Break Up With Debt For Good

brought to you by the every dollar app start budgeting for free today normal is broken common sense is weird and we're here to help you transform your life and your money here from the ramsey network in the fairwinds credit union studio this is the ramsey show i'm jade warshaw next to me george camel taking your calls for the next couple of hours triple eight eight two five five two two five is the name of the game rob is in wichita kansas hey rob how can we help today um thank you uh i'm running into a little bit of a snag trying to create a budget i'm in the construction industry and during the summer months i'm 70 to 80 hours a week coming into fall i'm average it's between like 40 hours two weeks ago 70 hours last week and then 50 hours this week so i'm not sure how to quite make a budget with with how my hours fluctuate i'm especially trying to pay off debt and everything or i just need a little bit of guidance on how to possibly do that is the fluctuation seasonal is it because it's seasonal or is it just because that's just the nature of the work all year round seasonal i'm working concrete oh okay i see i see so what's the minimum hours you're working on and what's the minimum hours you're working on and what's you would likely work in a week if the weather is bad 40 okay so that's a kind of a worst case scenario as you're working a 40-hour work week and what would you make working 40 hours 700 and a seven i think it was 791 is what my last 40-hour check was and that's take home after taxes yep okay so if you multiply that out for four weeks let's say in a given month you're bringing home about 3 200 bucks on a bad month what do you need to cover your household expenses for that month to cover i have uh my truck payment is 800 a month my wife's truck payment is 200 a month uh average electric bill is about 200 uh coming into winter months i'm going to guess my average gas bill is probably going to be around uh but i'd say 150 100 somewhere around there because it's going to be used a little bit more and what about your rent or mortgage rent is uh 1900 okay so what i would suggest is coming off this call if you don't have every dollar we'll give it to you for free let's create an every dollar budget because you're naming off the things that we kind of think of when we make a budget just those necessity things rent mortgage utilities lights water but there's a lot of other things that kind of eat into our money whether it's some subscriptions here or there gas bill some of those variable things that it's kind of hard to put a number on without you you know thinking about it so do every dollar figure out exactly what that number is and then from there we can work back and kind of create a peaks and valleys account we can make sure that we're uh accounting for those low months because here's the thing if you have those high months what do you make on a high month on a high month about 18 1800 and 1900 a week okay excellent and so what if we took some of that overage and said hey maybe maybe when you do your over every dollar budget you find out hey i need 3800 a month to make my budget hum then on the months where you go well over that well we can take some of that stash it away and always have an account that has 3800 bucks sitting in it and if you have to pull from it that's fine to make ends meet and then you stack it back up to 3800 bucks but in the meantime all that extra margin you throw it at whatever baby step you're on yeah you said you've got some debt so you could start chunking it at that debt but that's not going to happen so i'm going to start chunking it at that that peaks and valleys fund is what's going to save you with this regular income and the other piece is what's called the prioritize spending plan and all that means is we need to know what's going to get covered first when that next paycheck comes in so for you that would be the four walls that's your rent your utility bills food insurance we're going to cover those first before we hit any of the debt payments then if there's more money we hit the minimum debt payments and if there's more money we attack the debt with extra on the principal do you see where i'm going with this yep i actually just liquidated a lot of classic car parts and paid off $10,000 worth of debt amazing 20 days what is that truck worth with the $800 payment on it uh it's worth about 15 15,000 and the the it's at 18,000 or 17,800 right now is what i have left on that's alone okay i was just trying to think i just when you said you make 800 in a week and that car payment's 800 i went you are donating a quarter of your time to a lender think about it you're donating a quarter of your time to a lender you're doing that for that truck company that's crazy to think about right it is my credit wasn't the greatest and i bought this truck from a buy here pay here place a couple years ago yeah well i want you to just think about the different debts you have and get creative about how quickly we could pay this off and that if that means selling the truck and covering the underwater difference you might do that but if you love the truck and you're going to be able to pay this off you're you can knock all of your debt out in the next 18 months then you can stay the course how long is it going to take based on your math my goal is to have everything paid off by october of next year okay so one year from now you've paid off how much total consumer debt i now have uh forty seven thousand dollars left okay and in debt now rob you mentioned your income and your debt but you also mentioned your wife's car is she bringing home any any money any income yes she she makes uh she would get a straight forty every week and it's about six hundred and five dollars it fluctuates from 605 to 615 so about ten dollar difference week to week okay so that is what mine is like 2400 a month is that fair yep okay so yeah i love that i mean if you guys combine forces on this and like i said when we give you every dollar i want you both to sit down plug in your paychecks yours at the top uh hers in there as well and then let's go through this because i actually one day i'm going to be able to pay off my debt and i'm going to be able to um with her income i wonder if you actually will need a peaks and valleys account because if your lowest month is a 40-hour work week and you're bringing in 3200 she's bringing in 2400 i actually wonder if that's enough to make your budget tick you'll not know that until you plug in the numbers in every dollar but i kind of like the idea of then whatever margin you have when you have a really great week chucking that at the debt you guys are going to be done in no time yep that's that's that's definitely the goal for sure all right well that's the homework sit down tonight and when you do this george it's so important that both spouses are on track because this is it can be pretty drastic to say okay we're going to cut back we're going to cut back on extra things like subscriptions maybe we're cutting back we're not you know getting our nails done as much we're not doing going out to eat as much all of that you can't just spring that on your spouse you have to make sure you're aligned to want to go through with those behaviors and even more than a line just get fired up about it because usually one person's real excited you know they're like we got to do this and we're going to do this and we're going to do that and the other person's like whoa who is this person i don't know you just yesterday you were making terrible financial decisions now you're a guru right just because you read a book just because you listen to a radio show right so that's the hardest part is bringing the other spouse on board with the intensity that you have and part of that is dreaming together thinking about the future not making it you got to stop spending because we got to get out of debt well now it's an attack and they got to go on the defense instead it's hey i've done a real terrible job leading this family when it comes to money and i want to do better yeah and i learned about this plan yeah well imagine a year from now we're completely debt free we would free up two thousand dollars a month in payments what could we do with that two thousand dollars yes now you start dreaming for the future now they're starting to get excited too and that's one of the hardest parts of the plan is you know your spouse better than anyone yeah and if you know what if you know what makes them tick if you can plan it around what their kind of thing is like for me if you talk about peace i'm like sign me how do i get involved how do i get so knowing what fires up your spouse spinning it towards the future and then you know what makes them tick if you can plan it around that and take the time to have those conversations it will pan out better for you on the back end if you spend the time having the conversations cast 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first month's membership chministries.org slash budget, or click the link in the description. all right back to the phone lines we go where we have ernesto in madison wisconsin hi ernesto you're on the line being here what's up yeah yeah thank you how can we help well um i'm going on to the um step five of the baby steps and um going into actually no skipping through that i i'm going into step six actually and i i recently bought a a property that i'm living in as a house hack duplex and um i my lender on the property just gave me a follow-up call saying that they're offering a new product basically where they would refinance into a first position key lock that's all in one and it would essentially be like a velocity um method for i was waiting for that trigger word velocity banking yeah i've heard about this yeah so obviously i've done a lot intentionally to not have debt and um i just in general so you tell me if i'm getting the strategy right they want you to open a he-lock that's first position and run all of your expenses through the he-lock and that'll essentially help pay down your mortgage faster with a little less interest correct yeah the intention would be that um so i'm i make a good amount of uh of money but it's commissions so they vary pretty dramatically from um from month to month and from from time of the month and essentially the idea is that i'd be able to make big equity payments and you know um pay off that equity as fast or pay off the loan as fast as possible um while also having all my expenses ran through um the he-lock now riddle me this why would a lender call you offering this product well um it does help that i i actually work with him as a um so he's a referral partner of mine i'm a real estate investment focused uh agent on uh out of the madison area okay but tell me this a lot of referral would would he benefit from you carrying a bigger variable loan against your home i'm sure he would there we go i just like to know what's the motive is behind things but to answer your question i do not subscribe to the velocity banking method i think it's a very complex risky ridiculous way to pay off a mortgage when the best way is to just simply apply extra to the principal yeah what's wrong with that that's how i personally did it and it was just it was a much more peaceful way to go and you know i hear what you guys are saying i i bought the place back in april and so far i i went from five percent down to now over 20 down on the place so i've been really aggressive on paying the place down really the interesting part is that i'm able to leverage the um the ability to write a check as as needed well all i can feel comfortable with month-to-month expenses while also investing as much but there's nothing comfortable when your rate could spike the rate's changing your house is on the block and you have to play the game perfectly to see any benefit from this so for me personally i'm not doing it now i've seen this sold because there's a guy with a course they have a whole content thing around this and they're not doing it right now so i'm not doing it right now so i'm not doing it right now around velocity banking and they sell it like it is the life hack that the banks don't want you to know about but the truth is they're just selling you helox they're in the heloc business in the course business and i got nothing to gain from you not doing this or doing this i'm just telling you the way that i recommend and the way that i've done it multiple times which is just as much as you can put extra on the principle as fast as you can knock it out and i kept my fixed rate mortgage the whole time i did that so how quickly would you pay it off if you didn't do this on the pace that i'm at right now it'd probably be about four years okay and the pace that in which you think you would do this velocity banking would be what based on the estimates would be about two and a half and that's without the rate changing because you're going to have a higher rate and it's going to be variable compared to your current rate all right that's that's assuming that you know rates stay within what we have considered reasonable within you know the last 20 or so years but you know certainly can change and do you control that definitely not and for those reasons i'm out i like to control what i can control and stay away from the things i can't and remove all the variables and for me i'm never going to recommend anyone take out a heloc especially to make extra principal payments on the mortgage so if i'm in your shoes i think you're going to knock this thing out in less than three years just putting extra on the principle and i just think a rule of thumb ernesto that we operate around here is i mean obviously we're a no debt culture and the one debt that we don't get upset about is a home mortgage that's taken out you know the right way but this idea that you can borrow money borrowing money gets you out of debt that really goes against kind of everything that we teach around here the way that you get out of debt is using your margin using your income throwing extra payments at the principal that's the best most effective way to get out of debt and if i have to do mental gymnastics to try to understand the formula something about that doesn't sit right with me because then i then i go gosh there's loopholes here that i might miss there's something about this that i might not quite understand and i just think personal finance should be simple it should be simple enough for anybody to implement and go yeah i'm gonna go do that today it makes sense i don't have to bash my head against the wall to make it make sense exactly and the heloc doesn't create any cash flow in this scenario you create the cash flow you have to come up with a surplus to your actual income in order for this to work so at that point i go okay if you already have surplus just throw it at the