would say, if you got a house mortgage,

you know, you've got some student loans you're still paying off, you're working the baby steps, you're a normal 34-year-old in America today.

Oh, you definitely need 10 times.

And the reason is this.

$60,000 income earner, 10 times would be 600,000, 12 times would be $700,000.

So if that person died,

let's say that was the husband, he died and left the wife behind with two littles and half the income that used to be there, that wife could take that $600,000 and invest it.

If she made 10% on $600,000, it creates $60,000 of income without touching the nest egg that is created.

The goose will keep laying that golden eggs perpetually.

If you invest $600,000 at 10%

in a good growth stock mutual fund, it should average that or more,

then she's going to have the same income off of that mutual fund that her husband used to produce.

And you did not sacrifice retirement.

Yeah, and she didn't have to starve to death.

Okay.

And so that's where it leaves her in reality.

And we've got thousands of those stories over the years.

But that's where it comes from.

You invest that 10 times

at 10%, then you end up with replacing the income of the person, and that's what life insurance is for.

That makes sense?

Yes, I think so, yeah.

Okay.

So if, you know, if you what's your situation?

How old are you?

I'm 35.

Okay, single or married?

I have I'm married.

We have three kids, two in middle school, one in high school.

Okay.

And what's your net worth?

Our net worth is roughly about $200,000.

Okay.

All right.

So you're doing pretty good.

All right.

How much debt do you have?

We don't.

Okay.

Good.

House or anything?

Well, house we have a little bit left.

There's a little bit less than $100,000.

Okay.

Well, you're ahead of the game.

Agreed?

Yeah.

You're doing better than average for your age.

Okay.

Funny, I picked out 34 a minute ago, huh?

For the

example.

But yeah.

But that is the exact average.

So what does your husband make?

My husband makes about $80,000 a month.

So if he had a million on him and we invested that at 10%, he'd make $100,000 minus taxes.

You'd have $80,000.

And we would not miss his income.

We'd miss him, but we wouldn't miss his income.

And here's the weird thing.

If he's healthy, if he's not obese and he doesn't smoke,

that million dollars on that 30-something-year-old is very inexpensive.

It's like the cost of a pizza.

I mean, it's nothing when you look it up.

Have you priced it out yet, Kayla?

Yes.

Yeah, we had gone through Xander and had a couple estimates.

And so we had priced it out.

I was just trying to figure out exactly

where we should land with that.

So truthfully, a million is a little much for y'all because you're in such good shape.

Because if you didn't get his whole income income replaced as good a job as you've done, you'd probably be okay.

But for the difference in the cost in 800 grand and a million on policy is so low, I'm going to go ahead and beef it up a little bit.

And even later on, when the kids were grown and gone and we had some wealth, Sharon wanted me to keep life insurance for a while, and I kept it for a little while.

SWI, Sharon wants it.

There was no reason for it whatsoever, mathematically.

She just wanted some.

She let it go?

I finally talked her out of that a few years ago.

But for about a decade, I kept life insurance for no apparent reason other than SWI.

Makes her feel good.

She said, I'd rather have that million-dollar policy than another diamond.

I'm like, wow.

Good.

Okay.

You can have it.

It's just a gift to you.

But you understand it's not good financial planning.

You understand it's not what I teach.

And she's like, I don't care what you teach.

I want it.

Okay.

To be a fly on that wall.

But that's where it comes from.

If you take 10 times or 12 times your income, your spouse could invest that amount at 10% and we have replaced you.

If something happens to you financially, obviously no one could replace you.

You're special.

But yeah, right.

But anyway, so yeah, that's the thing.

You're going to be okay.

And then as you age, like let's talk about once you've aged out of it, like

when you feel like you've net worthed out of it, let me call it that.

Well, the kids are growing 15, we say 15 to 20 year level term.

That's a good point.

Because 15 to 20 years from now, the kids will be grown and gone.

That's right.

And they're making their own money.

