Debt Steals Your Freedom - Fight For Financial Peace

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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 Fair Winds Credit Union Studio, this is the Ramsey Show.

I'm Dave Ramsey, your host, George Camille, number one best-selling author, Ramsey personality, and co-host of Smart Money Happy Hour is my co-host today. Open phones at 888-825-5225.

Nicole is in San Francisco. Hi, Nicole.
How are you?

Hey, good morning. Merry Christmas.
Merry Christmas to you. What's up?

Hey, so I just have a question, a rental question. My fiancé and I have been together for almost three years, and we're getting married at the end of December.
We're very excited.

And after the wedding, we're planning on moving in together, obviously. um the home that he's living in is a home that he actually lived in with his ex

so his name his ex's name i just found out recently is still on the lease again it is a rental he's tried multiple times to get her to take her name off he even um had a court order via some of their custody hearings that the judge said she had to take her name off she still refuses to do so His property management company isn't being responsive.

I'm a realtor and I spoke with our property management division. And they said that basically we have three options.

One, the property management company can just out of the goodness of their heart take her name off and redo the lease with just his and my name.

Two, get her to sign the paperwork, which he's been trying to do unsuccessfully.

Or three, terminate the lease, likely forfeit the deposit because her name would be on the check and then move out and move back in.

The dilemma that I have right now is that I'm not, it feels really, really gross to me to move into marriage and move into a home with this ex's name on it. Mind you, they also have a child together.

There's a lot of really gross custody situation going on. So it's not just an ex that we never hear from or speak to.
It's an ongoing problem in our lives.

And I just, I don't know if it's worth being dramatic in the potential issues financially and like losing deposit.

When is the lease up?

Well, it was up,

and he's continued to live in the home. So they broke up.
No, I mean,

when does the current lease expire?

It's a month-to-month now. Oh, okay.

So you can give 30 days' notice and move out.

We could. Okay.
And then

you would have to find a new place. And then you just find a new place.

That's easy. Okay.
Now,

however, let's back up a second. She does not have a say in this.

Okay. Her name being on the lease is making her obligated for the payment on the lease.
It doesn't give her any rights to possession.

Okay,

it's just like

if someone co-signs a lease for you to move in, like your dad signed for you to move in or something. It doesn't give him rights to live there.
It just says that he's also liable.

And so the property management company can simply redraft the lease and take her name off of it. They don't have to have her permission to do that.
They can just take her off

and put you on. And so, you know, what I would do is just call the property management company.
And I don't know why your fiancé's not handled this. This is really bizarre to me.
This is on him. Okay.

And you're right. This is gross and it should have been dealt with a long time before you, three weeks before you get married.
Geez.

Call me up a week for it. We're going down the aisle next week.
And I'm not going to, you know, well, yeah. So, but anyway, so if it's me, I'm calling the property management company.

I'm your fiancé, and I'm saying, look, I want my wife to be on our lease, not my ex.

And so we are going to give you two options. One is you redraft the lease with me and the new wife on it, without the ex on it, or we're going to give you 30 days' notice to move.

Which one do you want us to do?

Okay. And I'll get you responsive.
I'll just move. Sure.

Okay. Right.
Okay. But you don't need her permission or a court order regarding her.
The landlord simply just needs to agree to release her from liability.

Okay. She gets no rights.

There's no rights here at all.

And she hasn't lived there in a long time. And so I don't know why it would even be an issue.

Right. Yeah, I don't know.
That's just the.

Well, apparently this chick has got issues and she's throwing anything she can around to try to take power plays any any kind of a flex that's possible and you're just worried about that right

right and yeah and i

right yeah

and again it just feels gross moving in with you know yeah you don't want to show up in a house that i live in it's not going to be good for your health Don't do that.

What's the upside of continuing for him to live there and you to move in there? Why not just get a different place?

Well, as you know, San Francisco is a very expensive market.

He has rent of

very, very, very little.

The property magic, the landlord was very gracious.

They have not raised the rent in like the four or five years he's lived here.

It's thousands of dollars less than anywhere else.

I don't want to live there.

I just wonder, even

though I don't know if you can't wait to live there,

and I don't care if it's thousands of dollars less or not, I don't want to live there unless her name is off this lease and yours is on it. Right.
Yeah.

I should have the same lease. I want to move.
So either fix it or I'm moving. And that's my direction to your fiancé.
Grow a backbone.

You should have already done this eight months ago for your girlfriend, your soon-to-be wife, and you've sat on your thumbs. Now fix this, buddy.
That's my direction to him. Okay? Okay.

You shouldn't have to be calling me about this. He should have already taken care of this.
This bull crap. Okay, but he also gets pushed around by her pretty regularly.

And that's what's really bothering you at the core of this. And I'm not sure that's going to stop, even with this lease situation fixed.
Nope.

Not till we run down to Walmart on aisle three and pick up a backbone. That's what that's going to happen.
So, all right. Open phones at 888-825-5225.

So, a lease is an obligation. It is not a blessing.
Being released from the obligation would be a blessing. Is that the opposite of a lease? Is it release? Yes, there we go.

Released from the lease, yes. But I mean, so, I mean, think about it.
It's like a loan, okay? If you go through a divorce and you have a mortgage loan, your spouse is liable on the mortgage loan.

The mortgage company won't let her go, won't let him go, right?

Unless you refinance and take them off.

They won't just release you from that because prove that you're responsible enough to handle it. But you don't have any rights because you're on the mortgage.

You have lost rights because you're on the mortgage. Same thing with a lease.
Yeah. So there's not a

there's no

benefit to

the director

other than I guess control to stay intermingled in his life. Yeah, just to be constantly flexing.
Only reason I can think of why you'd want to stay on that thing.

All the more reason to put up because he could stop paying and it's on her. Yeah, exactly.
There's one move. Yeah.
Well, it's just, I'm moving. I'm moving.

Yeah, Yeah, not worth the drama, that's for sure. Nothing.
Nothing is worth the drama. Oh, goodness.
Don't sell your soul for a couple thousand bucks savings on something.

Don't sign up for lack of freedom and drama and call that a good deal. That's not a good deal.

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Rachel's in Columbia, South Carolina. Hi, Rachel.
How are you?

Rachel?

Earth to Rachel.

Rachel, three,

two,

five. Oh,

we had her right there.

There she was. Okay, I'll stop.
I'll try her again. She came up.
We'll try it again. Rachel, are you there now?

Yes, I'm here. Okay, how can we help?

I'm actually calling because how do I even start the baby steps when I am absolutely drowning and even trying to get caught up on my bills?

Well, getting caught up would be the first step before you start the baby steps. You're right.
You're onto something there.

So why are you drowning?

I actually had some health issues over the past year

that I'm I've missed so much work. I've had to find another job of because I believe my last job was killing me.

And that required a pay cut. And I'm working from home now.
And

it's just getting caught back up.

Okay. Well, you got the exact wrong solution for being behind on your bills, taking a pay cut.

We want to go the other way. So what in the world? What's wrong with your health?

Well,

my job was very unsteady while I was at.

And they

working from home to being pulled back into the office, and I just started having a bunch of anxiety attacks.

Working in the office caused anxiety?

It was

I the people I was around, and then they started doing layoffs, and it was just a very stressful situation. Okay, what were you doing?

I do medical billing. My job is not hard.

Okay, so that's what you were doing at the other place?

Correct. And that's

what were you being paid?

I was being paid around $45,000.

It wasn't a huge pay cut. I'm at about $40,000 now.
Okay. And how much debt do you have?

I have about $120,000 without mortgage. Okay.
And what's that on?

$6,000 is about my medical debt.

$14,687 for

a boat.

I have student loans and about that's about $10,000.

We have a truck that's $37,000. Well, it's about $38,000.

And then I have a Jeep that's about $41,000.

I have two credit cards. You just said we.
What's your husband make?

He makes about $70,000. Okay, so you have $110,000 income currently.
All right. And you got a Jeep, a truck, a boat.

Yes, sir. And then what else was it? A student loan and a medical debt.
And what else?

And two credit cards, and that's about $2,000. Okay.

And we do have

IRS debt. Well, my husband does, so I say we.
and I think that's probably about 8,000.

Okay

all right yeah okay

but so your $5,000 pay cut didn't really cause you any trouble it's all your overspending that's caused you trouble

and I can agree to that yeah

so

uh

you're not gonna like me

Sell the truck, sell the Jeep, sell the boat.

Okay. Oh, I'm starting to get my life back now.

I mean, you clear the majority of your debt if you did that. What stopped you guys thus far from getting rid of these things that are crushing you?

I will say the boat, that is all we do.

I don't care. I think you should be working instead of boating.
You're calling me talking about you're so stressed out, you can't breathe, and you're $120,000 in debt. You can't afford a boat.

You're broke.

Go to the park and throw a frisbee.

Yeah.

You're not going to do any of this, are you? You're not really ready. You're not really in enough pain to fix this.
You just, you want an easy button. I don't have one, honey.

The only button I got is the one that'll work. I love you enough to tell you the truth.
And the truth is, you got to sell this crap.

You've been spending like you're in Congress and you're rationalizing and justifying and rationalizing and justifying.

And only when you look up and go, I caused this and I can fix this are you going to be able to fix it. I can tell from the tone of your voice, you're not going to do any of it.

So, when you're ready to be helped, we can help you and we love you, and we'll try to help you. But we're not going to tell you what you want to hear, we're going to tell you what really helps.

And so,

we're really not known for telling people, making people feel good. That's not the point.
We want you to feel good at 10 years from now, not today.

Today, I want you to have pain so that you can get free of this trashy life you have. Your life sucks.

You make $110,000 in Columbia, South Carolina, and you gave up a job because of anxiety at the office. And really the anxiety was at home

sitting in the driveway with a boat and a Jeep

and a truck. That's where it was.
So yeah, you just got a bunch of crap you can't afford. You're living like You know, you're spending like you got money and you don't have any money.

I'm sorry, honey, but we can help you when you're ready to do that. But you're going to have to amputate some crap and that'll give you your life back.

Until you're ready to do that, though, I don't have an easy button for you. I can't help you.
Kevin is in New York. Hey, Kevin, what's up?

Hey, how's it going? Better than I deserve. How can I help?

