“My Husband Has Been Cheating On Me For 30 Years”

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Speaker 2 This is the Ramsey Show, and I'm Rachel Cruz, hosting this hour with Dr. John Deloney.
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Speaker 2 All right, first up in Vancouver, we have Sarah on the line. Hi, Sarah.

Speaker 2 Hi. Hi, welcome to the show.

Speaker 3 Thank you for having me.

Speaker 2 Absolutely. How can we help today?

Speaker 3 So I've been married for 46 years and my husband does not contribute financially to the household finances. And he's also not healthy.

Speaker 3 And I recently found out that he's been having an affair probably for about 30 years,

Speaker 3 which is unable to go on because he's had a cell phone for a long time and he worked shift work, which made it really convenient to sneak around. Good cool.

Speaker 3 So I'm wondering, is it worth divorcing at this point in time? Or do I just wait until he dies because he's not taking care of himself health-wise?

Speaker 9 Holy smokes.

Speaker 2 Gosh, Sarah. Okay, so when you say he was having an affair for 30 30 years, was it with the same woman or it's been often on multiple levels?

Speaker 7 So he's been running.

Speaker 3 Well, I believe there's been others, but I believe there's been one very long-term.

Speaker 9 Wow. So he's doing shift work, but he's not contributing.
So is his money go to him and then you take care of the house?

Speaker 5 Yes.

Speaker 7 I mean, you know,

Speaker 3 he did pay for the mortgage on the house and I paid for everything else. But then once the mortgage was paid for, which has been more than 20 years ago,

Speaker 3 he's quit paying for anything.

Speaker 9 Let me reframe this a little bit. You've been divorced for 30 years.

Speaker 9 Y'all just have been living in the same house.

Speaker 10 Yep.

Speaker 9 Yeah.

Speaker 9 And I guess,

Speaker 9 with all due respect,

Speaker 9 I can't give you that answer

Speaker 9 because I can't carry the weight for you of what you have to do next.

Speaker 9 You get what I'm saying? Like, it's such a huge call.

Speaker 7 You have to make that call.

Speaker 9 Yeah. But Rachel and I can sit with you and tell you that you're not crazy.

Speaker 9 But you've been feeling this for three decades, though, right?

Speaker 11 I thought there was something going on a long time ago.

Speaker 3 And when I confronted him, he just said, no, we're friends.

Speaker 5 And then, of course, again, because of the shift work and

Speaker 3 cell phones, you know, they're able to sneak around.

Speaker 2 When did you find all this out, Sarah?

Speaker 3 When I came home from work,

Speaker 3 more than a year ago, I came home from work and I found him and his girlfriend in our backyard. Wow.

Speaker 9 All right. So here's the part that

Speaker 9 nobody will tell you about finding out you're being cheated on. And by the way, you've been cheated on financially, you've been cheated on romantically.

Speaker 9 Your whole marriage has been based in deception. One of the things that nobody ever talks about

Speaker 9 is that scary, terrifying realization that you don't trust you either

Speaker 9 because part of you knew something wasn't right

Speaker 9 and so what I can tell you

Speaker 9 I know I know but there's that intuition there's that something is off with this person that I pledged my life to

Speaker 9 and over time it's like man I think I'm crazy and he confirms it right yeah you're crazy you don't know and well that's your money that's your grocery like and it just you slowly go along with it and all of a sudden you find yourself three decades removed from that voice inside your chest, right?

Speaker 9 And so, what I would tell you is

Speaker 9 the way I can help right here is for the first time to actually sit down and be honest with you about what you know.

Speaker 9 And that's scary to do because you either have to choose, well, this is my life, and I'm just going to sit here on the pile of rubble that was the marriage I thought I had, or I'm going to be about excavating this thing and and building something new.

Speaker 9 And in this, in your case, by yourself, but there's a reality to that. You get what I'm saying?

Speaker 2 And do you want this marriage to be healed, Sarah? Like if he came to you and said, I want to do the work and I want to repair this, would you want that? Or are you pretty much out?

Speaker 7 I'm out. Yeah.
Yeah.

Speaker 7 Yeah.

Speaker 2 Which

Speaker 9 I'm not going to blame you.

Speaker 2 Yeah.

Speaker 2 So from the financial part of this, Sarah,

Speaker 2 yeah, I would be keeping everything separate.

Speaker 2 And even if you wanted repair, I would still say keep it separate until there's a level of trust and healing within the marriage because the money's the symptom, right? You guys, it's a thing

Speaker 3 because he's not healthy enough to

Speaker 3 do anything.

Speaker 2 Yeah, so is he not working anymore?

Speaker 3 No, he's retired.

Speaker 9 Okay. So, so why now? This happened.

Speaker 9 This all came to light a year ago, confirming what you've known for years. Why now?

Speaker 9 um

Speaker 9 good question

Speaker 5 I guess because I feel stuck

Speaker 9 what does that mean

Speaker 3 do I leave do I stay

Speaker 3 do I walk away from half of everything I've invested in like when I say invested in I mean like

Speaker 3 doing a lot of the work and then walking away from whatever pension he has and

Speaker 3 not being able to, you know, receive any of those benefits after all these decades.

Speaker 9 Are you going to? Or are you sure that he's not leaving them to his mistress of 30 years?

Speaker 3 Well, I saw his will recently and it has not it has not been changed. Okay.

Speaker 3 I do think there's a bank account that she might be

Speaker 3 accessing, but I have no proof that either.

Speaker 7 Okay.

Speaker 9 Maybe for the first time begin to trust yourself.

Speaker 9 Okay.

Speaker 9 And it's worth asking questions.

Speaker 9 And the other question you have to ask yourself is, are you going to be able to sleep at night if you leave him and he dies next month? Are you going to carry that with you?

Speaker 9 No. That's not a reason to stay.
You're like, nope, nope. Like, that's not a reason to stay.

Speaker 3 Because I've dealt with some of this stuff. Yeah.
And I've made decisions already, but it's that last, final piece about staying or leaving.

Speaker 9 Yeah. I think anybody in our position, in Rachel Einstein's position, that would

Speaker 9 tell you, yes, you need to go do this,

Speaker 9 is

Speaker 9 taking a really powerful and important decision away from you. And we're not going to do that.

Speaker 9 But we can call it out and both of us will confirm.

Speaker 2 But I think you know, Sarah.

Speaker 7 Yeah, this is unhealthy.

Speaker 9 This is, you've already made your choice.

Speaker 9 As my boss, Dave Ramsey, always says, when your spirit leaves, let your body leave too.

Speaker 9 That's a good one. But,

Speaker 9 and I think

Speaker 9 this is why I'm hesitant just to say, yeah, you need to run, because it's easy for me to say that, but that comes with very real financial implications, living arrangement implications, health implications.

Speaker 9 It comes at a cost that you're going to have to bear regardless of what you do. And so I can tell you, you're not crazy.

Speaker 9 You've been cheated on multiple times for a long, long time and dragged behind this marriage.

Speaker 9 I want you to reestablish yourself as somebody you can trust. And what I mean by that is, do you trust yourself not to squash that inner voice anymore?

Speaker 9 Do you trust yourself to write things down on a piece of paper and say, here's the reality with which I live in?

Speaker 9 And do you trust yourself to go get the professionals and friends and spiritual advisors next to you in this next season, regardless of what you do?

Speaker 9 If you choose to stay or if you choose to go, it's just a heavy path.

Speaker 2 Yeah, and not doing it alone, to your point.

Speaker 7 That's it.

Speaker 2 Having people around you to help wade through some of these decisions is such a gift.

Speaker 9 So, yeah, I'm heartbroken for you.

Speaker 2 Sarah, we're so sorry. We're so sorry.

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Speaker 2 Up next, we have Sean in Fresno, California. Hi, Sean.
Welcome to the show.

Speaker 14 Good morning. Thank you so much for having me.

Speaker 15 We appreciate it.

Speaker 2 Absolutely. How can we help today?

Speaker 15 All right. So my wife and I spent the last couple years completely exhausting our emergency funds.

Speaker 15 We've paid about $20,000 in federal taxes over the last two years and in unforeseen tax bill, federal tax bills, because my wife's paychecks did not have any federal taxes taken out by the HR department.

Speaker 15 Even after we had talked to them about it, they missed it again

Speaker 15 And we missed it too.

Speaker 6 So okay.

Speaker 2 Yeah, I was going to say, because you would know, I mean, when you get your paycheck to know, this is what I made.

Speaker 7 Exactly.

Speaker 2 But you didn't. Y'all didn't.

Speaker 15 There was like a couple months. Yeah.
There was a couple months that went by where they were taking it out and then it stopped for some reason or it changed.

Speaker 15 Their HR department kind of, I don't know, and it was on us.

Speaker 7 Yeah, yeah, sure.

Speaker 2 That's bizarre. Yeah.

Speaker 7 We also never heard of that happening. That's frustrating.

Speaker 15 It was wild. And yes, absolutely frustrating.
We've also, so we live out in the country, and so that incurs some country costs.

Speaker 15 So, this year has been the year where it hasn't been enjoyable to live out in the country.

Speaker 15 Our solar has gone out, our wells needed fixed, our cars have needed about $8,000 of repairs over the last two years as well.

Speaker 15 So, anyway, we have spent about $40,000 of our emergency fund over the last two years and has ended up where I have a loan of about $7,000 left against my 403B.

Speaker 15 We are also still $100,000 and uh about oh and ninety five thousand dollars worth of debt uh in both cars as well as student loans

Speaker 15 um and so

Speaker 15 we had we had started our marriage off about nine years ago hardcore and ramsey and then we got lazy and so we're trying to get back on track okay um and so i'm very thankful we had an emergency fund and it used you know it served its purpose but we're trying to get back on track um and it just feels like we cannot get back We keep exhausting our emergency fund and we just keep getting shelled.

Speaker 15 So I was just calling. I need some wiser wisdom than I have.

Speaker 2 Yeah. How much do you guys make a year?

Speaker 15 Together, about $185,000.

Speaker 7 Okay.

Speaker 2 Is that before tax?

Speaker 15 That is before tax.

Speaker 7 Yeah. Or before the taxes that weren't paid until later.

Speaker 2 No, okay, I got you. I got you.

Speaker 11 On a monthly basis, we bring in

Speaker 15 about $12,000 post-tax.

Speaker 2 Okay, okay, perfect. And out of the 95,000 of debt, and you said student loans and cars, how much it's break those down for me.
What, how much is the student loans and how much are the cars?

Speaker 15 50 is in cars,

Speaker 15 51 is in cars, and the rest is in student loans.

Speaker 7 Okay.

Speaker 2 The cars, two different cars?

Speaker 16 Two different cars.

Speaker 7 What are the loans on those?

Speaker 14 So one is 36 and the other one is 15.

Speaker 7 Okay

Speaker 15 the

Speaker 15 so we I have a third car. We have a third car.
I have a truck that's completely paid for cash, but I also commute for work. And so getting 10 miles a gallon was killing me.

Speaker 15 I was spending $600, $700 a month in gas.

Speaker 7 How far is your work?

Speaker 15 Well, I actually got an elect, yeah, to go to work.

Speaker 15 So I got an electric car. I took out a loan on that.
So that's the $15,000 on an electric car.

Speaker 15 But but I charge for free at work so my gas money yeah but then you got how much is your car payment

Speaker 15 350 bucks a month okay you just trip it

Speaker 7 I mean yeah

Speaker 2 so

Speaker 2 okay so yeah some decisions I feel like need to be made where you guys are living

Speaker 2 considering how much it just cost you solar the well I mean all of it are all of those pretty sustainable going forward that you foresee or are they still like yeah we're probably gonna have to fix that again?

Speaker 14 I think we're good for now

Speaker 12 for the next few years.

Speaker 15 But

Speaker 16 I mean, those costs or those different things just pop up randomly.

Speaker 2 Sure, which they would for any homeowner, even if you're not in the country.

Speaker 2 I'm just trying to figure out, Sean, you know, there's a little bit of this, like, we just want to be able to do everything we want. We want to live where we want to live.

Speaker 2 And so that means we have to drive so far to work, which means we have to get an electric. Like, there's a reality to life.

Speaker 2 And sometimes you have have to pick and choose to make it make sense if you will and i'm not saying you'll have to like move by any means but i'm saying having these thoughts that you know you guys are kind of used to doing a little bit what you want i mean to a degree i mean there's a little bit of like yeah we're gonna just kind of keep moving so everything you do going forward has to be at a 180 degree difference like what you would normally do i would stop and be like okay is this really the wisest decision right now um or you have to you have to live on on a on a principle of

Speaker 9 let me put it this way. None of this will change unless one of the chief principles of your home is we do not borrow money.

Speaker 9 Because I had a long commute in an old banged up truck that I made for five years. And that putting gas in it was expensive.
But my wife and I had a anchor into concrete commitment.

Speaker 9 We don't borrow money on depreciating assets, especially. I would on a mortgage, but not on a car.
And so that was never even in the cards.

Speaker 9 And we would curse the gas bill every month, but we're not going to go buy another car

Speaker 9 under the guise, like we're just going to, we're not going to rob Peter to pay Paul, right?

Speaker 15 Right. And that's kind of where I'm feeling.
Like, yeah, on, I guess it makes sense.

Speaker 11 Like, I've made it and made sense.

Speaker 15 There you go. I'm saving this money on gas.
Right.

Speaker 7 It's justification is what it is.

Speaker 15 I don't want a car loan. I don't want a car loan.
And like, I have my truck. And I love having a truck because I do use it as a truck.
Sure.

Speaker 15 I don't work on the farm for the farm, but it's it's nice to have it. It's another tool in a tool belt, right? And it's like a convenience thing that I like.

Speaker 7 And I think what my truck, I don't know. Yeah.

Speaker 2 And what John's saying, and I think what you have to get to before we even get to the baby steps of the thousand dollars and you pay off the debt is there has to be a value system conversation in your household, Sean.

Speaker 2 There is.

