Financial Victories Don't Happen Without Sacrifices

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

Merry Christmas to you. We're so glad you're here.
Open phones at 888-825-5225.

I'm Dave Ramsey, your host, Solo today,

at least for part of the time. So here's how it goes.
Simon's going to kick us off in Phoenix. Hi, Simon.
What's up?

Hey, Dave, how's it going? I appreciate you taking the call. Sure.
How can I help?

I am

26. Me and my wife are both working full-time.

She's a paralegal. I work in Personal Lines Insurance.
But on the side, we run a small that's turned into a little bit bigger than small turo fleet of about six cheaper vehicles.

They range from 2017 to 2019.

And we've kind of used some of your methods over the years. It's been about three years since we've done it.
We've paid for them, gotten them paid off very quickly, and we're debt-free on all those.

And it's pretty much just straight cash, taking in cash at this point. But I want to expand it more

quickly so that it maybe can turn into a full-time thing for either her or for me.

And I'm just curious on maybe what would be the next step

from somebody else's perspective to jump into that without taking out a major loan since vehicle prices are pretty extremely high right now, especially for newer ones, but especially for cheaper ones at the moment, or for older ones that don't seem to be as cheap at the moment without drowning myself in debt from that.

When we're teaching small business people entree leadership lessons, I tell those guys and gals to grow organically with the cash that the business creates.

That's what we've done at Ramsey for 35 years. $300 million company this year.
We've never borrowed a dime. Every bit of everything we have, we reinvested profits to grow the business.
That was slower

than I would have liked it sometimes. I was frustrated at times because I think I've got something in front of me that feels like an opportunity and I don't have the money to do it right now.

And that limitation has kept me from doing some pretty stupid things where I got out over my skis.

So I tell our guys all the time when we're coaching small businesses to try to land on the cover of Slow Company magazine,

not fast company magazine. Patience.
Patience. Build something that's sustainable.
And because the one thing we know about the space you're in, it's a brand new space. It's a disruptive space.

And it's going to iterate. There's going to be a lot.
Five years from now, it will not look anything like it looks right now. Agreed? Absolutely.

And so if you had a five-year loan, you're anticipating nothing changing and being able to make that loan. That's asinine.
You're not going to get there. Okay.

Because you're in a very disruptive space. So

how much? So your only cost, once you pay cash for the car, the capital asset, then you're taking,

obviously, the customer is providing their own gasoline, correct? Correct. And so you're providing insurance and repairs and loss in value and so forth, right? Correct.
So those are your expenses.

So how long have you been running these cars? About three and a half years. What are you netting? What's your net profit after your expenses?

This year was our best year. I would say it was about, after all the expenses, it was about 32,000.
So buy some cars with it. You have a job.

Yeah.

Yeah.

And it was, and I guess actually net would be a little bit lower this year. That's what I asked was net?

Yeah, cash in the bank would be

about eight right now

after

we pay the insurance and full.

You've got gross revenue minus expenses equals net,

which would, in a cash-based business, would be the cash in the bank, dude. And by the way, that's all taxable.
You've got to pay taxes on that. So here we are at the end of the year.

You're going to get hammered. So some of that 30-something thousand is not $30,000.
It's probably more like $25,000 or $22,000. What was it?

Yeah. Minus taxes, buy some cars.
Yeah. Yeah, absolutely.

I guess the only other. What's your average price of your car?

To sell today,

they range from probably with all the depreciations.

No, I mean, if you went and bought a car today to put into this, what would you pay for it?

$14.

Okay, so you can buy one car. Okay.
Yeah. Or two if you are two if you roll up your sleeves and don't dough 14, right?

You can probably buy two $10,000 cars. Yeah.
Yeah. And that's going to, and you've got a fleet of six, and so that's going to increase your revenues by 20%.
That's a pretty strong growth curve.

Correct.

Absolutely.

Have you discovered yet that some models of cars do better in terms of appeal to the potential renter? Sure. Significantly, sure.
Minivans do.

And have you discovered that some cars break down more than others? Sure. I stick to only Honda and Toyota.

Because of that. Okay.

So you've kind of got your pattern laid out here.

You're tweaking your business model

as you should, iterating as you go along. And I'm just going to beg you to not get out over your skis, man.
I know it's tempting. You feel like you're making a lot of money, but you're really not.

I mean, you make 20 grand. Correct.
That's not life-changing money. And you're putting up with a lot of crap for 20 grand.

I mean, this is Airbnb in a car. You talk about air freshener.
Dude, you need some after these. I mean, unbelievable.

So, I mean, gee, so I don't even want to think about the stuff you find in these vehicles. And so, I know, I mean,

yeah, this is a lot of work for 20 grand. I don't know that we want to scale this, but you can scale it and have some fun with it, but pay cash as you go.

And then the worst case is the thing iterates out from under you. It becomes illegal in your city, or the driverless cars come in and take over your city and put you out of business or whatever it is.

Something else iterates and disrupts because welcome to our world. And that's what business people understand is risk and that

there's a thing called the myth of continuity. And this idea that things are going to continue the way they always have is mythology.

100% chance of change. It's in the weather forecast.
Every night, there's going to be change. There's going to be change.
There's going to be change.

And when you're running a small business and you go along with a myth of continuity, so you go borrow $35,000 or $40,000 and put six of these things on the road only to find out you're completely out of business and have car debt.

Oh, wow. That's That's a problem.

So you can't predict all the outside variables. All you can do is build a solid foundation so when COVID hits, you survive.

So when Waymo hits, you survive. So when it becomes illegal to do Turo in your town, you survive.
And all of those things are in play, by the way, because guess who doesn't like you?

Some of the big boys, Hertz, Avis, hello, they got a little money. They're messing with your city council right now, I promise you.
Guess what? Who else doesn't like you? Taxicabs.

They don't like Uber either, but they haven't been able to run them out of business yet, but they were trying. So there's always an ongoing war.

There's an outside force that you're not considering when you just look at your simple cash flow and you haven't considered all these risk factors in there. So build something sustainable.

Be on the cover of Slow Company Magazine. I don't mind you growing it, but grow it only with cash.
And that'll be a governor,

a limiting factor on your growth curve to keep you reasonable and keep you from getting your butt in trouble, man.

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Ricky's in Sacramento. Hi, Ricky.
Welcome to the Ramsey Show.

Please

have me on. Thank you so much.
Sure, what's up?

I have a question

about me and my boyfriend. We've been together for about two years.
Our financial

system has been completely fine. We have all of our bills.

We've never had a true conversation about money in our future. And I want to know how I can bring this up to him without starting into argument or having him shut down on me about finances.

Because it seems like every time I do bring it up and I do want to start talking about finances, it's, I want to do this by myself. Please let me do it by myself.

And I want to work with him on this, but I don't know how to bring that into a conversation.

Are y'all talking about marriage?

Um,

yeah.

So, in about

uh, he said when our relationship got to the fifth year that he would propose to me, um, but

uh, with how our financial situation is going, I don't, I'm not sure if that's actually going to happen.

Okay.

Well, the number one cause of divorce in America is money fights and money problems,

money stress, disagreement.

Okay.

And so if you're going to get married, you have to solve for that not being there

to increase the probability of your marriage being a success, right?

Yes. Yeah.
And so that's how I'm beginning to talk to him about it and say, listen, the number one thing that breaks people up is money issues. We need to get on the same page with money.

And if we're on the same page, it doesn't matter

what the page is, as long as we're on the same page. I mean, you can have debt.
You can have an income issue. I can have debt.
I can have an income issue.

But, you know, we've got to be in agreement about how money is being handled and that we're working our way out of debt and into wealth to have a high probability, a high chance of our marriage being awesome.

Yeah, I understand that completely. And that's how I would say it.
Say that. Say that to him.

Yeah, absolutely. I will definitely

get hold of it. And if he says, I just want to do my own thing, he's telling you he doesn't want to get married.

And I should just accept that at that point and kind of go with my own financial situation.

Well, just decide whether you want to live with somebody the rest of your life and be, you know, sharing the mustard or whatever it is you do.

All right. Which, by the way, the probability of you building wealth is very low when you do that.

Married people have 13 times the net worth of unmarried people shacking up.

I got you.

I got you.

I will have a conversation with him, and I'll try to bring this up and everything. Yeah, that's what you got to do, kid.
I mean, you just got to talk it through and say, listen,

if we're really going to have a future, it's like 30 years from now, we're sitting on the front porch with the rocking chairs and so forth, right?

40 years from now, whatever it is. If we're really going to have a future, we've got to start talking about what that looks like and what the best path is to get there and be in agreement on that.

And money flows through every bit of that. And irresponsible spending does not flow through that.

And big piles of debt does not flow through that. That doesn't, you know, and, you know, just buying whatever I want to buy, being immature and having a little fit.
I work so hard.

I deserve, you don't deserve anything. Shut up.

Whining. When you have the money to buy it, you deserve it.
And that's because you worked for it.

Until you do, don't talk to me about what you deserve. Crud.

You deserve calluses on your hand and sweat on your brow until you you get the money to buy something. That's how it works.
And that's what all of us face. It's how we all live.

And so, yeah, anyway, so Ricky, you just got to talk that through and you guys have to be in agreement about our goals and what our desired future is and where we're going from here.

And man, it makes a big difference when you do. It's very, very cool.

Alex is I was Ricky. I'm sorry.
Alex is with us in Salt Lake City. Hey, Alex, how are you?

I'm doing well. Thanks for taking my call.
Big fan. Thank you.
How can I help?

So in approximately three to four months from now, the two savings accounts that I have in saving

will line up with what I owe on my mortgage that will be paid off. My question is

approximately $300 a week that I was paying towards my mortgage, what should I do with that? Your mortgage payment is only $1,200?

No, no, it's $1,550, but of course,

that includes taxes and insurance. okay so you're you'll be rid of the 1550

and your question is what

what should you do with that the three

yeah what should i do with the the three hundred dollars a week which i'm estimating do i stack that on top of my 401k contributions do i put it into a

acorns account no um i

you don't put out that's where my money is really

that yeah i have

so

I've been saving in Acorns, two accounts, the later and the one that's now

for many years. That Acorns account is worth, you see, $62,000 of today, and I've made $19.8,000.
The later account is worth $20.5,000. That's a Roth IRA account.

This year is the first time I've maxed out $7,000 towards the Roth IRA. You're not talking about cashing out the Roths to pay off your mortgage.
No, no, I'm talking about the first one where.

So your mortgage is only $60,000.

No, no.

The other account is a savings account. My mortgage right now is I owe $97,000.
Oh, I see. And what's the interest rate on your mortgage?

$3.375.

You're not making any more than that on savings.

No, no, I'm not. No, the savings is just a rainy day fund.

Right now, I have $10,000 in the market. So when you pay off the mortgage using the acrons and the savings, do you have an emergency fund left?

I have nothing left. Well, we don't do that.
Because I wouldn't do that.

