Build A Life That Doesn’t Depend On Debt

Brought to you by the EveryDollar app, start budgeting for free today. Normal is broke and common sense is weird, so we're here to help you transform your life from the Ramsey Network and the Fair Wentz Credit Union. Studio, this is the Ramsey Show. George Campbell, number one bestselling author, Ramsey Personality, is my co-host today. James is in Springfield, Missouri. Hey, James, how are you? I'm doing well, sir. Thank you. Sure, what's up? I have, I guess, I own two houses and I'm wondering if I need to go bankrupt or let one of them go in foreclosure. I've been paying both mortgages since my children who were my tenants moved out in late July and I'm running out of my savings. Okay, so the house that they moved out of, what is it worth? It's right around 400. And what do you own yet? 260 with a he-lock of 100,000. Okay, so is it for sale? It is for sale since July. Why is it not sold? I think the market, my wife and I combined families about seven years ago, I converted the carport into a garage, which seems to be the carport into a room, so that all of our children could live in one house. And that seems to be the biggest great from the buyers right now, that there is no garage in Phoenix, Arizona. Yes, sir. All right, ouch. Okay, yeah, I mean, I'm going to keep dropping the price and who has the he-lock, the local bank in Missouri, the local bank in Phoenix. In Phoenix, Bank of America. Oh, Lord Jesus, okay. You're dealing with evil empire. Well, what I would do is have you got what's your real estate agent like? He is, I mean, he's okay. He was a high school friend. I'll answer one of firing. Okay. He's okay. He was a high school friend is not how we pick a real estate agent when we're standing over the fire and they're getting ready to light it. Okay, so you need a, you need it because I fired my, you need a high octane high protein pro go to Ramsey Solutions.com and click on Ramsey Trusted for a good real estate agent and get an offer. And if the offer is less than you, oh, take the offer to Bank of America. That's called a short sale and a good agent can show you how to do that. But if you don't have them, I'm guessing you don't, how much cash do you have in savings? It's depleted after my, I know how much cash do you have in savings? 6000. Okay, not enough to help with this. What's your income? Since January, we knew that we were going to be letting the kids leave the house. I got a second job. So I make good money, $6,900 for my primary source of income and roughly $2,000 a month from my second job. Okay, and so that, you know, $8,900 is not enough to cover all the bills in both mortgages right now. Buying your kids a house to live in is causing you to face bankruptcy. I wonder if I'd hear that out there. Yeah, next time one of you call in here wanting to buy your kid a house to live in, I'm going to yell at you because of James. Okay, and people like James that I've talked to for the last 30 years that do this stuff. Oh my gosh, I'm so sorry. You're not bankrupt. You might get foreclosed on. Is your primary residence up for sale? My primary residence we live in in Missouri. That's your primary residence. Not a for sale. We live in it. Yeah, what do you all want in it? Let's move here from Arizona, so $385,000, it's probably worth $4.25. Okay. And you can pay that payment pretty easy if you stop paying the other one, right? Yes, sir. Yeah. Okay. So here's your number one, you take care of food. Number two, lights and water in Missouri. Number three, you make sure your house payment is paid in Missouri. And you keep your lights on and burning there in Missouri. And the other thing is the problem. Agreed? Yes, sir. So if something's going to go buy by, it's going to be the thing in Arizona. So put the house on the market with a good real estate agent. Get an offer, a short sale offer. Take it to Bank of America. If they don't take it, tell them to come take it. Maybe they want it worse than you do. So if they, you know, $100,000 of them, if they offer nets them $70,000 and they won't take that, then say, all right, guys, here's the keys. Good luck with it. The work of my mortgages with another. That's okay. Your first mortgage is not the problem. Your second mortgage is the problem. I mean, if you could sell it for $2.60, it'd be gone. Yeah. Yeah, but you've got this big, but yeah, you got this big, but home equity loan on there. And the whole deal. So you got other consumer debts too on top of that? $6,000 in credit card. I have a car loan for $13,000, but that's it. Okay. Well, you need to plow through those and keep the house in Missouri afloat and let the other one go. And hopefully you can sell it before they foreclose on it for something in short sale. If you quit paying the payments on the Arizona house, both payments, the home equity and the first mortgage, you can stay afloat in Missouri with the numbers you gave me. Am I right? Yes, sir. Absolutely. Yeah. You've just got to prioritize. You're going to. Pain is coming. You should choose it. Okay. That's what I'm saying. And this thing of. I've got one foot on the boat, one on the dock, and a boat's leaving. You're going up in the water. Okay. So choose the dock. Let the boat go. Right? And so. If they foreclose on you, you may. They may push you into bankruptcy four or five years from now, but I doubt it. Okay. If the. In the event of foreclosure, probably at the foreclosure sale, the first mortgage will get covered. Because it's got a lot of equity above the first mortgage. Then all you've got to deal with is the evil empire bank of America. And if bank of America, if you owe them $100,000, it gets foreclosed on. They get $20,000 out of that, or so. They're going to come after you for 80. You're going to settle that for 20 or 30,000 bucks, five years from now. Okay. But bank of America is completely incompetent. It takes them forever to get around to doing anything. It may go four years before they foreclose, even. The first mortgage might foreclose before they do. They truly aren't completely incompetent. News came out yesterday. They're getting ready to get a $1.2 billion fine for misbehavior with the Federal Trade Commission. This is how bad Bank of America is. It is truly a cesspool. But that's not your fault right now. It's really not even your problem. Your problem is you made a dumb decision to try to keep this house afloat for your kids. And when they told you in January they were moving, you should have put it on the market right then and given it away. And put them in a street where they belonged. But instead you got caught in this thing trying to be super dad and you don't have the money to be super dad. Man, I'm so sorry. Yeah, let that thing rot over there and then deal with it when you have to deal with it. But you're not bankrupt till somebody chases you and starts taking stuff. If they foreclose on it, whoopty-dupty. You got a foreclosure. [Music] This episode is brought to you by Better Health. 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 Better Help. Better Help 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 Better Help, insurance options may now be available nationwide through participating providers. And eligible members have an average copay of just 23 bucks a session. Listen, you know what's coming this holiday season. this year, you have time to make a plan. man before the holiday chaos by preparing differently. Go to betterhelp.com/ramsy to check out your payment options. That's betterhelp.htlp.com/ramsy or click the link in the description. Olivia is in Houston. How are you Olivia? How are you? Oh my gosh this is so cool. I'm doing good. Good. How can we help? Okay so my try to keep this brief. My son turned 18 in August and he's in his senior year of high school and he leaves in June for the United States Marine Corps and I was going to give him a small graduation like gift like a fine of a thousand dollars but he blew through the thousand dollars I gave him on his 18th birthday in August in like three weeks and he just he works. He has really good bulk ethic and he said and he blows all his money every month and so I feel like am I enabling bad spinning behavior and should I instead of giving him the thousand dollars cash put it in some type of savings account for him or what advice would do you have? He's got a much larger problem than one thousand dollars. He's getting ready to go into the military at 18 years old with no supervision whatsoever and blow every single thing he makes there. When you leave the base we do a lot of work with the military. When you leave the average base in America and you go driving out through the gates as soon as you drive through the gates you see every stupid human thing that can be done on each side of the road for the next two miles. The predators feed on these young naive people like your son and they suck the marrow out of their bones. It's sad and so it's not unusual at all for us to meet an 18 year old or a 20 year old or a 22 year old who spent four years in the military and has spent every single dime they've ever made plus some and gone into debt because they get scammed by all these people just outside the gates. So that's a bigger problem than him blowing your little thousand dollars. His first paycheck is going to be more than that right? Yeah I mean I would assume so like with the ranking I think he'll be making around 2000 not very much. So when does he go to the military? So he should be leaving in June. He's in the delayed entry program right now so he gets to finish out high school and so he'll be leaving for graduates in May from high school. So what I would do is nothing to do with the thousand dollars or nothing to do with your question instead it just raises the bigger thing. He's not been taught how to handle money and so I know but he didn't work. He sucks at it and he's headed straight for the wall. We got to stop him. I'm scared for him and you are too. That's why you called. You're a good mom. Now are you married? I am. Where's his dad? I am not married to his dad but his dad is in the picture. And what about the stepfather? What's his relationship with him? It's good. Yeah they have a good relationship. Have you been involved with the recruiting process into the military? Do you know the recruiter? Yes I do. Okay I'm gonna put all three of those men in his face. Father stepfather and recruiter and go you have just a few months to learn how to not be stupid. The recruiter will completely agree with me. I promise you which branch of the service? Marine Corps. Oh definitely he'll agree with me. Okay for sure. Go down and you and your husband and maybe his dad go down see the recruiter and y'all gang up on his kid and put him in financial boot camp from now until May. Put him through all of our materials. I'll give it to you for free. I'm gonna give you our home school curriculum for high schoolers. Okay for free right now and you guys got to make him go through that and then you can tell him when he completes that and proves that he has learned it and is going to live that way then I will give you a thousand dollars. Okay so Daniel will help him with gas now a hundred dollars a month should I not be doing that? Once again let's not treat the symptom let's go to the problem. Okay the problem is he sucks at money. That's the problem. Okay if he didn't suck it money I don't care how much money you give him. It's not you're not enabling then but right now you're giving a drunk a drink for sure. Okay and so we've got to get upstream for this for his sake because I'm telling you the the the third largest reason for dishonorable discharge in the military is financial irresponsibility. These young people get in they blow everything they get deeply in debt they got payday lenders coming out their ears they've been screwed by a repawn shop and everybody up and down through there and they got four tattoos to prove it and it's just it's unbelievable and and and then they get and they lose their security clearance so their pay goes down this is the stuff we deal with when we're trying to help folks in the military and the senior officers and people like this recruiter they know exactly what we're talking about and it's an opportunity for this young boy to become a man and learn some stuff as he goes into the military here so we'll we'll put him in financial boot camp until he goes to real boot camp and then get those three men in his life and bust it on him stepdad dad and recruiter and holding him accountable for for learning how to behave with money because if not you're turning the child loose in in the middle of a nightmare it's it's you don't you folks don't believe me go to a military base drive outside