They're doing their own thing.

They're not a liability anymore financially.

15 to 20 years from now, you'll be out of debt, 100% house and everything.

That's right.

Because we tell you, never take out more than a 15-year mortgage.

So you're going to be completely debt-free 15 to 20 years from now.

And 15 to 20 years from now, you probably have a million bucks or more in your 401k.

Because you will have been investing in Baby Step 4, 15% of your income.

And so

your assets are rising, your debts are going down, and the kids move out.

out,

then it takes less to support you, and you set up with good financial planning, working the baby steps, a situation where you become self-insured.

Right.

Really, at that point, the only thing you're thinking about is your health.

Yeah.

And caring for your health.

And so there you go.

Yeah, but we're not.

Again, if something happens to me today,

we've done all of those things and then some.

Right.

So Sharon's more than okay.

And vice versa.

I'll be okay, you know, without her income.

It'd be okay.

She doesn't have an income, but that's good.

So that's other than mine because it's ours and all that.

That's right.

What's up, guys?

George Camill here.

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or click the link in the description if you're listening on YouTube or podcast.

Guys, remember, retirement is not an age, it's a number.

So it's not like 65.

Bing!

No, it's more like

2 million six.

Bing.

You know, okay, what is it you want?

What's the nest egg you want to where you don't have to think about money, then you are able to retire at that point.

Now, we can call that financially independent.

I don't like that phrase very much,

but

we could call that whatever.

And I don't like just saying I'm never going to work again either.

I think you ought to do something.

I work and I don't need to because I love what I do and I help people and it's a good thing.

And so find something to lay your hand to.

That's a good thing.

Because too many people do, quote, quit work and like a year later they're dead.

So you need something you're doing, right?

You need to be plugged into something.

But that's it.

Remember, retirement is not an age.

It's a number.

All right, here we go.

Amelia is in South Carolina.

Hi, Amelia.

How are you?

Hi, Dave.

I'm well.

How are you?

Better than I deserve.

What's up?

Great.

Okay, well, I'm calling because my husband is a physician, and his practice is a private practice, and they are about to merge tomorrow with some other groups.

And

we just figured out that his 401k from his old company, or the company he's with today, that's about to become a new company tomorrow,

we don't have to put that into the new company's 401k.

I guess we can instead make it a self-directed IRA.

Or you could just roll it to an individual IRA.

Yeah.

Yeah.

Yeah.

So

I think that that may open up lots of different options and just wondered if you had any advice.

Like, could we consider putting some of it into real estate investments or something like that?

Okay.

All right.

Good.

Well, the first thing is, yes, I would roll it to something.

I would not leave it with the new company 401k.

This is an opportunity to move it to something where you have a lot more control and a lot more options.

At a minimum, you sit down with a Smart Vestor Pro and you pick a series of good mutual funds on your own, and

you roll it to an IRA.

There's zero taxes on that, and you manage that from this point forward at a minimum.

Okay.

If you chose to do a self-directed, you could roll some or all of it that way.

How much is in it?

It's our biggest of all of our retirement accounts.

It's $1.155

million.

Okay.

Do you own other investment real estate now?

No.

Okay.

How old are you guys?

52.

Okay.

All right.

So here's the um yes, you could roll s half of it or some of it or all of it.

Let's say you moved a half a million over and you bought a couple of $250,000 rental houses in South Carolina.

And you put the other half a million or other $600,000 in a regular IRA like I was talking about in mutual funds.

Okay.

In the self-directed then, you can buy real estate, as you mentioned,

and you could do those two $250,000 houses in there if you wanted to.

The downside is two things.

One,

people screw up and forget that you can't touch any of the money from those rental houses.

Just like you can't cash out your mutual funds in your IRA until you're 59 and a half, you're going to get penalized.

So you can't pull the rent money out and use it.

100% has to be operated like it's someone else's company, and you can't embezzle or commingle funds in any way.

