Change Your Habits, Change Your Life

[MUSIC] Brought to you by the EveryDollar app. Start budgeting for free today. [MUSIC] Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Farewell's Credit Union studio, this is the Ramsey Show. I'm George Campbell, joined by Dr. John Deloney, taking your calls in the next couple of hours, triple eight, eight, two, five, five, two, two, five. Sarah joins us in Cleveland to kick it off. What's going on, Sarah? [MUSIC] >> Hi, I was coming. I just have a ton of debt and I honestly, I've made the payments and everything for the last year and a half. But it's gotten to the point now that we're on my interest rates. It went up to where my payments have doubled. Basically, I've made all my payments every month, except for after I make all my payments, I tend to live off of my credit cards because I don't have a cash left on everything. I don't know how to get out from under my credit cards. This is the first time I missed the re-credit card payments this month that I didn't get paid, and I don't know how to get out from underneath them. >> Why didn't you get paid? >> No, I got paid. They didn't get paid. >> They didn't get paid, okay. >> Yeah, this is the first time that three of my credit cards didn't get paid. >> Gotcha. >> Are you talking about minimum payments? >> Yes, just the minimum payments. >> Okay, well, let me tell you, if you just make minimum payments, the debt will swallow you whole. That APR of 29%, while you're making a payment of 50 to 100 bucks a month, is not going to touch the balance. So what you need to do is just lay them all out and attack the smallest one, and just make the minimums on the rest. Now, it sounds like you were trying to do that, but you're also still using the cards, and that's part of the problem. >> Well, one of my credit cards, the payment, $679 a month. >> Goodness. How much credit card debt is this all together? >> Alt together credit card. That one there is just, that one there is $21,157. >> What's the total total total? Give me everything and one bucket, how much is it? $21,800, $12,000, $6,000, $17,800. Those are all my credit cards. >> Do you have other debt? >> I have no, I do, I have, like, I buy how to get siding on my house, I have $14,000 for that, and I have a personal loan that was $7,300. I have a mortgage and a car payment. >> Wow. Are you single? >> Yeah, I am. >> Okay. How much do you make annually? >> About 103,000. >> Okay. >> Wow. Well, you're calling us because you're at the end of the row here. You're going, I can't, I'm starting to miss payments. You weren't making progress before. You were just barely staying afloat, it sounds like. >> Yes. >> All right, Sarah, I want to tell you this, okay? Number one, I'm glad you called. And number two, this is really scary, and we're going to give you a plan that will work 100% of the time if you'll just work it, okay? But you have to decide, I'm done with this way of doing life. >> All right, I am done. I want to just, because I make fantastic money, and if I didn't have all this debt, I would, I wouldn't need. >> There you go, sister, that's it. >> You already are future casting what your life would not only look like, but would feel like how much peace you would have, how much laughter you would have, like just how well you'd be able to sleep if you didn't have this, because you're working your butt off all week, all month, all year, and then you find yourself getting further and further behind. But it can't be, and again, this is 30 plus years of doing this. It can't be, with the whole you've dug, you have a big shovel, which is great, but you can't partly get out. You have to decide, I'm all in, or we'll love you, and we'll just say best of luck to you, and we'll still be friends and all that. But you have to make the choice, and I'm calling you out, make the choice today. I'm going to be done with doing life this way, and that means I'm going to have to be radical, and my friends are going to think I'm weird, and I'm going to do something completely different. So that, I can make this great six-figure salary, doing what I'm good at, and what I love, and I want to start loving the life that I have all around that job, right? >> Yes. >> All right, game on. I'm glad you're here. >> Thanks. >> What's left on the car loan? >> The car loan, I owe $14,238. >> Okay. >> So based on my napkin math here from everything you threw at us, you're in about $95,000 in debt. Does that sound about right outside of a mortgage? >> Approximately, yeah, maybe a little less, but yes. >> Have you pulled your credit report to get a real picture of what's going on? >> The last time I looked at it, it was like $6.85 was my credit score. >> No, your credit score, your credit report. That's going to show you all the accounts, all the balances. >> One of my credit cards gives that to me free, so it has it all on there. >> What a gift. That's nice of them. There's a part we don't talk about enough. >> That's like giving you an ice pack after we punch you and punch you and punch you. It's like here, we give away free ice, like thanks. >> Yes. >> Okay, so what are you doing for work? >> I am a nurse. I work three days a week, and then I just picked up a second job, and I've been trying to pick up extra at my job. >> Good. What's the second job? >> Just trying to get some extra. >> The second job I'm working in a doctor's office is one day a week. What's that pay you? >> The doctor's office pays me $25 an hour. >> Okay, and you can ramp that up if you needed to. I'm trying to figure out which levers we can pull here for the income side. >> Well, I could pick up extra more on my other job because I make more money there. I make $65, $60 an hour. >> Yeah, the more you can do with your full-time job, it's going to be even better. You said 103 is your gross income? >> Approximately, I think it was 103 in some hundreds last year. >> Okay, are you taking home about $6,000 a month? >> No, my bring home is almost $5,000 a month. I have insurance, it's $300 a pay, and I did cut down my 401(k) because I did have it at 8%. I dropped that down to 3%, so that way I wouldn't still get the free money. They also, because they match it, so I went from 8% down to 3%. >> Are we concerned about free money right now when we're missing our credit card payments at 29%. >> No, I guess we shouldn't be. >> What if we're doing something counter-cultural, like John said, and we took our match down to zero? >> Okay. >> Just for 18 to 24 months, that's it. And then, boom, you just freed up $3,000 a year right there. >> Okay. >> Now, it may not feel like a lot, but what that does is two things. Number one, it frees up real money back in your paycheck, and it also gets you a little bit more angry at your debt. Because now, it's not just stressing you out in the present. It's robbing you from your future, and now you have an illness to go even harder in the pain that this debt, and that plus 1,000 other things is what it's going to take. It's not going to be one thing that's going to be the magic sauce here. It's going to be, I'm going to do a budget every day, look at my accounts every day, look at the balances every day, and look at that smallest one with a vengeance, and attack it with all the margin I can muster up through extra work, cutting my expenses down to nothing, and you're single, so you can do this without affecting many people, right? >> Right. >> Good. So no one's going to be like, man, I wish you were home more, it's just you. So that's a blessing, because right now you could work 60, 70 hours a week. >> What's your mortgage payment every month? >> 11, 78. >> No, wonderful. >> Good, good. So the debt payments, have you added them up to see what it would take to just cover the minimum payments on all debts for a month? >> I think I did, but it's like. >> Is it $2,000? >> No, it's more than that, because it's. >> So here's your homework. I'm going to give you our every dollar premium budgeting app, and what you're going to do is list out the next upcoming paychecks, you're going to jot down all of your expenses, including the minimum payments on those debts, and then you're going to see how much margin there is. And if there's not a lot, that tells us we got to cut some expenses, we got to increase the income, that margin, that little green number at the top showing you there's a thousand bucks left over if you do it this way, that is your ticket to freedom. >> Meal, hang on a line. >> No more going out to lunch, no more guts to dinner, we're going to be all over this getting this debt paid off. >> Hey guys, it's Rachel Cruz. When it comes to life insurance, most people fall into one of two camps, the ones who make a plan to protect their family, and the ones who hope everything will just work out. But hope isn't a financial plan. When you get married or have kids, your money decisions aren't just about you anymore. Your income helps keep the lights on, pay the mortgage, and put food on the table. And if something happens to you, will your family have protection or uncertainty? Well at Ramsey, we recommend term life insurance that 10 to 12 times your income with a 15 to 20 year term for the years that your kids are at home and your mortgage is still being paid off. That's why Winston and I have our term life coverage through Zander Insurance. We're an independent broker who works for you, shopping all the top companies to find the most competitive prices on coverage you need. Get instant quotes online in just minutes at zander.com or call 800-300-200-100. 356-4282 to get your family protected with term life insurance. That zander.com or 800-356-4282. 356-4282. Alyssa is in Oklahoma City next. What's going on Alyssa? How can we help today? Hi, yes. Thank you for having me and John, your work, book and show just impacted my life so much. I just want to say thank you for-- That means the world. Thanks, Alyssa. Appreciate that. Yeah. So my husband and I have been married 12 years, majority of those years we don't do finances together, which is not my choice. And up until the last year and a half that we've been back together because we separated for six months due to DV, things have gotten much better except this area. There's been small changes and I've had to set boundaries, we didn't file taxes together this year to protect since I don't know what's going on. And my question is, is how much longer do I give grace and set boundaries before its ultimate comes down to how do we want to do life moving forward? I think this is going to sound strange because you called the Ramsey show, but as I hear you lay out your story, money is a distraction from the real issue. Coming back from a domestic violence separation, the chief objective here is safety. And part of safety is physical, part of safety is emotional and sexual right, but part of safety is financial and you can't pick and choose safety because as Vander Kolk says your body's keeping the score. So you can't say, I'm not going to put my hands on you anymore, but I'm still going to live my life this way and this way and this way and you just got to deal with it. That means you're not addressing the full picture of safety. And so by just choosing to isolate out all the other ways he's continuing to gaslight you not tell you the truth, live his own life inside of the house, you all share it together and start the marriage. I'll share it together. Do what he wants to do except just not for this one pretty awful thing. And then it kind of leaves you out to try to feel crazy about it. The more you focus on just that one sliver, your body is going to continue doing what it's supposed to do, which is ramping up the alarms, not letting you sleep at night, making you feel unsafe in your own house because you are unsafe in your own house. Yeah. I mean, domestic was, I mean like I said, God did a huge work otherwise. If I wouldn't have, he took full responsibility, apologize. It's just this financial area where he's having a hard time even with his phone. It's just like this. He hangs on like, there's these things that he gives bits and pieces, but it's like that tells me he's still being deceptive and that tells me he's still not ready to fully be your husband. Okay. Okay. And I know that sounds dramatic and I'm saying it that way intentionally on purpose. Okay. That's not a guy who's interested in doing life with you. It's a guy who's interested in trying to hang onto his marriage and he won't do this other thing anymore. Okay. And so part of you setting the road map for, here's what it's going to look like for A us to keep this marriage together and B you to move back into my home is I am choosing safety and here's what safety looks like for me and here's the deal. You get to, you get to lay out what safety looks like and I'm telling you now, after just sitting with thousands of different people, individuals and couples, you're not going to feel safe if you don't know where the money is. You don't know what he's borrowing where it's going. You're not going to feel safe if he flips over a cell phone every time you walk in the room and how dare you ask for the code of my, of my cell phone. He's not going to feel safe if he slams a laptop closed every time, right? You know what I'm saying? So you get to paint the picture of here's what safety is. Now I'm going to tell you the hard part about doing this is you have to have an or what statement on the other end of that. Okay. Like here's what I'm requesting as like the path back to trust, the path back to us healing our marriage all the way. Not just you don't hit me anymore, but all the way is here it is. Here's what safety looks like for me. Are you in? He could say no. I'm not. I will never get there. And then you have an or what statement are you going to say, okay, I'm just going to, this is the, this is the marriage I'm choosing. I'm going to, I know for the rest of my life, I'm going to be on my own financially. I'm never going to file taxes, I'm going to keep my own retirement, my own self safe. If you want to make that choice, you're a grown adult and I'll still love you. Still be friends. Or if you say you, these things happen or the marriage, you're, I'm going to take your signal, your action steps as a language, behaviors of language. I'm going to take your action steps as you've left this marriage. You're no longer interested in being married to me and helping your wife feel safe in her own skin and her own home. Mm-hmm. Do you know what I'm saying? Yeah. And I know it's harsh. I know it's real direct. Back, I can feel my own chest tightening up here on your behalf. Yeah. And I don't want any, especially, and again, I've, I just got history sitting with women in this situation. I don't want the super bad thing to not be there anymore. And suddenly, it wallpapers over all of the other things that make you feel unsafe in your own home. Yeah. And there's all safety matters, and