the gates you'll know exactly you'll see what exactly what I'm talking about in 20 seconds it's strip clubs tattoo parlors tote the note lots payday lenders payday lenders payday lenders I mean it's just like every stupid thing you can do with your life or with your money is right outside the gate and so and they're 18 years old he's gonna walk out of that tote the note lot with the truck payment of a thousand bucks with a 15% interest rate you know that's what's gonna happen but I got me a f-150 yeah you killing me yeah so that that's what he's facing Olivia and I'm glad you're you know you're you're realizing there's a problem but I want you to go deep under the soil and dig out the roots of the weeds so no more weeds are there and then the thousand dollars or the hundred dollars for gas or all that stuff doesn't matter and you can be a hard worker and be stupid I've done it work ethic is one part of it but if you just spend it all get nothing to show for it exactly so it's a it's a real opportunity for him I'm so glad you called and and thank you for raising a young man that wants to serve his country that's incredible we appreciate you all right George is with us in New York hot George how are you hey how you doing today better than I deserve what's up all right so I have a settlement that I received um and I kind of trying to figure out what to do exactly with that money I have 50,000 in cash um I I am in debt I have student loans credit card debt in a car loan how much is each of those how much is each of those so credit card I have about 8,000 in total um student loans is about 10 grand and my car loan is about 16,000 cool you just became debt free congrats so that's that's not yet not yet that's what I'm trying to figure out exactly you know do I use that settlement to become fully debt free and from there start saving and you know building up how much do you have saved right now cash I have my rock in the cash I have around like 2000 my raw fire rate I have it halfway max okay well we've got a system here where we pay off the debt first then we get the emergency fund then we build wealth there's a prerequisite and it's for a good reason if you invest while you're carrying debt you're not going to invest very much and you have one emergency and you slip back into debt so if you clean up this debt now and promise yourself and God you're not going to go back into debt you've got a good situation where the rest of your income is going to help you build wealth instead of go to lenders so even if you paid off all your debt you got 16 grand left for an emergency fund parked out with your two now of $18,000 for whatever life comes your way and then you start investing so basically don't invest any of this money use your future income to invest once you pay off all your debt once you park that emergency fund now this is catapulted you into what we call baby step four George the danger is that you won't change your habits and that you'll use a credit card again so cut it up and you have to raise your right hand and swear I will never borrow money for a car I will never borrow money for a credit card and I will never borrow money again because I got this one lump sum you're not getting one of these again you get one get out of jail free card so use it be debt-free but never go Go back! 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Click the link in the description or go to Churchill Mortgage.com/RamseyOffer for an exclusive Ramsey Audience offer. Well, Dr. John Deloney's new book, "Building the Marriage You Want" is now officially available for pre-order. The book actually pubs in January, and we'll ship them out then, but you can get a serious bargain if you go ahead and buy it ahead of time. And we'll send you a little postcard to wrap up and put under the tree at Christmas. Plus, you get the enhanced audio book in for free. The book is $24.99, but we're throwing in $100 worth of stuff, including early access to the e-book, which will get there two weeks before the book. And you get instant access to this exclusive video, Dr. John Deloney on "Connected Communication." It's a talk he gave at the Money and Marriage event with the He and Rachel do together. So this is an incredible book, practical tools to reconnect and marriage, to build a stronger marriage. I've read a bunch of marriage books over the years, because I read books on anything I'm concerned about. And this is really, really good. So building the marriage you want, officially available right now at RamseySolutions.com and go ahead and get the pre-order in so you get all the bargains. Melissa's in Tampa. Hey, Melissa. What's up? Okay. What's up, Dave? I will be turning 50 years old in 10 days. Happy birthday. Happy birthday. Happy birthday. Thank you. Thank you. I decided that I don't want to spend the next half of my life the way I spent the first half of my life. And I was a single mom at 19 years old. I worked a corporate job for about 17 years and then decided to open my own company. I spent all of my 401(k) opening that I built over that 17 years, maintaining that company and then eventually over 15 years of owning that company, I accumulated almost $200,000 with the debt. And that's not owning a home. That's just debt in my business by itself. And so last year, I decided that, of course, I'm getting ready to head in the 50. I can't keep scrambling like this and so I decided to file bankruptcy. And I am now with a clean slate since about April, April May of this year. I have a completely clean slate now. I don't own a home. I don't have any debt at all whatsoever. I don't even own a car gate, a car that I gave everything back. And I've never felt better in my life. And so I want to determine how to move forward from here because I have to hurry up and create a nest egg for myself for my retirement. No, you don't have to, you don't have to, you don't have to hurry up. You just need to be the tour. You need to be this tortoise, steady, steady. So how are you eating? Where's your income coming from? Well, I started a new business when I closed the other business. And this new business, I'm able to scale a lot better. My revenue in that business is about 10,000 a month, about 9,000 of it comes in my pocket out of there, very low overhead. And then with my rent and other bills that I have, I probably pocket about $5,000 to $6,000 a month. And so I feel like, should I be saving for my business and for myself, I'm kind of split of where I should be putting the money. What kind of business do you have? It's a training company. And I'm in the process of scaling it. So by the end of next year, my income will probably be double because I'm pushing out online content, online courses and things like that. Did you learn your lesson about borrowing money to scale your business? Absolutely. Absolutely. It's horrific. And I'll never do it again. I'm at a point now that I've got rid of the car. I don't even want a car anymore. Why are you getting around? If you don't have transportation. I work from home. And if I need to go to a meeting or I need to handle business, Uber, I'll use my son. I've actually been enjoying not owning a vehicle. Eventually, I will purchase one cash, but right now I'm just enjoying not having the stress of having the car and the bills. Okay. It won't be long. I won't be like that for longer promise. Okay. Well, the thing that if you're going to go through something as horrible as bankruptcy and the story you've told me, you just want to make sure you check the boxes and learn the lessons that God had for you in that horrible experience. And so for me, when I went through bankruptcy in my 20s, it was, I learned I never borrowed money again. And it was, I always give. I'm always generous. It was, I always have retained earnings, I always have a stack of cash. And so I'll never be without savings, I'll never be without giving. And I will never be in debt again. I had a whole lot of nevers after I went bankrupt. And I think you need to establish those and make sure they're really firmly there. And then you just get to growing and stacking this cash. It sounds like you have the ability to earn money. I'm proud of that. Absolutely. How much savings do you have right now? Right now I have about $6,000 in savings. After the bankruptcy, I still had some things to clear up. Right now I have the only thing I couldn't clear up was my IRS debt and not only the IRS right now about $10,000, and so I plan on paying that off over the next probably five to six months. No, no, no, no. You pay that off this month. No. Immediately. As soon as you have $10,000 as immediately, you get the KGB out of your life. Okay. So what other debt do you still have after you're so clean that you're not clean? That's the only, that's the only one. Okay. That's the only person I'm paying. Yeah. And get rid of that. Get paid on it, so just go ahead and get rid of it. As soon as you possibly can. And if you're making five or six grand a month net of your expenses, you should be done with that. Yeah. Okay. So 30 days from now, that's gone. You got a couple grand in your savings. Now let's build that up to a fully funded emergency fund of three to six months of expenses. And you need some retained earnings in your business. Do you have anything in your business savings account? No. Yeah. That's the part I was, because it's like, do I save for me first or do I save for the business first? First thing you do. First thing you do is eat. Second thing you do is clear the IRS. And once you've done that, I want you to take a percentage of your profits each month, do a PNL each month, a profit and loss state in each month, a percentage of your profits, you decide how much. I don't care. 5%, 10%, 15%, whatever, and set that aside for in business retained earnings. For future growth. You use that money to grow with because you're not borrowing money anymore. And then you take everything else home and you work the baby steps at home. Okay. I've got it. Do you have a tax pro? Apparently. No, not at this time, but I'm actively seeking one because I just want to do whatever calls the IRS to be there. It doesn't need to be there anymore. And you're probably not sitting here quarterly estimates aside and keeping your books properly because you just came out of the fire. So George is right. Go to RamseySolutions.com and click on Ramsey Trusted for tax professional in your area and sit down with somebody and get your tax thing straightened out. Not only the old bill, but be setting aside the money for the new bill. That'll sneak up on people who are self-employed, even if they're going, "Hey, I'm debt-free." Well, unless you owe the IRS money, that's scary. So make sure you're setting that money aside and a good CPA will help you figure out how much to set aside and when to pay it and all that good stuff. Okay, Melissa, I'm going to tell you what's bothering me because I know this person because I've looked at him in the mirror. I've always had the ability to make money. I haven't always until the last half of my life or sooner than that. The last three quarters of my life learned how to manage the money that I had. And your language and the way you're talking about this business shifted two or three different times inside the conversation. which all of it was around this idea. You're really good at making money. You're not very good at systematizing and managing it. And you cannot out earn your stupidity. I tried it. And I make a lot of money. I've made a lot of money in my life, but I cannot out earn my stupidity. My stupidity would always trump any amount of money I can make. So you have to systematize and get detailed. It's not your nature. You are an entrepreneur's entrepreneur. Your nature is to go leave the cave, kill something, drag it home, and then let someone else do the butchering, right? You've got to stay on top of the details here. You've got to stay on top of every dollar that comes in and exactly where it goes out, build good accounting systems, build good tax systems with a tax pro. You can't just go make a lot of money and solve this. One of the things we learned is that you're not good at managing it. You went $200,000 in debt over 15 years and lost your business. So you've got to make sure you don't do that again with systems and processes. When it comes to your health insurance, one of the biggest mistakes you can make is believing you're stuck in a one size fits all plan that costs too much and covers too little. That's why I recommend health trust financial. They're the only Ramsey trusted health insurance partner because their advisors take the time to understand your situation and help you explore the coverage options that are available to you. 