It has to be a standalone operation, and 100% of the repairs are done from the IRA.

The roof, the

heat and air that goes out on the rental, the carpet that has to be replaced on the rental, and 100% of the income created in the rental has to stay in the IRA.

You understand?

Okay.

Yep, that makes sense.

Because if you pull one dime out, number one, they may toss you out of the whole thing, but number two, you're going to get penalized on that dime and taxed on that dime when you pull it out.

So don't commingle it.

And people often mismanage these things.

So you got to just be real airtight with that and promise, promise, promise, and stick with it.

The second thing is you've never owned any real estate.

Not as an an investment.

Yeah.

And you're getting ready to be a landlord and buckle up, Buttercup.

This is a new experience.

Okay.

So when she pulls the rents, those hypothetical rentals that she purchases, she pulls the rents.

Those money, that money has to immediately go back into the IRA.

You're not pulling it.

You're running it as a separate company.

It's got its own checking account.

You're running it as a company over here, like it's not you, like you're doing it for somebody else.

So it all stays encapsulated within the IRA.

So there's no liquid money for repairs.

No.

That's interesting.

Yeah, well, the rents would create, because they're stuck in there.

You can't pull the rents out.

The rents begin to build up cash

over time.

Hopefully you're cash flowing.

I mean, you're buying

two paid-for rental properties, right?

So hopefully you're cash flowing.

You're making some money.

So

those $2,500 rents are piling up.

Then you've got to pay property taxes out of that, pay insurance out of that.

You got to do your repairs out of that.

And what's left in there is profit, but 100% of that profit stays in there.

That's what we're doing.

So, yeah, you just got to be ready because here's the thing.

If you get in these things, and this is a lot of trouble, you'll make more on those two rentals if you buy them well and manage them well than you will on mutual funds.

But you're also going to invest a bunch of time in it.

Okay, that makes sense.

Because people who say real estate's passive investing make me laugh.

There's nothing passive about it.

Okay, it's real estate.

The beauty of it is it requires some more effort.

With mutual funds, you can set it and forget it.

Look at it once a year, twice a year, and not worry about it.

I look at my real estate stuff every month.

I get reports on it every single month.

And that's just me looking at the people that are managing it for me that work for me.

And I look at my mutual funds once a year.

I mean, so I burn a lot more brain calories on my real estate than I do on my other, but I make more money on it.

But I love real estate.

I'm a real estate guy, so it makes a lot of sense for me.

I would not put 100% of it in real estate.

I would do something like I outlined, maybe 50%.

Okay.

But do you think with the real estate market where it is right now that this is a good time to consider something like that?

If you get a bargain on a piece of real estate, it's always a good time.

Okay.

Don't pay retail.

Good lord.

No.

No, we want to get a deal.

And so we're going to get a deal.

We're going to buy a $300,000 house for $250,000 $250,000 because we're writing a check and we're closing Friday.

You want to sell your house, it's sold.

I'm getting a bargain.

Okay.

And we're looking for a deal.

And deals are hard to find, but they're worth it.

It's $50,000 you made right then as soon as you buy it.

$50,000 under market.

And that's what I'm looking for if I'm buying.

I don't buy houses anymore, but if I was buying houses right now, that's what I'd be doing.

I'd be looking for a bargain.

Are they everywhere on every corner?

No, they never have been.

There's no market that they're everywhere, but you can find them.

And

somebody out there needs to sell a house right now.

And there stands Amelia with cash.

And yeah, you can do it.

And here's the other thing.

If you get into it and you hate it, you can sell them inside the self-directed IRA.

and roll the self-directed into mutual funds into a regular IRA.

You can put the car in reverse and back out of this

and maybe not even lose money.

But if you just get into it and go, this is a pain in the butt.

I don't want want to fool with this.

And I want to be traveling.

I don't want to dealing with renters, right?

And so that's okay.

That's fine.

So you can put the car in reverse and get out of this.