I was just looking for some help. I'm married, 33, and I'm having some trouble with the fear of kicking Murphy out, as you guys would say.

So I'm looking for a big old kick in the butt to help me get rid of some irrational fears on that. I'm so confused.
What are we talking about?

In your book, Kicking Murphy Out, is one of the chapters for

basically lowering your

savings to

like emergency fund to $1,000 and then putting that all towards debt. But I think it's Murphy's Law as well.

To temporarily do that so that you can get the debt cleaned as fast as possible.

We're not living there forever.

Yeah. You understand what I'm having trouble with is I'm afraid that something's going to happen in the meantime

to a car or medically or something.

It might. It might.
How much debt have you got?

Right now, between me and my wife,

we have

about $25,000 debt.

And what's your household income?

Household income together is $8,600 a month. Okay, so how fast do you clear up $25,000?

I'm looking at

other than the car, August, and then after that, I would say it within a year, about 12 months. Yeah, $2,000 a month, and you'll be done.
So for 12 months, you've got to make it on $1,000.

And if something during that 12-month period of time happens beyond $1,000, you'll have to stop your get-out of debt plan and pile up some cash to fix whatever it is that's beyond $1,000.

The probability of that's very close to zero, though.

I think the fear comes from childhood or something. That's my fear is that something, just something's going to happen.
Yeah, that is a rational fear. I don't even know where it comes from either, but

walking around with $1,000 only to your name for the rest of your life would be stupid.

Because common sense tells you something's going to happen, right?

Yeah. So your fear is,

I think your fear is justified, but it's not justified enough to stay in debt.

How much money have you got in savings?

Right now, about $15,000. Okay, so wait a minute.
We have 25 in debt. We're not in debt for a year.

If you put 14 towards the 25, that's only 11 left. You should be done in like three months.

Yeah, the 15 was

without putting it towards it. Yeah.

Yeah.

So could you take half your take-home pay and throw it at the debt? If you cut down your expenses and worked harder. Right now we put, yeah, right now we put $1,800 a month towards

the emergency fund. Okay.
What I would do is I would throw everything at the debt, and that leaves you $11,000 worth of debt.

You make $8,000 a month, and I would be done with the debt in three months. You don't need to keep stacking this emergency fund.
You need to start killing this debt, man.

Dude,

you're acting like this is a 30-year problem. It's a 90-day problem.
I mean, when the leaves turn green, you're going to be done.

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One of our favorite things is hearing people share their stories of how they're winning.

We just heard this from Claire and Winston fan quote, this is me and my husband's third month budgeting with every dollar, and we're amazed at how much money we found.

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

We each had four credit cards and have been able to pay them all off, never going back.

Way to go, guys. That's amazing.
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Go download the Every Dollar Budget app for free. It will guide you hand-holding through the Ramsey steps.

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It's time. Courtney's with us in Los Angeles.
Hi, Courtney. How are you? Hi.

Thank you for taking my call. I'm so excited.
Well, we're honored to have you. How can we help?

Well, I want to start by saying that my husband and I are completely debt-free minus our current home and our rental property.

My question today is regarding our rental property. Okay, Dave, so my parents are the tenants, and it's not going well and it has not been going well for the past 11 years.
I wanted to help them out

because they could no longer afford their home. So I wanted to be a good daughter and help out my parents.
The issue is that they're not communicating with us. The rent is late each month.

For example, Dave, I received November's rent last Friday, which was December 5th. No communication.

I have diligently made sure each month I communicate with them for the past year about the rent, but nothing's changed. I've asked them to move in with us.
The answer is no.

I've asked them to think about moving it to something cheaper. The answer is no.
I've asked them, do I need to set aside money to get a bigger home with the mother-in-law unit? The answer again is no.

Dave, I sent them through Financial Peace University. Nothing has changed.

I only owe $60,000 on my rental property in California. That's really, really good.

This is supposed to be part of my retirement, money towards my kids' college fund. We sacrificed so much, Dave.

This process and your principles have helped us so much, things that I had no idea we would be able to accomplish, but we have. I'm just, I need help, Dave.
I don't know what to do.

Share your wisdom.

Well,

you're not shocked that your parents have not paid this on time.

And I'm not shocked that they've not paid it on time. They've never paid anything in their lives on time.

And you knew when you stuck them in there that they weren't instantaneously going to become financial geniuses.

You had to know that this was going to happen.

So you signed up for this trip, right?

Oh, my goodness.

Yeah, I'm sorry. It's so hard when it's family and especially your mom and dad, and you're trying to do something nice for them.
So you kind of got one of two options. One is give up.

None of the options are going to be try to talk them into becoming financially responsible. That obviously doesn't work.

So that's not one of the options we're going to try.

That ship has sailed.

We tried it. Okay.

So either you give up and you pay the house off. it's only $60,000.
Let's get over and get it paid off. And just let them live there.
And then when they pay and if they pay, be surprised. Okay.

And just surrender.

That's giving up. Okay.
If you want to do that, that's not a bad thing. But you're just saying, whatever that house is worth, I'm just pissing that money away in the name of taking care of my parents.

And I'm just going to live with that. And I'm not going to fret about it because happiness comes, you know, I always laugh when I'm playing golf.

My golf motto is: the secret to happiness is low expectations.

Yeah.

So if you quit expecting them to be something that they're not going to be, then you can just chill, right? So you're just going to let them live there. And if they pay, we're going to act surprised.

Okay. And that's not a bad plan.
You could get the $60,000 paid off in a few years or a few months or whatever and not worry about it, couldn't you? The other option, if you want to be a little more,

shall we say, aggressive, okay,

then I can help you with that one too.

You can call them and say, mom and dad, I talked to my financial advisor. I'm your financial advisor.
And he said to sell this house, and so we're going to put the house on the market and sell it.

So y'all are going to have to find a place to live.

Okay.

And they just go figure out their life because they're like grown-ups and crap and they ought to have been figuring out their life a long time ago without being babysat by their own daughter.

So hello. How old are these people?

My dad is, what, 65? My mom is 64. Yeah, so get a job and go pay your rent.
Shut up. I mean, come on.
So let's play the scenario. They go rent somewhere and they have a landlord now.

Do you think they're going to pay on time? Well, that's up to them. That's their problem.
All of a sudden? That's their problem. Yeah.
I think they'd quickly figure it out, wouldn't they? They go,

we're not giving an option of you have to pay on time or we're selling it. You just say, I talked to my financial advisor.
He says, we got to sell the house. So y'all got to move.

We're going to put the house on the market February 1st. So y'all got to be gone by then.
So y'all look for a place because we've got to get the house sold.

Well, what about, listen, you know, it worked for a while. You were here for 11 years and now we can't do it anymore.
And the financial advisor says, I got to sell it.

So I got to sell it because I'm telling you, you got to sell it. So you can blame me.
Just say, say, my financial advisor. I'm the bad guy.

But that puts them back out and to deal with the reality of their misbehavior. And that's actually not a bad thing either.

But then you can't be running and rescuing them every time they stub their toe. You've got to just let them go.
I just love you.

Some people need to be loved from further distance than others. You need a little more distance between you and them.

If you stop the enabling, then it'll also stop the resentment that's been bubbling up in your life. Just say, gosh, you're over there, and I sure hope it works out for you.
I love you.

Be cheering for you.

And, you know, I'm not going to worry about it after that. It's their problem.
You've done all you can do, and then 11 years years too much, right?

Correct. So, I mean, it isn't like you didn't try.

You're a sweetheart. You tried everything.
So if you want to cut them loose, you could do that. And you would not be doing something immoral or unethical or unbiblical or anything like that.

You gave 11 years worth of enabling a shot here and it didn't work. So,

yeah. So either just give up and pay it off and let them live there and don't worry about it.
And just be shocked when they do pay. Don't bring it up again.
Don't communicate about it.

Don't even mention it ever again. Just if the check comes, the rent check shows up, just be, wow, I'm so shocked.
I mean, just to have that attitude about it, and then you'll be fine.

Or put the house on the market February 1st and tell them to go find a place to live

and blame it on your financial advisor. And I'll take that role.
He can take it. Actually, George.
George is your financial advisor. You can blame me.
I can handle that. His name is George.

Your financial advisor's name.

Last name.

I love it. It reminds me me of the old quote, if they wanted to, they would.
If they wanted to pay on time, they would. If they wanted to become debt-free, they would.

And so you just can't change people. Guy used that on me in my 20s when I was late for everything.
He says, you're late for everything. I said, well, I'm busy.
I'm busy.

He goes, if you want to be on time, you would.

And you know what? Pissed me off.

But he was right. And I'm not late anymore.
You're very punctual. That's actually shocking.

It's arrogant to be late. You're making a statement to the people that they don't matter.
That's at the root of this is a lack of respect.

It's a lack of respect for their daughter and the kindness that she's offered them. Yep.
To say, hey, we're not going to pay on time. Yep.
Even though that's what we agreed to.

We're not people of integrity. It

smells like a parasite. Yeah.

It's just sad when your parents are qualified as that. It muddies the waters, which is why I personally would not have signed up to my mom and dad

and become their landlord. Nope.
Because they remember when they change your diaper. Nope.
So it just makes it awkward when now you're demanding rent payment. Yeah.
Yeah.

Sorry, mom and dad, we we got to sell the house.

It's the easiest way. It's the nicest way to evict someone is just to get rid of the whole situation.

Start from the screen. You don't have to go into all why, and you don't have to go into, you don't pay the rent on time.
So you don't have to go into, we begged you, we've tried.

You don't have to try to be corrective with it. There's no point in that because it's not going to work.
It's just clean.

It's just like, gosh, you know, sorry, y'all got to look for a place we're selling the house. So either that or just pay the thing off and quit worrying about it.
Either one. Either one's okay.

Either one's okay. You're a good daughter, either way.
You gave it a run. But it's living in your head rent-free.
And currently, they're basically living in your house rent-free.

There's a lot of free rent here.

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Today's question comes from Craig in New York. I'm 70 years old, still working, and I'm now a high-net worth individual individual thanks to your principles.

I agree with 99% of what you say, but here's the 1% I don't agree with. I have a $320,000 mortgage at 2.75% on a property that's worth $4 million.