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We're seeing these other houses that are more appealing. And they're above that range. I think most people would say that we're fine, we're good, but those are also the people that can get a $600,000 mortgage for our house and can afford, so. - Well they're like the banks that they're budgeting. - Yeah, yeah, well that's exactly it. And I've been listening to the show for 20 years and kind of glad the way he's not on today because I'm a psychotherapist or I know he'd probably bust my chops about it, but figure out what I would call and get your feedback on it. - So what price range home are you thinking of buying? - $7,750,000. - Are you paying cash? - Mostly cash. - Okay, and you're keeping the other two properties? - No, actually we would be selling both those properties. We have about 45 inequity from the two of them. I also have a small business known in office outright, which is about 400, but we're not touching that. - So you got $4.85 equity you're gonna use toward the down payment plus other cash savings? - Yes, another $100,000 on top of that. - So you got $5.85 down on $750, let's say. - Correct. - Okay, and what's-- - So like a hundred grand in debt, yeah, okay, and your household income's what? - A household income is three to three 50 a year. - Okay. - You can afford a $23, $2400 payment on a 15 year fixed. - And we figured we would throw extra money into it. I guess what I got stuck on and going down a rabbit hole, I couldn't find anything online about the amount of wealth you have and how much of that is tied up in a home. - Ah, okay. - I guess I was looking for a percentage. - What you're looking at that-- - That's a good question. And the data that we have, just from anecdotal observation, tells us that the higher your net worth, the smaller a percentage of your net worth is in your home. Well, no duh, okay. I mean, if you got a million dollar net worth and you have a $600,000 house, that's not a big deal. That's 60% right? But if you've got a hundred million dollar net worth, you really wouldn't want a $60 million house. That'd be weird, okay? And so that would be out of range. So you can't use a straight percentage. It skews the higher your net worth goes. The smaller amount you would use on consumption and on house and on cars and so forth. I mean, if you have a $100,000 net worth, the percentage you have in cars alone is way higher than it would be if you had a million dollar net worth. That kind of thing. It would be on a curve in that regard. So what is the rest of your nest egg? - Okay, our retirement, we have about 1.5, and I guess I get stuck on that number. We've got 1.5, which is certainly we can live on together. We've got that number of years to work left. - Well, a little pro, I mean, it's not over. You're not touching it. - Our millionaire study showed about a third was, real estate, two thirds was their nest egg. So you're about where you're right there. - Yeah, I think you're fine. Yeah, your ratios are just fine. If you told me you had 200,000 dollars and I'd go, you're probably a little high on this house, you know, like 750 as a percentage of 200, of a million total, you know, that might be touched in it. But I think you're in great shape. This is perfectly, I would recommend you do what you're doing, and then I'd recommend you pay off that 100,000 lot of mortgage as fast as you can. And so that you're freed up to just invest and save and enjoy your life, right? - Wonderful. - Way to go. - Good job, man. - Well played. - It's nice to give someone the green light once in a while on, buying, quote, unquote, "too much house." You did great. - Sam's in Franklin, Tennessee, right here in our neighborhood. What's up, Sam? - Hey Dave, how you doing? - Better than I deserve. How can I help? - Thanks for taking the call. So I'm just trying to see if I'm at a financial position to purchase a luxury watch. - Okay, how much is it? - It'll be between 12 and 14,000. - Okay. And how much is your net worth, what's your nest egg, that kind of stuff? - So I make a 92,000 year, but more importantly, in 2028, I'll be receiving a large bonus between 80 to 90,000, which is what I would be using to cash flow that purchase. - In 2028? - Yes, sir. - Okay. And how about just the large bonus? - Between 80 to 90,000. - And what's your net worth now? - Right around 200,000. - Okay. It's probably not going to cause you to go bankrupt or anything like that. And it's, you know, you're asking a question about something you're going to do in three years. - Right? - You're not doing this now. - Yeah. - So this is kind of a lot. - I would do once I have the cash in hand that I would make the purchase. - Yeah. - And you're debt free? - Debt free. The only thing I have is the mortgage investing 15%. - Yeah. So the rule of thumb I use on luxury purchases, when Sharon and I are doing that, or something like an expensive trip, travel, whatever like that, is we just use the burn the money in the middle of the floor, brew. If you took $12,000 after you get this check and burned it in the middle of the floor, does your life change? - No, not necessarily now. - Right, right. It wasn't still kind of a lot, based on the numbers you're giving me. - It is. - It's not like you're sitting on a million bucks and you're spending 12 grand. - Right. - It's currently, that's a pretty good chunk of your net worth. Now, in the future, it won't be. We'll be a mood point when you're worth two million. - And the thing I will not tell you to do, and I have several friends that have a watch problem. It's going to be a problem, Sam. They, they, they, like, some call it, and you can only, you only got one arm to wear a watch on. But anyway, the, the, do not fall for this, and I, the same thing, true of diamonds, I have a diamond problem because I buy them for my wife. But do not fall into the trap that this is an investment. It's not. Some Rolexes, a few of them go up in value, but if you go online and pull up 30-year-old Rolexes, they really are not appreciating, yeah, not that much. A little bit maybe, depending on the watch, and there's some special ones in that kind of crap. But you really can't predict that today, and so don't, don't buy it as an investment. Buy it as a consumption. Thank you very much. Now humans go up in value. No, they don't. I've been buying them for 30 years. I couldn't sell them for what I got in them. And so and I know because Sharon got wanting to get rid of some of these that she had and we're just like for that we'll just keep them. Now we're taking the loss that hurts each other. She deserves my feelings knowing about it. But um yeah, so these are just consumption things, but we they fall in the category of oh, you know Rolexes, you know, they go up in value and no necessarily. Yeah, there's a couple of super collectible versions, but at that price point, it's probably not going to be something that is going to be worth 30 grand one day. Yeah, you know, but and if it is when you back out the percentage rate of return, it sucks. So um, you know, just don't buy it for that reason. That's my only advice. Buy it if it passes the smell test to burn the money in the middle floor. And I think you can do that. Sam, uh, you're right on the bubble though. It doesn't if you told me a $50,000 watch I tell you now, you know, and there's plenty of those even Rolexes. Yeah, so wow. I still go, man, I would love to see that mortgage paid off. That's just me. I'm a nerd. I like to dangle the carrot. I'm going, Hey, that'd be a pretty cool thing to much better than on a watch. Yeah, if I had 12 grand right now, what I rather put it toward the mortgage to say that balance go down or have a watch in my drawer, that's that's kind of an interesting question as well as what's the best use the money. You don't have a watch problem. No, no, and maybe one day I might that might be my only hobby because I'm terrible at golfing you might. But wearing something that's $50,000 on my wrist would just freak me out. I'm like target demo to get mugged. So I just, you know, I just try to you want to look too nice in the street. I look like easy money. So I'm not I'm not doing that. It just scares me. You see these pickpocketers and if you're traveling, especially you're traveling internationally, you got some nice watches on people take note. 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So look, there is a way out, but the longer the straggs on the fewer options you have, you have to deal with it now while you still can. So go to guardianlit.com/ramsie. That's guardianlit.com/ramsie or click the link in the description. It's turning advertising results may vary and no specific outcomes guaranteed. Welcome back to the Ramsey show in the fair winds credit union studio George camel Ramsey personality is my co host today. John is in Raleigh, North Carolina. Hey, John, how are you? I'm good Dave. How are you doing better than out of serve? What's up? Yes, sir. So I'm 29 married kids. And I built a solar company that does residential solar back in 2024. We did about 350,000 and then about 750,000 in 2025 when the law changed. Whenever that happened, our finance partner about five months ago filed for bankruptcy and a lot of our deals are tied up with them. We just didn't get paid out on. So then we were trying to figure out how to run the company, you know, with cash deals, which the pool of people that buy solar and cash is pretty small. And now over the last six months accumulated about 220,000 dollars in debt and we just got reprimanded on our license for not being able to pay a customer back on time. And so now I am out of crossroads are monthly expenses. We do not own a home. We're renting a home or about 9,000 hours a month because start making money and decided that it was a good idea to start living like I made money and now I'm not making money and I'm just trying to figure out what to do. I'm considering bankruptcy and just kind of at a loss. I'm sorry. I was exactly your age when I was facing the same thing. And so you said you're married. Yes, sir, married one kid. How old your baby? She's two. Okay. How long have you been married? Three years. Okay. All right. Would you allow me to just start at the beginning before I answer your question? Yes, sir. The most important thing when this is over is you and your wife. Nothing else in this conversation matters until you have that and you keep that because the number one calls of bankrupt or the number one calls of divorce is money fights. And when Sharon and I were in the situation you're in, we just about killed each other. Yes, sir. We would have left, but she didn't have a car. That's the exact situation where I mean, and so you need to go back home and and here's the reason and here's where that comes from and if you understand the reason that it helps you to battle it. Number one, ladies are more security based than men in general, not all, but in general terms. Okay. Stereotypical terms if you want to call with that. And my wife security planned was going into spasm mode because you know, because she could see everything falling around us and she was terrified. And when you're running a business like this and you've been successful, followed by not being successful for you, that is a major blow in confidence and an identity and in self worth. And when she's afraid and gets her claws out, you're not in a position. It makes your self worth go down, which makes her get more terrified. And it is a vicious cycle that's ugly. Yes, sir. So when you first thing you do is when you get off the phone, you hug her and you say, we're going to get through this together. We started with nothing. We can go again if we have to as long as you and me and baby, you're okay. And we're going to be okay. I can make money. I can get a job. Okay. Yes, but and then detach yourself emotionally from whether. Whether you're okay, if this business is makes it or this business doesn't, instead, you're emotionally just going, this is a round of monopoly and I'm getting beat. But I'm not going to die from it. Okay. So hang on to your marriage, hang on to your worth and let her know it's going to be okay. And that we're going to be together and we're going to get through this. And you need to say that like every morning to each other. Yes, sir. All right. Now then. Thank you for letting me go back there because I do remember that. And I have coached with a lot of families in your situation in my situation that didn't make it. And so I always want to start with you make it first. Now then. Now, okay. Now let's play monopoly. What's going on? All right. So what kind of debt is this 220,000? So it's 120,000 and customer obligation. So people that paid cash, the finance company, the file for bankruptcy. What do you, how do you, if they pay cash for solar panels, why do you owe them money? Because whenever they, whenever we had the reprimand on our license, we had told everyone that we were waiting for the approval to be able to do the installations again and we gave everyone a timeline. Oh, so they've given you money. You haven't done the installation. Yes, sir. Yes, sir. Wherever we go. The deadline passed. Now you just sell them the money back. It's over. Yes, sir. Yes, sir. Yeah. We have 20% restocking fee on all the equipment on top of that. So on the customers, the canceled. We have to pay. We send the equipment 120,000 of canceled. 