So, yeah, if I were you, I'd try it since you got the itch, but I wouldn't try it with more than half.

And I wouldn't do it.

Of course, you're going to pay cash.

But

I actually knew a guy that did this because he was a guy that did flips.

And he took his million and made it into three doing flips.

Wow.

All inside the IRA, though.

He couldn't eat out of it.

Well, I was going to say that.

He had to have a job over here to eat.

Yeah.

It's a fail-safe in that way.

You're not going to spend your earnings.

It keeps your hands off of it unless you screw up the whole thing.

Yeah.

You work your butt off for your money, but your money's never going to return the favor if all you do is hope for the best.

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Michael and Kara are on the debt-free stage right here in the lobby of Ramsey Solutions.

Hey guys, how are you?

Doing well, how are you?

Doing good.

Better than we deserve.

Good to have you.

Where do you all live?

King George, Virginia.

Oh, fine.

Welcome to Nashville.

And how much debt have you two paid off?

$212,626.

Good for you.

And how long did that take?

65 months.

Good for you.

And your range of income during that time?

Was $96,012,000 and down to about, I think it's going to be about $115,000 this year.

Cool.

What do y'all do for a living?

So I am a vendor.

I work for

Lift Off Distribution, which is a Red Bull vendor.

And I work for a child development center at the Navy Base.

Oh, very cool.

Very cool.

All right, $213,000 over 65 months.

That's your house?

Yes, sir.

Look at that.

Weird people.

A paid-for house.

How old are you two?

I am 34.

Wow.

I'm 35.

Wow.

And a paid-for house.

Oh, and there's a picture of it in the snow.

I like it.

So, what's that house worth?

Well,

they said in the email after, I think it was $330,000, yeah.

$330,000.

Amazing.

Good for y'all.

And you're 34 years old.

And how much have you got in your retirement nest eggs at this point?

$146,000.

All right.

Halfway to a million area.

Halfway there.

Gonna be there quick now.

How's it feel to have a paid-for house at 35 years old?

Y'all know how weird you are, right?

Oh, yeah.

Yeah, we hear it a lot.

Yeah.

It feels great.

Yeah, we're really excited.

Yeah, that's fun.

Good for you.

So what started the journey?

Yeah, I mean, like 65 months ago.

Wow, five years and strange.

So

you did an interview on the Sunday special, and I got to listen to it one day when at the time I was working at Frito, And I was loading my truck and I was listening to it.

And I was listening to it.

And I said, oh, I can't wait to get home.

I got to tell my wife this is the greatest thing since sliced bread.

I got to go home.

So I got done, came home, and I said,

you know,

we got to do this journey.

And my wife was like, what are you talking about?

I came in through the front door like I was crazy.

And

he got into the Fritos again.

Yeah.

And she was like, okay, well, it makes sense.

So, you know, where do we start?

And I said, well, the first thing is we got enough money.

We had a car payment.

Pay the $3,000.

Let's just pay the rest of it off.

We got the money.

And she said, okay, let's do it.

Well, all right, one down.

Wow.

So you didn't start with a bunch of consumer debt.

You had kind of kept your way out of debt up until this point.

Oh, yeah.

Yeah.

No, it was.

And we've always been against credit cards.

Yeah.

Credit cards and all that stuff.

To be honest with you,

I wouldn't have gotten the car debt if my mom didn't tell me that it was good for you.

And so since it it was so good for me,

I went ahead and paid that off.

Yeah, so we paid that off, and then

we did the six months,

get your emergency fund, and then right about that time, COVID happened.

So, once COVID happened,

I took advantage of the refinance rates because they were way down.

I went to two and three-quarter on the house.

And

then at that time, you know, so we continued to put anything extra on the house, and it was just a small amount at first.

And

every raise, we'd put more.

And I got a little more intentional.

Yeah,

every raise, every tax return, it just was automatically the raise that I needed to put on the mortgage every month.

Every single month, every single year, if it was $7,000 back, okay, divided by $12, that's what it goes up.