principal yeah and make it so much simpler reduce your risk keep your rate much lower and it's not a variable rate it's going to stay fixed and so for those reasons anyone listening out there if you've seen this word velocity banking all it is is a fancy name they put lipstick on a pig that's what they did it's still a pig yeah i actually had not heard that and i looked at real quick and i thought gosh anything again we're putting our house on the block we're utilizing a heloc just principles alone i can already tell you that it's not a variable rate it's going to stay fixed and so for those reasons to your point i'm out on that and always ask who benefits from this right if it's such a life hack for me why are they the one pitching it so hard gosh and if i'm going to refinance let me be refinancing just my normal mortgage into a lower interest rate to a better mortgage thank you 15 year fixed rate instead of a variable rate yeah absolutely so guys around here our principles are pretty simple you know we're like i said we're a no debt culture we're all about living on less than you make we believe the borrower a slave to the lender all of these things and that helps us filter the advice that we give to you guys and we really sell it through a series of baby steps and a guy like ernesto's is a wonderful example of that he's obviously interested in walking the baby steps but he's wanting to forsake some of the principles and i'll tell you guys right away the baby steps work because they're a system and systems are meant to be done as they're written if you start deviating it's not going to work the same way and part of that part of that is saying hey i agree with these principles and if you start living by those principles it really is a guiding light and it'll really change your life when you look at the baby steps it's all about creating peace it's all about minimizing risk that is the entire point so if you start entertaining ideas that are going against that principle gosh the plan is just not going to work for you the way it's intended yes and if you have to use the words leverage or arbitrage number one a puppy stops wagging its tail but number two that's just a fancy way to say i'm going to take on a bunch of risk go into crippling debt and hope that it works out on the end this show would not exist if it all worked out like it did on paper and like what the guy told you would happen because you could lose a job yeah absolutely that's a real variable too it's a real lenders don't give a rip no they don't care and therefore close on you if you can't pay now i love that ernesto was interested in paying off his mortgage early because that is something that we're very interested around here when we look at the seven baby steps baby step one is getting a thousand dollars saved baby step two paying off all of your debt all of your consumer debt except your mortgage because we're saving that for later baby step three we're going into saving up our emergency fund three to six months of expenses is what we would suggest baby step four now we're finally starting the wealth building process we're investing 15 of our gross income every single month is what we would suggest uh and then from there we're getting into some legacy things baby step five we're saving for our kids college we don't tell you exactly how much to put aside it's really up to you put that in a 529 plan but then baby step six which is where ernesto was if we have extra money if we can be intentional about making extra mortgage payments throwing a little extra to that principle whenever possible gosh paying off that mortgage before retirement is so key guy guys and then we go on to baby step seven which is living and giving like no one else build more wealth and give that's what it's all about and so yes you'll save a bunch on interest but you'll also gain peace freedom margin and options and if you want to check it out we'll drop a link to our mortgage payoff calculator to see just how much you could save with a couple extra payments you I love a good sale. I also love the holidays. But if you're like me, sometimes those two don't mix well because six promo codes and a commercial later, it's so easy to convince yourself that you need just one more scented candle or a waffle maker shaped like a Christmas tree and some flannel pajamas. The temptation to spend more than you budgeted for is real. That's why I love having a bank that keeps my free spirit in check. And for me, that's Fairwinds Credit Union. With their smart bundle, you can choose a Ramsey themed debit card that says live like no one else. It's a great reminder to stick to your goals and what you're working toward, especially in a season that wants you to spend instead of save. You get a no monthly fee checking account and a high yield savings account. You can even open up additional savings accounts like a holiday fund for gifts so you can finally pull through. Pull the trigger on that waffle maker because staying on track for the holidays doesn't mean giving up your free spirit. It just means being smart about it. So get your live like no one else debit card by opening a smart bundle today at fairwinds.org slash Ramsey. That's fairwinds.org slash Ramsey. Insured by the NCUA. Chris is in Sacramento, California. Hi, Chris. Welcome to the show. Hi, thank you so much for having me. Yeah, you bet. Hi. So I'm calling because my wife and I are on baby step number two right now. And we have about $35K to pay off on our student loans and about $4K to pay off for our IBS expenses. That would be pretty much all of it. The only thing is we keep having crime activities in our neighborhood. And we've my wife is now like seriously considering she's quoting around getting fence quotes so that we can put our vehicles in the driveway. Yeah, they've stolen my tools already. There have been side swipes to our cars in the street multiple times. Yeah. Is this a rental or you own this place? It's a mortgage. Yeah. We it's not a forever home. We don't plan on staying there longer than five years. But, you know, we kind of we need advice. We're not sure what to do. What's it cost to put the fence up and have some security on the premises? So we're looking at around $15,000. That includes fencing the entire front part of the property and expanding the driveway so that we can fit two vehicles into in there. Okay. And that way you're not parking on the street. You're parking within the fence. And does the fence keep somebody from coming into your little carport area and stealing the tools? Or do you need some ADT situation going on? Well, it might. I feel like it would be a big deterrent to, you know, have a fence built around because we also want to. Well, we're considering getting a sliding, I guess. I'm not sure what its proper terminology is, but a sliding kind of gate so we can. Drive in and out and then another little opening door so we can walk in and out. Does anyone else in the neighborhood have a situation like that? As in they're looking for. Does anyone else in your neighborhood have a fence and have they done what you're trying to do? Not in our near area. Around us, yes, though. Okay. I'm just wondering how other people have dealt with this because it feels like an extreme solution versus like, hey, can we get a cop to hang out in the neighborhood at the time? Or can we install a security camera? Have a huge flash come on as soon as they enter your premises? Yeah, so I've. I mean, buying a dog would be way cheaper than this. You get the scariest dog you can find. From the pound. That's 50 bucks. Yeah, I mean, the thing is, it's also. We have a dog. He currently barks whenever there's noise. We started leaving him in the garage where, like, anybody that walks by, he alerts us. That's good. Either way, it's kind of a hassle having to wake up at 11, 1 in the morning to go and check. How often is this happening? Yeah, how many times have you had something stolen? Stolen once recently. Okay, so. And how did they get in? They just got in, like, through the back. I believe they picked the lock. Okay. I was parked on the street, yeah. Have you changed the lock and got a more secure lock that can't be picked? We're in the process of that right now. Because that's a cheap fix. I'm just going. That's one of, like, the $100 fixes I can do instead of dropping $15,000 while I'm in debt. Because you guys don't have that money. You don't. And, yeah, how would you pay for it? That's true. I mean, yeah, it would be like a car. I think safety. Chris, I think whenever somebody violates our trust in that way, they violate our property, they violate every piece of us, our safety, privacy. It's different, and it makes us want to do whatever it takes to never experience that again. I think you've experienced this at. I'm not trying to take anything from it, but at a lower level, they didn't break into your home. They didn't break into your car. It sounds like they just waltzed into an open area where it was your area. I'm not. But it looks like it was pretty easy for them to do whatever it is. They stole some tools. And George and I are thinking, hey, what if you start. Let's start at these low-level fixes and see if that works. And if you find, hey, this is just not working, now we can go to the next level. And if that doesn't work now, we go to the next level versus kind of going from zero to 100. You know, in three seconds. Because the truth is, you just don't have the money. And I do think, George has said it, and I think, gosh, if we put some floodlights in there, if we put a couple of security cameras, and if you keep your dog out there, I think that's pretty good. That's pretty good. And if you put it. Maybe you put up a sign that says, like, this area is under surveillance, like, we're watching. I think that that's. Yeah. That could be a good place to start. Have you guys notified the police? Like, is there sort of a neighborhood watch happening on that side? Neighborhood watch, we have notified the police, but they're very slow to get back to us. The police report itself is still pending, and this was about a week ago. Now, the side swiping, I do wonder about that. That just sounds like people not. Maybe it's a narrow street, you're parking on the street, and just people don't care. That feels like an odd crime to commit. Yeah, it's very weird. How does it benefit them to side swipe a vehicle? I understand stealing some tools. They're trying to get some quick cash here. I just think that that's. It's just carelessness of people driving by, right? Yeah, it's happened three times already in the three years that we've been there. Yeah. So you were going to pave an area for you to park in, is that what I heard? Yeah. I mean, what if. I mean. What if you just parked in the grass? You know, I would love to do that. I don't think the wife likes the idea, but I'm more than willing to. I mean, for now. I'm not saying that this is the be-all, end-all, but just for now, making it work while you're paying off this $47,000. $47,000 of debt, and then kind of let that be. I love reverse engineering the situation and saying, instead of doing the thing that I really want right now that I can't even afford to do, let me put that at the end of the journey, and it's the thing that I'm working towards, and I go, gosh, this is my motivation to go really fast and be really intense because I want that fence. I want that paved driveway. I want the carport. And then that kind of serves as your motivation. Gotcha. Do you have good insurance as well? Car insurance, yes. Homeowner's insurance. Both. Yeah, we have homeowner's insurance. Okay. Because that'll help replace anything that does get stolen. Yeah. We're currently in the process of that right now, still waiting to get a result, but. Okay. You know, these things take a while, yeah. Man. Well, I wish you guys the best. I think the simplest path is don't go $15,000 to debt out of fear. Just go, okay, I can go to Facebook Marketplace and go buy some security cameras. I can go down to Lowe's or Home Depot and get some quality locks and a floodlight and solve 80% of what I'm trying to do, which is deter. And as much as I hate group chats, if you can create kind of like a chat in your neighborhood where people are, you know, a Facebook group, wherever people are just reporting suspicious things, I mean, I know in my neighborhood that thing goes off. I'm not on social media anymore. I just go to a little group meet for the neighborhood. I go, what's the tea? Linda's not happy about them parking outside her house. Or like the ring, if you have a ring doorbell, I mean, there's a whole chat in that that you can get into in your neighborhood. I've been guilty of posting those videos. Yeah. That's something that he should do. If you don't, you know, make sure you have a ring alarm, all that stuff. Yeah, that's, that's, I mean, I would have cameras at every point they could enter. Yes. Outside the garage, front door, around back. And again, those are cheap scenarios. Those are cheap things you can do for under 200 bucks. Yeah. You can outfit all of that. Even though, I mean, I guess you could, I mean, I'm thinking about the mind of a criminal. You could wear a ski mask and it's like, nobody's going to see you. But if you can create some kind of an alarm or something that, I don't know, there's something out there. As soon as that floodlight comes on, I'm thinking they're probably going to go, this is, this ain't the house. This is not good for me. I hear a dog barking, the floodlight's on. I see there's cameras everywhere. I see the beware of dog, you know. Can you have a sign that says like, we have shotguns or like something that's like. We are armed and dangerous. Get off my lawn. I mean, it's America. I feel like that's, you know, unless it's an HOA violation. Yeah. Which at that point, the HOA should step up. It doesn't sound like there's much of an HOA in his situation. Nobody's talking about it. There's no neighborhood watch. - It would be cheaper to gate the community at that point than gate his own house. 15 grand, that's a heavy price. price to pay. Yeah. And, and I mean, it goes back to, again, to the teaching of when you're in baby step two, you have to be so careful of where you draw the line, um, of I'm going to stop paying off debt to do this other behavior over here, because especially when you're just getting started, because there's going to be things that pop up, like that's life. Life doesn't stop just because you're on baby step two, the emergencies don't stop. The, the, the, the, the repairs don't stop. None of that stops. And so you have to adapt to it and go, Hey, every time life throws me a curve ball, I have to stick to my guns. I'm not going to veer. I'm not going to stop every time there's an emergency. Every time something doesn't go my way and drawing that line in the sand and just being so clear about that, that's going to help you keep your intensity. That's going to help you stay committed to the very end. And it helps you to be creative. Like we just did let's find creative solves that don't cost us a lot of money. It might not be exactly what we want, but it'll get the job done. If you've ever thought, I don't even know where to start with life insurance. You're not alone. And that's exactly why I recommend Life Insurance. Zander insurance, because the insurance world will throw everything at you. 