Speaker 2 There is a principle that we do not, we do not spend more than what we make. If we can't pay cash for this, we can't afford it.
Regardless, it's fixing the well, whatever it is.

Speaker 2 We are not going to borrow money. So what does that mean?

Speaker 2 If that is like a hard line in the sand, what happens is other options come up, harder options, not as fun options, but options that you're able to actually have where when debt is an immediate answer because it just fixes the urgency of the situation.

Speaker 2 Then you wake up, you're like, oh my gosh, look at all the payments we have. And this is how we've gotten here.
So

Speaker 2 what the no debt policy does is it forces you to be creative to look at other options because there are always other options.

Speaker 9 Yeah, they come fix your well. I have a well out in the country and they come fix it and it costs eight grand or whatever.
And you say, hey, I can give you four right now.

Speaker 9 And the next 30-day cycle, I'm going to give you, I'm going to give you the other four when the work is complete.

Speaker 2 And we're not going out to eat. We're doing nothing because we have $4,000 we got to save up this month.
And I may have to work extra to get that bill.

Speaker 7 But we're going to do that.

Speaker 2 But in three weeks, we're going to figure it out.

Speaker 7 But we have water. Right.

Speaker 2 So like, it's that kind of, and it sounds extreme from how you probably making decisions, but it's the way you have to do it. So, yeah.
So if I were you guys, Sean, I would, I would sit down.

Speaker 2 Is your wife pretty on board? Is she feeling the stress and attention too?

Speaker 2 100%. Okay, yeah.

Speaker 2 So, for you guys, we're going to, if you stay on the line, before don't hang up, so when we get done with the call, Christian's going to pick up and we're going to give you every dollar for a year.

Speaker 2 And I want you guys to sit down and do a budget. Do the every dollar budget because what it's going to expose is how much spending is happening without you even realizing it.
This $12,000,

Speaker 2 where it's going.

Speaker 2 And so, what you're going to see, and I want you guys to cut everything, but food, shelter, utilities, transportation, insurance, like the things that you have to have, everything else, target runs, out to eat, I mean, literally subscriptions.

Speaker 2 I'm not kidding. Just say, if we did nothing but what we have to have to survive, how much would be left? And then you guys got to look at that number and say, okay, there's that number per month.

Speaker 2 And I don't know what it is, 6,000, whatever it is. And if we did this for X amount of months, how quickly could we pay this debt off? Now, what if we sold the $36,000 car for $32,000?

Speaker 2 Maybe we had to take out a loan because it's underwater for a little bit. Okay, well, let's make, let's do that math.
That $6,000, play it out, play it out and say, well, we don't want to do that.

Speaker 2 That seems too extreme. Okay, maybe it's $4,000, whatever it is.
You guys have to run out scenarios of your reality.

Speaker 2 But what I would push you to do is to do this in a short amount of time because you guys make great money. And I know you're in California and all the taxes and everything, but

Speaker 2 there's something to be said about doing a really strict plan and you and your wife saying we're doing this for a period of time.

Speaker 2 And it may be a year, it may be two years, and it may be you work an extra, she finds some extra income. But getting out of this debt for you guys, I think, is going to be a massive win.

Speaker 2 But you have to do it so intentionally and so sacrificially. And y'all haven't felt that in a while.
So it's going to be uncomfortable. But that to me is the path forward for you guys.

Speaker 2 So hang on the line. Christian's going to pick up and we're rooting for y'all.
I mean, you can do it. You guys are smart people.
You got this.

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Speaker 2 Welcome back to the Ramsey Show.

Speaker 2 Up next, we have James in Dallas. Hi, James.

Speaker 2 James, are you there? Hi, welcome to the show.

Speaker 19 Hey, thanks for having me.

Speaker 2 Absolutely. How can we help?

Speaker 19 Hey, so my wife and I are on baby step two.

Speaker 19 So we're working on paying down all of our debt other than the mortgage.

Speaker 19 We've been, you know, we're on a plan.

Speaker 19 So we're on a budget. We're Christians.
And, you know, I got to be honest, one of the things that we've really struggled with over the years is

Speaker 19 I'm, I don't know, I guess I'm newer in my faith, maybe three, four years in, and we've never been great tithers.

Speaker 19 But now that, you know, I'm getting, one of the reasons I wanted to get on debt is because I was convicted about, you know, God tells us not to carry debt.

Speaker 19 And so my question is, should, while we're just really trying to attack all these debts, should we be tithing? Or should we just be laser focused on nothing but essentials and paying down the debt?

Speaker 2 Yeah, it's a great question.

Speaker 2 I feel like one that we get a lot because I think people are really motivated to do whatever goal they're in, whether it's getting out of debt or saving the emergency fund.

Speaker 2 But the way we kind of approach money, the way I see money is it's very holistic and it's very much a picture of who we are as people.

Speaker 2 There's something about our character, what we believe, our value system at which then money is then handled, right?

Speaker 2 So people that don't care about debt or whatever, like just want to have an urgent, you know, get whatever they want in the moment, debt's right there, you know, whatever, no worries.

Speaker 2 But if you have a value system at which probably what you are feeling from a spiritual element, even an emotional, psychological element of carrying debt, it's very heavy.

Speaker 2 And you feel that and you're like, yep, that's why God says no, because when you, when you, when you owe someone something, it changes your life, it changes the reason you go to work, it changes so much.

Speaker 2 So you wouldn't be free of that. And so I would put giving in that same light, James.

Speaker 2 From you, we could go the spiritual side or even the non-spiritual side, but for me, it's, you know, the giving side, I don't want it ever to be legalistic because I don't think that was the heart of God.

Speaker 2 I think the heart of God is when we talk, when he talks about how to give, how to sacrifice, when Jesus gives us examples of that all through the New Testament, what that looks like is living life on the selfless side of the spectrum.

Speaker 2 And we live in a world that is so selfish, right? And I think there's something to be said when we use our money as a tool, as a reflection of who we are in our character and our value system.

Speaker 2 There's something holistically

Speaker 2 good about that. And so for me, that's giving.
So yes, is it a commandment? You know, is there scripture around it? Absolutely.

Speaker 2 And as a Christian, like you said, but that can naturally kind of lean in a legalistic sense. And giving is like the one area of money that I'm like, I don't want you to be legalistic.

Speaker 2 So I think you miss the heart of God in that. And I'm definitely not on the prosperity side that if you give, you know, there's going to be a brand new BMW sitting in your driveway.

Speaker 2 You know, I don't think that's true either.

Speaker 2 But there's something about living a selfless life and knowing the ownership of our money is God's and we're just the managers. We believe that as Christians.

Speaker 2 And when you actually physically live that out, it changes who you are. It changes your view about money.
It changes how tightly wound and controlled you are by it. It releases so much.

Speaker 2 And that's what really giving does. Not only helps what you're giving to, obviously, but who we are as people handling money, it's just a release that I think is really, um,

Speaker 2 really impactful to us as people, if that makes sense. So that's a long way to say, yes, I would be tithing and giving regardless of where you are financially.

Speaker 2 And I write in my book, Know Yourself, Know Your Money, about, you know, give a little until you can give a lot, right?

Speaker 2 So for some people, again, we teach 10% at Ramsey, if you do the every dollar budget, literally at the top, the very first category is giving, and it's 10% is set there.

Speaker 2 So that is something that, you know, I stick by. But again, I don't want it in a legalistic sense.

Speaker 19 Yeah, no, that makes sense. It's a it's a heart issue.
And wanting to, you know, that's, that's the difference between the Old Testament and the New Testament is you should give what

Speaker 19 you feel led to

Speaker 19 in some regard.

Speaker 9 Well, and whether you're a Christian or not, I think as a culture, we could

Speaker 9 we could all

Speaker 9 use a reclamation of an understanding that money is a spiritual issue issue and work is a spiritual issue and your relationship with your wife is a spiritual issue.

Speaker 9 If you're a person of, if you're a Christian, then

Speaker 9 it goes with that lens on, right? But these things are all bigger than us. And I think culturally we've reduced it into what can I get for me?

Speaker 9 And I, like my personal belief is that was us sitting at the top of the mountain and that was the slide off the hill, right?

Speaker 9 And there's something powerful about saying, reminding yourself every month or every two weeks when you get paid, this is not my money. And more importantly, I am not the number on this paycheck.

Speaker 9 I'm a person who, fill in the blank. I'm a person who gives.
I'm a person who is generous.

Speaker 9 I'm the person who sees that exhausted waitress and I over tip her or I over tip him because that's who I am is I keep my eyes open for others, right? It makes it a,

Speaker 9 I keep using the word spiritual, not to mean Christian, but it is a, it's an ethos with which you carry yourself in the world. And so, again, like Rachel said,

Speaker 9 if y'all can't, if you don't have groceries, right, there's something about being sacrificial that might not be this percentage, but there is something powerful about starting every check with this part is for others.

Speaker 9 You get what I'm saying?

Speaker 18 Yeah, totally.

Speaker 9 And I'm with Rachel. I will transform how you move throughout the world.

Speaker 2 Yeah, and I think, too, the money journey that everyone's on, which is more of a marathon than a sprint.

Speaker 2 And this is all not, you you know, you don't just, you know, do things with money for two years and then you're fine the rest of your life. It is an ongoing daily decision of what you choose to do.

Speaker 2 And as you earn more and as you guys get out of debt, James, and as you guys invest and you really do start to build wealth, because that's mathematically what's going to start to happen,

Speaker 2 we always say, Dave always says it, but it's so true. You know, money is a magnifying glass.
It makes you more of what you already are.

Speaker 2 And if you can create habits now when you don't feel like you guys have a lot or you have this big goal that is so noble and so great, but you still are doing things that are changing who you are.

Speaker 2 What is being formed today is the James that's going to be carried through the wealth building. And there's a challenge there.

Speaker 2 I mean, I think there's something really beautiful to say that, that of like, man, you know, we, we could get out of debt, you know, I mean, honestly, what, two or three months faster, maybe if we didn't get, you know, you could, you could, it's, but at the end of the day, the change that happens within you guys as you are giving and you're sacrificing is worth maybe that two to three months of being in debt longer because it's changing who you are that's going to carry you through this entire journey of money.

Speaker 9 James, can I give you an exercise I would love you to do with your wife?

Speaker 7 Sure.

Speaker 9 I want y'all to go away this weekend and y'all are in babysitter two, so don't go spend a jillion dollars.

Speaker 9 But after Thanksgiving, if y'all have a chance to get away with just two of you, maybe it's an hour, maybe it's three hours or whatever.

Speaker 9 Go for a walk, go for a hike, sit in front of the fire, whatever.

Speaker 9 Come up with five to ten we are statements.

Speaker 9 So let's pretend your last name is Smith. The Smiths are people who.

Speaker 9 And let those values frame your action steps, not the other way around. Because so many of us live, when I get X, Y, or Z, then I'll become.
And what you find is that's not how the world works.

Speaker 9 But the Smiths are people who are generous, period. Well, that's going to frame everything.
The Smiths are people who value our relationship with God. That's going to frame it.

Speaker 9 The Smiths are people who always invite people over to their house. When you have millions of dollars in the bank, that just means your table will be way bigger.

Speaker 9 You get what I'm saying?

Speaker 19 That makes a lot of sense.

Speaker 9 But if you try to go through life plan first and identity later, that's a recipe for this year. I'm going to lose 40 pounds and whatever.
You're never going to stick to that.

Speaker 9 If you wake up January 1 of 2026 and say, this year, I'm going to be a person who... is a good steward of his body.

Speaker 9 Well, that's going to frame how you sleep, how you take days off, how hard you exercise, how you exercise when you're tired, because I'm a guy who takes care of his body.

Speaker 2 What was the book about habits? It was James Clear.

Speaker 9 James Clear.

Speaker 2 That's right. I was going to say there's something about that identity that he talked about.
Yes.

Speaker 9 Yeah, most people try to go into life change with habits first. I'm going to wake up every day, 45 minutes, and always you run out of gas on that.

Speaker 9 But if you start with, I'm a person who, or we are a family who,

Speaker 9 then you have people over when you're tired. You have, you give money when you don't feel like you've got enough that month.

Speaker 9 And you're like, you know what, we can do without ice cream or we can do without tipping or we can do without it, just changes who you are.

Speaker 9 So get together and come up with those identity statements and then reverse engineer the action steps that are going to back up your new identity.

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Speaker 2 All right, let's go to Oren in Maryland. Hey, welcome to the show.

Speaker 10 Thank you.

Speaker 2 Absolutely. How can we help today?

Speaker 21 So I am basically a college student. I am currently going to community college.

Speaker 21 I did not go with the four-year because it was just too much.

Speaker 21 So right now, my situation, I'm about halfway done. I definitely did not apply myself to scholarships like I should have.

Speaker 21 And I took a took a semester break just to work and just to kind of, you know, absorb and try to reach out for resources. So I'll be going to school for an extra year.

Speaker 21 But I did find a lot of resources, a lot of scholarships. I talked to a lot of people.

Speaker 21 I'm currently about $12,000 in debt. And then obviously, if I were to continue, I have about 27 more credits.
We're talking about $200 a credit.

Speaker 21 So my question for you is, Is that should I pay cash?

Speaker 11 Because I'm currently working part-time.

Speaker 21 Should I pay cash? I have the money to pay for a semester now. Should I pay cash for the semester and don't worry about it?

Speaker 21 Or should I kind of, I know you guys hate this term, but live a little.

Speaker 7 We don't hate that term.

Speaker 7 I know, I know.

Speaker 9 Have you met Rachel Cruz?

Speaker 7 She lives a lot.

Speaker 2 To live in the right order financially, though. So, that's the only caveat.

Speaker 2 So, I mean, yeah, if you have the cash to pay for the semester, 100%, that's what I would do.

Speaker 2 You know, and if you didn't, then I would tell you to pause like you have in the past and start to just work your way through. It'll take you longer, but at least you're doing it, cash flowing it.

Speaker 7 Okay.