If I got, she got a raise at work for cost of living or something, okay, it's $1,200 divided by $1,200.

That also goes on it.

And we just lived exactly the same way for 65 months.

No vacations, no eating out, no nothing.

Just

streamline.

And now you're completely done and halfway to being millionaires already.

Yes, sir.

Congratulations, you guys.

Thank you.

Wow.

How many people making fun of you while you're doing this?

To be honest with you, it didn't really

fun of us.

A lot of people were just like, wow, that's awesome.

I wish we would do that.

Yeah, they were like, I had a lot of people saying, you know, it was, that it is unusual.

Why did, you know, why do you want to do it?

And, you know, I'm just

kind of fed up with some career path stuff that corporate America does to people.

So

I got really, really aggressive.

Yeah.

Get that piece.

So you got to walk away power at that point.

Yeah.

Yes.

I know, that's right.

So what's the, my favorite question is, what are you going to do to celebrate?

Yeah.

You haven't done vacation.

You haven't done anything in five years.

You're way overdue.

Well, we brought all of our kids here today.

That was not a vacation.

As far as vacations and stuff like that, I don't, I'm not totally ready for it yet.

I just, because the mission's not quite done.

So this house is done, but the house that we have now, you know,

we got a full house.

Five kids, nine pets, 1,200 square feet, running out of room.

Yeah.

So probably going to take the next year and a half or so, pile up cash, take the equity, buy, you know, $550,000, $600,000 house cash.

Then from there, then you can take a vacation.

Oh, no, take a vacation.

Listen, I think take one in between.

A little one.

A little one.

Oh, boy.

Congratulations, you guys.

Thank you very much.

I'm proud of you.

Thank you.

That's pretty amazing.

Who was cheering you on?

Our families.

Yeah, his parents, my parents.

I'm one of 13 kids, so we have lots of aunts, uncles, cousins.

So

we had a lot lot of big support system.

Yeah.

Wow, wow, wow.

That's good.

That's good.

That's the way it should be.

All right.

So, can this still be done?

Do you think people listening can do it?

Oh, absolutely.

Absolutely.

Absolutely.

Definitely.

You just need to be motivated.

Yeah.

It is the discipline.

It is discipline.

Where did the discipline come from?

How did you develop your discipline?

To be honest,

I think it's been a work in progress.

Over the last 10 years, I think he's just steadily got more disciplined and everything.

I think a lot of it is perspective.

I listen to a lot of podcasts because I do work by myself as a vendor.

I get to listen to a lot of it and, you know, being able to hear what other people are doing, being able to,

not just on the Ramsey show, but maybe on Jocko's podcast or other things like that, and hearing the type of disciplines that people go through, the life things that they go through as well.

That, you know, if the worst thing that I've got to do is, you know, throw product in the rain, okay, my life's pretty good.

I ain't got to go out and go get a new car to impress somebody or

go spend some money or whatever to feel good.

I can hold off.

Cool.

Wow.

Well, way to go, you guys.

Rock and roll, man.

That's fun.

That's fun.

So, how does it feel one more time?

It feels amazing.

It feels great.

Like you said, that you brought you brought the kids with you?

Yes.

They're in here to do the debt-free screencast.

Bring them up.

Let's introduce them.

Get the names and images on them.

Come here.

You come with me.

All right.

There's the first one.

There's the first one.

This is Decky.

This is Declan.

We got a Landon.

We got an Anthony.

We got an Elliot.

And we got my big baby Riley.

I love it.

All right.

Very cool.

Fabulous, guys.

Well done.

Well done.

Good stuff.

Well, these kiddos don't even know how powerful a hero their mom and dad are.

They've changed their whole family tree.

Everything's different in your house because of your decisions.

I'm so proud of you.

Thank you.

All right.

Michael and Kara and the gang from Virginia.

$213,000 paid off in 65 months, making $96,000 to $120,000.

