Nothing Destroys Your Finances Faster Than Broken Trust

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Speaker 2 Normal is broke, and common sense is weird. So, we're here to help you transform your life.
From the Ramsey Network in the Fairwinds Credit Union Studio, this is the Ramsey Show.

Speaker 2 I'm Ramsey personality George Camill, joined by best-selling author Jade Warshaw, and we're taking your calls at 888-825-5225.

Speaker 2 Peter is in Philadelphia to kick us off. What's going on, Peter?

Speaker 3 Hi, how are you? Just

Speaker 3 stressed about bills and thinking about bankruptcy.

Speaker 4 Oh, man.

Speaker 2 How much debt do you have?

Speaker 5 A little over $25,000.

Speaker 2 What kind of debt is that?

Speaker 3 Closer to $30,000.

Speaker 3 Car,

Speaker 3 personal loan, hospital bills,

Speaker 3 gas bill. bill.

Speaker 2 And what's left on the car?

Speaker 3 The car is 10. The personal loan is 11.

Speaker 3 And that's just, you know, like personal loan just because

Speaker 3 I'm trying to get myself out of a jam, so I go back into it.

Speaker 2 You're in a cycle. What do you make?

Speaker 5 Right.

Speaker 3 $126

Speaker 3 base salary.

Speaker 8 Dude.

Speaker 3 And I think last year I pulled in about $180 for overtime.

Speaker 2 America just lost all empathy here. You make $130,000 and you're calling in trying to file bankruptcy over $20,000.

Speaker 9 Yeah, what else is going on?

Speaker 9 What else is eating your lunch? Because it's not $25,000 of debt.

Speaker 2 You could pay off this debt in less than

Speaker 3 time. I mean, I do have other things.
I mean, I take care of my kids.

Speaker 9 Okay, tell us about that because right now

Speaker 9 we're trying to understand where's the problem.

Speaker 3 Well, so I don't have a court order on the kids. I just, you know, whatever they need and whatever their mom needs, I just take care of.

Speaker 9 That's true.

Speaker 10 But again, if you were, if you were, I'm not going to lie, misspending.

Speaker 9 Okay, that's what it is. Because even if you were married with the kids in the house taking care of them,

Speaker 9 you know, $125,000 income would still be a great income. So it's not the kids.
It sounds like you're overspending in other areas. Do you have any kind of budget that you're on?

Speaker 7 No, not really.

Speaker 9 Okay, there's the problem. So I guarantee you today, if you were to just do an old school budget on a piece of paper, if you just said, All right, here's the money I take home,

Speaker 9 my net amount when I take home my check. And now I write down what I'm spending money on, and I'm just going to go back through my bank statement.
I think you would see the problem.

Speaker 9 Are you dating anybody?

Speaker 5 No.

Speaker 9 Okay, so then you're just spending money on yourself. Is it food? Are you doing a lot of door dashboard?

Speaker 2 If I looked at your bank statement, what would I see as the number one thing that you're overspending on?

Speaker 3 I don't know. Maybe fast food.

Speaker 3 Yeah, I guess going out, fast food.

Speaker 4 You go out with your buddies. You guys go have some drinks, anything like that?

Speaker 8 I don't have time for that. I work too much for work.

Speaker 9 Okay, so here's what George and I are saying.

Speaker 9 If you make a hundred, and I mean, we could talk about taxes and nickel and diamond, but essentially, if you made a hundred thousand dollars a year, 126, you could live on a hundred and pay this debt off, right?

Speaker 9 At the basic level in less than a year. Can you live on $100,000 a year?

Speaker 4 I think so.

Speaker 9 I think so, too. You're a single guy.
I mean, yes, you've got your kids to take care of how many two?

Speaker 12 Three.

Speaker 4 Three. Okay.
How old are they?

Speaker 4 16,

Speaker 5 20, and 9.

Speaker 4 Okay.

Speaker 9 And the 20-year-old, is she in college?

Speaker 9 Yeah. What do you put towards that every month?

Speaker 3 About $600.

Speaker 2 Okay. And what are you taking home? Like what ends up in your paycheck? Is it like $8,000?

Speaker 8 Oh, that's right. I also have a pension loan out.

Speaker 4 A pension loan?

Speaker 9 Tell us about that.

Speaker 5 Yeah.

Speaker 3 I totally forgot about that because that comes out of my check automatically. So I think I have about probably about $24,000 left to pay on that.

Speaker 4 Okay. How much comes out of your check?

Speaker 3 $463,000

Speaker 5 every two weeks.

Speaker 9 What caused you to take that pension loan?

Speaker 8 Oh, that's a long story okay

Speaker 9 uh what about credit cards are you using those

Speaker 3 no oh oh glad you said that so there's a i got about six thousand on uh okay uh capital one okay now it's starting to come to view we went from 25 up to 50 now we're at 56.

Speaker 16 anything else you want to tell us about like hand on the bible what else do you have going on student loans that's i forgot about the capital one card did you forget about student loans a year ago no i don't have any

Speaker 2 thank god is any of this in collections?

Speaker 3 The Capital One card.

Speaker 8 Okay.

Speaker 3 And the gas bill.

Speaker 2 All right. Are you ready to take control of this as a grown man with three about grown kids? And you're like, dude, I'm ready to clean up my life.
Because if you're ready, we can help you.

Speaker 4 If not, call us back when you want to.

Speaker 8 Yeah, I am.

Speaker 4 Okay.

Speaker 5 I'm just too stressed out.

Speaker 2 Starting tonight, you're going to make this budget and it's going to give you so much peace just to have the numbers laid out in front of you.

Speaker 2 Even if it's scary, even to go, ooh, I don't like what I see. At least it's not the boogeyman and all the unknowns.
I'd rather you be scared of the facts than the unknowns.

Speaker 2 So we're going to gift you every dollar to actually make the budget. It's a digital app you can download.
And you're going to list out your income for the month.

Speaker 2 And if that's $7,500, you list that in the income section. Below that, you're going to list every expense you can think of, including your minimum debt payments.

Speaker 2 And what you're going to see very quickly is if you're going over budget every month or under budget, and you should have wiggle room to use that money to throw with the debt.

Speaker 9 And I want you to use your bank statement as a guide when you do this, because I kind of feel like you have something that's living in your head of what you spend versus what's actual reality.

Speaker 9 So if you don't use that bank statement, you're going to say that you spend $400 on food, right? When the reality is you might spend like $1,100 on food, right?

Speaker 9 So go back, get the bank statement for September and use that as a guide when you make this budget going into November, okay?

Speaker 9 That's going to let you see, okay, now you're going to see, oh yeah, this pension thing came out. Now you're going to see, oh yeah, this is what I spend on gas.

Speaker 9 And it's going to take you, you know, you could do it. If I felt like you had an accurate picture, you could probably do it in 30 minutes.
But I really think you need to look at these numbers.

Speaker 9 It's going to take you an hour or so to get this done. But it's going to give you, like George said, so, so much peace.
And the other question is, are you investing at all?

Speaker 3 No, nothing serious.

Speaker 5 Just pennies on Robin Hood.

Speaker 4 No, boy.

Speaker 2 Let's delete Robinhood for now. Can you promise me that?

Speaker 4 Yeah. Okay, we're not really building any wealth.

Speaker 2 We're just wasting time.

Speaker 9 And what do you get every year when you do your taxes?

Speaker 9 What kind of refund do you get?

Speaker 3 I don't. Last year was the first time I owed.

Speaker 4 Okay.

Speaker 9 Okay, good. Yeah.
The budget, I mean, it's the blood work. It tells all.
It tells everything that's wrong with you.

Speaker 8 Okay.

Speaker 2 So once you do this budget, you're going to figure out your main expenses. Here's like food, utilities, housing, transportation, insurance, minimum debt payments.

Speaker 2 Anything beyond that, you're going to get real judicious and cut out. And that means eating out, that's got to go because we got got to clean this mess up.
And we don't want it to take 10 years.

Speaker 2 Let's do this in 18 months.

Speaker 2 Does that sound better?

Speaker 3 Yeah.

Speaker 2 Well, think about this. You got 56,000 in debt, let's say, just using ballpark numbers, and you throw 2,500 a month at this, you're done in 22 months, less than two years.

Speaker 2 That sounds great, right?

Speaker 3 Yeah.

Speaker 2 And we avoid bankruptcy, which is going to implode our life for the next seven years and hurt your ability to get jobs, to rent apartments.

Speaker 2 It's going to hurt you in in a huge way to file bankruptcy, especially over debts these small.

Speaker 4 Yeah.

Speaker 2 And so I don't think bankruptcy is your answer. I think you are the answer, Peter.
So hang on the line. We're going to gift you every dollar.
Make that budget tonight.

Speaker 2 It's going to give you a whole lot of clarity. And the new every dollar in that onboarding, that first 15 minutes, it's going to show you how much margin you will create if you decide to commit.

Speaker 2 And so it's like, we're going to be in your pocket guiding you along the way on this journey. And we are rooting for you, man.
We think you're worth it. We think those kids are worth it.

Speaker 2 And you're very capable. If someone's willing to pay you $130,000 a year, you are smart enough to make a budget and get out of this debt once and for all.
But first, you got to stop going into it.

Speaker 2 Debt is not a shortcut, it's not the answer, man. You are.

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Speaker 2 This is the Ramsey Show. I'm George Campbell, joined by Jade Warshaw.
Open phones at AAA-825-5225. You call us and we'll talk about your life and your money.
Eli is up next in Indianapolis.

Speaker 2 What is happening, Eli?

Speaker 6 How you doing, guys?

Speaker 2 We're doing well. How are you?

Speaker 13 I'm doing well.

Speaker 18 So my question is,

Speaker 18 I lied to my girlfriend that's not the question

Speaker 4 that's an admission it's a confession we appreciate the honesty here yeah i'm not a priest though i can't help

Speaker 4 maybe we can help financially for

Speaker 6 for two two years now that i can't afford stuff

Speaker 18 that uh i'm broke and that i like staying in

Speaker 14 i'm not

Speaker 19 i'm not broke i i I can afford pretty much what I want.

Speaker 10 I'm out of debt 100%. I own own my house.

Speaker 2 And she thinks you're broke because for two years you were like, hey, listen, I'm strapped for cash.

Speaker 19 Yep, pretty much.

Speaker 22 And it's not like I've been mooching off her or anything.

Speaker 18 Like, I pay my way.

Speaker 10 I don't, I'm not trying to be worthless in that matter or anything.

Speaker 4 Why then?

Speaker 23 I just like.

Speaker 20 I've got a

Speaker 6 95 Toyota Tacoma.

Speaker 20 She's always asking me, why don't I get something else?

Speaker 23 And I always tell her I can't afford it.

Speaker 4 Why?

Speaker 2 Why not just tell her I'm happy with my truck?

Speaker 19 I mean, yeah.

Speaker 2 What? Yeah.

Speaker 4 What's behind all of the pathological lies?

Speaker 23 It was pretty stupid, wasn't it?

Speaker 9 Is it because you just said it and then once you said it, you were like, I got to stick to it now.

Speaker 2 You got to play this weird character?

Speaker 4 No, I mean.

Speaker 9 What is her financial situation? Is she bad with money? Is that why, are you afraid that if you tell her that you are good with money, that she'll start mooching off you?

Speaker 20 That's been my, that's what i've had happen in the past

Speaker 2 so there's past baggage and trauma and so you're going well i'm not going to do that again that hurt yes and so now i'm going to lie because if she knows i have money i could get hurt again

Speaker 2 yes is that a more accurate picture so because usually behind every lie there's a fear there's a lie that you told yourself long before you lied to someone else

Speaker 20 Yes, and honestly, I didn't even realize it's been a lie until a couple months ago.

Speaker 10 And then I'm thinking, like, I'm wanting to get serious with this, with this girl, and I'm wanting to make things happen.

Speaker 6 So she's going to have to find out sooner than later.

Speaker 9 How long have you been dating?

Speaker 10 We've been about two years.

Speaker 9 So two years. And you've been saying this from the jump.

Speaker 9 Here's what I want to know, because I know you're saying that you've been lying.

Speaker 9 I'm trying to, I want to go a little bit deeper on this. So

Speaker 9 does she think that you have mortgage debt or you just haven't mentioned it?

Speaker 4 Does she think that you carry debt?

Speaker 10 She knows my house is paid off.

Speaker 24 Okay.

Speaker 4 Okay.

Speaker 18 So, I was, I was, uh, I was very proud whenever I paid my house off.

Speaker 7 I, she was the first one that I let know when I paid my house off about six months ago.

Speaker 9 But, like, when it comes to doing fun or what you might think of extravagant things, even though you're thinking, hey, yeah, I might enjoy doing that, you're lying and saying, no, I don't want to spend money on that.

Speaker 9 I just like a simple life, right?

Speaker 10 Yes.

Speaker 2 Is it affecting your relationship? Is she frustrated that you guys can't enjoy experiences and eating out?

Speaker 20 I mean,

Speaker 10 she's a very, very simple woman, and that's kind of what's going on.

Speaker 2 I would just have to come to Jesus conversation, take her to a different environment and maybe a different place, a date, whatever, and say, listen, I got to come clean because I want this relationship to be built on trust.

Speaker 2 I've done a poor job of that.

Speaker 2 And then say, here's what I did. Here's why I did it.
And I i am very sorry will you forgive me can we move forward with this relationship with honesty

Speaker 9 yes okay that's the only way forward and her response is now that's up to her how she responds she might say kick rocks pound sand i'm done with this relationship i just have a i have a funny thought about this though like usually okay here's the thing eli usually if somebody says they've been lying i'm like ready to go hard in the paint but I'm listening to you.

Speaker 9 You have no debt. You have a paid off mortgage.
Part of me is like, how much are you lying?

Speaker 9 Because I'm like, you seem like you are kind of a simple guy who doesn't want to spend a lot of money because you've done all of these things.

Speaker 9 So I'm trying to, I need an example of like what you said that was a lie,

Speaker 9 like what you've been saying to her. Because I'm like, it sounds, you sound pretty simple to me.

Speaker 20 The most, the simplest

Speaker 20 example is

Speaker 10 I was working on my pickup truck.

Speaker 19 It's a 95 Toyota.

Speaker 6 And it's kind of a hunk of junk, but I grew up dirt poor.

Speaker 4 Okay. And

Speaker 20 I love that truck.

Speaker 10 I don't need anything else.

Speaker 20 I hardly ever drive much.

Speaker 6 But she asked me, well, why don't I just get something newer and better?

Speaker 23 And I told her I can't afford it.

Speaker 9 Okay, when really you feel like the reason is I just don't want it.