I would have an emergency fund, and above that, I would pay off my mortgage. So, the first thing is you need to grow an emergency fund or keep an emergency fund.

So, what would I do if I were in your shoes? I'd put $60,000 on the mortgage out of the acrons and close the account today.

And I would take the mortgage down, the other savings count down to three to six months of expenses and put it on the mortgage, and then I'd tear into that mortgage as hard as I could tear into it.

Then, to answer your question, what do you do with the $1,500? Are you single?

I'm single. I have one kid who's 28.
Do you have any other debt of any kind? No. What do you make?

I make $106,000 a year, and then I rent out my basement as a mother-in-law, and I make $9.50,000 a month. Okay, good for you.
Well done. Okay, so Alex, there's three things.

When you get all this done and the mortgage is gone and you have your emergency fund in place, and then we're putting 15% of our income into retirement, into into good Roth IRAs and Roth 401ks with a match if you have one at work and that kind of thing.

Once you're doing all of those things, then there's three things you can do with money and you ought to always do all three things. We've already covered the first one, which is investing it.

The second thing is generosity, giving it.

As a matter of a percentage of your income, steadily giving, not just one time I gave $10.

That's not what I'm talking about. I'm talking about a steady rhythm of giving.
Third thing is a steady rhythm of enjoyment of your money. You are a saver, my friend.
You enjoy saving.

You get a high from saving. You need to also learn to give and you need to learn to enjoy some of this money.
That's why it's so hard to get.

And then you need to have all three things going at all times.

And that's what I would tell you to do once you have the house paid off and have a fully funded emergency fund of three to six months of expenses in your savings account.

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Rachel Cruz, Ramsey Personality, number one best-selling author. My daughter joins me as a co-host.
Corey is in Bowling Green. Hey, Corey, what's up?

Hey, Dave, it's such an honor to talk to you. Two very quick questions for you.

All right. So

my kid is in college last year. He got financial aid, most of it paid for.
Our income has increased to the point where next year, I'm probably going to be paying for the whole thing.

Our lifestyle has crept up at the same rate that our income has crept up. So while we're trying to become a little more disciplined on our spending,

I've committed to paying for my kid's college and trying to cash flow it, but we are still in debt ourselves. So my question is, should I

hold on to that commitment to cover his college if we are still in debt ourselves?

What is the expense for the college? How much?

I expect next year there could be a potential living on campus. So it could be $30,000.
It's local. It's not too bad.

And what do you make? What's household income? So my wife and i've household income it's uh it's two hundred thousand

okay

and how much debt do you have not counting your home

so

uh let's see not counting my home um it's about fifty thousand dollars okay what's it in corey what type of debt it's uh it's a stupid car and uh just

very little credit card debt. So how much is the stupid car?

Right at $30,000. Okay.
And $20,000 in credit card debt. Yep.
Okay. All right.

And do you realize that what you said to me was that we increased our lifestyle while we're in baby step two trying to get out of debt.

And instead of cutting that, you were talking about not getting out of debt to pay for college and keep our lifestyle up. That's what you accidentally told us.

Because I'm sure you didn't say that on purpose.

Well,

I'm aware. I've been listening to y'all for a while, so there was a little intentionality there.
Okay.

All right. So when you say upping your lifestyle, Corey, what does that mean? Is it just that you guys are enjoying this $200,000 that you're making? You know what I mean?

Go ahead. I apologize.
When my kids were very, very young, we used to not be able to afford the smallest of toys.

So as our income has come up, we've started going on probably a little larger family vacations than we should be going on.

Well, you need to, you guys, you and your wife need to sit down and decide what your goals are.

Okay?

Because you can't have three goals at once. You have to have one.
So what is our goal? Is our goal to build wealth and some sustainability for our family?

If it is, we're going to live like no one else, which means we're going to temporarily go no lifestyle.

No vacations, no restaurants, no anything, until we get this stupid debt cleaned up.

And when the debt is cleaned up, then we're going to build an emergency fund, then we're going to start building some wealth with Baby Step 3, putting putting 15% aside for retirement, which I have a feeling your 401k is still running too, isn't it?

Oh, yeah. So you're not on Baby Step 2.
You're just kind of making up your own plan. Okay?

Baby Step 2 is you stop all lifestyle, scorched earth. You temporarily stop the 401k.

The kid lives at home, not on campus, and you pay for his tuition, and that's it. And you knock this debt out.
And if you want to do it even faster, sell the car.

But otherwise, keep the car and pay it off.

The car's not hugely impossible, but you can't go out to eat every night, go on a lavish vacation, put the kid on campus, have all this debt, and hope the debt just magically goes away.

Mathematically, it's not going to happen. That's what you've discovered.

Yes, sir. So something's got to give.

And you ought to decide what's going to give on purpose, not be making 200 grand and end up broke someday. That'd be a dadgum shame.

Agreed. Yeah, and Corey, and honestly, you know, your income's great.
And so you look at it, and it's not going to take you guys too long.

I mean, if you think about after taxes and everything, what you're bringing home, I mean, if you guys just lived on 70 for a year, that's it.

You could do all, you could pay off debt, pay for the college. I mean, all of it.
You know what I mean? It's just like one year, the year of 2026.

This is our year of just getting everything cleaned up. Because making this kind of money and having 20,000 in credit card debt does speak pretty loudly to where you guys are.

I'm going to promise junior to pay for college, but I didn't promise to pay for beer pong so you can live at home.

Right. That is what's currently currently happening this year is living at home.
Yeah. Yeah, that's not a bad thing.

And maybe it's you guys, you know, make massive progress in the spring and maybe him starting in the fall. You know what I mean? Like then he can live on campus or something.

But I think a lot of this, these numbers are pretty doable, Corey, but it's going to take. And by the way, Junior could go get a job delivering pizzas and pay for his own dorm.

Yes, yep.

I worked when I was in college. Did you go to college, Corey?

Yes. Did you work when you were in college? I was a full-time father, full-time worker through college.
Yeah, me too. I wasn't a father, but I was a full-time worker.
I was going to say.

Full-time worker. And I mean,

most adults walking around over the age of 35 will tell you that if they went through four years of college, they worked some of the time. It's not child abuse.
It's actually very good.

If I'm hiring as a Ramsey CEO, someone straight out of college and they've never worked, I'm nervous. Yes.
I've never held any job yet.

I would rather hire a B-minus student who worked 40 hours a week and knows what a callus is than I would an A-plus student who's never worked a dime and doesn't even know what it means to show up eight hours a day.

Because they're going to come in here and go, oh, wait, this is what we do? We come every day, all day? Yeah, that's what we do. And it changes everything.
So it's okay if Little Jr.

goes and gets a job. And our research, this is probably a little bit older.

We may have done this, I don't know, maybe eight years ago.

When we did the borrowed future documents. And students that hold a job 15 hours a week while in school, 15 to 20, actually have higher GPAs than students that don't.

So it's the probability of graduating. Yes.
So, yeah, it is.

Yeah. There's something to that for sure.
Yeah, the student athletes, a lot of them run, and they're running full-time jobs as student athletes.

A lot of them run higher GPAs than the general population.

It's not unusual. And because the professors may like them, too.
Well, that could be, but it could be like, you know, I remember when Pat Head Summit, well, Pathead Summit was there.

I know, yeah. Every one of those girls graduated at the University of Tennessee ladies' team in those days, the women's basketball.
And the vast majority of them were on the honor roll.

I mean, so it was.

Yes. I think all the coaches run the tight shift.
Anyway, all this is possible. But, Corey, y'all need to sit down and go, okay, we have three things here we're wanting to do.

Send Junior to college, enjoy life, and get out of debt. We can't do all three for this year.

Do we want to take a year off of enjoying life so that we can be debt-free and And Junior goes to school and lives at home that year. And that's all very, very doable.

You'd be debt-free in a year without even selling the car. Oh, and temporarily stop the 401k for a year.
Yeah.

And this is a great example of kind of like the ish mentality when it comes to this because it's like, yeah, I mean, he's funding retirement.

I mean, he's doing some things that are, you know, fine, but it's like, eh, we'll have a credit card and we'll get that one car loan. The other car's paid for, but this one.

It's just this like back and forth. And you end up just so mediocre in all of it.
You know what I mean?

And so, yeah, so there is this like extreme mentality to take, but then you get the result out of it, which is fantastic. Live like no one else so that later you live and give like no one else.

No discipline seems pleasant at the time, but it yields a harvest of righteousness. There's a process to be, there's a price to be paid to win at these things, and it's focused intensity.

And when you're intentional with it, it changes everything. The problem is in America, we make so stinking much money that it feels like we can have it all.

And the old saying, you have your cake and eat it too, right?

You really can't. And so for years, I was really good at making money, and I worked really, really hard to try to out-earn my stupidity, out-earn my mediocre, undisciplined habits.

And it doesn't work. You can't make enough to do that because your mediocre, undisciplined habits will go up every time your income goes up.

And so you can't get away from this until you deal with the person in your mirror. All of us.
Corey, you're no, I'm not fussing at you exclusively.

I mean, it's all of us, all of us deal with that same thing. But I think you and your,

I have a sense that you've kind of realized this, but you're afraid to break it to the rest of the family. And so, you and your wife tonight get to have a come to Jesus meeting,

and we're going to decide what we're going to be when we grow up. Grown-ups are children's.
Adults devise a plan and follow it, children do what feels good.

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JC is in Poisey, Idaho. Hi, JC.
How are you?

Hi, JC. How are you?

JC?

Hi, can you hear me? I can. How are you? I'm great.
How are you? Better than I deserve. How can we help?

Hi, I am trying to figure out how to save for retirement and leave my kids with as much money as possible since my husband passed away.

I'm sorry. When did he pass?

Two years ago.

How old was he?

He was only 28. Whoa, what happened? Oh my gosh.

He actually passed away from an accidental overdose. Oh, my God.
Oh, JC. I'm so sorry.
Oh, it's horrible. How many kids do you have? Three.
Three. What are their ages?

10, 4, and my little one. I was pregnant at the time, and he'll be almost two.
Oh, my gosh. Whoa.

Life insurance?

I'm trying to get it, but unfortunately, I have some medical issues, so I keep getting. No, no, no, no, I'm sorry.
Did he have life insurance that was left to you? No.

Okay. So, what is your income, ma'am?

Well, I am making $50 an hour right now with my cleaning business. Good for you.

That's a lot of work. That's great.
How much money are you bringing home a month?

I'm bringing in about $2,000 a week,

but I just started rebuilding my life. I

went through a lot of depression and blew through what savings I had, so I'm having a lot of guilt about that. I wouldn't.
You've been through hell.

I completely understand

where you are. And I'm real proud of you for coming up out of this and rising up out of it and then starting your own business $50 an hour.
Way to go, mom. Good job.
Thank you. Thank you.
Very good.

Okay.

So

it sounds like, it feels like that you're fairly new to all this Ramsey stuff. We teach a process for building wealth called the baby steps.
Have you ever heard of that?