Speaker 2 So, no, I would be

Speaker 2 no, yeah, I would definitely be putting that money. And I think you have a lot of life to live and you're going to live better.
Yeah.

Speaker 2 And even more wonderfully, you know once you like have a job and have an income and no debt and you're like oh great I get to go on like really awesome stuff now again it doesn't mean you do nothing you can still enjoy life and have a lot of

Speaker 9 living it up is or living a little is

Speaker 21 I mean like my brother always say like live simple I mean he like you know we're all into kayaking we love kayaking I live in the country we love kayaking on the river we all own kayaks you know so we you know in the you know in the summertime we all love to go kayaking I'm huge huge into bowling.

Speaker 21 I love bowling. I already have all my equipment.
So like going out, doing stuff like that, maybe going out to the beach during like a random weekend, two-day trip.

Speaker 17 Yeah.

Speaker 21 That's kind of like what I mean by like live a little.

Speaker 7 How old are you?

Speaker 11 20 years old.

Speaker 9 Okay, all the things you just said are either quasi-free or especially in your situation, you've already bought all your gear is free. That's number one.
Yeah.

Speaker 9 Okay, so you can always just go run out into the water or you can take your kayak and go on the water or you can go throw the big heavy ball at the pins whenever you want, minus lane fees.

Speaker 9 Okay, so that's already solved.

Speaker 9 The other thing is, it sounds like you're not fighting that reality, you're fighting an ethos.

Speaker 9 Okay, you're fighting this idea that other people have it better than you do.

Speaker 21 I don't feel jealous in that way, but I definitely like

Speaker 9 it's not the actual things that are happening, it's this older brother who's like, bro, you need to be, and you started this call by apologizing twice.

Speaker 11 Okay.

Speaker 9 With kind of like your head down as though you've already lost something. And dude, I'm telling you, you're not even at the starting line of the race yet, which is awesome.

Speaker 7 Yeah.

Speaker 9 If you will invest in one person,

Speaker 9 and that's you

Speaker 9 for the next five to ten years,

Speaker 9 you will have no idea what quote unquote living a little looks like, like to Rachel's point.

Speaker 11 Okay.

Speaker 9 If you pay cash and get out of school and go put your nose to, like, I,

Speaker 9 you should have more than a part-time job right now, is what I'm saying.

Speaker 7 You should have a full-time job.

Speaker 9 College. I know, dude, but I had a full-time job and two kids, and I got a PhD at night and on weekends.
You can do it.

Speaker 21 Okay, so the counselor's telling me at college, you should only work a certain amount of hours a week. That's kind of BS in a sense.

Speaker 9 I'm not going to, I'm not going to put that onto the counselor. I'm telling you, John, blame the counselor.

Speaker 2 Okay, yes.

Speaker 9 It's nonsense. It's nonsense.
Okay, so here's the deal. You're in community college, work full-time, get another part-time job, and get done with your school.

Speaker 9 And there's always Saturday mornings, Sunday evenings, you can go knock out the stuff.

Speaker 9 You're right. Now, what is your brother doing professionally?

Speaker 21 Actually, I might have.

Speaker 7 No, you said he lives simple.

Speaker 14 Yeah, he does.

Speaker 2 Yeah, he's chill.

Speaker 21 He followed your guys' program. He actually introduced me to the Dave Ramsey program.

Speaker 21 He has everything paid off except for his house. And what do I mean by what I was telling you earlier? So he's into kayaking.
He already bought a kayak previously.

Speaker 21 He loves going hiking. So he already has all of his hiking gear.
That's the stuff he has the most fun by spending the less.

Speaker 7 Okay, gotcha. So he's like a good model in that way.

Speaker 9 Okay, so he's a good model in that way. My good.

Speaker 23 You're good.

Speaker 7 You're good.

Speaker 9 How much older is he than you?

Speaker 21 27. So he's seven years.

Speaker 9 Okay, so it's very common that people are graduating high school, graduating college, and they want to move into the house the same size as their parents' house that they just moved out of. Yeah.

Speaker 9 They want to drive the car that their mom and dad drove them around to school in.

Speaker 9 And that's unrealistic expectations. So your brother has a seven-year head start on you where he lived very frugally,

Speaker 9 found love and going out in nature, very inexpensive activities on the whole. Now, I'm in the middle of hunting season and I figured out a way to make that very obnoxiously expensive, right?

Speaker 9 But he's doing it the right way. And he's just got almost a decade head start on you.

Speaker 10 Yeah.

Speaker 9 So put your head down, work really hard.

Speaker 2 And I bet he would be a great one to be able to relate to you, though, to say, yeah, you're twin. You don't need that stuff.
I mean, I bet, like, you know, his

Speaker 2 story.

Speaker 9 I've been kayaking with people who have fancy kayaks, fancy stuff, and I've got the rented one that's $15 and it's

Speaker 9 uncomfortable. It's annoying.
I'm not sure if he has a kayak.

Speaker 7 You know, it's not Rachel.

Speaker 21 Yeah, exactly.

Speaker 9 Right. It's great.
But, but, but listen, if you will, yeah.

Speaker 9 Write a letter to 50-year-old you.

Speaker 10 Okay.

Speaker 9 It's a letter of gratitude for here's the things I'm going to do for the next six to seven years with my head down, working my butt off

Speaker 9 so that 50-year-old you has the life that you want to live.

Speaker 9 50 may be too long. 40-year-old you, 35-year-old you.

Speaker 9 But, dude, I want you to put some money in the bank. Don't take debt off the table.
I'm a guy who never borrows money, period. Establish that.

Speaker 21 I drive a 1990 Dodge project.

Speaker 15 Okay, so there you go.

Speaker 2 Is the 12,000 of debt student loans? Is that what that is?

Speaker 7 Yeah. Okay.

Speaker 21 Yeah. So I've, that was, so when my first half of college, I signed up for FASFA, which is a student loan.
Yeah. Yeah.
And they were like, here's money.

Speaker 21 Basically, they'll basically say, hey, we'll give you 500 bucks for the semester for books. We'll give you $500 here and there.
You know, we'll give you all this money.

Speaker 21 But the catch is you got to pay like 8% interest at once you graduate.

Speaker 9 The day you graduate, they start charging you.

Speaker 7 I know.

Speaker 2 It's terrible.

Speaker 21 I can get out of it, but I would pay everything cash. And that's, I really want to because I don't want to be out of it.

Speaker 2 So yeah, so I think it's that. So I think you have a couple of goals tactically is I want you to do a written budget.
I want you to pretend that you do have two jobs. Like what John said.

Speaker 2 What if you had the income you have coming in and an extra job? How much money will be there?

Speaker 2 How much money do you need to save per month to make sure you cash flow the next, starting in August, right? Because you have enough money to cash flow the spring semester coming up.

Speaker 2 So how much do you need to save between now and August to make sure you cash flow the fall semester semester or summer classes whenever you're gonna do it and then from there you're gonna be able to see okay perfect.

Speaker 2 That's how much I need to save that's priority. How much is food? How much is gas? How much is my rent?

Speaker 2 Like go ahead and list out all your expenses and then get to the bottom and say okay how much is left and and to John's point everything you just talked about whether it's bowling or kayaking It's not gonna cost a ton but if you had I don't know I'm just gonna guess an extra hundred bucks a month or something to be able to enjoy to be able to go do some of these things Then that's gonna feel great So So, I feel like there's a part of me that says you can probably do both.

Speaker 2 I don't think it has to be this extreme case of all or nothing, but you have to make sure it's at least in priority.

Speaker 2 You want to make sure that the school is taken care of because I don't want you going deeper than this 12,000.

Speaker 2 And then, when you graduate, yes, those bills start coming, and that's when you're going to start attacking those. But I would not worry about the past student loans until you're out of school.

Speaker 2 My number one focus would be to get through the rest of the school without taking out any more loans.

Speaker 2 And then anything extra, you can have fun with, but making sure that that is covered first and foremost.

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Speaker 2 Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I'm Rachel Cruz with Dr.
John Deloney and we are answering your questions. All right, we have Mike in Ann Arbor.
Hi, Mike.

Speaker 2 Welcome to the show.

Speaker 11 Hello. Thanks for taking my call.

Speaker 7 Absolutely. How can we help today?

Speaker 23 Yes, I've got, I think, a rather unique situation. Okay.
My sister, so I'm one of three children. I'm the middle child.
My older sister is going through divorce, which is a terrible situation.

Speaker 23 She's got three kids. Her eldest, I think, is about three years away from starting college.

Speaker 2 Okay.

Speaker 23 And previously, like my sister, all three of her kids were attending private schools,

Speaker 23 her and her husband driving luxury vehicles, fancy vacations, living extremely well. And no judgment there, that's fantastic.
I'm happy for them.

Speaker 23 But appears from an outsider that they had a very high burn rate.

Speaker 23 Recently, we've discovered, as there's kind of the discovery process going through figuring out how the divorce is going to play out, that they have under $50,000 in savings and that includes retirement accounts.

Speaker 7 Oh, wow.

Speaker 2 Okay.

Speaker 23 So my sister is expecting to buy her husband out of their current home and her dental practice, and she needs $800,000 to do that.

Speaker 4 She doesn't have $800,000.

Speaker 9 How is she expecting to do this?

Speaker 8 Great question. So

Speaker 23 she reached out to me, and it turns out she had reached out initially to my parents, and they had agreed to provide her with $400,000.

Speaker 2 Oh, my gosh.

Speaker 7 Do they have that money?

Speaker 23 They do in their retirement. They're retired, but

Speaker 23 it's their nest egg.

Speaker 9 Are they multi-multi-million?

Speaker 2 Yeah, how much money do they have? Your parents?

Speaker 23 It's a great question. I don't know the number, but.

Speaker 2 Okay. Did it feel like that's a significant part of their retirement, like a fourth or a third? Or is it like, oh, no, that's...

Speaker 23 $400,000 they wouldn't miss.

Speaker 7 Okay. Okay.
They'd be all right.

Speaker 9 Dang, Gina.

Speaker 7 It's great. I would.

Speaker 9 I'd miss it a lot.

Speaker 7 I would miss it. A lot of misses.

Speaker 23 Definitely. And so my sister then reached out to me and asked if my husband and I had an extra $400,000 she could borrow.

Speaker 2 And

Speaker 23 we're pretty good with money.

Speaker 23 So we wouldn't have $400,000 sitting

Speaker 23 and getting destroyed

Speaker 23 by inflation. So, I mean, I told her that, you know, without selling one of our properties,

Speaker 23 we wouldn't be able to get her to $400,000, but we'd still be willing to help. And then she called me back and told me, don't worry about it.
She should make other arrangements.

Speaker 23 So I spoke with my parents and turns out they're the other arrangements oh no they're going to give her the full 800 full 800 so they claim that she's overleveraged on debt and she can't get a loan from a bank she's got a mortgage and so we're going to we're going to let her go almost a million dollars in debt to us awesome great plan well i that's i don't even know is it going to be a loan or is it going to be a gift

Speaker 23 oh okay okay okay but you know my parents have this parental guilt they feel that she's a victim of this situation She trusted her husband to manage finances.

Speaker 23 This is where I disagree a bit on the point.

Speaker 7 We're with you, Mike. Yeah, I'm with you.
Yeah, we're with you.

Speaker 23 It's trust but verify at this point.

Speaker 7 You're an adult. Yep.

Speaker 23 And then they also want assurances that in the event that she were to get back together with her student-to-be ex-husband, you know, they would want all of this money back immediately.

Speaker 7 That's right. All the strings attached.
All the strings.

Speaker 9 Don't, don't, don't, don't. Yeah, all this is a horrible thing.

Speaker 2 So what can we do to help, Mike?

Speaker 23 I totally totally understand. So from my perspective, and first of all, I want to know if I'm crazy, but my perspective is my parents have worked hard and lived frugally their whole lives.

Speaker 23 They've provided us with fantastic childhoods.

Speaker 3 They paid for our college.

Speaker 23 And I want them to enjoy their retirement and spend their money on what brings them joy. Well,

Speaker 2 but you can't control that money.

Speaker 2 Yeah, that's what they're choosing to do. Are they asking your opinion at all?

Speaker 23 I gave it to them because I also happen to be the executor of their will.

Speaker 9 Nice.

Speaker 2 Okay, that's fair.

Speaker 23 And we have similar financial behaviors. I mean, we're in similar situations, finally.

Speaker 7 All right, but

Speaker 9 here's the brass tacks.

Speaker 9 Let's say 100%, and Rachel and I take these calls, so it does happen, that your sister was lied to, manipulated, and just got hit by a steamroller with this divorce, the financial position, she had no idea.

Speaker 9 She thought everything was different, and bam. Okay.

Speaker 9 There is that mess. And in my world, we say not by her hand, but in her lap.
She didn't cause this, and boom, here it is.

Speaker 9 That doesn't give license to avoid reality moving forward.

Speaker 9 And what does that mean? That means she can't afford the house she lives in. She can't afford to buy a dental practice as much as she wants to own one.

Speaker 9 It's a

Speaker 9 because I got screwed, I'm now owed X, Y, or Z. And that's how our country is in almost $40 trillion worth of debt.

Speaker 9 That's how student loan debt is almost $2 trillion.

Speaker 2 Credit card debt said it all the time.

Speaker 9 I didn't get this, so I deserve to go to the college I want to. I deserve to have this.
I deserve to have this program or that. And

Speaker 9 her world blew up.

Speaker 2 And it sounds like her world before it blew up, she never was told no either. Right? She never has had to rationally.

Speaker 7 Face reality. Yeah.

Speaker 2 Of, oh, there's not enough money here. My kids can't go to the school I want them to go to.

Speaker 2 There's not enough money to buy a car that I really want to buy. So I'm going to choose a different one.

Speaker 2 You know, it sounds like her conditioning for years and years and years has been, I kind of get what I want and we're going to use debt for it because that's exactly what the savings show.

Speaker 2 They have no money saved. They've put nothing away.
They've spent everything or more. And so for her to want these things to me is pretty obvious.

Speaker 2 I understand why she does because she doesn't have another way of thinking.