Speaker 2 It's not a priority for you. Yeah.

Speaker 4 Okay. Yes.

Speaker 2 But you felt weird saying that. It was easier for you to lie, to have the guys of like, well, it's just, it's too much money for me.

Speaker 10 Yes. And then

Speaker 18 her and her family went on a cruise a while back, and I didn't go because I couldn't afford it, is what I said.

Speaker 9 But really, what you're feeling is

Speaker 9 you came from being dirt poor, and

Speaker 9 it sounds like you're afraid to go back to that. And so, certain things that other people might splurge and spend money on, you're like, listen, I don't feel the need to do that.

Speaker 10 Yes,

Speaker 24 I really don't.

Speaker 4 Okay.

Speaker 9 So So maybe it's just a simple thing of changing the language.

Speaker 9 And next time you talk to her, you're saying, you know what, I've been telling you I can't afford things, but I want you to know my heart. Technically, I can't afford it.

Speaker 9 I just don't care about spending money on those sorts of things. You know me, I've got a paid-off house.
You know, I don't carry debt.

Speaker 9 And my priorities with money, I feel like sometimes our priorities with money are different. And maybe that's the conversation because

Speaker 9 you kind of painted yourself to be a lie, like a liar about it. I don't know.
It doesn't feel like.

Speaker 2 You don't seem like a terrible person.

Speaker 4 Yes. And it's the weirdest thing to lie.

Speaker 2 Most people would say, I lied. I'm actually in crippling death.
Right. And she thinks I'm very wealthy.

Speaker 4 Yeah, you're sort of.

Speaker 9 It's just your motivation. You're not telling her your true motivation.

Speaker 2 But I would say, I would, I think it's okay to just sit her down and say, I need to be honest with you. I know, like, this is a big deal to me.

Speaker 2 It may not be to you, but my phrasing and language has not been honest. Yeah.
When I tell you that I'm broke, I don't have the money.

Speaker 2 Really, it's just, it's not a priority for me, and I don't care to spend money on those things. But it's my bad for positioning myself like I was some broke person when truly I'm not.

Speaker 9 That's right.

Speaker 9 And maybe even line it up with the next part of that, which you did let us know that you're kind of worried that if she knows that you technically can't afford to do these things, you're worried that she's going to try to inflate your lifestyle in a way that you don't necessarily agree with or want to do.

Speaker 9 And I think it's important to have those conversations before you think about things like getting engaged or getting married because you do want to find out, you know, and it's, don't get me wrong, it's okay if she's different from you, but you guys need to start figuring out what that balance looks like.

Speaker 9 And to George's point, you being very honest in your communication from here on out is going to be very important.

Speaker 9 Okay,

Speaker 2 I hope that helps, Eli. That's a very interesting conundrum.
Thanks for trusting us with this situation. Yeah.
Wow. All right.
Let's try to take a quick one here from Mike in St. Louis.

Speaker 2 Up next, what's happening, Mike?

Speaker 20 Hey, guys, thanks for taking my call.

Speaker 2 Sure.

Speaker 4 How can we help?

Speaker 26 Hey,

Speaker 6 so I'm wondering if my wife and I can pause baby steps four and five to finish baby step six in under 24 months.

Speaker 13 And the reason I'm kind of feeling that way is because I'm looking at it the same way you guys look at baby step three, B, where you can pause investing for two years or less while you're saving up money for a house.

Speaker 23 It's just, I already have a house.

Speaker 18 So I'm trying to get you guys' thoughts on that.

Speaker 9 Short answer is I'm always going to tell somebody to walk the baby steps in order.

Speaker 9 How much do you owe on the house?

Speaker 18 What are we talking about? Just check to...

Speaker 28 Yeah, it's $137,000 left.

Speaker 2 $137,000. How many kids do you have?

Speaker 13 Just one.

Speaker 2 And how old are you guys?

Speaker 13 I'm 30, and she's 28.

Speaker 2 Okay. And the child, I imagine, is very young?

Speaker 20 Actually, she's 13.

Speaker 27 She's from previous relationship.

Speaker 2 Okay. So we're talking

Speaker 2 college in five years.

Speaker 2 Do you have enough covered right now to cover college or to help pay for it?

Speaker 29 We have about $30,000, which would cover the first

Speaker 4 probably year or two, depending on where she wanted.

Speaker 9 And you're doing no investing right now?

Speaker 13 Oh, no, we are doing babysitters four and five right now.

Speaker 24 We would pause to do that.

Speaker 2 I love your excitement to get the house paid off. I don't think the juice is worth the squeeze on this to pause the investing, to pause college.

Speaker 2 I would just keep investing 15%, put some money towards college. The house will get paid off probably a year later.

Speaker 4 Big whoop.

Speaker 2 I don't think you need the gazelle intensity that you currently have. You're moving from intense to intentional in baby steps four, five, and six.
I'd stay that way. Thanks for the call.

Speaker 2 This is the Ramsey Show.

Speaker 2 Hey guys, George here. You know I hate debt, and that includes sleep debt.
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Speaker 2 Welcome back to the Ramsey Show. I'm George Campbell, joined by Jade Warshaw.
The number to call is 888-825-5225.

Speaker 2 Well, it's time for our long-running segment, Jade.

Speaker 9 And by long-running, you mean this is the third time? The third time.

Speaker 4 Okay. It's long for me, you know.

Speaker 2 So it's called Pick a Side, and this is where we have two people on the line, and we have to help them kind of settle a debate.

Speaker 2 And you and I, at the end of it, have to pick a side after we hear them out and hear their case.

Speaker 9 I enjoy this thoroughly.

Speaker 2 I pitched Judge George for the name of this segment. They didn't like that.
Judge George? And I wanted a little gavel.

Speaker 9 Oh, just a little baby gavel. Then I'm going to pitch Judge Jade.

Speaker 2 Oh, dang, that's so much cooler. All right.
I give up. Here we go.
Let's see what Jennifer and Joe have to say in Denver, Colorado. What's going on, guys?

Speaker 21 Hi.

Speaker 30 Yeah, I'm ready to buy a new car, and my husband thinks I'm fine with the one that I have.

Speaker 2 Oh, all right, Joe, what do you have to say for yourself?

Speaker 31 Well, I do agree that she needs a new car.

Speaker 31 She just wants to spend way too much on a new car.

Speaker 4 What does she want to spend?

Speaker 31 $50,000.

Speaker 31 Okay.

Speaker 2 That's a lot of money. And that's the most you guys have ever spent on anything outside of a house, I'm guessing?

Speaker 15 Yes.

Speaker 31 Yes.

Speaker 2 Okay. Where are you guys at financially?

Speaker 30 We're on baby step seven.

Speaker 2 Paid for house, no debt, love it. And what's your net worth?

Speaker 30 It would be what our house is worth.

Speaker 31 Yeah, $600,000.

Speaker 4 Plus retirement?

Speaker 30 $700,000.

Speaker 2 So not quite a million?

Speaker 4 No. Okay.

Speaker 2 All right. And what's the household income?

Speaker 30 $150,000.

Speaker 5 Approximately.

Speaker 2 $150,000. And how much cash do you guys have in the bank?

Speaker 30 We have our emergency fund right now of $10,000.

Speaker 31 And I got $10,000 in my business account.

Speaker 9 So $10,000 and $10,000. If you were to buy this car,

Speaker 9 A,

Speaker 9 were you thinking of getting something brand spanking new? And two, how are you going to pay for it?

Speaker 4 I would want to save up for it.

Speaker 32 Okay.

Speaker 30 And I don't necessarily want something new.

Speaker 30 It's just what I want just came out. So I want to wait a couple of years until I can buy one a couple of years old.

Speaker 9 What kind of car is it? Can you tell us?

Speaker 30 It's the Toyota Grand Highlander.

Speaker 4 Highlander.

Speaker 2 Where's John Deloney when we need him? That's what he ended up getting.

Speaker 9 I need like a picture of a Highlander. I don't really know what that is.
I'm going to Google it.

Speaker 2 They're beautiful. Really great cars.
Okay, so what is the car you're currently driving?

Speaker 30 I have a 2007 Acura MDX and it's getting close to 200,000 miles on it.

Speaker 2 Oh, she's just getting started.

Speaker 9 That's a nice, that's a nice MDX is invincible.

Speaker 2 Okay, love that. And what is he driving? I'm curious.

Speaker 31 I have a 2004 GMC pickup truck and then we also have a 2020 Transit Connect van. I'm self-employed and so I use that van for work.

Speaker 15 Cool.

Speaker 2 Okay. Might be time for both of you to upgrade.
Maybe step seven, living like no one else. I know that's guessing have a sizable margin in your budget now to save up.

Speaker 2 How much could you throw every single month just to kind of a side savings account?

Speaker 30 Oh, I think we could have it saved in six months.

Speaker 4 Wow. Yes.

Speaker 16 Yeah. That's pretty simple.

Speaker 4 That's pretty simple.

Speaker 31 So, yeah, I mean, we could save five, six thousand a month.

Speaker 4 That's great.

Speaker 9 Okay. So

Speaker 9 tell us, Joe, why tell us what you would do if it were your choice. Obviously, we know Jennifer wants this $50,000 Toyota Highlander slightly used.

Speaker 9 In your book, what's something a little bit more reasonable?

Speaker 31 $30,000, $35,000. Maybe not the grand Highlander, but the regular Highlander.

Speaker 9 That's what I'm looking at. This one I'm looking at is like 30,000, 2023 Highlander LE.
Is that not the one?

Speaker 30 No, I want the grand Highlander.

Speaker 4 You want the big boy.

Speaker 30 They just came out in 2024.

Speaker 8 Okay. Got you.

Speaker 2 Joe, I'm curious, where'd you get that 35 number from?

Speaker 2 Just your heart?

Speaker 31 Oh, yeah, just my heart.

Speaker 31 I mean, I look on Craigslist and you can find the regular Highlanders.

Speaker 4 I see one.

Speaker 31 30, 30,000 miles for 30,000 or so.

Speaker 9 Yeah, I see what's going on here. Okay, interesting.

Speaker 2 All right, we have a lot of information here.

Speaker 30 I feel like,

Speaker 30 you know, we've been doing Dave Ramsey's baby steps for a long time. I feel like I've been living like nobody else.
When do I, we're on baby step seven. When do I get to live like nobody else?

Speaker 9 Listen, I feel that so tell me when was the last time you did an activity that you would call a live like no one else the ladder that that you like at least a couple of grand where you're like we dropped some money on this

Speaker 30 we went to Dominican yeah okay

Speaker 9 when was that

Speaker 2 last month nice okay okay so you guys are enjoying life Yes, so we would say you you've driven like no one else now it's time to drive like no one else. You've driven the the hoopty Dave car.

Speaker 2 Now it's time to drive the Dave car. You know what I'm saying?

Speaker 9 I've made up my mind. I know what I'm, I know how I'm going to vote.

Speaker 30 I got in a car accident a couple months ago, so it's dinged up on the side.

Speaker 9 And listen, you keep playing.

Speaker 32 Tell us more.

Speaker 4 She's like, she's really playing it up.

Speaker 30 All these stupid little things don't work on it anymore. Like you cannot reset my clock.
You can't tell what time it is in there.

Speaker 9 Jennifer, I call those special features.

Speaker 9 My seatbelt doesn't go back.

Speaker 4 Listen, I got my phone in the car. I got my Apple watch in the car.

Speaker 2 I know what time it is. It's fine.
That's not a big deal. But I'm with you.
Here's okay. Can I vote?

Speaker 9 I know what my vote is. Are we casting votes?

Speaker 2 I think we're casting votes. You guys ready to hear the verdict?

Speaker 9 Let's say it on three.

Speaker 4 All right.

Speaker 2 Or the name of the person that we think is right.

Speaker 9 Yeah. Say the name of the person you think is right on three.

Speaker 4 One, two, three. Jennifer.
Yeah. Oh, my.

Speaker 2 Jennifer, you just won a brand new

Speaker 4 Toyota Highlander. That'd be fantastic.

Speaker 2 And Tomat said from Broy Hill. I could be aware of that.
What do you think?

Speaker 9 Are you shocked?

Speaker 4 No, I'm shocked.

Speaker 9 Of course, Joe is shocked.

Speaker 2 Here's the thing, because I know this. We bought my wife a new to us car.
It was a slightly used luxury car, and it hurt my soul, Joe, to write that check.

Speaker 2 But I also knew this is part of living the plan. It's part of the plan.
And I have a hard time letting go and writing a big check like that.

Speaker 2 But when you pay for it in cash, you go, oh my gosh, that was a lot. And then you go, this is paid for.
This is amazing. This is a huge blessing.
And it's why we lived like this for so many years.

Speaker 2 And so I think you guys are doing the right thing. Just so you know, the parameters here, you don't want all things with motors and wheels to be more than half of your annual income.

Speaker 2 So that's where I'm going. All right, 150K is your income.
Everything you own should be 75K.

Speaker 9 Listen, Joe, you could turn around and get yourself a $50,000 car and be all right.

Speaker 2 Now, what is this Transit Connect worth?

Speaker 31 About $20,000.

Speaker 4 Okay.

Speaker 2 Yeah. So even the $20,000 plus the $50,000 for hers, that would be $70,000.
You still got some wiggle room there.

Speaker 2 Not too much. Not too much.
And, you know, maybe you wait three years and you get the Highlander, but I think you go for it in two years from now and you get a two-year-old grand Highlander.

Speaker 2 And if you can't wait that long, then just go for a normal Highlander and you can always upgrade later.

Speaker 2 Nothing says you have to drive this car for the next 20 years, which is kind of how you guys have been living.

Speaker 2 Right.

Speaker 2 I feel like Joe's really disappointed.

Speaker 4 He was waiting.

Speaker 2 No, you shouldn't spend more than 30.

Speaker 2 But I think that will help you guys to go, okay, half of our income shouldn't be tied up in these things.

Speaker 2 That means we do need to scale back because this transit plus the car Joe's going to get, plus the car Jennifer's going to get, it's going to add up to be a large part of our world.

Speaker 2 And then once you hit millionaire status, you can go buy that brand new car. And here's why.
It's not a fundamentalist thing.

Speaker 2 It's just that too much of your world would be tied up in a depreciating asset. But when you have a a million-dollar net worth, you can stomach that hit on depreciation a little easier.

Speaker 2 And so you guys will be there no time. How old are you, two?

Speaker 33 I'm 45.

Speaker 31 And I'm 56.

Speaker 2 Oh, my goodness. You got so much time to live and drive like no one else.
And you know what, Joe? I think it should be time for you to upgrade after. What is your dream car, Joe?

Speaker 9 It's a $30,000 car. We know that.