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So if you want a little bit more information, you can check out the link below or you can check out one of the earlier segments and you can hear it straight from moi. All right, let's go to Joe, who's in Boise, Idaho. Hey, Joe, you're on the line. Hey, great. Thanks for taking the call. So my situation, I have a whole life insurance policy that's got about $42,000 in it, but I also have one consumer debt that I have is an IRS debt that's about $18,000, and student loans are about $15,000. So I was wondering if I should take the money out of the whole life insurance policy or just pay off the student loans and get a term life insurance policy. I love that for you. I'm going to go yes and. I'm full improv on this. I would have cashed it out anyways, but the fact that you can knock out all of your debt, 100% do this. And I would definitely get term life insurance in place first before you cancel the whole life policy. Okay. Have you looked into the, like, surrender fees and what it's going to cost to get out of this thing? I talked to the rep, and he didn't say anything about any surrender fees. He said they would give me the whole 42. Oh, even better. He didn't say anything about anything else. I would not delay. Who sold it to you, by the way? I'm always curious. Northwestern Mutual. Yes, there it is. Was it a college buddy? Family friend? No, it was some guy I knew from a networking group. Oh, there we go. Well, that makes sense. It's kind of MLM-y. But I'm glad you're getting out, man. I'm glad you're about to be debt-free with some money left over. Yeah, it's going to be nice. If you don't mind me asking, Joe, what made you change your mind about the whole life? What made you kind of go, hey, this is not it? Well, a different thing, actually. I'm getting divorced, so I'm going to have to pay out my wife quite a bit of money for the equity in the business. So I'm trying to knock out as many of the expenses, monthly expenses that I have so I can use that. Right, but something caused you to go, instead of whole life again, I'm going to get term life, right? Obviously, you wanted the cash, but you also changed products. Yeah, I think it was mainly because of the show. I mean, you guys talk about whole life insurance policy quite a bit versus term life insurance policy. So I kind of started looking into it, thinking about it. And I think that was what I heard on the show is kind of what prompted me to look into it in the beginning. I love that. Good. Yeah. And for anybody listening, you know, we suggest term life insurance. If you're looking, you know, go through Zander. That's where I have mine through. That's where George has his. Everybody here. But whole life insurance, I mean, gosh, it's broken into two products. And that's the thing. Your insurance should just be insurance. and when you're looking at whole life you've got the cash value and the death benefit and the cash value is an invested portion that you're paying every single month for somebody else to invest that money at a poor rate of return so we say why not keep your insurance your insurance pay for pay your premium for your death benefit and then turn around and invest your money at a you know 10 or 11 percent rate of return plus you have access to way more of the market to invest that money And so just dollar for dollar, every single time we find that whole life is just a giant ripoff. And so if you have a whole life policy, surrender it. But before you surrender it, make sure you have term life through Xander in place first. That's the way to do it. All right. Kelsey is in Dallas, Texas. Hey, Kelsey, how can we help? Hey, Jane. Hey, George. So quick question for you. My daughter is a minor, and she was injured at a play area. Anyways, she is going to be receiving a settlement of $60,000, and I don't have an attorney. I didn't get one. I did consult a few before I started communicating with the company. anyways, some of them weren't super willing to take it on anyways. So I have just been communicating directly. Long story short, we're now to the place where they have agreed on this settlement. So there's only one thing that will be coming out of the funds, which is like something to do with insurance. It's called subrogation, but it's only a small amount. So ultimately she'll receiver on $53,000. She is six years old. I have been presented with a few options. Because she's a minor and because this is a settlement, there are only a few ways that it can be, I guess, invested. It'll be considered a trust account. One of the options is an annuity. And I have a a court appointed person who I've been speaking to, um, and she's gone through some annuity options, but I just wanted to call and see if y'all had, had experienced anything like this before. There's also, I believe something, um, called a chapter one 42 trust that I could potentially use, but it's kind of an odd question, but what's the other way you said there's a third way? And those are the only two options that I have seen so far. It's the annuity pass. And then the second one is called a chapter 142 trust. And from my, I have me and chat GPT have become attorneys, but I, that's scary. Does the trust allow you to set the ages and the disbursements of the, of the funds to her? I believe it does. And one of the, like one of the things that it can be invested in is like an educated education based account um like a 529 plan it's yeah essentially a 529 i do think it has to be regulated like with a trustee appointed um so we haven't yet gone to court uh to have this finalized but our court date is in november so what i'd be looking for i'd be looking for i don't love the annuity option um i do i would lean towards a trust option. But more specifically, what I'd be looking at is something where I can structure out the payments, making sure she's not getting a lump sum at age 18, protecting her from that. I'd want something where I can have a bit more control of how the money is invested. So that's another reason that I didn't like the annuity because you may be guaranteed a payout, but it's again, the rate of return is going to be poor on that. So those are the things I'd be looking at. And I'm not mad at you consulting with a lawyer on this because they're going to have more expertise in what your options are and I would hate for you to leave anything undone when I look at this I'm kind of thinking about it like selling a piece of real estate there's a lot of money on the line it's a big asset and there you don't want to leave anything on the table because of um a lack of knowledge or foresight on something that maybe a professional might have okay yeah I will um I of videos. If you're new here, the thing to know is that we answer every question through a series of videos. If you're new here, the thing to know is that we answer every question through a series But it's you could also to get an opinion, you could talk to a SmartVestor pro, a financial advisor instead of a lawyer, because that's it really leans towards the financial side more than the law. And they can they'll know your state. You can find a local one at RamseySolutions.com and click on SmartVestor. But I would consult with them to actually look at all of the variables. So things like present value, the payment dates, the carrier ratings, the guarantees, the commissions, everything to you get a full picture of where this money is going. But based on what you told me, I'm leaning towards that trust, which looks like it's a Texas specific trust. It is. Yeah, we're in Texas. And I guess because she's a minor, I mean, I know because she's a minor, you know, there are there are quite a few more stipulations. Like it would never come to me as a parent directly. Well, you can imagine parents would go, great, it's my money and I blew it instead of covering like medical care for the kid. I mean, is your child OK? Are there ongoing medical needs? Yes. No, thankfully, thank God she's she's OK. She, you know, she she does. She did. It was a pretty, pretty bad injury, but nothing, you know, thankfully life threatening. She'll just have a scar for probably a very long time. But thankfully, you know, she's she's physically OK. Emotionally, it was not OK. But physically, she's OK. Good. I like the idea of pre-funding her education. That's a fun concept of you needing. To save less for education because it can be used for that, it looks like. So that that's the kind of thing I'll be looking at from age six to 18. If it's invested well, you know, 12 years of growth on 60 grand is pretty substantial on 53 grand. I can show you the math here. Twelve years to grow. Let's assume a 10 percent rate of return. That's one hundred seventy five grand. So you're fifty three turns into one seventy five if it's invested well, again, I don't know what you can invest in. And that's where a smart investor pro could come into play. So I wish you the best. And I'm glad that that kid is OK. Yeah, that's that is scary. But again, that's what we're looking for. I mean, we talked about whole life insurance. Annuities are the same thing. Gosh, if we can avoid those, let's do that. We want our investments to simply be our investments and we want them invested at a good rate of return. George. If you or your parents are on Medicare, listen up just because a Medicare plan worked this year doesn't mean it's the right one for next year. Premiums, networks, prescription coverage, all of it can change even if your health hasn't. So if you just roll over your plan, you might get stuck overpaying or not getting the coverage you need. But sorting through Medicare plans is a mess. There are more than twenty four thousand of them. That's why I. Recommend chapter their advisers compare all of those plans to find the exact one that makes sense for you, your health, your doctors, your budget and using their services costs nothing. In fact, chapter saves Ramsey fans an average of eleven hundred dollars a year, which is why they're the only Medicare advisers I recommend. Look, Medicare annual enrollment is happening right now. Don't assume this year's plan still works. Review it with chapter before the window closes on. December 7th. Just go to ask chapter dot org slash Ramsey, ask chapter dot org slash Ramsey or click the link in the description. Welcome back to The Ramsey Show here in the Fairwinds Credit Union studio. We have Lucas, who's in Houston, Texas, up next. Hey, Lucas, how can we help today? Hey, how y'all doing? Doing all right. What's up in your world? Doing good. I just had a quick question. I wanted to get your perspective on something from both a financial and a Christian standpoint. Shoot. OK, so do you all believe it is wise for a young couple to get married even if they aren't like one hundred percent financially stable yet or would it be better until they are more financially secure? What's financially stable? I mean, do you both have jobs or you don't even have a job? Well, I'm 17 and she's 17. I'm 17 and she's 17 as well. And I mean, I know exactly what I'm going to do. She knows what she's going to do. I already have my I already know what I'm going to do when I go to work. So it's going to be like. What are you going to do? I'm going to start. I'm going to be an electrician. I'm starting a apprenticeship this next May. Right. And so and I'm a junior this year, so I'm going to be saving up all my senior year. So it'd be like another like two years before. Before you even got married? Yes, sir. OK, so this is real future thinking. So you're getting married? Yes, sir. So you're getting married at 19, say, is what you're thinking. Yeah, I'd be I'd be 19. She'd be 20. I'd be from I did like some of the mathematics in my head, whatever. And I would be hoping to have around 30,000 saved before we got married. With no debt? Yes, sir. That's great. I mean, that's enough that you could have an apartment. You would have an emergency fund and you're working full time. She's working full time. What's wrong with that? I mean, obviously, you're not millionaires and you're not, you know, buying a car. You're not buying a $800,000 house. But I tend to think of financial security. You'll be well ahead of Americans twice your age at that point if you're just debt free with 30 grand in the bank. You know how few people in America have that going for them? Yeah. So cash flow the ring, cash flow the wedding. It's more about, you know, your emotional maturity and spiritual maturity to get married more than it is a financial one, because broke people get married all the time and they can still work out. The key is you don't want to stay broke. So it's OK. Most couples start their marriage out broke. That's a fact. You're only going to get older and wiser, hopefully, and make better financial decisions. So you don't even need to be debt free to get married. Luckily, you are. It's going to make your life easier, let me say that. When you can cash flow a wedding, less money fights, less money stress, start off your marriage with savings in the bank, investing for the future, I think gives your marriage a better shot for sure. Oh, yeah. Does that help you out? Right now, I'm paying off my truck right now. It's like a 2019 with 140,000 miles. So it's relatively new. 140,000 miles? Yes, sir. 140,000. Put some miles on that thing. Why so many miles? So fast. Well, no, I didn't buy it new. I bought it from someone I knew, and he took very, very good care of it. OK. So what do you owe on it? What's left? So I had 12,000. I've only had it for around three months. My parents, they don't really put any money towards it besides some gas here and there and the insurance. Mm-hmm. So I only have around $6,000 left on it. OK. How much do you have in savings? And I'm hoping to get that done by next spring or summer. OK. And what about your girlfriend? What's her philosophy on debt? Her parents bought her a car, and so right now, she's just saving money, and she's working right now part-time. OK. She doesn't have any right now. She doesn't have any, but is that because her philosophy is I avoid debt? Or that's just by default? No. Her and her family are really frugal, and they don't make very unnecessary purchases. OK. And she's kind of in the same boat as me, is that we're not going to be stupid on our spending as we get older. So I'd have those conversations. I'd sit down with