Speaker 9 Well, and we all want our kids to go to the best schools on the planet. We all want fancy cars, big houses.
We all want debt.

Speaker 2 Yeah, yeah, yeah. But and then your parents, to a degree, enabling that by continuing to just, you know, fund a little bit of her not facing reality.
It's what you're doing.

Speaker 7 Not a little bit of a million dollars. Not a million dollars worth of it.
It's true.

Speaker 9 Here's the way to have this conversation with your dad. It's not about money.

Speaker 9 It's a, because he's going to say, I have it. It's my money.
I can do what I want. And he's right on all counts.
And he can, yeah. He is guaranteeing

Speaker 9 by his participation in this, in your sister's pain, not just sitting with her in the pain and saying, this is awful. He's participating in guaranteeing that

Speaker 9 there will be a rift in their relationship forever. And after him and your mom pass, that rift will get passed to you guys,

Speaker 9 his other kids.

Speaker 9 Guaranteed. Because when he gives her $800,000 and she shows up in a new car, his first instinct is going to be, why did she pay me back? Or where'd she get that money to buy that car?

Speaker 2 Yeah, that was supposed to go to the house.

Speaker 9 That was supposed to go to this. And what about that?

Speaker 9 And then when this guy comes back a year later, which happens a lot, and realizes his life's awful and wants her back and sees her thriving practice, and she's going to be like, oh, well, it is the father of our kids.

Speaker 9 And then

Speaker 9 she's just going to blow things up.

Speaker 2 Yeah, the marriage is, if that's the case, and the marriage is redeemed in a healthy way. That's an applause.

Speaker 9 Yeah, but there's an $800,000 price tag.

Speaker 2 Now there's a million dollars. You know what I mean? That gets dragged in the middle of that into a beautiful redemption story.
So I'm like, all the way around,

Speaker 2 it's not wise. But Mike, what sucks about your position is you have no control.
You really don't. Like, he, he's going to, they're going to do what they're going to do.

Speaker 2 And you can say everything you want to say, say it in the way you think he's going to hear all the things. And at the end of the day, they're going to choose.

Speaker 2 And then you're going to have to, you're going to have to deal with yourself in that decision, whether it is pain and sadness and feeling like that's unfair to you and your other sibling.

Speaker 2 I mean, whatever it is, that's going to be yours to carry from then on out.

Speaker 9 Is it normal for her to call you and ask for money?

Speaker 9 I'm sorry.

Speaker 9 Is it like her calling you and asking for money, that just after asking mom and dad and then asking you and your wife, that feels like a level of desperation of someone who's scared that their life is unraveling.

Speaker 9 And sometimes the greatest gift is to let it all the way unravel and sit with somebody in the ash.

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Speaker 2 Well, it's that time of year. In a few weeks, we're going to be doing our special giving edition of The Ramsey Show.

Speaker 2 It's one of our favorite shows that we do all year, and we want to hear stories from you about how you have given generously this season.

Speaker 2 So, maybe you've tipped a waiter or waitress like a ton, and you have an awesome story around that. Maybe you've bought someone Thanksgiving dinner.

Speaker 2 Maybe you bought someone a car, whatever it looks like, but outrageous generosity. We want to hear from you.
Or maybe you were on the receiving end of a very generous gift.

Speaker 2 And then those are always obviously as wonderful. So we want to hear from you.
Again, whether you have been the giver or have been given to, we want to hear.

Speaker 2 So go to ramseysolutions.com slash ask and put giving in the subject line. And we do this,

Speaker 2 gosh, we do it once a year, always around Christmas time. It's one of the most popular shows that we do.
It always gets so many listens because it's just,

Speaker 2 it's kind of like faith in humanity. You see the good that's being done.
And can I tell you,

Speaker 9 now that you've just read this

Speaker 9 like promo, like we're doing this. Yeah.
It reminds me, like back in 2007 or 2008, I was a part of this, it was like a men's group that met on Monday mornings. And there was a guy there.

Speaker 9 He was a general counsel. His name was Slade.
And he was an attorney. He was one of the greatest men I've ever met.

Speaker 9 Every Monday morning, he would go around the table and ask us what's one nice thing you all did for your wives last week oh the number of times

Speaker 9 I'm a new married guy Sunday night I did a nice thing so that I could say something Monday morning okay that sounded cheap and it sounded like not in the spirit of to this day Sunday nights I still look around is there can I go fill my wife's up car up with gas can I help with the laundry before school whatever and so if you haven't done anything outrageously generous go do it just so you can call in.

Speaker 7 You know what? That's a great thing.

Speaker 9 But it's about, but it's about the practice. And you will feel how good it feels, and you'll be more likely to do it again.

Speaker 9 So, if you haven't done something outrageously generous, let this be the call to go do a thing and then write in and tell us.

Speaker 9 And then, while you're doing that thing, keep your eyes open, bring your kids with you, let them be involved with it, and it will transform obviously somebody else's life, but it will transform your life and hopefully inspire you to give more throughout the year.

Speaker 2 I love it. So good.
Yep. So, that show is coming up December 18th.
So, again, start sending in your stories because we do want to celebrate living like no one else.

Speaker 2 The later you get to live and give like no one else. All right, let's go to Houston and we have CJ on the line.
Hi, CJ.

Speaker 26 How are you doing, Ms. Rachel?

Speaker 2 We are doing great. You got another Houston, H-Tone.
Houston,

Speaker 2 what were you? A resident of Houston, I guess? I don't know, next to me.

Speaker 9 Oh, gosh. You're not a resident of Houston.

Speaker 7 You're from there.

Speaker 9 You know what I'm saying, CJ? You get it.

Speaker 2 From Houston. Yeah.

Speaker 7 All right, CJ. How can we help?

Speaker 10 Hi, I'm currently 60K in debt.

Speaker 26 I'm currently 22 years old.

Speaker 26 I'm a college student, and I work full-time as well. 30K, about 25K of it is a co-sign.
This was before I started listening to the show. I cosigned a car for my mom that she had totaled.

Speaker 26 She totaled out her previous car, and she wasn't able to get a car. So I'm the only one of her children that has a great credit score and very little financially stable and AI,

Speaker 26 but I feel like I'm drowning.

Speaker 2 Has she stopped paying on that $25,000? Are you picking that up?

Speaker 26 No, no, no. She's paying on that.
I'm making sure

Speaker 26 she's paying on it every month.

Speaker 13 I'm currently putting on it.

Speaker 2 But you're on the hook for it is what you're saying still, which, yep.

Speaker 7 Yeah. I get that.

Speaker 26 It makes me uncomfortable. Yeah, yeah, yeah.
It makes me uncomfortable. Totally.

Speaker 2 What's the rest of the 35,000? Is it student loans?

Speaker 26 I have 10K 10K in student loans.

Speaker 7 Okay.

Speaker 26 And I'm going to cash flow the rest of my time. I'm currently in community college.
I have like a semester left.

Speaker 7 Good for you.

Speaker 26 I'm going to be going to either UTSA or

Speaker 26 another college for cybersecurity.

Speaker 7 Okay, good for you.

Speaker 2 And then what's the other 25,000?

Speaker 26 20 of it is my car.

Speaker 7 And then

Speaker 26 the other,

Speaker 26 I might might be miss wrong, but I have like 7km credit card debt

Speaker 26 currently paying on.

Speaker 7 That's my baby step one.

Speaker 9 CJ, what kind of car are you driving around?

Speaker 26 I have a 2021 Honda Court.

Speaker 9 Not for

Speaker 13 long.

Speaker 7 If you

Speaker 2 sold it, private party.

Speaker 7 Great car.

Speaker 7 I know it is. But listen, I rolled, I drove all over Houston.

Speaker 9 I'm a 6'2 ⁇ , 200-pound guy. I drove all over Houston in an 88 Trousselle EZ hatchback and moved up to a Corolla.
Was it great? No.

Speaker 26 I'm 6'7. I'm 6'7.

Speaker 7 Like,

Speaker 26 the Honda is the only car.

Speaker 7 You can't get in.

Speaker 26 You can't get in.

Speaker 7 You're a hatchback.

Speaker 9 Man.

Speaker 26 I'm making it big.

Speaker 2 Okay, CJ, though,

Speaker 2 we can find a bigger car for less than 20.

Speaker 7 We do have to.

Speaker 2 Oh, no.

Speaker 2 You can't.

Speaker 9 I'm not going to be a kid.

Speaker 2 That's what my kids do. 6'7 ⁇ .

Speaker 2 6'7.

Speaker 26 Push it all the way back. The last setting in the car.

Speaker 9 You gotta take the back seat out of that thing. All right.
Good for you.

Speaker 2 Okay. How much money are you making, CJ?

Speaker 26 I'm making $2,155, and we're getting a raise in about a month.

Speaker 2 How much are you bringing home a month? What's hitting your bank account each month?

Speaker 26 About $3,500 on the low end, but I have opportunities to work. Right now it's slow, but next year, when the year starts, we're going to have plenty of overtime.

Speaker 7 Great. Okay, awesome.

Speaker 26 I only have $5,000 in my savings.

Speaker 7 And I know we're supposed to have a thousand but me and my family have went through a lot so yeah you nerve it yeah it freaks you out a little bit yeah

Speaker 26 more than a little bit i have a crazy i currently am talking to a therapist i have anxiety and depression so the anxiety comes from

Speaker 9 stability yeah when i don't feel stable yeah it just my world rocks yeah trust me dude if you will make this a madhouse priority to get this dead out of your life i've been right where you are, dude.

Speaker 7 Right there.

Speaker 26 Oh, trust me, I'm on the way to it.

Speaker 7 And listen, just

Speaker 26 get rid of that $4,000.

Speaker 7 I know. I know.

Speaker 9 I got you. But listen, on the other side of paying all this debt off, you're going to sleep like you have never slept in your life.
I promise, because I've walked those same shoes.

Speaker 26 I know, but I just can't get rid of the safety blanket of that 4,000.

Speaker 7 No, no, no.

Speaker 9 I'm with you on that.

Speaker 9 You do what you're doing.

Speaker 9 I'm just saying the whole get out of debt thing.

Speaker 2 The whole idea. Okay.

Speaker 2 It's going to have, you're going to have peace in the way that you probably have.

Speaker 9 You working overtime, you going to school, you're doing all this stuff. It is worth it is what I'm telling you.

Speaker 2 So what I would do, CJ, if I were you, because you're right on that cusp of that $20,000 car, okay, from a mathematical standpoint, regardless of height and all the things.

Speaker 2 Just you, I mean, unless you're working overtime, can you afford this car?

Speaker 2 Because our rule of thumb is if you can't pay the car off in 12 to 18 months and or it's more than 50% of your annual take-home pay, you have too much car. And you're right there, CJ.

Speaker 2 So, I mean, I just want you to just look, just look, run some numbers, and just say, okay, what if I did sell it private party? Because it probably is holding its value pretty well.

Speaker 7 It's a great call.

Speaker 2 So, you may be able to actually, I mean, depending on when you bought and how all of it's, you may be one of those rare cases that you actually may, you know, be able to sell it for a little bit more than what you owe, or you may be a little underwater.

Speaker 2 And then I want you to look around, CJ.

Speaker 26 A little underwater. Okay.
I did a little bit of numbers. It's worth 18.

Speaker 2 Okay, perfect.

Speaker 9 Is that private sale or is that trade-in?

Speaker 26 That's private sale.

Speaker 7 Okay, so CJ.

Speaker 26 Trade-in was about the same thing, but I think I could get a little bit more for it.

Speaker 2 Yeah, okay. So again, I want you to just run the numbers that if you...
If you were underwater, 2,000, I want you to look around and just do some research on a $5,000 car. Okay, just pretend.

Speaker 2 And maybe you find another older Hondo cord and you're like, okay, great. I can get a crappier car.

Speaker 2 And that means you have $7,000 you owe versus 20, which is going to fast forward this whole debt payoff so much faster so that you don't have to work overtime much longer, right?

Speaker 2 So again, it's a give and take situation. That car is right on the cusp of being able to keep it and paying it off.
It's just going to be a longer get out of debt process.

Speaker 2 So what I want you to do, so priority number one is I want you to stay current on all of your payments, okay? Stay current on everything.

Speaker 2 The second priority since you're in school is I want you to make sure you're cash flowing that last semester. So save up enough to make sure that that is covered.
Okay.

Speaker 2 Once that's done.

Speaker 26 I'm planning on cash flowing with the rest of the school.

Speaker 7 Yes, that's great. Yep.

Speaker 2 So is making sure that that is true because I don't want you to go into any more debt. And then I want you to start working off paying out that $7,000 in credit card debt.

Speaker 2 So if you have multiple cards, start with the smallest, even if it's an $800 bill on one of the cards, whatever it is, cut everything up and start working your way through the debt snowball, which is paying the smallest debt off first.

Speaker 2 It's going to be some of the credit cards. And then your student loans won't hit till after you graduate.
And then that car is going to be your second big one.

Speaker 2 So that's going to decide, hey, do I want to keep it? Is it worth working all this extra? And you'll get to decide that. But CJ, we're so proud of you.

Speaker 2 You're changing completely your family tree and we are here for you.

Speaker 1 I've been doing this show for over 30 years and some of the saddest calls I have taken are from situations that are completely preventable.

Speaker 2 Yeah, and what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible, are people that call in and their spouse has passed away suddenly and they don't have life insurance.

Speaker 2 We actually took a question of a lady and she had three kids pregnant and husband didn't have life insurance.

Speaker 2 And I'm like, I can't even imagine. Or even if it was opposite, right? If a mom passed away, there's a dad with kids and trying to figure out how am I going to afford childcare?

Speaker 2 How do I, how do I outsource some stuff that maybe she was doing? Like, and it just takes the grief and the sadness of something like a sudden death to a whole new level.

Speaker 2 Like, when you have to think through how am I going to pay my bills

Speaker 2 next week, yeah, in the middle of all that grief, like, it's just, it is, it's terrible.