I have just been listening to you and started hearing of it again. Yeah.
So the first goal is to save $1,000. Do you have any money saved?

I have

nothing saved right now. I blew through my savings.
Got it. So the first goal is to get a little baby emergency fund between you and a flat tire.

Okay. Okay.
Or you and an alternator going out in the car or whatever it is, right? Okay.

Because you got to get to work and you got all these kids, like all these little baby birds there wanting to be fed, right? So we got to make sure they're okay.

So goal one is a little starter emergency fund. Then do you have any debt?

I have a car loan right now. How much do you owe on the car?

$30,000. Okay.
That's a lot. Okay.
Yes. And what other debt do you have?

Just a couple of little things that probably equal $1,000. Okay.
Like a little credit card debt or something?

Yeah. Okay.
All right, good. Do you have a mortgage?

No. Okay.
We rent. And you're 32?

31. 31.
Okay. That's what I'm based on your numbers, that's what I was guessing.
Okay.

Okay, so goal one is $1,000. Two is we've either got to sell this car and move down

and or or get it paid off very, very quickly. It is standing between you and the answer to your question.
Your question was how do I build some wealth for retirement and leave something to my kids?

Okay?

And the answer is you get rid of the stinking car payment. That's step one.
So we've got to get the thing paid off or sell it and move down so that we can get that one paid off even faster.

When you are 100% debt-free, then we're going to go back to the $1,000 account. And baby step three is is three to six months of expenses.
Let's call that $10,000 or $15,000 for you.

Okay. Now, with your income and no payments and $15,000 in the bank, life feels different already.
Agreed?

Yes, it's just my expenses are so high. My rent is $2,000 a month.
My daycare is almost $3,000 a month. And your car payment is $700,000.

Yeah. And that's the only one we can deal with.

Okay.

Unless you move into a cheaper rent. If you want to do that, that's okay.

But when you don't have any payments, except those payments, no car payment, in other words, and you've got an emergency fund, then you're poised to begin to build some wealth.

We start talking about saving up to buy a house, and we start talking about putting 15% of your income away for retirement.

And you'll be able to do all that because we're going to put you on Every Dollar, which is the world's best financial tool and budgeting app.

So, it's going to not only teach you how to do a budget, but it's going to teach you how to walk through these baby steps and do stuff what we call the Ramsey way, okay?

Which is the shortest distance between where you are and retiring with dignity. You said you had some health problems preventing life insurance.

Yes, what are they?

I'm dealing, I have a traumatic brain injury from a CAR REC, so I deal with things like vertigo. I have a

sleep apnea I'm trying to do a sleep study for, and

just a few other things. Are you overweight?

Are you overweight?

Yes, I gained some weight since my husband passed. Okay.
Is that affecting the life insurance? Because obesity will hit the life insurance harder than smoking will. Okay.

And sometimes the apnea will tie back to that and that's what will

keep you from getting a decent rate. So again, something you can work on.
Okay.

Being overweight and smoking are the two biggest factors in driving life insurance costs way through the roof. Otherwise, it's just the cost of us pizza.
And those are both controllable factors. Okay.

So long term, I'm just talking through your 10-year game plan here. I'm not 10 days.
Okay.

I want to heap a bunch of stuff on you, but there's a whole process you can go through here where the life insurance gets cheap.

You make sure your kids are taken care of before you've got some wealth built. And then we get out of debt and we build some wealth.
And then you're taking care of it in retirement.

Teach them to go out and be self-sufficient. But if you left them a couple million dollars, that'd be okay too.
It'd be the great end of this story, wouldn't it?

Yes. Okay.
Is it too late to build that money? No, no.

You easily could have five or $10 million when you retire if you follow exactly what we teach you to do. But you're going to have to make some tough choices.
Yeah, I'm wondering, JC, for the car,

do you know if you sold it, what you could get? Are you underwater on it at all?

They said it's not worth what I bought it for.

They said it's only worth, I think, like $18,000 right now. Okay.
They are a dealer wanting to buy the car at wholesale.

So jump online at kbbkellybluebook.com and run a private sale out on that thing. It's probably $25,000, $26,000.

Okay. Yeah, I would just be curious because

if you can get out of it and get a $10,000 car, it sure would be helpful in this process.

Okay. And there's some reliable cars at that price point.

Not forever, but just to get you away. No, but I'm just thinking if she's a mom with the three little kids,

that is going to be a a concern. I'm not saying drive a $10,000 car for the rest of your life.
I want you to be a multimillionaire and drive a nice car, okay?

But we have to pay a price to get there, and you're digging out of a tremendous hole. Hey, we're going to give you every dollar and the full upgrade to it and a full subscription.

I'm also going to send you a copy of the book, The Total Money Makeover, which walks you through these baby steps we've been talking about. And we're here for you, kiddo.

If you need anything, you call us back. I want to hear your story.
I want to hear how you're doing. We'll put you back on the air and answer your question if you run into something.

But you can do this. You can do this.
You've just been through hell. Yeah.

And on the financial side, JC, like the, the emote, the, the, the shame and the guilt and all that feeling of even what you've mentioned on the call, like release all of that, JC, because you're, I mean, I, I can't imagine, imagine walking through what you've walked through.

And so a hundred percent. I would be using every dime that I had in order just to keep my head above water.
So that was there as that was there as a gift. See that as a blessing.

That savings was there to catch you financially.

You know what I mean?

Jason, you really could have called us and had easily 30 grand in credit card debt, you know, and we would have understood, you know, there's a part that you're like, I could see how you got there.

If, you know, your husband passes away suddenly, you have three, you're pregnant, three little kids. Like,

it could have been so much worse, right? And so there is a, there is the reason those savings was there, and that's a gift.

And you used it as someone who lost their husband and you had two little kids and you were pregnant. And that's what it was for.
So I would release that guilt guilt right now. Amen.

Can I give you one more suggestion?

Can I give you one more suggestion? Yes. If you're not in a good church, find one in the area and start attending.

One of the things that people of the book are required to do, and we're people of the book here, is take care of widows.

And they'll wrap their arms around you and you'll have a support mechanism to help and walk you through this. Because you've also been by yourself while you're doing all this and you need community.

So just just an idea. Check it out.
We're going to give you all this stuff. You stay on the line and Christian's going to hook you up.
We're going to set you up with everything you need.

And you call back anytime you need to, kiddo.

Hey, it's Rachel Cruz. The holidays are here, which means family time, giving back, and remembering what the season is all about.
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welcome back to the ramsey show in the fair winds credit union studio frank is in montreal quebec hey frank how are you

you

good how can i help

been listening to the show for a few weeks now i'm a big fan um so i just need a clear path uh because i I feel a bit financially trapped. I'm currently 32 years old.

I'm working at a federal agency and I make about 3,800 gross a month. Hey, come off speakerphone.
Come off speakerphone. You sound like you're in a barrel.

Apologies for that. Can you hear me better? Yes, sir.
Thank you. So you make $3,800 a month with a federal agency and what?

Yes, I have $8,400 left on a student loan and $2,300 on a consolidated loan. And we're about to face major public layoffs within the new year.

So my job definitely feels a bit less secure than it used to be.

If I stay within my current department, the growth feels a bit capped, and I don't really see a realistic path to buying a home or building wealth without decades of extreme frugality.

What do you make? I'm torn between. Oh, no, you told me what you make.
$3,800 a month.

Exactly, yeah, gross. All right.

What do you do at the department?

I'm a program officer, so I manage

the finances of the projects that

we manage.

Actually,

okay.

And

what's your degree in?

I studied a Bachelor of Arts in Law.

In law?

Yeah, exactly. Like, it's not exactly a law degree in the sense of

I'm not entitled to write the bar after it. It's more of like a bachelor's degree in legal studies.
Gotcha. Okay.
And what were you planning on doing with that?

So, yeah, I'm currently torn between the fact that you're going to be able to do that. I mean, when you were studying it, what was your plan?

My plan was honestly to study law school. Oh, but the thing is, I ended up working immediately after, and

that was sort of my trajectory at that time. Gotcha.
Are you married?

I'm not, no. Okay.
All right, cool. So are you thinking of just a whole new career path, Frank, because you don't see growth in what you're currently doing?

Kind of, yeah. So if I stay in my current job,

the options are a bit limited in terms of career growth, especially considering the cuts coming in the new year.

Additionally,

so what do you want to do?

So yeah, my options right now is if I do a master's in business analytics or supply chain management within my What do you want to do?

That's a good question.

I mean, right now I work in a lot with I work a lot with data analytics and I've been really interested in it, and I've become more and more passionate about it, taking on major projects within my team.

So I think I really want to gain more of an expertise within that field.

If I do study it within my city, I can get a major

subsidy to pay off my master's degree, and I would pay a total of $5K around for the degree. And it would also open up the opportunity for private opportunities, private sector roles.

Yeah, okay, cool.

What I would do, I would not go back to school full-time, though.

What I would do is go get a job at an entry-level position in data analytics while you're studying to get your master's in data analytics.

Exactly.

If I am not laid off within my job in the new year, I will maintain my job and

begin studying the analytics. Yeah, and if you are laid off, go get a job.

Exactly, yeah. In the data analytics field.
And maybe they'll pay for your master's.

Yeah, you're right. Yeah.

That's what I would do. But you don't go to school unless you're trying to put, because degrees are not the currency on which we trade.
Knowledge is the currency on which we trade.

And so I can tell you, we've got.

500 people that work for us in the data world, okay, data scientists, platform, data security, data analytics, all through Ramsey. It's a digital world we live in.

And so we've got a ton of what you're talking about working here right now. And I couldn't care less if they've got a degree.
What I care is do they know how to do it?

Exactly. And so knowledge is what you trade on, not degrees.
And so getting a master's and going deeply into debt and not working while you're doing that or some kind of a plan like that's dumb.

Don't do that in that world. I would go look and get some of the certificates,

certifications like a Microsoft cert or two in the data world and see if there's a couple others you can pick up to help you land.

Now that actually will get your foot in the door because it indicates that you have the knowledge and it doesn't require a four-year degree or it doesn't require a master's degree to be a data scientist today.

But you do have to have your brain working in the proper order and know how to

work through those decision tree models. And so,

and you can do that.

I think it's very possible. But what I I would do is just say, hey, this instability is my wake-up call.
I landed in what I thought was a stable job where I didn't have to think much.

I didn't have to work much. And it turns out I do.

Yeah, and hold on the line, Frank. Christian will pick up and let's get on Ken's book.

Probably.

Find the work that you're wired to do, too. That's good.

Because I do wonder, you know, with this whole new, I know you lean on what you think you want to do, which may end up being that, but it'd be just a good assessment just to take in general because it could,

yeah, just give you some creative ideas of things you've never even thought of of as you're kind of entering into a new space.

Yeah, as an adult, folks, here's what we don't want you to do, and we hear people do this all the time. A hard time comes along in my career patch, and so I

quit life and go back to school.