I paid extra for years, and at this point, over half of my monthly payment goes to principal, and the rest goes to interest.

The house payment is a small percentage of my monthly income, and I'm making way more interest on the over $320,000 I have in savings than the house interest is costing me.

Why would I consider paying off that mortgage?

It's like a common core math riddle here. Sleep.

You'll sleep better.

And you don't even know it.

It's a very small problem for you. You're not going to go bankrupt because of this, and you're not going to not become a millionaire.
Apparently, you already have. So congratulations.

But you didn't become a millionaire because you borrowed $320,000. You became a millionaire because you saved money and got out of debt.

And I got to tell you, you have no idea, Craig.

It's going to blow your mind. The peace,

peace is going to run down your spine when you pay this off. You're going to feel it physically.

And you're going to sleep better.

It's that simple.

And

debt equals risk. And risk has a math factor to it that you did not use in your little formula.
So your formula is naive and incomplete.

So if you adjust for risk mathematically, the money that you're making on your high-yield savings over the top of 2.75 isn't spit and won't buy you a biscuit.

So you're really not some financial genius here.

At the end of the day, you're actually fairly naive about it. But it's okay.
If you want to keep your mortgage like it's a pet, that's fine. But some people keep pet snakes.
I don't.

I don't have any pet snakes. You got any pet snakes? Zero.
Okay. I think so.

they're of the devil.

You've got zero mortgages, too. That's true.
Yeah, even the math isn't that impressive on this when you go, well, I could make three and a half, but the mortgage is 2.75.

So if you make 1% on this, you made $3,200, $250 a month. It's not worth me taking the call for this.
It's a biscuit. I mean, really.

And you can now invest the mortgage payment and make up for lost time.

It doesn't matter. It's irrelevant.

It's hilarious. It's like, I can borrow $4

and make money on my $4. Who cares? As a portion of your freaking worth and your income, this is not worth it.
It's irrelevant. It's irrelevant.
The property is worth $4 million.

You keep your little mortgage if you want to pet it on the head.

If you like pet snakes, I don't like pet snakes, even small ones. And so they're all poisonous as far as I'm concerned.
I hate

the oxymoron.

I hate the large banks. I hate the car companies financing and putting people in debt.

I'm sick and tired of the federal government ensuring 18-year-olds can borrow $100,000 and they can't even buy beer.

And so,

but we're going to put them in debt because we're going to help you out. We're from the Congress, and we're going to team up with the big banks.

And the big banks in Congress, when they team up, is never good for the regular people.

It's never good for us regular folk. So I'm sick of these people preying on everybody and then you know turn it in into sophisticated bull crap.
It's not sophisticated at all.

So, Craig, I'd pay it off, but you're not going to. So, good luck with that.

It becomes someone else's problem. Your kids will deal with the estate planning and pay it off for you.
It's not a big thing. This really doesn't matter.
So, Carolina is in Las Vegas. Hi, Carolina.

How are you?

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

So, I just wanted to ask how you would recommend paying off $90,000 in debt while in school and saving for my daughter's college fund.

Okay. Are you married?

Yes, I am. What does your husband make?

He makes $2,800 a month.

And

you're in school? Studying what?

I'm getting my master's in applied behavior analysis. To do what?

To work with children with disabilities. It would be to be a supervisor.
Okay.

All right. Making what?

In the future.

It says on the internet, right? It says that I would make close to $100,000 a year,

and that's what I know. Between $9,000 to $100,000.
What does your husband do?

He is a driving instructor. Okay.
And what's his plan for his career?

So in January he starts welding school.

So he's trying to do that. Excellent.
How old are you guys? 23?

I'm 28 and he is 33. Oh, missed that.
Okay.

And your baby's how old?

She just turned six. Okay.

Well, the formula that we have to work with is income minus outgo.

Your income is low low

because you're not working and he's not working much

or he's not making much. It's a better way of saying it, right?

You guys haven't got a lot. It's not like you're buying coach purses on the weekend, okay? I mean, you don't have any money.
$2,800 and a family of three and you're in school.

How are you paying for school?

So I took out a $50,000 loan.

And when do you finish school?

18 months. Okay.

And total balance of student loans is 90K, and there's more debt on top of that? No.

No, it's 90K

in total, yeah. I don't think you're going to get out of debt until you get your income up.
But the good news is you have plans to get both of you to get your income up.

I mean, his income is going to double when he gets his welding certificate or more, depending on what he's doing.

And then you're going to get out in 18 months and make money, and then you guys are going to plow through this. But right now, you're making $34,000 a year, and you have a little baby, baby.

So you're probably not going to make big dents in this 90K. Is that fair?

Yeah.

But I would work and you can work and he can work and you can do side jobs and let's do what we can to bring in extra money because you don't have much money coming in.

You have a big hole and a very small shovel right now.

I'm looking forward to the day that your shovel is bigger in order to fill up this hole.

Right. And that's what I think.
And that's okay. That's not the the end of the world don't go in any more debt okay

yeah we we um

like turned off our credit cards and things like that like i want to turn off these student loans no more yeah no more student loans

and you finish school with no more student loans

yeah that's fifty thousand for the entire yeah the entire course okay and to your question i would not be investing in a college fund right now yeah we've got a priority of knocking out this debt and so every dollar needs to go toward that.

We'll make up for lost time in a few years, and you'll still have a great runway of a decade to save up for college. You make $30 something thousand dollars a year now.

You'll be making $130,000 in 24 to 36 months. And you knock this debt out, and then you start saving for college, and you work right up the baby steps the way we teach.
But today,

you don't have extra cash laying around to do either. And so

first thing is take care of your own household. Don't add any more debt.

And then if you can scratch together a little bit more, both of you working some extra jobs or something, you want to throw something at the 90,

it doesn't make me mad, but I'm just not going to put heavy expectations on you because, again, you have a very, a $90,000 hole and a small income. That's your shovel.

So, but the good news is you're doing something about that. Both of you are going to get sizable upgrades in income, and that's just wonderful.
Good for you. Congratulations.
Very cool.

Man,

the trades are the answer for a lot of these folks. A lot of people moving that direction nowadays.

People want to know where all the jobs are? Trades. Step into the welding, step into the diesel mechanic, step into the heavy equipment operator, and you step into six figures pretty quick.

And it makes Mike Rowe happy to hear that.

But he's right. He's onto something.
He's been onto something since before it was cool. He was an early adopter.
But there you go. Good stuff.

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Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. John is with us in Huntsville.
Hey, John, how are you?

I'm doing well, doing well. Thank you guys for taking the call.
Sure, What's up?

Kind of stuck in a financial and a moral dilemma, and I don't know which way to go. Okay.

Brief backstory is

father passed away about 12 years ago. I inherited the business solely,

built it up. Now I've sold it off.

The moral side of that is none of my family members knows that I've sold it yet. And

they weren't part of it. They had no business dealings with it.
But after our father died, it just seemed like I was the sibling that everyone came to for

everything,

you know. And

just listening to you guys, you know, I think that

with the sell of that business and selling the home I'm currently in,

I would wind up being debt-free completely and have quite a bit at you know 46 years old to be able to retire with.

And I'm just, I'm wondering,

I guess, you know, have I been too deceptive with what's going on? Or

it's like nobody ever calls to say, hey, how are you doing? It's always, hey, I need this or that or the other.

And I guess I'm too much like my dad in that aspect.

Okay.

I don't know.

It sounds like you're

to what extent have you been helping?

How much money or what have you been doing?

I've bailed one brother out of two different mortgages twice.

To the tune of like $100,000 or something?

A couple hundred thousand, yeah. Okay, so you gave him a couple hundred thousand dollars.

It was a loan, and

I know where you're going with that, but I haven't been paid back. I've gotten about $30,000 of it back.

But that was

$30,000. What about everybody else?

One sister,

if we're keeping track, she probably owes me around $65,000. For what?

Apparently, there were some medical procedures that I was told was dire

that was more cosmetic than medical.

And

our data.

have you have you um you know have you made the determination that this was really not helpful in the end that their lives pretty much ended up about where they began and so you really didn't cause them to cut suddenly become prosperous with your gifts

that is correct yeah

so does that give you the courage does that give you the courage to say no next time

there's there's where a problem lies because i

i i really it's not a

they always play on that you know how daddy was kind of thing well daddy's gone honey and that and so now you're daddy you got to grow up and I can't help you you got already gave you 200 grand already gave you 60 grand to have your tummy tucked and I'm done

I mean

grow up

these are grown people

Now, you don't have to be that mean to them, but that's what needs to go through your head so that you can just smile and say, gosh, I hope it works out for you. But I'm not daddy.
Daddy's gone.

Yeah, so I've, in

the one good thing was the business broker that we were involved with

had mentioned, you know, have you ever heard of this program? And of course, I, you know, I grew up in Franklin, so I'd heard of y'all's courses and stuff before.

And I just felt like from a deception side of it, because I'm literally moving completely

out of state. I don't, you know, you could just tell them I sold the business, sold my house, but but you don't, you don't owe them any explanation or cut.

You know that, right?

Yes, sir. I think there's some survivor's guilt here because you've done well and you've seen them struggle.
And you go, well, I guess they deserve some of this because you're a good person.

But the problem is you're being manipulated and abused by these people. And the only time they reach out to you is for more money, right?

More money or

work done at their, yeah. So there's no relationship to salvage here.
If you keep giving them more money, you just continue the transaction.

So, no, you don't have an obligation, so there's not real deception, but you're just not wanting to tell them because you think they're going to come for money. They want some of it.

And so, and you're just going to have to get emotionally prepared because at some point, this is going to come out, whether you make a big deal about it or whether you don't.

If you just go, oh, yeah, by the way, I'm leaving. We sold the house, we sold the business.

What? Yeah, yeah, that's what we're doing. And so, you know, we'll stay in touch and let you know where we land because we love you.
What would you suggest with the remainder of the money

as far as like because like I said, I am 46

and you know, I just kind of want not want to retire fully. I just

want to relax for a while. Like, I've been working with my dad since I was seven, and

I'm tired.

What kind of business did you sell?

It was a construction services company. Okay.
Good for you.

All right. So first, let's stay with the first part of the conversation for a moment and then we'll come to the second part.