Speaker 4 It's the one he's got.

Speaker 35 I actually love my truck.

Speaker 2 He wants another GMC pickup.

Speaker 4 No, he wants the one. He to keep the one he has.

Speaker 16 He's the one I got.

Speaker 4 That's amazing.

Speaker 31 It's got an eight-foot bed. It's got the diesel, and I'm good.

Speaker 2 Thank you, Joe. They don't make those eight-foot beds anymore.
All these new pavement princesses out here got the tiniest little beds. I'm like, what are we even buying pickup trucks for anymore?

Speaker 9 So then, Joe, real quick, tell us, if you could spend $30,000 on anything, not a vehicle, what is your thing? Like, what's your live like no one else thing?

Speaker 20 I would do a boat.

Speaker 4 Hey, okay.

Speaker 9 There we go. Now we got it.

Speaker 2 Joe's in the boat. Thank you guys so much for the call and for letting us have some fun.
Excited for you guys to make that cash purchase of that beautiful new to you car very, very soon.

Speaker 2 More of your calls coming up. 888-825-5225.
This is the Ramsey Show.

Speaker 36 The holidays can come with a lot of pressure to spend. Family, friends, secret Santa at the office, all the things.
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Speaker 9 You're listening to the Ramsey Show. The Ramsey Show question of the day is brought to you by YReFi.

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Speaker 2 Today's question comes from Alyssa in Pennsylvania. Oh, never mind.
It's Courtney in Iowa. We had two.
I'm going to go with Courtney in Iowa. Final answer.

Speaker 2 She asked, My ex-husband and I received a large inheritance during our marriage and set aside college money for both of our children.

Speaker 2 Now my ex is financially strapped and has asked our youngest son for his college fund, which he didn't end up needing to fund his education.

Speaker 2 Our son is 24 and getting married soon, and I trust he will use the money responsibly. I can't believe my ex has put our youngest son into a terrible position.

Speaker 2 Is our son morally obligated to give his father this money?

Speaker 2 Short answer, I'm going to say no. There's no moral obligation.
There's no legal obligation.

Speaker 9 No.

Speaker 9 And I have questions, though. I mean, my first thought is, okay, the parents put the money aside for the kids in the 529.

Speaker 9 They list the child as the beneficiary, unless there was a discussion that was like, hey, if you don't use this money, it goes back to us.

Speaker 9 And they change the beneficiary back to themselves or the wife or whatever. I don't know.
But if it's still in the son's name, I'd be like, this is my money.

Speaker 4 Or, I mean, he's about to be a kid. I can pass it to our kids.

Speaker 2 How cool would it be to change the beneficiary to their kid?

Speaker 9 That's what I'm saying, yeah.

Speaker 2 In a year or two or five or whoever, you know, I think that's, and part of this is we're enabling this ex's bad behavior for a grown man to just suddenly be financially strapped and need to rob his kid's college fund tells me a lot about the character of this person.

Speaker 2 Right.

Speaker 9 Because a 529 is a gift. Like, is you gifting the gift of education to your

Speaker 2 well the confusing part is this came from a large inheritance during their marriage that they then set aside in a college fund yeah but still even if they had worked to save the money you know it would still be money that they earmarked and said this is a gift to our kids for their education so in many ways it does feel like revoke like like turning around on a gift yeah i'm i don't like it i don't like it yeah i don't like it and i don't like this ex having i think he needs to find a different method to get this money than to rob the college fund, which, by the way, will come with a whole bunch of penalties.

Speaker 2 You got to pay income taxes plus the 10% penalty on top of that.

Speaker 2 And so I'd hate to see that when this money's been growing tax-free, it can be used for future generations to allow them to go to college debt-free.

Speaker 2 And who knows what college is going to cost 18 or 20 years from now? Right, right, right. When this son has kids, yeah.

Speaker 9 And if you're, I mean, let's just pretend for a second, let's play this out, George. Let's say how much money would need to have been in there to pay for kids' college.

Speaker 9 Maybe, maybe there's $70,000 in there to pay for the whole thing. If you didn't use it, then this is idea of my ex is financially strapped.
Like you don't suddenly up and need $50,000 or $70,000.

Speaker 9 That's over time,

Speaker 9 many decisions being made.

Speaker 9 So,

Speaker 9 yeah.

Speaker 9 My final answer is.

Speaker 2 This whole thing just gives me heartburn just looking at it. But I would say,

Speaker 2 no, your son is not morally obligated to give his father this money, and I wouldn't if I were him.

Speaker 9 And if I were the mom. So I can keep going on this.
And if I were the mom, it was both of their inheritance.

Speaker 2 That's the thing. We don't know where this came from and all that.

Speaker 9 Well, she says my ex-husband and I received an inheritance. I'm like, part of this is on her, too.
Like, she should get to decide. And if she says, no, this is our son's money, that on that.

Speaker 2 You can figure it out. All right.
Thanks for the question. That's a real

Speaker 4 hardcore math problem. It hurt my brain.

Speaker 9 These are the hard topics that George and I go after on the Ramsey show. It's very hard-hitting content.
That's what we do. All right, let's go to David in Providence, Rhode Island.

Speaker 9 What's going on, David?

Speaker 15 Oh, hello.

Speaker 4 Hello. How are you?

Speaker 23 Hi.

Speaker 12 All right.

Speaker 23 I'm good. How are you?

Speaker 7 I like how Dave puts it. I'm better than better than I deserve.

Speaker 4 Okay.

Speaker 9 Love to hear it. How can we help today?

Speaker 7 So me and my wife are in an interesting

Speaker 7 financial choice right now.

Speaker 18 And I think it's kind of like a pivotal choice.

Speaker 7 And I just need some advice.

Speaker 7 So we have no debt, no kids.

Speaker 7 Lord willing, we'd like to have kids in about five years.

Speaker 4 Okay.

Speaker 7 And then at that point, you know, we would go down to like a single income.

Speaker 23 You know, we just would both value her being a full-time mother.

Speaker 37 So we have about $40,000 to $45,000 saved up in the bank.

Speaker 7 And we're currently renting an apartment right now.

Speaker 7 Our rent is $1,575 a month,

Speaker 7 which is sort of average for the area that we live in.

Speaker 15 So

Speaker 7 our question,

Speaker 7 my question rather, is

Speaker 7 do we buy a home that we can afford right now that would not really suit us when we have children, meaning we would probably have to sell it in about five years,

Speaker 7 or do we continue to rent for like another three to five years and then buy a house that would be bigger and maybe maybe suit us more as a larger family.

Speaker 2 Why would you need to sell when you have one kid?

Speaker 9 That's what I was going to ask.

Speaker 18 Yeah, I mean, we really wouldn't need to sell for like the first kid.

Speaker 7 We kind of both would like to have more than just one, though.

Speaker 9 But yeah, I mean, like, but that stretches you to like five or that stretches five years to like maybe seven years, no?

Speaker 4 Um,

Speaker 9 as far as space, because an infant is like this big,

Speaker 18 yeah. Well, so maybe I should define the space a little better.

Speaker 4 I mean, they don't make one-bedroom homes

Speaker 14 Well,

Speaker 4 what I'm looking at is

Speaker 7 $200,000 for not really a home, I guess. It's more like a cottage.
It's 650 square feet.

Speaker 4 That's like a tiny home. That's super small.

Speaker 4 Yeah. Yeah.
It's pretty small. Okay.

Speaker 4 That does change it a little bit.

Speaker 9 That's tiny.

Speaker 2 So what if we got something more reasonable? Let's say it's a two or three bedroom to where you could grow into it, even with two kids, even if it was a little bit tight. What would that cost you?

Speaker 7 In this area, I mean, there's nothing.

Speaker 38 it would either need such a large amount of repair that it's like really a huge undertaking um like maybe more than just an average fixer upper so what about one in good condition

Speaker 4 you don't have to do some hd tv show

Speaker 2 probably about like 350 okay or so that's reasonable and you're going to keep saving a down payment is 45 everything you have in savings does that include your emergency fund or is this just earmarked for down payment

Speaker 9 that's that's everything we have yeah okay that does change it a little bit too So I would, and what's your household income?

Speaker 7 Yeah, so right now with both of us, it's it's about 160 to 170,000 a year.

Speaker 4 All right.

Speaker 7 But if, you know, after we have a kid and my wife would stop, you know,

Speaker 7 making an income, right, then that would go down to about, I don't know, 110 or so. I mean, it depends on with me getting a raise between now and then and whatever.

Speaker 18 But it, you know, around 110.

Speaker 4 Okay.

Speaker 2 I would say you're on the path and I would just set the home budget budget that makes sense and then go, okay, well, how much more down payment do we need to save up to make this affordable to where it's no more than 25% of our take-home pay?

Speaker 2 And that I would base that take-home pay off of your income alone since you know that's the goal.

Speaker 9 Yeah. And the good thing is your rent is not astronomical.
Like your rent is not far out that I'd be like, you got to get out of this rent. You're paying $3,000 a month for rent, right?

Speaker 9 You guys' rent is at a good spot. And I don't think that I'd be interested.
I know it's not an actual tiny house, but I don't think I'd get into this tiny house deal.

Speaker 9 I think I'd ride the wave and just go, you know what? We're going to take the

Speaker 9 instead of living five years in this 600 square foot house that basically is an apartment, let's live in an apartment and let's save up this money and do this, this $350,000 deal.

Speaker 23 Okay. Yeah.

Speaker 7 Yeah. That's kind of what we were thinking about.

Speaker 7 I value the opinion. Thank you so much.

Speaker 7 Yeah, for what it's worth, our apartment is actually bigger than the house.

Speaker 37 It's nothing crazy, but it's

Speaker 2 a 700-square-foot apartment. You just beat the cottage.
For sure. So I would go slow.
There's no urgency or rush on this.

Speaker 2 And I would just stack up as much as I can while you have two incomes and no kids. Now is the time.
Yeah.

Speaker 2 And you might need to save up 100 grand or 150 grand to make this payment affordable for your solo income in the future. But that's what I would do.

Speaker 2 I would aim for that 350 house and try to get there as soon as possible because, Jade, like we know, it's a moving target. Yeah, that's right.
Three years from now, that might be a 450 house.

Speaker 9 That's right. So you still want to move with urgency, still move with intensity.
And of course, we never want that payment to be more than 25% of your take-home pay all-in.

Speaker 9 That's thinking about things like homeowners, all of it. So that's the framework that we're working with.
Hey, thanks for hanging out with us. That does it for this hour of the show.

Speaker 9 George and I will be right back with you before you know it. This is the Ramsey Show.

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Speaker 2 Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I'm George Camill, joined by Jade Warshaw this hour.
And the number to call is triple eight eight two five five two two five.

Speaker 2 If you want to join the conversation and pose your question for the good of the group and for the good of America, Chris has chosen to do that. He's in Washington.
What's going on, Chris?

Speaker 5 Hi, guys. Thanks for taking my call.

Speaker 8 I really appreciate it.

Speaker 4 Sure. How can we help?

Speaker 5 So my wife and I, we're new parents. Well, relatively new.
Our son's nine months old. I'm super excited about that.

Speaker 5 We made the decision to have her stay home because daycare was too expensive. And we're just trying to figure out if you guys have any tips and tricks to

Speaker 5 managing our money going forward and making sure that we're setting ourselves up for success in retirement and setting him up for college and all that good stuff.

Speaker 9 Yeah. So what was she making before she decided to stay home?

Speaker 5 She was making about $75,000 a year.

Speaker 9 Okay. And

Speaker 9 what do you make?

Speaker 5 I currently make $110,000 roughly annually, and then I have a side business that I run that brings in anywhere from $20,000 to $45,000 a year.

Speaker 9 Okay, so we'll just say that you're at $130,000. Do you feel good about that? Yeah.

Speaker 4 Okay. Yeah.

Speaker 9 And so have you guys done a new every dollar budget with this 130 because how much does that allow you to take home every month

Speaker 5 you know that's that's been really really new for us um

Speaker 5 and so you know if i had to put a number on it i mean our more we have our mortgage we have no other consumer debt um we've done a really really good job got all of our vehicles paid off and everything like that

Speaker 13 um

Speaker 5 and so you know our mortgage is roughly 2400 a month and our living expenses you know at another

Speaker 5 you know 300 350.

Speaker 9 Yeah, I don't think your mortgage is going to be the problem.

Speaker 4 I think probably feeling unclarity.

Speaker 2 I'm wondering, it sounds like you have like a little bit of regret, like, oh, should we have done this? Things feel tight. So where is that coming from?

Speaker 5 Yeah, I just, I'm, I'm so

Speaker 5 analytical when it comes to like looking at our budget.

Speaker 5 And we've, you know, both worked really, really hard coming out of, you know, roughly $95,000 in student loan debt, you know, over the past three years. And,

Speaker 5 you know,

Speaker 5 we've just worked really, really hard. And I don't ever want to put our family in a place where we're in

Speaker 5 need for money. You know what I mean? And

Speaker 5 we've done a really, really good job of that. We have a bunch of money put aside already.

Speaker 2 So you're following the baby steps to a T?

Speaker 5 Yeah, pretty. I mean, I would say so.
Yeah.

Speaker 9 You said that, but you didn't answer the question when I said how much you're bringing home every month.

Speaker 5 Oh, yeah. I mean, we bring home probably

Speaker 5 let's see

Speaker 5 40 no 6

Speaker 5 800 a month roughly.

Speaker 9 So I'm gonna challenge after I'm gonna challenge you to for your own good because you described yourself in one way and don't get me wrong it probably was the way that you were before you had an eight month old.

Speaker 9 You said I'm very analytical and I'm really on this but the truth is right now you're actually not on your numbers.

Speaker 9 You're kind of guessing at them and I have a theory that the reason that you're feeling that uh that tightness or that feeling of like you don't like the way your money is feeling i think it's more because you don't know exactly what's going on and you don't have a clear path and plan for it that's why i asked about your your every dollar budget because if you look at that tonight with your wife once the baby's down Once you guys have, you know, had something to eat and you say, okay, we're going to look at every dollar tonight.

Speaker 9 We're going to plug in our numbers. We're going to log on HR and find out exactly what the check is.
And now we're going to plug in the mortgage, everything we think we're spending money on.

Speaker 9 What does life look like now with an eight-month-old? How much are we spending on diapers now versus when the baby was first born?

Speaker 9 All of those things are going to give you a much clearer picture on what it looks like today with the new lifestyle that you're in today. And I think that's actually going to help you because 130,000

Speaker 9 where you live, I think you should be okay. Now, don't get me wrong, to lose 75,000 a year is a lot of money.
But that lead, that actually led me to my other point of it's just one baby, right?