Speaker 2 And so, life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive.

Speaker 2 Xander is the place that Winston and I actually get all of our life insurance. And we keep re-upping it because I'm like, I just want it there.

Speaker 2 Like there's something about that safety of knowing that you have money if something suddenly happens.

Speaker 1 And it doesn't cost much because Xander shops among a gazillion different companies. It doesn't cost much.
You just have to admit that someday you're not going to be here.

Speaker 1 You got to say it out loud and you got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of stinking pizza.

Speaker 2 There really is. So that is one thing to do to say I love you to your family.

Speaker 1 So we've used Xander for all of our family's needs for insurance for many years, including, of course, term life insurance. To get a free quote, go to 800-356-4282.

Speaker 1 That's 800-356-4282 or go to zander.com.

Speaker 2 Up next, we have Lee in Omaha, Nebraska. Hi, Lee.
Welcome to the show.

Speaker 25 Hello, thanks for taking my call. Absolutely.

Speaker 2 How can we help?

Speaker 25 I'm 65, retired, and I have about 1.8 million in a traditional Roth IRA, and I have about 400,000 in a

Speaker 10 Roth.

Speaker 25 As I look ahead to the required minimum disbursements, yep, this will be

Speaker 25 kind of

Speaker 7 a lot. Yeah, but making you feel great.
Yeah.

Speaker 10 So

Speaker 25 the last couple of years, I've moved $100,000 each year from the traditional to the Roth. Good.
Would I be better off to keep doing that that way?

Speaker 25 Or should I just take the pain, say maybe move a million and be done with the pain or just piddle along at $100,000?

Speaker 2 What other money do you have?

Speaker 9 Do you have the cash to do that?

Speaker 25 to pay the taxes. To pay the taxes on it, it would have to come out of the out of the account behind it, yeah.

Speaker 2 I don't have okay, so you'd be paying

Speaker 25 approximately $100,000 in the bank, you know, but yeah, right,

Speaker 2 yeah.

Speaker 2 Um,

Speaker 2 if you don't have the cash to be paying the taxes, I would not take money out of the account just to pay the taxes. Um,

Speaker 2 if you can do it, but you, yeah, do you have any income coming in besides your investments?

Speaker 25 Yeah, I just

Speaker 25 Social Security, Yeah.

Speaker 2 How much is that a month?

Speaker 25 Social Security is about $2,300.

Speaker 7 Okay.

Speaker 2 And are you living off of money in the Roth or the traditional?

Speaker 25 I am. I'm between between Social Security and

Speaker 25 it's about $7,000 a month. I'm with

Speaker 25 total I'm living on a month. Okay.

Speaker 7 Okay.

Speaker 2 Yeah, I mean, kind of our rule of thumb is if you don't have the cash to pay the taxes,

Speaker 2 And if this is all you have, if there was a lot of money that you were going to, you know, have, the great thing about a Roth is, you know, not only are you not paying taxes on the growth, but when you pass it to your children, they're not going to pay taxes either.

Speaker 2 So it just like becomes even, you know, a bigger pass down, which is such an advantage. That's why we are such a fan of the Roth.
But again, having to pay the taxes on it each time

Speaker 2 is that's that's what's going to be key. And I'd hate to use your retirement investing to pay the taxes on something that's already invested.
But how much are you having to take out every single year?

Speaker 2 How much is that?

Speaker 2 The required

Speaker 25 that they're making you? It gets up there in the

Speaker 25 $300,000, $400,000 a year I got to take out if I live long enough.

Speaker 2 Yeah. Do you know how quickly that's going to be?

Speaker 10 Yes.

Speaker 9 No, you don't have to take out $300,000 a year out of your 1.8.

Speaker 25 Oh, you get there to be late 80s. It gets pretty high, according to the form the man gave me.

Speaker 2 Of what it is with all the growth.

Speaker 25 I'm not sure. Yeah, I'm making it right now.

Speaker 25 My money's making about 12 to 14%, you know, thereabouts.

Speaker 10 Yeah. Give or take.
Yeah.

Speaker 25 So, you know, I keep telling them to grow.

Speaker 9 I'm out over my skis on this mathematically,

Speaker 9 but that number doesn't sound right, but I could be out to lunch on it.

Speaker 2 Yeah, I know.

Speaker 2 That required, it's a weird, it's it's a weird formula when you look at it. And so I don't, I don't, I, yeah, I can't do it right now.

Speaker 2 So, yeah, what I would say, Lee, is unless you had the cash to be able to pay the taxes because you had money saved elsewhere, that would be an automatic yes for me.

Speaker 2 But you could look to see, okay, if I, if I rolled it over, how much from where you are in the tax bracket, how much would that would I pay in taxes if I took it out and that would come out of my investments versus if I left everything in and had to start pulling money out and pay taxes on that, you know, which you're going to have to pay anyways when they make you take it out.

Speaker 2 I would run some of those numbers and I would sit down with the Smart Investor Pro as well because I would want this to be the most mathematical efficient for you.

Speaker 2 But usually converting to a Roth if you don't have the cash on hand,

Speaker 2 that's usually a sticking point. All right, let's go to Alex in Toronto.
Hi, Alex. Welcome to the show.

Speaker 16 Thank you. Hi.
How are you guys? We're doing great.

Speaker 2 How can we help?

Speaker 11 My quick question, or hopefully a quick question, is: can we afford to travel?

Speaker 6 So we live in Canada.

Speaker 14 We want to go to Spain for my friend's wedding in May.

Speaker 15 That's fine.

Speaker 14 And my wife and I were just wondering if we can afford it.

Speaker 9 Dude, my friend got married at Arby's, man. Your friends get married at Spain.
That's awesome.

Speaker 14 Well, they live there. It's my best friend from like Highland.

Speaker 2 He's international. Alex has friends all over the world, John.

Speaker 9 Yeah, that's true.

Speaker 9 You got cooler friends than me.

Speaker 2 Okay, so Alex, where are you guys at financially?

Speaker 2 So

Speaker 14 I make about $150,000 Canadian a year.

Speaker 15 Okay.

Speaker 11 We don't have any debt other than our home.

Speaker 14 We owe to our home about $463,000.

Speaker 7 Okay.

Speaker 2 How much does your wife make? Does she work?

Speaker 14 She doesn't work. She's a homemaker.

Speaker 2 Okay, wonderful.

Speaker 2 Do you guys have money saved? Do you have an emergency fund?

Speaker 14 We have a small emergency fund of about $9,000.

Speaker 6 Our expenses are about $4,000 to $5,000 a month.

Speaker 7 Okay.

Speaker 14 I have a pension with my current work that I contribute towards and my employer matches.

Speaker 6 About 20% goes towards that pension.

Speaker 14 Then I have a

Speaker 14 retirement plan that came from another job that I had in the past that I took with me. There's about $100,000 there.

Speaker 15 Okay. And then there is...

Speaker 2 Do you guys have kids, Alex?

Speaker 8 We do.

Speaker 2 Okay, how many kids do you guys have?

Speaker 7 Two kids, eight and six.

Speaker 2 Okay. How much will this trip cost, total?

Speaker 14 Total, I'm expecting around $5,000.

Speaker 2 Okay. Do you guys have $5,000 to spare? You don't have a great emergency fund, so I would want you to bump up that emergency fund to at least three months of expenses.

Speaker 14 So for the last, sorry, for the last two years, we've been saving money, putting money aside. I was investing on my own, but then realizing that my tension is pretty good.

Speaker 14 that I shouldn't be, I mean, I don't know, that's up to you're the expert.

Speaker 14 So do I continue putting towards another investment like retirement thing on the side, or do I just stick with my pension that I currently have?

Speaker 2 Yeah, so the

Speaker 2 investing is a little different in Canada, but I can tell you from here, we would always say that your 15% of your income needs to go into retirement, and your pension would be considered.

Speaker 2 I would, I would, I would cut that percentage in half. So, how much, what percentage is going into the pension?

Speaker 14 So, my estimate is around 20%.

Speaker 2 Okay. So, what I would say is that would be quote unquote 10%.
So I'd be saving 5%

Speaker 2 more somewhere else.

Speaker 2 And again, the Canadian retirement, you'll have to look to see what's probably the better option.

Speaker 2 But I would put 5% of your income into that. So I'd have the pension

Speaker 2 at the 20%. And then I would put 5% somewhere else.

Speaker 2 Because the reason we say the pension, it is included in that 15%, but it's half is because it is still a great place to put your retirement, but you have no control over it.

Speaker 2 And so that's what it's always a little bit like, eh. Um, so again, five percent somewhere else, but yeah, if you guys can cash flow

Speaker 2 this um,

Speaker 2 this trip to Spain, I mean, I would make it a goal to get your emergency fund up, I would be putting some money away there, but yeah, if you guys have the ability to cash flow it and again, cash flow and it not stress y'all out, um, yeah, you have no debt.

Speaker 2 I mean, you guys are saving, you're doing great, so I would say, yeah, I'd be okay with it.

Speaker 14 Okay, hopefully, my wife can listen to this now and then.

Speaker 7 Oh,

Speaker 2 I don't know. John, would you go?

Speaker 7 Sean's a little bit more nadas.

Speaker 9 Yeah, no, I would go, but

Speaker 9 here's where I would fall short. The moment I deviate from a plan, right? Like if I'm trying to accomplish an exercise goal, the one morning

Speaker 9 I don't keep my word to myself, I'm off it for the next four months.

Speaker 9 And so the only thing giving me pause here is how low, the fact that you got kids and how low your emergency fund is, and you are one kid doing one fun thing in the front yard from burning through that $9,000 in no time

Speaker 9 and if you do choose to go to this wedding it can't be

Speaker 9 well we've done it once and now we can do it again and now we can go ahead and get this car and now we can go ahead and get this other thing it would have to be such an anomaly and it'd have to be different than I'm able to do right now

Speaker 14 Yeah, no, I totally get that.

Speaker 17 Yeah,

Speaker 14 last time we traveled like that was two years ago.

Speaker 7 Yeah. Yeah.

Speaker 14 So it's on a certain like a constant thing that we do every year.

Speaker 9 And it may be a thing. It may be a thing that like only you go.

Speaker 9 And it would be cool to take your wife to Spain and then celebrate a wedding or whatever, but we can only afford, it only makes sense for us financially for one of us to go.

Speaker 9 So those are some more variables you can.

Speaker 2 Yeah, and your wife may be more okay with it if she knows there's more money saved. There may be more security knowing, okay, we have some, we have good money, you know, money saved.

Speaker 2 Okay, I can take a breath and go on this trip. But yeah, you got to figure out how to get this emergency funded and the trip.
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Speaker 2 Or if you're watching on YouTube or podcast, you can click the link in the description. All right, let's go to Ricardo in San Diego.

Speaker 7 Hey, Ricardo.

Speaker 6 Hey, Hey, how's it going?

Speaker 2 Doing great. How can we help today?

Speaker 17 I had a question and kind of want to give you a little summary about my life and see if you can help me out with it.

Speaker 17 I wrote it all down, kind of just compacted in a quick summary for us.

Speaker 2 Perfect.

Speaker 17 All right, so I'll start by saying I'm 28 and I'm calling from San Diego. I live in a rental home with my family, my two-year-old son, and my soon-to-be wife.

Speaker 17 Living together is the only way to make San Diego affordable, and every rent payment gets us one step closer to actual homeownership.

Speaker 17 We all share expenses so support each other and we're working towards building something stable for our future. Currently I work two jobs Monday through Friday.

Speaker 17 I'm an HVAC, a career I switched into after a 10th month training program because I wanted long-term stability for my family. On Fridays and Saturdays, I work in a restaurant.

Speaker 17 I used to have more hours there, but it's slow season. So I learned that I had to lean more into the hrack to grow and stay consistent financially

Speaker 17 i still work there in the restaurant don't get me wrong um i bring home about

Speaker 17 around 3 650 to about 4 200 a month after taxes depending on my tips also at the restaurant job and i follow dave ramsey's like baby steps i've saved a 7 000 towards my emergency fund budgeting and trying to use the every dollar app and cutting back where i can I'm working on paying off a $29,000 car loan that I just got because I needed to be mobile in order to get me around.

Speaker 17 And the car I had before broke down on me and it actually got totaled and I got in an accident.

Speaker 17 Right now, my student loans are also in administrative for parents. So interest is still piling up on them, but I'm staying focused and attacking them with the debt snowball.

Speaker 9 Yeah,

Speaker 9 get right to your question, brother. You're right to your question.

Speaker 9 Sure.

Speaker 17 So my question is,

Speaker 17 what do I do as of right now? Even though it's tough supporting my son, my finance, my family, dealing with the high rent, juggling two jobs, managing debt, I'm trying to stay committed.

Speaker 17 And every sacrifice is about getting my son security, helping my family, and providing disciplined teamwork.

Speaker 16 The thing is that I recently had to go to the hospital.

Speaker 17 I have a ruptured eardrum. So it's very hard for me right now to see if what's going to go next in my life because they're thinking I'm going to need surgery.

Speaker 17 So I'm thinking I just put all this time into this career I'm trying to build and now I'm thinking, can I even go back to it?

Speaker 16 Because I'm going to be around loud noises and everything at high elevation.

Speaker 2 Okay. Well, on that end of it, yeah, you will have to figure out is that feasible? I don't know what that looks like.

Speaker 2 I don't know if there's protective earwear, you know, you can wear that helps you because if you're able to stay, I think within the industry you're, you know, that that you have is great because you can only move up from there.

Speaker 2 But is 4K sustainable, Ricardo, per month for you?

Speaker 17 As of right now, because I have my family living under the same home, it is sustainable and it's the sacrifice I have to make because I make $20 an hour in the HVAC job and then I make $17.25 plus tips in the restaurant job.

Speaker 17 So it's just more about getting my experience because I have no experience. I just have to do it.

Speaker 2 Yeah, how quickly for the HVAC will you be able to start upping income?

Speaker 2 Is there an income track that you can see?

Speaker 17 Yeah, yeah, there is.