The first part of the conversation, sir, is you need to pick up Henry Cloud's book. It's called Boundaries.
You don't have any

boundaries. Your boundaries.
You don't have any fences. Fences are down on your farm and the animals keep getting in.
And the animals keep getting out. And you need fences.

Okay?

You know what I'm talking about.

Your no button is broken and you need to fix it because you're not really helping. You're just being weak.

Am I wrong?

It's hard to hear, but no, you're not wrong. Okay.
So just fix your no button. That's good for your brother.
It's good for your sister.

If you want to call them, if they call up and say something, just go, hey, listen, I'll tell you what I'm going to do. That money that I loaned you, just don't worry about it.
Forget it.

Because you're not going to get it anyway, by the way.

So just forgive it.

But we're done. We won't be doing any more business transactions, okay? You're my brother.
You're my sister. I love you.
But we're not doing any more money transactions. Those loans are forgiven.

I'm not going to make that mistake again. So don't ask.
And just you need to get you need to fix your no button. It's broken.
Now, then that sets you up with the money that you've made.

And so what did the business sell for? How much you got?

$1,230,000. Congratulations.
That's not enough to retire on at $46,000.

But it is enough.

But it is enough. You already have some save.
How much?

$2.25 million. Okay.
All right. So you got $3 million net worth.
Okay, you could quit.

But I don't want you to quit. I want you to take a break and decide what the next chapter is.
You know what an encore is?

After the band has played all their greatest hits and they left off one and the Eagles, everybody's clapping and the Eagles come back out on stage, right?

And

they play one more song and it's what it delights the crowd. You got one more song in you or two or three.
You're only 46. And fishing and golf will get old after a while.

You need to lay your hand to something. You don't have to work 60 hours a week.

You don't have to bust your hump, but you could kind of cruise into something and be of value to your fellow man because you're a smart guy. You're a wise guy.
You're a kind guy.

You're a person of character. And we actually need you operating businesses in the marketplace.
America needs men like you and women like you to do stuff. So, take a little break.

A year from now, I want you to start something-something you've always dreamed of that's been tickling in the back of your head.

And I want you to spend a little of this money getting it getting it going, and I want you to

make yourself useful

because you're gonna have more joy that way than you will sitting on your butt.

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Angels in San Francisco. Hi, Angel.
How are you?

Hey, what's up, guys? Thanks for taking my call. Good.
How can we help?

So I'm a little confused.

I worked my whole life since I was probably 12 years old. And everything I've done to create money is basically on my back.
You know, I bought a property, I had a small house.

I built a second home in the back.

from the plumbing to the electrical to the foundation everything was me to save some money.

Now I'm renting the property in the front,

but everything that I everything else that I do is always labor. And I make pretty decent money and I'm wondering

where can I put my money in so it makes me money.

And I don't go on vacation with my with my wife and kids and I'm thinking, man, the truck is parked and I'm losing money every day while I'm here in vacation, right?

So I have that stress of not making money if I'm not working.

Is that does that make sense to you? Yeah. Are you running a business?

Yes, I got a trucking business, but technically I'm an owner-operator, right?

I make about a yearly about $325,000.

My wife works as well. But whenever the truck is parked or it breaks down,

there's no income coming in. Yeah.
And that's where I'm having trouble. So

all it is is you own your job.

Yes, that's it. Yeah.
And so if you don't work, you don't make money because you own your job.

It's straight commission. Yeah.

And so the only thing you can do

is to grow that business and

have several other people doing that work that work for you, and then they're working when you're not. But until then,

you're a solopreneur, we call it, a single person small business, and it does all depend on you.

You're on a treadmill. And so you're stuck on that.
And that's not bad. You're making 300,000.
Like you said, you're making 320,000. So shut up and take a week off.
That's okay.

You can go on vacation. It's not going to kill you.

You're not going to go hungry if you take a week off when you're making 320 grand.

No, so here's the thing, though. I'm in California.
So in California, to get drivers, to get other trucks and more,

the profit, because I've already done it before, the profit is not there, and it's not worth all the stress and the headache. So

you're going to own your job. And when you're not working or when the truck's broken, you're not making money.

I mean,

that's your reality. And there's nothing wrong with that.
It's just, you just know what it is. But there's not really a fix for it except to do something else.

Well, I guess that's what I'm calling you guys to see where.

What do you want to do? Do you want to? It sounds like you don't want to scale and delegate this and you don't want to do it all on your own. is it you want to do?

I want to be able to put my money somewhere where it makes money, and

it's not on my back all the time. Do you want, quote, passive income?

Yes, passive income. Okay.

And yesterday, I ran into one of you guys'

commercials, and

I put my link, I put some information, and I got about 40 people calling me, and they're, you know, saying everything works for you, and this and that, that.

And they're throwing me one way and the other way. And that's why I called you guys today.
I'm trying to figure out.

Okay,

you did not get in touch with us. We don't have 40 people to call you.

Yeah, that's

one of those. You got scammed.
Some kind of AI bull crap or something. Be careful what you click on on the internet.
Yeah.

Yeah, exactly. That's why I called you guys today.
Okay, so what have you, have you been doing any investing with this money? Because you're making amazing money. Where is it all going?

Where's this 25, 30 grand going every month?

Okay, so

when I bought the property, it had a small house. I built a second home for us in the back, and now I'm renting the house in the front.

What are you doing with the money that comes in every month?

So I just

purchased some, they're called luxury bathrooms, restrooms for events.

I purchased some of those things. So you're spending all the money coming in to start new businesses?

To start

something? Because you have a trucking business, and now you're talking about buying luxury bathrooms.

Yes, just in case, just in case the trucking business doesn't feed me anymore, maybe

the other business will, right? But again, the other business is always me calling the bathroom from here to there. So I wanted to invest on the market, or I wanted to invest somewhere where

I can. So you want to stop investing in all these multi-businesses because you can't be a serial entrepreneur and do it all at once.

And so you're wanting to invest it elsewhere, like in mutual funds in the stock market?

Something like that, yeah.

That's what I need to do. Yeah, but here's the thing, okay? Running a small business always makes a lot more money for the money invested than investing it in anything else.

If you bought a rental property and paid cash for it, it doesn't, you know, you put 500 grand into that. It doesn't pay you what if you took that same 500 grand and opened a business.

It would pay you a lot more, but you've got to work more as you have figured out. So,

no, I would not open six businesses and call that investing. That's just serial entrepreneur, and they're all going to fail because of lack of focus.
I would not do that.

Decide what businesses you want to be in, and very carefully and very diligently and very gradually make your move into those and away from trucking so that you can get off the road because it sounds like that's really what you need to do.

And then, as far as your investing goes, I personally invest, Angel, in two things other than my business. And I put money in good growth stock mutual funds.

And you can find a person that doesn't work for me, but that we recommend called a Smart Vestor Pro on our website only

at not on Instagram. You can't find them there.
You can find them on our website at ramseysolutions.com and click on Smart Vestor. They'll sit down with you and help you do some mutual fund investing.

But you're not putting enough money in there right now to not have to work. It's going to be a long time before you get there.

And then I personally also buy real estate that I pay cash for, but I would only recommend that to you after you're 100% debt-free house and truck and everything.

And so I'm going to get you completely out of debt. That frees up all your money to build wealth with and to be generous with.
And that's how I have done mine.

Okay.

And folks, if 40 different people call you and say they work for Ramsey and they have things to sell you,

they don't work for Ramsey because we don't do that. You're about to get scammed.
Don't fall for it. We don't have that.
Okay. We have a network of people.
that we endorse that are real estate people.

And so if you click on our website and say, I want a real estate agent that's Ramsey trusted, we'll send that to you.

If you click on Smart Vestor Pro and want to talk to somebody about doing investing, we'll send those people to you. They don't work for us, but there are also not going to be 40 of them calling you.

And we don't have stuff that we're calling you to sell you. Okay? It's not what we do here.
So that's some of the AI crap. There's something on there the other day.

Somebody sent me the, apparently, it's like a kung fu movie or something. My mouth doesn't even match that.
Oh, it doesn't match, yeah. Is it like a car loan, like a car insurance? Insurance thing.

Dave doesn't believe in insurance agents or something. But how stupid is AI? Because they said, this is Dave's mouth.
I love my Tesla.

And I went, wow, AI, do better if you think that's what's going on. Yeah, it wasn't even AI.
It's just a bad, it's a bad edit by some Russian scam artist or something. I don't know.

But yeah, that's probably what you've gotten into, honey. So we just don't get into all that stuff.
We're very simple people here. All right.
Open phones at 888-825-5225.

Hey, Christian, just for the fun of it, send him a copy of Building a Business You Love with the Five Stages of Business. He's stuck in Treadmill.
Maybe that book will help him.

It's a bestseller angel on how to operate a business and the stages of business. My latest bestseller.
It's the last book I did, matter of fact. And so I'll send that to you as a gift.

And you're a fellow entrepreneur for sure. You just need some clarity, some vision, some direction.
He's just doing all of it.

Don't do everything at once. And jack of all trades, master of none.

Don't lose your focus. Just figure out a couple things, do those well,

and just keep pushing, keep pushing the rock.

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Fairwinds doesn't push credit cards.

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In the lobby of Ramsey Solutions on the debt-free stage, Alex and Amanda are with us. How are you guys? Merry Christmas.
Merry Christmas. We're doing great.
How about you, Dave? Better than I deserve.

Where do y'all live? Live in Altoona, Pennsylvania, basically in the middle of nowhere, Pennsylvania. I love it.
That's a pretty area, actually. Oh, awesome.
Very nice. Very cool.

Welcome to Tennessee. And how much debt have you two paid off? $100,000.
I love it. And how long did this take? Five years.
Five years. And your range of income during that time? Between 80 and 130.

Okay. And what kind of debt was the $100,000? That was our mortgage, Dave.

You're weird, people.

It's a little bitty mortgage, but you knocked her out. Congratulations.
What's that house worth?

About $400. Very cool.
And how much in your nest egg these days in your retirement accounts? A little over $150,000. All right.
Very cool.

So sitting right there at $550,000, heading towards a million dollars. How old are you two? 34.
I'm 35. And I paid for a house.
How weird are y'all?

Very cool. All right.
Tell us the story. What started this five years ago or more, and how did you get connected to Ramsey? So this really started about nine years, almost 10 years ago now.