her because you used a lot of good words, but they're not the same as a debt philosophy. Frugality doesn't equal I don't borrow money. Being a smart spender, it depends on what you think smart spending is. I think it's a good idea to have a smart spending philosophy. Right. So there's different definitions that people can have for the same ideas. And so I would love for you to start having those conversations. You've got plenty of time. You've got two years in front of you. But this is the time to start getting to know each other better. What is frugality? And how do you get to know each other better? What is frugality? Being a smart spender, it depends on what you think smart spending means, right? you got two years in front of you, but this is the time to start getting to know each other better. What does frugal look like to you? What does that mean? What does it mean when you say be smart with money? Exactly. What does that mean? Paint a picture. And you guys get to know each other well, pay very close attention to, you know, each other's habits and how you deal with conflict. And that's my best advice to you. Yeah. I mean, and then again, the maturity at 19, it's hard because I mean 17 even you change so much from 17 to 19 to 21 to 24 there's a lot of life change that happens a lot of prefrontal cortex action happening and so just go with the speed of the relationship there's no need to rush it there's no need to get to a certain financial spot when you guys are both ready you will know and go ahead and get married yeah you don't have to put that pressure on it too just just uh hold it like this hold it loosely yeah there you go Linda is in San Antonio Tejas. What's up, Linda? Yes. Thank you. Yes, ma'am. I have a question about a, um, my husband and I are both in our mid seven, mid to late seventies. So, uh, a year and a half ago, we went to an investor for, I'd been doing, or we'd been doing it all ourselves, saving our money and putting it in stocks and all that, not stock, but Vanguard. And I decided that it was time for us to give it up to somebody else so that maybe our kids could help later with the investments uh but i'm looking at what he has invested in and you know i want to be hands off but i feel like i'm sticking my nose in where maybe i shouldn't it's your money you should be hands-on i know you should be all over that that's what i was hoping you know i used to i we used to do it all ourselves, but anyway. - He works for you, I just wanna remind you. - Uh-huh, and if he makes you feel, if he makes you feel like you're getting in his way, or it's annoying for you to have a say in your money, it's time to move on. Well, he hasn't really. We've only talked to him once, and at the time I talked to him, I was more concerned with he's got international stocks. 17% of our money with him is in international stocks, and so I just thought that was too high. Single stocks or mutual funds? Pardon me? Well, it says international stocks. I'm guessing that it's a fund, so that's not a concern. It probably is a fund. Okay. What else are you concerned about? So far, no red flags. 17% is not fine. If you had 25% of your invested money in international, we'd be okay with that. Okay. Oh, you would? That's what we recommend. As long as it's split. Okay. Okay, he did lower it after I talked to him, but I'm noticing now cash and bonds, he's got almost 35%. In cash and bonds, and I looked at the year-to-date return. It's low, isn't it? It's low, 5%. Because you're only halfway in the market. The market is at 13% year-to-date. Well, this is year-to-date, 5.1. Sure, and truthfully, Linda, this makes sense. Everything you're saying, this is a classic financial advisor. The financial planning community at large want to keep their jobs, and so what they do is they keep everything. So safe, so that you don't lose money. But what that means is you're also kind of capping your gains on the other side. Majorly. So nothing about this person seems nefarious, but you can tell them, hey, my risk tolerance is this. Are you guys needing to pull a bunch of money out of this retirement account right now? No. In fact, when we gave it to him a year and a half ago, we kept like $350,000 to ourselves. Okay, but you're not even touching the investment account that's with him. Pardon me? You're not touching the investment account that's with him. No. You're not needing that money. Then let it grow. Let it grow for your children at a higher rate of return. And so tell them, hey, I want to weigh up the stocks in here and less bonds, and I want to do it the Ramsey way across four types, and that's essentially large cap, mid cap, small cap, international. That'll help you diversify while keeping your money growing for you. This episode is brought to you by BetterHelp. Every year you tell yourself you're going to handle the holidays differently. You're going to stay calmer. You're going to feel more peace. And then it's the same old pattern, the same family tension, and you're cranky and you're tired, and you find yourself snapping at people that you love. Listen, you still have time to get ahead of everything and understand what's behind your reactions. Therapy can help you build a healthier plan before you actually need it. When you're ready to have that conversation, I recommend BetterHelp. BetterHelp is an online therapy platform with more than 30,000 licensed therapists across its network. If your first therapist isn't the right fit, you can switch at any time for no extra cost. And get this, if you've thought about trying therapy with BetterHelp, insurance options may now be available nationwide through participating providers. And eligible members have an average copay of just $23 a session. Listen, you know what's coming this holiday season This year, you have time to make a plan before the holiday chaos by preparing differently. Go to BetterHelp.com slash Ramsey to check out your payment options. That's BetterHelp, H-E-L-P, dot com slash Ramsey, or click the link in the description. BetterHelp is in Syracuse, New York. Hey, Christopher. Thanks for calling in. Thank you. Good afternoon. How are you guys doing? Yeah, we're doing great. How can we help today? So, just getting to the point, my family has over $100,000 in debt split between three student loans, one of which is a Parent PLUS loan in her father's name, who she's estranged with, but we feel a moral obligation to pay, and a credit card. So, currently, I'm active. I'm on duty in the military, and I bring home after taxes $4,700 a month. And my wife is a nurse, but has been working since then. We have now two kids, and she would like to be a stay-at-home mother, and I want to support that. But my question is, with being in the military and not being able to just simply work overtime to make more money, how can we actually attack this? Because my wife is an avid listener, and we keep following the baby steps, but we end up just falling back over and over again. How many kids do you guys have now? Two right now. And how old are they? Three and two. Okay, so I'm going to start this by saying there's a huge piece of this that's very value-centric, okay? So, your values are going to play into how quickly this is going to play out for you as far as paying off the debt, and is it more important for you to pay off the debt first before she stays home, or are you guys okay with her going out to work? Okay. All of that is going to play into it. I just want to start the conversation by saying that. All right, let's go to this $100,000 of student loans and Parent PLUS loans. Can you walk us through what that situation looks like? Well, mine, so we both went to the same college. Mine is only $16,000. Hers is, and her name is $35,000, and then I guess at one point her parents, well, she couldn't afford to keep going, but her parents, so I got a Parent PLUS loan for $39,000. And did it balloon all this time? Did that payment balloon? No, no. Her loan and her name, and my name is thankfully in deferment right now, in forbearance, so we're not making any payments on it right now because that's the only thing that's been keeping us over water, honestly. Okay. But her Parent PLUS loan is now kicking back in, and we just, we can't, you know, we can't really, I'm worried about everything else kicking back in, and then we're not going to be able to afford it because, you know, we want to be able to pay off her Parent PLUS loan because it is in her father's name. Did she say, was that the agreement from the beginning? I want to get the moral obligation part. When she was in college, did she say, hey, mom and dad, take this out, I don't have the credit or whatever, and I'll pay you back? She said that? No, the, her mother surprised her. I remember the mother surprised her saying that we actually found, something called a Parent PLUS loan, and, you know, we're just taking out my father's name, and then, you know, you can just pay it back later, and, you know, we both. That's the key word, and you can just pay it back later, and then she said, sounds good. Yes. Okay. So she agreed that she would be the one to pay it back. Okay. So $90,000 in student loans is what I calculate here, and. And credit cards too? Uh-huh. How much? Yes. $8,700. Okay. So $98,000, almost $100,000, you're taking home $4,700. She's not taking home any money. The only way, and I'm going to make this really simple, and then we can get into the weeds. The only way to pay off this debt is with income, and the only way to do it quickly is with a lot of extra margin from your income. So that, you can look at that a couple of ways. You can look at that as, we're going to scale back our budget to find extra margin, and you can also look at that as, we're going to bring in more income to find extra margin. And to your point, you're limited, some capacity, because of the nature of your job. She's at home. She actually has the biggest opportunity to add to your income at this point. That's the truth. That's just the facts. Then it's up to you guys to decide to what extent are you both okay with her going out to work? Maybe the kids go to daycare. Maybe they go, you know, two times a week. Can you figure out a situation where she's contributing actively and heavily to the finances so that you guys can do this in a reasonable amount of time so that she can become a full-time stay-at-home mom? Okay. Right? That's the equation we're solving. Not what you wanted to hear. I know. But here's the math on this. Right now, you barely can make ends meet if you have to cover all the minimum debt payments plus your expenses, right? Yes. Which means there's nothing extra to put toward the debt. Correct? Yes. Which means the balances are going to go up with these interest rates, and you're going to be looking at $110,000 soon. $120,000. So that's one picture. If we just stay status-aligned, she gets to stay home. Wonderful. But the trade-off is we're going to be in crippling debt for the foreseeable future. What we're talking about is what if we sacrifice for two years, she goes to work, puts every ounce of her income toward those debts, let's call that $50,000-plus a year towards the debts. You guys are debt-free 24 months from now. She gets to stay home for the rest of her life. So that's what we're talking about. Two years of sacrifice so the next 20 are bliss. And, I mean, I want to say this part because it's just a reality to face. When we make a mess as an adult, it's our job to clean it up. And life is not always, I get to do all the things that I want to do when I want to do them. And so when we look back to the college situation, it's like I wanted that and I wanted it at any expense. And so I took out the student loan debt, but now fast forward to where we are now, it's like, okay, I want to be a stay-at-home mom, but these decisions, you're now having to pay for a decision that you made. and so you know as much as I'm not saying that to, you know, beat her down or anything like that. I mean, I think we've all been in that situation. I certainly have been in that situation. I know George has where you've made a mistake. And then because of that, you have to sacrifice to win for a short period of time in order to get things right side up and to retain your right to have options again. You know, that's that's basically what it is. And she's not really financially values is another thing. But financially, she's really not in a position to not work. So, OK, and there's no way I can possibly budget it out. Can we do that, too? I mean, we can if you can find four thousand dollars to throw at the debt out of your forty seven hundred, we might have a conversation. But from what you've just told us, there's nowhere to squeeze a couple grand out to even start throwing at this debt. Even if you could throw two grand a month, this debt, it would still take you over five years, likely. And if you guys are OK with that, that's where you get to the values. If you guys go, hey, for us, the number one thing is that she stays home. And to that extent, she stays home. And to that extent, we're OK with this taking five years. That's your choice. But I will tell you, and I'll caution you, the longer that you stretch it out, the least likely you are to stick to the plan because you've already kind of said we're willing to just be a little lackadaisical on this for this reason. And it gets tough, you know, and the more I'll just say like this, the more children you add to the mix, the older the kids get, it just gets harder to sacrifice because you start relaxing into life more. You guys are just getting started. Now's the time to like, like snap into action and really get after this. If I had to advise you and you said, Jade, what do you think? I'd be like, man, get after it for two years. And then to George's point, she's got two years. I mean, after that, she can stay home as much as she wants. She's free, totally free. OK, yeah, that makes sense. So it's going to be a hard conversation. And I don't know that you guys are at the place where you're ready to do this. But, you know, as someone who serves our country, number one, I thank you so much for your sacrifice. You know more than anyone. What sacrifice, discipline, fighting for freedom looks like. But it's hard to do in your own house. It's hard to have that level of sacrifice when you tell your wife, I'm sorry, babe, you got to go to work. That's the only way we're going to claw out of this thing. But on the other side of this is freedom. For the next 20, 30, 40 years, we're not going to have a payment in the world except for our mortgage. We're going to knock that out over time. But at this point, I just see a life where the balance is going up every single month. And you're feeling more and more hopeless every single month. While saying, well, this is our values. And so at some point, there's a trade-off here. Because staying at home, I love it. My wife stays at home. It is a luxury. It is a math problem on top of being a values-based decision. It is. Because that's the other thing. If you decide, hey, we want her to stay home, then you have to go, gosh, what kind of lifestyle is that? There's this stress that's kind of this impending doom that's around your shoulder at all times. There's this weight of student loans. You lay down to sleep at night. You feel it on your chest. There's a quality of life on the other side of that too that takes a negative toll when you have that debt. You know the balance is going up. So I mean, gosh, I love a stay-at-home mom. I love it. But gosh, you want it to feel freedom. You want there to be peace. And you want to know that I've done what I need to do. I'm going to use a Jade quote here. If it costs you your peace, it's too expensive. Mic drop. You know what's scarier than a life-size skeleton on your neighbor's front porch? A stranger from the internet showing up on your digital front porch because they found your address online. It is so easy for creepy data brokers to get a hold of your information. These days, they're out there right now buying and selling your personal data without your knowledge or consent. That is all trick, no treat, my friends. 