there's no relationship. The, the, the, the baseline for any relationship at all starts with safety and trust. If you don't have those two things, you don't have a true relationship. You have, you might have a co-partnership. You might be able to live autonomous lives right next to each other real close, even share the same bed, whatever. But you don't have the true foundational relationship, unless you have safety and trust. And you don't have either of those things because your husband won't, won't play ball. Yeah. It's hard to not come, compartmentalized up, but I feel you're saying I know, but I want you to know your body doesn't come, compartmentalize it. Right. You're not wrong. Your mind does, but your, if he pulls into the driveway, does your, does your chest tens up? Not as much as he used to. Okay. I want you to hear your language, not as much, but, but yes, yeah, right? When the bills come every month, do you, do you, nobody enjoys opening bills, but are you in terror when you tear the bills open? Are you just annoyed? Right. He pays a 90% of them, but yeah, okay. So all of this, everything I'm telling you is hard. It's scary. It's hard. All of it. I want you to choose the hard path that's going to get you to safety and trust. Yeah. Okay. Okay. Cool. All right. Well, thank you. You bet. Man. Sorry. I hate you in the situation. Actually, listen, hang on the line. I'm going to hook you up with three months free with our friends at BetterHelp. I want you to sit with a licensed professional therapist and you can start within 24, 48 hours. Somebody will see you just so you can have some, they'll be able to walk you through an actual action plan. What's this conversation going to look like? What's an or what statement going to look like? What is managing the response going to look like? I want you to sit with a licensed professional and they'll be able to see you within 24, 48 hours. So hang on the line here. We'll get with BetterHelp. Man. John, that's a, that's a heavy one. I like this method of going what must be true for this relationship to continue. Most people never get to that point. They just sort of tolerate, they learn a new normal and they go along to get along. Yeah. I think one of the most heartbreaking statements a person can make, especially inside of a marriage is this is just the way this is going to be. This is just the way this is. And I always want to shake that snow globe and say it doesn't have to be, right? And that's often forces folks, especially in this situation, say, okay, I don't want it to be like this anymore. And he says, well, I'm not changing. And if that is, I'm, I'm always going to have, I'm not going to, I'm not going to remember to rinse the sink out after I shave. So there's always going to be a little bit of hairs, right? Some of that you, you get over it's annoying and whatever. On big stuff like putting my hands on you, big stuff like I'm going to, I'm taking care of the money and you will never know where the money is. How much I owe what our situation is. How much debt we have. How much gambling debt I have. How much other addiction debt I have, that's, it's, it's, it's tragically unsafe. And so if somebody's violated the, the fidelity of a marriage, right? If someone's blown it up, whether through abuse, whether through infidelity, whether through financial infidelity, the person who's aggrieved, the person who, who says, okay, I want to rebuild trust, they lay out the map. Here's what it's going to take on a weekly basis, then a monthly basis and then an annual basis. Here's what I want to see. The other person's got to say, I'm in or I'm out, right? And that's a tough place to be, especially like I said, when something so bad has been happening with that super bad thing's not happening anymore. It's really easy to drop your shoulders and say, all deal with all the other bad because this big thing's not happening anymore. And man, I want to call her and her husband to a better way to live, man, a more peaceful, connected way of doing life, everything in your life gets better. Whatever you think you're protecting by holding on, not sharing, not being honest, not being vulnerable, whatever you think you're hiding there, whatever you think you're protecting, I promise you there's more peace on the other side of connectivity and honesty and exhale. Right? That's the hardest part of marriage is letting go of those parts and letting someone see it all. See it all. And then, praying, they look across the table and say, and I still choose you. [Music] When you take your car to the shop, you're probably thinking two things. How much is this going to cost me and is it going to get done right? What you need is a mechanic who will give you transparent information so you can make the best decision for your car and your wallet. Christian Brothers Automotive is the official auto repair shop of the Ramsey show because you can trust them to take care of your vehicle the right way. Their digital vehicle inspections let you see exactly what their technicians see, giving you confidence on which repairs are urgent and which ones can wait. Plus every repair is backed by their nice difference warranty, 3 years or 36,000 miles. With a guarantee like that, you can walk away knowing that your car and your wallet are taking care of. Schedule your service today and get 10% off your visit at cbac.com/ramsey or click the link in the description. 10% off, up to a $250 value, see store for details. Sarah is in Denver up next. Sarah, welcome to the Ramsey show. Hi, thank you. My question is about college and saving. My husband and I have completed baby step 4. We have six kids and no savings for college. My oldest is a junior and we have five of the six kids are going to graduate within six years. Part E. Along with that, we know that we have an upcoming medical expense next summer that will be about $40,000 out of pocket. So we are wondering now that we are fully funded emergency funds, where do we allocate our funds? Like what is the best way to move forward because we don't want to go back into debt? Is there any chance y'all have like a, I don't know, I'm thinking of like a small treehouse in the backyard of your house that might have $2 million under it? Well the good news is I don't want you to feel obligated that you have to cash flow every single dollar of every single child schooling or else you're a bad parent. So you need to prioritize what's happening in your life right now and that's the medical expense. The other priority is we're not going into debt. And you can hold all of that together and that means a conversation with every kid and you're going to have to do this kid by kid because life could look different six years from now. You might be able to cash flow the last kid's school and it's not going to feel fair to the one who had to hustle and work three part time jobs. But the conversation needs to be, hey kids, we don't have money to cover college and as a family, a value of ours is we're not going to go into debt to do this. We've seen how it hurts, the students, we've seen how it hurts the parents when you take on these parent plus loans. So we need to make a plan for how you guys are all going to get the education that you want or need debt free. What is their awareness of all that right now? Are they just like, well, mom and dad said we'd figured out. So we're good. No, they're aware. We talk about it. We do have to adopt it and I don't know if there's anything out there that would help them. But yeah, they're aware that they're going to have to sacrifice. Well, depending on what state you're in and depending on how the adoption was done, I know in my home state of Texas where I grew up and where I worked, if a kid is adopted in certain trajectories, I mean, their school is taken care of. So it'd be worth exploring there in Denver. It may not be the case, but there may be resources there. How old is your second oldest? She's a freshman. Okay. So you have a freshman in a junior? Yep. And then I have three middle schoolers. Okay. I would as quickly as possible because we're going to blink and it's going to, the first semester is going to be over, right? I would you and your husband get on the same page and I would take your 16 year old out for breakfast somewhere and just lay it out. And if you can do just some cursory inquiries into does Colorado have free community college for two years? Like many states do is like bring at least one or two or three options on the table. We are projecting that we might be able to help $500 a month with food or with you know, books or whatever. But just lay it out. The greatest gift you can give this kid right now is honesty. And that way there's, you don't want, I've been in these conversations with families. You don't want this because this conversation is going to happen. You don't want it to happen. They're second semester. They're senior when all their friends are getting their acceptance letters or when your son comes running in the door with an acceptance letter to a college. That's pretty great. But just like Alexis, it's amazing. But if you can't afford it, you can't afford it. And that's a much harder conversation than just laying it out on the front end. And look, if you feel embarrassed, if you feel like this is not what you wished, like you wish you could just write checks where they're telling that, okay? This is not how we drew this up. It's not how we would have designed it. This is us owning reality and wanting to walk alongside you. And we're going to plead with you to not take out student loans. Okay. So any extra funds we have now, we should have put in a savings account for that medical bill. Absolutely 100%. And not even think about college until that's paid for. That medical bill sounds like it's the priority. You know what's happening. You know the dollar amount. You know it's going to be out of pocket. I mean, unless you'll make quarter million dollars or 500 grand a year and you're going to have extra on top of the 40,000. No. Okay. How much do you guys make? I wish. I haven't stayed at home. Mom. My husband's a primary care physician. So he makes about 300,000. Great. Okay. So you guys might figure out in the budget. Hey, as this goes on, we can start to budget for this and allocate, I don't know, $50,000 per year in a high yield savings account for college. And then that means that's the budget for that kid coming up. And if they can get scholarships, they can get grants, they can work part time to supplement all of that. But the goal is we are not going into debt. So we got to figure out a plan, which means we're not going to go shopping at the Porsche dealership. We're not going to go to the big name brand schools touring across the country because then that school down the road from you is going to seem like you're just getting a, you know, a key of serento comparatively. And so you want to make sure that you're very clear that we're not just carte blanche, you can go wherever you want. The world is not your oyster in this case. The world is, hey, you don't even know what you want. They do really? So let's just knock out our gen eds at the local community college. And it's not a less than experience. The education has come such a long way that community college is on par with the state schools. And the state schools are on par with some of the private school education. So they're going to be okay. They're still going to have their hopes and dreams fulfilled. It just may not look like that out of state across the country school that costs 50 grand a semester. And if, if, if making 300 grand, if, after you get this medical expense, taking care of, y'all are able to, even cash flow $1500 a month, $2,000 a month, and you and your husband can make a budget and project out that far. That's great. That's awesome. You can start a, every semester, you can put that semester on a payment plan with the school and not take out a student loan and you can pay it monthly. And so maybe y'all are able to help in that way. I don't know how it all trickles down if you got six kids there, but, and what your life expenditures are and your cars and your home. I don't know all that. You and your husband ought to figure that out. I'll also tell you this. Here's what I do with my kid. I have a 16 year old who's a junior. My wife and I sat him down the summer and his mom and I, my wife and I are nerds. Like, that's no surprise. We made a pretty complex spreadsheet that basically laid out. Here's some schools I would love you to go to. And here's what percentage of those schools I'll pay for. And, but the big thing I put in his lap was, if you get X, Y, or Z on the ACT or the SAT, which by the way, that test in of itself does not matter, but that score has a dollar amount to it. That's just part of playing this game. I will pay for prep courses. I will pay for tutoring support. But if you get this particular score on this test, here's, I'll write you this big of a check on your graduation day, right? And what I'm doing is I'm putting some of the onus on him. You're going to self-select out of certain schools and there are certain bands of schools that my wife and I told him, we will, you can go to him. We will pay zero dollars, right? So you're going to be earning every bit of this on your own. But we were real clear, just laid it out, but I wanted to give him as much responsibility as possible. And what a junior can, can, can own right now is making their full time job outside of school studying for one of these standardized tasks. The other thing to think about is not every kid may want to go to college. Right. Have that conversation too. There could be trade schools, associate degrees, certificate programs, they might be entrepreneurial. And so that's the good news is we don't have to figure this all out today. So let's just kind of like the dead snowball. We're focusing on the smallest debt. Let's just focus on the oldest kid, see where their heart is. their mind is where it comes to further education. And then let's make a plan around that. And for about 11 year old, you may set up a $5.29 and go, "Hey, we got seven plus years to fund this thing. We can invest the money and have a growth for us." Let compound growth do a little bit of the lifting. And you might have some state tax benefits as well with that. So there are a ton of options, but the homework I would give to you guys is do like a family movie night and go watch borrowed future. This is our documentary on student loan crisis. And what we'll do, it'll open their eyes to what's actually happening in higher ed and open their eyes to all of the possibilities and solutions that are to avoid what is. This 1.7 plus trillion dollar crisis where everyone's gone, nobody told me. This is you telling them. This is your way of opening up that conversation to where you don't have to start it. That will start it for them. They'll be asking questions by the end of it. And you'll see our friend Dr. John Deloney in there as well. If your business is making seven figures or more, you should be proud of that. But that growth probably brought a mess with it. Systems that don't talk to each other. It's impossible to track down your numbers because they're scattered everywhere. That's a visibility problem. 