Amanda's parents, my in-laws, for one of our wedding gifts, got us Financial Peace University.

And we started

Dave-ish, and then we had our never again moment, which we had $12 in our bank account. We weren't going to get paid for about a week, and we were...

We were looking through our couches looking for change.

And basically living on beans and rice.

Got paid,

did a baby step, did our first baby step number one, $1,000, and we never looked back.

We paid off about $85,000 in a car and student loans

at that point. So we got rid of all our consumer debt.

And then after that, we decided that we're going to move to, we were living in New Jersey at the time, and we decided that we're going to move to Altoona, Pennsylvania.

Now, during all of this, we really struggled with infertility.

So

we purchased our house.

We put a really nice down payment on it.

And then we adopted embryos during that time. Oh, wow.
And we cash flowed everything. We cash flowed everything.
Wow. And our three littles are sitting right here in our testimony.

Very cool.

That's awesomeness. Proud of y'all.
About as good a use of money as I can think of. Absolutely.
Well done. Good for you guys.
That's so powerful.

How's it feel to be 34 years old and completely dead-free? It feels so good.

It's awesome. It's awesome.
Very free. It's doable.
It is. What do y'all do for a living? I actually just got promoted.
I'm the chief financial officer of a small startup, Health and Healthcare.

And I'm a social media coordinator. All right, good for you.
And a lot of mom, huh? Yes. Three littles running around.
Enjoying every moment.

So, what was the hardest part over five years? Because that's a longer journey. You know, baby step six.
It's not as aggressive. Did you ever lose steam? What kind of kept you going?

I'd have to say it was just

communication and just leaning on on each other and every time we just we we have these like little thermometers every time we'd put another chunk on the mortgage we'd color some more oh there they are if you're watching on youtube or spotify

so making a visual really helped you guys yeah the visual really helped and every next you know ten thousand dollars you're like oh my gosh we're one step closer yep we're getting closer we can do it yeah it's i mean even another piece of this about what almost a year and a half ago i got laid off from my job and we weren't nervous we weren't scared and we were pregnant with twins at the time.

Oh, and we were like, okay, what's a severance look like? We'll make it happen. And that was an absolute blessing because my job was super stressful.
It took away from my family.

At the time,

we had a young daughter and obviously a wife as well.

And it was an absolute blessing because we were able to take a little bit of a risk in the next job. And that's been

unbelievable.

Such a blessing. Gave you options.
Absolutely. Absolutely.

Yeah, That's amazing. Well done, you guys.

All right, when people hear that you've been on this journey and you've done all of this and now you're debt-free, what do you tell them the secret to getting out of debt is?

I'd say being on the same page. Yeah, working together.
You can do anything if you work together and you communicate together.

I mean,

anything is possible. It really is.
So why did you move from Jersey to Altoona? Amanda's family lives in Altoona and we were traveling there about two, three times a month.

Put a lot of mileage on the car. Okay.
All right. But I'm guessing it was a major cost-of-living shift.
Huge. Absolutely.
Huge cost-of-living shift. Yeah.

Tax base and everything. Yeah, absolutely.
Yeah. And it was crazy.
We both got jobs on the same day. God sent us jobs.

It all just worked out. Just worked out perfectly.
Yeah. In Altoona.
In Altoon. To facilitate the move.
Exactly. Okay.
Wow. No income to dual income.
Just like that. Yeah.
I like it. Very cool.

That's fun, guys, because we often are talking to people and going, you know, you may have to move. You know, and

what you're trying to do doesn't fit there, and you may have to move.

And so, I always wonder because, you know, you made the choice to move to a more rural area and obviously a lower cost of living area and that kind of thing. But it's a great place to build a family.

Absolutely. But you got to have an income.
And so it's all worked out and you figured out how to do it. Perfect.
I love it because that's inspiring for other people listening right now.

Some people are stuck in a market they can't afford to live in. Yeah.
And they need to unstuck themselves. And then that'll get them moving.
That's good. Good for you guys.

It's a six figures in a a low cost of living area. I mean, that's a wealth hack.
So you guys are, you've cracked the code here, and it's only uphill from here, or I guess downhill.

Way to go, guys. Fantastic.
Proud of you. Who was cheering you on along the way? I would say us two are our biggest motivators, but also our families were huge to us.
I mean,

they gave you Financial Peace University

10 years ago. So they got to be going.
I'm glad it worked. Yeah,

I think you got a lot of support. And you brought grandbabies to my neighborhood, so that's good.

Everybody's happy, right? So there you go. I like it.
Grandpa's happy. My grandma's happy.
Oh, absolutely. Well, they got to be cheering you on.
I'm proud of it. Good for you guys.
Well done.

Well done. Very good.
All right. You want to bring up the littles? Are they going to cheer with you? They're going to cheer with us.
All right. What are their names and their ages?

We have Isabella, who's three. We have Alex and Regina, who are 10 months.
All right.

Come on up, guys. Oh,

all right.

Oh, look at these guys. They're great.
That's a good reason to become dead free, right now. Very cool.
Yeah, there's a good why right there in that picture. Good job.

See, those kids are not old enough they're even going to remember that this happened, but their parents were heroes and changed their whole family tree by deciding to do this.

Sitting here completely debt-free at 34 years old, be millionaires in another four and a half to five years. Pretty impressive stuff.
Very well done.

Alex and Amanda, Isabella, Alex and Regina from Pennsylvania. $100,000 paid off the last portion.
That would be their mortgage. They're weird.
Did it in five years, making 80 to 130? Count it down.

Let's hear a debt-free screen.

Get ready.

Three, two, one.

We're debt-free!

Yes, we

are.

Love it. Oh, man.

The little 10-month-olds, they're going to be watching this on YouTube in like 2038.

Yeah. Go and watching vintage clips.
That's when the old man, old lady made us rich. That's when we got out of debt.
Your show is going to be vintage. That's pretty cool.

At some point, everything becomes vintage. Yeah, well, I don't want to talk about that right now.

I was vintage a long time ago, George. I'm way past vintage.
Now I'm over into antique.

Oh, man. You got a special license plate for that, at least.
Yeah, that's right.

Oh, that's so funny. I want the license plate that has no speed limit.
That's the one I want. That's the Audubon.
I can't get that one.

You guys are incredible. Alex and Amanda, look at these heroes, man.
This is so powerful.

powerful are we seeing more and more people in their early 30s because they had their financial peace babies the parents got them onto financial peace they actually believed that it could happen they grew up in a household so when they got married they had to apply it and ten years nine years later here we are including you know three babies on the way that and there's a lot of cash flowing going on with this story oh yeah these guys um but i i just want to encourage We hear all these people talking about affordability and they can't afford to live.

And, you know, these guys make 80 to 130

and they move to Altoona, Pennsylvania, and they're doing unbelievably well.

It's still possible. There's a formula here.
Notice the correlation, boys and girls. Yeah, they can afford to live there.

It's affordability. Wow.
People forget.

You can choose where you live. You can choose the job you have.
Interesting. But it's going to take sacrifice.
Interesting.

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I mean, it's here. Boom, just like that.
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Savannah's in Omaha, Nebraska.

Hey, Savannah, how are you?

Great. Great to talk to you both.
You too.

So my question is, my husband and I are in our early 30s. I stay home with two toddlers, and my husband works.
He makes $75,000 a year. We have no debt other than our house.

And we are currently not saving for retirement. We make enough just to cover normal expenses without living too uncomfortably.
And then some months we can save a little.

Some months we aren't able to put anything anything into savings.

How much is your house payment?

What's that? How much is your house payment?

We have $150,000 left.

No, your payment?

Oh, it's $1,300 a month.

Okay, and you make $75,000 a year.

Yes. So $7,000 a month minus taxes.
So he's getting home with five.

Right?

It's about $4,500.

How much was your tax refund?

I think about, we just had a baby, so

$2,000, but this year it'll be about $300.

Okay.

Where's the money going out of his check then?

Because that's not your taxes are not that high.

Okay.

We have insurance, HSA. We contribute about $150,000 or $200,000

each paycheck.

So maybe that's it. No.

How much was the insurance?

I believe, if I recall correctly, $250,000.

Still not right.

That doesn't add up to your, that doesn't add up to $75,000 a year. You're missing something.
Okay. Okay, something's gone.

I'm trying to find out why you've got a pinch because with no, your house payment is reasonable and

given your income and you don't have a single of the debt. You don't have a car payment.
You don't have anything. No.

No.

I don't know where your money's going then. I think you need to be on a written budget because you should be able to save 15% of that, which would be about $1,000 a month and retire with dignity.

Does he get paid twice a month? We are.

He does. Yeah, it's about...

Yeah, it's $2,200 a month, or sorry, every two weeks. We are on a written budget.
I watch all our money coming from his paycheck.

I don't know, I'm less familiar with what happens to his paycheck before it comes to us, so taxes and everything.

I'd sit down tonight with him and just take a look at it and see all the deductions that are coming out.

Because what should be happening, if you invest 15% into his workplace retirement plan, that's about $468 that would be coming out for the 401k.

So now the goal is, how can we live on the rest that actually shows up in the bank account and then budget off of that? That should become your reality.

And And that might mean we need to cut some expenses because all of a sudden it's too tight.

And so with the remaining, if you're a $1,300 mortgage payment, you still have another, you know, $3,300 of wiggle room here to use to cover all of your other bills.

And that's the part I think we can drill down on and figure out. Yeah.
And an every dollar budget will help you guys do that. So I would sit down tonight and make sure that.

What does he do for a living?

He's an operations supervisor at a manufacturing plant. Okay.
All right.

Well, and the other question I'm going to begin to ask myself is: what are our career plans? Right now, you're a full-time mom, right?

Yeah.

Our plans are: I would love to go back to work when they get in school, and he would love to leave his job any day.

Okay. Yeah, sorry.

Yeah, I'll be working, but obviously for an upgrade, we don't want to leave his job for a downgrade.

That's kind of counterproductive to this whole discussion. So, yeah, so as your careers increase, you're going to find more wiggle room, probably.

But,

you know, you're making an average American household income. $78,000 is the average right now.
Okay.