And there's a little bit of, I want to hide from reality in that. There's a little bit of, I may need some new tools, and that's fine.

But what I really want you to do is to take two steps back and say, before I spend a bunch of money and a bunch of time going and getting in a degree in some area, I want to make really, really sure it is what I want to do.

And so, A, I want to go to work in that field, even if it's entry-level, I'm doing the grunt work, okay?

And B, do some testing and take some assessments like this finding the work you're wired to do assessment, and we'll give it to you as our gift, okay?

And you can buy it in our bookstore or on Amazon anywhere you want. It's just a few dollars, and you can take the little assessment in.

25 or 30 minutes, and it changes everything, and it'll give you some real insight into what you want to do.

So you just don't want to throw a dart at the dartboard blindfolded again and hope this all works out. Yep.
Because

obviously the last time when you went and got an undergrad in law, you've used absolutely none of it.

So don't go do that again. Don't go to the expense and the trouble to do that again.

Only go to school to get knowledge to do what you're sure you want to do. Yeah, and I'd say also if the industry requires it too.
Exactly. Because sometimes they don't, right?

And people go get an MBA and they're like, they probably didn't really even need to. You know what I mean?

As if the MBA is a ticket to success. It's not.

The knowledge you get while studying at a good MBA program will really help you in business. It's a master's in business.
That's what an MBA is. But it doesn't guarantee success at all.

And it doesn't guarantee you're going to like the company you're working for. And it doesn't guarantee anything.
So,

you know,

just use education to get knowledge, not to get a guaranteed path of success and happiness, because it's not going to provide that. Degrees do not make people successful.

Knowledge, on the other hand, helps make people successful. It's a lot easier to be successful when you're not dumb.
You know, a lot easier. So knowledge is a good thing.

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Brandon is in Atlanta. Hi, Brandon.
How are you?

Good. How are you doing? Better than I deserve.
What's up?

Awesome. Yeah.
So quick question. My fiancé and I just got engaged and we're looking to buy our first home.

And I was trying to understand the, so basically we have the ability to put 20% down on the home.

But based off of, you know, all the math behind the numbers, I've seen it seems more optimal to possibly put down less and have more liquid cash available to invest, call it maybe 10% down with having the extra cash you're able to invest long-term in, say, Zoo or QQQ or like a large cash ETF or index fund.

So I wanted to get your thoughts on it. It's not optimal.
Your formula left out something called risk. And it left out something towards good night's sleep when your home is steady.

We studied 10,167 millionaires. 89% of them were first-generation rich, meaning they started where you are and became wealthy.
The number of them that said

we optimized our home mortgage by putting as little down as possible to invest and became a millionaire that way, the number of them out of 10,000 that said that was precisely zero.

No one does that in the real world. That's a mathematical theory that doesn't hold water.

And the reason it doesn't hold water is you have not risk adjusted mathematically because you're adding risk risk to your life.

So the typical millionaire, when they hit their first million dollars in net worth, have an $800,000 paid for house and a $700,000 or $800,000 401k.

And they were sitting on a million and a half and their house is paid for. And that's the typical millionaire.
Like it was stereotypical. There are so many of them.

It was crazy in that study, in that piece of research. So what you left out was the fact that when you have no mortgage or you've got a rapidly reducing mortgage, there's more peace in your life.

Your career choices choices are better your relationships are enhanced your physical body doesn't carry the stress with it and so you don't have stress related diseases all of these things play into your finances and none of that was in your formula

so looking at it you're saying including the risk adjusted returns long-term you're saying if you have the you know 30-year fixed mortgage you're going to be a lot safer with that known variable and it continuing to decrease over time over

15 years

Getting rid of the mortgage.

As fast as possible.

Yeah. Going to my second question, which I am a long-time listener, so I assume you have an opinion on this, but I wanted to kind of specify our exact situation.

So we're touring some new construction. They're town homes.
They're smaller homes that we plan to be at for, call it four to five years max. We're 26 now.

We want to start having children in four or five years. Hopefully we get something a little bigger by then if our income continues to increase, which is our plan.

What we have been seeing a lot of in our areas, people doing a five-year arm due to the fact that interest rates are currently relatively high with the assumption from the Fed that they'll slightly decrease over the next few years.

If we're planning on only being a house for call it five years or less, would a five-year arm ever make sense in that situation? No, because you don't know what's going to happen.

You don't know what you're doing. So, again, just playing

You have a plan, but your plan is not going to unfold the way you think. One of two things is going to happen.

You're going to get wealthy faster than you thought, or you're going to have some kind of blocker come up, some kind of problem come up that's going to slow down something.

And you may end up in that house for a little while longer than you thought. So nothing works out exactly the way you think it's going to.

And so you put together things that are sustainable and that are not based, that don't add extreme risk to your situation.

So in other words, what I've talked to over the years, Brandon, in 35 years of doing this, is I've talked to a number of couples who did something like you're talking about, and then they think the arm is coming up and adjusted, and then they had a child that had some needs and they weren't able to continue with their income increases for a period of time because they had to take care of the kid's needs.

And they get stuck, and then they get hammered, the thing adjusts, and they can't afford to stay, and they end up selling the house to to keep from losing it and become a renter again.

Because they took a step back in the mother mayi game because they moved forward without permission. If you remember that, yeah, and Brandon, let me encourage you.

I mean, every you're obviously a well-thought-out guy. You're trying to look at the path of least resistance in your head.
I hear what you're doing. You know, you're looking out this angle.
Yeah.

But I just want to encourage you, Brandon, what's going to make you guys win with money, it's you guys. It's not these like small, we're going to finagle the system and get this and that.

I'm not kidding. If you just do really boring, common sense stuff with money, live on less than you make, don't carry debt,

invest in your retirement, pay off your house early, and you guys make an insane income and you just do those things, you're

all you have to do. And so you don't have to try to

shave a half a point here. Yeah, so this is optimize a quarter of a point there.

Yeah, so Ramsey is, I mean, like our principles and what we talk about on the show, because you've listened, it's pretty boring to guys like you.

There's other podcasters out there and they're finagling this and this, and okay, well, you can get the spread here and they're doing this.

I mean, but the amount of mental calories and how it actually ends up really, truly working long term doesn't end up like that. And so people that follow this plan, while boring, right?

It's not exciting. It's not the new thing.

The amount of peace, you're solving for peace. This is what it is.
And when you do that and you do common sense things and you don't try to make it all

complicated,

it's an enjoyable life.

It really is. You're obviously.
I hear you. I hear what you're saying and what you're doing, and I get it.
And I think there's like the math nerds out there, and they love this stuff.

But I'm telling you, people that win with money long term,

it's them. They're the reason they win.
It's not this system that you kind of rig here or there. Yeah, to verify that, Rachel, Brandon, you're obviously brilliant.

I mean, the questions, the way you formed your sentences. It's very thoughtful.

The way you even formed your sentences, you actually know what you're talking about, which is rare.

Sometimes I get people asking these questions that you're asking, and they don't know what they're actually saying.

They just heard it on TikTok, but you actually know what you're talking about.

And that's going to work against you if you're not real careful. You're going to analyze your way into paralysis of the analysis if you're not careful.
So, do that.

So, I'll give you another example of what Rachel's talking about, Brandon, and the data. Because what we keep following is the data of what actually works, not the theory of a think tank math, right?

It's not math think tank. Right.
Okay, so here's the data:

the people that end up with a million dollars in their 401k

did did not pick,

on average, did not pick the best possible mutual funds.

They picked a sub-par mutual fund. There were plenty of funds that outperformed what they picked.
Now, they didn't pick the bottom 20%,

but they didn't pick necessarily the top 20% of funds out there. They were somewhere around that 80 percentile.
And so I'm looking at that going,

you missed it, you missed it, because I'm a math nerd like him, right? And what the data says, and this is,

is that what they find is that what they did do is exactly what you're talking about. They weren't that great at picking the right fund.
But what they did do was they never missed a month.

Consistency. Yep.
Forever.

No matter what. They put money in their 401k.

Every stinking month. Prom dress, transmission goes out, kids sick, dogs got cancer.
Every month they put money in. Every month.
Market's up, market's down.

What they didn't underperform in was consistency. Yeah.
They over-indexed on consistency and they under-indexed on fund choice. And that's an example of what you're talking about.

They really weren't that mathematically savvy or mutual fund savvy. They just were consistent.

Versus the amount of people that don't do anything and they have theories of what they may want to do, but they don't want to do that.

Or they try this whole thing and then they try this other little thing and then they try this and they're always scheming and scamming, trying to cut a half payment.

Yeah, and it's the same thing about paying off the house.

We get that call all the time of people have, you know, $80,000 left on their mortgage and they got $90,000 sitting in some fund over here and they're like, yeah, but I could be making X amount.

And the amount of people we've had at live events, people here, I mean, that were around, that we asked the question, those of you that paid off your house, raise your hand.

And we'll have an auditorium of 2,000 people. And at some of of these events, it's like 500, 600.
It's, yeah, I mean, there's a lot of them. And we say, okay, keep your hand up if you regretted it.

Who regretted paying off their house? None. None.
Never. Zero.
Never. So, again, that's not in a formula, but I'm telling you, like when you solve for peace, as Dr.

John Deloney says with your money, that is worth it.

That's worth the small percentage point here or there because you have peace and you sleep good at night and you have a happy family and a wonderful new marriage, little babies, and it's great.

And it's great. And it's okay to wait a year after marriage to buy a house, too, by the way.

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Or if you're watching on YouTube or podcasts, click the link in the description. Talya is with us in Orlando.
Hey, Talya, what's up?

Hi, I hope you guys are doing well.

Better than we deserve. Merry Christmas to you.

Likewise, likewise.

I'm calling because me and my fiancé are in

a very big transitional period in our lives right now where our gift of having no rent, living with family is coming to a close very soon.

He just got another job that'll have an increase in pay, but we also are still working on Baby Step 2, which also just got a little knockup because of the good old IRS.

So I'm just curious on how we should plan to move forward with Gazelle Intensity because now we're on the same page and I'm just not quite sure how to navigate this tricky in-between stage.

When's the wedding?

To be be determined. We haven't set a date yet, actually.

There's not a we until we're married. Okay, fair enough, for sure.
You don't pay his debt, he doesn't pay yours.

Yes, sir. I agree.
You can get in all kinds of trouble with that, and you don't want to get there. It'll be a relational nightmare, too.
How much debt do you guys have, each of you?

What's the point in delaying if you're living together anyway? Why don't you just get married?

I'd like to. I guess it's just I don't feel we have the money for it right now.
Yeah, it doesn't cost $50.

You're right about that, too.

I suppose I'm just

part of a Latin family, and so I'd always wanted to do it big.

Yeah, but you're broke and you don't have a place to live, so that's not really an option.

You're not wrong. You are continually.

You're being very agreeable.

She's like, yes, Dave.

Yes. I want you to have a big party after you get out of debt and celebrate your marriage that happened two years ago.