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So if you wanna know what those are, take a few minutes to learn the plan, you can get a whole lot more out of every episode if you know them. So we'll drop a link in the description of this episode if you wanna learn more about those baby steps. All right, Jake is down the road in Nashville. What's going on, Jake? - Yeah, well, not too much, man. How you guys doing? - We're doing great. How can we help? - All right, so I am about 45K in debt and some of that personal loan, some of that credit card and a 15K car loan. So with my new income, I've just picked up another job and I see the light at the end of the tunnel, I'm just gonna ask you guys some what priority and I'm thinking about selling my car and when I should do that. - What's the car worth? - So I owe about 15 on it and I could probably get 11, 5 to 12 from a dealership. - Oh. As far as private trail goes, I know that the brakes might need to be replaced soon. So more of like a personal, like, I don't know if I'm gonna sell this privately and have it come back to be later. - Well, when you let it, you know. Or you fix it before you sell it. - I would be completely honest, yes. I'm just sure when I kind of avoid that whole process. - Okay, so you think you could get maybe 13 or 14 out of this even after the brakes are repaired. - Yeah, if I did that and sold it, well, if I sold it to Provincel right now, I'd probably get like 13, 5 or something. - Okay, cool. And how much do you make? - Well, right now, I make probably between 110 and 120. I picked up another job. I make about 60 in sales and then I also film weddings full time and make about 60 a year doing that. - Nice, way to go. Okay, so can you keep this up for another six to 12 months and knock out the dead? - Yeah, yeah. So that's the thing. In the tone, I'm making great money, but the thing is, I have a, on one of the credit cards, it's $9,200 balance at zero percent, but in January, 2027, it goes to 29%. So that's obviously top priority. I got to pay that off before that interest kicks in. - Disagree. - You disagree. - You disagree. - I disagree. - I don't think interest is your problem here. - You need a mind shift shift. - Well, I haven't added to my debt since probably April. So I've changed my habits. - Well, let me change it this way. - That going up is annoying and it's gonna be frustrating. It's gonna cost you a few bucks. But if you just start busting your butt and do it in a way that will also not only get you financially at a debt, but it will shift to you psychologically as well. The way we've taught millions of people to do it, you're gonna be at a debt at a year or less anyway. - So it doesn't matter. But I promise you, chipping away at a $9,000 debt instead of getting the momentum of paying off the $1,000 debt, the $1,800 debt, the $2,200 debt, there is a momentum that begins to pick up and you're taking all that money and dumping it into that $9,000 one versus just with an ice pick out there at the bottom of a mountain, just slowly chinking away at it. Man, that's a recipe for folks who just get burned out and they give up. - Yeah. - How much is the personal loan? - So I have two personal loans, 11,000 each, one that's six percent, one that's seven percent, my car loans, 15 at nine percent. - So your next smallest debt is the credit card or is that on multiple cards? - That is the smallest one. - Well. - So you're gonna attack it first anyways, but we're not doing it because the interest rates come from the edge. - I'm gonna insert my foot in my mouth. So here you go, you gotta get your ice pick and start trying to take this mountain down. - And to your question, nothing about this is screaming. You need to sell the car. It's far less than half your income, which is our parameter for all things with wheels and motors. You're gonna pay the car off within a year. So if you like the car, just keep the car. 'Cause it's more hassle to cover the email you're under water on go buy another car and then you're gonna yell at me if it has one issue and go, well now I gotta cover this repair on this $5,000 car. So I would just keep the car fixed to brakes on it. Don't be driving dangerously out there. If you need to pause your debt snowball to save up and cover the brake repair, go for it. You have 1,000 bucks right now? - Yeah, so right now I have $8,000 in the bank. Just in my control. - Jake, you hold me, lead man. - Lead with that dude. - But. - But. - No. - No but. - No buts. - Have this credit card paid off this time next month. Period, end of story. - Yeah. - He's gonna be like, I have a life saving surgery I need next month, John. That's why I have the money. - That would be the second. - No, no, no, no, no. I just want all of this paid off by the spring so my mindset is, you know, if I were to sell the car and get rid of half of that debt and then have that extra $400 payment a month. - Dude, you're doing some Benson Boon back flips over here when you don't need to. You have the money to knock out the credit card next month. You just freed up a huge payment there, a huge chunk of the debt. Now we're attacking the person alone, the next person alone, and the card is coming next. If you can you throw 4,000 a month at these debts? You're bringing home like, what, seven a month? - Well, so, you know, as a wedding video I throw a lot of my income is seasonal. So next month I'll make about 8K in that, but then I don't have any more till next year. So, you know what I mean, gosh, Jake. - Nobody's getting married until next year? - Well, that's just how much good you work during the winter time. It just kind of drops off. I might pick up one or two through the winter. - Okay, but hold on, hold on. You're telling me you have $8,000 in an account right now? - Yeah. You're gonna get another $8,000 on top of your regular paycheck next month. - Yeah, but I have bills in a family, so. - I know, I know, I know you can't take all of it, but I'm saying you've got money coming in. - Yeah. - Can you pretend like that wedding gig money is just debt payoff money? Like you don't touch it? - Yeah, so, yeah, so that was my intention, but we just had a baby five months ago, another baby, so we have two kids. And I've been taking up a lot more of the slack on like the daycare cost, just the cost of living expenses. My wife's a teacher, so she kind of, her dollars are kind of allocated to certain things right now, but. - But you're making 120 and she's making another, what, 50, 60? - 50, yeah, 50. - So you guys make 170. What do you talk, Jake? - We should have no issue paying this off. It's more about how quickly can I do it? - Hold on, I don't like the language you're using, dude. What is her money allocated for? - She, just like with, with her, with our specific bills and stuff like that, we, she doesn't make that much. And so. - She makes 50,000 dollars a year. I want you all to take all of your money and put it in one big pot. That's as much debt as you have. If you just took her income, you'd be out of this in a year. - Yeah. - So here's the, you've been talking about my mindset, my plan. - It's y'all. - Are you willing to try a different way? - Yeah, so we've, this has been an ongoing thing for many years and so. We've talked about it and I just see you guys have separate finances. No, no, no, okay. No, but when it comes to my dad, I try to, I try to do that on my own. Oh, so you don't want to bring her into that. So like, hey, this was my debt. You don't worry about it. I'll stress about it. Yeah. Basically is what what that's come about. Okay, so just like those against your principles. Well, and forget our principles for said you didn't hurt our feelings. Yeah. We just want you to win for a second. Just rest assured, you trying to macho up and I'm going to cover my debts and I'm going to work extra all weekends, whatever to try to protect your wife from having to participate. I promise you, brother, she's wearing it. No, I know. We just, we talk about it all the time. Okay, let's stop. Let's stop trying to be a hero and let's actually solve this problem. Y'all make a bunch of money. This whole thing can be done in seven months. Max. Yeah. If you all suck it up and just have a pretty real tight budget and you'll allocate and you take a couple of extra wedding gigs and you get out there and hustle and get this stuff knocked out, you will be debt-free before you know it. All right. So that'll sell the car. No, no, okay. Don't sell the car. Think about this. You got eight grand right now. If you took seven of that through it at the debt, you're down to 38K total, right? Yeah. Now, John said seven months. So that's 5,400 bucks a month, come hell or high water is going towards minimum payments and extra on the smallest one. That's what you're committing to out of your, what, $10,000 take home pay. Between the two of you, yeah. That's what we're working with here. So now we need to figure out in the budget, what's feasible? Okay, we bring home 10K, daycares, 2K, plus, plus, plus we have the rent, the mortgage, add all that up with a budget tonight for the both of you with both of your incomes in there and you will see a very clear path to how quickly you can do this. And you can, you can shake hands and say, we're not going to go out to eat until June. June one is when we're going to go on a date because that's when we're going to hit, hit send on on the final payment. Make that commitment to each other just to be done with this stupid thing. Man, you'll make too much money to be living like this. How old's your other kid? You got a five-month old and how old four, four, okay. Dude, think about that. By the time you have a one-year-old birthday party with a smash cake, you're dead free. That's the picture I want you to have in your head. So get out of your own mind, get a line and work this plan, dude. And call us back. We'll sell it right with you. I'll even get that one-year-old a birthday gift. [MUSIC] Running a business is hard enough. The tools you use to run it should make your job easier. Too many business owners spend more time fighting their software than selling their products. You didn't sign up to become a web developer. You signed up to build a business you're proud of. And Shopify gets that. With Shopify, you can design and launch a professional storefront fast without the headaches. Everything you need to start selling is built in. And when your customers are ready to buy, Shopify's purple shop pay button is one of the best converting checkouts in the world. Which means fewer abandoned carts and more sales. And when questions come up because they always do. Sidekick, Shopify's built-in AI assistant is there to help you keep moving. All you need is the idea. Shopify handles the rest. Start your free trial at Shopify.com/ramzie. That's Shopify.com/ramzie. Shopify.com/ramzie. Welcome back to the Ramzie show in the Fairwinds Credit Union studio. I'm George Campbell here with Dr. John Deloney taking your calls at triple 8-825-5225. Courtney is in Columbia, South Carolina up next. How can we help Courtney? All right, so my question is, how do I get my husband to save a retirement as a small business owner? I can give you some back story. Yeah, what's stopping him? It sounds like you want him to. Does he not believe in it? So he thinks that the business is a retirement. Okay. So it's a family business. He just took it over three years ago. It's debt-free. We own the property. We own all the fans. We own everything. And so his long-term goal is that we will sell that and that's what we will live off of. I like his confidence. So I've been-- How old is he? He is in his 50s. I am in my 40s. I'm a school teacher, so I've been instead of doing the pension. I chose to do the optional retirement and put my money in the stock market. So I do have about 300,000 in my retirement. Good. And he did. I will say he did start his guys on retirement, but he only puts in like three percent. What kind of retirement plan does he have? He has the simple IRA. Okay. So does he have to put it in as much as he's--as the other guys are getting? Yeah. So he matches himself, so he puts in three percent and he matches three percent with the business. Okay. And he's not doing any investing elsewhere. Correct. So he's investing three percent of his income. And then he thinks this business could sell for how much down the line. So when his dad had it appraved, you know, 15, 20 years ago, it was about $3 million. And we took it over. That was not what the assessment came back at, but he has grown it in the last three years. He has a whole other leg of the company that he has grown. What's the business? It's commercial refrigeration. Okay. That's good. We're going to need fridges in the future, I hope. So that's a solid business, but has he played out a scenario where the business isn't as worth as much as it is today and he needs a backup plan? Because he can't work anymore, let's say. I mean, I don't think he's ever thought about a thing. It's been like a 35-year-old business that even with just the property and the way that our town has grown up is like he, if the business had nothing, we would still have good assets. The thing that's coming to mind, and again, I am overly biased here, so hear me say this, I was born and raised in Houston, Texas, and there was a company, I think at the time, was the fourth largest company on planet Earth, and that was called Enron. And I had friends, I had family that worked there, and one of the magic things they gave their employees was 100% buyback for stocks. Why would you put your stocks in the market? You can just put them back into this big giant, the fourth biggest company in the world, and it's growing at 5 billion percent a year, right? And I have a lived experience of people who went to bed, millionaires, who woke up with zero dollars, nothing, right? And so for me, it feels like that at a much smaller scale, which is if you just think of this as his retirement plan, he's putting every single egg he has in one 30-year-old basket. But does that, does my, like, income and my retirement, like, offset that? Oh, you're saving the day. You think about our stuff at the portfolio, like, you're saving the day right now, yeah. And that's what you're doing. You're hedging your bets, and diversification is key. I mean, even Dave Ramsey, the Ramsey children, they all invest outside of the business, even though they are owners of the business. And so it is wise to diversify just like you would if you wanted to buy some real