Speaker 17 And as of right now, when I talk to my teachers and I also talk to my bosses at work, it's between like the one to two-year mark just because I have to get that experience and I have the knowledge.

Speaker 17 But it's great to get that experience.

Speaker 2 Okay, so Ricardo, I hate to say it. You can't afford a $30,000 car.

Speaker 9 Yeah, you got to sell your car

Speaker 2 today. That's too high.

Speaker 2 So you can still find a great $10,000 car that will not break down. We had a guy on the show last week doing a debt-free screen, and he's driving a $4,000 car around.

Speaker 2 And he's like, listen, it's got 200,000 miles, but it's been great. It's giving me no trouble.

Speaker 2 So there still are great cars out there that are older that will not break down, like what you experience. So

Speaker 2 I would first and foremost, yeah, put that car. Have you looked at Kelly Blue Book that if you sold at private party, what you would get out of it?

Speaker 17 So I just just recently got a car it's the 2025 Toyota Camry oh man you bought a brand new car and that's the 30 that's the 29,000

Speaker 2 yeah and I'm paying monthly on it yeah yeah so I would go on Kelly Blue Book and see what what how much you could sell it for and you may be underwater because it's brand new but it won't be too much underwater if it is so um yeah that needs to be sold how much is in your emergency fund

Speaker 17 right now it is about seven thousand and I'm trying to get it to ten hold on how much do you owe on student loans?

Speaker 17 On student loans, right now, I owe

Speaker 14 about $6,000.

Speaker 9 Okay, pay those off today.

Speaker 6 My other question would be: is it feasible for me to do that?

Speaker 17 Because as of right now, since I don't have my ear, like, I can't hear from my ear, I don't know when I will go back to work. They haven't told me.

Speaker 17 I don't know if it's going to take months, like, to get the surgery or to get to the end of the year.

Speaker 8 Wait, do you have to?

Speaker 2 Okay,

Speaker 2 I'm a little bit ignorant. Can you not go, can you not do your HVAC work with

Speaker 2 hearing in one ear?

Speaker 17 It's more of the, I talked to the doctors, and they said that I wouldn't be able to do it soon enough. It would take a little bit of time.
So I'm not sure what time they're really giving me.

Speaker 9 Can you flip over and go full-time at the restaurant?

Speaker 17 I can't because it's slow season right now. They just cut everybody's.

Speaker 2 Okay, so maybe another one.

Speaker 9 Yeah, like you don't have an alternative, brother. You got to find another one.
Yeah. And I hate that for you.
I hate that with all my guts for you. And that's the reality you find yourself.

Speaker 2 And maybe it's the season, right? So maybe for the next six months to get you through the spring, you're working two restaurant shifts and having to hold off on the HVAC because of your ear.

Speaker 9 Or you have to go throw boxes at Walmart at night or whatever. Or Amazon driving

Speaker 2 for holiday season. You know, they usually are picking up tons of drivers.

Speaker 9 Is your girlfriend working?

Speaker 16 Yeah, she also works.

Speaker 17 She works two jobs. We're both hard workers.

Speaker 7 Yeah, no. No question about that.

Speaker 2 Yeah, yeah. We're just trying to be strategic with the hard work to kind of figure out.

Speaker 9 Here's a really uncomfortable question. You live in one of the most, if not the most expensive place in the United States to live.

Speaker 17 I know that for sure.

Speaker 9 It's beautiful. It's stunning.
Every day

Speaker 9 is a great day. And there's a mathematical reality.

Speaker 9 You are working so hard and what you're doing is so honorable, but you picked a place that very few people can afford to live day in and day out,

Speaker 9 especially seeking the kind of security you're looking for that I hear in your voice. What does it look like to pack up and move to Texas or pack up to move to Kansas?

Speaker 9 I mean, I'm being serious because you can't afford to live

Speaker 9 how you're running.

Speaker 17 It's crazy because I actually made that.

Speaker 17 I actually tried to talk to my senior B wife about that decision too of moving like to Arizona or Texas just because I know since I'm in my field, I am and I'll find work out there.

Speaker 7 You will, but here's the deal.

Speaker 9 It's a less an emotional,

Speaker 9 it will become a very emotional decision, make no mistake. But right now, you have a math problem.
You don't have a work ethic problem.

Speaker 9 You don't have a like wanting to love and take care of your soon-to-be wife and kid and all that. You don't have those problems.
You have a math problem. Yeah.

Speaker 9 And I'm listening to a man who's working himself literally to death. And

Speaker 9 every month is a grind.

Speaker 2 So, you know, okay, so here's what I would do, Ricardo, as you get off the phone.

Speaker 2 If I were in your shoes,

Speaker 2 my goal would be to save

Speaker 2 $2,000 this month and next month, however that looks. And then in January, I would be putting my car up for sale.

Speaker 2 If you're a little underwater, I think what that's going to give you is you'll have, you'll keep $1,000 in your emergency fund, and then you're going to have $10,000 cash.

Speaker 2 You're going to use some of that money to pay the difference, get rid of that, use the remainder to go buy a crappy $5,000, $6,000, $7,000 car. Okay.

Speaker 2 That's gonna that for me, that's step one. That's what you've got to do because this car is killing you.
So I would get that out of your life. That's going to free up that car payment.

Speaker 2 And then you guys can start working on building back and figuring out for medical expenses for the spring. And then from there, you're going to work on paying off the student loans.

Speaker 2 But that's going to be possibly putting two restaurant jobs together. That's going to be, you know, it's, it may look like a driver.

Speaker 9 And one driving.

Speaker 2 Yeah, it may look like movie. I don't know what that looks like, but those would be my steps.
Car number one, cash flowing a new car and paying the difference in cash.

Speaker 2 That would be my number one goal. And then we have to, yeah,

Speaker 2 figure out the lifestyle, which is a really, really, really big decision, but it's one that long term could relieve you guys a lot from the hard work that you're already doing.

Speaker 2 Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I'm Rachel Cruz with Dr.
John Deloney. You can give us a call at 888-825-5225.

Speaker 2 All right, starting us off this hour is Cynthia in Miami. Hi, Cynthia.

Speaker 7 Hi, how are you?

Speaker 2 We are doing great. How can we help?

Speaker 4 Hi, so I'm coming to get you guys perspective.

Speaker 4 So we have a house and we are selling it to clear out all our debt that we've been having, plus the house, because when we bought the house, we didn't do it the right way. We didn't put 20% down.

Speaker 4 It was an older older home and now there's like a lot of work that needs to get done so if we are able to sell it we're able to cash out and then we'll have all our debt paid for and we'll be left with 160k around there left over so I just kind of wanted to see what you guys think we should do because we were planning on renting for a little bit so that when we're ready to buy we'll buy the right way and also just making sure we'll have money to fix things

Speaker 4 and yeah so I just kind of wanted to see what you guys think and also you know we'll use that money for investing just kind of see what you guys think yeah absolutely okay so two questions one

Speaker 2 um

Speaker 2 for you selling this house because i just want to clarify yes 20 is ideal for a down payment but we always say if you're a first-time home buyer five percent is okay so i do want to make sure you're not rushing to move out of this house is it really drowning you guys financially like you're like we we got to get out because sometimes people are like well we can just sell wipe out our debt and we're all okay.

Speaker 2 But sometimes that doesn't always fix the issue, you know, if, you know,

Speaker 2 does that make sense from like a behavior standpoint?

Speaker 4 Of course. Yeah.
So it does make sense. We actually been trying to pay off a lot of debt like since we've been together for like about five years.

Speaker 4 And then the thing is that if we keep the house, it'll be an additional 25K in debt because it meets like a roof ASAP,

Speaker 4 AC water heater. And when we bought the house, the money that we had, we fixed it inside.
It was like a fixer-upper kind of house.

Speaker 3 Sure, okay. We didn't do all the major things at first.

Speaker 2 Okay, gotcha. And then the payments too much and all the expenses that are going to be with it, you're like, it's just too much for us to handle in our income.

Speaker 4 Yes, correct. So we were just thinking of starting fresh now that we know what we know and we're more, you know, we're more diligent with our money.
So we're like, we'll have a clean slate.

Speaker 7 Okay, yeah.

Speaker 2 How much consumer debt will you guys pay off with the equity?

Speaker 4 $199,424.91. Oh, wow.

Speaker 2 What was that in?

Speaker 4 It was in, well, the house is $153,000, and then the car, credit cards, all that.

Speaker 9 Where are you going to get the $160,000 in equity?

Speaker 4 Of selling the house.

Speaker 9 You only owe $150,000 on it?

Speaker 4 $150,000, yes.

Speaker 9 Okay, so you're going to sell it for $330,000, $340,000?

Speaker 4 Yeah, $340, yeah.

Speaker 9 Are you confident confident that someone's going to come in and buy a $340,000 house that immediately needs a roof and a hot water heater and all that other stuff?

Speaker 4 That is actually, yeah,

Speaker 4 it's already done. They put in an offer.

Speaker 9 Oh, the offer is in and good to go. Okay, cool.

Speaker 7 Okay, great.

Speaker 7 Good to go.

Speaker 2 Well, you all have great equity. I mean, you did well, whether you're aggressively paying it off or it was just the market, but well done.

Speaker 7 That's great.

Speaker 2 Okay, so yep, so you're able to pay off the remaining mortgage and then about that $40,000-ish dollars of just consumer debt that you have, and then you're have $160 left.

Speaker 9 $160, left or $120 left after you pay your debt off?

Speaker 4 After, oh, probably after,

Speaker 4 I believe, hold on, let me double-check. I think it'll probably be like around $130,000 we might have left over, possibly paying the consumer debt.
Okay. I know it's like around that.

Speaker 9 All right, I want you, Rachel's going to tell you what to do with that, but I want you to make me a promise in front of

Speaker 9 all of America who listens to this show.

Speaker 9 Okay.

Speaker 9 After you've paid off your consumer debt, this money goes into a high-yield savings account and you don't touch it for 90 days.

Speaker 4 I will make that promise.

Speaker 9 You can't buy anything.

Speaker 2 No new car, Cynthia.

Speaker 4 No, we do not want nothing. We're actually paying our car now, so we will have this car for a long time and we're going to take care of it.

Speaker 9 I know, but that money is going to burn a hole in your pocket.

Speaker 7 Y'all have to, y'all have to, like,

Speaker 9 like, like, I don't know how y'all do it in your marriage. Spit shake, contract.
Y'all go outside and etch it into the driveway. Y'all will not touch this money because it is going to be so.

Speaker 9 You're going to look up.

Speaker 2 Cruise is going to look good in December.

Speaker 9 They're in Miami.

Speaker 9 Brand is going to get remarried. I want you to go to Australia.

Speaker 9 A buddy's going to have a brand new car that he just has to sell. It's such a great deal.

Speaker 9 Your husband's going to want to buy crypto. Like, it's just going to happen.

Speaker 9 Y'all can't touch this because otherwise you're going to sell this house and you're going to find yourself right back in the the same situation.

Speaker 9 I promise you, we've taken this call countless times over the years.

Speaker 7 Okay.

Speaker 4 No, yeah, definitely. That's our goal.
Like, I don't want credit cards. I don't want none of that.
Like, if you can't afford it, you can't afford it.

Speaker 7 I'm going to believe you, Cynthia.

Speaker 9 I'm a believer. All right.
I'm trusting you. And you're going to get struck by lightning or something like that if you spend the money, okay?

Speaker 2 No, I'm going to like hear God's voice himself.

Speaker 7 Not one penny.

Speaker 9 It goes into a high yield savings account and all that bad. And all your friends are going to be like, oh my gosh, gosh, you can get higher rent.
I know. This is a spiritual exercise for you guys.

Speaker 9 Okay.

Speaker 7 Yes.

Speaker 9 Okay, cool.

Speaker 2 So we're not touching it until February, March. Yeah.
For Per John's.

Speaker 7 Per John.

Speaker 2 I think that's great.

Speaker 2 I think it's a great principled act. I think that's awesome.
Okay. So, Cynthia, for you guys, month to month, when you go rent somewhere,

Speaker 2 if you factor in the new rent plus your life, how much do you guys spend a month? How much do you guys need in operating expenses a month?

Speaker 4 Yeah, so that's actually something we've been working on. So we'll make about like $4,700 a month.
They'll range to $4,7 to $5. Okay.

Speaker 4 And what we'll do is now we factor in the rent and we're also like factoring our groceries. We've been really like...

Speaker 7 Are y'all both working, Cynthia?

Speaker 4 Yeah, we both own a business together. So we're both, yeah, we both rent it together.

Speaker 2 So how's the business going? Do you say, is there an upward trajectory of it?

Speaker 7 Okay.

Speaker 4 Yeah, it's going good.

Speaker 2 Because around 50, you know, I mean, you guys are 60K-ish in Miami. It's not a ton.
It's an expensive area.

Speaker 4 Yeah.

Speaker 4 So it's, it's good and it's okay. We're not like in Miami.
We're around that.

Speaker 7 Okay. Okay.
So

Speaker 10 doable for you guys.

Speaker 7 Yes.

Speaker 2 Yeah. Okay.
Good.

Speaker 7 Good. Yes.

Speaker 4 Especially since we're cutting off all our expense, like our like those bills, like those credit cards, we're really just, well, our goal is, is to pay the rent. We'll get our groceries paid out.

Speaker 4 And then all that money will be able to get.

Speaker 7 Do you all have kids?

Speaker 4 We do. We have two kids.

Speaker 2 Okay, great. Okay, so what I would do for y'all is probably more of a six-month emergency fund, which will be about 25K.

Speaker 2 So I would earmark, you know, around 30,000 of that of your new money just for an emergency fund that you're never going to touch unless you need it. And that leaves about 100K.

Speaker 2 So I would make that my baby step 3B because you guys will have no consumer debt. You'll have a fully funded emergency fund.
And then I think the next step is getting into a home.

Speaker 2 Now you guys can start doing retirement. Do you you all have like a SEP or do you all have any kind of thing within your business, a simple IRA?