Speaker 9 Right. And you're telling me that it costs $75,000 a year to daycare one baby.
That's not true.

Speaker 5 No, no, it wasn't much of that. It was, you know, more so, you know, I want

Speaker 5 A, right, it was expensive to do daycare and B, for the, for the amount of money it was going to cost us, you know,

Speaker 5 she wanted to stay home and wanted to raise our son.

Speaker 4 Which is fine. That's That's fine.

Speaker 9 But the way you framed it was it wasn't worth it for her to go to work. You made it seem like it was more of a cost thing.
So it's just personal values.

Speaker 5 Yeah. Yeah, I guess.
Yeah, you're right.

Speaker 9 And that's fine. I think all of that, though, what I'm trying to get you to is clarity.

Speaker 9 And I think if you can clearly say, we're doing this because we value mom being at home with baby, that is a whole different conversation than it's too expensive. We can't afford daycare, right?

Speaker 9 So now you're talking about real things, which is no, this is a value of ours, which knowing that is also going to reflect how you feel now about the budget being shorter because you've said, no, in our hearts, we want this.

Speaker 9 So now we are able to tackle a smaller budget or working with a smaller income. Do you see what I'm saying? I'm just trying to get real.

Speaker 9 I mean, George, you know how it feels to have an eight-month-old at the house.

Speaker 4 Oh, yeah.

Speaker 2 I got a newborn, a two-year-old. Life is chaotic.

Speaker 2 And that's where you and your wife sitting down looking at the budget every month and just going, okay, I want to bring seven grand in this month and our mortgage is $2,400.

Speaker 2 We're going to have $1,000 left over. What are we going to do with this? And for you guys, you already have the emergency fund?

Speaker 2 Yes, we do. Are you investing 15% out of every paycheck?

Speaker 5 We are.

Speaker 2 Okay. And then beyond that, how much margin would you say you have at the end of every month, or is it disappearing into random spending?

Speaker 5 I would say more disappearing into random spending.

Speaker 2 That's what's making you feel out of control because you're analytical. You're going, the math ain't mathing.
There should be two grand laying around, and it's gone. And it's amazing.

Speaker 2 If you like take all the receipts of all the money you spent, it'll make a little bitty book of the reasons why we feel that way.

Speaker 2 And so that's where budgeting with the new Every Dollar, with your bank connected, the transactions are flowing in, total transparency and accountability with you and your wife.

Speaker 2 And then you might decide, oh, you know what? Yeah, we need to be spending more. Cause she's like, dude, I'm spending it on things the family needs.

Speaker 2 We just need to up the budget line item to account for that instead of going red flag, red flag, you're over budget.

Speaker 2 So I think there's probably just some discongruity with like what you're actually spending versus what you think you're spending. Yeah.

Speaker 9 Your life has changed a lot. And I mean, there's the kid and then there's, yeah, wife is at home.
Money-wise, things have changed.

Speaker 9 And it's just like George said, reflecting your, your, your line items to updating your line items to reflect that change.

Speaker 5 Yep. No, I appreciate that a lot.

Speaker 5 And that's something that we've actually embarked on recently is kind of combining our finances, just listening to you guys and kind of buying into that, buying into that idea of, you know, becoming a unit, you know, and we're, you know, working through those things.

Speaker 5 And so I really appreciate the feedback.

Speaker 9 I love it. I think you're doing a great job.
And I think that you're a you're doing better than you think. Uh-huh.
And you're a reflection of the fact that this whole thing is a process.

Speaker 9 Like no one just in one day or in one listen or in one movement gets it all. It is like building blocks stacking on each other.

Speaker 9 And like you said, first we did the combined finance thing, then we did the debt payoff thing. All of that is stacking up.
And I just, I think you're doing fabulous.

Speaker 2 Are you using a spreadsheet right now? Are you using a budgeting app?

Speaker 5 Yeah,

Speaker 5 we're using a spreadsheet because that's a good idea.

Speaker 2 How many times has she said, hey, can I look at that budget spreadsheet? That sounds fun.

Speaker 5 Zero.

Speaker 4 Thank you.

Speaker 2 Final answer, Your Honor. I'm case closed on that.

Speaker 9 We're going to send you the brand new, all new, every dollar for you to have something that not only would a wife like to look at, but now she doesn't have to say, can I see that spreadsheet?

Speaker 9 You can just say,

Speaker 9 she'll open her own app and be able to see it.

Speaker 2 Here we go. That'll help get her on board on top of combining finances.
Proud of you guys. You're making progress, man.
That's all you can hope for.

Speaker 2 Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits.

Speaker 1 You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes.

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Speaker 1 But there's another piece that people often overlook, and that's long-term disability insurance.

Speaker 2 Yeah, it's important to understand the difference between them. Life insurance steps in when you die.
Disability insurance steps in while you're alive, but can't work.

Speaker 2 So it replaces a large part of your income so the bills still get paid while you get back on your feet.

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Go to xander.com or call 800-356-4282.

Speaker 1 Protect yourself, protect your income, protect your family.

Speaker 2 Welcome back to the Ramsey Show. I'm George Campbell, joined by Jade Wardshaw this hour.
The number to call is 888-825-5225. You call us up, we'll talk about your life and your money.

Speaker 2 Jacob is up next in Los Angeles, California. What's going on, Jacob?

Speaker 20 Hi, thank you for taking my call. Sure.

Speaker 4 How can we help?

Speaker 4 So

Speaker 40 I kind of need some,

Speaker 40 I guess, some direction in terms of what to do next in my life financially.

Speaker 40 My parents recently went through a divorce, and so I kind of had to take over

Speaker 40 as like the main contributor to the household financially. I'm currently living with my mother and my younger sibling.

Speaker 40 So I'm kind of paying for mortgage, you know, all the insurances.

Speaker 4 Why is that?

Speaker 4 Why is mom not working?

Speaker 40 Oh, no, no, no, she is. She is.
So

Speaker 40 because,

Speaker 40 you know, cost of living in California is insane.

Speaker 40 The way we set it up is I pay for, I say, I want to estimate like 60 to 70% of my take-home pay.

Speaker 40 And then the rest is made up by my younger sibling and my mother.

Speaker 4 How old are you?

Speaker 40 I'm 28 right now.

Speaker 9 Okay. Okay.
So when you say 60 to 7%, 70% of your income, tell us dollar-wise, how much money is this costing you every month?

Speaker 40 I would say maybe around 28 to 3,000.

Speaker 9 Okay, so you're spending 3,000 bucks kind of paying

Speaker 9 the things that make the house go round. And tell me again, explain to me again why mom is not contributing?

Speaker 40 No, no, she is.

Speaker 4 But how much is she contributing?

Speaker 9 If you're contributing that much.

Speaker 40 Right now she's contributing maybe like $1,500.

Speaker 9 And explain to me why that is?

Speaker 40 Well, she doesn't really make much.

Speaker 40 So, because I make the most in the household right now, so I wanted to, you know, obviously.

Speaker 2 So, did she ask you to take on the brunt of this? Or was this something you sort of stepped up and went, mom, here's what I'm going to do?

Speaker 40 Yeah, no, I definitely stepped up. I mean, it isn't fair for her to, or for me to force her to try and find a job out of nowhere.

Speaker 2 The scary part is is it's not fair for you to prop up a lifestyle that's not sustainable for them.

Speaker 2 Because let's say you go up and get married next year, you move out, you're not still paying all of their bills.

Speaker 4 And how old's your sister?

Speaker 40 My sister is 25.

Speaker 40 I guess to give a little bit more information,

Speaker 40 so in terms of the unsustainable lifestyle,

Speaker 40 it more or less is.

Speaker 40 The reason she got a job is because if me and my sister were to contribute 100% of our take-home pay, we we would be able to afford you know all the groceries and you know everything else to make the to live um but because she as a you know wonderful mother that she is she's like oh I don't want you or both of you to you know not have any savings for the future so she said I'm gonna get a job to do it but because objection wait a minute let me let me jump in here okay

Speaker 9 couple quick quick questions you guys live in Los Angeles but it doesn't sound like it's for the reason of a career like nobody's like listen, I started my firm here and now this is where I'm at.

Speaker 9 It sounds like you guys are kind of making ends meet, to use your terminology. Why are you still living in such an unsustainable, to quote you, an inexpensive area?

Speaker 4 Well,

Speaker 40 my dad's business was here, so we all moved here. And my mom does help with that.
Even through the divorce, you know, it wasn't

Speaker 40 an ugly divorce. You know, now

Speaker 40 it was one of the situations where, you know, they got married, you know, out of, you know, necessity because they needed to help each other.

Speaker 9 But that money is not filtering into your lifestyle now because they're now divorced and the two children are grown.

Speaker 9 So my question stands, it sounds like if this is an unsustainable situation for your mom, and I'm saying your mom because the two kids are grown, like you're grown,

Speaker 9 it sounds like she's got to decide where can she live that's not Los Angeles, California, and afford her lifestyle. Because here's my second part of this.
You're You're 28, your sister's 25.

Speaker 9 Typically, the reason that somebody would say, somebody your age would say, hey, I'm living at home is typically because they've got student loans, they've got bills, and it's cheaper for them to live at home than it is for them to maybe do something on their own.

Speaker 9 And in your case, that's not really the case because you're paying for your mom's life.

Speaker 9 And I understand that there's, you know, it's been something traumatic here with the divorce, but it still doesn't place that ball in your court. Do you see what I'm saying?

Speaker 9 And so I think all three of you have to go, what does my life look like? Where can I live where I can afford to be an independent person? Because do you have debt?

Speaker 40 No, I have no debt.

Speaker 9 You have no debt. There's nothing that stops you from saying, Hey, I'm going to go a further radius out from

Speaker 9 you know, Los Angeles, California, wherever that is, and I'm going to figure out where I can live to do a job that I can make more money doing and support my lifestyle. What are you earning now?

Speaker 9 And what is your job now?

Speaker 40 I'm an analyst for a film film studio, and I earn gross is around $80,000.

Speaker 9 Okay, so that's great. To me, $80,000, you're doing good.
Like,

Speaker 9 there's got to be a life that you can have on $80,000. Is that fair enough?

Speaker 4 Yeah. Okay.

Speaker 2 There, Jacob, on my screen here, it says, how do I make enough to take care of my mom? Is that the ultimate question? Are you wanting to make more so she can stop working?

Speaker 40 Yeah.

Speaker 40 She's working right now to help contribute, but obviously, you know, she's kind of

Speaker 40 getting getting up there in age. I don't know how to put that delicately, but

Speaker 40 because she's first language. She's turning 60, but she does have some like health issues.

Speaker 2 So what is her plan for retirement? Because right now, you just, it's going to stunt your growth as an independent person to just, well, I got to take care of mom for the rest of my life.

Speaker 2 I'm going to live at home. What if she lives to be 90? Now you're 58 and still propping up her life?

Speaker 4 Because she didn't prepare?

Speaker 40 Yeah, that's because because that's the kind of situation I'm in. Like, she does kind of have

Speaker 40 a very loose retirement plan. I don't think it's as structured as I would like personally.
What is it?

Speaker 2 Lay it out.

Speaker 40 So she said that her plan is to,

Speaker 40 well, we'll still live in this house that we, or this condo that we have. And, you know,

Speaker 4 she.

Speaker 9 Did you say wheel? Like, all of you will still be living together for her retirement?

Speaker 40 No, my sister is planning to move out. And so they'll just be me and my mother.

Speaker 4 But

Speaker 4 This is not good.

Speaker 9 This is not good. This is not good.

Speaker 40 Yeah, and I know it is not good, but

Speaker 40 yeah, once she is old enough to get social security, she says she plans on finding like one of those,

Speaker 40 I guess, like apartments or whatever that is, like income-based or like low-income

Speaker 40 something like that, and

Speaker 40 kind of live there. But I guess another piece of information is my parents do have a second property that's paid off, and that's they're getting like rental income.

Speaker 40 But because of the divorce, they were debating whether or not selling it or just splitting it.

Speaker 9 Do you know what it's worth if they were to sell it? What would they, what would they take to have to split?

Speaker 40 Um, I think collectively, if they sold it, they'd get maybe around a million.

Speaker 9 Okay, so she'd get 500,000 and then have to take out fees and whatnot, right?

Speaker 2 Yeah, is she getting rental income right now from this property?

Speaker 40 Yeah, yeah, right now. It's already been paid off for years, and they've been kind of how much is she making from that? Um, now that it's split, she'll make around a thousand.

Speaker 2 And then what is she making from her job?

Speaker 40 Right now, she's only she's in like elderly care, so I guess it's based off how many people she takes care of. She's only taking care of one person,

Speaker 40 so she earns around $1,500 net, but she says she is planning on, you know, assisting another person. That would bring her

Speaker 4 listen.

Speaker 9 I don't mean any harm. You got to separate yourself from the situation.
This is going to pull you under, dude.

Speaker 2 You're going the opposite direction by saying, I'm going to work more so mom doesn't have to work Yeah. Because that becomes enabling.

Speaker 2 And you're going to have to keep that up for the rest of your life. Uh-huh.
Because mom's not going to up and get a job 10 years from now if you decide to move out.

Speaker 9 Right. And right now you're paying, like to your point, you're paying 60 to 70% of the household expenses.
She has no reason.

Speaker 9 And in her mind, the plan is your sister can go on along, but you're going to live with me until I'm done. And that, that, that really puts

Speaker 9 you in a bad position. If I were your mom, I would be talking to ex-husband.

Speaker 9 I'd say, we need to sell this property because I need this $500,000 and I need it in my nest egg so it can grow for me for the next 10 years.

Speaker 2 And she still has to work for the next 10 years.

Speaker 9 That's right. Oh my goodness.

Speaker 2 So Jacob, we're basically telling you to do everything opposite the way you're headed right now. And it's because we care for you.
We care for your mom. We want her to have a great life.

Speaker 2 And currently her loose retirement plan is going to end up stunting your growth for the next decade or two or three. And so we need to end this codependence right now.

Speaker 2 Otherwise, it's going to hurt both of you in the long run. So sorry to hear that, man.
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Speaker 2 Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw.
Open phones at 888-825-5225. Jessica's up next in Nashville, Tennessee, right up the road.
What's going on, Jessica?

Speaker 26 Hi, thank you so much for taking my call. Sure.

Speaker 2 How can we help today?

Speaker 26 So me and my husband recently started listening to the podcast and really getting into finances. And we only have about $2,000 left on our credit card, which will be done within the end of the year.

Speaker 26 And we're looking at our student loans and we just don't know what to do.

Speaker 4 Mine are all kind of like little tiny, like 2,000, 3,000 loans, whereas his is like a giant $45,000 loan.