estate as another diversification. And so I would encourage him that while the business is worth a lot of money, let's also save over here to split it up, and that way you have options. That's really what you're giving yourself. Even if he started fully funding Roth IRAs, if you all fall within that bracket, I mean, yeah. What's your household income collectively? So he doesn't pay himself the market wage of a CEO, he pays himself actually less than my teacher salary. So together we make about 150,000. And why does he do that? Because he grew up, as he says, they're poor, and his dad has like over a million dollars sitting in a savings account, that's just how they grew up. So just kind of scare city minded and frugal. Yes. Yes. Okay. And what kind of future do you guys want? As a couple? Sounds like you have a different picture. Well, I mean, he listens to you guys. And so I mean, that's why he got his blue collar guys to start investing, which none of them had ever done before. It's awesome. So I don't, I don't know, like we live in our dream home, he's one of those that he will work harder to make more to make it happen. And I guess I, I mean, I've got so much respect for this dude. I love it. I love the hustle. I love the, and as a fellow scare city minded guy, I get that. And by the nature of me and George's job, our whole job is predicated on one thing. Somebody's plan didn't work out. And so when I hear the kind of type of work he's doing, man, he's one. One accident away from a lawsuit that's gonna bury that small company. He is one of the vans fallen apart in a driver, right? So I see so much risk here, but I love the hustle and I love the intent. And also, I mean, I can't imagine what's even the dirt, how the dirt is appreciated in Colombia, everyone's still living in Colombia right now. I get that, but pretending that's gonna be the case 25 years from now, who knows, man? Think back 25 years ago, there was no such thing as a podcast, YouTube, smartphone. None of that existed 25 years ago. So-- - No, like he says, AI won't take over his job. - Wow, wonderful. - One or four of their hands. - Great. I would be careful, 'cause the overlords, every time they hear that, they're like, all right, hold my beer. I'm gonna take over that one too, right? So, and you know what, they probably won't, to be honest with you, that sounds like a viable bet. But I wanna, like George said, I wanna have some risks spread out a little bit. And you are doing a fantastic job as a teammate here. And if he looks at you at the end of the day and says, I can't, I can't, I won't, I can't. Then I want you to continue doing what you're doing, because all you can control at the end of the day is you. And he sounds like he's a great guy, he's just really struggling, like not struggling, but he's really committed in this area. Maybe you max out your own retirement. - That's it, exactly. - And that might be, you know, 40% of your income. A couple is, is to pay off our house. So that's still, that's like another. - So you still have a mortgage. - That's great. - How much mortgage do you have left? - Yes. - Well, we just bought our dream home. So, about 500,000. - I would love to see him pay himself an actual wage of what his job is worth, and draw from his company and get his house paid off. - Well, and that's what we did talk about that, 'cause he's our accountant, who we really love. She changes to an escort, 'cause she knew he wouldn't pay himself more. And she says, "If you need it, "it's there, he can take a parole from it anytime." - Sure. - Well, I have talked about doing that. - As soon as you get that house paid off, the more you're going to be able to invest. - There you go. - So that would be the game plan. Invest 15% of your household income right now. That might be mostly you, a little bit of him with his 3% into the business. But outside of that, let's get the mortgage paid off, get him paying himself more. Then we can really batten down the hatches and save big for retirement, and you guys will be okay in the end. If you diverse more than okay. (upbeat music) Hey, George Campbell here. Listen, if you're behind on debt payments and drowning in debt, I already know what you're thinking. I can't afford a lawyer to help. And honestly, that's exactly what creditors are counting on. But here's what most people don't know. Guardian litigation group doesn't work like a traditional law firm. There's no massive retainer. There's no hourly billing that costs more than the debt itself. Guardian is a law firm built specifically for people in default behind on payments or staring down bankruptcy. And their model is designed so people in that situation can actually access real legal protection. From day one, you're assigned an attorney. If a creditor sues you, you have someone who can actually represent you. Not a call center that isn't built to defend you in things escalate. The best path out of debt is still doing it the right way. Budgeting, working the plan, changing the behavior. But if you've already hit a wall and you need real help, guardian delivers. Their attorneys have settled over $600 million in debt for more than 55,000 people. So go check it out for yourself. guardianlit.com/ramsie. That's guardianlit.com/ramsie. - The attorney advertising results may vary in no specific outcomes guaranteed. (upbeat music) - Mike is in Baltimore up next. Mike, welcome to the show. - Hey, thanks for taking my call. - Absolutely, how can John and I help? - I have two kids, 23 and 25, both recent college grads. And we have about 150,000 left in their combined 5,200. - Wow. - Nice. How much did you save up for them? I'm curious as someone who's actually done this. And it sounds like you cash flowed both of their school all the way through? - All the way through I did. And I really just contributed the minimum in my state to get the tax credit. But I started it immediately. - When they were like zero? - When it was at birth, basically, and just caught some massive gains a bunch of years. - Wow, way to go. Okay, I just want to let people know that this is possible. And they're like, I can't save enough. It sounds like compound growth, did a lot of the heavy lifting, and you started early. - It did a lot. It did, and then also they received some scholarship. And at that time, I could have taken money. The equivalent out of the 5.29s, but I wasn't really sure when they were going to graduate and all kinds of uncertainties. So I didn't do that. - Yeah, that's a good note for people out there. You can withdraw against scholarships that come through. You will owe taxes on it, but there won't be any penalties. So they're just being income taxes. Okay, so you're wondering, what do you do with 150K sitting there? There's no more kids in the picture. What are my options? - All right, so I'm looking at the options, but of course, maybe I've missed them. So one would just be leave it, keep it invested, and maybe it's a something they inherit, or it's like a retirement parachute for me, but then I'm looking at like a 40% taxes and penalties to get it out. - Yeah, there's a 10% penalty on the earnings portion, and the earnings will be taxed to your ordinary income as well. - Right, plus my state will then claw back the credits they gave me. - Oh, yeah, I don't love that. To me, it's like a worse, worse, worse case option. There's a lot of other things you can do. Number one, you can roll up to 35 grand to a Roth IRA, up to the annual limits. Right, so I'm looking at doing that, but I'm not yet even retired myself. - Okay. - That seems a little, for me to now be funding their retirement, but I understand that that money in the Roth, now that can hopefully explode for them in the next 30 or 40 years. - Yeah. - I could roll the dice, they don't even know that they're gonna have kids. Even if they want kids, they're gonna have kids. And there's no other, anyone in your immediate family, grand children, nieces, nephews that could use this money that you'd want to give them? Give it to? - Correct, correct. - Okay. I got two kids, if you want to just change a bit of fish here, your brother, I got you. - We can start a little kind of go find me for the Ramsey audience. - I don't. - And it's happy, like, was to fund their undergrad. I don't necessarily want to fund grad school. I want them to be able to do that on their own terms. I don't want them to go because someone's offering their money. I don't want to feel like they have to go or can't stop because of that, I just want them to go figure that out, though I'm leaning towards funding the Roth. But again, it just seems a little, I guess I will have this nagging feeling that that could have been a parachute for me 'cause I know that it could become a million dollars in 20 years. - Now, how much do you have in retirement? - I'm planning to retire in two years and I have about three million. - Oh, what are you concerned about? - Mike, Mike, Mike, Mike. - You're like, "I don't want to give them seven grand. "I only have three million." - Well, I'd be giving them, you know, it's 150 grand that I know I could turn you into another million. Am I going to regret that? - What's the actual regret? - That maybe three's not enough. - Okay. - That's the real question. - That I remember. - Yeah, that I remember. - What's your current lifestyle? How much do you spend in a given month? - I'm spending probably, let's say 4,000 a month. - Okay, that's 50 grand a year. - I don't know, but I own my cars, yeah. - That's it. So let's say you've doubled that. Would that be balling out if Mike doubled that number? - Absolutely. - 100 grand a year. Do you want to know how much that is of your actual three million dollars? - I don't know. I mean, I've done the full percent of it. I guess I just worry that you can never have enough in retirement and that I'm passing on money too soon. - What if you re-imagined it? 'Cause I think I hear some of the struggle, like this money was already designated. - Right, it's no point. - You gave it away at birth. And now, I love two things you can do with this one. The thought of putting, getting them that far ahead with fully funded Roths at 21, 22, 23. I mean, you're talking about transforming your potential grandkids that you may never meet. You're talking about transforming their life. And I like the idea now where you're in the driver seat when it comes to one of your kids decides to go, I'm making something up, man. But get a graduate degree in engineering or go to med school or something wild. And they come up with the first year and all of a sudden at Christmas, you surprise them and you say, "Hey, I'm taking care of next year. I'm proud of you." - Yeah, and there'll still be a little left, if I give them the 70 over the next, combined over the next five years, they're still going to be growing over the seven years. - Yeah, man. - So think about that. This could be a generational endowment. - Well, do you want to go down, saying, "I could have had three and a half million and said I had three?" Or do you want to go down as the guy who said, "My great-grandpa covered our college funds generationally." That's a pretty cool legacy. the thought is just to keep it invested in a five twenty nine, but I just don't know that they're ever going to have her in kid because it could be a million dollar. I don't know if we're all going to be here tomorrow. So there's a lot of things we don't know. I'll tell you this, Mike, with how you've set your kids up and how you have loved them well, the data tells me those are guys that are going to go have their own families. They have a lived experience of what the what the good life is. Yeah. Are they working full-time? Yeah, they're both working full-time. Upstanding citizens? Yeah. Okay. That was that was a little bit hesitation there. It's going to be an upstanding citizen of 21 Mike. Okay. I'm just saying they're not entitled kids. These are not people who are like, well, dads, it's, you know, bank of Mike over here. We're just going to go to him. If they got work ethic and they want to pursue higher education, I'm going to just cover it. That's a worthy thing to cover and bless them with so they don't have the stress in their early adult life because you remember being 23. Yeah. Now picture being 23 in 2026 with current prices and how the heck am I ever going to own a home? So the way that you can set them up now is far better than anything you can leave to them as an inheritance when they're in their 60s and don't even need it. Yeah, but what's it in the law if that's kind of taking grad school off the table? Why is that? You're still going to have a lot of money left over. There'll be some money, but not necessarily, you know, grad school for both of them. I think I could help with it, but do they want to go to grad school or just another story you're just wrestling with? No, they're figuring it out. But again, I'm sort of the, I don't want them to go because there's someone paying for it. I want them to figure all that out and not also not started and feel obligated to finish something at a law because I paid for it. I want them to do that on the road. I get that, but you're also wrestling that up against them. You might have trained them really well to be diligent with their money, and they're 23 working a job. They don't super love, and they have an optrine to go to grad school, and up their skillset and up their prof, I mean, their ability to their earning potential. And you've got this pot of 75 grand for each of them on the side that they don't know about. Absolutely. Yeah, I'll help them, but it will be, I am going to think prioritize getting the money into the Roth and whatever's left, certainly can go to grad school. Yeah, I think that's a good plan. I mean, I don't know any people who are going to grad school for fun, it's not like you're, you know, financing a party in Vegas for them. It's grad school. There's a lot of people who go to grad school to avoid the real world who kicked the can down the road. Yeah, not these two. Yeah. All right, so I would even at 55, I'm not crazy to be funding someone else's Roth. No, I think you're crazy. It's too strong of a word, but I want you to make sure you have something to do the day after you retire at 57. Yeah. Because all the data tells me that when somebody retires and they don't go to a thing, their body checks out. And their mental health and their physical health falls off a cliff. And so have a service orientation, have a new job. You've always wanted to start a new group of people. You want to help have something you're going to in these two years when you retire so that your body will continue the funding itself in pursuit of a purpose, and you're going to have a new group of people that are going to have something to do the day after you retire. Hey, this is Dr. John Deloney. 