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Back to the phone lines. We go we got Bridget, who's in Green Bay, Wisconsin. Hey, Bridget. Well, let me try you again. Bridget. Are you there? Let's see. Hold it. There we go. All right. Now. Yeah, we got your user error. User error. Oh, that's fine. My husband and I are in baby steps four, five and six. And we are considering selling 10 of our 20 acres attached to our house in order to pay off our mortgage. And we're going to be selling 10 of our 20 acres attached to our house in order to pay off our mortgage. Wow, that's a big decision. It is. How many total acres do you have? We have 20 total. So it'd be half of it. Okay. Have you looked at what it's going to take to get it all parceled out? Yeah, I think we just need a survey. And then we have two potential buyers. So I haven't gotten an appraised yet. But we're thinking it's probably about 8500 an acre. Wow. So you could get 85 grand. Yes. And what's your mortgage? $72,000 and some change. Hey, that's pretty drastic. What would cause you to sell off the land versus just kind of grinding it out and paying it down? Are you are you tired of the land? Well, one, we don't need it. I mean, we're renting it out to an area farmer right now. But the other thing is, is we're hoping to free up some cash flow. Because we're helping our son with his rent. And my husband also, he drives semi, and he's going to need to save up for his next semi in the next couple of years. And I think, I mean, we'd free up probably $1,450 a month. So it's a big chunk over time, I think. Yeah, I like this plan. I mean, if it's not, it doesn't sound like it's sentimental, family, generational, we want to do this big thing with it. I'm for it. This sounds like a great deal. Is it sentimental at all? Or is it just easy for you to let it go? It's not sentimental. No. All right, then. I mean, 85 grand richer, mortgages paid off, plus you're going to have a little bit of money left over, it sounds like. Yeah, where's the downside? Maybe that would jumpstart toward his next semi then. Yeah. And you guys have no other debt? No other debt, no. You already have savings? Yeah, we have $40,000 for an emergency fund. And then we're doing the college, you know, $529 for the kids for college and to spend in a way since 2018. So I mean, if you're not connected to it in any way, I don't see a downside. Is there a downside that we don't know about that you want to run by us? Um, it just feels like such a big amount. And I can't imagine like being free. So I just wanted to see, I guess, if there was something I was missing or. Well, if you talk to Deloney, he would say dirt is the most precious thing on earth. And if you talk to me, I'm going, it's dirt. I'd rather be mortgage free and hit other goals. I don't need to manage all the land. Because the more that you own, the more that can own you. It's just still a lot, mental load, physical, you're paying taxes on all that land. And so if you don't need it, and you could do better things with that money, and it sounds like you got some real goals ahead of you. I mean, what does a semi cost? It'll probably be around $50,000 for a used, like decent shape one. So if you're telling me I can cash flow college and purchase the next semi in cash, if I do this move and get rid of the mortgage forever, I'm going, this is a win-win. It's a win-win. I'm just running this out because I want to look at it on all ends. You did say that you were renting it to another farm or another, other people. So what were they paying you for that? I want to know kind of like what the net gain here is. So we're getting $350,000 a month for it. So that would pretty much be cut in half. So you're still, you're still using the other 10 acres for them to farm on? Well, it'd be more like eight and a half. Because we have our house and then some yard and a barn. So got it. Okay. But it's not a significant amount. It's not like that was really helping your lifestyle to, for the extra couple hundred bucks. Okay. So do you guys know if there's going to be like tax issues with this since it's like, it's connected to our house. So it's not really like an investment property. I would look into the capital gains tax. When did you guys buy it? And for how much? We bought it in 2020 and we bought 17 and a half acres for 111,000. And now it's worth? Oh, I'd have to do the math on that. 8,500 an acre times. So you bought it about 6,500 an acre and now it's selling for 8,500 an acre. Except for 6,000. Okay. Yeah. I would just, I would run it by a tax pro. If you guys don't have a good one, you can jump on ramsaysolutions.com and just ask about the tax implications of selling off part of the land. And if there would be taxes, in In my head, it doesn't sound like there would be any at this point, but I don't want to be too sure of that. Yeah, I'd rather be safe than sorry and make sure you're planning for a tax bill if there could be one. Love that question. That's exciting. I've never seen someone so excited. I know. I was expecting there to be like some drama or something there, and it was just as simple. Usually someone disagrees. One person wants to hang on to the land. They had big dreams for the land. That was it. That was the winning call. We won. All right. Jonathan's in Savannah, Georgia. All right, Jonathan. What do you want to talk about? In fact, I'm taking a call, and it's actually very similar to the last caller. I'm a small Venezuelan-owned restaurant, and I'm 48, and my wife is 39, and this is our sole income. And as you can imagine, the last few years, the restaurant industry is tough with the economy. It's a tough period. I'm currently stuck in an adjustable rate mortgage on our home. And owe about $100,000. $180,000. And thankfully, we've done well in the market. And I wanted to know what your thoughts are on possibly selling some investments that are in non-tax-deferred accounts to pay down the mortgage or possibly pay it off. I love the idea of paying off the mortgage. You owe $180,000 on it? Yeah. So on the home, I owe $180,000. Right now, the rate is $7.5, and it resets every April. Uh-huh. And then on our business, I owe about $80,000, and that'll be paid off in two years. And you have how much in non-retirement investments? Non-retirement, about $500,000. Whoa. Wow. What were you investing for? For a rainy day. Well, how much do you have in retirement investments? About the same. Holy smokes. So you're a net worth millionaire. Way to go. That's incredible. I 100% would do that. I would take money out of the non-investment. I would take money out of the non-retirement accounts. I'd pay off the mortgage. And, yeah. Could you pay off the business debt, too? Or do you have, like, partners? Well, the business debt is, I'm at, like, 4% on it. So I, right now, I only have less than 24 payments left. So it's all principal going to it anyway. Do you own it 100% outright? I will, yes, in two years. That's awesome. I love that for you. I would 100% do that. So you'll have to sell off enough. Can you pay the taxes from outside of that account? Yeah, so with the proceeds, so, like, last year, we lost $35,000 as a business. So my income, my tax rate right now is low. And talking to my financial advisor, I think on the first $50,000, I think we were looking at, and I'm going off of memory, but maybe $20,000 or $25,000 in gains. And my hope is if we sold maybe $75,000 this year, I could still stay under the. the threshold to owe capital gains. Because my account, I think, at the. You're trying to stay in the 0% long-term capital gains bracket, you're saying? Yeah, the way the year's running, I still may be, you know, not looking great on income. So I might be able to even be at 0%. Wow. I mean, that'd be pretty sweet. But even if I wasn't, I'd be at 15% at the max. Yeah, I mean, 15% of $25K, $50K, $100K, it's not going to break the bank. And it sounds like you guys have the money. We look at $3,000. You have the cash outside of that in the savings? I mean, right now I've got about $10,000, $10,000, $15,000 in cash reserves. For your personal life? Yeah, it's in the business I have more, but, you know, business, it fluctuates. Sure. As you can imagine. Yeah, I mean, I would do it. I wouldn't let that stop me, to your point. If it's 0%, that's fine. If it's 15%, it'd be nice if it were free, but it's not, you know, it's not going to stop me. I'm thinking I could lock in a, you know, 7.5%, 8% return. And my concern is we have a, you know, we have a correction in the market, and now I've lost, say, 20% of my investments, and I still owe $180,000 on the house. Yeah, that obligation is going to be there regardless of what the market's doing. I wouldn't wait on the market. I'm just going, I could be debt-free today, do it. I would even pay off the business debt, too, but it sounds like you're unwilling to do that. I don't care what the interest rate is, man. Being debt-free is worth every penny. I don't need the arbitrage. I want peace in my house. I 100% would reach over and pay the business, too. Hey, this is Dr. John Deloney. I take my sleep seriously because better sleep. Better sleep means better health. And if you've been losing sleep or waking up sore because you've got some old, thin, gross mattress that wasn't designed with you in mind, it's time to make a change. I love Helix mattresses. They make mattresses for real, individual people. Whether you're a side sleeper, a back sleeper, whether you sleep hot, or if you and your partner have completely different sleep styles, Helix has a mattress designed just for you. I want you to get online and take the Helix Sleep Quiz. It takes, like, two minutes. Two minutes. And they're going to match you with the perfect mattress that fits how you actually sleep. Helix is not just a show sponsor for me. I sleep on a Helix mattress. Helix mattresses are the best. The best savings of the season are happening right now on Helix mattresses. Go to helixsleep.com slash Ramsey for their best-of-the-web offer and get 27% off site-wide. That's 27% off site-wide at helixsleep.com slash Ramsey. That's Helix, H-E-L-I-X, sleep.com slash Ramsey. With Helix, better sleep starts right now. Well, guys, everyone needs insurance, but it can be hard trying to find pros that aren't just looking to make a buck and agents who know their stuff. Luckily, Ramsey Trusted insurance pros are vetted and coached to make sure they're market experts who have your best interest at heart. So go to RamseySolutions.com slash coverage to find the type of insurance that you're looking for and to connect with a Ramsey Trusted agent. All right, Francisco is in Atlanta, Georgia. Hey, Francisco, how can we help out today? Thanks for taking my call. I needed help. So my mom has sold the house that we're living in right now and is in the process of finding a new house. She already has the house sold. She said we're moving out in December. She's been talking with a broker and everything like that. But today she's been asking me to take out pay stubs and W-2s because she wants me to sign something for the house. I don't know if she wants me to co-sign. She didn't really get into details. I don't know if it could be anything else. And I was just wondering if that was a good idea. it is a terrible idea and i would hope that she would not uh trick you into doing that but be very clear on the matter and say hey i need another co-signer on the house would you do that and if so here's here are the documents i need from you right like let's be forthcoming uh based on what you're saying it does kind of sound like that um sounds like she's buying too much house based on her income yes because the if the bank is saying you can't buy this house without a co-signer that tells me she's not in a great financial spot yeah and if i could definitely not um we used to live in a trailer and now she's wanting to move into an actual house how old are you scared i am 20 years old okay are you working are you in school uh yes sir i am a first year um plumber okay good cool so you're in trade school and what does she do for work i'm not in trade school i'm working with a company so i'm in my first year of um and being an island band fantastic all right and what does she do and what she make uh she's a school bus driver um i'm i don't know how much she makes but okay i'm guessing i don't know anywhere between like 40 around there i have really no clue okay what are you making francisco as working on plumbing uh since it's my first year i mean it's really slow for me that's fine i know i probably can be making way better money in another company well what are you making today i think i really haven't checked my pay stubs or anything like that but i think i'm around um either like 35 to 40 okay 40 000 a year okay so what's um i know you just started with this and to your point maybe there's things you can do to supplement your hours until you get more hours. And I think you should do those things. Um, why are you still living at home? And the question I'm, what I'm getting at is, are you living at home because you want to live at home or do you feel like you're living more at home because your mom needs the financial support? And so you want to help her out? Uh, I definitely don't want to live at home. Um, I don't have the best relationship with her. I say that we have a very toxic relationship, if I'm being honest. I don't want to live at home. My fear is that I don't know if I can afford to go live on my own. Okay. So let's talk about that for a little while, and then we'll come back to the co-signing question. I think that needs to be your number one