House and everything.

Halfway to Baby Steps Millionaires at only 34 years old.

Count it down.

Let's hear a debt-free scream.

Three, two,

one.

We're debt-free.

Yay!

Oh, man.

If you didn't know what freedom sounded like, you can play that back.

Now that's what freedom sounds like.

That's how it works.

I love that.

Listen, if you can pay off a house in five years, then you can save up a down payment to buy a house.

You know what I'm saying?

Like, it's just a mirror to show real estate dream is not dead.

Right.

They paid off their house.

They paid off their house at 34 years.

With a house full of kids, by the way, and dogs.

Gas.

Yes.

This is doable.

This is reachable.

And that's why we do the Dead Free Screams to remind you guys that real people are doing it too, and that gives you permission to go do it.

Hello, it's called Hope.

This recording is the public.

Proverbs 18, 4 is our scripture of the day.

The words of the mouth are deep waters, but the fountain of wisdom is a rushing stream.

Elizabeth Elliott said, Never pass up an opportunity to keep your mouth shut.

Make a boring podcast, but other than that,

michelle is in dover hi michelle how are you

i am wonderful dave jade how are you great how can we help

well i was calling in because i need some guidance uh getting out of a financial mess and um i have been in and out of this mess for many years and i'm tired of being tired and I just figure someone has eyes from the outside looking in and can say, hey, this is what I see.

And I know, like, I know how to do it.

You know what I'm saying?

I just, I need, I don't know what I need.

I just need some help getting out of the mess

because that's what it is.

Yeah, you're sick and tired of being sick and tired, huh?

Yes.

So tired.

Yeah, okay.

So tell me about it.

What's the mess?

Well, the mess is I have,

I've been

I'm in debt.

What kind of debt have you got?

$40,000.

I have IRS debt, $22,000 worth.

IRS, $22,000.

Yes, $22,000.

What else?

A car loan, $20,000.

I have a credit card, $477.

And I have a loan I literally just had my car

repaired and financed $834 of that.

$834.19 to be exact.

That it?

Yes.

No student loan.

No.

You got a mortgage?

No.

I've got an extraordinarily expensive, for my budget, rent.

How much is your rent?

$18.99.

Okay.

All right.

Are you single?

Yes.

And what do you make?

It fluctuates.

I work

as a teacher,

working, I work online, so I have about one, two, three jobs.

And generally,

I literally just did this.

In one of the jobs, I bring home $500 a month.

Let me see.

I'm just looking at the numbers.

$500 a month.

The other one is $1,000 a month.

And the other one is approximately

$2,800 a month, approximately, because they fluctuate.

All of them do.

Okay.

All right.

And how did you get IRS debt?

Some of this $10.99 and you didn't pay your taxes?

Well, I was, yes, that is the end.

That's the cut-and-dry thing.

Yes.

I've worked at this one of these companies for 15 years.

And when I first started, we were $10.99.

And, of course, you know, the tax bill is so high, and I couldn't afford it, to be quite frank.

And I've been paying on this since then.

Okay.

All right.

So for many years, you've had this IRS laying there?

Yes.

Okay.

So you've got $3,800.

You've got $4,300 a month take-home pay

and $8,000 and $2,000 almost.

On rent.

Your rent is ridiculous.

Yes.

It's ridiculous.

Okay.

And how much is your car payment?

It's $4.27, I believe is the exact amount, but I've been behind on it.

So I literally called yesterday and got a payment arrangement for $500.

I've been paying $430 on it.

Okay.

All right.

So

first thing is we have to address living emergency to emergency.

And then the second thing is you're going to have to make some adjustments in your rent.

You can't stay there and prosper.

Got it.

You simply cannot afford $1,899 on $4,300.

That's your math strain point.

It's killing you.

Now, how many bedrooms are there?

Three.

Okay.

So the other option would be to take in two roommates.

But if you're not going to do that, you have to.

I'm sorry?

What?