Speaker 34 And we don't know if there's a difference and who we should tackle first.

Speaker 4 Okay.

Speaker 9 Well, I love number one that you guys are kind of on this road together. You've decided it's important for you both to pay off the debt and you've decided that it's important to work together.

Speaker 9 So kudos to that.

Speaker 9 For this, it really is just the methodology of the debt snowball. And all that is, is we list all the debt between the both of you in order from smallest to largest based on balance.

Speaker 9 So not payment amount, not interest amount, but by balance. So right now you're kind of already doing that.
You've got 2,000 left on this credit card.

Speaker 9 And then what you do with these student loans is you both pull up your screen of your provider and you go through smallest to largest. Like you said, yours are busted up in little bitty guys.

Speaker 9 And so you list those smallest to largest. And the same thing with his.
Is his a federal loan or a private loan?

Speaker 34 It's a federal.

Speaker 9 Okay. And it's just one, right? Because sometimes you make one payment, but when you really go in there and look, it's still listed by semester.

Speaker 26 No, he had one loan that was going to go into collections, and they told him that he had to consolidate.

Speaker 4 So, he's going to be one giant federal loan now.

Speaker 9 Okay, got you. So, that's going to be the final one that you pay.
But the good news is because you've worked the snowball, you will have gotten back all those little bits and pieces of payments.

Speaker 9 So, you'll be able to hit it with a big shovel.

Speaker 9 What's the combined amount that you have in student loans?

Speaker 26 I have about 65.

Speaker 9 65, and he's got 45.

Speaker 9 Yes. Okay.

Speaker 9 And then what's you guys' combined income?

Speaker 35 100,000.

Speaker 9 Okay. So you've got a little bit of a journey here.
You know, you've got $112,000 to pay off and you're making $100,000.

Speaker 9 Have you jumped onto every dollar? Because we have a really great financial roadmap that you can plug in all your numbers and kind of project what your payoff date is going to be.

Speaker 9 And then you can project when you'll be on baby step three and how long that'll take. Have you done that yet?

Speaker 26 We are on my every dollar.

Speaker 26 The premium expires today, actually.

Speaker 4 We just sat down last night and finally put all the numbers in there.

Speaker 2 You didn't pay for it yet, did you?

Speaker 39 No, sir.

Speaker 2 This feels like a plant, Jessica. Did you call in on the day of the expiration hoping we'd give you every dollar?

Speaker 22 I promise I didn't.

Speaker 25 I just happened to look

Speaker 2 either way. We're going to give it to you.

Speaker 4 Yeah, we're going to give it to you.

Speaker 2 We're going to give it to you. So hang on the line after we're done.
We'll help with that.

Speaker 2 And what I love about every dollar at the bottom, you're going to list those debts with the minimum payment, with the balance, and it will list them all for you, smallest to largest.

Speaker 2 And it's a great way to keep track of how much extra you're putting on that little one and when it'll be paid off. So that's going to be a big help.

Speaker 2 But it really is, I think, psychologically motivating to see the little ones get knocked out.

Speaker 2 And I know you're going to get to that big one and go like, oh, gosh, we're in it now, $45,000 ahead of us. But you're probably also going to be making more money a year from now than you are, right?

Speaker 35 Yeah, hopefully.

Speaker 9 Are you guys doing any side hustles or anything to supplement that $100,000?

Speaker 22 He does.

Speaker 35 He does a lot of side projects on the weekends that probably bring about 400 in.

Speaker 9 Oh, 400 a month every, oh, 800 a month.

Speaker 4 Yes. Okay, great.

Speaker 9 Okay, good.

Speaker 9 So, yeah, I, my recommendation, I think that if you have debt, and this is not just for you, but anybody has debt, they need to be bringing in anywhere between five and two thousand extra dollars.

Speaker 2 That for me is the 500 to 2,000.

Speaker 9 Yeah, at least 5,000. But if you can get to 2,000, you're swinging for the fences.
$5,000.

Speaker 2 Yeah, I like that plan. And Jessica, the fun part for me, and maybe I'm a math nerd, I go, okay, how little can we live off of out of this 110?

Speaker 2 And that might mean we pause investing. It should mean that.
If you guys are currently investing, let's pause that to get some money back in our budget.

Speaker 2 And then with our take-home pay, we go, all right, it takes us $2,000 to cover all of our basic bills. That should free up another $2,000 of our $4,000 take-home pay to tackle the debt.

Speaker 2 And now you kind of know the gap. Because if you do the math right now, how long is it going to take you to get out of debt at the current pace?

Speaker 26 Probably about 15 to to 20 years.

Speaker 2 That sucks. Can we agree?

Speaker 9 15 to 20. Wait a second.

Speaker 2 She's saying if she makes minimum payments on all the debt. Oh, minimum payments.

Speaker 9 Okay, okay, okay.

Speaker 2 But now with Jessica's current plan, it's probably more like four or five years.

Speaker 26 I think so.

Speaker 2 And the Jaden George plan is like, how do we do this in two years, maybe two and a half?

Speaker 2 And that means there's a gap. All right, instead of throwing a thousand of the debt, we got to throw 2,000.
Yeah. And here's what we're going to cut.

Speaker 2 And that's where the budget is going to be your best friend and show you the reality of where you're spending and where what can go.

Speaker 9 And here's a couple of freebies. I mean, are you guys getting a tax return every year?

Speaker 23 It's only like

Speaker 4 $300.

Speaker 9 $200 $300. Okay.
I mean, you can look at that and see if you can get it down. Probably not.
That's pretty close. What about investing? Are you doing any investing?

Speaker 26 I only do the match my company does into my 401k.

Speaker 9 Okay. How much is that every month?

Speaker 26 It's 4%, but I just started a new employer, so it hasn't even begun yet because I have to be there for three months.

Speaker 4 Okay. Perfect.

Speaker 2 So let's just not start that because that's going to free up hundreds of dollars that could be going toward debt. And I promise you, we'll get back to investing with a vengeance later on.

Speaker 2 But what happens for most people, Jessica, is they go, well, I want the match and therefore I'm willing to stay into debt longer and I'm kind of comfortable here.

Speaker 2 And then they do 3% or 4% for 10 to 15 years.

Speaker 4 That's right.

Speaker 2 I'd rather see you do 15%. two years from now.
That's right.

Speaker 9 Next category, because I'm just trying to help you find money. I want this to happen fast.
What do you spend every month on going out to eat?

Speaker 26 We have a budget of $50.

Speaker 9 Okay, good. What about groceries? It's just the two of you?

Speaker 16 It is.

Speaker 34 My husband does.

Speaker 22 He's like a gym guy, so our budget is about $800.

Speaker 9 Okay, that's not bad.

Speaker 4 You might have to approach a little.

Speaker 9 Yeah, you might be able to do it a little less, but that's not bad. $800 for two folks.

Speaker 2 Get the boneless chicken thighs from Aldi. You stock up on those.

Speaker 9 That's plenty. I don't know about a chicken thigh, George.

Speaker 2 Well, yeah, Jade's not, she's not dabbling in that world. I'm just, I'm a big gym rat myself, Jade.

Speaker 9 If you can't tell, I could tell by your bulging biceps.

Speaker 2 But I do watch a lot of videos about protein for some reason. I don't know.
I'm very intrigued by the lifestyle, Jessica.

Speaker 9 But the point here, Jessica, is we're going through the budget with a fine-tooth comb. And this is, like I said, for anybody listening, withholdings, a great place to start investing.

Speaker 9 Look at that food budget.

Speaker 9 Cars, a lot of times, people's opportunity is sitting in their driveway. So tell us about your vehicles.

Speaker 26 My husband's is a 2012 completely paid-off.

Speaker 4 Okay.

Speaker 26 And then mine was gifted to me by my father.

Speaker 35 So I actually don't pay for it.

Speaker 4 Okay, so that's paid off.

Speaker 22 Yes, a 2018 Toyota.

Speaker 4 Okay, good.

Speaker 2 Another thing that's really people don't think about is insurance. Across the board, reshopping insurance.
If you go to ramseysolutions.com slash checkup, we have a great coverage checkup.

Speaker 2 It'll take you just a few minutes to do the quiz. And I helped a friend here, actually, reach out to Xander.
They reshopped their insurance, and they had better coverage while saving $80 a month.

Speaker 2 Nice. $80 back in the budget.
So just doing something like that, Jessica, with homeowners, auto, across the board could save you $100, $200 a month.

Speaker 9 Yeah. And then there's the utility type stuff.
You can go in, call your cell phone provider and say, hey, are you offering any deals? If you still have cable in Baby Step 2.

Speaker 2 Yeah, what are you guys paying for your cell phone bill?

Speaker 33 I'm sorry. Can you repeat that?

Speaker 2 What are you paying for your cell phone bill?

Speaker 26 So right now ours is separate because I do own my phone and that should be knocked out by the end of the year.

Speaker 35 But mine is $87 a month, and his is $60, but we plan on going to Mid-Mobile, where it's like $30 a month.

Speaker 2 I was going to say, Tello has been a great sponsor of the YouTube channel, and they're $25 a month for unlimited. You can't beat it.
You can't beat it. Which is incredible.
So that's a big saving.

Speaker 2 Some people are just paying like $120 a month for their phone plan, not even including the phone. So

Speaker 2 just some ideas, Jessica. Along with Every Dollar, I'm going to send you my book, Breaking Free from Broke.
I want you to specifically read the Margin is Breathing Room chapter.

Speaker 2 In there, I lay out a bunch of the ideas that jade and i threw out and many more uh just to get you going because we're pumped for you guys to become debt-free do you feel like it's closer just on this call

Speaker 26 Yes, I mean, we also made progress.

Speaker 35 We started with about $16,000 in credit card debt and we're down to maybe two, $3,000.

Speaker 25 I think

Speaker 15 $2,400.

Speaker 26 So thank you guys so much.

Speaker 4 This was really helpful.

Speaker 2 Love to hear that. And you're right down the road in Nashville.
So come see us for your debt-free screen. Looking forward to meeting you guys and celebrating in person.
Hang on the line.

Speaker 2 We're going to send you every dollar premium and my book, Breaking Free from Broke. Hope those resources help you along the way.
More of your calls coming up. This is The Ramsey Show.

Speaker 2 Welcome back to the Ramsey Show. I'm George Campbell, joined by Jade Warshaw.
If you're enjoying the show today or any other day for that matter, do us a quick favor. The show is free.

Speaker 2 What I'm asking you to do is free. Just hit the subscribe button, hit the follow button, leave us a kind review, share it with a friend.
Maybe it's a clip or a highlight from the show, a full episode.

Speaker 2 Tell them, hey, you got to check out this podcast. All of that helps us get higher up on the algorithms.
And it's not for our own egos.

Speaker 2 It's so that we can reach more people who may not know that that this show even exists. And we're trying to just displace all the filth and nonsense out there in this toxic money culture.

Speaker 2 And you guys sharing, you're the best marketing plan we have. So, thank you for doing all of those things.
Danielle is up next in Houston, Texas. What's going on, Danielle?

Speaker 42 Hi, good afternoon.

Speaker 15 How are you doing?

Speaker 2 We're doing great. How can we help?

Speaker 34 Awesome. Awesome.

Speaker 35 So, I'm in a little dilemma that I've almost been dealing with for almost a year with my vehicle.

Speaker 4 Okay.

Speaker 44 Outdoor attention to make a repair.

Speaker 26 I started having the same issues.

Speaker 32 Now I need a new engine.

Speaker 44 I still owe about $65,000 on this vehicle that I've only had for a year and a half.

Speaker 2 $65,000?

Speaker 9 What kind of vehicle is it?

Speaker 42 It's $65,000 and it's the Audi QA 2019.

Speaker 45 I did buy it used.

Speaker 45 So it was a bad decision I know now, but I do not know what to do.

Speaker 28 On top of that, I do have hidden loan debt about $32,000 and about $5,000 in credit card debt.

Speaker 44 So I'm looking at around $100,000 that I made up.

Speaker 22 So my question is, I don't know what to do with this vehicle.

Speaker 42 The warranty company only wants to cover about $7,000 for a total repair that costs $20,000.

Speaker 28 So I would have to come out of pocket.

Speaker 45 I don't know if I should get rid of this vehicle.

Speaker 22 I don't know how much they would give me for the vehicle of the dealership.

Speaker 25 Well, they haven't given me that answer yet, but I don't know if it's a good idea.

Speaker 4 I wouldn't give it to the dealership.

Speaker 9 What's it worth? If you don't repair it, what's it worth? If you were to sell it,

Speaker 45 now it doesn't have an engine, right? I would have to get a new engine.

Speaker 44 So I'm thinking around $30,000.

Speaker 4 I honestly don't know.

Speaker 9 And it's going to cost $7,000 out of your pocket, you said, to get it fixed?

Speaker 44 No, the warranty company is willing to give me $7,000.

Speaker 2 why are they only willing to cover a third of it

Speaker 2 i have no idea either they cover it or they don't i'm confused why they go well it's kind of our fault so i guess we'll cover seven grand they

Speaker 35 audi made it audi made a repair um two weeks later i get my car well i get my car back after a few months and then two weeks later after i gave my vehicle back i had the same issues but now my engine went out

Speaker 2 i would fight this to where they cover the full 20k

Speaker 2 That's personally what I would do is I probably would not sleep and I would just badger them and wear them down until they go, all right, she's a squeaky wheel. Let's just cover this repair.

Speaker 44 Honestly, we've been dealing with the dwarves company since November.

Speaker 2 Speak directly on your phone, Danielle. We're having a hard time hearing you.

Speaker 32 Sorry. Okay.

Speaker 25 So they pretty much told me that I've been dealing with this since November of 2023.

Speaker 45 So as you can see, we're on the 2020.

Speaker 4 What are you driving now?

Speaker 42 Well, Audi gave me a loaner vehicle. So,

Speaker 32 I've been driving.

Speaker 25 Yes, I still have the loaner vehicle.

Speaker 4 Do you have any money saved?

Speaker 16 I do not have any money saved.

Speaker 4 Are you single?

Speaker 26 Yes.

Speaker 2 What do you make a year?

Speaker 26 $65K.

Speaker 9 Girlfriend, girlfriend, girlfriend.

Speaker 4 Goodness.

Speaker 2 What were you thinking buying us? How much does this car cost you? $70,000?

Speaker 45 Yeah, around $75,000.

Speaker 4 Oh.

Speaker 32 Do you? Yeah, I

Speaker 4 okay. What's the payment on this?

Speaker 4 I know.

Speaker 32 The payment is high.

Speaker 4 What is it? So I'm currently,

Speaker 45 it's about $1,600 a month.