That's fair. And I think that's definitely worth a

consideration.

Because here's the thing.

When two horses lean into the harness together, you can pull a lot more weight than two individuals are pulling

because of synergy. And this agreed thing.
We combine our incomes, we combine our efforts, we combine our spirits, we combine everything.

And you can only do that without a huge risk when you're married. And so

we strongly recommend, and the data backs this up, by the way. So,

yeah, to go ahead and get married. Lots and lots of couples in lots of generations just get married and didn't have a big party and didn't have a $78,000 wedding.
And so.

But the advantage, the marriage advantage on the other side.

From a financial, a family aspect, emotional, I mean, all of it. So if we did that, what is your income? What's his income?

His income is about $40,000. It should be closer to $50,000 since he just got this new job.
Great. And I'm currently at 54.
Okay, so you got 104. That's great.
How old are y'all?

I'm 30, and he's 33. Excellent.
Cool. All right.
And how much debt do you have?

I've been doing everything combined in my head. That's fine, combined.

We're going to pretend you get married this weekend. Merry Christmas, okay?

Wednesday's anniversary is on Friday, so it's a great time to get married. I'll say that.
I'll say that. Christmas is a good day.
Anyway,

Rachel will send you a gift if you get married friday so the uh uh anyway the the the debt is how much it combined 112 combined and now that we're getting gazelle intense we're hoping to knock more of it out but we're currently sitting at completed 39k

already good okay

and what was the irs hiccup

um the hiccup was uh filing 2024 late um in addition to being in the process of paying off 2023 because he was an independent contractor and is that in the 112

Yes, sir. Okay, cool.
All right. And

what are you anticipating rent being? Have you been out and looked for the cheapest thing possible?

A garage apartment out back of a rich old lady's house and you clean her gutters and mow her grass and it costs almost nothing to live there.

Yeah, I haven't had too much luck with that yet, but the ballpark we're seeing is about 2K in our area. Yeah.
If we're looking for a bare minimum. Yeah.
And I think you can get off of that.

You may need to move out of town a little bit further to get off of of that, but it's doable. Okay.
Yes, sir. Orlando is expensive, though.
It's a wonderful town, but it's high. Okay.
And

so, yeah. But, you know, the thing is this, whatever we're paying in rent is taking away from these other goals mathematically.
We know that.

So we want to pay as little in rent as possible so that we get out of the debt so we can have the emergency funds so we can buy a house.

And the least we pay in rent, the better. But, yeah, so what I'm going to do is rent something that is

right on the edge edge of uncomfortable. Okay.
Like no, like not really proud to have friends over.

Okay. Not scared to have friends over, but not proud.
Okay. Understood.
Not necessarily shooting up and down the street. I don't want Dodge City, okay?

But I do, not trying to impress anybody with what I'm renting, for God's sakes.

I hear you. The lights will turn on, but maybe the AC doesn't work all the time.

Well, no, I don't want the AC to work. You're in Florida.
For God's sakes, the AC needs to work.

But no, I'm talking about it just doesn't need to be super fancy with the skylight, the jacuzzi, and the pickleball courts. Okay, so we don't need any of that crap.

What we need to do is get out of debt and a place to live and celebrate our new marriage. And so our first year of marriage.
And so that's what I would do if I woke up in your shoes.

And I think you're going to be just fine. If you do that and get on a beans and rice, rice and beans budget, you could be debt-free in two and a half to three years.

I agree. Now, tell me this, because I need first, last, and security to find one of these cheaper places, assuming it's actually not somebody's

back door,

extra bedroom. So do we pause on business step two to save for that? Yes.

But before I save for it, I would go find the actual place,

not go on theory of what I think is going to happen. Because if you might find an actual place that doesn't have both, first and last.

Okay.

They're out there. There are people that want to rip places right now.

Okay.

And there's a saying in the real estate business: if someone comes to look at your piece of real estate in December, they're a serious candidate.

Okay. Tire kickers are not out looking at open houses on December.
Yes, my odds are good. Hopefully, we'll.

Well, they're going to treat you like you're a serious customer because you are.

Yes. Yeah.
Definitely. Yeah.

Okay, so

you're going to be able to talk him into popping.

You're going to be able to talk him into getting married?

Yeah, I think so. No, no, no.

We've been together for eight years already, so I'm the one that's holding everything up. Yeah, it's time to paint her get off the ladder.
Yeah, really. Yeah.
Yes, sir.

You're awesome. You're fun to talk to.

She's like, listen, I'm Latin. I want a big party.

I'm a hillbilly. I want a big party.
I don't disagree with that. Whatever.
It's not an ethnic thing. That's a party thing.
So I love it. Good for you.
She's fun. She's fun.
They're going to do great.

And it's just time to get real real serious about all this stuff. Hang on.
We're going to give you every dollar and sign you up for that as our wedding gift. Yeah.

And for people listening to kind of circle back on one of those points, even though, Talia, I don't wish this upon you. I don't think it's going to happen in your situation.

But we do see couples and they combine it. And then it's the ex-fiancé we get the call about, you know, two years later.

Without being married. Without being married.

You know, and then there's an ex-fiancé in the picture two years later for something, and they've used all their hard-earned money to clean up his IRS debt. You know what I mean?

So there is something very true about the separation until you're married because you have no legal protection at all.

And so there's,

yeah, there's big on that. So those of you listening, I don't think Talia, I think you guys will, I think you've been together eight years, all the things.
That's wonderful.

And I think it'll happen for you guys. But for people listening,

even if you are engaged, there are such a thing as an ex-fiancé and you spend a lot of your hard-earned money paying off his smallest debt because his happened to be the smallest in the debt snowball when you combine them.

And your money goes to, you know, his debt.

And then you break up and you're like man that was 12k that could have been going to mine you know so and if you get married on friday you'll be getting married on rachel cruise on winston's anniversary that's right december 9th that's a big deal you can you can just say that i'm telling you though a winter wedding it's underrated everyone wants the summer and the spring a holiday wedding it's so fun everyone's in good moods and everything is is decorative and the uh look we got the wedding gifts the wedding gifts kind of got combined with the

christmas gifts no that didn't happen I don't think so.

We left the family on Christmas alone on honeymoon. No, I was talking about the wedding gifts.

Oh. Your wedding gift to us.
No, no, no, no. I'll say you pay for my wedding, so thank you for that.
You're welcome. Thank you.

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Today's question comes from Kristen in Ohio. How should I deal with the issue of Christmas gifts for teachers?

I have four children who have multiple teachers for physical education and music, plus their cafeteria workers, teachers, support staff.

I mean, all of it. So I understand and appreciate that they are hardworking professionals, but we're still on baby step three.

Is it okay to to skip this until we're in better financial terms for our family?

Yeah, I mean, I would say for a year or so. I mean, I still think appreciation is wonderful.
And I still think, honestly, a lot of people in that position, I'm like, yes, nice teacher gifts.

That is one thing I prioritize on the other side of baby step three because I very, very much appreciate our teachers. Oh, I love them.
Yeah, I can. I love them and appreciate them.

I've never given any of them a gift. Well, you haven't.
Mom did, girl. Did she really? Did she really? Yes.
Yes. I had no idea.
yeah

i'm generous i like giving gifts but that just wasn't on my list i mean i like giving the garbage man a bunch of money i like doing that i like a big tip at christmas time because you gotta haul off because you take out the garbage yes they gotta fall off all the girls interact with the teachers now i do that one i did love giving teachers nice gifts because yes

i like the teachers i love them i'm happy with them yeah that's interesting okay so i guess i guess i'm the i'm so old it's like an apple no i just think you were teaching fpu classes at the holiday inn mom was was

raising us kids in elementary school. I think that was

it. Yeah, I would not, that would not be a huge guilt trip thing for me.
It would just be, but for sure. But when you have the opportunity to, it's great.

And honestly, people in this position, yes, do they love a nice gift? Absolutely. But also just a note and some cookies that you've made.

I mean, at least it's the recognition, honestly, that's a good thing. A nice letter,

clearly stating what you have appreciated about

homemade and then something homemade or something, you know. Definitely make some cookies.
Definitely make some cookies.

That's it, though. I mean, that's I'm having like a flashback childhood memory.
Do you, I remember this. You probably don't.
I remember in the third grade, Mrs. White, remember Mrs.

White, her Christmas gift was your book, Financial Peace. I think we gave your book.
That was

her mother. I wouldn't have done that.

I definitely didn't. True story.
That's so much ego I couldn't have done.

Here's my book

that no one has yet read. No one knows who we are.
No one cares about it. Thank you for marking.
If you need something to light the fire in the fireplace tonight, you can use this paper.

Yeah, I don't. Ugh, no, that's gross.
I do, I do. At least your mother was proud of it.
Oh, my gosh.

Laura is in Jacksonville, Florida. Help us, Laura.
What's up?

Hi, Dave. Thank you so much for taking my call.
How are you doing today? Better than I deserve. What's up?

So my question is, my husband and I received our escrow analysis today, and we are going to be short $2,400.

So we either can pay that up front or have it rolled into our payment. And I'm wondering what is the best thing to do?

First and foremost, do a full audit on the thing because most of those are calculated poorly.

So what happened with ours was our, we just got our mortgage literally last November, so we've only had it for a year. They underestimated our property taxes, number one.

And then number two, we forgot to file for our Florida homestead exemption. So we paid property taxes on a full value of our home.
Okay.

All right. So you have filed for that now? Have the property taxes come down?

Yes. So we have the homestead exemption in place for 2026, but they don't print the tax bill until October.
Yeah. But the.

wait a minute. So you know, they can calculate it exactly.

I called them this morning and they told me they couldn't.

They have a valuation on the house. There's a tax rate on the valuation.
A sixth grader can calculate it.

I calculated it. I had it already.
I have it on a spreadsheet right in front of me.

And they told me that unless I could provide them with an updated tax bill, they went by the current tax bill. Oh, you're talking about the idiots at the the mortgage company,

not the tax people.

Correct.

Yeah, okay.

All right. Now that makes sense.
Okay.

So

my husband and I are in baby step two, but in January, I get three paychecks plus a bonus. So I have, we have the money to pay the shortage.

Now, the problem is it's going to be an overage after you pay the shortage.

It is going to be, yes. And that was one of the things I talked to my husband about was what do we do? Do we pay the shortage up front? No, I wouldn't pay it up front.

It's like prepaying it and putting it in a savings account of the mortgage companies, and then they're going to give it back to you with no interest.

So I'm going to pay it as slowly as possible because it's still wrong.

It is, yes.

They calculated our new payment without the shortage.

Our payment's going to go up $150 no matter what, because what their estimate on the property taxes was versus what our actual property tax bill they received in the market.

No, I think my answer is I want to talk to your supervisor.

Give me to someone who knows how to think and not answer without thinking.

Because your answer is not acceptable to me. You want me to overpay escrow, and so now there's going to be an overage and you people are going to owe me.