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That's helix h e l i x sleep dot com slash Ramsey with helix better sleep starts right now. Everyone needs insurance but it can be hard trying to find pros who aren't just looking to make a buck and agents who know their stuff. While Ramsey trusted insurance pros are vetted in coach to make sure their market experts who have your best interest at heart. So go to ramsey solution dot com slash coverage to find the type of insurance you're looking for and connect with a Ramsey trusted agent. Kayla is in Charlottesville, Virginia. Next what's going on Kayla? Hey can you hear me? We got you. Okay great. My husband and I are about $49,000 of consumer debt and we own our former home and are renting it and it cash flows about $692 a month. So we're just trying to figure out if we should sell it here really doesn't want to and just like how to get out of this debt. Are you guys renting right now in a different home? We own our current home also. We tried to rent but have pretty big dogs that made our rent go up really high. So it made more sense from mortgage standpoint to buy here also. Yeah what's that other rental worth? It's worth about $505,000 and we owe about $380,000. We also really love the home and would maybe retire there one day. It sounds like you're attached to this thing. You're not willing to sell it. Well my husband is definitely attached to it. Is it close by? I know we are about two states away from it but we have a pretty good management system. We have friends that are helping manage it and great renters there right now. All right let me ask you this question. Yes. If you are where you live right now in Charlottesville, Virginia. You and your husband are 40 would you say 46,000 dollars in debt? Yeah 49. Okay you're 50 grand in debt. Would you all look at each other on Saturday morning and say you know what let's buy a half a million dollar house in two states over and start renting it out. No probably not. Okay there's your answer. Okay so it's in sell it. I personally would based on what we know. Now let's get into some more details here. What's your household income? He makes about $5,554,000 in mind. His salary is $82,000 a year. Okay and are you working on something? No I have four young kids that are all at home with me. Okay what kind of debt is the 49K? Half of it about 24,000 is a car and the other 25 is credit cards and they're interest-free until July of next year. Well don't tell me with a good time. Okay what's the car worth? 28,000. And you said how much is on the loan? 24,000. Okay so you could sell it and walk away with four grand and knock your debt in half. Yes. How about this is a compromise. I'll give you two paths and you can choose which one you guys want to do. If you desperately want to keep this rental I can't force you to sell it. That's the easiest path. You sell this thing. You're gonna net a hundred grand. You're gonna pay off all of your debt and a 50 grand in savings. All in one fell swoop. That would change your life wouldn't it? Yes. Or we sacrifice, we sell the car and for the next several months we're trying to throw two grand at this thing for the next you know 12 months in order to pay off the rest of the debt. Those are your two paths forward. Neither of those are fun can we agree? Yeah definitely. Which one is actually feasible? Out of the 5500 income can you guys throw two grand a month at this thing? Oh I don't know. We're pretty tight. What if you sold the car? What's that payment? The payment is $600 a month. The problem is that we just bought it and because we sold my car that we had paid off because it kept breaking down on me with my four kids. Why is that a problem that you just bought it? No it's not a problem that we just bought it. It's just I just sold but we had paid off. Yeah. So now what you're going to do is turn around and take that four grand or whatever savings you have and go buy a different car that's going to be not as nice of a car. Let's put it that way. So those are the two paths that I see out of this. Otherwise you're going to stay in the same spot a year from now, two years from now because you just told me you guys don't have any margin to pay off the debt. Right. So something's got to give. There's got to be sacrifice on other side. Personally, the easier one as much as it's going to hurt is to sell that other rental that your friends are managing. Yes, you'll lose $600 a month but you're going to gain all of the payments that you are sending to lenders every month. Plus, what did you say you have 170K and equity? What do you owe on your current mortgage now? We just moved here six months ago, so I don't think we've paid much off of it. I know, but what do you owe? It's 321,000 that we paid for it, and let's see, yeah, we're paying, so I think 319,000. So imagine that, to me, this two separate issues, one, you have a debt problem, which George gave you a path, and B, you have a out-of-state landlord issue. And so I would sell the house regardless of the debt, just simply because it's going to give you peace in your home, your mom with four kids, your husband's working as butt off, and you'll have zero margin. Like, I would sell that just simply for the stress, and there's two ways you can look at this house. And as this fantasy that one day we're going to move back, and you can keep that out there, or you can look at this house as what an extraordinary glitch in the matrix blessing this is, that we bought this house, we rented it out for a while, and it's about to knock a hundred thousand dollars off our primary mortgage, bring us down to 219, it's also going to pay off our debt, and fully fund an emergency fund. Yeah. Like, you're talking a game changer in the peace and freedom of your home. I overstated that a bit, you're probably getting up with 75 grand to put towards your house, but still. Like, man, you're talking transformation inside your house. Yeah, definitely. So how much do you guys have in savings now? We have 76, well, we have cash right now that we can get to is about 2,000, but my husband has 76,000 in retirement. Oh, okay. Let's not touch retirement. No. That is untouchable. Okay. So you have 2,000 dollars. What is the chances of that changing drastically if nothing else changes? Are you going to have 10 grand in there soon, 20 grand, or are you going to pay off extra debt? No. So have you ever had 50,000 dollars sitting in a savings account ready to protect you from life? Definitely. Definitely not. With four knucklehead kids running around? Right. You know what I mean? No, we have not. Yeah. A newlywed couple living your life, I'd say, you could probably stomach some of the risk. But with four kids, I'm trying to solve for peace. I'm just going to give me some peace. I don't want to see him working 90 hours a week to sacrifice for the next 12 months. I'd rather have him home. And if that means, I mean, if this rent money was changing your life, you guys would be debt free by now. Yeah. For sure. So instead, you're using it as sort of an excuse to hang on to this thing as if it's some magical investment that's supposed to change your finances. It's not. Yeah. And so I would sell it. That's a harder conversation to have with him. It sounds like he's less willing to sell it than you are. Yeah, definitely. By the way, that conversation can't be about real estate. It can't be about the dollar and sense that has to be that conversation is a wife sitting down with her husband saying, I want to choose peace in this house. And we have one switch we can flip that will a, take all the stress outside of the state off our shoulders, be fully funded emergency fund, see for the first time in our marriage, drop our primary mortgage with a two in front of it, D pay off all of our debts. So would you, you would say, take the money that we made, profit it from it and put it into the equity here? No, I'm saying pay off all of your debts first, that's $49,000, then you can keep the car. That's a nice perk. Then whatever's left, you then put an emergency fund and anything beyond three to six months, you can throw it the mortgage. I throw that at the mortgage. So that's the filter. Consumer debt first, fully funded emergency fund and a high yield savings account. And let's say that's $30,000 for you guys and you have 25 left over. You can chunk that at the principal and the mortgage. Okay. So if you walk away, like after fees and stuff, if you walk away with $140,000, you're paying, taking 50 of that to pay off your debts, you're taking 30 of that to, or 50 of that, whatever number you feel comfortable like for your emergency fund. I, with four little ones, I'd probably go more closer to the six month mark than the three month emergency fund. And then you're, you're talking about 50, 60 grand against your mortgage, 70 grand against your mortgage. And suddenly you have, go from 319 down to 275 to 265 to 250 and man, and you'll have margin to keep out of it. Yes. Have you guys ever been debt free since you've been married? Uh, yeah. Um, probably about five years ago. Hmm. That was a good. That was a good time. A simpler time. Let's get back to that. Absolutely. You've got a cheat code to get there with this rental property. You got a big, you got a, you got a, like a, do not pass code. You're not collect $200 pass. Man. This is incredible. Hey, it's Rachel Cruz. I don't know about y'all, but I can build something up in my head until it feels way harder than it really is. I'll convince myself it's going to take forever, be super complicated or cost of fortune. Then I finally sit down to do it and I wonder why I waited so long making a will might be one of those things for you. That's why I love mama bear legal forms. They've taken something that can feel overwhelming and made it so simple. Their online wills are designed by attorneys and tailored for your state. And while you're on the mama bear website, it'll walk you through the whole process step by step. So you feel confident that you're doing it right and that your loved ones will be taken care of. Plus making your will with mama bear only takes about 20 minutes. So don't make a mountain out of a molehill. Go to mama bear legal forms.com and use promo code Ramsey to save 20% on your will. And 20% off is exclusive to Ramsey fans only mama bear legal forms.com with promo code Ramsey. Today's question of the day is brought to you by YRIFI. When private student loan payments start getting away from you, it can feel like you're paying for decisions you made years ago. YRIFI helps borrowers explore low fixed rate refinancing options and payments designed around your current situation. Visit YRIFI.com/ramsey may not be available in all states. Today's question comes from Carly in Oregon. Carly writes, "We are aggressively paying off debt and baby step two and we recently became grandparents. We don't want to wait two years until we're debt free to visit those babies. We travel very cheaply in our paid off car but we'll have to stay in an Airbnb. A week-long trip could cost us up to a thousand dollars. Would it be okay to cashflow or create a sinking fund to take a couple trips every year?" Oh. This is a main question. Bring a main question. You hit our soft spot with the grand babies. Two years. Two years exactly. I don't know. This feels like two years until they're debt free. A couple trips a year, again, there's some vague language here. Is this like three, four trips a year and now it's four grand a year going towards this? That's my question, Mark. And does it have to be a week-long? Right. Because that can cut down if you're, you know, the Airbnb stays. What's crushing them here? Right. And so one of the things, George and you and I, and we talked about this off the air, like the principles are, like everybody knows somebody in their life that plays the credit card game like a xylophone, right? And they're always moving. And that's the life they've chosen to live and they figure it out. And so I couldn't sit here and say, I don't personally know somebody that plays that game and is not doing fine financially. I know one person in my life that that's what they do. It's like they're, that's their video games or skateboarding or whatever. Similarly, the reason we tell people, just go bananas on this is because of the question you just brought up, can you limit yourself to two trips? And could you stay three days instead of five? Could you do a one bedroom? Could you stay in a hotel where it's cheaper than an Airbnb? Like, once you start, once you crack that door and that's what the principles, while we're so dogmatic about the principles, is what we've know about human beings, myself included, George included, all of us included, is once you crack certain doors, the flow of water is so powerful coming from culture, coming from businesses, coming from out, just comforts. It's almost impossible to stay the course. Carly, you may be the, you may, your spouse may be the one, right? Y'all could create a sinking fund while you're aggressively paying off this debt. And I can't sit here in good conscience and say, don't go see your grandkids. I can't do that. I would love for my parents to be around my kids all the time, right? On the other side of it, you and your spouse have to be very specific about, we are still in sacrifice mode. And that means if we do this trip, here is the absolute end all, be all budget. Here is the compromises we're going to make on where we're staying, for how long we're staying. We are going to be overly sacrificial because we got to go see these babies, I get that. And we can't let that crack the door open to, we're going to make five trips. We're going to go ahead and stay in a really super nice area. be and pick up all the meals and, and man, you're talking meal prep, you're talking, you know, you're, you're bringing groceries on the road with you. How much could you contract this thing? How much sacrifice are you willing to put in on these trips? And so that's, that's my, my thought on it. What do you think, George? My thing is always, what are you willing to do to make that happen? And if you're willing to cut your expenses down by a hundred bucks a month to create that sinking fund? Cool. If you're willing to work extra to make this trip happen on top of your already, your debt's not wrong. You're saying keep your debt payments fixed. If you can stay on your debt-free plan if we're doing this in two years or less and get found money or working more or spending less, that makes me feel better about it, that I'm not derailing, I'm not having to let go of one to get the other. And then I'd feel real good about taking this trip without guilt. Okay, so let's, I like that because that's a little bit of, that's some Missy Elliott slap it up, flip it, reverse it. So instead of you Carly looking at the baby steps saying the baby steps aren't allowing us to go see our grandkids. I like George's tack which is look in your budgets and look up