Speaker 2 Girlfriend, $1,600?

Speaker 4 Yes. What's the interest rate?

Speaker 39 12%.

Speaker 39 Woo!

Speaker 2 She's stretching. She is.

Speaker 4 I might need to take a walk. I need to take a walk.

Speaker 44 I totally, I totally got screwed.

Speaker 9 No, you didn't get screwed. You chose this.
Let's be honest. You chose it.
Because here's, I just want you to know, what I want to, I need to be able to sleep tonight.

Speaker 9 And so I need to understand that had you not had any engine problems, let's just pretend this last year was gravy and you had no engine problems.

Speaker 9 You're just paying $1,600 a month on a $75,000 vehicle when you make $65,000.

Speaker 2 I was hoping you were going to say, yeah, I make $200,000. And I'm like, okay.

Speaker 4 This tracks.

Speaker 4 Did you know it wasn't good?

Speaker 9 Like the first two months were you like that?

Speaker 45 Honestly, at first, I was renting out that vehicle, so I didn't have those payments.

Speaker 2 You were renting it out, like on Turo or something?

Speaker 25 Yeah, yeah.

Speaker 2 So you fell for the scheme that I'm going to make money off this, and they'll pay the payment for me.

Speaker 35 Pretty much.

Speaker 25 And then

Speaker 42 my other vehicle that I had, it ended up getting stolen from me.

Speaker 22 So I ended up using the Audi.

Speaker 16 And then.

Speaker 2 Someone stole your vehicle?

Speaker 14 Yes.

Speaker 4 And they never found it?

Speaker 28 They never found it, no.

Speaker 9 Here's what I...

Speaker 2 Did insurance cover it?

Speaker 42 Yes.

Speaker 25 I got insurance and gaps, so they did cover it.

Speaker 2 And what did you do with the insurance money? Yes.

Speaker 44 They didn't give me anything because I had still owed on that vehicle.

Speaker 11 Oh, my.

Speaker 2 It's not your first rodeo making bad decisions.

Speaker 25 Yeah, I know.

Speaker 28 So this vehicle,

Speaker 33 I don't know what to do.

Speaker 9 So tell me again, you said it before, but I was writing down. So warranty so far is only going to pay $7K.
What are you on the hook for?

Speaker 26 I would have to pay the difference.

Speaker 22 They say the total cost would be about $20K just to get a new engine.

Speaker 4 Okay, so you're on $13.

Speaker 2 Let's play out both scenarios. Let's say you sold it as is and you get $30K.
That's what you told us.

Speaker 2 That means you're in the hole $35K, where you need to go out and find $35,000, whether it's your own money or getting a loan. You need to go into debt another $35K.

Speaker 2 The other option is you're in debt $13 extra thousand to cover this engine repair because the warranty company is going to cover seven right yes

Speaker 2 so on paper option b is a better option they're both terrible but that's a better option right now is that you get the engine repaired and then you're able to at least sell it

Speaker 2 so that's what i would do if i was in your shoes whatever you need to do to get this engine repaired do that and then sell the vehicle immediately but not to the dealer not to the they're going to screw you on this deal because they already did so you'd have to sell it private party to get the most value out of it and i want you to talk to

Speaker 9 I want you to get with somebody on this because cars, I know you've been trying to make it your thing, but I don't think it's your thing. And so find the wisest person that you know.

Speaker 9 I don't know if that's dad or big brother or a cousin or your best friend's brother, whoever it is.

Speaker 9 get with that person when it's time to sell this vehicle and when it's time to get this vehicle fixed because i don't want them taking you for a ride um figuratively when it comes to the price anymore on this i just feel like you've been screwed every way which way possible and i don't want that to continue for you

Speaker 9 on the fixing or the sale of this vehicle. And from here on out, George, tell her the rule on buying these cars from here on out.

Speaker 2 I think you should buy the cheapest car possible, Danielle, at this point. But the parameter at Ramsey is you pay cash.
It's a used car unless you're a millionaire, probably four plus years old.

Speaker 2 And the value of the vehicle is no more than half of your annual income. The value of all things with wheels and motors.
So for you, if that's one vehicle, which do you have multiple toys or vehicles?

Speaker 25 You know, it's just a mile and this is the office only one.

Speaker 9 Okay.

Speaker 2 And so right now that would mean with your $65,000 income, you would buy no more than about a $30,000 car.

Speaker 9 When the time comes in cash.

Speaker 2 I still think that's you don't need to worry about that until you're out of debt completely. You get the student loans knocked out, the credit cards knocked out, you have an emergency fund.

Speaker 2 Let's get the income up. Then let's save up and pay cash.
So this could be years down the road. But for now, we need to figure out a way to get that 13 grand.

Speaker 2 That might be you go to a credit union if your credits not shot already and you go, hey, I need 13 grand to cover the difference to get this engine fixed.

Speaker 2 Do you have the car loan through someone?

Speaker 26 It's through

Speaker 29 Wells Bargo.

Speaker 4 Okay.

Speaker 2 You might want to go to them and say, listen, you got bad collateral on this thing because it's only worth $30,000 right now. I owe you $65.
I want to get this loan paid off.

Speaker 2 It's impossible right now unless you guys loan me this 13K and a personal loan to get this engine replaced.

Speaker 26 Yeah, my credit's good.

Speaker 42 I don't have an issue with that.

Speaker 9 Okay, then let's do it.

Speaker 25 I made a bad decision. Yeah.

Speaker 2 So that's what I would do, Danielle, and it's going to hurt. And God bless the USA when we can be $100,000 in consumer debt, but we have great credit by gosh.
Look at that, Jade.

Speaker 2 I got an $850, but I don't have $800 in the bank account, and I'm $100,000 in debt. That is the American way.

Speaker 9 I can't even respond. I'm shooketh.

Speaker 2 She hath been shooketh.

Speaker 2 What a way to end this hour of the Ramsey Show.

Speaker 2 Thank you to my co-host, Jade Warshaw, all the folks in the both in the booth keeping the show aflow, including Kelly Daniel filling in on the producing, who's done a fantastic job, better than James, I might add.

Speaker 2 We'll be back with you before you know it.

Speaker 9 Normal is broke. Common sense is weird.
So we're here to help you transform your life and your money. From the Ramsey Network in the Fair Ones Credit Union studio, this is the Ramsey Show.

Speaker 9 To get involved in the call scene today, you can call 888-825-5225 to get your name on the line. I'm here hosting.
My My name is Jade Warshaw. Next to me, George Camill.

Speaker 2 George, are you ready to get it on?

Speaker 2 I've never been more ready.

Speaker 9 All right, let's do it. We've got Elaine from Indiana on the line.
What's up, Elaine?

Speaker 46 Yes. Hi, thanks for taking my call.

Speaker 4 Yeah, how can we help?

Speaker 46 Yeah, so I am dealing with a little bit of financial infidel from my husband. And I'm just kind of wondering, you know, how we can move past that.

Speaker 46 The original incident, well, I mean, it's happened several times, times, but the kind of straw that broke the back was about a year ago.

Speaker 46 I learned that he had borrowed about $14,000 from his employer.

Speaker 32 Oh, crazy.

Speaker 46 Oh, I guess they offered to pay off a debt that was trying to garnish his wages.

Speaker 46 And I found out

Speaker 46 it was from, he had started a business several years ago.

Speaker 46 And so we're working on paying off a lot of the consumer debt that was kind of left over from that.

Speaker 9 Did you know about that debt before he got the loan to pay it off?

Speaker 46 I did. And we did get a, you know, a notice about the,

Speaker 46 they had found the lawsuit, and it was a court date.

Speaker 46 He said he went to the court date, explained to them that the business had been closed, and they kind of just said they were washing their hands of it. And I didn't hear anything else about it.

Speaker 4 So he made up that entire lie that they...

Speaker 46 I think he went. I don't know that it was actually, you know, wiped clean.

Speaker 46 I don't think you told me the full extent of it.

Speaker 9 Well, clearly it wasn't because then they turned around and borrowed it from his employer.

Speaker 46 Right. Well, somebody showed up at his work, a deputy or something maybe, and with that order to garnish his wages.

Speaker 46 Instead of doing the garnishment, his employer paid it off and they took a lump sum out of each one of his checks. And I didn't find out until about nine months after his checks had been.

Speaker 2 So essentially, he tried to avoid wage garnishment by having his employer do it for him.

Speaker 46 Exactly. Until that was about a year ago, I found out that.
And I actually, you know, we have kids, and I was done at that point. He's made a lot of stupid financial decisions in the past.

Speaker 9 But

Speaker 9 before you keep going forward, I want to keep pulling that first one. So they were garnishing the wages out of his checks, $14,000.

Speaker 9 How much? Because

Speaker 9 how did you not see that?

Speaker 46 He got his own bank account, God separated all of our finances.

Speaker 4 Okay, so finances are totally separate. Okay.

Speaker 2 So he made a lot of moves to hide this from you.

Speaker 46 Yeah.

Speaker 2 Like open another bank, then move the direct deposit to that new bank without your knowledge. And then have you guys had separate finances in the past?

Speaker 46 No, they were together up until about

Speaker 46 two or three years ago.

Speaker 46 And ever since then, it's been, yeah.

Speaker 9 So you said this was not the first thing. Give us another example of something because this one's pretty extreme

Speaker 46 um well when he had his business open i saw um

Speaker 46 a bill in the mail for um you know one of his i guess suppliers or somebody and it was a lot more than you know i had anticipated um and i asked him about it and he was like no it's wrong it's wrong it's wrong it would say he'd take care of it and then finally When I call, they're like, no, like we've been trying to get a hold of you.

Speaker 46 This amount is correct. This equipment was never returned.
Your bill's, you you know, $15,000.

Speaker 9 As opposed to what you thought would have been $15,000.

Speaker 16 And then maybe a couple thousand.

Speaker 5 Yeah.

Speaker 9 Okay. So these are big numbers.

Speaker 15 Yes.

Speaker 2 And have you asked him directly, why are you lying about all this? What's behind it?

Speaker 46 He says that he knows that it stresses me out and so that he's just trying to take care of it himself without me having to know about it.

Speaker 2 So take care of it means more lies, more hiding from it. Right.

Speaker 2 Correct. And you've made it clear that's not how you're going to rebuild trust in this marriage.

Speaker 8 Right. Yes.

Speaker 2 Has he fully owned up to all this? Like, where is he at today?

Speaker 46 Well, that was a year ago.

Speaker 46 And, you know, when I said that I was done and I was tired of him lying and hiding things from me.

Speaker 46 And I actually moved in with the kids with some family and we, you know, he had cried and he'll never do it again. And

Speaker 46 so we decided to work on things.

Speaker 46 So we're living with family and collectively, you know, we have probably about ninety thousand dollars of debt from this previous you know company that he had started that didn't work out um so we said we'll tackle it together um well a few weeks ago i found out that somebody else had um tried to you know sue him or whatever it was and he got another loan from this company oh this one was only three thousand dollars yep and that um for the past three months he's been paying that off and it's paid off now and we were able to pay off the fourteen thousand dollar one you know once I found out about it and I said let's put everything towards it and so we did that so I thought everything was good after that and then but you guys you never you never really sat down and and counseled your way through this it was kind of just like let's try it again let's try it again let's try it again and I'm not really defensive I you know

Speaker 9 here's the thing you're telling us this I 100 believe what you're saying

Speaker 9 you said

Speaker 9 he you know you left him and he cried and all this stuff I don't know what the, what the word is for that, but there's a word for the fact that he's making a mistake, but he's putting it on you by saying, I don't want you to be stressed.

Speaker 9 I don't want you to be the one that's upset. This is too much for you.
Like, there's a word for that. I don't know what it is, but I know I don't like it.

Speaker 9 And there's just part of this word. Yeah, you've outlined many instances, and yet he continues to do the same kind of crazy, erratic behavior with his debt and with his money.
Yeah, I would.

Speaker 9 I would sit down with a counselor. And in the meantime, yeah, I would keep the money separate.
And I wouldn't do much more on this until you can sit down with somebody and say, here's what's going on.

Speaker 9 I don't know why my husband is continuing to do this behavior. Maybe I, maybe I do have a hand in it.
I'm willing to own if I do, right? And you guys both sit down.

Speaker 9 And until you've given this a fair shake with the help of a professional, you know, that's what I really want for both of you because something is, and I'm not apologizing or giving merit to what he's doing, but something's causing him to do this, whether it's some sort of scarcity mind, the way he grew up,

Speaker 9 some piece of him is feeling like he's got to control this and hide it from you. I don't know why, and I'm not saying that it's right, but I hope you guys can get to the bottom of it.

Speaker 9 And if it were me in the meantime, yeah, I would set some really clear boundaries, George. I'd be like, listen.

Speaker 9 You have disrespected me and our family and our money, and you've put us in an unsafe position. And because of that, I can't be, I can't be linked with money because I got to keep our family safe.

Speaker 9 So my question for you, Elaine, is, do you earn any money?

Speaker 46 I do.

Speaker 46 And, you know, combined, we do make a decent, I mean, we bring in about $135,000 a year. About 45 of that is from myself.

Speaker 9 Okay, so you're bringing in 45. So what I would say is this, I'd say, What would make me feel safe while we're in counseling is for us to put our money into this account.

Speaker 9 And I will give you full transparency into what I'm doing with the money, but you're taking our money and you're putting it on debt and you're making payments and you're putting us in an unsafe space.

Speaker 9 Will you go to counseling with me?

Speaker 9 And if he says no, he won't and no, he won't combine the money, then now that's your, that's your chance for you to take that to counseling and figure out what you need to do next because you can't control him.

Speaker 2 Yeah, you need consistent honesty from him over time and proof through actions. Those are the two things that will rebuild trust.

Speaker 2 And if he's unwilling to do that, that is him opting out of this relationship. So you guys need to go through counseling and start to set those guardrails and boundaries and work towards healing.

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Speaker 2 Go to ramseysolutions.com slash insurance, ramseysolutions.com/slash insurance.

Speaker 9 You're listening to The Ramsey Show. If you want to get involved, you can call in.
It's a live show. The number is 888-825-5225.
Christian will pick up and screen your call.

Speaker 9 Remember, this is a show about your life and your money. We're helping people build wealth, do work that they love, and create amazing relationships.
That's what we're all about here.

Speaker 9 So let's go to the phone lines. We've got Olivia in Roanoke, Virginia.
What's going on, Olivia?

Speaker 29 Hi.

Speaker 33 Yeah, so I called in just

Speaker 33 basically because I feel like I'm experiencing a lot of disagreement in my marriage as far as finances go.

Speaker 2 Tell us what happened.