So I don't like saving money at no interest with a mortgage company because you can't do math. So let me talk to your supervisor.
I'm going to become a problem for them.

Got it. God, they're dumb.
Oh, that's so aggravating. Most escrow accounts accounts are screwed up.
That's why it's so aggravating.

But because it's really not hard. It is 1 12th of the actual tax and 1 12th of the actual insurance bill.
And we should have both of those in front of us.

And that's what the thing ought to be running on. Now, are you in the hole from last year? Did they come up short last year?

Yeah, so the mortgage company estimated our property taxes to be 3,500. And it's a new built home.
So

they said they didn't have anything to go off of. They estimated it to be $3,500.

Our actual property tax bill without the home set in place was $5,300. You did pay that.

We did. And that doesn't get refunded.
It just doesn't get charged next year.

Well, they... You're not going to get that money back.
That money's gone, right?

Yeah, correct. So we would be paying the shortage.
Yeah,

that created the shortage. And I don't mind paying that shortage because that's an actual shortage.
What I don't want is an adjusted payment going forward based on wrong numbers.

Yes, and that's where part of my problem is.

Yeah, that's the one where I'm going to talk to the supervisor. The actual shortage, let's pretend your payment was recalculated for January accurately from January on, okay?

Whatever shortage there is up to that point, yeah, just pay that.

Okay. But don't wrap it into the payment you're saying.
Yeah, don't wrap it into the payment. And then have the proper payment going forward.

That's the one I'm talking to the supervisor because I want the payment properly calculated. I have the tax bill in front of me.
I have the insurance bill in front of me.

Here's actually what escrow should be. And when you properly calculate that, that's the payment I want in January.

And until you can tell me that's going to be the payment, I'm going to continue to ask for whoever's on the phone supervisor until I get to the president of the freaking mortgage company.

Find somebody over there that can add.

Because it's real simple. Because I'm not trying to create a shortage and I'm not trying to live off of you.

I'm going to to write a check for the existing shortage, but I don't want to create an overage next year because you guys didn't do the math right.

You didn't do it right last time either.

Yeah, because even in a new build, you can calculate property taxes closer than 50, closer than 2,000, 50% off. Unbelievable.
Wow.

Oh, my goodness. Oh, my goodness.
Yeah, that, no, nope, nope, nope, nope, nope, nope, nope, nope, nope, nope, nope, nope, nope. Yeah, so

it is not a bad idea to jump online if you have a mortgage

once a year and check and make sure they're having the right amount you know right amount in your house payment for one twelfth of your insurance and one twelfth of your taxes because truthfully this is what you deal with at the other end it's the it's the lowest common denominator answering the phone over there and

you know apparently they studied something other than math in college or no they probably didn't make that. Anyway, in eighth grade, or wherever it was that they missed the lesson.

But yeah, it's not hard, but it seems to be hard.

Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio. Rachel Cruz, Ramsey personality, number one best-selling author, and my daughter is my co-host today.
Lloyd is in Seattle.

Hi, Lloyd. How are you? Hi, I'm well.
How about yourself? Better than I deserve. What's up?

So I make about $200,000 a year, and my family and I are living paycheck to paycheck.

We're on baby step two, and I'm just wondering if there's anything I can do to help jumpstart our process of paying off our debt.

Where do you think all that money is going?

It's all payments. It's all consumer debt, and

it's all been overwhelming. I'm sick and tired of being sick and tired, if you know what I mean.

Okay, so how much debt do you have, not counting your house?

About $100,000. Okay.
And what's that on?

Two car payments. How much is the first car? How much do you owe on the first car?

$20,000. What do you owe on the second car? $30,000.
Okay, and what's the other 50?

It's credit cards and personal loans.

Okay. So $50,000 and credit cards and personal loans.
Was that all lifestyle, Lloyd, or did something happen that you guys had to take out a loan for?

It is all lifestyle. We purchased a house last year and we got a little in over our heads with the renovations and decided it was better to follow through on it than to live in a half-finished house.

Okay, so it's finished now?

Close to it. I've got one more bathroom I got to finish.
It's about halfway through the remodel. Okay.

And how much is your house payment?

$4,500 a month.

What's your take-home pay?

I make about $8,000 per month without bonuses, but with bonuses, it can be upwards of $14,000 per month.

Okay. It's a big swing.
Let's see.

Well, I mean, to get to $200,000, you have to be at $14,000.

Yeah, well, I'm on track to make $200,000 this year

before taxes, and that's with the bonuses. My bonuses are quarterly, and they're based on how I do at work, obviously.

Yeah, because if it's

a money,

you got a large chunk of your income that comes quarterly. Wow.
Yes. That makes a cash flow management tough.

It does. Yeah.
That's why it feels like it's paycheck to paycheck.

You're trying to live more like on 130,

and then 70 is bonused.

Yeah, I mean, if I make my bonus, we feel more than comfortable making all of our payments. But if I don't make bonus, then it's we're in the red.
Yeah, yeah.

If you could get down to living and making your payments on your base, and then when bonus comes in, it clears debt, that would work.

Yeah, my plan was to get rid of one of our cars because I have a company vehicle I drive, but I'm actually they're pulling my company vehicle and giving me a gas card and a stipend instead.

So now I have to start using my personal vehicle again to commute.

So going down to one family vehicle is kind of out of the question at this point. Yeah, that makes sense.
Okay.

And how much are you putting in your 401k?

None.

Hmm.

How much of a refund, tax refund, did you get?

Well, last year, I think it was about $7,000 this year. I'm hoping it'll be about the same.
We had a kid last year. We're going to have another kid this year.

And we also bought a house last year, so that also helps us a little bit on our.

So you're over-withholding?

Correct. About

$600 a month. Yeah, I guess.
Yeah. When I was filling out my paperwork,

it's all a bit confusing. And when my wife stopped working with our first kid, I was trying to figure out how to make it so we didn't end up owing.

So I actually, I think I put, I think I have them withhold an extra $300 per paycheck just to make sure I don't end up owing at the end of the year.

And that ended up actually being a interest-free savings account with the IRS, and they give it back to you in April. Because that's about what you're over-withholding is a $300 a paycheck.

Okay. Yeah, that's $7,000 a year, by the way, right?

Yeah, Yeah, that's what it turns out. So, I mean, you're over-withholding and then you get it all back with no interest.
So, no, I think we'll stop that.

And that'll help some.

I mean, half of this is your cars, like what you're saying, Lloyd. I just wonder if.

Yeah, I mean, that's really what I wanted to do. We were on track.
I mean, we're underwater on both vehicles.

We have to pay off at least $4,000 to $5,000 on either vehicle to be able to sell them without selling private sale, which is obviously difficult.

I'd like to be able to just go take it in and have a dealership take off my hands.

But difficult is what you've got right now. That's your whole life is difficult.
This is true.

So we need to do some things that are difficult, like never going out to eat again and never going on vacation.

And I don't know what the deal is with that bathroom, but it needs to be either finished in the next 30 days or you need to pull off of it and start getting these bills paid. Because

you guys have got to tighten up. Y'all have been kind of living a little sloppy.
Yeah, 50 grand and

all of it. Yeah.

More than a little sloppy, that's for sure. Yeah, well, but I mean, even if you're just a little sloppy with your income with these debts,

you are paycheck to paycheck. Yeah.
Because your $4,500 house payment is outrageously high on your base.

If you don't make bonus, this house is insane.

Yeah.

But if you make bonus, you're fine. I mean, $4,500 as a percentage of $14,000 a month is okay, but not of $8,000.
That's over 50% of your take-home pay then. So we can't.
Do you guys have good

monthly planning, Lloyd, that with the bonus?

Like, I'm just wondering to put you guys, like, from a budget standpoint, that there's an account where the bonuses come in and you're able to use most of that for debt, but it's also there as a cushion.

It's like the highs and lows is what we call it, a fund that's able to kind of sustain some of this monthly

monthly expenses. Like, I'm just trying to get as consistent for you guys as possible.

And sometimes having an extra account where there's money in there that you're, that you guys have already planned out throughout the year, you know what I mean, that you can kind of pull from just to, and again, low lifestyle.

It's not for going out to eat and all of it.

But I'm just trying to think from a, I just, I don't know, I could imagine month to month it feeling like this, and then you're waiting on that bonus check.

And I just wonder if you can just spread it out a little bit more to give you more advantage. Here's the theory that I want to leave you with.

The thesis, better than theory, the thesis I want to leave you with.

The more radical you get in your reaction to this situation, the faster you're going to be out of it.

Can we agree that I need to get rid of the cars somehow?

I think we can agree with that, but and move way down in car. That'd be a radical move.
I don't want you to be to one car, but you know, so okay, I borrowed $5,000 from the credit union. I borrowed

$12,000 from the credit union.

Instead of $30,000, I got a $7,000 car and a $5,000 hole from the last car that I'm paying out of. I'd rather have $1,200 than $30,000.
30, and

that's moving out of that 30.

Whatever.

Let's just work our way down this thing and say, all right, what radical things can we do to shock this family system temporarily and get this math moving in our direction so we can see a light at the end of the tunnel?

Because it feels like we're kind of stuck like a rat in a wheel by the mediocrity, the mediocre handling of things.

And so what I want to do is get extreme over here, extreme over here, extreme extreme over here, as a one- or a two-year plan so that I get rid of all of this.

And then we've got the renovations of the house in the rearview mirror, and we've got no payments. We have an emergency fund.

Then we can do a lot of stuff with this quarterly bonus stuff coming in and out, and you've got a lot of wiggle room, and you can start your 401k and start building some wealth.

But you feel really stuck right now. And so what I'm going to do is throw dynamite in the middle of this thing, blow it up.
Let's create some chaos

and shock the system of the family. And I, you know, we always laugh and say, sell so much stuff the kids think they're next.

And we're not going to see the inside of a restaurant unless we're working there. And we're not going on vacation.
And we're going to be on a written plan. And it's beans and rice, and rice and beans.

And we're going to make an adventure out of this.

And we're going to put a piece of plywood across that bathroom for right now. And we're going to use the rest of the house.
It's $4,500. Screw it.
And we're going to get this car sold and move down.

And we're going to be radical.

Then you'll be okay.

Hey, George Camel here. So, you're thinking about buying or selling your home.
It's exciting, but there's a lot to think about, and all those decisions can feel overwhelming.

Well, here's the good news: you don't have to tackle the process alone.

Ramsey's Real Estate Home Base is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence.

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So if you're ready to take the next steps toward your home goals, go to ramseysolutions.com/slash real estate. That's ramseysolutions.com slash real estate.

Changing it up, a little boys and girls, Ken Coleman, Ramsey Personality, number one one best-selling author, is at my right. To my left is Dr.
Les Parrott, number one best-selling author.

And to my far left, iconic number one best-selling author, Dr. Gary Chapman, who wrote the absolute perennial bestseller,

the five love languages that most of you have learned and heard and used in your marriages. And if you didn't, you should have.