I said, I don't want to do that.

I don't want you to do that either.

So you're going to have to move then.

Because you simply cannot do this, okay?

Unless you're going to tell me that somebody's offering you a job to double your pay.

And I missed that in the conversation.

So yeah, this is what's killing you, don't you think, Jade?

I think so.

Can you tell us more about the jobs that you're doing?

Yeah, so I'm an ESL instructor, and basically it's the way that they pay, it's kind of like piecework, if you will.

So depending on how many students I teach for that day, then I get paid.

Basically, I get paid for every student that I teach

per the minute.

And the other is

it's

one is the same thing, actually.

It's just another company.

I do that as well.

And then the other job is I work as a tutor

for schools throughout the United States.

I just came off of a job on the other side of this same company where I had just for six months because of the summer

where I was working full-time.

Is there any decent money in translation at all?

That's what I'm wondering.

Well,

there is, but I don't know any other language.

These companies, these in the United States.

So you're teaching English as a second language, but you don't know the other language.

Right.

It's the unofficial first language.

English is the unofficial first language in South Korea.

That's where I teach.

So I don't have to know Korean.

I see.

Got it.

Got it.

Got it.

So you're

that my end goal is that I've been called to ministry,

but I do not and refuse to be broke.

I don't know the Dover, Delaware market.

Is it an expensive market?

No, it's not.

Okay.

You just found an expensive place to live.

Okay.

And

is this taking up 40 hours a week or 50 hours a week?

Oh, I'm working literally sunup to sundown, before sunup to sundown.

Let me change gears back to what I said a minute ago.

The first thing you've got to do is to do your detailed budget, and you have to prioritize every dollar that's coming in.

And the priority sounds like this.

The first thing you buy is food.

The second thing you buy is lights and water.

The third thing you pay is rent.

And it's an adjusted rent because you're moving.

Okay.

And so food, shelter, clothing, transportation, and utilities.

We pay your car payment.

We keep the lights on.

Okay.

So we're not ever behind on the car again.

We're not ever behind on the rent.

We're not ever behind on the lights.

You've got enough to do all of that.

The only question is, then, how can we make progress when we knock out these first two little debts, the little credit card debt and the little car debt you just took on?

But from now on, you're going to be so in control that these little things that pop up are not going, you're going to put $1,000 as your baby step one aside savings.

And so if a little car thing pops up, you just pay cash for it.

You stop everything, you go back, build that thousand back up.

But you've got to get away from this crisis to crisis to crisis to crisis because it starts to feel like your life's a country song.

Well, the rent is the unlock for that.

Yeah.

Well, but being on a budget and a prioritized budget,

every detail written down before the month begins, and then it's prioritized.

As a dollar comes in, it is already spent because you've got the next thing up.

Next thing up.

First thing up is food.

Second thing is lights and water.

Third thing is shelter.

Fourth thing's car and car gas.

That's it.

Next thing up, next thing up.

And then we're going to knock out the little $400.

We're going to build our $800 or build our $1,000 up.

Then we're going to start on baby step two and working our way through that.

You adjust that.

You also have a car you can't afford as well.

And so

I'm going to start looking at that, but it's not as big a pain point as the rent is.

The rent is roughly double what you can afford.

And so you may, you're doing all this remote anyway.

You may be moving out a ways from the city to find a bargain in a little bit of a more rural area and get a much better deal of some kind.

You know, a garage apartment over the back in the backyard of a rich old lady, and you move in there and help watch over her a little bit or something, and she's make sure she's doing okay, and you get a bargain with that garage apartment until you get this thing squared around.

And then when you get it squared around, you get these debts cleared, then you start to build your good emergency fund, you start to build some wealth, then you got some wiggle room to start to build a better quality of life at that point.

But in the meantime, we're going to beans and rice, rice and beans.

And we'll give you every dollar for a year and get you set up and get you going on that.

That's going to really help you with the process.

Our gift to you.

That puts us 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.