Speaker 33 Well, we're both on the same page that we want to get out of debt. Like we both agree that we want to get out of debt.
We want to have more money in our bank account and more security.

Speaker 33 I just I feel like I'm the one sort of leading with that like gazelle intensity.

Speaker 16 And

Speaker 33 right now I feel like one of our roadblocks in front of us is my husband's car.

Speaker 32 We both have a car.

Speaker 33 I have a more reliable American-made car that it's up there in the miles, but it's, you know, one of those ones that's meant to last. And then he has a 20-year-old European car.

Speaker 33 And it's something that he got earlier this year after he wrecked his reliable car during a snowstorm. He paid in cash, which is great.

Speaker 33 We don't owe anything on our vehicles, but ever since he got that car, which

Speaker 33 I never wanted him to buy it,

Speaker 33 and I expressed that to him, but just let him do it because he was adamant and it was what he wanted. And he was just.

Speaker 9 How much did he spend?

Speaker 33 It was a $3,000 car.

Speaker 16 Okay.

Speaker 33 And I would say...

Speaker 33 Considering how much we've spent, which I don't know exactly, he hasn't told me I can't access his receipts.

Speaker 33 He told me he hasn't even been putting the receipts together with the rest of the cars and what does that mean you can't access?

Speaker 9 Do you guys not share a bank account so you can't see? No, we do.

Speaker 33 We do. But like,

Speaker 33 like, I don't have a place where all of this stuff is just compiled, like all of the receipts on what he spent on car parts.

Speaker 33 He's very handy, and he does a lot of the repairs himself, but he's probably done at least... five or six repairs since he bought the car.

Speaker 4 Are these for fun repairs?

Speaker 2 Like is he like souping it up or is he needing to keep the the thing going?

Speaker 4 Okay.

Speaker 9 So you're also then, then something also tells me you guys aren't keeping a budget because if you were keeping a budget, you wouldn't need receipts. You would see the transactions coming through.

Speaker 9 Okay. He went to Advanced Auto Parts.
He went to Pet Boys. He, you would see that come through.
So is that right? There's no budget?

Speaker 33 As of right now, no. I have like downloaded y'all's app before and tried to like get that going, but our financial situation has not been great.
And I

Speaker 4 all the more reason to get into the budget. okay let's break this down

Speaker 33 so I agree you're like he's spending way too much money on this three thousand dollar car he's probably already spent more than three thousand dollars on the three thousand dollar car correct maybe not maybe not quite but we're in a position now where the car isn't working to where he's comfortable driving it even to work and so we're down to being a one-car family and he works 40 minutes away okay and you want to sell this car

Speaker 33 i want to sell it and we literally can't even afford it's like three hundred dollars in parts that he needs right now and we can't even afford to buy that.

Speaker 9 Is it sellable?

Speaker 4 If you sell it, what would you get?

Speaker 9 Or is it just scrap?

Speaker 33 If we sold it right now, we would get pretty much nothing. But if he fixed it up,

Speaker 33 he might be able to get a similar price as what he bought it for.

Speaker 16 I'm not 100% sure.

Speaker 2 So you're saying right now he would get 500 bucks, but if I put 300 bucks in, I could get 3 grand for it.

Speaker 9 And you wouldn't get 3 grand. You'd break even.
You'd get the money back that you right.

Speaker 33 So we barely, technically, we wouldn't break even after everything he spent.

Speaker 4 But

Speaker 4 if you

Speaker 4 why don't you guys do a little math on this?

Speaker 9 Go back and do a little, do a little detective work, see what's been spent on this car, and then you guys can make the best decision, figure out what needs to be done, add, factor that in, and then figure this out.

Speaker 9 This is the smallest of the concerns in my mind, this car.

Speaker 2 This is not what's holding you guys back right now. It's just the ankle biter that's in front of your face.
So what's the real thing holding you back? Is he not willing to make other sacrifices?

Speaker 33 Yeah, so I would say stubbornness is what's really truly holding us back. I tried to discuss this car with him yesterday, and it just turned into an argument.

Speaker 2 Let's say we never talk about the car again. What else are we doing? Because just not dealing with the car is not the thing that's going to get us out of debt.
Yeah, totally.

Speaker 2 So what are the steps you're taking?

Speaker 4 So

Speaker 33 I'm pretty much the only one doing anything to get out of debt. I have, I mean, I don't know.

Speaker 11 He works.

Speaker 9 What are you doing? What are you doing to get out of debt?

Speaker 4 Let's talk about you.

Speaker 14 Yeah, so I am working.

Speaker 33 I'm a full-time mom. So I work on the weekends to clean for somebody, and I've been setting aside that cash for a little while.
And I don't even have my $1,000 yet because we keep running into things.

Speaker 33 And I keep having to fork over my emergency fund because there's no money in our bank account.

Speaker 4 Let's halt right there.

Speaker 9 There's a couple of things that I hear that is really going to help. Number one,

Speaker 9 there's a lot of division here. There's I'm doing this.
He's not doing that. This is my emergency fund.
I don't have access to the receipts.

Speaker 9 Like there's a lot of division that I hear that lets me know there's something, there's something missing here.

Speaker 9 So there's some marriage things going on where you guys are feeling separate from each other. You're not able to talk to him.
He's not able to hear you and probably vice versa.

Speaker 9 So I would want to do some detective work there and maybe get into some counseling to figure out

Speaker 9 what's the holdup there.

Speaker 9 Number two, I think the problem that you're running into financially with when you are setting aside money and it's getting eaten up, it's you don't, you guys don't have a budget.

Speaker 9 So there's no way to know what's coming. There's no way to plan for it.

Speaker 9 So before you get off the line, George and I are going to get you hooked up with every dollar because, George, I think that's really the issue here, at least financially, the issue.

Speaker 2 Well, tell us about your take-home pay. What is the take-home pay for the month with your cleaning on the weekends, him working full-time? What comes in?

Speaker 33 If I worked four weekends a month doing this one cleaning job that I'm doing, I would be bringing in,

Speaker 33 let me just pull my calculator up really quick.

Speaker 33 I've never actually done this math.

Speaker 4 This is exciting.

Speaker 9 This is great. This is part of it.
For everybody listening, knowing these details.

Speaker 2 You got to know your numbers.

Speaker 9 You know your numbers, then you know what you need to do in order to get where you want to get.

Speaker 15 So

Speaker 33 in just four days out of the month, I would be bringing in $720.

Speaker 32 Okay, great.

Speaker 2 What does he bring home every month?

Speaker 26 That number, I don't even know.

Speaker 33 Okay, so like he has so many medical issues.

Speaker 4 Like

Speaker 2 you know, you see, you have access to the bank, right? What does the bank statement say was his income?

Speaker 9 Yeah, when you see his check roll through.

Speaker 2 Is it the same check every month?

Speaker 33 No.

Speaker 33 The average I would say that we get so like weekly is between $300 and $500 a week.

Speaker 9 Okay, so maybe $2,000.

Speaker 9 $2,000 a month.

Speaker 2 Why is he making so little?

Speaker 33 So part of it was they cut his hours back at work because business business was slow. And then they recently brought his hours back up.
And when that happened, he also got

Speaker 33 basically what I would call a raise. They allowed him to start receiving commission because he's an incredible worker.
He's a hard worker.

Speaker 4 What does he do for work? He does.

Speaker 33 He's a chimney sweep.

Speaker 33 But then he threw out his back pretty much right when that happened. He has had back issues his whole life and he probably needs surgery one day, but he's he'll miss work because of stuff like that.

Speaker 33 Like this isn't just the first time it's happened where HRS is back out. It happens, I would say, once or twice a year where he misses a few days of work because of it.

Speaker 33 And then there's like sickness and all those like normal life things that throw it that things out.

Speaker 2 I think he needs a new job.

Speaker 9 Yeah. Is it fair to say that he can't be a chimney sweep anymore?

Speaker 9 I mean, when you said once or twice a year for a couple of days, at first I was like, that's, I mean, you get a cold and you're out once or twice a year, right?

Speaker 9 The people in the audience are like, yeah, Jade. So there's part of me that's like, how big of a deal is this? Like, we're, we're not losing weeks of work,

Speaker 9 you know, every couple of months. It doesn't sound like it sounds like it's a day here, a day there.

Speaker 4 I'm, he needs to make more money.

Speaker 9 I'm with you on that. He needs to make more money.
You need to make more money. You both need to earn more money.

Speaker 9 I agree with you there. I think here's, can I just be honest with you what I think, Olivia? I think you're frustrated and rightfully so.

Speaker 9 And sometimes when we get frustrated, it's easier to look at the other person and go, here's what they're not doing. But I think this is both of you.

Speaker 9 I think there's something that both of you, I think there's more that both of you can be doing to make this better, even something as simple as knowing the numbers, right?

Speaker 9 And in these types of situations, when you are married, here's the thing. You can't control what he does.
You can control what you do.

Speaker 9 You can ask him and you can let your, you know, let him know, here's what I'd like. But at the end of the day, Olivia can only control Olivia.
So here's what you can do.

Speaker 9 You can get the every dollar budget. You can say, hey, let's do this together.
And if he doesn't do it, you can still put the budget together.

Speaker 9 You can tell him, hey, for baby step one, I think we should save $1,000. And if he doesn't want to do it, you still save $1,000.

Speaker 9 Like Olivia can be on her game and lead by example until your husband starts to get on his game. This is the Ramsey Show.

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Speaker 2 Welcome back to the Ramsey Show. I'm George Camill, joined by Jade Warshaw.
Open phones at 888-825-5225.

Speaker 2 You call up, and we'll try to give you the right next step for your life and your money. Marcus has chosen to do so over in Denver.
What's going on, Marcus?

Speaker 38 Hey, how's it going, guys?

Speaker 24 Thanks for taking my call. Absolutely.

Speaker 2 What's going on?

Speaker 38 Hey, so recently engaged, we are going through some premarital process, some workbooks, and some finance questions that I'm not sure entirely what to do.

Speaker 38 I know the rule is when you get married, then you combine your finances. I currently have about $100,000 saved up for a down payment on a home.

Speaker 38 She has about $80,000.

Speaker 37 My fiancé has about $80,000 in student loans and $10,000 on a car.

Speaker 38 And so I know I could pay that off instantaneously when we get married and kind of push the house down the road.

Speaker 38 She's not necessarily totally on board with that. I'm just not sure what to do with that when

Speaker 38 we say the ideas.

Speaker 9 Why do you think she's not on board with it? Is it guilt?

Speaker 19 Yeah.

Speaker 38 Yeah, it definitely is.

Speaker 38 You know,

Speaker 38 we've both worked very hard and she knows how hard I've worked to get out of debt and save up for money. And it's kind of a little bit guilt-ridden that

Speaker 38 I'd give up all my, uh, the cash we saved for a down payment just completely into her.

Speaker 9 You know, there's a part of that

Speaker 9 that is very real. My husband and I faced that.
And, you know, he felt bad that he had more student loans than I. But there's part of that that you kind of, if you put it in any other term,

Speaker 9 as far as cleaning up a mess ahead of time, any other personal mess, you can't make perfect before you get married. Do you know what I mean?

Speaker 9 You don't feel the obligation to fix it completely yourself before you come to them. Like we're imperfect people and we make mistakes.

Speaker 9 And so I think when you frame it in that way of why are you categorizing money in a completely different light than all of the other aspects of our marriage where we're basically taking each other as we are and we're working together to go forward.

Speaker 9 I think when you put it into that framework, it kind of changes the way you think of it. And you're like, oh, yeah, okay.
That makes more sense. You're taking me with my mistakes.

Speaker 9 You're taking me with my flaws and we're working together to improve ourselves in our marriage.

Speaker 2 And accepting, you know, that blessing of, wow, this person worked really hard to save this money, and they're willing to use that to give me a clean slate.

Speaker 2 I mean, not to get theological, but that's a beautiful picture of the gospel.

Speaker 24 It's beautiful.

Speaker 2 We came in with all the debt, and he's got an unlimited savings account. And he's like, I got you.

Speaker 4 And it's like, I can't accept this. I need to work for it.

Speaker 2 There's a piece of that that exists. And also, it's a lot easier to go into 100 grand of debt versus saving up 100 grand.

Speaker 4 That's right.

Speaker 2 So there's also that piece that she's feeling of, he works so hard for this. But the truth is, if you looked at a cons list of, okay, what she's coming to to this marriage with, 100 grand.

Speaker 2 You look at the pros list, her.

Speaker 2 You know what I mean? Like, that outweighs any level of debt.

Speaker 2 And you guys working together, this is going to be like a blip in your lifetime where you look back and be like, oh, remember we cleaned up that debt real quick and then we started building wealth together?

Speaker 2 And yeah, it delayed our home buying by, you know, two years.

Speaker 9 Who cares? And big whoop.

Speaker 2 And so I think this is harder for her to grapple than you because it sounds like you are like, yeah, I'm willing to go ahead and pay off the debt and we'll restart the down payment process.

Speaker 4 And then, you know,

Speaker 9 for her, I mean, and I hope she does listen to this call. The flip side of it, which is the pretty obvious, is it's way better to have someone who says, Oh, yeah, it's just money.

Speaker 9 Like, I'm happy to pay this off and start, you know, my money's your money and your debt's my debt. And I'm happy to be one with you on this.

Speaker 9 And, well, we're paying it off together with the money that we have once we get married. Um, that's a lot better than having a jerk that's like, no, you got to pay off your debt.

Speaker 9 I'm not marrying you until you parry that debt. You know what I'm saying? Like, that is terrible.
And if you were like that, she wouldn't accept that either.

Speaker 9 So it's like, if you have to choose between A and B, I'm choosing A with flying colors.

Speaker 38 All right. Well, you know how us guys roll.
We're very direct and to the point.

Speaker 24 So I'll try to frame it a little bit more differently.

Speaker 4 Have her watch this call.

Speaker 2 Also, I'm wondering, what will your household income be once you guys get married?

Speaker 38 Once we get married,

Speaker 4 a year's time,

Speaker 38 I'll gross 220 and she'll be about 55 to 60.

Speaker 2 Ding, ding ding my friend so think about this mathematically if you want to help her out just go to a piece of paper a napkin math and go all right we're gonna pay your debt down leaves with 10 grand we still need a little emergency fund maybe okay we make 275 at that point how quickly can we save up a hundred grand probably eight or nine months yeah pretty quick and so I think showing her how little of a problem this really is it's not derailing your home ownership dreams for a decade nope yeah you're just taking a step back to catapult forward.

Speaker 4 Yeah.

Speaker 38 Okay. Well, I'll try to frame it differently.