every single streaming service, every single cell phone plan ability I'll have. And then say, no, it's not the baby steps keeping you, it's no, we want to keep all five of our streaming services. We want to keep this, we want to keep the lawn service, we want to keep these other things and we want to keep buying fancier groceries or whatever on our grocery runs. That's what's going to keep you from that. I like that because that puts the ownership back on you. That way you can't, you can't look at the mirror and blame us for not seeing your grandkids. Go see them, but what sacrifices are, how deep are you willing to cut to make that happen? I like that, George, just good. And maybe they visit them once the baby is a little older, easier to travel with, they get one visit where they go to Oregon. Maybe, yeah, during the holidays. And that way they cut their visits down to two per year for the first couple of years. And this is a short season, the, the babies won't remember. That's the good news. It's your own memories, that you're, I know, it's still. I tried. Grandparents need to be around the, the grandbabies. Jennifer is up next in New York. What's going on, Jennifer? How can we help? Hi, guys. Thanks for taking my call. Can you hear me? Okay. Yep. Okay, great. So I, my question is, I have a relatively high income and I'm looking to purchase my first apartment. I'm calling to ask if the numbers that I have laid out are prudent or if you think it's a bad idea. So basically, I want to purchase a $1.3 million apartment with has $1,800 a month maintenance cost. My plan would be to put down 20 to 25%. I've already been pre-approved. And so my two questions are, would you recommend that a 20 to 25% is a healthy amount to put down? And once purchased, is it smarter to pay the mortgage down fast given the current interest rates or should I keep investing aggressively since I can out earn the mortgage interest in the market? Great questions. And great use of the word prudent, by the way. Very impressed. George doesn't hear that word that much. That's awesome. How much do you make? Pretty tax or after tax? You can give me both. That'll help. Okay. Let me just look here. So the last 20, 25, I make just over a million pre-tax, after taxes about 600, yeah. God bless New York taxes. Oh yeah, it's a killer. I cry every three months. Are you debt free? Sorry. Are you debt free? I am debt free. Awesome. How much do you have in savings aside from the down payment? So I have 400 K liquid and then 1.2 in investment. Wow. There's 1.2 or non-retirement? About 40% is non-retirement. Wow. Are you willing to give some of that up for this house? I kind of don't want to. I don't know if that makes sense. I don't want to pay capital gains. Sure. No, I understand that. Okay. So what is your actual monthly take-home pay on average just after tax monthly income? About 50 K. Oh, fantastic. Because I'm crunching the numbers here on our mortgage calculator. And based on 25% down, I even did a 15 year fixed, which will give you a lower interest rate. You're looking at about 11 grand a month for a payment? Yeah, I thought even lower actually was looking at around like at nine, but I guess my fear is that like, what is something happens and instead of making a lot less money? That's a legitimate fear. So I was going to ask you how consistent is this? Because here's my parameter is 25% of your after tax monthly income going toward that payment. So if you can tell me, hey, I know I can get 40 K through the door with a 10 K payment. I would feel good about you going for this. But if you're saying, hey, there could be a bunch of months where it's only 20, I would be a lot more nervous to lock yourself into this payment. Yeah, it's consistent. Months a month and from last year, every year, I've made more than the previous year. I haven't had one that's decreased. But I think I'm just, I'm very cautious and it's just me. So I'm just scared that what if something were to happen? Am I setting myself up to be house poor or to be in a really bad situation? Well, hey, can I compromise with you? What if you just sell some of the non-retirement investments and you put 50% down, bringing your payment down to like eight grand or less a month on a 15 year? That would be pretty cool because now you have a lot of wiggle. Yeah, the opposite of the capital gains though, it wouldn't be. Is it long-term capital gains? I don't know. It probably would be if you've held the assets for longer than a year, I would crunch the numbers on the tax hit and go all right, I'm willing to pay 50K one time in taxes to have this condo that I really want. You're trading stress, one place or the other, you're trading stress from pulling it from the market or you're trading stress from the stress you feel that I've got to earn a million dollars every single year or I go underwater. So pick your stress, but you're doing great. This show is sponsored by Better Health. A lot of you are just trying to keep it together all the time. You show up to work, you pay the bills mostly on time, you smile at all the right times, but no one sees you when you're exhausted. No one sees you snap at your spouse or sit awake at 2 a.m. running through everything you wish you'd done and said differently during the day. Just because you're functioning doesn't mean you're okay. Talking to someone else is a great way to process what's happening in your life and get to the root of what you're experiencing. That's where Better Health comes in. Better Health matches you with one of their 30,000 licensed therapists. Someone you can be real with and finally put down some of the weight you've been carrying. They can help you get perspective and see other sides of your situations and help you move forward with a plan for getting well. Better Health Therapists all follow a strict code of ethics and if the first therapist isn't the right fit, you can switch for no extra cost. Asking for help isn't weakness. It's wisdom and strength. If you're exhausted from always having to hold it all together, trust a Better Health Therapist to help you carry the load. Go to BetterHealth.com/RAMSI for 10% off your first month. That's BetterHealth, H-E-L-P.com/RAMSI. Welcome back to The Ramsey Show in the Fair Winds Credit Union Studio. I'm George Kamel, joined by Dr. John Deloney and we are taking your calls at AAA825-5225. Jump in. We'll talk about your life and your money. Lee's in Tallahassee up next. What's going on, Lee? How can we help? Hey, how you doing, fellas? Great. So I am a single father of a 14 and six year old currently going through the worse and I am trying my best to get out of living paycheck to paycheck. I had to leave a job to contain my 50/50 custody so I took about a $30,000 a year pay cut and tell me about that. Why do you have to quit your job? So I was traveling on the road. Past several years making better money and when the divorce process started, I got 50/50 custody awarded to me so I had to leave that and come back to a municipality job that I had once before. I want to tell you I'm proud of you for making that choice. Thank you, sir. That was hard and it has a true financial cost, a true stress cost attached to it, a true identity cost attached to it and you prioritize in those kids and the limited time you're going to have with them, you're going to be a laser beam focused on them. That's that's pretty impressive, brother. Is your 50/50 custody is it every other week or is it part of a week? How's it broken up? It's every other week, Sundays to Sundays. And how old are they again? 14 and six. Currently also trying to get a majority custody. What is, how much debt do you have? So dead, I'm sitting at 11,573. What kind of debt is that? Credit cards that were wrecked up while I was away from home. Okay, and that's your only debt? Is 11 grand in credit cards? Yes, sir. Okay, what are you making? Currently, I am making 30,000 a year. Man, that's a big pay cut. When you said you were making 30,000 less, it cut in half. Yes, sir. Okay, but Lee, you could, in Tallahassee, there you could go work at a Starbucks and make that. Why have you chosen to make take this job. Uh, has comes with state benefit or state retirement and benefits, medical, dental vision. Um, the my check is taking a hit because I've added the kids to that. Um, and it's a different, you know, the, the, the municipality pays for a mine, but not the kids. Um, and the X is not contributing to her portion of half of the expenses for the kids. So I hear this all the time, especially with my friends who are in government jobs is you, there's a, I don't know, golden handcuffs, if you will, to the benefits. But right now that's, that's killing you. You got to make more money because you're bringing home like two grand a month. It 2400 bring home. What's your rent? Uh, I own a single wide and two acres that I'm on. Okay. What's the cost of that every month? Um, so total like expenses for the house is about 900, I'd say. Is that with utilities and everything? Yes, they're groceries. Okay. So when you don't have the kids, do you have the ability to go and just work like a madman extra? I'm currently searching for now is a job that will work with me. Um, after hours in my full time job and then as much as they will on the weekends that I don't have the kids. Okay. Even if you have to go sign up driving back and forth to airport via Uber or doing food delivery or pizza delivery or something and all where you're kind of in control of your schedule and you're flipping switch on and off to say I'm working or I'm not working. Um, I, I want to challenge you to expand like you're settled in. You got health insurance. You got the kids covered. And by the way, when, you know what, let me stop myself. When is your divorce finalized? Um, it's an ongoing process right now. She's not currently participating. She's actually been held in contempt a couple times. Okay. Is there a point when the judge is going to come in and just sign it off? Um, I'm sure hope and so. Okay. I, I, George, tell me if I'm wrong here. I want to see you stack cash and get through the divorce. Are you paying an attorney right now? Um, I did have, uh, excuse me, I already have paid him up. Okay. Um, and, um, just waiting like, so waiting out this process right now. Okay. Because the goal is to not go into any more debt. So I don't want you trying to tackle the debt, but then going to other debts on the side because the divorce isn't finalized. But I even know if the debt's your problem. I, I mean, you're the, the water you're trying to swim in is so shallow, 30,000 bucks, man. That's so tough. Yeah. I feel like I'm barely keeping my head afloat. Yeah. You are. And what do you do for work? What kind of line of work are you? Uh, natural gas utilities. Um, I was going to say I have just went bare minimum on everything I can to cut out. And I, I was able to save like 300 and something dollars that way. And I also got through one of y'all's insurance people that helped me lower my vehicle insurance. Good. And save me some money that way. Okay. Now you, I mean, you're cutting down to the bone on the expense side. And so the income side is the lever that we can really hone in on. And that's your ticket out. Cause if you pay a thousand bucks a month towards these credit cards, you're out in a year. Okay. So that's the, that's the, the easy math I can do with you on air. The hard math is you coming up with an extra thousand dollars a month. And that's what I'm saying. The week that you don't have the kids, you're coming up with an extra thousand bucks that week. That's the, that's the processor right now. Put in applications, lift and ride all these past two weeks. Are you a handy guy? Yes, sir. I can work any piece of equipment. I've got a key in it. I mean, if you just started a little handyman business on the side, you could make 50 bucks an hour doing that. Or if you went and just joined up with a construction company for a year or two, and I know you might have to make some concessions on benefits and stuff, but man, oh man, you have too much of a skill set that's in such high demand in certain places. Um, and you're a guy that I'm rooting for so hard because you, I could tell you're a good man. I can also tell you're trying to defend your wife, right? You're trying to not say negative things about her, which tells me you're a man of high honor, even though she's blown your life up and you are struggling just to take gulps of air, man. And so here are two guys that aren't in the middle of it like you are. We see a guy with a ton of potential and it's hard for you to believe in yourself when you look in the mirror because you're so freaking tired. Know that George and I believe in you know that everyone listening here believes in you. Okay. Thank you. And it might be you stepping out on a limb and calling some local construction companies, some local builders, some local whoever. And whether that means you're just running a front in loader on weekends, doing dirt work for folks just on the side or you're getting off work and then you're going straight to a job like whatever that looks like. Just know okay, for one more calendar year, I'm going to be exhausted and then I'll be free. Yes, sir. So the short term is let's get a side hustle. Let's clear the dust on this divorce. Let's knock out the credit card debt, get a little bit of savings. Once you have that and you can up your income full time, now we can braid a little bit. So there's a short term version of this, which is the next year, year and a half. But then long term, we don't want you side hustling forever. That's not a sustainable future for you. So that's what we're saying. This government job is stable as it is and the benefits are great. It may not be the thing for you for the next 20 years. And I want to say it one more time before we let you go. George and I believe in you brother. I sure appreciate that guys. I spent a lot of time talking with men that I think need to step it up and it's an honor to talk to a man who is laying it all on the line for his kids. Hang on the line, Lee. We're going to send you some resources. One is every dollar, the premium version. You can list out that income, those expenses. It'll give you a real clear picture of how to get the most control of every dollar and also give you my book, Breaking Free From Broke. I hope it's an encouragement to you and that way we can walk with you through this. Hopefully your long journey, maybe even less. You're one of the good ones, man. Stay on the path. 