And

you've got a decent, you've done a great job, by the way, to stay out of debt. Most people in this situation call me up with a car payment or two

and a student loan hanging around and then can't figure out why they're broke. Or their mortgage is $3,000 and they make $4,500 a month.
Yeah. And so you guys don't fall into that.

Yeah, you should be about $5,000 a month take-home right now. So I still got, I've still got, I'm still tickling my brain because it's $6,300.

Now,

I'm not talking about every two weeks. I'm talking about monthly.
So that throws it a little bit because you've got two magic months if you're getting paid every two weeks.

Two magic months where you get three paychecks, and that throws the numbers off a little. So

that might get you back to where you need to be.

You might be right. It might be about right.

So because you're not really making $4,500 a month. You see what I'm saying?

You've got two months where you get extra $2,200.

So we do a four-week budget and a five-week budget based on the projection. So we do 12 of those.
So I think we have about two or three five-week budgets and the rest are four-week.

So four-week budgets are four weeks. There should be two.
There should be two where you've got a five, three paycheck and one

and the rest of them are not. So 10 otherwise, because

that's the way the two-week cycle works. So yeah, if you're doing that with your every dollar,

the extra $4,500 a year might make up the difference and mean that I'm seeing I was running everything saying you ought to come home with more than $4,500 a month and you do.

Because it's actually about $5,000, you must say $4,500.

It's about it's almost $5,000 a month average that you're coming home with, which is what it needs to be. So you're probably not going to find a bunch bunch of stuff in this check.

But look at it anyway, be sure.

So

yeah, what I would be very concerned with is

those two months when you get that extra check, if you could just invest all of that

and live on the 4,500 every single month,

you'd be okay. That would get you started on your investing.

Okay.

You see how I'm doing that? Just pretend like you didn't get those checks. Just live the whole thing on $4,500, take home pay, $1,300.

And, you know, it's not, you've not got a, you're not living opulently and you've been very responsible and have done a very good job.

I don't want to leave this call with you thinking we've judged you because it's quite the opposite. You're impressive.
I really like what you've done. You've done a lot with a little.

And you've got a good long-term plan where he upgrades and you go back to work and your income is going to go through the roof. You're going to be at $150,000 when those two things happen.

So

and then zoom zoom on building up your retirement at that point. Okay.
You'll be fine. So you're not in trouble and you've done a very good job avoiding debt and managing the money that you have.

So congratulations.

Thank you. Yeah.
But maybe the maybe the hack is for now, take the two magic months, the third, that have the extra check, and throw that whole check into a Roth IRA.

And so that at least gets $5,000 a year going. At least gets something moving that way.

And then as you see some increases from whatever, make sure you start jacking up 401k contributions steadily as you get to more and more room in the budget. And for God's sakes, don't go into debt.

So you've done a great job avoiding it so far. So, Savannah, you've really, I mean, I would put them in the top 5% of Americans and how good a job they've done.
Yeah.

I mean, that's a solid income and no debt, and they're living very reasonably. That's a key for success.
Very carefully. Yeah.

It's not opulent. I mean, they're not living some kind of fancy advanced life.
You can't at that point. No, it's not really.

If you dial in that investing and learn to live on what comes after that, you're going to be just fine. Amen.
You're going to make great show.

Welcome back to the Ramsey Show in the Fair Winds Credit Union Studios. George Camille Ramsey personality is my co-host.
I am Dave Ramsey. We're glad you're here.
Thanks for joining us.

Hannah is in Indianapolis. Hi, Hannah.
How are you?

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

Well,

considering I'm doing okay,

I recently lost my job last Friday. Wow, what happened? And,

well,

they said that

I wasn't productive enough in downtime,

and

which we had a lot of downtime, but not a lot of busy work.

So all of the work that I was given, I would always complete on time

and just wasn't like super engaged. It was a really great job.
I don't feel like I extremely enjoyed it,

but it was a small office setting, and

there was just a lot of downtime and really not enough work to go around between me and the other office administrator. So did they give you a severance package?

They gave me a two-week severance package, which I'm really grateful for. I wasn't expecting it.

I have about $4,000 in savings.

My bare-bones, no extras budget is about $3,500 a month.

I had just recently went back to working a part-time job last month

and was kind of using that to

you know kind of keep

not a whole lot it's $12 an hour to a serving job it brings in you know between four and five hundred dollars a month it was just on the weekends

I'm a single mom I don't get child support I don't get court ordered supposed to get

50% of their expenses paid as far as like medical extracurricular and things like that but I currently have quite a balance that's owed to me that you know hasn't been paid and I'm not getting any financial help from my ex-husband.

Am going back to court within a month

due to other reasons. What were you making at the job you lost?

I was making

$27 an hour.

Okay. What kind of role was that? I wasn't paid for my insurance fully.
I didn't have any out of pocket for my insurance. What were you doing? What was your job title?

AP, AR, payroll,

regular like office type duties, things like that. Okay.

Man. And so going on to the discussion.
About four weeks before Christmas is when they decide they have to do this.

Yes. This is strange.
Yes. And I actually had to stop back in there yesterday, and a family member was already in there training for that spot.
So I don't know if it's something that they had had.

planned. I don't see them in that light.
Like in general, I think they're really great people.

But it was definitely kind of a shock to my pride a little bit.

So I don't know. But

so I'm kind of freaking out. It's also court ordered that

I'm the one that has to carry the insurance and they paid for my insurance fully. Yeah, well, you'll get that in the next position.
So really,

this just means that we have to just really, really, really,

it's

you're forced

to set the emotions that normally go with this aside and just dive straight into a job hunt.

Yeah, I was really sad Friday. Saturday, I was, I can do it.
I redid my resume, did my cover letter, and then Sunday and yesterday, I started to panic.

I used to Uber on the side, so I went back and I Ubered yesterday, and it was kind of depressing. I didn't really,

I was out and about for about four or five hours and just didn't make anything. The big town that's next to me me is

the traffic's congested, so it's just hard to get

running.

It's just hard to make money with it.

So

I don't think you need to panic, but I do need to think you need to, I'm with you. It's fair to be very concerned because this is going to run out and

you got two weeks and you've got a little bit of money and that's it. And so

you got six weeks minus you probably got eight weeks because because you can add to it with your server job, which you can probably gear up, and that's probably going to be more productive than Uber,

actually. Yeah, it really is.
It really is. And I'm putting miles on my car, and I have a nice car.
It's paid off. Yeah, I don't think Uber is planning to do that.
I don't think Uber is your plan.

But what we do need to do is land the next full-time gig that has the insurance and it has the, you know, the $30 an hour thing. And so, and it sounds like you've got some accounting training.

So I was in banking for eight years.

Loved

between, I started out as a teller, moved to a banker. I was an assistant manager, a branch manager.
I did retail support.

And

I feel like I really thrive in that busy environment.

When there's too much downtime and a slow setting, I get really distracted and it is hard for me to maintain like a productivity.

So I just, I like to be busy and I do like, as draining as customer service can be, I feel like I excel when it's you know customer focus or just people focused. I enjoy

leadership roles. I've been a trainer before.

It's just really hard in the area that I live because I don't live, I live about an hour from Indy and

a lot of the jobs that I know that I could get hired

in a couple of days, it's $15 an hour.

You may need to be moving to Indy. Yeah, if you got a job making $80,000, would you just move and go work there? What's stopping you from moving?

If I got a job in Indy or like a close, because there's some like distribution stuff up there that I could maybe do,

I would just, I would just have to commute as far as

my,

it really comes down to how important my home is. I only owe $80,000 on it.
It's probably worth $300,000.

If you can get a job in banking, making 80 and Indy, sell it and move.

Yeah, well, I applied for a branch manager position

about 45 minutes away, and the salary is between 70 and 100. There you go.

And you can keep your house or make that commute. Yeah, I'm fine with that.

The management position that I held, it was more of a, it was like a community bank, a state bank.

And they didn't do a lot of like outside relations, that like relationship management portion that a lot of the credit unions do.

So I applied to a credit union and their managers, their branch managers are rarely ever actually like in office. They're kind of out rubbing elbows and things like that.

So that's stuff that I don't have a whole lot of experience in. I would love to.

I think those are your answers. So you're right on track.
We can't hire you, so I'm not going to interview you.

But I do want you to continue down that track. And here's the thing.
I'm going to send you Ken Coleman's book.

And I want you to go to kencoleman.com and look at his website on all the different things in the letters and the resume covers and all that. It's very, very important that you figure out who you know

from somewhere. Kids soccer, wherever it is you know them from.
You know them from church that works in one of these companies.

Or if you know someone that knows someone that works in one of these companies, that they can get you, they can hand walk your resume into the boss's office and say, hey, look at this. lady.

She's sharp. Give her a look, please.
She's a friend of a friend. Give her a look.
And that doesn't get you hired, but it gets a look and it gets your resume out of the stack.

And so the proximity principle is the idea. And it's a book that Ken wrote.
I'm going to send you a copy of that. I'm also going to send you a copy of Finding the Work You're Wired to Do.

Hannah, you're going to be fine because you're so proactive. You're going to be just fine.
That's the key.

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Jack is in Kansas City. Hi, Jack.
How are you?

Life's good. Good, man.
How can we help? Merry Christmas.

Merry Christmas. Thank you.
So I'm a 76-year-old retired electrician slash contractor that has found the lady that he'd like to marry. And

I was married for fifty three years.

My wife passed away for the last five years.

Didn't think this person would be there for me, but she is.

And that's kind of where we are. My children

now are becoming concerned about

trust funds, pre-nap,

wheels.

And all my children are followers of Dave Ramsey. And I said, well, do you ever listen to Dave where he says you're one,

you don't need two checking accounts. You live together.

You talk about important things like how we spend the money, church, God, those things.

So

we've had some hard feelings of things that have been said, mostly negative things about my fiancé of

not supported but in their minds. And

in my position, I go to her defense because it was unfounded and still unfounded. But you do background checks on people's name and you find out there's a lot of people with the same name.

So

am I hearing this correctly, Jack? Let me summarize this for you. Your kids think your new fiancé is a gold digger and they want to protect their gold.

That's absolutely right.

A matter of fact, we had those.

How long have you known your fiancé?

We have been talking for 12 months. We've been seeing each other for nine months.
Where did you meet her?