120,000 dollars worth. Yes, sir. Yeah. The other ones are like they're fine with waiting. And so we have those. Have you already restocked the equipment? Yes, sir. We've already sent it all back. Okay. All right, so that's a done deal. Just water on the bridge. Water on the bridge. So what happens if you don't pay those people? Take your license? Yeah. Well, our license is already suspended. So I mean, I'm kind of operating under the idea of it. I have to generate another form of income. There's no way for us to generate income with the business right now. I'm actually on a trip with a different company out of speed right now because I have to pay bills. So the business can't produce a dollar in income until you repay the 120. Yes, sir. What's the other hundred other hundred is a line of credit. it with a different distributor. It's tied with the finance company, so it's not directly affecting us yet, but it will, if we do not pay it, but the finance company pretty much, we would finance a deal, the line of credit would go through the finance company, and then through the distributor, and they flip the, they pay you out on the paper, yeah. Yes, sir. Oh, yeah, yeah, yeah, yeah. What are you making now with this other business? I'm going to be making, I make about 20,000 a month, so about 240,000 a year. Good. Okay. All right. So, well, before you file bankruptcy, what I would do is nothing, and just let it sit and see how long it burns. Okay. Okay. And who knows it may turn around, it might turn, something might come loose, but you're, at this stage, you're filing bankruptcy on what might happen, they might sue you for this money, the customer might, the finance company might, these, these debtors might sue you, but they haven't yet. Yes, sir. And you can't produce any revenue with that company, and, and because of this mess, and so, you know, if enough of them come at you that you can't cash flow settlements with them later, a year from now, you might be forced into a chapter seven, but you're not there yet. Okay. And if you can emotionally set this aside and say, I didn't set out to screw these people, I'm not a bad person, the market changed because the law changed, and then the finance company went broke, none of those are things I could have affected, so I didn't set out for this to happen. So I'm going to do the best I can do to work through this, and if I can't, I can. 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Well, I'm looking at possibly getting a vehicle equity alone for an attorney. My ex-wife wants to to leave with our children and actually I move out there to Tennessee. So I'm just scared. I'm sure exactly what to do. And they're $7,500 retention fee for this attorney is just money I don't have laying around. What do you make of your? It could be somewhere around 48,000. God, bring home about $3,600 a month. Do you have any money? No. How much debt do you have? Let's see here just by just under $4,500. What's your car worth? Yeah, I just did KCB on hold with about $11,000. Well, I mean, a vehicle equity loan is a very sweet sugary way of saying title pawn. Right. Which is a ridiculous interest rate. So you're going to the loan sharks. Yeah, they told me about 20 somewhere between 25, 27%. Yeah. Well, first thing I'm going to shop attorneys and see if I can get one to take the case for three to 5,000 retainer. And because it may be that some letters and just having an attorney slows her role. Okay. Okay. And I not be 7,500. It might not be the you know, just you just found this guy. Okay. But maybe you can find someone to take a case for a smaller retainer. Before I would take on 27% on title pawn and get screwed, I just sell the car and buy a $2,000 car and use the cash to buy the attorney. I think I would say something like that was I was just going to say I have shopped around attorneys. This one has seems to be one of the better options. But even they said Anthony, this might this might rack up to $15,000 case. Which is that's another big concern of mine. If I am to sell the vehicle, then I have to go out and try to get some other loan again. But now I don't have no, no, no, no, you sell the car for $11,000. You buy $2,000 car that puts $9,000 in your pocket. Is the car paid for? Okay. It is great. So it's all profit to you when you sell. And you take the nine and apply it to get the attorney and you still have some money leftovers. The goal is use the money towards the attorney and use the leftovers to get you whatever car you can get from, you know, Facebook marketplace. Yeah, just get you some car dealership. Beat or car. And because here's the thing, this is going to set, you know, you're creating two problems. Instead of one, one problem is a big but attorney fee. But now we've got another problem, 27% interest. And you're going to, you know, you're going to look up and be underwater on this thing in a heartbeat. They're going to, you know, they're going to have you in handcuffs, not literally, but figuratively. So if I were in your shoes, I would fight for my kids. I kind of appreciate that anybody wants to do that. And I still think if I were in your shoes, I would look at other attorneys as well. I'm not in love with attorneys. I've never found one that I loved. So I'm not married to one. I don't want to get married to one. So literally or figuratively either one. So, you know, and if he says it might go to 15,000, say, well, really not an option. If you want to get paid, that is because I don't have 15,000. And I don't have any money. This is the money I've got. And so we're going to go as far as we can go for this amount of money, because I can't do anymore. And so if you're planning on running this up, we, already, are starting with a bad plan. So one more reason I don't like your guy. So yeah, it could. It could run to 82,000 if you want to fight that long. And if you want to fight that hard, you could do that. But you are going to be in a mess when you do that. You're going to bankrupt yourself with these attorneys fees. So it could be that if you get an attorney that does know how to posture and negotiate and threaten that you could slow her roll, you know, for a lot less. You know, it may be that just once somebody stands up to her, she goes, oh, okay, whatever. Maybe she thinks you're not going to. And so, but once she gets a letter, and once she gets a filing with it, but to come before the judge, then we've got a different issue. So that's, wow, I'm sorry. You're facing this stuff. Janet is in Wilmington, Delaware. Hey, Janet, how are you? I am good. How are you today? Better than I deserve. What's up? Well, I've been listening to you on and off. And I'm kind of to a point. Where I keep looking at my finances to try to start putting something aside. And I figured if I could maybe just start with like $25 a month, at least like putting it someplace and not touching it, or if like some kind of a savings, would that be a good start? No, I can't buy a biscuit for $25. Why is the number so small? I'm practically living paycheck to paycheck. How old are you? I'm 62. And how much do you make a month? About 2,000. And that's working full time, 40 hours a week? Yes. What do you do? I work at Walmart. Have you considered working on your career? I see buying that around of like moving to a different position, or like a completely different job. Yeah. And it's like, I'm established, where I am, do I want to start? Oh, we've established. You don't make any money is what we've established. You're starting to adapt. No, I have a car to drive. I have a bed to sleep in, a roof over my head. And I actually help my church. You have a food pantry. And we're allowed to bring things home. So that definitely helps with the grocery go. So what's your game plan for the future? What are you going to retire? Well, at this point, probably be like five, 10 years, I'm looking at. And, you know, right now, because it's hard for me to save because growing up, we weren't taught anything. It's hard for me to say because you don't make any money. Yeah. But I love the poverty level on your income. I have done it. I have done it. And I know I can do it again. But it's just really hard. Done. Yeah, you mean made more money? No, no. Okay, you need to make more money, Janet, for the fifth time in this conversation. You need to make more money. You don't make enough money. More money, more you can save. The answer is not $25 a month. The answer is double your income. You need a new job. When was the last time you felt confident walking into an auto repair shop? I mean, in the first place, you're stressed because your car is acting jankety. And then, you hand over your keys and hope you can trust the person who's fixing it. You deserve to feel confident that your car is going to get fixed right. And, at a fair price, that's why I'm a big fan of Christian Brothers Automotive. You never have to wonder if the repairs are legit. With their digital vehicle inspection, you see exactly what their technicians see. So, you get the honest info you need to make smart decisions. And, every repair they make is backed by their nice difference warranty. That's three years or 36,000 miles, whichever benefits you most. I take my card to Christian Brothers because I don't feel stressed. I feel taken care of. And that gives me a lot of confidence when I get back on the road. So, schedule your service today and get 10% off your visit at cbac.com/ramz. Or, click the link in the description that cbac.com/ramz. 10% off. Up to a $250 value. See store for details. Our question of the day is brought to you by Ask Ramsey. Today's question comes from Abigail in Florida. Would you help us out with the definition of a used vehicle? We know not to buy a brand new vehicle from a dealership because of depreciation and planning. But, we know that if you want to buy a new vehicle, you can buy a new vehicle. We know that if you want to buy a new vehicle from a dealership because of depreciation and planning and cash, should our criteria be based off of the manufacturer and or number of miles? We're considering a 2025 model with 4,000 miles and just want to make sure it wouldn't fall into the category of a brand new car. Interesting question. Well, I mean, use simply as you're not the first owner. The actual parameters here, if you're paying cash and the value of all the things in your life with wheels and motors, no more than half your annual income, and this is not a big part of your world, you could go buy that car. Yeah, I mean, the 27 models are out. This is a 25. And it's 4,000 miles, not 4 miles. It's a used car. So is that car significantly cheaper than if you bought brand new? Probably. Yeah, because I did something similar and my car was I think 25 to 30% off just because I waited for one person to drive at 4,000 miles. There you go. So you're still not taking the hit on depreciation upfront. Stacey's in Detroit. I stacey, how are you? Hi, doing well. How are you? What's up? My husband and I are on baby step number six and really have been trying to keep away at the mortgage. But we've been thrown a large, large curve ball with a data center potentially moving in about a half a mile from us. And we're looking at exploring to remove and take ahold of the equity that we have had in our house before we potentially lose that. Yeah, and kind of derail a little things financially that we have set up. Well, my guess is is that anyone buying the home wouldn't know about the data center. Potentially, it's not, I mean, yes and no, right? It's not a for sure thing. Yeah, it's been all over the news. Not in our area. Other areas there have been. Okay, so I'm sorry. Potentially. Yes. Potentially is not happened. Correct. Right. That's why we're trying to figure out. Okay, do we? Yeah, but I mean, what if you move and then it doesn't come? It's a done thing. How sure are you? This is coming. How sure are you? This is coming. I mean, probably about 80 percent. Then other people know about it. They do. Yes. Then you're, you've already taken the loss. Well, our neighbor just sold their home for what we would want to sell in that ballpark. Okay. And still have equity. All right. What, what, what, what is the price range of your home? We could sell for around 600. Okay. And what's your household income? 