Some 20 million of those have sold.

My friend Les and Dr. Chapman have teamed up to do a brand new book called called The Love Language That Matters Most.
Welcome, gentlemen. Good to have y'all.
Thanks. Good to have you.
Thank you.

So what is the love language that matters most? It's yours. Yeah.

Thank you, Les.

I'm going to tell my wife that tonight.

Right now, that's the one that matters.

Well, the love language that matters the most is the love language of your partner, of your spouse, or your child, or whoever it is that you're in front of that you want to express love.

And for the longest time, Gary's incredible book, by the way, isn't that amazing? 20 million copies. That's why I wanted to help him.
I wanted to come alongside. Yeah,

he needed a lift, huh?

And, but, you know, so many times we read that book and we go, okay, there, now love me that way, right? Now you know how to love me. And this is kind of turning the tables and helping us figure out.

I like you missed the point. Yeah,

I remember I took the DISC. Remember that thing a thousand years ago? Like 40 years ago.
I came home, showed it to my wife, and she read it. She goes, Yeah, that's what's wrong with you.

It's the same thing, right? Same thing. Oh, I love it.
This is great, guys. And of course, Les, you're the master of assessments.

You put together some of the best assessments out there, Symbus and several others that have gone worldwide, best-selling, assessing different things.

And you guys have done an assessment to go with this. We have a premium assessment.
This is one of Gary's biggest dreams for the longest time, right, Gary? Yeah, absolutely.

We have had a free assessment for

determining the five love languages. It's just a quiz.
It's two lovely languages. A quiz.

A quiz.

And 155 million people have taken the free quiz. Whoa.
And I told my publisher, we should have been charging a dollar a piece. Yeah.

For real.

Minimum.

But this one, we're dealing with things we don't deal with in the original book.

Two things primarily. One is how personality interfaces with the love languages.
And I mentioned dialects in the original book, but I didn't give any of the dialects.

But in this premium assessment, you find out which dialect or dialects within the language are most important to you. And the same thing true with your personality.

And so if the husband and wife both take the premium assessment, which we're hoping that's the ideal, man, they're going to have valuable information on how to more effectively communicate love to the person.

Because you can sometimes try to speak the other person's love language and still not fill up their love tank because you don't quite hit the best. The nuances of, for instance, gift giving.
Exactly.

exactly as you know there's a lot of different ways you can do their

service there's a lot of different ways that can manifest yeah and that's what you mean by dialect that's right yeah let's dive into that because les you were sharing with me earlier uh you and leslie obviously leslie's on this book as well her love language primary love language is words of affirmation yet you were giving her the wrong dialect explain that yeah words of affirmation meant encouraging her and i so i became a walking hallmark card i was just like you can do it and man yeah you'd be great at that.

And anything that would come up. And it turns out that was putting all kinds of pressure on her to do things she didn't even want to do.

And what we learned in the research was her real dialect within words of affirmation is compliments.

So if I could say, oh my goodness, I saw you interacting with our son John, and that was an amazing piece of parenting that you did, that fills up her love tank. It's not a good thing.

In her case, catching her doing something right rather than trying to empower. Yeah, exactly.
And for some people, though, their love language is words of affirmation, and they want encouragement.

That is their dialect. It's just like, you know, I don't know if you've ever noticed this, Dave, but if you go to Boston, they don't sound like you do up there.
You know, they often have.

They have a different dialect.

So we have different dialects in our love language. Yeah, I've noticed that people hanging around together sound alike, too.
Most of those people have an accent. That's right.

So I got two of the best marriage minds and researchers on the planet sitting beside me.

We know that money is the number one reason for divorce, or at least something is manifesting itself as money, issues, as the number one reason for divorce.

How can couples use this book to change the way they communicate about money?

Great question, Gary. Well, I think that one of the things is if they feel loved significantly, if that love tank is full,

They'll be able to talk about money much more freely than they could talk about it if they don't feel loved by the person. Not threatened.
That's right. It creates a totally different atmosphere

to discuss financial issues. That makes a lot of sense.
It makes a lot of sense. Yeah, that emotional safety is what allows you to talk about the finances without spinning out of control, right?

Because you know you're accepted, if you're loved, then you can process it and communicate it. It really does come down to communication.

If you've not read the five love languages,

you need to, folks.

It's a standard in the world. I mean, mean, you do 20 million of anything.
It's a standard, right?

And

it sets you up then to understand the other person, and that's the whole purpose of this book, is to redirect it and go, not intake, but outgo. Yeah, and that's another way of saying empathy, right?

How we can put ourselves in the other person's shoes and accurately meet their needs, actually fill up their love tank. You know, the love tank is such a great metaphor.

because it's so easy to just ask your partner, hey, how full is your love tank right now? Scale one to 10. It's just an easy thing to do, and they'll tell you.
Ask Sharon tonight.

When was the last time you asked her? But it's been a while, Dave, hasn't it?

No, let me tell you. My wife is an introvert.
And so when I know that her tank in general is when she's had too many people. Yeah.
And

she needs some space. Right.
And that refills her tank in general. It's not a love language, right? That's just an introvert extrovert.

No, but that brings up something pretty cool that we did in this book and with the assessment, and that is to identify not just your love language but bring your personality like are you an introvert or an extrovert so words of affirmation if uh you're an extrovert you want to be affirmed in front of other people and if it's gifts bring them in front of other people make it a big celebration if you're an introvert oh please don't embarrass me right

i've got to ask a follow-up with you two in the room okay so we've got a lot of people that are in baby step two which for us it's you're taking your smallest debts to your largest debts and it is gazelle intense dave says rice and beans, beans and rice, you know the drill.

If one of their spouses, love language is gifts and we're telling you you're not doing any gifts until you get out of this thing.

What advice would you give to that other spouse who they, you know, they're trying to be disciplined, gazelle intents to get out of this,

but yet that love tank may be a little empty because they can't give gifts. What do they do, Gary? I would say the gifts do not have to involve money.
Okay.

I remember a man, he said, I was taking a walk. I knew her language is gifts.
I saw a bird feather. I picked it up and brushed it off.

And when I got home, I said, honey, when I was walking, I found this bird feather. And I want to give it to you because it reminded me that you are the wind beneath my wings.

And she said, oh, that is so sweet.

That is so corny.

Might be all you can do if it works, right?

Marriage saved by a bird feather, I'm just saying. That is great.

It is symbolic that the thought,

the old saying around Christmas time, we always say the thought that counts, right?

And it truly is.

There was a guy we did a thousand years ago. You guys probably remember the book, Writing Letters to Your Family.

treasure something, I think it was called.

And each year, and he sold a box, and you put these letters in a box each year.

But it was nothing more than affirmation and just other things in the letters, but it was, again, it was a type of gift giving that didn't cost a lot of money, but it elicits a lot of tears of joy.

Well, and for some people, that is their dialect when it comes to gifts. It's they don't want something extravagant.
I don't want an iPhone. I don't want a big fancy dinner.

I just want something sentimental. Write me a poem.
Give me a card. Dr.
Gary Chapman, honored to have you in our studio. Proud to say I now know you.
I've admired you for years.

and love the work you do. Fabulous stuff, the five love languages.

The new book with Gary Chapman and les and leslie parrot comes out the love language that matters most along with the premium assessment be out after the first of the year be sure you're looking for it absolutely incredible stuff thanks gentlemen good to be with you thank you

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.

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.

Don't stay stuck. Take control of your money starting today.
Go with ramseysolutions.com slash start.

Gabby is in Columbus, Ohio. Hi, Gabby.
How are you? Hi, Dave. Thanks for taking my call.
I'm good. How are you doing? Better than I deserve.
What's up?

So my question is whether my husband and I should pull some money from our emergency fund in order to buy a gun.

35 years of doing this. That's the first time I've heard that question.

What is the emergency? How would a gun be an emergency? Yeah.

I don't necessarily think it is, but my husband does.

So we had a weird situation that happened just a couple of days ago where it was like 11 o'clock at night and some guy started banging on our door and he was, we talked to him through the ring camera and he was saying that somebody stole his phone and that it was GPS pinging to our address.

And then it was probably 45 minutes to an hour before he actually left.

Like he was looking around our property and then he was sitting in his car just like sitting in front of our house waiting. It was very strange.

Why did it take the police that long to get there if you had a property invasion going on

i i'm not really sure they um said that he all like they we did call the police they said that he had also called them about the phone and i guess they decided it wasn't an emergency he wasn't he didn't seem like he was trying to break into the house he was just looking around on our yard yeah so you're gonna shoot him

Well, my husband, I think, is concerned that if he did come back and did decide he was just not going to going to shoot him. He was just going to break into our house.

Instead of tell the cops to come?

Yeah, well. Listen, listen, let me just tell you.

Let me stop.

I carry a gun.

I'm a gun guy, okay?

But there's no case like that that I'm going to shoot somebody.

Yeah.

We just escalated from a lost cell phone to somebody dead on your front porch.

Right. No, this is not okay.
That's not a, it's not the way to solve the problem. Yeah.

The only reason you would shoot someone is if they're inside your home about to harm your family.

Not banging on your door, not scaring you, not all of that. You don't go out in the front yard and wave your gun around because he's sitting in your driveway.

You call the cops six times and say, get your butt over here. One of us is in danger, and I'm not sure which one it is.
But you jack the police up and let them do their job.

But you don't wander out in the front yard. You'll get shot.

yeah I think he's just concerned that if something were like worse were to happen and somebody were to break into our house he's like if if we don't have it now we're not going to be able to we're not going to want to wait until something worse happens I guess is where he's coming from but I'm with you I really

what is your what is your household right now

um so

Annual is about $85,000, but our monthly income during the winter, a lot of it's pretty heavily

it's higher in the summer. So during the winter, we make about $4,000 to $5,000 a month.
Okay. All right.

Because I don't like his attitude about handling a firearm, I'm not going to tell you to buy a gun because I think you're going to get yourself

in a lifetime of hurt if you handle these situations with a firearm.

You don't use a firearm unless someone is about to die.

Okay, that's you just don't. I mean, it's not, that's not what that's for.
And he's, this guy on the ring doorbell thing is not even close to that.

This is people like that, when they get shot, that's when you go to jail. Right.
That's not, or you spend a million dollars trying to not go to jail.

And you, because you weren't even defending yourself, you just got spooked or you thought you were a BA or something. And so don't, don't do that.

Now, I will tell you that there's a product out there that I would put in your budget to address this concern. Okay?

But it's not a firearm. It's a non-lethal firearm called a burna.

Okay. B-Y-R-N-A, and it'll cost you about 500 bucks.
And it shoots a projectile that can either be pepper spray or a hard projectile.

That if you shoot someone with that, they will wish they had been shot,

they'll go down, but they're not going to die. It's non-lethal.
But if your husband pulls a Glock and empties a Glock into the guy's windshield because he freaks out,

he's going to jail.

Right.