Online. Okay.
All right.

I'm 65 and I've been married 43 years.

I can't imagine being in your shoes because I've not been there, but I can imagine

maybe being there someday.

Absolutely. And so

what is your net worth?

I'm at

without property. I'm at 1.3.

What about property?

There's another

mil, maybe. Okay.
And what is your fiancé's net worth?

30 gallons. Less.

I can't tell you the exact number. Okay.
Well, I would want to know that. If I were in your shoes, here's what I would do.
Okay. And you can do whatever you want to do.

You're obviously thinking through this clearly. And

your children,

if their only motivation is to make sure that you are safe,

I appreciate their motivation. Even though I might disagree with their tactics and certainly disagree with them being insulting.

But

if their motivation is to protect what they think is theirs and it's not theirs, well, that's just greed and you lose your vote. You lose your ability to give input at that point.
Okay.

But people in my life that are close to me and that love me, if they have a concern for me,

I have to say thank you for that, even if I disagree with it. Okay.

So, what would I do?

Okay, so I've got a substantial net worth if Sharon passed away, and if I were in the exact same situation, and I met someone that I didn't have a long history with, and you don't,

and I would hire a company and do a full background check. And I would also tell her that I will pay for her to do the same thing on me.
It's not an insult.

It's, I want to know what's going on and I want you to know what's going on. And you do need to know her entire net worth in detail.
She needs to know yours.

And you do need to have a shared checking account and share your incomes together towards your future. But

I would do a pre-nup on existing assets.

Okay.

Just because it keeps the weirdness out, okay?

And

it's not because I'm afraid of this lady.

I'm more worried. Anytime, the only time we recommend prenups at Ramsey is when there's a substantial difference, and you've got a two or three million dollar net worth, and she doesn't.

So there's a substantial difference there, and that can create weirdness if you don't have the clarity of a prenup.

Okay.

So I probably would do that.

And then, you know,

and that's not for your children's sake. It's for your sake.

Well, that's what they tell me, too. I mean, even though I get irritated, I know they're trying to protect me in the way that they do it.

Yeah, their tactics might be good, but their motivation, I mean, their motivation might be good, but their tactics suck. Is that fair?

Yeah, that's generous, I'd say.

Well, what's the age difference, Jack, between you two? We're the same age. It's very unusual.
Okay, I tell you, she's younger

at heart. Or she looks younger.
Six months. No, well, she does look young.
She is six months. We're both very active.
We walk. We do, you know, I mean, it's like very unusual.

I think you found a companion, and I think that's wonderful, and I want you to pursue it.

But let's just do it. This is not puppy love.
Let's just do it with some wisdom. And I would do a detailed background check because you and I both have lived long enough.

We've seen friends get scammed. Oh, yeah.

And

one of my good friends got scammed out of a couple million in a situation like this. It was crazy.
But

yeah, it was wild.

And I don't even smell that here.

And you know why? Because I trust you and your judgment after talking to you. You've got a level of wisdom.
And I think you've probably probably got a pretty good nose for stink.

And I don't, and you don't smell any stink, so I don't think there is any, but I think it would lay everyone's head on a pillow carefully, hers as well.

Tell her, look, it costs 500 bucks to do a full detailed private investigation background check.

Here's 500 bucks, and I want you to hire this company to do a check on me, and I'm going to hire a company to do this check on you. And that way, everybody will shut up.

And let's do a prenup for the assets, and we're going to combine our incomes and live our lives in a combined manner but the actual assets that we both enter in with we would leave with and and i think that's probably a smart thing and it'll give you both a lot of uh peace and maybe

i'm not really doing this for the kids the kids can jump in a creek but the uh but but

I'm trying to give them a little bit of love, saying if their reason, their motivation is to protect you, that's okay.

But also, if you go to the point that you have to be a jerk about it, then that's obviously out of control. So, anyway, that's what I would do.
So, good, good question. Very interesting.

Yeah, it's pretty neat to see that you can find love at that stage of life, and it's not a romance scam, which is a breath of fresh air today because we've seen so many of those where they go, Well, I never actually met her, and she asked for a bunch of money, and I wired it over to her.

That I can understand kids' concern. This is just a little bit that's a scam is why, yeah.

Yeah, but he's he's clearly met her several times, yeah, and she's of the same age, so it's not this like, you know, well, she's in her 40s, and, you know, she just likes me for me and my personality.

The kids sniff that out. This is very different.
So

I wish them well. There's some celebrity versions of that that are downright funny.
That's just frightening to see those age differences.

Well, I mean, it's,

yeah.

Anyway,

we all know. We all know.
Pop culture news. Yeah.
But yeah,

that's not what we're dealing with here, or it doesn't sound like it is. So very interesting.
Very interesting. Good discussion.

So, in this case, protecting the assets is wise because this is your entire life's work of building wealth, you know, building these assets up, which is different than I'm 25 and I want to preen up because, you know, I feel like she's going to take me to the cleaners.

No, yeah, that's this is very different.

And again, there's a major difference in anytime there's a big difference, one of you have substantial wealth and the other one doesn't. Yeah, that's what I'm most worried about.

And I've heard you say it protects from the crazies, the outliers in the family they're going to come after. Which apparently have shown up.
They're already here.

Welcome.

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on the debt-free stage in the lobby of Ramsey Solutions. Christopher is with us.
Hi, Christopher. How are you? I'm doing wonderful.
How about you? Better than I deserve. Where do you live?

Tucson, Arizona. Oh, beautiful.
Well, welcome to Tennessee, where it's cold right now. It's a nice change of pace.
Yeah, I guess. Good to have you.
And here to do a debt-free scream.

How much you paid off? $104,500.

Good for you. I love it.
And how long did that take you, sir? It took me four years and four months. Love it.
Man, your range of income during that time?

So I started around $30,000 and ramped it up to $70,000. Wow.
What do you do for a living? I'm an accountant for a local government. Okay, very cool.
And what kind of debt was the $105,000? My house.

Whoa! looking at a weirdo. That's a low mortgage.
Good for you. That's two of them in a row we've had like that.
Yeah. I love it.
What's this house worth?

I would probably say about $225,000 right now. Good for you.
It's paid for initiators. How old are you? 30.
And you have a paid-for house. Yeah.

But millennials can't afford to buy a house, George. And look at this guy.
He didn't just buy a house. He owns the house.
Shut up. Way to go, Christopher.
I love it. All right, tell me the story.

Four years, four months ago, what just made you decide I'm 26, by the time I'm 30, I'm gonna have my house paid off. So I started working, and part of it was the Smart Dollar.
They offered $20

off every week for my insurance if I went through it. And so I did it.
So your governmental agency bought Smart Dollar in? Yeah. Very cool.
Wow. What's the agency? What is it? Pima County Government.

Oh, yeah. Well, thank you, Pima County Government.
I love it. For those of you who don't know what we're talking about, Smart Dollar is our class on how to handle money.

It's like Financial Peace University, but it's taught as an HR benefit in corporate America and sometimes in county government. Look at that.

So they bought it for all the employees and said, if you go through it, we'll give you $20 off your insurance. Every week, yeah.
Boom. Every week.
That's quite

$20 a month, right there. Or every

paycheck.

Okay. Wow.
Oh, okay. So two paychecks a month.
Okay. So, did a bunch of people do this?

I don't know. You guys don't talk.
It's not like a, you know, all my coworkers don't. I encourage my coworkers to do it.
I was like, you know, it's 20 bucks. Go for it.
Yeah, well, you're the poster.

What's there to lose? You have no mortgage. They must be looking at you like, who is this guy?

Well, after that. I mean, an employer that furnishes this, and then the result is their team members pay off their home at 30 years old.
I mean, that's called an HR benefit. That's pretty cool.

So So I'm proud of our small parking team, and I'm proud of Pima County, and I'm proud of you. Everybody gets a proud of your, man.
This is pretty awesomeness. Very cool.

How's it feel to be 30 years old to have a freaking pay-for-house? It feels great. Like, when I first started, I was like, oh, it's going to be 40.
And then it's going to be 35.

And then I made it my goal to pay it off by the age of 30. And I did it, and I am so happy.

It's gone.

Every month at the start of the month, nothing's coming out.

that's so weird you don't have any bills electric you know I mean you just eat buy a little electricity a little food and life is good it's it's so nice you are seriously a low maintenance dude now that's amazing I'm so that's so cool man I take it you're single yes okay very cool and extremely eligible at this point ladies I'm just saying wow pretty stinking cool all right now you've been at this and you're making $30 to $70,000 a year during this during this journey So I started working at the library, and of course, at the library, you can get free books.

So I was like, hey, you know, as part of the course to supplement, I'm going to go check out those books free, read them. And it kind of just got me started and used the proximity principle.

Like the job that I have now, I sort of just used that and

got

got the job that I have now and it's been wonderful because I love the job and it's so much easier paying off debt when you go to a job that you absolutely love.

It does.

That's very true. But the bottom line is, I mean, you were not making $400,000 a year.
No. You're making 30 to 70 and you still go and pay off your home by the time you're 30.

What do you think the secret to that is?

The secret is just to have a goal and know what, you know, what's in store for you. Like listening to the other debt-free screens, like people are like,

you can't buy a house when you're 30. Like people

think that it's unaffordable, but it really is not. You have to have a goal in mind.

You have to know what you want to do instead of door dashing or, you know, going to all these different Taylor Swift concerts or whatever.

So. And you bought a very reasonable house.
Most people go with it. The key to being debt-free by the time you're 30, avoid Taylor Swift concerts.
It's not the worst wealth-building hack I've heard.

I think that's one I can abide by. I'll go with that one.
You invest that ticket price in a good Growth Stock Mutual fund. Seriously, you'll be a millionaire.
Wow. Shortly.
Yeah. Wow, man.

So the house you said is worth two and a quarter.

Approximately, yeah. Okay.
Tucson is a nice place. I've been there a couple times.
Does that buy a pretty good house in Tucson?

It's a two-bedroom, two-bathroom. Okay.
It's a condominium. A condo.
Okay. Yeah.

All right. And how long have you owned it?

About four and a half years. Okay, so you bought it and and then immediately started on this? Yeah, a little bit after.
So how much has it gone up in value in that five years?