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 your way above average. So why are you still listening to me? Go download every dollar for free and start saving more money right now. Ask Ramsay is our free AI tool that's built and trained on proven Ramsay principles. And today we're going to break down one of those questions we received. Here it is. If I'm a stay-at-home mom, how much life insurance do I need? I love that you didn't ask do I need it. You said how much? That's fantastic. So to start, every stay-at-home parent absolutely needs life insurance, even though they don't bring income into the home. I'm putting that in huge air quotes. The work you do has a real financial value that your family would have to replace. So estimate how much it would cost to actually replace that role for a year. What would childcare, daycare cost, housekeeping, laundry, meal prep, cooking, transportation, errands, all of that. So as a baseline, I like to say, let's put that out of half a million dollar policy because we tell people 10 to 12 times your annual income. And let me tell you in today's world, it's going to cost you at least 50, 60 grand plus to cover that kind of role, especially depending on where you live. So 400 to 500,000 plus would be a good starting point for a stay-at-home parent on a 15 to 20-year term policy and zander insurances who I have all my term life insurance through. And John, my wife stays at home, and we have a policy on her. Same with our family, me and my wife, yeah. So that's exactly what we do. We don't tell people to do things that we wouldn't do or haven't done ourselves. So if you're unsure about your next step, your specific situation, check out Ask Ramsey. It's going to give you very personalized advice. You can go back and forth, have a conversation, and get answers just like you went on this show. Ask questions today at ramseyslutions.com and click on Ask Ramsey, we'll drop a link in the description of this episode as well. Jess is in Columbus, Ohio, up next. Jess, welcome to the show. Hi, thank you for having me, how are you? We're doing great. How can John and I know? Yeah, thanks for taking my call. So I just had a quick question. I stepped away from my career last year to stay at home with our three-dog, three-young children at home. And so we're currently living on just my husband's income. And we are new to the program. So we're working through the baby steps. Right now we're currently on baby step number two. I'm working to pay about $114,000 in debt. And I'm kind of struggling with what to do. So I worked for the state. And I still have money in my retirement account from there. From the previous years, I was there. I was there about eight years. And now that I'm staying home with the children, I'm just kind of struggling with what to do. It would make sense to withdraw that retirement and use it because we have such a significant amount of debt to try to make a dent in that. Or if you think I should leave it alone, if I possibly decide to go back in the future to state employment or kind of what I should do. I will beg you to not touch that retirement account. And here's why. Okay. Number one, you're unplugging all of the future growth. And if you pop that into an investment calculator, you'll see this is not a $40,000 decision. This is more like a $400,000 decision. And on top of that, when you take that money out because it doesn't sound like you're at retirement age yet, at $59.5, you're going to pay a penalty of 10% plus taxes. So that's like taking out a loan of 35% interest to access this money. So you're far better off using any savings you guys have, any non-retirement investments you can liquidate, things you can sell, plus future income. So it sounds like you guys, you basically said we're doing this at all costs. It's a priority, but the math wasn't mathing quite yet. Yeah, yeah. We just kind of got certainly everything and I only had like 54,000 and that was the account value that I had. I know with the federal tax and the early distribution tax, I think it was looking at like 33. So it wasn't a huge amount anyway. How old are you? I am 33 and my husband's 33 too. So let me just play it out for you from 33 to 63. If you just leave that 54,000 alone, are you ready for this? Yeah. 30 years of growth is what we're talking about. That would be a million dollars. That's a 10% rate of return on average. Which you're not going to get. That's what you're giving up. You're not going to get from the pension it's in or whatever return for the state retirement, you might need to move that with a smart investor. So if you forgot the password to your retirement plan and you just left it alone, you would open it up at 63 to see a million bucks in there most likely. Instead of, well, it's not that much, yeah, I'll get 30 grand out, it'll help with some debt pay off. It is not worth it. So how much does your husband bring home? So he just got a new job to then come a little bit. So he's making about 130,000 a year and let some bonus potential. Good. And what kind of debt is the 114? So it's a little bit of everything. Some credit cards. We both have student loans that are about 50,000 between both of us. We have a cart loan and just like a personal loan. So just a little bit of everything. And that's really eating up a lot of like our monthly budget. It's just. A couple thousand dollars in monthly payments right there. It is. It's about like 21.22. And it was, you know, important for me to stay at home, but it's just been kind of a struggle each month, like with the budget and we're just, we're hitting use to using every dollar and trying to stay on that budget. But it's just been difficult to do that. So I was just kind of digging like, well, maybe I could put that money towards it, but that is not. So is there a possibility? And here's the beauty of being an adult, okay, is you get to change your mind. And could it be that you staying home is an incredibly important value to you, to your kids, to your husband, to your whole family? That's a thing you all are striving for. And because if we're just, if we're just trafficking in reality for a minute, we want it to grade our yard, but we dug a huge hole over the last five, ten, fifteen years before we do that. We're going to have to, before we grade the yard and plant all new sod and make it beautiful, like we want it, we're going to have to spend some time filling that hole back up. And so could it be that you made a huge jump, you walked away from your job, noble, awesome, and then you all did the math and realized we can't even afford to do this. And so you're going to have two competing values. One value I want to stay at home and another value is you and your husband want to like each other and you all want to have peace in your house, right? And so let's, it might be that you all get in a room and say, okay, I've tasted how much I want this, I've tasted how important it is, what a big deal it is to our family. But I got to go back to work for 18 months. And you want to talk about, you want to talk about someone who's going to be committed to a budget? Yeah, you, because every dollar you spend is another hour away from those kids, right? And so we're going to just go bananas getting this thing paid off. That would, that would be the conversation I think I would have to have in my house. Okay. Which is we set our, we, this is a huge value for us, but we set ourselves up to where we can't live into our value yet until we clean up past messes. Yeah. Okay. That would, um, the car loan is, I, I, it's worth about like 23, 24, but I still owe 27. So that was something I was trying to, maybe I could get rid of the car, but I'm kind of upside down on that because it's, it's a huge, it's 672 a month. Wow. So it's a big chunk of our, our money. And I was, that was something I did when I was still working. So it wasn't, you know, a huge deal. But now it's, you know, that's a huge chunk of our money eaten up every month. So I've tried to look at maybe getting rid of that, but I'm upside down. If I'm not really sure what to do, well, there's, there's a couple things to do after you get off this call is look up the private party value on Kelly blue book, not the trade in value, not the dealership, what they're going to give you, because that's going to be a way low ball. And once you find that number, now we have real figures on if we sold the private party, we'd be underwater by three grand. Okay. Now, how do we come up with that three grand? We can do that through our future income and set that aside and make minimum payments on our debts in the meantime. Notice how much we need for a car to get us from A to B for now or you go down your local credit union and get a loan for the difference plus a little bit for that car. So that way, instead of being in, you know, 24 grand of debt, you're in 10 grand of debt. So that's one solution to get rid of that car payment, which will then give you a little breathing room to attack the next smallest debt and the next smallest debt. And he, this also might mean he's working extra in the meantime. Yeah. So there's going to be sacrifices on either side, like John mentioned. So you guys just have to choose, choose your heart in this case. But this is, this is a lot of debt, comparatively to your income. So this might be a two and a half year journey, but knocking out that car loan is going to, you're going to get under that six figure mark, you're going to gain some momentum. And with every debt you knock out, you free up a payment. And can I ask, can I, can I put one more thing out into the ether, just a common conversation I have behind closed doors with women who were ballers professionally who choose to stay home. Yeah. So a total loss of identity, a sense of loneliness, and this nagging feeling that I'm not contributing because I can't attach a dollar amount to what I'm bringing to this household. Yes. I cannot identify with that more. I can't, I can't free you from it, but I want to free you from that. Yeah. Right. You all have a real math problem on your hands, but beyond the math problem, I want you to know, like you bring immense, almost unmeasurable value to your home. And that's not attached to a dollar amount. You are not your net worth, you are not your salary, you are the people who love you and people you love, and that's your family. What you're doing really matters and it's very, very important. You've heard from me and the Ramsey personalities for years, but nothing beats actually getting together in person. That's why we created the live like no one else crews. For seven days, we're vacationing with you and 2500 Ramsey people in the Western Caribbean. We live shows, us, new content, us and more. If you're on baby step four or beyond, come spend the week with us next March. Choose your cabinet at RamseySolutions.com/events or click the link in the show notes. Ramsey is taking over an entire cruise ship. If you haven't heard, it's called the live like no one else crews. It's happening in 2027 March 14th through the 21st, seven nights in the Western Caribbean, Bahamas, Jamaica, Grand Cayman, Cosmell, and this is more than just a vacation. This is a whole week of Ramsey experiences were taken over the entire cruise ship. You heard that right. So it's all our fans, people who have lived out these principles, they're dead free. They likely have their home paid off. I mean, I feel like over half the crowd is baby step seven. But this is for those people who have made it through baby steps, one, two, three, they're out of debt with an emergency fund. We want to mark the moments to celebrate with you guys. You're also going to get new wealth building teachings from Dave. We're going to have the world's largest debt free screen, live tapings of your favorite Ramsey shows and a lot more surprises. So if you want to join us, all inclusive pricing starts at about $2,100 per passenger. That's cabin food, entertainment, taxes, tips. The whole thing. Click on the show notes or go to ramseysolutions.com/events and book your cabin. I am pumped. Shay is in Richmond, Virginia up next. What's going on, Shay? All right. How are we doing today? Doing great. How can we help? All right. Yeah. So I'll give you a brief rundown and then the question. So I'm a 20 year old college student at Liberty University. My girlfriend also goes here. I'm studying aviation to be an airline pilot and she is going to go to law school. And we have plans to get engaged next year than married, but there is a lot of student loan debt with all that and it just seems like it's growing continuously. So just want to know what you think the best course of action is in our current state and how you feel about us wanting to get engaged and married at this point. I love y'all getting engaged and married. I think that's fantastic. When you say you have a ton of student loan debt, are you projecting into the future that you're going to have to borrow money for flight school, or she's going to have to borrow money for law school and just doing that math or are you guys already under water with your undergrad? Well, already underwater. So I'm in flight training right now. So right at the moment, I am recruiting a lot of student loan debt, but she, I mean, she does have a bit, but it's going to be a lot more in law school. She's finishing undergrad this year. Okay. So the challenge before you is not whether you should get engaged and get married or not. The challenge before you is you're worried about a problem that you are consciously choosing to engage in and you're playing to engage in even more in the future. Yeah. Yeah. I just, I just don't see how there is personally, again, you know, they're way, because for me, flight school is just, it's way too expensive for, for anyone to pay out of pocket in this moment. Is there only one flight school there? Um, yeah, yeah, how much is it? Well, it depends on the, on the course, it's the whole thing with like depending on it. It's a four year school, but I am at a four year school and it's, uh, it's about like 10 to 15,000 per, um, semester. Okay. And so if, I guess I just want to challenge you on that. It's a, you said a magic word in this moment, right? So you're right. You might have to slow down a little bit. It was, it's going to disrupt your imaginary plan for what you're going to do and when you're going to do it. That's just called being an adult. I guess it's just called, like, I want a hunting ranch and I want it to be really nice. I just can afford it right now. I could go to get a loan right today and go get it. I could do that today and a bank would give me a loan for it, but I don't want to do that. Right? So I'm delaying the thing I really, really want, um, in exchange for peace and making sure me and my wife are still connected, right? So A, that's the choice, B, a thousand bucks a month, a, or two thousand bucks a month. You can go out and get a job and get to work. You could do that. It would suck and it would not be pleasant and you wouldn't be able to live your college experience. But you could make that happen. And here's how I know I was just talking to two different private pilots. This one, one is commercial, one's private because my son's expressed interest in flight school. So