250. Okay. And you, you, you're under the impression that the value has not decreased on an 80 percent probability of a data center coming in. Correct. That's just not logical to me. But, um, what are you guys wanting to move anyways? I mean, this is our first home that we ever purchased. So, and we didn't think that this would be our forever home. So, we were open to it to potentially get into a different school district. And things like that just wasn't really on our radar right at the moment. Okay. All right. Well. Yeah. All right. Let me think about this. The number one. If you can get a price that you want to get out of a house and you want to sell your house, that's always a good thing. You should always do that. And then just move. Okay. For whatever reason. Okay. The, the second thing is is that I don't want to overreact for something that's not 100 percent. And even if a data center does come in a half mile down the road, there may be a drop in values, but they may be temporary. Because we don't have any, I mean, the, the fear is is the data centers, whatever people are raising hail about it, because it's going to lower the property values in the area. Maybe not. I've seen things like this happen where everybody thinks, oh, this is going to destroy property values. And, you know, for six or eight months, a few people panic sell, because they think that's going to happen and the property values drop. But four years later, they're, they're up and you're fine. And the actual, the actual physical impact on your living there is zero. And if that ends up being the case, then you've panicked and run out the back door because somebody screamed fire and there's no fire. And I don't want you to do that over react. Okay. So I've got a friend that owned a home that backed up to a piece of commercial property in a subdivision like you're in. And that piece of commercial property had been there blank piece of ground for a long time. And a Walmart announced they were going to build on it. And all the neighbors rose up and raised cane that Walmart was going to come in and it was going to destroy their property values. And of course, you can guess the end of the story. Walmart came in and their property values didn't flinch because there was always a piece of commercial property back there. Nothing was different. I mean, you got a light pollution. You probably got some a little extra traffic and some noise with the Walmart backing up to you. But it did not destroy their lives like they were carrying on the drama queen version, you know. So I don't know what's going to happen with the data center. It could have major impact. I don't know. But I always force myself to not over react. If I pull up the weather in the morning and it says that there is a 56% chance of rain in my mind, there's a 44% chance it's not going to. And so I don't want to. Oh, I'm going to stay home today because it's going to rain, you know, which people do that crap. I mean, we even close schools around here because it might be a tornado Friday, you know, and because we've lost our mind. But, but I mean, that kind of stuff because it might happen. If you want little children to die, no, I don't you drama queen. But anyway, so I, I'm the guy the other side of this day. She saw, I'm, you know, have you seen any data on I just look at a data centers? Here's what I'm finding currently is that homes within a mile of a newly announced large data center fell 7% on average over the following five years. Homes within three miles fell 3% on average. So let's say it's 6% her home value goes down. But it's going to cost her 3% in agent fees to sell 3% by not going down for no. And it said over time, there was some areas that actually they sold for more because the data centers tend to locate near strong infrastructure airports jobs, all these other things. Things that cause your property to go up anyway. It really is going to depend on location. What the data center is is that gigantic. Is it an eye sore? That does make a difference. Right. So if the average bad news is 7%, I'm not selling. Unless I wanted to sell anyway. Because it's going to cost you to move too. Yeah. So you got a factor that in. And in her case, she said, you know, she told her phone screen, she's got a low interest rate. She's going to have to give up that, you know, 2% 3% more. So you go double your interest rate on top of paying 3% fees to this agent, 3% for the buying agent over here. You're going to end up on what is losing potentially. Maybe. Yeah. Could be the town could come and fight against my brain. And it doesn't happen. Yeah. So I just don't want to overreact stacy. I mean, it could be a problem. But that's interesting in data. How reliable is that that chat? You got it. We got a wonder. This is from there's a UC Berkeley study. It looks like that was in from September. So it feels legitimate. There's a research paper involved. Maybe if you didn't say Berkeley, who was funding the research? Now I get to get to get to the bottom of this data center brought to you by data centers. That would make sense. It's open to new professor chair at Berkeley. I don't know. If it's only 7% then I wouldn't worry about it. I just write it out unless you want to move anyway. 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Check out the Fair Winds smart bundle including the all new live like no one else debit card at Fair Winds dot org slash Ramsey. That's Fair Winds dot org slash Ramsey. Ensured by the NCUA. John is in Miami. I'm good and yourself better than I deserve. How can I help? So I have a quick career question. I'm currently a general manager with some elevated responsibility at a gym down in Miami. The senior director that was currently are previously working with us move to another gym company is in Jacksonville currently and is offering me an area manager position. So it'd be an elevated title. I would go from about 60,000 a year to 90 potentially with at least 80 as my my annual my wife and I are considering the move in order to interview for the position. I've had to doctor my resume slightly. What does doctor main lie? I mean, yes, yes, basically. So I have, like I said, I have a lot of elevated experience and responsibilities here. I'm helping the area managers in our region when it comes to developing the team, doing like audits and oversight for other clubs. If you have to lie, you shouldn't do it. Okay, that's why I'm having some second thoughts on it. What's the piece they require that you're having a doctor? Well, I'm really just changing the title for my position. So the senior director had mentioned, Hey, just go ahead, keep your experience levels the same and note that you are an area manager rather than just we call it a senior general manager. So the title is changed, but my responsibilities are the same. And so that that's that's not sitting right with me. Yeah. Yeah, you're not going to like me. I wouldn't go to work for this guy. Okay. Hey, lie to you. He's teaching you to lie. He's going to cut your throat. Okay. Yeah, that's fair. And I mean, in in the past when he was working with us, he's what's helped me. He helped me kind of move into the general manager position. I've been with this gym for for five, almost six years now. Um, so he kind of helped me work the way up. And after he left, I'm finding out that there's stuff that he did with other employees. So I was considering the position because again, it is a title increase. It is a pay increase. Yeah. But I'm moving under a toxic guy that can't be trusted. His integrity is bad. And he's telling you to sacrifice your integrity. Okay. Yeah. That's that's what I was thinking. I just wanted a better better. I guess there was a more extra book out on this that was very interesting to me. Tom Stanley did a book in 1992 called the Millionaire Next Door where he studied Millionaires. And he came back later and studied Deca Millionaires. And I can't remember the name of that book is called Millionaire Something Millionaire Mindset or something like that by Tom Stanley. And he studied people that $10 million net worth or greater. And he found 38 characteristics of these Deca Millionaires, 10 million or more. And everything from education level to number of hours worked a week. What are the habits? What are the character traits? And and and then he correlated those among the study. And so the ones that appeared most often were at the top of the list. The ones that appeared least often were at the bottom of the one through 38 list. Does that make sense? Yeah. You know what the number one thing was among all of them that showed up every single time integrity. Yep. That's what it would have been, I guess. Yeah. And that's the reason for my sermon. But yeah. Millionaire Mind. Is that it? That's that's the book. Thank you. Yeah. And Tom passed away in a car wreck a few years ago and his daughter Sarah, we still interact with her. She does great research on millionaires and so forth. Still she's in Atlanta. But yeah. That that that stuck with me that if someone will lie to you, it's asking you to lie. That means they're going to lie to you. And if they're a known liar, then you're going to get, you know, you're stepping into a bear trap. And and whatever amount of money is promised to you, really isn't the promise isn't good because his promise is because it's working good. And yeah, so people, you know, I cheat on my taxes. Someone says, then they're gonna cheat you. Well, I hate the government, I hate the IRS, I hate paying taxes, but I pay every stinking dime exactly what I owe, not because the IRS is worth it, not because the US government deserves it, but because it's a statement about who I am. So you do exactly what you're supposed to do, because that's a statement about who you are, and be a person of integrity. And then you create a culture of that. I mean, that's what you've done at Ramsey with almost 1,000 team members here, we try to hire people of integrity. And you can sniff it out pretty fast. And people with integrity, we don't keep them when they don't. So yeah, so just, yeah. And the stats interesting, 95% of surveyed millionaires rated being honest with all people as a very important factor in their financial success, tied for number one with being well disciplined. - That's interesting. - That was from that book. - That's the book, yeah. - Look at that, all from my memory file. - That's pretty good. - And you found it on that thing called the internet. - Memory of an elephant. - Pretty cool. - I can't keep much up here. - That was before there were elephants over the internet, but yeah. (laughing) Yeah, anyway, yeah, it's interesting. You know, we had a thing a few years ago, people were talking about business ethics. And when we're teaching our small business people, what do you do with business ethics, business ethics? Do we need to teach business ethics in college now? While you're going through and getting a business degree should you have to get, you know, take two semesters of business ethics. And, you know, it's pretty simple. Just switch moccasins. Walk a mile on the other guy's shoes. And if, what would you want someone to do with that? And so if I'm looking at a team member here, how would I wanna be treated if I were them? If I were the team member and I'm gonna go, you know, if you're interviewing, if you were the person doing the interview and you own that gym company, would you want someone to lie on their resume to get the job? Well, the answer's no. 'Cause if they're gonna lie about that, they're gonna lie about something else. And so it's, you know, but just business ethics is pretty simple. Switch places. And how would you wanna be treated if you were on the other side of that? And you go, oh, well, that's the ethical answer. Treat other people like you wanna be treated. It kinda comes from Jesus' own mouth, yeah. And that helps you. It helps all your business ethics questions all the way top to bottom. It's an interesting call though. 