$50,000. So it's almost doubled.
$50,000. Or no, no, it's gone up 25% in that period of time.
Yeah, roughly. So great investment then.
Yeah. Yeah, that's very cool.
Good. Good for you, man.

Who was encouraging you along the way?

You know, I do have a coworker who also has a paid-for house. He's in his

probably

early 40s. And

also my dad, he paid off his house early. And

I grew up listening to this show kind of on the radio, maybe not all the time, but

it kind of got the gears turning. And when it came time, it's like,

why not?

What do you have to lose? Did you bring your dad with you? Yeah,

he's a little camera shy. Okay, that's fine.
He doesn't have to jump in, but

he ought to be here and be proud of you. That's good.
I'm glad he's here cheering for you. That's neat to have your dad do that.
Very good. Proud of you, man.
Good work. Good work.
Good work.

All right. So let's just reiterate.
It's really important for your employers out there to not miss this. I don't know.

We've got major companies like U-Haul and Costco and others that have got all their employees going through Smart Dollar, but we also got a lot of... police departments and this is a county.

I didn't even know this county was doing this, but we've got all kinds of different organizations that are taking and paying for their employees to go through these courses and it's very easy to implement.

We've got it really dialed in. It's a quality product.
I'm proud of the product. And obviously, I'm proud of it.
The ROI is the results are standing in front of us. I mean, hello.
That's awesome.

And so if you're an employer and you could have an employee end up like Christopher standing here, that'd be something to do. Smart dollar, it's called.

You can check it out at Ramsey Solutions, and our team will get in touch with you and help you if you're an employer.

So there's my advertisement, but just the same, Christopher, you're the walk-in billboard buddy. So good stuff, man.
Good stuff.

So what's the first big thing you're going to do to celebrate the fact that you don't have any freaking debt? Well, first of all, I came here, but

I have an old car. It's an 03.
I've been driving it since high school.

Oh, you need a car. Your car is a piece of crap.
What's the next car? Do you have it in mind? What are you going to buy?

It's still up in the air. Okay.
I need to figure out what's in my budget. Yeah.
Well, you don't have a house payment, so you can stack the cash, right? Yes.

It's stacking so much faster now.

Yeah, you'll be able to buy a car any minute. Good for you.
Well, that's fun. Yeah, get you a good car.
That's a good idea. I like that.

You've earned it, and you've been conservative, and you've taken your time. And man, that's impressive.
Very good job.

All right, ladies and gentlemen, Christopher from Tucson, Arizona, $105,000 paid off. That would be his house and everything in four years and four months, making $30,000 to $70,000 a year.

And he's 100% debt-free, house and everything at 30 years old. Shut up, you whiners.
This guy dropped a mic on you people out there. Well done, Christopher.
Count it down.

Let's hear a debt-free scream. Three, two, one.
I'm debt-free.

Boom.

Man. Boom.
This is

this entire show. 30-year-old mortgages, 30-year-old people with their mortgages paid off on the air on this show today.
Reasonable

mortgages is average salary. We had the answer to the affordability crisis in America.
Oh, we solved it.

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Our scripture of the day, Psalm 27, for One thing I ask of the Lord, this is what I seek, that I may dwell in the house of the Lord all the days of my life, to gaze upon the beauty of the Lord and to seek him in his temple.

George Carlin said, Some people see things that are and ask why.

Some people dream of things that never were and ask why not.

Some people have to go to work and don't have time for all that.

That's good. I was like, this has got to be taking a turn somewhere.
Come on, George. We know George Carlin's going to turn somewhere there.
All right. Hey, buying or selling a home is a big deal.

And with all the clickbait headlines and conflicting data out there, it's hard to know what is really happening in the housing market. We'll help you with that.
It's moving, by the way.

You don't want to miss this. It's kind of quiet, but there's this little revolution brewing.
And we're here to make the latest trends easy to understand.

Median home prices held steady around $424,000 right now. And in October, about one in five homes saw a price cut, which means buyers might have more room this winter.

Christmas time is a great time to buy a house, by the way. Not a lot of buyers out there bumping around.
Mortgage rates dipped down to five and a half now.

So you can learn all about this by going to ramseysolutions.com slash market or click the link in the show notes. We'll help you with your real estate decision making.

Yep, walk you through the whole thing. Travis is with us in San Jose.
Hi, Travis. How are you? I'm doing good.
How are you guys? Better than we deserve. What's up?

So I was just calling. So I traveled for work.
And,

you know, when I first started, I had a little bit of debt. That's why I started traveling for work.

And my truck broke. I had to get a new one with a bad credit already.
And so, anyways, I paid off the, I had 20 grand in credit card debt, paid that off.

But now I have the high interest truck with high mileage.

And so I'm just wondering what you guys would think on: should I pay off the truck and then just ride it out until it breaks and then get a new one again?

Because I'm going to, it's pretty bad, but it'll do until now. Or should I just

25.

What do you make?

$1,800 a week, take home.

Okay. How quick can you pay the truck off?

Realistically, because I got school coming up, so probably like March, March or April could be paid off. So you can pay it off in like six months.
Yeah.

I would pay it off.

Yeah, the thing is, is that the head gas gets blown and the transmission like flipped. And it's kind of like, here's the other thing is I live in it.
I travel forward, so I live in the truck.

And so I kind of always need it. So it's like a predicament of ride it, and if it breaks, then I lose more equity on trading it in.

You don't have equity because whatever you drive, you're destroying its value. Yeah.
You've expedited the depreciation. You steer way underwater.
Yeah,

you're going to, you really have whatever you drive is you're destroying it, and that's a cost of doing business.

So you want to destroy the least expensive thing. that will get the job done.
Now, get the job done means you live in it. It's got to have some comfort.
And get the job done means to be reliable.

But other than that, you don't need a truck. I mean, you don't need to spend money on it.
All you need is reliable and comfortable. That's it.
You don't need to be impressive.

If you buy a $100,000 truck, you're going to destroy it. If you buy a $30,000 truck, you're going to destroy it.
If you buy a $20,000 truck, you're going to destroy it.

Yeah.

So why not destroy the cheapest thing possible as a part of doing business? Agreed?

No, that makes sense. Yeah.
So fix the head gasket and the transmission drivers thing. I think Travis just wants wants a new truck.
Can we admit that?

Don't get me wrong. I do.
But the interest rate's 16.

You're going to pay it off in six months. It's an irrelevant interest rate.

If you were hanging on to it for a decade, you'd have a point. But I think you're just jonesing for a nicer, newer truck.
And the real solution here is to pay it off.

Because right now, here's the thing. You're probably underwater by eight or ten grand, right?

Well, that's a little $25 on it. You owe $25,000, but what's it worth? $15,000, $17,000?

Well, it has $430,000 on it. That's the part that's

$30,000 miles on it. So it's worth Jack Squawk.

Yeah. Do you understand what I'm saying? You're so far underwater that if you sold it, you'd have to cover the difference.

So you're better off putting a new transmission in it and eating that $8,000 versus spending $15,000 to get out of the difference you're underwater. And let's get this thing paid off.
Get it paid off.

And then I want you to save up and pay cash for whatever you move into.

Well, that was the whole point. Okay.
So

fix this one and drive it and get it paid off and then save up and pay cash for whatever you move up to and move up to the minimal truck that will has reasonable comfort and reasonable reliability because whatever you drive, you are destroying its value.

You have driven this thing into the dirt. And you're going to have to drive it all the way into the dirt now because you trapped yourself.

You got screwed because you got impulsive and bought a truck at 16% and they screwed you. So next time, walk in with a check with the actual amount you have saved up and no more.

Because that dealership will talk you into a nicer truck. Do not take on debt again for a truck that you're going to destroy.
Don't do it.

So, yeah, I'd clean this mess up and then I'd save up and move up from there. And that probably means you're almost a year from buying a better truck.

And because you got to get this one paid off, and then you got to save up for the next one. You got a great income.
It'll happen faster than you think.

Yeah, that's what I would do if I were in your shoes. You got to break the cycle of this because otherwise it's going to to break you.
Kimberly's in Charlotte. Hey, Kimberly, how are you?

Good. How are you? Thank you for taking my call.
Sure. What's up?

So

about six years ago, I got divorced. In that divorce, we had one daughter, and

I have her full-time.

Her biological father is not in the picture. He's not a safe person to be around.

And we get about $150

for child support a month.

It does really not anything for us. And so since she was born and I started getting those child support payments, because I had to leave when I was pregnant,

I've been putting that money into a savings account.

And at first, I put enough to have like a money market account because at the time that was the highest interest rate and then I moved it into a C D.

So currently I'm saving that money for when she goes to college or when she's in the middle of the year. How much is in the account?

About $13,000.

Okay. What I would do is jump online at ramseysolutions.com and click on Smart Vestor Pro

and open up a $529 and a good mutual fund, move the $13,000 into there and then add to it periodically when you have some more money come in.

And that'll give you a much better rate of return and it grows tax-free.

Okay. How old is she?

She's six? It's a mutual fund and a 529 plan.

529 means it grows tax-free and it has to be used for college or education of some kind.

And so

go ahead. Sorry, go ahead.
No, that's it. I mean.

So with the 529 plan, I've heard that they have to use it for college or it gets rolled over into

like a retirement account for the money. I would not do that.
You can do that, but instead they need to use it for college, which is what you just said. You were saving it for her college.

And it's a wide variety of expenses connected to education. And so

you do trade school, she could do code school, she could do a lot of different things. It's school, and she's going to need some kind of school.

Okay.

Just based off of

rough estimates,

I was imagining she would end up with like 36,000 in

she should have more. No, I just crunched the numbers for you.
At this rate, from 6 to 18, you invest it wisely into those mutual funds we talked about.

Even with just your $150 a month, you'd have like $90,000 plus.

And that's if you didn't add any more. But that's because you're going to be earning more than you're earning now.
That's an 11% return instead of a savings account making three or three and a half.

That's the difference with compound growth over those 12 years. Yeah,

just click again at ramseysolutions.com and click on SmartVestor Pro. And by the way, Kimberly, there's no moral or ethical reason that you have to put the child support aside.

You're allowed to use it to support the child if you need to. But if you want to keep investing it, that's the way you can do it.
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.