goal. point, it is a toxic environment. You're making $40,000 a year, which is a lot of people starting out. I mean, gosh, at 19 years old, that's a prime place to start. But what if we could supplement your hours with something else that you're doing on the side and get you to, say, $55,000 a year? Why don't you go work for another company? I'm in the process of that because I'm really tired of this company. It just hasn't been treating me right. Oh, so it's not like an apprenticeship? You're not beholden to them in any way. You could go find a plumbing job. You're licensed. You could go work and make $50,000, $60,000, $70,000 tomorrow? I'm still not licensed. I'm working under my boss's license, which is, I mean, legal to do in Georgia. What's it take to get licensed? So I'm starting right now to take my license. So I'm studying, and then I need to take weekend classes, which I'm totally fine doing, but I sometimes do work weekends on my regular job. So if you went to another company and did the same thing, you worked under another license until you got your own, would you be making the same $40,000 or would you be making more? I believe I would be making more because I don't believe this company does what it says it does to push their technicians forward to make as much as possible. Okay, so let's put that on your homework list. So here's what I have on your homework right now. This weekend, we're going to start looking for other plumbers. We're going to start looking for other plumbers that you can work for. That's thing one, as you're getting your licensing. That's thing one. But in the meantime, so simultaneously, I also want you looking for just side work that you can do to fill in the gaps. I'd love for you to find something that makes you another $1,000 a month. I think that's totally fair. You're 20 years old. You don't have kids. You're not married. You don't have a pet. Like, get out there and work. And then if you can secure either a new job or a side job, now it's like, okay, let's save up first and last month's rent, and let's get out of it. Get out of mom's toxic trailer, and let's get you into a one-bedroom apartment that is just super meager. It's just enough for you to handle your business. And then once you get settled there, now we're walking baby steps, and you're kind of in your own financial bubble at that point, free to make your own choices, free to kind of live your life. And it makes it a lot easier to say no to requests like, hey, will you co-sign on this house that you plan on living in with me, right? Now that you're under your mom's roof, it's tough to say no to her. Because you're kind of, even though you're not, you feel beholden to her. But once you get out from under that roof, now you can set your own chart, chart your own course, and be out there on your own, and you don't have to worry about it. There is some toxic financial codependency here happening, where you both need each other in a bad way, not in a good way. Because you both can't afford even rent on your own right now, it sounds like. Which is what she should be doing. She does not need to be going to buy a home. It sounds like she, are you getting any proceeds from this house that she's selling? What kind of money is that? Well, I highly doubt it. But is she making money on it? Probably not. I mean, I'm sure, the thing was, I know if I probably co-sign her, whatever she wants me to do, I personally don't think she's the best with her money. Clearly. That's the whole point. So I feel like that would affect me. That's just one more reason. We wouldn't recommend you co-sign no matter where you're at financially, but this is a giant reason. Yeah, and let's teach that for a second, Francisco. That's the whole purpose. So generally, when you take out a loan, the loan company is looking at how much you make. They're looking at the amount of debt you have. They're looking at all these things, and they're going to decide if they believe that you're financially fit enough to lend the money to. And if they look at your financial situation and go, hey, this person, it's not looking good. We don't feel confident that we can get our money back. That's when they say, hey, you need a co-signer, meaning you need to put somebody else on the bill that we think will be good for you. That's when they say, hey, you need a co-signer, meaning you need to put somebody else on the bill that we think will pay because we know you're not going to pay. And so when a bank is saying they don't have faith in your mom, and gosh, a bank will lend money to a dog. You know what I'm saying? So if they're looking at your mom saying we don't feel good about this, Francisco, you shouldn't feel good about it either. They're moving the risk from themselves to you by you co-signing. So definitely don't do this. You can help your mom find housing she can afford, and that's probably going to be a rental, even if it requires a roommate. Does she have anyone? Does she have anyone in her life outside of you? Well, she's very hard-headed, and she's really just stuck on buying a house because I'm guessing that's where she wants to live the rest of her life, I guess. Well, here's the thing. If you don't co-sign, they're not going to approve that loan. And so she's probably not going to buy the house. Well, tell your sister not to co-sign, too, if you like your sister at all. She's very like my mom. She's very on my mom's side. So she's on her side as well, on moving out. So your sister lives there, too? Yeah, as well as my sister's boyfriend. Goodness gracious. If I were you, Francisco, I wouldn't worry my head another night about this. I would mind your own business, which is finding yourself a new job, finding yourself a side job for the in-between time. And this weekend, I want you to go out and look for apartments. Get yourself excited about the new home. The new life that you're creating. Even if you need a roommate. You got any friends? Yeah, I have been texting friends. But, I mean, they kind of got it good with their parents and don't want to move out. Well, jump onto one of these local Facebook groups. Find a roommate. I mean, whatever you need to do to get by right now. But get out of this family situation. They're just going to drag you down with their hard-headedness and terrible financial misbehavior. welcome back to the ramsay show here in the fairwinds credit union studio still taking calls about your life and money matter of fact we have sean who's on the line from richmond virginia hey sean welcome to the show hey how you doing thank you for having me All right, so I am 23 years old, just recently moved to Richmond. At the moment, I'm making $24 an hour doing plumbing, although I am $33,000 in debt, some of it being from school, some of it being from credit cards and car loans. My biggest thing is here now I would like to go to plumbing school and also get out of debt. Okay, so making $24 an hour. I'm not sure how many hours you're working. How much is a paycheck every month for you? So I've only been working here in Richmond for about a month, but around like 45 to 50 hours is the average as of right now. Some checks are $1,500 and some checks are $8. Okay, so not bad. A fine place to start, I think. So around $3,000 or $4,000 a month? Right, exactly. Okay. So we'll call it $3,500 for right now. And is it just you? No, my wife. No, so I do have a girlfriend. She has $1,500 in debt, and she brings in about like $2,000 a month. You said $2,000 a month? Yes. Okay, so you guys are living together, and are you just splitting the expenses, or have you, hopefully not, but have you combined finances in any way? Yeah, so we used to work at the same job. We paid the same. We did combine finances. She does have a little girl as well. So we have combined finances, so everything, we've been kind of trying to tackle it together, if that makes sense. So why, I mean, I'm not trying to get off track, but I'm asking this from a financial and from a relational perspective, because it is linked. Your money touches every area of your life, and so obviously we see it does co-mingle with your relationships. Why not just marry this woman? So that is another big thing we're also going through. She is actually currently married, but she is trying to go through a divorce, although he's in the Marines or something like that. So it's been. Does he know that she's living with you? Yeah, yeah, yeah. So they are separated. He does not talk to his daughter at all. He doesn't reach out for more of a dad than he is. And we've spoken multiple times. I mean, we're pretty cool, but the only thing is he just doesn't. But you don't know, you don't know, when they divorce, you don't know what's going to be divided, how things are going to be divided in her financial life with him. And you're already combining money with somebody whose money is combined illegally with someone else. Do you see what I'm saying? This is very, very messy, Sean. I don't like this for you. And I don't want you paying her debts and her paying your debts. And in case. You guys break up one day, and now they're going, well, I paid 10 grand towards your debt. I want that back. And you have no legal protection. How long have you guys been living together? We've been living together for about a year now. We've been together for two, two and a half years. He lives all the way in Japan. He's overseas. So what stops them from getting a divorce? Like, sign in the papers, present it, sign it, wrap it up. Honestly, she sends the money. But I'm not 100% sure. I've been pushing her lately to do it. She did get in contact with a lawyer, and she's trying to go through the course of it all, but it just hasn't happened yet. Okay, so what I would say, and I don't think this is being mean. I don't think this is being ugly. I would put a hard stop on the combination of finances. If you guys are going to continue to live together, that's your bag. But my money's over here, and your money's over there. We don't pay each other's debts. We don't do anything like that. It's just I pay my portion of the rent, you pay your portion, just like any other roommates. Because truthfully, that's all it is. On paper, you're roommates, and so you should treat it as such. It's better for both of you, and it's a protection for both of you in the long run. So that's homework item numero uno. Untangle and untether. I like that, George. So let's treat your debts as your situation with your income only. Okay. What is the school going to cost? So I went to ESPN. I went to my school prior, and I had about $12,000 in debt. So that's with the other school, Fast Forward Loans I've gotten. So I'm thinking around another $20,000 to $25,000. To finish the program? Yeah, exactly. To go into trade school for plumbing. And how do you think you'll pay for that? Because obviously before you did student loans, is there a way that you can cash flow this so that we're not adding to the pile of $33,000 of debt? Yeah. So I'm going to go to ESPN. So that's what I was saying. So I got this really good job. My cousin is my boss, and he's really trying to give me the best opportunity possible, although I would have to get certified for that. So I think it would be a great step into investing in myself, although I don't have the most to invest in at the moment at the time. What's it cost? What's it cost per, I mean, I know $25,000 as a whole, but what's it cost like per year or per semester? How often are they collecting money? So when I went to trade school prior, it was a monthly payment that I had to pay, and then I paid off like $5,000 while I was there, and then I had the $11,000 remaining still over my head. Is that debt, though? Yeah, so the $11,000 is school debt. You took out a loan from them. Right, exactly. So let's see if we can find out. This is number two in the homework. Let's find out if there is a payment plan that's not you taking on a loan, but it's just like, hey. This is the tuition. I pay $1,000 in tuition every month to go to school and do this program, and figure out what that number is, and then it's working backwards to say, is there a way that you can do this with your budget, you know, making $3,500 a month now that you're only responsible for your life financially? Because here's the thing. She's got a husband that should be paying for half of her life and her child, not you. And that's just the reality of it. Right. Right. You're out here. You're 23 years old. You're trying to start a life for yourself, and you're getting tangled up in somebody else's mess. And I know I'm not trying to be hard on you, but I'm your friend, and I'm sitting here listening to you, and I'm like, man, don't forsake the path that you're on. If you don't reach out, if you're drowning a little bit yourself, and you're reaching over trying to take on a lady and her kid and this and that who's married, you're going to mess around and drown yourself. Right. So. You've got some debt to clean up first. So what's the plan for this car loan? What's left on that? So the car loan I owe. All right. So I owe $34,000 to $35,000 in all, $11,000 in school loans, and $15,000 is for my car. The rest is credit cards. Okay. What's left? What's the car actually worth? The car. So that was the problem. I crashed it, and the car was not worth anything because I was driving pretty far every day for. For work. So they only gave me about $4,000. The car in total in the beginning was $20,000. So what are you driving now? So I, me and her did end up getting another car, but she's totally paid off. We don't have any, anything except for insurance to pay all that. Oh, boy. This is just messier and messier. But it's in both of your names. No, no, no. The car is in my name. Okay. The only thing that is in both of our names is the house. Oh. And it's not, we're renting, so. Oh, you're renting. Okay. Thank God. Scared the crap out of me. All right. Listen, the only thing we can tell you, Sean, is you've got to be very aggressive. I mean, you can do it in love, but separate this money. And I'm telling you, until she's divorced, put yourself first because she ain't putting you first. The Ramsey Cash Giveaway is back. And this year, we're giving one lucky winner $10,000 in cash. Plus, we're giving away $500 every week. Just imagine what $10,000 of breathing room could mean for your family this Christmas. Come back and enter daily for more chances to win. And there's no purchase necessary. Just go to ramseysolutions.com slash giveaway. That's ramseysolutions.com slash giveaway. All right. Our question of the day is brought to you by Ask Ramsey. Ask Ramsey is your free AI money tool that provides personalized money answers based on Ramsey principles. So visit ramseysolutions.com slash ask Ramsey. Today's question comes from Bethany in Wyoming. You frequently mention to callers or debt-free scream guests that they are or almost are millionaires. What