'Cause the data, and you probably can pull this up while we're talking too 'cause you're done it's good in this call. But the data that I have read a couple of things lately that like some huge percentage of resumes, 80, 90% have falsehoods on them. That does not surprise me. And when we're hiring here, we consider resumes a bit of a joke. Because I mean, they'll, they'll embellish something. I mean, the guy's job was to mop the floor. And by the time you finish, you thought he was the head of surgery after you read the, after you read the, the write up on his work. It's like crazy. So we don't even look at that. We just talk to the people in the interview, actually learn about the people. Check them out, do a background check on them, that kind of stuff and cut through all the BS. - That's where referrals are so important to us. Our team member referrals is one of the best ways to actually get your foot in the door and get an interview. There's a recommendation. Someone with integrity, someone with skills, versus I have experience in Microsoft Word. Whoopty do, my toddler can figure that one out. I don't know why we're all still stuck on that one. - Hey, wait a minute, that's insulting. I can't. - Hey, struggles. - I'm struggling. Word I can do, Excel gives me a fit. - Those pivot tables, tricky. - Those would get you every time. - But it's a good reminder that we are always hiring ramesysolutions.com/careers. If you're a person of integrity. - Look at that. - Don't talk to her about it. - You're doing an insert there. - We need good people, Dave. And a lot of our listeners are good people. - They are. So yeah, when in doubt, don't be in doubt. Tell the truth. And that'll answer your ethics question. And if it means you don't get the deal, you don't get the deal. And that probably God protecting you from people that you shouldn't be dealing with in the first place. So, I mean, I've got a situation right now on a project we're working on outside of Ramsey that the, some of the players involved are their crooks. And so I just pulled the plug. - We're not doing it. - And the people around the project on my team are like, "Wait a minute, wait a minute." I'm like, "No, the guy's a crook." And if we expect him to be anything but a crook, after he showed us he's a crook, then we're the stupid butt people. We're the idiots. Once you know the guy's a crocodile, expect to be eaten. - You always say you play with things to get bit. - So once you realize, "Oh, he's a snake." Let's not play this game. - Yeah. Yeah, the simple continues on after seeing a problem. The wise stops and it's safe for it. This is the Ramsey show. (upbeat music) (upbeat music) - Hey, what's up, guys? It's Jade Warshot. Now, I know a little something about saving money. 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That's boostmobile.com/ramzie. $25 forever requires customers to remain active on Boost Mobile and Limited Plan. (upbeat music) - Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio, George Campbell Ramsey personality. Number one best selling author and co-host to smart money happy hour is my co-host today. Brittany's in Charlotte, North Carolina. Hi, Brittany, how are you? - Hi, Dave, I'm good and how are you? - Better than I deserve, what's up? - Great, so I've got a question. My fiancee recently won the lottery. He's from South Africa. So he's in quite a tax-friendly country when it comes to the lottery winnings. And I'm currently about $200,000 in debt. And he's been thinking that, you know, he's been looking through Tachy DTN. I don't really know exactly how to go around the processes. That it's probably better for me to file for bankruptcy with the current debt that I have so that we can start on the clean slate. So it's just inconvenient for you to pay the debt that you owe. - So can you repeat that? - I'm sorry. - Sorry, I'm struggling to hear you. - Yeah, so what kind of debt is the $200,000 that you owe? - I'm sure I've got about $50,000 in student loans. $50 for my car and then a hundred four credit cards, a medical debt, and some personal loans that I took out. - Okay, you understand that you pay the car or you lose the car in bankruptcy, right? - Yes, yeah. - So you're just gonna give up the car? - So what we're thinking of doing is, I found for bankruptcy, I give up the car. I also just write off the other bit that I have, $100,000 that I've got in the credit in the medical. And then we can take care of the student loans with his winnings. And if I don't do that, then we might have to look at getting a cream up. - Why not just sell the car? - I could look at selling the car, but where I'm just a little bit worried about is, you know, how will I be traveling around? - You get a cheaper car. - I'm not saying go without transportation. - If you sell, if you give up the car in bankruptcy, you don't have transportation until you buy another car, right? - Yes. - So if you sell this car, you give up the transportation until you buy another car, right? - Yes. - Yeah, and the student loans aren't bankruptable anyway. So 100,000 of the 200,000 of this scheme of yours is bullcrap. Because you can't bankrupt the student loans anyway, and you're either going to pay the car off, or you could sell it and pay it off anyway. So I have a different view on this than you and your fiancee have, so I don't think you're going to do what we tell you to do. I don't think you're the, I think you see things differently than I do. You're able to pay your bills. and you should if you can. I don't like that your fiance thinks it's inconvenient and I really don't like it that you think it's inconvenient. And to the point that the only way he's going to marry you if you keep this dead is if you sign a prenup because you didn't do it the way he wanted to. So there's so much fish in this kitchen that stinks that somebody's getting food poisoning forward on. I'm just, this is gonna go bad. So I'm old school and I understand when people get in a pinch and can't pay their bills, that's different than won't pay my bills for me. - Yeah, regardless of where the money comes from, lottery, savings, if you have all that money and you have this pile of debt and you go, nah, I don't really feel like paying that. - Yeah, so what would I do? I would sell the car and I'd work my way through these are the debts, plus or minus this fiance, the lottery winner from South Africa. It's just, there's just, this is bad. No, I would not tell you to do that because it's not what I would do and if you were my little sister, I would tell you not to do that 'cause I love you and I want good things for you in your life and I want you to live a life where of honor, of integrity, of dignity, not where paying your bills is just inconvenient for him. And so, now, but I don't think you guys are gonna do that 'cause I think you think differently than I do and that's okay, you're allowed to do that. But you called here so you have to get our opinion 'cause that's like what you pay for, right? So. - Oh, that's a tough one. And the other thing is either way, you're not changing the behavior they got you here, whether it was through bankruptcy or the lottery winnings paying off the debt, you gotta go, why did I go into all this debt in the first place? Why did I buy a $50,000 car I couldn't afford? And so, that's the other piece of the puzzle to solve before you guys get married is a line on your values 'cause otherwise those lottery winnings are gone. You're gonna blow right through those two. - Yeah, well, we don't have that piece of information as to the amount but it's just a matter of time you can burn through any amount of money, right? Ouch, Jordan's in Spokane, Washington. Hi, Jordan, how are you? - Hi, it's an honor to talk to you guys. - You too, how can we get my call? - Sure, what's up? - I am experiencing paralysis of analysis. And I can't decide if I should pay myself back out of my HSA or leave it alone. And I should say ours because my husband and I, we had our daughter earlier this year. - Mm-hmm, congratulations. - And when I was seven months, thank you. When I was seven months pregnant, he lost his job with his healthcare and everything. And so we went into modified stork mode. And now we have a pile of cash that we could use thankfully to pay off the remaining medical debt and just be free and clear. - How much is it? - We have $50,000. - $50,000 or $50,000? - $50,000 from the baby without insurance. - Correct. - No, no, no, no, sorry, sorry. That's the pile of money that we have- - Oh, I'm sorry, how much are the medical bills? - Okay. - So do I pay that out of the HSA or do I pay it out of the 50? - Correct. - Okay. - And the only reason I'm experiencing that I'm pausing is because I don't know whether or not we now need to figure out how to begin and start and everything with retirement options. My husband was able to find a job and with a new company that we're both really excited about and on board with and but they are unable to offer retirement or insurance for a while. So we are in a holding pattern. I don't know, there's no good answers. He would like to stay there for a while and we feel confident. I have the ability to go back. - Yes, insurance in place, right? - We're doing what the, we went through you guys and got recommended one of the health costs or health sharing industries. - Okay. - Yeah. - Okay, good. - We'll reevaluate that at the end of the year to see, I expect that we'll stay there only because we don't, we aren't expecting any additional high medical bills or anything like that. - And how much is an HSA account? That's the other thing is there's only like 40 in there and so I don't know whether it's worth conserving or not. - As much volatility as there is in your life, I would use the HSA. What would you do, Jordan? - I mean, if you can leave it invested and you don't need it, then do it. But if it's gonna make you lose sleep at night, just use it if you need it. - I think the HSA is for buying your next tiles and for making sure you got retirement going and getting through this job changing new baby and I'm probably using the HSA money. (upbeat music) You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey Trusted Pros. Whether you're looking for car, home, or any other type of insurance, Ramsey Trusted Providers have been coached and vetted to serve you like we would. Find what you need at RamseySolutions.com/insurance. (upbeat music) (upbeat music) - Buying or selling a home is a high stakes process 'cause it's a lot of money. You make a mistake, it could be 50 grand. You priced it too low, you priced it too high and it didn't sell for eight months and it should've sold eight days. Yeah, it's a big deal. So you need a high octane, high protein agent in your corner, so you're not making mistakes. And that's why Ramsey Trusted connects you with vetted real estate agents who have the experience to guide you step by step to make smart decisions not expensive mistakes and connecting is easy. Just compare our agent profiles, interview your top choices, pick the right one for you. Find a local Ramsey Trusted agent who has your best interested heart for free at RamseySolutions.com/agent or click the link in the description if you're on YouTube or podcast. Matthew's in Lubbock, Texas. Hi, Matthew, how are you? - Excellent day, thanks for taking my call. - Sure, quick question. I've got six months of savings in the big bank of America and I'm not getting any kind of a return on that investment. I want to try to stay ahead of the inflation and I've heard that online high yield savings accounts are getting like 4% or higher. Is it worth it? Is it safe to move my six months of savings into an online savings account? - Yes. - So here's what you want to look for. Two things, either FDIC or NCUA. And that is insurance covering your account up to a certain amount. So if you're a single guy, it's going to be $250,000. If you're married filing jointly of a joint account that'd be up to $500,000 with that bank. - Okay. And so if the bank is under, you're covered up to that amount. - Yeah, and so, but just because bank of America sucks doesn't mean that there's not a bank that pays a high rate that's not 100% online. So versus Fairwind's Credit Union is a national credit union that we endorse there, the sponsor of the studio. You're in the Fairwind's Credit Union studio, right? And they've got great rates on your HYSA. I don't know what it is today. - It's over three percent currently. So the rates have been going down over the last couple of months. So 4% would be a very high rate. I haven't seen that anywhere currently. That's not like a temporary bonus kind of thing. - Yeah, but good interest rates on your HYSA savings account is not unique to online banks. Other people have it. - Okay. My bank, a local regional bank, is, you know, we've got cash reserves at Ramsey that they're paying us very well on. It's not 4%. But your money that you're parking like that is not even going to keep up with inflation usually. It's the purpose is not doing, that account is not an investment account. That account is insurance against bad things happening when you're dealing with your emergency fund. - That's why you want to keep it liquid. You don't want to invest your emergency