Speaker 4 Yeah, we actually have a Roth IRA. We've been investing too for a long time already.

Speaker 2 Okay, so depending on how quickly you guys want to be back into home ownership would be if I, so I would either have that $100,000 and then start saving on top of that for a down payment.

Speaker 2 And then if you're not going to buy a home within, I would say probably three years, I would start investing as well, 15% of my income into retirement.

Speaker 2 But if you think you could buy a house in around three years with the amount you can save, I probably would hold off retirement until I'm in the house and then fund 15% of my income into retirement.

Speaker 2 But if it's going to take longer than three years to buy again, I'd probably go ahead and just

Speaker 2 do the 15% into retirement and build on top of that down payment. But those would be my next goals for you guys.
So yeah, excited for you guys for this next season.

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Speaker 2 So, buying or selling your home is a really big deal. And with all the clickbait headlines out there and conflicting data, it's really hard to know what's actually happening in the housing market.

Speaker 2 So, we're here to make the latest trends easy to understand. So, the medium home prices have held steady at around $424,000.

Speaker 2 And in October, about one in five houses saw a price cut, which means that buyers might have more room to negotiate this winter, which is great if you are looking to buy.

Speaker 2 Mortgage rates have dipped slightly to 5.49 in October, giving some buyers some breathing room. But since rates are unpredictable, the best time to buy is when you are ready.

Speaker 2 So if you are out of debt, you have a fully funded emergency fund and a down payment for first-time home buyers at at least 5%.

Speaker 2 20% is wonderful.

Speaker 2 Then you are ready to enter the market.

Speaker 2 So if you want to learn more about the housing market trends and get some free tools so you can buy or sell with confidence, go to ramseysolutions.com/slash markets or click the link in the show notes if you're listening on podcasts or YouTube.

Speaker 2 All right, let's go to Anthony in Texas. Hey, Anthony, welcome to the show.

Speaker 22 Hello, guys. How are you doing?

Speaker 8 We're doing great.

Speaker 7 How can we help?

Speaker 22 Good. So, my question is more a career question than financial.

Speaker 22 So, I am an apprentice for a utility company here in Texas. I gross around $150,000 a year.

Speaker 22 My wife also works. She grosses around $60,000 a year.

Speaker 22 I'm on the road Monday through Friday, usually about four hours away. I've been working a lot of weekends lately.
I have a kid due in February.

Speaker 7 So I'm wondering. Congratulations.

Speaker 22 Thank you for that. I'm wondering, do I stay here

Speaker 22 and journey out after? And then it's almost like if I journey out, what do I do next? Or do I go ahead and do a career move now and work towards something else?

Speaker 9 If you journey out, are you going to be able to have a more local gig? Or is that just a commitment to be on the road forever?

Speaker 22 So you can, there is a chance to be local, but everybody else is trying to go local as well. So it's a competition, basically.
So I couldn't say a month after I journey out, I'm going to be local.

Speaker 22 It took it a year.

Speaker 9 Well, flip that conversation around.

Speaker 9 Let me say it this way. Every single friend of mine in Texas who's about my age is talking about the utility boom.

Speaker 9 It's wild, right? You know this. They're paying you a bunch of money just as an apprentice, right?

Speaker 9 Yes.

Speaker 9 And they're paying you to be away from any sort of life whatsoever, right?

Speaker 10 Yes.

Speaker 9 There's a premium on that, right?

Speaker 9 The question I would ask myself is:

Speaker 9 if I bit the bullet for another year,

Speaker 9 how close are you to journeyman status?

Speaker 22 Two more years.

Speaker 9 It's a long time to be gone seven days a week.

Speaker 9 Here's my question.

Speaker 9 Is there a possibility that y'all are able to relocate once you get established?

Speaker 9 Because you're looking at one of those jobs that everyone in the country is saying people need to start looking for.

Speaker 10 Yes. So

Speaker 22 I could relocate, yes.

Speaker 22 I just did buy a house here.

Speaker 7 Okay.

Speaker 22 But in two years, yes, I could relocate if I needed to.

Speaker 9 Is there a way to not have to work weekend? I'm just, man, it's a tough, that's tough sledding with a brand new baby being gone seven days a week for two years.

Speaker 22 And there's some, I just worked 18 days straight before. So, I mean, there's sometimes I worked longer.

Speaker 2 Yeah. What would you do if you weren't doing this? Do you know?

Speaker 22 Honestly, I don't know.

Speaker 22 That's also a problem I have: I don't know what career path to go.

Speaker 3 Yeah.

Speaker 10 What your career path kind of, oh, go ahead.

Speaker 2 Well, is your wife going to go back to work or is it dependent? Is that dependent upon what you're making?

Speaker 22 She is going to go back to work. She said she'll never quit working.
So

Speaker 22 she's going to go back to work.

Speaker 21 She's a nurse.

Speaker 9 Okay. So

Speaker 9 anytime I feel backed into a corner, either I have to do this or I have to do that, one of my personal rules of thumb is I throw a bunch of random ideas on the table just to A, prove to myself I don't have to do this or that and give myself some breathing room and maybe another idea will emerge.

Speaker 9 Here's what I mean. Is there a possibility that y'all go, and you're doing this not for right now, but you're doing this for 10 years from now, y'all, okay?

Speaker 9 Is there a possibility that she took a 24-month hiatus from nursing and she

Speaker 9 y'all put her up in the nicest hotels when you travel? Or are you out in remote, desolate, nowhere West Odessa, where there's, I mean, there's nothing on top of nothing. That's an idea.

Speaker 9 Could she go to travel nursing and go with you for a season?

Speaker 9 I'm just saying, throw a bunch of ideas on the table because what I would hate for you to do is to take what every expert is saying is going to be one of the top jobs in the country for the next foreseeable future.

Speaker 9 And for two years of misery, you let that thing go.

Speaker 9 And at the same time,

Speaker 9 man, working 18 days straight with a newborn is really tough. Although I will say, man, I've got buddies who got deployed, right, when their wives are pregnant and they missed the first.

Speaker 9 I mean, it's not ideal, but it's not the end of the world.

Speaker 2 Yeah, so after the two years,

Speaker 2 after the two years,

Speaker 2 the job that you'll have, is that what you want to do, Anthony? Like, do you see yourself being fulfilled in that career?

Speaker 22 Honestly,

Speaker 22 probably not. This career kind of just fell in my lap and I took it because it's a great opportunity.

Speaker 22 Everybody in this area would die for this career.

Speaker 22 It's just, it just happened to go that way. I just don't know if I want to continue to do it.

Speaker 7 How old are you?

Speaker 22 I'm 27. Okay.

Speaker 9 What did you do before this?

Speaker 22 I did insurance. I was like a third party for insurance companies.

Speaker 2 Yeah, I would, man, I would be tempted to explore. We can give you Ken Coleman's book

Speaker 2 to look at the work you're wired to do there's an assessment in the back of it a career assessment that it's actually amazing that could even jog to john's point as you're starting to kind of think through other options could maybe you know create some ideas of oh gosh i never thought about this or that because in a perfect i mean right in everyone's perfect world which we're all adults and it's not always perfect is that you're doing a job that you love and that you are passionate about, that you're good at, and you're paid really well, right?

Speaker 2 Like that's the, that's the ideal world for 37-year-old Anthony, right? In 10 years, like, that's that's what's ideal. So, I want to start moving towards a path to create that.

Speaker 2 And

Speaker 2 if this is a job, even though it pays so great and it's such a great opportunity, doesn't always mean it's great for you.

Speaker 2 But I also don't want you guys to flounder financially by any means with any of it. Do you guys have a lot of debt?

Speaker 22 No, so the only debt we have is the mortgage, which is $250,000.

Speaker 7 Okay, yeah,

Speaker 7 that was great.

Speaker 22 Also, able to save $80,000. So, I have $80,000 just saved in a savings account

Speaker 22 because I knew this point was coming.

Speaker 9 So good. Well, that might be another question.

Speaker 9 Instead of looking at the work, instead of looking at the passion and that kind of stuff at this stage, could you and your wife sit down and agree on a number?

Speaker 9 I'm going to do this until we have 150 grand. Or till I have 125 grand.

Speaker 9 And while we're doing that, I'm going to be in my trailer or in my hotel room on my laptop working like mad to find other work so that when I make this jump I'm not making this jump into nothing but I'm making this jump to something you get what I'm saying yes totally agree

Speaker 22 so and another obstacle and sorry if we don't have much time but another obstacle I have is when I journey out my pay will be significantly higher it should be about 250,000

Speaker 22 so I don't want to get attached to the money if I do plan to leave see what I'm saying yeah but you your your character as it is right now you're not I I mean, that's not how you're rolling.

Speaker 9 If you, because we also talk to people who get this first job, make 120 grand.

Speaker 2 Okay, can I push back a little bit?

Speaker 9 Push away.

Speaker 2 Okay. But I also don't think he needs, they don't need it, though.
Like,

Speaker 2 if y'all had a ton of debt, Anthony, and no savings, I'd be like, sorry.

Speaker 2 You got to do whatever you can to get yourselves in a good position. Y'all are in an awesome position.
You know what I mean?

Speaker 9 I'm just trying to give them a framework for we're all going to be at peace when we cross.

Speaker 9 And that might be today. Your wife may look at you and say, hey, we have enough now.
We're good now. Yeah, yeah, yeah.

Speaker 7 I want you home.

Speaker 2 But find that number that you're like, this feels right once we hit this number to make a transition to maybe something different.

Speaker 9 And I'll tell you this, if you work for dollars,

Speaker 9 not for the life that dollars can supposedly give you. Meaning, if you think

Speaker 9 you're going to find peace at a dollar amount, you will never catch it. So,

Speaker 9 but I'm not worried about that for you, brother, because you're already proving you're a person of integrity and stewardship with your money.

Speaker 9 You and your wife get together and ask yourselves, what kind of life do we want to live?

Speaker 7 Let's reverse engineer for that.

Speaker 2 And hold on the line. Christian's going to pick up.
We'll get you, Kinspoke.

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Speaker 9 All right, today's question comes from Mary in Alaska. Mary writes, my husband and I owe the IRS over $90,000 due to property sales.
We are currently paying down that monthly.

Speaker 9 We also have $15,000 in credit card debt, car debt of $14,000, and a $250,000 mortgage. We have over $150,000

Speaker 9 in precious metals and $150,000 in a CD. We are retired and our income is about $7,500 a month.
I want to cash out the metals to pay off everything. Yes, you know why? Because you are wise.

Speaker 9 My husband wants to keep the medals because the value is increasing right this second.

Speaker 9 We have no retirement accounts except the CD already mentioned. My husband has been pilfering that account in order to buy more metals.
Good gosh, what should we do?

Speaker 2 Okay.

Speaker 9 I mean, this is an easy math problem. Precious metals are a speculative commodity.
They go up and then they go way, way, way down.

Speaker 9 And they stay down and they go up when people freak out and they go down.

Speaker 9 Sell them. Sell them.
Sell them today because you know what is going only up and more of a tighter and tighter chain around your ankle is this IRS debt. Get rid of this stuff now.

Speaker 9 And you know what's going down in value? Your cars. Well, that debt stays the same.
Your credit card debt is going up because of interest. Just cash this stuff out.

Speaker 9 But you have a bigger issue here, Rachel.

Speaker 2 Yeah, I mean, you guys don't have a lot of money, Mary.

Speaker 9 Well, somehow they've got $7,500 a month coming in. I don't know if that's Social Security.
I don't know what that is. That's a pension or whatever.

Speaker 2 So the consumer debt in the IRS debt, yes, needs to be paid completely.

Speaker 2 And then I would take money once the CD matures, take that $150,000 out, and then the precious, I mean, you guys will have $30,000 left after you pay off everything.

Speaker 2 And I would then put all of that into investments. I mean, I would sit down with a Smart Vestor Pro and say, okay, aggressively, what can we do to do this?

Speaker 2 I would not throw it all at the mortgage right now because I would rather you have some money in retirement that you're slowly paying off the house.

Speaker 2 But I'm scared, you guys, Mary, that I mean, you don't, you'll have $150,000 left basically. And so that does worry me for you guys long term.
That's not going to be enough money to retire on.

Speaker 2 And so the reality is, Mary, you guys are probably going to have to go back to work in some capacity.

Speaker 9 Well, they're making $7,500 a month.

Speaker 2 Yeah, they only have $150,000 saved in a $250,000 mortgage.

Speaker 9 Yeah. They may have to to sell that mortgage and way downsize.

Speaker 2 You may, yeah, you either downsize, and I don't know how much you could get. I mean, I don't know what equity you have in your home.
That's an option.

Speaker 2 Or, you know, for a few years, Mary, of figuring out, you know,

Speaker 2 how do we make some money? Because you guys just don't have enough to cover what debt you have, like your liabilities versus what you have. I mean, that's the math of it.

Speaker 9 To me, the scary thing here is your last sentence. My husband's pilfering

Speaker 9 our last remaining dollars to buy more more precious metals.

Speaker 9 This is a recipe for a disaster.

Speaker 2 Crash. Yes, 100% agree.
100%. Okay.

Speaker 9 So you got to address the

Speaker 9 lack of integrity in your husband. You got to address y'all's core marriage issues because I guarantee this isn't the only place where he's quote-unquote pilfering things.

Speaker 9 Y'all got to get on the same page there and come up with a unified plan moving forward. And I know that's easier said than done.

Speaker 9 You wouldn't be in these other situations if y'all had been united, moving together.

Speaker 2 And to your point, John, I mean, if your house was a half a million dollar house and you had 250 in equity and you owed 250 you know you could get out and go buy a 250 to you know 250 house free and clear you know what i mean if you just step down so be thinking about that long term um

Speaker 2 because i want you guys to be able yeah to to be able to breathe all right let's go to stephanie in chicago hi stephanie hi hello hello welcome to the show how can we help today

Speaker 4 Thank you. I've been a fan for a very long time.
I appreciate what you guys do.