is the Ramsey? What is the Ramsey definition of a millionaire? My husband and I may be millionaires and not even know it. This is very exciting. Well, by financial and accounting standards, there is only one definition of millionaire, which is a net worth of $1 million or more. So if you have $500,000 of equity in your home, you have $500,000 in investment accounts and savings and checking, you are by definition a millionaire. Now, when we say that, people get all up in arms. They do. And say, well, that's locked up. You can't access that money. Okay. We're not talking about a liquid cash. We're talking about a cash millionaire, which, by the way, very few people, even millionaires, have a million dollars sitting in a checking account because that would be stupid. Yeah. They haven't invested in the market. That's where it should be. That's what we celebrate is when you become a Baby Steps millionaire, we're talking about you followed the Ramsey plan and you have a net worth of $1 million or more. Yeah. And it's not even. End of discussion. Some people are like, what if you. Is it I make a million dollars a year? And that really feels out of reach. Yeah. You don't need to. You don't need to. And by the way, even people making a million dollars a year might not have. They have a million dollars to their name. Yeah. After they account for all their debt and payments and lifestyle. So there you go. Very good question. Thank you for that. Let's go to Jamie in Charlotte, North Carolina. Hi, Jamie. You're up next. Hi. How are you guys? Doing good. What's going on? So I am in Baby Steps 4, 5, and 6. I bought a condo about a year ago. And I'm just wondering what, or I guess how to split up how much to put on the principal versus how much. I should be putting in like liquid cash savings. That's a good question. What are you saving for? Funny you would ask. Well, I am in a long-distance relationship and we're hoping to get married in the next year, year and a half or so. And so there's a possibility that I would be selling this house to move to where he is. So I don't know if I should be putting all this money on the principal right now, if I'm just going to sell it in the next like two-ish years. Well, I would get clear on what you guys' plan is and how much money is needed to execute that plan in the way of a marriage, you know, who's going to pay for the wedding, all of those things, honeymoon, all those types of expenses. But in the meantime, I think I would continue to make headway on this condo because two years is a long time and a lot can change in two years. So there's a part of me that I'm going to stick with my plan for me as an individual. And then I'm also going to look over here and put money towards the future. Towards the things that we're also planning to do, but I'm not going to forsake this life that I have right now for something that's happening two years ago or two years in the future that may or may not happen exactly to plan. Does that make sense? So paying down your mortgage is just a forced savings plan. You're not losing that money. It's not locked away forever. You're just, it's in your equity. And so you're really making the interest rate that you're paying. Yeah. So you're, you're just saving at that rate. So I would recommend paying down extra on the mortgage. Number one, it's psychologically very fulfilling to see that balance go down. You're paying less in interest every month. And so I would highly recommend it regardless of what the future looks like. But then if you have other goals, like a vacation, a car upgrade, just set up sinking funds for those in your budget, which might, you know, limit how much you're putting towards the mortgage. And that's okay. You want to still balance life. Baby steps four through six is a long journey. It's never ending until you get to the house payoff. And then you're in baby step seven, which is also never ending. So you want to balance life. And if that might be, Hey, I'm planning for a wedding now. It looks different. I'm not putting as much toward the mortgage. Cause I got to save up and cashflow this wedding. I mean, gosh, you could go, George makes a really good point. You could go, if you say I have these major things coming up, they're important to me. If you went a year and didn't make extra mortgage payments, because you said for this year, I'm focused on that. That's your choice. And then say, after I'm done with that, I'm going to come back and start making the extra payments. There's people who make extra payments on their mortgage every single month. There's people who make one extra payment a year. There's people, do you see what I'm saying? So your frequency truly is up. to you and the other financial goals that you have. My thought is more so the reasoning behind it, which is two years is a long time. So if you had a personal goal of, I want to pay off X amount of dollars on my mortgage, I would not simply forsake that just because I might move in two years. Yes. The last thing I found is that once you save up a bunch of money, it gets real confusing and it gets real emotional to let go of that, to let it go toward anything, whether it's a wedding, a car, throwing it at the mortgage. And most people can't bring themselves to do it. If you saved up $30,000 and earmarked it for mortgage payoff, I think you would have a hard time actually applying all $30,000 toward it. You start looking at all the other things you could do. So I like the monthly element of just sort of forcing the discipline one chunk at a time, because then you're not tempted or paralyzed by that amount of money. Good word, George. Good advice. Good advice. Let's go to John in Virginia. Hey, John, you're on the line. Hello. How y'all doing? Doing all right. How can we help? Hello. Yes. It's kind of a two-part question. First question is about real estate. And the second question is more of about a career shift. So if I start with a real estate. I'm sorry. I said, let it rip. All right, cool. So the first one will be regarding real estate. And so I have two properties. Me and my wife's first property is a rental. We got it as a first home, 3%, the low interest rate, low payment, all that good stuff. And then we recently moved into a house, of course, higher interest rate, higher payment. And it's actually going to be about 45% of our take-home. I'm currently the only one that's working, working through jobs. And so we both grew up on Dave Ramsey. We Dave Ramsey-ish this very bad. Yes. And so a little bit on the stress side regarding that. What stops you from selling the rental and putting that money towards the principal on your current house so it's not 45% of your take-home? Is there no equity in it? Great question. We wanted to actually do the rental thing. So we've taken a swing at it. It's going well. Of course, as of right now, I mean, we just moved into this house. So they said like we end up having to refinance, right? We'll have to wait. I think it's like six months anyway. Well, you could recast it. Yeah. Why not just recast it? I mean, if you had a lump sum, you toss it on the mortgage, recast it, and now you're on the same terms. It's just at a smaller amount. And so your payment is going to go down to something that is probably going to be way closer to 25% of your take-home. How much equity is in that rental? The rental is about, I want to say 90,000. Gosh, that's a big deal. The house that you own and are in today, what do you owe on that one? We owe 345. Yeah, 345,500 is the exact amount. Yeah. So I'd run the numbers on that and see what a difference it makes. The next question I have is that rental that is causing you all this stress, gosh, how much are you even bringing home net profit from that thing? 500. Here's about 988. And then we're charging about 1,500, give or take. So all this for 500 bucks, it doesn't feel worth it to me. Does it feel worth it to you? No, the stress is definitely stressing. But I feel like you're doing it for the clout of saying, I have a rental. I got a rental property. I'm doing the rental thing. I'm like, for $500, you better get your piece. You can go deliver pizzas for 500 bucks. You can have the same clout, but it has the same result, less stress. Because then you can look up far earlier and say, man, I live in a paid-for house. Now that, my friend, has some clout to it. And if you start making choices like this, you'll be there in no time. Now we got 30 seconds. You said you had a career change? Yes. So I guess this whole situation is kind of pushing my idea of career change. Question, what would be your advice on this? I have a current job, making $80,000 a year. Includes pension, great benefits. Now, I did just get offered a director of operation job, making $100,000. And it's a startup company. And so I wanted to know, what's your take on that? I know the guy, and he's been growing every year, about $250,000 every year. He's growing. I was thinking maybe I should make that jump to that career to grow with the business. And I also wanted to get into supervision. Yeah. Why not? The other job will be waiting there if the startup doesn't work out. And then your resume shows, my last job, I was making six figures. So the next offer better be better than that. I would take it, and it's going to lower the percentage of your mortgage to take-home pay. And I would still sell the rental, use the proceeds to knock down the principal recast. Buying and selling a home is a big deal. And you want an expert in your corner fighting for you to get the right deal at the right price. That's why we only recommend Ramsey-trusted real estate agents. They're handpicked pros who know their stuff, listen to your needs, and have your back from the first call all the way to closing day. To find a Ramsey-trusted agent near you, visit ramseysolutions.com slash agent. Ramsey Solutions. Ramsey Solutions.com slash agent. Well, George, I don't know about you, but I am so excited that our buddy, our friend, our colleague, Dr. John Deloney, his new book is out. It's called Building the Marriage You Want, and it's available for pre-sale, for pre-order right now. And I'm getting my copy because, because it's going to be life-changing. The truth is nobody gets married planning to become roommates, right? That's not anybody's plan, but it can happen over time. Life gets full, kids, work, schedules. And then one day you just look up and you're like, gosh, do I even know this person? Like, we're just roommates. That's terrible. Just good teammates that tag in at best. And sometimes you're not even good teammates. But that's why John wrote this book, Building the Marriage You Want. He explains why marriage can feel so hard, but why it still matters, and yours matters too. And what can you do to. To make it great. It's just giving couples practical tools to reconnect and build a stronger marriage. And I trust Dr. John. Like when he says something, when he has a piece of advice, like you can take that to the bank, it is going to change your life. So pre-order yours now for $24.99. You can lock in a hundred dollars in bonus items, things like an enhanced audio book, early access to the ebook, which means you'll get that two weeks early. So that's cool. Plus you get instant access to his exclusive video, which is a talk on connected communication, which is really great. So get your copy now at ramseysolutions.com slash store, or if you're watching on YouTube or podcast, go ahead and click that link in the description. All right. Stacey is in Los Angeles, California. Hey, Stacey, you're on the line. Hello. What's up? Hi, I have a question. So, um, I'm actually going through a divorce and I just found out two weeks, that I am actually three months pregnant. Um, so yeah, I was already on my way out. I was ready to put, sign my lease and then I, we find this out. So, you know, long story short, we decided to reconcile and try to make things work. Um, you know, but yesterday, the day before I actually found out that the house that we're living in is actually on the market because when we were having issues a few months ago, he said, you know, get your stuff, you and your kids have to be out. We've been married for almost five years in this, in May of next year. Um, but it's always been like that. It's been very unstable. Uh, you know, I kind of moved in with my two kids when we first got together. So it's always been like a threat of like getting out of his house. Oh gosh, this is terrible. And you're trying to reconcile with this guy just because you got pregnant? I mean, yeah, I mean, I, I wouldn't want to be divorced with, um, you know, three kids. But he's always trying to kick you out of his house. He's hanging over the fact, listen. And you have two kids from a previous relationship or marriage? Relationship, yes. From my high school sweetheart. He's only been the second person I've ever been in a relationship with. And I, and I committed, like I decided, we decided to get married. Um, so I'm full in regardless, but I feel like he uses that a lot. Like I ended up selling my house to try to make something work with him because he felt like there was like attachments to my previous relationship. Have you guys been in counseling? Have you been in counseling? We have. Okay. We have. And it's kind of all points out to the same thing, which is, you know, that he needs, he needs counseling separately for the issues that he's dealing with. And has he been doing that? No. Okay. So I go back to, now you can do what you want to do. I heard you say something very, very clear, a very clear statement, which was, I've been married to this guy for five years. And for five years, it's been tough. He's threatened to kick me and my kids out multiple times, which means he doesn't even see your kids. You're married to a guy who doesn't even see your kids. You're married to a guy who doesn't even see your kids as his kids. And you've been in counseling and the counselor has said, Hey. This is not going to change until this man decides that he wants it to change. And then the ball's in his court. And he said, I don't want the ball. I ain't going. That is a clear message. And you were out the door until you read that little pregnancy test. And that made you go about face. So I'm just going to say what I think you really, what I think the real problem here is you're afraid of doing life on your own with three kids. And that is so fair. Like that is 100% fair. I'd be terrified. But let's deal with that. Instead of going, oh, I'm scared. Let me go back to this thing that I know is really toxic. And that all of my senses told me to exit it, right? Yeah. Okay. So what's your financial situation? We've never had any sort of like shared finances ever. I feel like he's a very financially irresponsible individual. He's in sales. He's always been in sales. So some months he's in the negative. Some months he's great, getting