So that ain't cool. And you can buy a Glock for about 500 bucks, okay?

Yeah. But so either one will do the job and you can do that in your budget.
It's not an emergency, though.

But the fact that you all are reacting to this situation emotionally and actually calling this an emergency means you need to rethink how you're going to defend your home. Yeah.

And I got to tell you,

again, I have a gun on my person most of the time, but the chances of me pulling it out are zero. I will run away.

I'm not going to shoot somebody. Yeah.

It's just too, there's just too much involved. And it's not the answer.
And,

you know, the only time is if one of my grandkids or my kids or somebody was in danger. My wife was in danger.

Yeah. But that's not, that's the only, the only way.

And it would not be that I was scared at somebody knocking at my front door. I'm going to be on 911 talking to dispatch until somebody rolls up on this boy and puts him down.

He doesn't be running around my front yard scaring my wife and me. This guy needs to go down.

And, you know, you guys did not communicate with law enforcement accurately and urgently enough to get some reaction. People don't need to be squirreling around my dad gum house.

I don't care if he's drunk. I don't care if he's got the wrong address or whatever with a cell phone.
It doesn't matter. All that stuff doesn't matter.

You can't bust up on somebody's house like that without consequences. And so put law enforcement on that for God's sakes.
No, buying a firearm for self-protection is not an emergency.

What is an emergency is changing your situation so that if you need to spend some money on changing your situation so that you don't have this emergency, like you don't live there anymore, you move or something like that, if you've got a place that's unsafe, then I would do that.

But I'm not going to, you know, build Fort Knox over here and stick, you know, AR barrels out of every window to protect my house. No, we're not doing that.

That's just not a good use of

your life. You should be doing something other than that with your life.

So, and I'm

about as much a gun guy as anybody you'll ever talk to. So don't misunderstand.
I'm not anti-2A. I'm anti-shooting people.
Hello? That's a bad idea.

Maxie is with us. Maxie is in Knoxville.
Hi, Maxie. How are you?

Hi, Dave. Thank you.
What's up? I'm doing well. Good.
How can we help?

Yes, my husband and I owe about a year ago inherited just over a million dollars in assets, including a home.

And after paying off the home and the debts that that family member left behind, we have approximately $288,000 left in investments and including our personal cash. So we've rolled that into into

an S ⁇ P 500 account, which stands about

$220,000.

And my husband and I have about $127,000 in personal debt, and we're wondering if we should go ahead and pay off that debt. My husband wants to jump the gun and do it, wipe it out.

That personal debt includes student loans, cars, and some home repairs.

or if we go a little bit of a slower approach and do a snowball method with our debts and do it that way.

What's your household income?

Combined, $120,000. Okay.
And you kept the other house and it's paid for?

Yes. My husband and I were renting an apartment before.
So you're moving into the paid-for house.

Yes, we paid it off. Okay, and that was the family home, or that was a family home or whatever that you inherited.

Yes. Okay, I got you.
I got the picture now. Okay.

So here's the problem.

Mathematically, you should pay off all the debt today.

Okay.

And then from this point forward, take all the payments and live on a written budget and start investing aggressively because you don't have a house payment, you don't have $127,000 worth of bull crap payments, and you put all the bull crap payments and the whole house payment or rent payment into one lump, and that starts going back into that SP or back into some good mutual funds with a Smart Vestor Pro, and you'll be back to $200,000 in a heartbeat.

If

you change the way you've handled money to this point, if you keep handling money the way you've handled it to this point, in four years you're going to be back in debt again.

Because every time I want something, I go get it.

No way. You got to stop that.

No more buying crap unless you have the money ever.

And if you can't pinky swear and spit shake and write that down in blood and both of you agree to it and we're going to be on a written budget the rest of our lives then you're going to screw this up by going back into debt by not changing you

so change your habits if you're both convinced you can do that then i'd pay off the debt

it's one of the best times of the year but it's also the time of year when people let their money get totally out of control everywhere you look it's just buy buy buy.

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Our scripture of the day, 1 Peter 5, 6 and 7, Humble yourselves, therefore, under God's mighty hand, that he may lift you up in due time. Cast all your anxiety on him because he cares for you.

James Clear says, worrying about the future is like watching a leaf fall and trying to predict where it will land. Stop trying to guess where the wind will blow and get to work.
Amen.

One of our favorite things is hearing people share their stories of how they're winning, and we just heard this from Claire and Winston.

This is me and my husband's third month budgeting with the Every Dollar app, and I'm amazed at how much money we found.

We went from feeling like we were living paycheck to paycheck to finding $3,500 extra margin each month to put toward our debt.

We each had four credit cards and have been able to pay them all off, never going back. Man, that's great, you guys.
Hey, folks, you can do this too. You can take control of your money.

You can change your family tree. You can live like no one else.
Go download our Every Dollar Budgeting app for free in the App Store or Google Play. Jen is in Jamaica.
Hi, Jen. How are you?

I'm good. How are you? Better than I deserve.
What's up?

So I'm a 13-year teacher, and I've saved up about $200,000.

And I'm trying to figure out how to best invest this. I don't have any retirement.
Because I'm an international teacher, there are no 401ks.

So it's just intimidating to try to figure out where do I put all of that money, but I know I need to.

You're a U.S. citizen? I am, yes.
Okay. You're filing taxes in the U.S.

No, because I live overseas and I'm claimed as a resident overseas, I don't have to pay U.S. taxes.

Okay.

Roth IRA is based on earned income, and I suspect that would mean even if you're a citizen, an earned income that is reported to the IRS.

So I don't know, but I don't think you're going to qualify for that. I'd have to double-check.
I don't think I do either, yeah. I would have to double-check that.

So, I mean, you're left then with just buying mutual funds. And as a U.S.
citizen abroad, you can do that without any trouble.

I just don't know how to get started with that. Yeah, okay.

What I would do is sit you with a financial advisor or get you on the phone with a financial advisor,

a smartvestor pro

and on ramseysolutions.com. They don't work for me, but they're people that we have vetted that are in the investing community.

And the main thing we make sure they do is that they have the heart of a teacher, meaning they're going to teach you what your options are.

And I do not know

what their licensing rules are regarding an international investment. But as I remember it,

since you're a U.S. citizen, they probably can do the investment for you.
So what I would do is just pick Nashville, where I live.

Because I know I don't have one in Kingston, Jamaica. I'm 100% sure.
Okay.

So pick Nashville and get in touch with them and ask them if there's something they can do to help you get started investing. If they can, that's your best route.

Okay. All right.

Go ahead. Go ahead.
Oh, I was just going to ask the other thing that I was going to, because we are international and we move a lot, we don't currently have a home.

And I've liked that because I don't know, we used to, but we got rid of it. I'm just trying to decide, is that something that, would you think that that's okay and that we're just putting things into

I think that's fine what I would do is just make sure you have a what's your end game target and how you're going to handle real estate in the end game

okay are you planning to retire in the States yes okay yeah so at some point we've got to have a home fund

so let's call it the magic 65 or 70 years old or whatever we buy a home for cash and we still have a nest egg beyond that to live on for the rest of our lives for retirement because your home is your largest item in retirement in your budget.

And to not have it paid for destabilizes your retirement.

So I would just have a target of saying when we call this foreign teaching quits and come to the States to retire, you know, we need to have a big pile of money in a mutual fund to buy a house and another big pile of money in some mutual funds to live off of.

And that so this is our overall. So in other words, you're paying yourself, you're investing 15% of your income or or more for your retirement, and then you're also paying yourself a house payment

into another fund.

Oh, that makes sense, yeah. So that that fund is going to be enough to buy you a house later.

So hopefully the Smart Investor Pros can help you. As a fallback, rather than just having it sitting in savings, there's a thing called

I hate the phrase, but I'm going to use it. Passive investing.
Okay. So the average of the stock market is the S ⁇ P 500.
Have you heard that? Yes. The S ⁇ P 500 index funds do what the market does.

No better, no worse.

And you can just reach over to Fidelity or Vanguard or American or somebody and buy that. You could just jump online and buy that.

And you'd have 200 grand in there

and it would be going up what the stock market does. No better, no worse.
Now,

I have some parked in that that I'm using to save to buy some real estate later.

But I also have regular retirement investments in the four types of mutual funds I talk about called growth, growth and income aggressive growth and international that I buy through my Smart Vestor Pro.

But if you want to do a dumbed-down version that's much better than

doing nothing, that would be just put it all in an S ⁇ P 500.

Okay. And you can do that online, and you won't have any trouble doing that.

But that's your worst case scenario. And just to, you know, the market is averaged between 10 and 12 a year, depending on what you read and who you believe.
But

I see 11.8 is the average that the S P has done for 70 years. And see, that's a lot better than a 3% high-yield savings.

Right, right. And this calendar year,

today, at this moment, the S ⁇ P

for this calendar year is up 17%.

That's not normal. That's unusually good.
But

instead of three, you could have made 17.

And so that's a $35,000 error

with 200 grand. Okay.
So that's what I mean. At least do that.
If the other thing, if you call the other people and they go, nope, can't help you. We're not licensed.
We can't do it.

You can't do it the way you are. You don't have a U.S.
address. I can't help you.
All that, then... then just jump online and buy an S ⁇ P.

Okay.

At least it'll grow. And the good news is it doesn't usually generate much income tax on the growth until you sell it.

And when you do sell it, it's actually a capital gains rate rather than personal income rate.

So it's a great investment tool if you don't have anything else available kind of a thing, or if you've maxed out all retirement, but you don't have much available because of your situation.

Very interesting. Good question.
Thanks for calling us. Merry Christmas to you.
Cindy's in Charleston, South Carolina. Hey, Cindy, what's up?

Hey, good afternoon. Thank you so much for taking my call.
Sure.

I am in need of your wise counsel about retiring at age 62 instead of waiting

for a few more years. Okay.

How large is your nest stake?

We have $1.5 million in investments, and I have $135,000 in my TSP, which is the government equivalent of $401,

familiar. And then we have $45,000 in high-yield savings accounts.
And no debt?

No debt, no, sir. House paid off?

House is paid off. It's worth about $335,000.

Another part of this equation is that when I do retire, we would like to move closer to our grandchildren. So that may involve spending a little bit of our nest egg for that move.

What do you make?

$150,000. And what does he make?

My husband is already medically retired. Ah, okay.

So he's got disability.

Yes, sir. Yes.

Well, here's a good rule of thumb. I was just talking to the other lady about mutual funds.
Okay,

if you've got your stuff invested in that 1.2

and it averages what the market has averaged, 11.8.

Okay? Yes. Let's call it 12 for easy math right now.

And you leave 4% in there every year and took off 8%,

the nest egg on average will grow at the rate of inflation. So if you can live off of 8% of that nest egg or a little less, you can make it pretty fine.

If you want to work a few more years, you can obviously double it again and live more than pretty fine. Either way is fine with me.

That puts this Hour of the Ramsey Show in the books. We'll be back with you before you know it.

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