fund. - If it makes zero, it's still doing its job. But there's no reason to not try to get. I mean, you got $20,000 or $30,000 or whatever it is there. Not try to get 3% some change on it. But I wouldn't go out on a limb was something that looks sketchy to try to get an extra half a percent, either. - There's usually a lot of fine print involved and you got to know the reputation of the bank. How easy is it to use? Are there fees involved? So know all of that before you step in. But if you want an easy, great one where you can have a checking, and HILD savings, Fairwinds, Credit Union, you can jump on to Fairwinds.org/Ramsey. And they've got a great smart bundle just for our. to get you going. Anna is in Sacramento. Hi, Anna. What's up? Hi, guys. So I, like most people my age, I have student loans. I have about $50,000 of student loan debt. And I have a 401k from my old company that has $42,000 in it. And my current company as an ESOP program. And so I've only been with them now two years. And it's already worth more than the 401k of my old job. And so I'm wondering if it's a good idea to just pull out the 401k for my old job and use it for paying down my student loans. Please don't do that. I'm begging you, Anna. Here's why you are going to pay a steep penalty. You sound like a nice young lady. You're not 60, right? No, I'm not. I'm 30. So you're going to pay taxes on that money plus a penalty. So it would be the equivalent of you going out and borrowing at 35% interest to then go pay off your student loans. Which we would agree that's a bad idea. I would agree. And I'm 30. So let's say at 65, I'm going to play this out. If you just left that money alone and it grew at 10% average for the next 35 years to 65, it's $1.3 million. So what you need to do instead is work your way through the student loan out of your cash flow, even though that's harder. But it's not worth it, 35% hit. Is George's point? Okay. And get with the Smart Vestor Pro and roll this old 401k into an IRA in some good mutual funds that are growing faster. Because it sounds like the 401k is underperforming also, the old 401k. Because you said it's not doing anywhere near what your eSOP is doing. And it sounds like the employee stock, you know, that part scares me a little bit to have a lot sitting in there in one stock. So you may want to cash out anyways and invest it on your own or use it to pay off student loans. Well, that one you can't. That's her current job. Yeah. Can't be cashed out of a 401k in your current job. Well, she's saying she has the employee stock options. The eSOP is pouring into the 401k. And so she's getting profit match there, short amount still. That's why it's-- Yeah, you can't mess with it now. You can't beat that old one. Yeah. Of course it's going to. But on your old one, I would roll it to an IRA with a Smart Vestor Pro and then I'd work my way through the student loan debt with your income. And just, you know, I would believe it or not, I would stop adding to any 401k until I get the student loans paid off. But I don't know if you'll do that or not, but that's what we teach and that's what you should be doing. So good question. Thanks for joining us. Brianna is in Washington, DC. Hey, Brianna, what's up? Hey, guys, we're in my partner. We're wondering if we should switch to a 15-year mortgage because the interest rate went down. You can know that will bring us over 25% of our monthly income for our mortgage amount. How much over? 4,600 would be the payment. And right now we pay 4,000. Yeah. And are your careers going well? Yeah. So we both have pretty good careers in 19. Obviously, if one of us lost a job for some reason, we only worry we're like locked into this 15-year payment. And property taxes go up and unforeseen things happen. And now we're locked into something that we're not sure. Yeah, but $600 shouldn't put you out of business if your careers are going well. Yeah. Yeah, I guess that's true. I guess we're just kind of like, do we lock in? Or not? Yes, I would take a lower interest rate and be out of debt sooner. What's your current rate? 6.3, and this is 5% with the local credit union. Ooh, I love it. What's your loan balance? 491. Okay. So we're talking about 5 grand a year in savings. Yeah. That's 500 bucks a month on that. That'll ROI pretty fast. Oh, wait a minute. That's almost what you're paying extra in payments. You're going to be saving that much in interest and you're going to put it right back in the payment. Save 1.3% on $500,000. That's going to be about 500 bucks a month in savings. Okay. But the way you're structuring it is it's all going on the loan, all going on the, you're using that to get out of debt faster, right? It's more as a principle. It's built into your 15 year, but my point is you're saving. You're not giving the bank wasted money called interest to the tune of about 500 bucks a month. Meanwhile, your payment went up 600. And so all of that is the reason you're getting out in 15 years. I really like this plan. Yes, do a 15 year. Yes. Yes, yes, yes, yes, yes. And look up 10 years from now and pay it off. Look up 7 years from now and pay it off. Completely. That's where you're headed. So very cool stuff. [MUSIC PLAYING] People ask me all the time. George, what's your number one money saving hack? I'm glad you asked. Nothing makes me happier than helping another frugal friend. So here's the hack. Get on a budget. Seriously, how are you supposed to save money if you don't know how much you're spending in the first place? And that's what makes the every dollar budgeting app a game changer. With every dollar, you'll get a clear picture of your spending. And from there, it's easy to see where you can get more intentional, cut back, and save more money. How much money are we talking? Well, the average every dollar budgeter frees up $395 in their very first budget. And if you ask me, I think you're way above average. So why are you still listening to me? Go download every dollar for free and start saving more money right now. [MUSIC PLAYING] In the lobby of Ramsey Solutions on the debt-free stage, Calvin and Latasha are with us. Hey guys, how are you? Hey, how are you? Welcome. Welcome. We currently live in Chicago, Illinois, but I do want to make it clear. We are from North Carolina. [LAUGHTER] OK. Very cool. Well, welcome to Nashville. We're glad to have you all here to do a debt-free screen. How much debt have you paid off? $150,000. Wow, and how long did that take? Seven years. OK, cool. And your range of income during that time? Dave, we started off at $50,000 and we finished off at $300,000. Very cool. What do y'all do for our living? I am a social worker, currently. And we also have our own pest control in wildlife. OK. And that's you. Yes, sir. OK. Good for you. Very cool. Good deal. So seven years, 160,000. What kind of debt was that? 130 was, 32 was student loans. And we also had some cars. We had some credit cards. So we were pretty normal. But the one thing I did want to make sure you knew is I spent a lot of money on an engagement ring day. No. Did you go into debt for it? I definitely didn't do that, George. And how about this? It was $497. Wow. You big spender you. You know me. I love it. Good for you. So what happened seven years ago? Is that when you got married? So if you asked, I believe we got married eight years ago. OK. And we moved to Chicago. And about a week after we, um, after we all moved up, we got married. OK. And about a week after we, um, after we all moved up here, I lost my job. Uh-oh. So we were trying to figure out what we were going to do, finally ended up, you know, lending the job. Uh-oh. But I was still like up to my eyeballs and debt. I was literally getting calls from the debt collectors telling me that I owed money on the $497 ring. No way. So I knew I knew something there, Dave. Uh-oh. I was calling one of my friends, you know, he mentioned Dave Ramsey, so I went and I started going down this tunnel of just looking on YouTube and looking at all of your videos. And I told myself I was going to watch every video you ever made. And then I realized there were decades videos to watch. So, uh, finally, I just called my wife and I said, we're not going to make it. And she said, what do you mean we're not going to make it? And then I explained to her, you know, what was going on. And she said, well, what are you going to do? And then I said, well, look, I got something for you. I ended up showing her Dave Ramsey and we've been going hard every since then, Dave. Wow. Following the baby steps. Yes, sir. And seven years later through all of that, you get completely free. Yes. What was the one you paid off that you went? I hate you people. I'm so glad you're gone. Student loans. Student loans. Yeah. Sally May is an ugly woman. Yes. Yeah. Ugly woman with a ward on her nose. Get her out of my house. I like it. You guys are awesome. So glad for you. Congratulations. So seven years is a pretty long journey as far as baby step two goes. How did you guys maintain momentum while still needing to live life? Well, outside of, you know, my Lord and Savior Jesus Christ helped me along the way whenever I did get weak. I did want to say, when I say, my wife killed me. came kicking and screaming. The most important part that is not the kicking and screaming, the most important part is that she came because we would not have been able to do this along. - She was sort of the reluctant spouse at first. - Oh my goodness, she was my cheerleader. One way or the other, let's put it out. - And accountability part. - There you go, yes sir. - So Natasha, for you, what was the hardest part as the reluctant spouse to go, all right, I get it now. I'm in, what was the turning points for you? - Not spending, not being able to spend. So the turning point was like, oh gosh, we really are stretching ourselves then. Well, I'm stretching us then because, you know, he's on this page and I'm on this half a page and it's just like I had to get on the full page in order to, you know, make our family able to be in this position that we are now. - Yeah. - So. - So you kind of woke up and saw this is the only way out. - Yes. - So you know what it was, Dave, we were headed out of town and I had just sold my 2010 Dodge Challenger. And I had $6,000, hard cold cash in my hand. And before we got to the airport, we had to ride together to the ATM because the bank was already closed. We put that cash inside the ATM and her seeing all those transactions we had to make with all that money in our hand. I noticed a twitching around there and everything changed. (laughing) - I sold my Challenger, baby. - Yes. - Wow. That's serious right there. That's what we knew he was doing it. - Yeah. - He sold it for a minivan. - That's true sacrifice. - Wow. - That's the ultimate sacrifice. - That's so stereotyped, unbelievable. - Yes, you guys, speaking of minivan, I see some beautiful children over here. Most of them don't look like they're older than seven right. So was there a bunch of kids that came along during the debt-free journey? - Yes, three. - Wow. - Yes. - So how did that work out? As you guys are trying to maintain momentum, you got babies coming, left and right. - It was actually momentum believe it or not. Because I had a daughter, I said, well, I gotta get a second job, you know? And then they do work harder. Oh, yes, and then I had another daughter and I said, I gotta get a third job. And then I had another daughter, I said, I gotta get a fourth job. - I gotta go on business for myself. - Mine as well, right? - That's amazing. So every extra kid just added more motivation of here's why we're doing this. - There you go. - Was that your why? What was underneath all of this? - Yes, so most definitely, that was a why. Just looking at them and looking at the future that they could have, that was definitely something that pushed us forward. Our oldest son, our oldest child Calvin Lee, he was kind of there with us through it all. You know, we saw some of the struggles that he had to sacrifice with as far as, you know, going to schools that were in the best, you know, living in areas that were in the best. And we didn't want that for everyone. We didn't want that for him for the rest of his life either. So it helped us to push to go further and do more. - Yes. - Now that you're 100% free, how's your feel? - Feels great. We haven't went outside and walked on the grass. Yeah, barefoot, but I'm excited about doing it. - That's the next step is getting rid of the mortgage. - There you go, yes. - That's good. And I like that. So what do you tell people now that you've gotten through $160,000 in debt, it's gone. What do you tell people and they say, how did you do that? What are you to tell them the key