new cars. And just like, I'm afraid of really, knowing what's behind his financials because I've gotten, we've gotten letters in the mail of like credit card denials, IRS, you know, back payment. So I'm just like really afraid. I've never had anything to do or never seen his account. So I don't know what his financials are. I've always kind of worked in, you know, in the little jobs that I've had or in sales. I've always made my bills and my kids, I've taken care of everything. I recently just got employed. I'm making about $5,200. But now with all the new bills and, you know, on my own, I'm just a little, I'm just a little panicking. So I'm curious to see if I can get a personal loan and just have a stable monthly payment for that personal loan and get rid of like $7,700 in credit card debt and $2,000 miscellaneous kind of like buy now pay later, kind of like Klarna or whatever accounts. So kind of get my foot. You have $9,000 of debt total between buy now, pay laters and credit cards and whatnot. I do have another account, a new credit card, which I'm going to get down, but I don't want to pay it off with a loan, which is another $9,000. We don't want, we don't want you to get a loan to pay off because didn't you tell me you make $5,200 a month? Yes. Okay. And of that 5,200, let's just, let's just play a game for a second. Let's pretend just for a moment. I know you're in Los Angeles. My guess is you're not in the city. Do you know what it costs to pay rent? For an apartment in your area? Yes. Yeah. So I was about to sign my lease. I'm going to get together with them. It's an apartment that's near my home now. So the schools will remain the same. It would be about 2,400 every single month. Okay. Plus my car payment of 400 insurance, 200. Wait, so you have 9,000 more in credit cards plus a car loan? Correct. So what's the total amount of consumer debt you have? Consumer in total would be, Oh, goodness. You got nine plus nine. Yeah. Nine plus nine, 9,000 for one credit card, 7,700 in miscellaneous and two other credit cards and a car loan, a car note of 10,000. Okay. Okay. So, and like I said, all my debt has always, always been taken care of by me. I've never asked them for any money. It's all in your name only. But I take care of bills. So what I, I think that's good. I mean, at least for this situation, I mean, you were in a toxic situation. You kept your money separate. Now you're exiting that. Obviously the rent is a little high for 5,200, but that tends to be the case for a lot of renters in your area. The question I have and the statement I want to make is you can't use debt to pay off debt. And that's something I want you to remember. You can only use income and margin to pay off debt. Debt doesn't pay off debt. It just moves it. And it's still haunting you. It's still looking. It's still looking after you. So what the solution to the problem is, let's see if we can find any margin to clear out this debt. That's, that's the biggest thing that you can do for yourself because that's going to free up more margin to pay off even more debt. So the $2,000 in buy now, pay later, what are you paying a month for that? Do you know? Um, it varies it. One of them's like for three, seven, three, 88, another one for one 63, right? So it just kind of varies. But I do have, I yesterday walked into my house and it's completely empty. All of my, everything is gone to storage. So now I really have like only about a week to find a place. Um, so do you have family or friends nearby that can help? I don't. That's the other fear that in this pregnancy, I'm like, like my parents have no involvement in my relationship or help. Like I, they live 40 minutes away. My mom doesn't drive. She's disabled. My dad constantly travel. So I'm literally on my own. And if that's a local church, that's fine. You walk in there and ask for help. Yeah. This is a season where you're going to need to ask for help because you're going through a lot. You're pregnant. You got two other kids. How old are the other two kids? Uh, thankfully my son helps me out a lot with my little one. My son just graduated high school. He's 18, but he's going to trade school in December. So I'm not going to be able to count on him much for the next five months because he's going to be away. And my daughter is 13. So she still needs to pick up some stuff from school. I think you're going to be okay, Stacey. I think you're going to be okay. I think this is a complete loss. This is a completely new foray into a completely new life for you, but you have a, you have a career. You have a nice income. You may need to move out to another area. Nothing's keeping you tied to the area. It's not your family. So can we go to an area where there's a little bit more affordability and it's going to be a little tight for a while and that's okay. You're going to make this work. Listen up. If you're a business owner, you know what it's like to work 13 hour days and still struggle to scale your business. But here's the truth. Your business will only grow as much as you do. That's why Entrez Leadership created a free resource to help you grow your business and leadership in just six minutes a week. The Entrez Leadership newsletter. You'll receive expert business advice, insights from our proven system, and practical tips you can apply. Right away. Go sign up at RamseySolutions.com slash business newsletter or click the link in the show notes. All right, guys, our Ramsey show scripture and quote of the day. Psalm 128 too says you will eat the fruit of your labor, blessings and prosperity. It will be yours. Sam Ewing said hard work spotlights the character of people. Some turn up their sleeves. Some turn up their noses. Some don't turn up at all. And some turn down for what? Thank you. Sorry. That was a Jade edition. I had to. Poetic license. You're welcome. Little John would be happy. All right. Let's go to Jessica in Columbia, South Carolina. Hey, Jessica, how can we help? Hi, how are you guys? We're doing good. What's going on in your world? Sorry, I made myself laugh with that last quote. It was ridiculous. But moving on. OK, so my question is, currently, I'm married and have been married for going on five years now. And we have a two year old now. So life has been pretty crazy with unexpected expenses with the toddler. Currently, my husband sends me his half of the bills. And I. I pay all the bills. What do you mean sends you? The unexpected. He sends me his half of the bills and then I take care of the bills. OK, but he lives with you in the same house. Yes. OK, and he's the father of the child. Yes. OK, but the finances were like, hey, that's too far. It's a bridge too far to combine our money. We don't have a joint account. So what's been working for us is that he's just been sending his half and then I've been paying the bills. OK, tell us your question and we'll try to figure out what's going on. I'm going to filter that out for the moment. But if we have to bring it back, Jessica, we're going to bring it back. OK, understandable. So some unexpected things came up, car and other little miscellaneous things. And I've made a kind of a very dumb decision by getting out of auto loan. I didn't tell him. And now I am scrambling, like trying to catch up the bills every month. So you bought a car without telling him? No, I already had the car. I got out of auto loan on the car that I own. Oh, you took out a title loan. Oh, a title loan. Title loan. What caused you to do that? That's a desperate move. Yeah. What caused you to get so desperate that you're like, I'm taking a title loan out? Because by fixing my car and other miscellaneous things that came up with the baby, I wasn't able to pay the mortgage. I didn't want the mortgage to be late. So I took out the title loan. So you've just, Jessica, you have given me permission. You've given me permission to bring back the first topic, which is I said I would table it unless we needed to bring it up. And this is precisely a reason to bring it up. So I got to know how much, because he said, you said he gives you half of what he makes and then you take half of what you make. Well, half of the bills. Oh, half of the bills. Half of the bills. So how much. Not half of his income. Okay. How much is the bill money that you take from him? It's maybe like 600 total. - That's it. - Like 700? Bills are $1,200 or $1,400? Well, for what we split together. Okay, what do you not split? My car insurance, my phone bill. I handle the cable bill. Okay. And that's all that we don't split. Okay, and that means he pays his own car insurance, his own phone, and his own. Okay, so then my question is, how much do you bring home a month, and then how much does he bring home a month? A month, after taxes, like $3,200. Okay. Him, maybe like $4,000. Okay, so here's my thing. You're over here taking out a title loan. You would rather go to a bank and take out a drastic title loan. At 300% APR. Yes, than to go to the man who made a baby with you and say, I can't cover the bills. I can't cover the bills. Can we use some of your money to cover them? Do you see, like, there's something about that feels inherently wrong to me. Because this is supposed to be your ride or die life partner. And so there's, what I'm trying to get at is there's a chasm in your marriage. Because you're on this side and he's on this side, and it doesn't need to be like that. What if there was a world where you just said, hey, let's put our money in a pot. Now we've got $7,200 a month to cover. $7,200 a month to create the world and the life that we want to live in together. I love that for you. So what's left on the title loan? And what's the monthly payment? The monthly payment is $1,000.54 a month. Is that just interest? And the interest is 179.57%. Yes, it is. Okay, so $1,000 a month. And what's left on the loan to clear it and get your title back? $7,000. Okay, and you took out the $7,000 to cover the mortgage? Well, no, it was, no, I took out, it was like maybe $3,200. And then when something else came up, I refinanced it again. So you just kept rolling it into a bigger snowball. And they love that. Okay. And does he know about this or he doesn't know about it? He doesn't know. I was trying to get out of it myself. I just, I don't know. But you're trying to put. You put out a fire and the fire is just expanding into the house and he's in the same house. So we need to tell him and say, we have an emergency and you're going to just say, I'm sorry, I didn't tell you about this. I was trying to do it on my own and clearly I screwed up and I need your help cleaning this mess up. Otherwise, you're going to lose that car if you can't keep up with those payments. Yes. And on a relational tip, like this is, I'll continue on George's metaphor because I think it's good. You know, he's your, he's your teammate. He's on the fire department with you. He should be. He should be spraying the hose right next to you. But instead, you see what I'm saying? So if I were you, along with the financial advice that we're giving you, which is the first piece is you got to let him know what's going on and you need to ask for help. If you can't ask for help from your husband, who's supposed to be your best friend, who can you ask for help from? Then the other piece that's the more emotional side of this is we need to get to the bottom of why that's like that. And it's, it's, it's likely nothing negative or like, you know, no one was intending for it to be that way, but you set out and you guys kind of probably created a financial, you know, landscape thinking this will work. This is a good idea. Like there was nothing bad, but now you're looking up and this is a really good indicator that, man, I don't think this is working. I shouldn't feel like I can't go to you. I shouldn't feel like I'm on, you know, out here on my own trying to figure out the mortgage and figure out my payment. I don't like the way that feels. And I just wonder if you went to him, what would he say to that? I don't know. I know he would be supportive, but I just, I just feel so bad because I got myself in this. But if we drop the shame for a second and go, okay, we're a team. If he made a mess, you're going to help him clean it up. If you make a mess, he's going to help you clean it up. What if he had 7,500 bucks in savings right now to fix this whole problem? Yes, that's true. Does he? I don't know. The problem is we don't know. And then flip the script. He might be in crippling debt too. Yeah. Flip the script for a second. Let's pretend if he came to you with this, let's pretend, let's pretend he came Jessica to you and said, uh, Jessica, we got to talk. I, I think, I know I made a mistake, but I wonder if we got off on the wrong foot because you don't know this, but I've really been struggling financially and I didn't feel like I could come to you. And it's not because of you. It's something on my end. And I want to fix that. Right. What would you say? I would be supportive. You would be supportive. Try to figure out what we can do. Yeah. Okay. So I think you guys are great people. I think you have a great marriage. I think this is something, like I said, you started out with good intentions and I just don't think it's working for you. So let's change it. Let's be each other's biggest teammate, biggest cheerleader, biggest helper, and get on the same page. And my guess is if he has debt, you have debt, you combine it together, you combine your income, you have a great income, and then you guys can actually create something together for the future. Whatever the lifestyle is that you see, if it's a debt-free lifestyle. If it's you take vacations together, you're building wealth together. All of these things go faster and do better when you do them together. You're right. Can we kickstart it for you, Jessica? Can we gift you Financial Peace University on the promise that you guys will actually watch the videos together? Yes. And I'll give you my book, What No One Tells You About Money. I think that'd be a really good one for you as well. This is the. I appreciate it. Financial Transformation Starter Pack. And we'll give you every dollar. Boom. And you get a car. And you get a car. Well, you know what? Because I'm considering this like this is you're rebuilding something. You're creating a new marriage here by doing this. And you deserve wedding gifts since you're creating a new marriage financially with your spouse. They might renew their vows at the end of this. I like that. What were we doing? We could have been building wealth instead of we were building our own little kingdoms here that we lit on fire. Yeah. It's okay to look at something and go, that's not working. I want to do something different. You can change. All right, guys. Well, remember, there's ultimately only one way to find out what's going on. And that's to walk daily with the Prince of Peace, Christ Jesus.