I dug in and what does it cost? Both of them reported back to me, there is as many paths to a flight licensure as there are students. And so it sounds like you've got an idea for a way you wanted to do it. And a college counselor said, here's how you can do it and you just follow that path. And, um, when you lock yourself, same with law school, did I, I was a dean of students at a law school for six or seven years. I know a lot of students that man, they were, talk about exhausted, but they went and worked or they scrunched scholarships or they went to the law school. I was teaching it. I think that was a part of because it was the least expensive of a bunch of other options and they got scholarships, etc. You can do that. If you have it locked in your head, I have to go to this school at this time, at this date. Yeah, man, it's like walking into a car dealership saying, I will leave with this fancy car that I want. So I'm just going to sell it to you instead of saying, I'm going to wait two years and save up the money and get the, the car that I want and it's going to be mine. I can only but any money. Yeah. Yeah, it just seems, it just seems hard because like I'm almost, yes, I'm almost done since I'm, I'm a, a year out and she's just about finishing undergrad. So you're saying just, um, you know, way the options of having other, you know, the priority of getting married, uh, financially stable and having another job. Well, if we need it, you, you, you said it's going to be hard. Yeah. I want to tell you every decision you make moving forward as an adult, it's going to be hard. It's choosing which hard path is going to get me where I want to be. And so if you and your wife want to get married, I want to, dude, run to the all to go do that, man. Like as soon as you can and start building a life together, but do it based on shared values. And if one of your shared values is as a couple, we do not want anyone. No bank, no federal program. We don't want anyone telling us how we're going to live our life, which means we're not going to own anybody any money, make that a core tenant and then live with the consequences of, I really want to go to law school this year, but I'm going to have to stop and earn money like crazy and save up and save up and save up and save up. I'm going to go in two years or you say I'm going to get through flight school and I'm going to go get a job adjacent to instead of going to get my hours because I want to get this debt paid off. Okay. Right. What I don't want you to do is just so you know, you're, you're resigned to this thing. Because though it's, there's a wave coming at you and there's nothing you can do about it. And I just want to shake that up a little bit and say, dude, there's so many things you can do about it. None of them will be pleasant and I will tell you being a newlywed, owing 500 grand after law school, flight school and undergrad school, that will not be fun either and staying single so both y'all can rack up a bunch of debt. That won't be. That's going to be hard, right? Right. Right. Well, it will be hard. Choose the hard path that's going to get you where you want to be. And I hope you choose the thing that will accelerate health, finances, everything and that is having a good or great marriage. Yeah. No, that's actually helps a ton. I appreciate it. Does that make sense? And we hear too many stories, Shay, where people call in and they're 28 and they're married and they're going, we got 600 grand. We didn't realize what life was going to be like carrying all this debt. And now we just had a baby and she wants to stay home. But we have all this law school debt and so it's an impossibility. And so we're trying to give you the most options. And that means front loading the sacrifice. So if you guys say we're taking debt off the table, we're going to take it slow, we're going to do this in an affordable way, go to the most affordable path we can to get to the goal. That means you're going to actually get there and not be stressed with $4,000 in minimum payments on the other end. And I can tell you this, I'm not a, I've never had a call big law or anything like that. I've had to engage with attorneys multiple times as an adult. Zero times have I asked them where they went to school. Right. Zero. Zero times. Okay. And I don't know where any of my pilots went to school. I just assume if they're letting him fly the plane, he's probably good for it. And also take fair. Hey, let me say I want there to be great pilots in the world. I really do. And I really want there to be great attorneys. They do an extraordinary service for humanity when they're, when they're good. Okay. So I want both of you all to go do those things. I really do. But it might not happen at the same time. It might be you finish flight school, you get a job. Now boom, green light, she can go to law school because you have an income. What won't work is both of you just piling on debt to cover your living expenses. So both of you can pursue the dreams at the same time. That's the part that worries me. So I would caution you to do more of a baton pass with this. Okay. But getting married is going to help. Yeah. So combining your lives together, combining finances, combine your goals and vision, it's so much easier and better with another person. A ride or die as John would say. Appreciate it. Here's my last piece of advice. Don't wait a year to get engaged this weekend. Call it, brother. Quit waiting. You already know you already have a plan and you have a road map. Get engaged this weekend. Go ahead and call it. Let's get this thing going, baby. Ring by spring, John. That's the Liberty promise. I just made that up. But I'm sure it is. Ring by spring. Make it happen, brother. May your graduation or your money back. That would be fantastic. [Music] Whether you're a small business owner or an individual, doing your taxes is not fine. It's like an algebra test where if you get anything wrong, the IRS can make you pay with actual money. But if you work with a Ramsey trusted tax pro, you don't have to be a tax whiz because they are. They know taxes like the back of their hand, which makes filing super easy. So work with a Ramsey trusted tax pro and get back to doing what you love, which probably isn't taxes. Visit ramseysolutions.com/taxpro and fill out the referral form to get connected to a Ramsey trusted tax pro today. Our scripture of the day, Proverbs 13-11, "Dissonus money dwindles away, but whoever gathers money little by little makes a crow." I love the ESV version of this, John. It says, "Money gained hastily will dwindle, but whoever gathers little by little will increase it." That's an average quick right there. Andrew Carnegie said, "If you want to get rich, think of saving as earning." Nice. All right, Andy. Good stuff. Ryan is in Georgetown, Texas up next. What's going on, Ryan? Hey, what's going on, Jens? I appreciate you guys having me on. Thanks for calling. Brother, what's up? So I didn't grow up with the best financial examples and now that I'm making a little bit more money, I want to be a better steward of it and then build a solid future from myself or if the Lord ever decides to turn me into a family man. And I'm contributing in my 401(k) to be beyond that, not really sure what the next smart move is, whether it's paying off the house or investing it in other means and what that looks like. Wow, how old are you? I am 29. Great. Well, you figured this stuff out early. I know it feels like you're behind, but man, a lot of people don't get this kind of financial literacy until way later in life. So you're investing currently. Do you have any debt? I do. I have a good bit of it. I have 377 in a house and then Dave's favorite 21 in a truck. 21 a truck. scared me. So 377s in a mortgage. Are you married? No, I am not. It's just me, my dog. Well, what forced you into this house? That's a big purchase. Nothing forced me into it. I just figured I'm going to be in the area for a while. And I liked the house that I saw when I was just out and about. Okay. How much do you make a year? After taxes, it is 9200 a month. Nice. Okay. Solid income. What's the mortgage payment every month? 2150. Okay. And that's on a 30 year, I imagine. Yeah. And I pay an extra three to 400 every month. Okay. Why are you paying extra on the car? Why are you hanging on to that debt? I do pay a little bit extra. But yeah, not nearly as much as I guess I should be. How much do you have in savings? 12,000. Okay. Good. So you got 12,000 savings. Any other investments outside of the 401k? I don't think you guys would consider it, but I do have a few vehicles that are all paid off and whatnot. So it's kind of like a fun emergency account. Tell me about these vehicles, brother. You buried the lead on us. Okay. So there's a classic Mustang, a couple trucks, a few bikes. What is this all add up to, the value? Probably about 90,000. Goodness gracious. And 20 of it is debt for the truck. Okay. So you have 90,000 things with wheels and motors, and our parameters, half of your annual income being tied up in that. And so right now you have you violated that principle. That's a lot of your world tied up in things going down in value. Maybe outside of that Mustang. I don't know. Any of the stuff is. Tell me about the trucks. Okay. The truck is a 2024 F-150 and then a 2005 Tacoma. Man, both of those are awesome. Do you need the truck for work? George, he's a Texan. No, it's more than just for for hauling the vehicles and stuff. Tell me about the bikes. Okay. There's a 22 Indian FTR-1200 and then an adventure bike and a Harley. Gosh, dude, you have all cool stuff. All the toys before your 30s. Okay. But these are cool toys. I got to give, I got to like shout out Ryan, you're not like buying ridiculous like you don't have like 14 jet skis. And also. Thank you. Also, you know, I'm going to tell you, if you sold just a couple of these things, you clear up everything, man. You clear up everything. And what would you be willing to say to your Mustang? If I said you had to sell stuff to get rid of the 21K on the truck, what would you sell? Probably one of the bikes and then the Mustang. Oh, you're going to sell the Mustang. I was going to give you the benefit of the doubt to hang on to it. What's the Mustang? No, I just, I could probably get 25 out of it. So you only need to sell that. You don't need to sell everything. I would just say and if you could sell just enough to get rid of the truck payment. Does it have sentimental value? Not too much anymore. It's kind of just eating up too much money. And I mean, it's very easy just to think more into it. Sell it today. Put on the market and have it gone this weekend and be dead free by Sunday. Okay. I like this plan. And by the way, you have 12K in savings. So you could use 11 of that and knock your debt down to 10 and just sell one of the bikes and be done. So there's a lot of ways to go back that one a lot more. And then you just then your next goal, every single piece of margin you have, every dollar and margin from those paychecks goes towards building an emergency fund of six months of expenses. Six months. Okay. Now you've reset, right? You got no consumer debt. You got six months of savings in the bank and you have enough margin to now invest 15%. And you're making nine grand a month. And so now you're you're dropping three or four grand a month towards your house payment. That thing's going to just start to dwindle right underneath you. That would be amazing. Yes. Okay. So I want to how do I do this? I want to challenge you on two things. Okay. Okay. Thing number one is I want you to also do the math and I want you to see it all laid out in front of you. What the registration and the insurance and the gas and the maintenance on all keeping all these vehicles is costing you every month. Okay. My guess is it's going to be six or seven hundred bucks for the privilege of these pay it off things sitting in your in your garage. And I want you to ask yourself is six hundred five let's say five hundred is six thousand dollars a year to not do any not to drive them not to play with them just to simply for the privilege of owning them is that worth it to you. Okay. That's thing that's thing number one. And here's thing number two you ready. When you started this call you said if God blesses me with a family one day. I want you as a 29 year old making great money who's a homeowner who's actually thinking through future stuff. I want you to get out of your house and go meet people go on dates and go get after it. Okay. I want you to think where do you go out to the to meet people I don't drink anything or anymore. Dude join every join leagues. Go to a local church. Go join a bowling league. Join a chess league. Join a book club. Join a karate class. Go take yoga. Go do stand up comedy. There's like 14 clubs there in the Austin area. Go out and meet people. I want people in their 20s and early 30s to only be at home to sleep. Wow. I know. I know. And that's why I'm leaning on you a little bit. Here's why this is the grossest reduction of marriage. I could possibly make it. Okay. But if you look at marriage simply from an ROI factor. Having a good or great marriage amplifies your net worth over time, your health over time, your overall happiness and joy, like health outcomes recovery from like it just is a magnifier because you're anchored in with one other person doing this amazing wild adventure called life together. And so when you're thinking about optimization and where I want to be down the road, I want people who are like you who are going to be a great catch for somebody. I want you putting yourself out there being awkward, getting rejected, going again and again and again, making doing all the uncomfortable things so that you can put yourself in the best position to meet somebody and build this amazing life together. Okay. Good. I will flourish in being awkward. Yes. Hey, that's one of my spiritual gifts. I mean being awkward. And but here's the thing. I think I think George, I think we see value in you that you don't see. Okay. Well, I appreciate it. Okay. Let me put it this way. If my daughter comes home one day, she's 10 right now. So don't even think about it. But if my daughter comes home one day and says, hey, I met this guy. He's a good man of faith. He's bought his own house. He's making a great income. He actually has an old Tacoma that he paid off that he takes out on adventure trips out in Texas. I'm going to be like, dude, I got to meet this guy. Right? And he's dead free on top of that. And he's dead free. That's you know what I'm saying? Like you're a catch brother. You barely need a personality at that point. Get out there and go meet people. That puts this hour of the Ramsey show in the books. Remember, there's ultimately only one way to financial peace and that's to walk daily with the Prince of Peace, Christ Jesus. [BLANK_AUDIO]