Speaker 2 Yeah. Have you guys gone through Financial Peace University as part of your premarital?

Speaker 6 We haven't. We're doing a couple workbooks.

Speaker 38 We haven't done FPU yet.

Speaker 2 If I gifted it to you guys, would you go through it?

Speaker 38 I would pay for it because I appreciate your guys' services.

Speaker 2 Oh, that's so kind. Well, I can't let you do that today, but you know what you can do? You can pay it forward.

Speaker 2 You can get it for someone else, but I'm going to gift that to you today, Marcus, because I'm a Marcus fan. And I think Financial Peace University is a huge part of premarital counseling.

Speaker 2 It doesn't encompass everything with premarital counseling, obviously.

Speaker 2 There's a lot of other pieces, but as far as finances go, I cannot think of a better way to get on the same page, learn that language by going through all nine lessons together.

Speaker 2 Because me trying to convince someone else about the thing I'm excited about, I'm like, Jade, you got to

Speaker 2 this guy, Dave, he's like, sell the car. And you're like, what?

Speaker 2 What happened?

Speaker 9 I know.

Speaker 2 And then you watch the lessons and you're like, I got to sell the car.

Speaker 2 And it becomes your idea versus this thing they threw onto you. Yeah, so that's a very different vibe.

Speaker 2 And that's why I encourage couples, whether it's premarital, post-marital, whatever, go through Financial Peace University if you're trying to get someone on board.

Speaker 2 And it's the most cost-effective way to make your marriage better and build wealth together. I agree.

Speaker 9 I concur.

Speaker 2 We nailed it. All right.
Alex is in Chicago up next. What's going on, Alex?

Speaker 4 Hi, guys. Can you hear me?

Speaker 9 Yeah.

Speaker 9 Loud and clear.

Speaker 41 Okay, so

Speaker 41 yeah,

Speaker 26 my main question is

Speaker 41 I'm debating whether I can leave my job in December or if I should sign up for another like little group of second shifts for

Speaker 41 kind of getting a head start on my emergency fund.

Speaker 9 Okay, so there's no debt you're working on an emergency fund. Is that what I understand?

Speaker 41 Okay, so starting in November, I started paying down about $82,000 of debt.

Speaker 44 It was 72 by the time I started the Ramsey plan, I had a total of 82.

Speaker 44 And now I have 19.4.

Speaker 8 Nice.

Speaker 41 And at the end of the year, I should have about 5.5.

Speaker 44 And if I quit my job in December, my debt payoff will be the same

Speaker 35 in February.

Speaker 4 Okay.

Speaker 35 I'm thinking about keeping it for

Speaker 35 like a head start on my emergency fund, but I'm I'm also like completely exhausted and hoping it's kind of like less.

Speaker 2 Are you saying just quitting your second job? Are you keeping your full-time job?

Speaker 42 Yeah, so right now I work about 52 hours a week.

Speaker 41 I work 40 and then I work like an extra four hours a week. And this is three times a month for my, so I work about 44 hours and then I work an extra eight.

Speaker 9 Is it the work or the type of work?

Speaker 9 Is it the fact that you have an extra job or is it the nature of the second job?

Speaker 41 It's more than nature of the second job because I'm a therapist in an acute care setting

Speaker 41 and it's like a very physical job. And I'm like, what do you make from it?

Speaker 9 What do you make from it?

Speaker 41 Yeah, so my base pay and my primary job is 4.3K.

Speaker 4 And I do week.

Speaker 41 I work weekends on my primary job. So I have 5K with my weekend pay.
And then with my second job, I do

Speaker 41 5.6, and then I do work overtime at my primary job.

Speaker 4 5,600.

Speaker 2 Wait, your second job is bringing in more than your full-time job.

Speaker 41 No, I'm just explaining that I actually

Speaker 41 like that's my monthly income incrementally as I add on more hours.

Speaker 2 Oh, so you're making an extra $600 from the side job?

Speaker 11 Gotcha.

Speaker 41 It's about $2.50 per shift, and I work about eight shifts every three months.

Speaker 4 So 12.

Speaker 9 Go ahead. I'm just trying to understand.
Just give us really clear what you bring in from the side job every month.

Speaker 9 Because what I'm getting at, what I'm getting at here is if you're telling me it's the nature of the job that's the problem and it's giving you 1,200 extra bucks a month or 600, whatever that is, I'm pretty sure you could probably.

Speaker 4 750. Perfect.

Speaker 9 I think that you find another job and replace that income because a lot of times the burnout is not on the hours itself, it's the job that you're doing during those hours.

Speaker 9 It sounds like you've been going hard for a really long time and you just need to change a pace.

Speaker 2 Yeah, if you did something that was more enjoyable, even less, you'd be okay. But I wouldn't just slow down just yet.
You're so close.

Speaker 2 Keep the gazelle intensity up until you're through baby step three. But I do think we need a shift in the meantime, just shift the plan a little bit.
This is the Ramsey Show.

Speaker 1 When you're tired of feeling stuck with money, there's just one solution. To get different results, you have to do something different.
No one accidentally wins with money.

Speaker 1 You have to have a game plan, and that begins with our get-started assessment. Go to ramseysolutions.com slash start, answer some questions, and we'll show you what steps to take next.

Speaker 1 Don't stay stuck. Take control of your money starting today.
Go with ramseysolutions.com slash start.

Speaker 2 Welcome back to the Ramsey Show, our scripture of the day, 2 Corinthians 12, 9. My grace is sufficient for you, for my power is made perfect in weakness.

Speaker 2 Therefore, I will boast all the more gladly about my weaknesses so that Christ's power may rest on me.

Speaker 2 In a left turn, J.K. Rowling once said, Anything's possible if you've got enough nerve.

Speaker 2 I like that level of persistence.

Speaker 9 George, you got some nerve.

Speaker 2 That's me getting discounts. That's my version of that.
I've got enough nerve to ask for the discount.

Speaker 9 Listen, I've watched you in these breaks try to get these discounts on these Seinfeld tickets.

Speaker 2 That's right. If anyone's got the hookup, I refuse.
Jade's like, George, just go. I know.
Just pay the stub. I'm like, I'm not going to to let the scalpers win.
Not on my watch.

Speaker 2 I'm going to get these tickets at face value if it's the last thing I do.

Speaker 9 Waving the white flag.

Speaker 2 That's my latest conundrum. If you're wondering what's happening in the world of George,

Speaker 2 you're trying to get a deal. Yep.
All right. That's fun.
Let's go to Joan in Jacksonville, Florida. What's going on, Joan? Make us happy.
How can we help?

Speaker 39 Well, hi.

Speaker 22 Thank you for taking my call.

Speaker 39 I have a situation where I have a couple of options, but I really don't know what to do.

Speaker 34 I'm 86 years old.

Speaker 15 I

Speaker 39 have only Social Security.

Speaker 16 I own my own home.

Speaker 14 I own

Speaker 14 my car.

Speaker 39 But I have about almost $30,000 credit card debt.

Speaker 4 Oh my goodness.

Speaker 14 I know.

Speaker 32 I

Speaker 29 have making minimum payments, but I've only left with maybe

Speaker 14 $100, $200 a month to eat, put gas in the car.

Speaker 39 Now, I do have

Speaker 14 help

Speaker 14 from a daughter and an ex-husband that

Speaker 14 feeds me, you know,

Speaker 26 as I need it if I make a

Speaker 16 suggestion, but I it's embarrassing that I don't want to.

Speaker 39 I could

Speaker 39 think about selling the car. It's 17 years old.

Speaker 16 I won't buy another one, but I'm pretty much going to be grounded.

Speaker 2 What's the car worth?

Speaker 39 Well, it's a crown Victoria.

Speaker 2 I don't think that's going to make a dent in your credit card debt.

Speaker 4 I'd rather you keep the car to get it right.

Speaker 11 Yeah, true.

Speaker 16 And or sell the house.

Speaker 14 That's what I want to know. Oh, boy.

Speaker 39 And get an apartment.

Speaker 2 Well, the problem is right now you have a fixed expense with this paid-for house

Speaker 2 right so if you sold it to pay off your credit card debt that leaves you with an expense that's ongoing and increasing and with your social security i don't know that you're going to be able to afford the payment of the rent how much do you get every month

Speaker 4 um

Speaker 14 11198 okay almost a thousand so about twelve hundred bucks a month

Speaker 4 yeah.

Speaker 2 And what are your monthly expenses right now?

Speaker 2 You're saying you have a hundred bucks left over. So you need uh about eleven hundred bucks to live

Speaker 2 a thousand?

Speaker 22 No, no.

Speaker 39 I the reason I'm in credit card debt is I always need about a two hundred dollars more until I use a credit card and then I start paying the minimum payments and then the interest starts hitting on and the bill bill builds.

Speaker 39 Now the last two or three months I've I had, like, almost $3,000 in

Speaker 34 car repair and some other $700

Speaker 23 to the dentist.

Speaker 4 Yeah. And so.

Speaker 4 You just have no cushion.

Speaker 9 You have no cushion to pay for anything that comes up beyond your $1,100 a month, right?

Speaker 14 Unless I beg it from either a daughter or an ex.

Speaker 4 I'm sorry. Goodness.

Speaker 2 I'm so sorry.

Speaker 2 Joan, this is not a fun place to be. What is your house worth?

Speaker 32 My house.

Speaker 2 Your house. What's it worth?

Speaker 39 Well, what do you mean by that?

Speaker 2 If you sold it today, what could you get for it?

Speaker 4 Oh, my house. Okay.

Speaker 35 Oh, the house is probably worth

Speaker 28 $195,000

Speaker 22 to maybe $250,000.

Speaker 4 Okay. That's a big.
But

Speaker 39 on either side, the houses

Speaker 39 have built around me, and they're worth $600,000 and $500,000.

Speaker 9 Why is yours so low?

Speaker 2 No updates. Is it in rough shape?

Speaker 14 No,

Speaker 29 mine is just old. When I came here 21 years ago,

Speaker 2 they built a bunch of new houses around you.

Speaker 35 Yeah, they built everybody around me, and I don't have an HOA and everybody else.

Speaker 2 Are you at the point where you can move in with your daughter?

Speaker 14 Well,

Speaker 39 I could, but I'm not too sure about that.

Speaker 14 You know personalities.

Speaker 16 I mean it's kind of it would be

Speaker 14 I have

Speaker 39 some health problems but they're under control.

Speaker 2 Well the problem is let's say if I snapped my fingers and got you out of credit card debt you're going to be back in $30,000 of credit card debt because you're using the credit cards to float your life and expenses.

Speaker 39 Well, I promised her that from now on, I would ask her after

Speaker 39 if I had to charge something.

Speaker 2 But you're still behind 200 bucks a month, which you're using credit cards for, you told us.

Speaker 4 So you've got your daughter.

Speaker 2 That's not going to change anytime soon.

Speaker 9 You've got your daughter, and do you have other kids, or is it just her?

Speaker 22 Yes, but that wouldn't be possible.

Speaker 9 Okay, so your daughter has said, mom, let me know before you charge this credit card, tell me, and I'm going to try to help you out, basically, right?

Speaker 22 Yes.

Speaker 9 So,

Speaker 9 like you said, it's embarrassing and it's tough, but your options are you either reach out to your daughter and you say, hey, you told me that this lifeline is here.

Speaker 9 And the truth is I need $200 every month in order to be able to live and not spend any more on this credit card. That $200 will help me make my minimum payments and not go over.

Speaker 9 If you said that to her, is she on board to say, okay. I'm going to help you in that way.

Speaker 9 And then, because the other option is we might have to look at this house, which doesn't really make sense because of the cost of living today. Like, there's not really an option.

Speaker 4 I know, you know.

Speaker 14 Yeah, that's one thing that's made it gone up more.

Speaker 14 Well,

Speaker 39 okay.

Speaker 2 Your expenses are $1,400 and you're bringing in $1,200. That's the truth at the end of the day, right? Because you're going $200 into debt on the credit cards.

Speaker 35 Yes.

Speaker 2 So we need to find a way to either lower our expenses somehow or increase our income.

Speaker 4 I don't know we're going to find a way to increase income.

Speaker 16 I wrote down every penny I've spent this past month.

Speaker 16 And

Speaker 2 could you downgrade in-house?

Speaker 2 If you sold it for $250, could you go buy a place for $200?

Speaker 4 I'm not sure in Florida right now.

Speaker 32 I mean, or even an apartment?

Speaker 26 No, it's a house.

Speaker 2 I'm saying, could you downgrade to an apartment?

Speaker 39 Oh, well, I could go. Yeah, I mean, I could, but I'm 86 years old.

Speaker 2 I mean, I know, but we also didn't set ourselves up for a bright future in retirement.

Speaker 4 No.

Speaker 2 So this is part of it, is we got to deal with the ramifications.

Speaker 22 I was a single mother since I was 19 years old

Speaker 39 with no child support.

Speaker 14 And I worked until I was almost 80.

Speaker 4 What were you doing for work?

Speaker 28 I was a, well, maybe I better not say.

Speaker 14 I worked in a pharmacy technician.

Speaker 4 Okay.

Speaker 2 Is there something you could do to make a little bit of extra money right now? Are you able to get around and do that?

Speaker 39 Oh, yeah, I get around.

Speaker 23 I mean,

Speaker 14 I'd

Speaker 2 I think we might need to find a little part-time job to clean up this debt and increase our income if you're able-bodied.

Speaker 2 It's not fun, but this might be your only option other than selling the house and downgrading to an apartment that you pay cash for, which allows you to clean up the credit card debt, lowering your monthly expenses.

Speaker 39 Well, I have leukemia.

Speaker 14 I've had it for 21 years.

Speaker 14 I really don't have a high

Speaker 39 energy level. And I have a dog,

Speaker 39 and the dog, I was going to tell you the expenses the dog cost.

Speaker 22 The dog was the biggest expense.

Speaker 4 I bet. I know.

Speaker 2 I got two little French bulldogs, and they're the biggest line item in my budget right now. So, Joan, I'm so sorry.

Speaker 9 It was

Speaker 22 $181 for the dog.

Speaker 4 Every month?

Speaker 9 No, just this month.

Speaker 4 Just this month.

Speaker 2 Oh, Joan, I'm so sorry. You have been through it.

Speaker 2 I would definitely look at downgrading a house and going to an apartment you pay cash for, getting rid of the credit card debt. If you need to rehome the dog, I'd rather you eat before the dog.

Speaker 2 So that's the hard truth. I hope it helps, and I hope your daughter or ex-husband can help.
That puts this hour of the Ramsey Show in the books.

Speaker 2 Thank you to Jade Warshaw, all the folks in the booth, and you, America. We'll be back before you know it.