Speaker 7 Thank you. Thanks for calling in.

Speaker 4 My question is related to our retirement savings.

Speaker 4 So my husband and I recently bought what we hoped to be our forever home. We sold our starter, and our mortgage has obviously increased, as has the rate.

Speaker 4 So we're wondering if it's ever okay for us to pull back from retirement savings and just kind of give ourselves more margin for our increase in expenses.

Speaker 2 What percentage is your mortgage payment on this forever home compared to your income? So

Speaker 4 it's close, it's about 25% of our monthly income.

Speaker 2 So, where's the rest of your money going?

Speaker 4 So, we do have, our son does go to private, which is something that it was kind of one of the reasons that we did move neighborhoods.

Speaker 4 So, it's very likely that he may be going to the local public school next school year.

Speaker 4 But we have some repairs to do in this home that were a bit unexpected and we do have some goals for the future as far as saving for a vehicle and paying off the home faster which is something that has kind of been weighing on me I was very comfortable with the mortgage that we had but

Speaker 4 we're kind of at odds at whether we should pull back. I'm kind of more on the, I think we should just keep saving where we're at and make it work.

Speaker 2 Are y'all doing 15%, putting 15% away and that's too much is what you're saying

Speaker 4 so we're each doing 16% not including our company match which is pretty generous

Speaker 2 okay and then we're we're also maxing out our Roth IRAs from our take-home pay okay do you know percentage wise how much of your income is going to all of those because that's going to be way more than 15%

Speaker 4 um I don't okay um if if we're including our company match it we're both each putting away 24% of our income.

Speaker 4 Okay, yeah.

Speaker 7 That's not including the Roth IREs that we're doing. Yeah, exactly.

Speaker 2 Okay, yeah. So, yeah, you guys are probably putting too much in retirement.
So, what we would say is 15% of your income needs to go into retirement. How much does your company match?

Speaker 6 It's 8% total.

Speaker 2 8%. Okay.
So, what I would do is go up to the match,

Speaker 2 and then the remaining percentage that you guys have, I would go then to the Roth, max out the Roth, and if there's any percentages left, go back to

Speaker 2 the 401k um but I would just I would just do 15% of your income into into retirement you both your 401k the 8% not including the employers match so that's not 16 I don't count the employers as 16 I just count your 8% going in

Speaker 2 and then

Speaker 2 and then the remaining 15% take to your Roth IRA

Speaker 2 and if you max that out depending on what you're making if you max it out go back to the 401k or it may just be enough just to do the 8% and then maxing out the Roth I'm not sure.

Speaker 2 So you guys will have to kind of do the math on that. But yeah, I would cut back your retirement to 15%.

Speaker 4 Okay, so you're saying just do the 8% to match the company and then put the remainder of that into our Roth.

Speaker 2 Into your Roth, yes. But

Speaker 2 because

Speaker 2 how much are you guys making a year?

Speaker 4 Combined, it fluctuates because we both have our base salary and then commission, but I would say comfortably, it's the most we've ever made. We're at about 160, 160.

Speaker 2 Okay. Well, then, okay, so the max on the Roth this year, I think, is eight.

Speaker 2 So what I would, 8,000 each.

Speaker 2 So again, after you fund that 8%, if 7% of your income left fills up the Roth IRA, then just stop. You guys are good.

Speaker 2 But again, if you hit that max and you still have one or two percentages left of your income to hit that 15%, go back to the 401k. Does that make sense?

Speaker 4 Yeah, it's hard for me because I know on paper, like what we, what we have saved up looks good, but like my mind doesn't connect with, it just never feels like enough.

Speaker 4 I think I maybe worry too much about the future.

Speaker 7 So

Speaker 9 what does enough mean?

Speaker 4 You know,

Speaker 4 I wish that I knew. I think it just boils down to the fact that we both grew up pretty poor and no one in our family

Speaker 4 had any financial literacy. And I'm always like, you know we're i feel like we have a really how old are you guys how old are you guys stephanie we're both 38.

Speaker 2 okay and how much y'all have in retirement right now

Speaker 4 between all of our ira's and 401ks it's just about 500 000.

Speaker 2 okay sister you're good so what's crazy is stephanie if you just stop right now and don't do anything your money will double every seven years okay so you guys are gonna have millions every time right if you didn't do anything from now like even if you just stopped and you're gonna continue to contribute 15 So the remaining money that you're going to stop putting in retirement, yes, upgrade the cars if you need to and pay the house off early.

Speaker 1 It's one of the best times of the year, but it's also the time of year when people let their money get totally out of control. Everywhere you look, it's just buy, buy, buy.

Speaker 1 So you start swiping the credit card and suddenly it's January and you got a mess on your hands.

Speaker 9 Don't let that happen.

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Speaker 2 Our scripture today comes from Isaiah 66, 9.

Speaker 2 I will not cause pain without allowing something new to be born, says the Lord. Malcolm Gladwell says, A lot of what is most beautiful about the world arises from struggle.

Speaker 7 So good.

Speaker 2 All right, let's go to Ryan in Minneapolis. Hi, Ryan.
Welcome to the show.

Speaker 16 Hey, how are you guys doing?

Speaker 2 We're doing great. How can we help today?

Speaker 18 Yeah, I'm just,

Speaker 15 I had

Speaker 19 a question.

Speaker 19 A relative just passed away, and he, by default, because my

Speaker 18 father passed away, me and my brother are set to inherit what he has left,

Speaker 19 which is a house and a few cars and whatnot.

Speaker 15 But the only problem is he has a

Speaker 18 um IRS debt of about 120,000. And uh

Speaker 20 so we're going to have to um sell the house through a cash out refinance to pay for the house.

Speaker 19 But I'm what I'm wondering about is if

Speaker 18 um

Speaker 19 me and my brother should sell it or if we should hold on to it. That's what we're kind of uh

Speaker 20 at odds about right now.

Speaker 2 Yeah, I mean, yeah, the IRS lien's going to, how much is the house, how much is it worth if you sold it, what would it be worth?

Speaker 19 It's give or take $200,000, probably

Speaker 18 somewhere in that, in that range, yeah.

Speaker 20 But if it was fixed up, it's worth it's worth like

Speaker 19 easily $400,000.

Speaker 2 It would double in value if you fix it up?

Speaker 9 Yes. Okay.

Speaker 9 All of this is good,

Speaker 9 but

Speaker 9 it glosses over the main question here, which is, can you afford to do that?

Speaker 9 Like, if somebody drove up here and said, hey, I got a brand new Lexus and it's awesome, it's just going to cost $100,000.

Speaker 9 And there was a $200,000 card, that'd be a great deal, but I don't have the money to go buy that thing.

Speaker 9 Right.

Speaker 9 And I'm sure I'm not going to take out a cash out refi with a house with liens all over it. You get what I'm saying?

Speaker 9 Okay. And co-share it with a brother who I already have difference of opinion on how we're going to manage stuff moving forward.
Like, this is just bad decision after bad decision after bad decision.

Speaker 20 Okay.

Speaker 2 Yeah. So the smart thing, Ryan, would be to, you got to sell, you got to pay the IRS debt, and then you guys split whatever's left in it.
I mean, that's the cleanest, smartest way.

Speaker 2 And then you take that money and then whatever you want to do with money, you know, whether you want to go and save and buy up a rental and have another second home to do whatever, you know, whatever that looks like for you, you can do that on your own terms.

Speaker 2 But yeah, yeah, John's exactly right. Sharing a property with a family member is so messy.

Speaker 2 And then financially, if you're not even in a position to be able to cash flow all of this, then yeah, it's not if your brother wants to buy you out, then let him.

Speaker 19 Well, see,

Speaker 19 the only problem is there's also more debt as far as like credit cards.

Speaker 20 And so I'm pretty sure the estate will, it's going to become insolvent.

Speaker 7 Okay. Yeah.
You may not get anything from it.

Speaker 2 And that's great. I'd rather be out and not even be near it than

Speaker 2 I would not try I wouldn't try to make the deal work, Ryan.

Speaker 9 Do you do you have is this an emotional attachment too?

Speaker 19 Yeah, it's for sure sentimental.

Speaker 18 For sure.

Speaker 7 So, dude, like

Speaker 9 I'm I'm all with you on that.

Speaker 9 What what's important about this house to you?

Speaker 18 Well, it was um

Speaker 18 it was the house my dad grew up in.

Speaker 18 Um my grandpa and grandpa or my grandpa basically built it built the whole thing with his hands.

Speaker 19 Everything hasn't been updated since he did it in the 50s and 60s.

Speaker 9 Yeah, so like

Speaker 9 your emotional attachment to this, the sentimental value is very real. And Rachel and I don't take that lightly.
That's a real pain. That's a treasure.

Speaker 9 And

Speaker 9 that sentimental treasure is going to become like a weight around your neck, making it very hard to continue to tread water in an already chaotic time

Speaker 2 okay do you have what what's your financial state ryan do you have money saved

Speaker 2 consumer debt where are you at

Speaker 19 no i'm i'm fine no debt um

Speaker 19 i just got married a month ago and we're we're about uh

Speaker 15 yeah we're uh we're we're we're fine personally

Speaker 18 um

Speaker 7 you know we have we're on track for retirement um yeah do you have a lot of cash available?

Speaker 19 Um, not $120,000.

Speaker 7 Yeah, no, yeah. Does your new wife have any?

Speaker 2 Um, I know she hasn't, obviously, you guys are newlyweds, but does she have any thoughts in this?

Speaker 2 Sometimes an outside spouse, you know, that's new to the situation, who's less emotionally attached, has thoughts too. What is what is she saying?

Speaker 15 Um, I mean, she would, she would like for us to own a house eventually

Speaker 19 and me as well, uh, But she doesn't want to live there until it's fixed up, understandably.

Speaker 2 Yeah.

Speaker 2 And that's going to be more money going into it.

Speaker 9 And everybody who thinks it's going to cost X to fix it up, the rule of thumb is double, if not triple, that amount of money that you think it's going to cost.

Speaker 9 You're going to get into a hundred-year-old home and find out it needs all kinds of stuff. Yeah.

Speaker 10 Yeah.

Speaker 2 And like you said, if you get into this estate and you keep this asset,

Speaker 2 they're going to come after you for, I mean, it's just going to be, it's going to be a mess mess financially of what you're going to have to do to get above water to be able to keep it and make it make sense.

Speaker 2 And then on top of that, let alone the repairs and everything.

Speaker 9 Can I tell you something that an experience I had a few years ago?

Speaker 9 So when I started working in universities, my granddad, who's one of my all-time life heroes, one of the greatest men I've ever known, he brought me into his closet and he gave me this tweed jacket because it looked like a professor's jacket.

Speaker 9 It had like the brown patches on the elbows and everything. It has never fit one time.
It never fit. But I carried that jacket with me everywhere, house to house to house to house.

Speaker 9 And then one day a few years ago, I was packing up to move yet again. And I looked at this jacket.
I thought of my granddad who'd passed away. I smiled and I put it in the keep pile.

Speaker 9 And then for whatever reason, I turned and I looked at that jacket and I said out loud, without thinking about it, it wasn't some big aha moment, but I just said, My granddad is not in that jacket.

Speaker 9 And then I put my hand on my chest and I said, He's right here.

Speaker 9 And I picked up this jacket that somebody's going to use and it's going to use it well. It will never be me.
And I put it in the donate pile. Oh, John.
I did.

Speaker 9 Because

Speaker 9 somebody's going to need that jacket, and I'm keeping it from them by pretending to hang on to a memory that

Speaker 9 is actually inside of me.

Speaker 9 And it was sad, it was heartbreaking. And I've got a couple of keepsakes on my desk right now at my house where I'm writing.

Speaker 9 It's right there.

Speaker 9 But sometimes these sentimental things,

Speaker 9 they become bricks we carry around. And it's not like you're calling us and saying, hey,

Speaker 9 my dad steward his money well and his father's money well. We have a property worth $5 million and we just want to buy new cars.
So we're going to sell it. That's not what you're saying, man.

Speaker 9 You're saying that you've got an absolute mess and there's a bunch of heartstrings attached to it. And so, man, I honor that.

Speaker 9 But, dude, doing a bunch of unwise financial things, especially on the heels of a brand new marriage, this house is going to turn into a deep resentment. It's going to further

Speaker 9 put a gap between you and your brother's relationship. It's going to begin to build

Speaker 9 a space between you and your new wife because you're not going to be able to buy the house you want because you're going to have all this outstanding debt on this house.

Speaker 9 It's just going to cause a mess, man. Just a mess.
And also, dude, I get the heartbreak. It stinks.

Speaker 20 Yeah. Yeah.

Speaker 19 That's a, that's a, well, thank you for telling that story.

Speaker 20 That's a, yeah.

Speaker 2 Yeah.

Speaker 2 Well, and it's so hard, too, because when it's the right thing to do, even though it's the sad thing, that's, that, that sucks.

Speaker 7 Just because

Speaker 9 just because it hurts doesn't mean it's not the right thing to do. Yeah.

Speaker 2 But that is the wisest path, Ryan.

Speaker 9 I hate it for you. Is that.

Speaker 2 And I know that it's heartbreaking. And,

Speaker 2 you know, and it shows, too, how much we talk about this a lot on this show, our emotions can drive so many decisions. And then we look up four years later and think, what was, why did I do that?

Speaker 2 Right out of stress, out of fear, out of grief, like whatever it is.

Speaker 9 And my fear for him is he's going to have $300,000 out on a money pit. Yes.

Speaker 9 And find himself in a state. He's stuck there.

Speaker 2 Yeah. Yeah.
I know, Ryan. I'm so sorry.
But I hope that helps.

Speaker 7 You know, that's why I'm having a lot of fun.

Speaker 9 I'll be able to pay off all the debts.

Speaker 2 Yep. And you build a great, great life with your new wife.
All right, well, thanks to our wonderful audience here in Nashville at Ramsey Solutions.

Speaker 2 Thanks to all you in the booth, John, thank you as well. And remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.