is? - Consistency is the big one. It's the huge one. - Don't stop. - No. - Just don't stop. - Never give up. - Never give up, never quit. Never quit. - So I would say get that consistent budget and stick to that consistent budget that you're doing with that written down budget and have those conversations with your spouse ongoing. It's not a one-time conversation, but it's ongoing. And having those conversations help us to be able to grow financially, spiritually. And as far as our relationship was concerned, because it uncovered a lot of stories, back stories that we had that we didn't know about one of them until we began to have these conversations. You gotta get the family worked out of you. - Yes. (laughing) - There you go, you know, parts of the family anyway. We'll keep the good parts, but the rest of it, yeah, some of these people, yeah. Oh, thank you, oh, thank you. All right, let's bring the kiddos up and introduce them and give us their names and ages, a beautiful family. - All righty. So we have Calvin, he's our oldest one, he's 13. We have Natalie. And we have Natalie Seven, we have Haley. And then who's five and we have Emily who's four? - All right, very good. Now, you guys are come all the way from Chicago to the debt-free screen. Have they been practicing? - They have been practicing the entire time. Hi mom. Hey. (laughing) - Love it, very cool. All right, Calvin and Latasha, Calvin, Natalie, Haley and Emily, Chicago, Illinois, $160,000 paid off in seven years, making 50 to 300, count it down, let's hear our debt-free screen. - Three, two, one, we're debt-free! - Yeah! - Woo! - Woo-hoo-hoo! - That's how that is done. - Wow, I love that. I love looking back on it. Do you think they could have seen themselves seven years from now, completely debt-free, making $300,000? I mean, just what a wild journey. People often overestimate what they can accomplish in a year they underestimate what they can accomplish in a decade or seven years. It's hard to look that far out, but the progress is unbelievable and you're that diligent over time. - Yeah, and seven years from today, where will they be? - Yeah. - Probably back here for a mortgage debt-free screen. - And heading towards a million dollar net worth. - Yeah. - And that's 14 years. You'll blink and that'll happen. So you can just happen anyway. - It's gonna happen anyway. - Yeah. - So you might as well do some smart stuff while you're there. - Or you can be you or and say, well, I can't make progress, so what's the point? It's too much debt. - E-Or, well, E-Or is not in their vocabulary, so these are can-do people, rock stars. I'm so proud of y'all. Very, very well done. Excellent, excellent work. (upbeat music) (upbeat music) - I finally get to announce that my brand new book, "Building the marriage you want is available for pre-order." If you and your spouse have been feeling like roommates lately, like maybe this thing called our marriage has just run its course, like this is just the way marriage is, I get it. This book is me sitting at the table with you and you and your spouse helping you both take the next right step towards the marriage you both want. Marriage is still worth it. Order now for $24.99 and get over $100 and pre-order bonus items at RamseySolutions.com/store. (upbeat music) Our scripture of the day, numbers 6, 24, 26. The Lord bless you and keep you. The Lord make His face shine upon you and be gracious to you. The Lord turn His face toward you and give you peace. James Crook said, "A man who wants to lead the orchestra must turn his back on the crowd." Brody is in New York, hey Brody, how are you? - Hey Dave, I'm doing great, thanks for having me. - Sure, what's up? - So I have a question, I've been listening to you guys for a while and my wife and I are not on the same page in terms of budgeting. So I've downloaded the every dollar app. I started using it but it's hard to use if only once spouse is on board and what I've really been doing is using it as a reactive tool to say, "Hey, this is what we spent." And now let's put it in use categories and stuff. - I bet that makes you popular. - Yeah, well, no, I don't really bring it up because, and I guess the question is, you know, I know if we were on a budget, we would save a lot more. But and the reason my wife doesn't really want to do a budget or really, you know, when it's spending is because when she was really young, her dad passed away and you know that, you know, a lot of times she brings up, you know, I don't know if we'll be here for retirement and we shouldn't wait till we are retired to go on all the trips we want and stuff. So we go on a lot of vacations, which I do enjoy. But my guess my punch line question is, how are you paying for those? - Oh, in cash. We're not, we only, we, the only debt we have is our budget. - Okay, so what would be different about writing it down and planning to spend the money in cash and doing exactly what you're doing now? What would be different? That's a budget. - Yeah, just sitting down together and saying, how much do we want to spend on vacations? How much do we want? But I guess my question is, is it, obviously, we would save more if we were on a budget? - It's not about saving money. It's about if you work for me and ran a business unit for me, I would fire you for incompetence. - Yeah. - You're not managing your money well. And she's not acting like an adult. I mean, you guys need, she didn't work for the Congress. There are limits on her life. I don't care, I'm sorry her dad died, but there are limits on her life. I mean, what if she just decided to spend $100,000 on a cruise, what would you have to say? Oh, wait, honey. We don't have the money. No. Well, we've never, like, we are not even close to, like, you know, putting anything on a credit card or anything. That's not the point, man. The point is is that she wants to act as if there's no boundaries while there is actually boundaries. And a budget is just admitting that question is, do we do we need balance? Yes, but you don't need to use the budget as a punishment, too. It's not a form of medieval torture. It's simply you say, before the month begins, honey, here's what we are agreeing. We can spend our money however we want to. We're just going to tell it what to do instead of wondering where it went. And we probably will do almost exactly the same thing we're doing now, but we're going to be adults and be on top of it and telling it what to do. I'm not asking you to cut your spending on these trips in half. I don't know if that's the case. That's up to y'all. But the idea that a budget somehow automatically means restriction, automatically means lack, automatically means sacrifice. It doesn't automatically mean that unless you two decide it does. My budget allows me to do anything I want to do. It sounds like the real rub is that you're the saver and she's the spender and we haven't called that out and come to an agreement on what that looks like. And so I don't want you to use it as a whip and a chair on her. No. We can do, honey, we can do almost exactly the same thing we're doing now, but I simply want us to be an agreement about that before it happens not after because this is, it's not maturity. It's not emotional maturity. And it's not about whether we save more or spend more or save less or spend less. We together will sit down and look at that and decide that together. But I'm telling you, man, the data is in. The people that don't do budgets don't win with money. They simply don't. I don't care what you make. I mean, you can out earn it for a period of time. But if you don't keep up with what's going on with your money, you don't have any eventually. And so we studied 10,000 millionaires, almost all of them do a budget with their spouse and their inagreement, but they're not necessarily penny-pensures. Some of them are some of them are tightwads, but some of them go on cruises, some of them by cars, they do whatever they want to do. And it sounds like you've got a great life. I would keep doing your great life and just write it down and let that be your starting point. And then the two of you adjust that and go, here we are. But this idea that we don't need to save for retirement, we're going to eat dog food. I mean, you don't want to be on social insecurity. Of course you need to save for retirement. That's completely ridiculous. That's juvenile. Of course you need to have some wealth built. So that you have some money to sell, you have some food to eat when you're old. It's just an intentionality tool because if you guys work too hard to not have any plan for where this goes and just hope there's enough in the bank account. So that's all we're saying is there is a boundary here. Let's make a plan for it so we feel good about it instead of guilty. Telling your money what to do instead of wondering where it went. That's all it is. And again, to both of you have a vote, she has a vote. This is not a tool to rein her in or control her or something like that. She gets a vote. And if her vote is, we were spending $10,000 on a trip. And now we're going to spend $10,000 on a trip still. That's okay. That's her vote. And we'll sit and look at that and talk about that together. That's fine. We both get a say in this. We both get a, and that's where you get this wonderful communication tool in your marriage and this combining of your values and sharing of your goals instead of, she tolerates you managing the money and you tolerate her spending. That's not a, that's not a high quality situation. But I think the problem is that she probably views a budget as somehow, she got the message that you're going to use that as a way to rein her in and control her. And that is not what we teach. It's not a straight jacket. No. Not a form of medieval torture. It's simply telling your money what to do. Anthony is next. He is in Albany, New York. Hi. Anthony, how are you? Hi. How you doing, Dave? Thanks for having me. Sure. What's up? So I just have a quick question. I'm going to try to keep it as beef as possible. So I'm on baby step three. I literally just paid my car off today. Why did it go? Awesome. Yes. It was nerve wrecking. Trust me. I've been bingeing your shows for the last three days because I already had the anything I wanted to do it because of you. And today I just pulled the trigger and went with it. So at this point, I'm completely out of debt, listening to your show. But that wasn't really the basis of the call. I wanted to know a little more about the next step because that next step, I have absolutely no knowledge of. And if you could help me, you know, even get the ball rolling in that direction out of your studio. Sure. So you're talking about investing. Once you're done paying for the past, they'll start building for the future. Well, it's simple. You want your money to beat inflation. You want the harness, the power of compound growth, which is where your money makes money. The new pile of money makes money. And we found the best way to do that, the best way to start is through tax advantage retirement accounts. Most people have those through their employer or you can always open up something called a Roth IRA. And the Roth word just means after tax money, that's going to then grow tax free. So you're paying the taxes now instead of later. And if you just do that, if you just fully fund a Roth IRA for the year, that's a $7,500 limit for you for the year, you're going to be a multi-millionaire if you invest it in some good growth stock mutual funds. Now, we don't have time to go into what mutual funds are, but I'm going to send you a link to our free investing guide. So your homework, Anthony, is to read through this guide so that you have a full understanding before you ever invest a dime. Oh, that'd be helpful. That's great. And then if you actually need somebody to help you do it, you just sit down with one of the smart investor pros you're here is talking about, just go to ramsysolutions.com and find a financial guy, gal. And they can sit down. They help you get up, get set up to set up that Roth IRA and it can come automatically out of your checking account once a month if you want it to. That's the best way to do it. If you've got like a 401k, a Roth 401k, even better, just dial it up to 15%. Never touch it. Make sure you're in some good funds that are diversified. We recommend four different types. We'll walk you through that in our guide. And for anyone listening, we'll send you a link as well at ramsysolutions.com/guide. We'll also drop a link in the description of this episode. Got to love it. That puts us out of the ramsyshow and the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace and that's to walk daily with the Prince of Peace. Christ Jesus.